Five Funds Invest Jointly €247 Mn in Axia

27/06/2014 – Expansion

Real Estate Investment Trust (or Socimi by its acronym in Spanish) Axia Real Estate will eventually debut on the continuous stock market on July 9th.

The new vehicle driven by ex-executive of Testa and Alza Real Estate, Luis López de Herrera-Oria, will start trading with a €400 million raised at its initial public offering of 40 million shares sold at 10 Euros each.

Axia has already got commitments for €247 million subscribed by huge institutional investors. Precisely, US hedge fund Perry Capital will take the seat at the managing board with 25% of the stake.

Tabue Hodson Stonex (THS), T Rowe Price, Gruss Capital Management and Pelham Capital will act as anchor investors grabbing 62% of the whole subscribtion. JB Capital Markets and Citigroup are the underwriting banks, whereas Gómez Acebo & Pombo, White & Case and Linklaters perform the functions of the legal advisors.

Axia, born without assets in possession, is going to focus its activity on offices (to make 70% of the entire portfolio), logistics (20%) and commercial real estate (10%) situated principally in Madrid and Barcelona.

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE

Duro Felguera Buys an Office Building From Gmp For €20 Mn

27/06/2014 – MisOficinas

Duro Felguera is a company specialized in the “turn-key” projects execution rendering services to energy and industrial sectors. The firm acquired an 18.000 square meter area building situated in Vía de los Poblados for €20 million paid to Gmp.

The company aims at saving on costs and gainging visibility of all its branches in Madrid by gathering them in one place and at the same time it wishes to maintain its main headquarters in Asturias. The purchased building stands adjacently to the M-40 ringroad. Duro will relocate in there the following divisions: Oil & Gas (right now found in Las Rozas) and Electrónica (Tres Cantos), as well as several replicated businesses managed from Asturias.

Duro Felguera wants to move to the new offices as soon as possible. The renovation works will begin next week so that the amenities would be in perfect condition in the last quarter of 2014 and the firm could move in in the first quarter of 2015.

 

Original article: MisOficinas 

Translation: AURA REE

Asian Funds Alight on the Spanish Property Market

27/06/2014 – Expansion

Asian investors get off to a flying start on the Spanish real estate market this year. From having just a token presence (€50 million invested during 2013), in the first quarter of 2014 solely they spent €368 million in the country. Still many transactions are found in the due dilligence process, making experts believe the total amount invested by the businessmen from the Far East could rise to €550 million this year.

Over the past years, Asia has generally reinforced its bet on the European property market. In the years 2008-2012, they multiplied the sales volume by ten, until hitting €5 billion, according to advisor CBRE.

Sovereign Wealth Funds

The investment has been mostly boosted by sovereign wealth and pension funds, such as China Investment Corporation (CIC), Government of Singapore Investment Corporation (GIC) and National Pension Service of South Korea. These vehicles paved the way for other Johnny-come-lately funds to arrive at Europe, like institutional investors coming from Malaysia, South Korea and China.

In 2013, only one noteworthy transaction has been conducted by Asian investors: the purchase of the Hotel Valparaíso in Majorca by Chinese group GPRO that paid €50 million for the property.

However, in 2014, Far East buyers played the main role at three large operations: the sale of the Edificio España building in Madrid for €265 million to Chinese millionaire Wang Jianlin and two purchases of an India-born businessman residing in Hong Kong, Harry Mohinami: the Edificio Estel building in Barcelona (€56 million) and the Casa Palacio del Conde de Cedillo building in Madrid.

Investment Strategy Director for CBRE España, Patricio Palomar, claims the Asian funds has been always “good quality asset buyers, taking advantage of changing economic cycles and spending equity in the countries which seem interesting opportunities to them”.

Moreover, legal amendments in the Asian countries relax the requirements for investment abroad.

The investors not only explore office buildings for sale, but also hotels and construction projects.

 

Original article: Expansión (by Marisa Anglés)

Translation: AURA REE

Mortgage Approvals Dip Down Again & Slide 13.4% YOY in April. Rates Shrink by 4%

27/06/2014 – Expansion & Cinco Dias

According to the National Institute of Statistics (or INE by its acronym in Spanish), new mortgage signing came back on the downward route and fell by 13.4% year-on-year in April after climbing 2% in March and thereby bringing the first positive news in the last 4 years.

During the month of April, 15.326 new mortgages got signed. It is by 7.8% less than four weeks earlier. The figures have been obviously influenced by Easter, befalling this year in April, while in 2013 in March. Moreover, the information available inclines us towards recognition that the data also involves the previous months, in case of the year 2013, those following the tax relief removal at the end of 2012.

The total amount lent declined to 1.538,64 million Euros, by 8% less than in March and by 9.6% less than in March 2013.

In turn, average amount borrowed via the loans for house purchase fixed at €100.394 in April, by 6% more than a year earlier and by 2% less than the €102.397 mean from March, which almost has not changed over February.

About 93% of the mortgages approved in April applied variable interest rate, while only 6.9% used the fixed rate. The Euribor is the most popular benchmark rate for variable new contracts (87.5% of them).

Average interest rate for all properties post 3.84%, lent for 21 years on average. Mean interest rate for mortgages for homes sat at 3.97%, by 8% smaller than in April 2013. It is the fifth consecutive fall. To compare, in November the average rate marked 4.29%.

Talking about Spanish regions, the most new mortgages were granted in April in Andalusia (2.760), Catalonia (2.489) and Madrid (2.359).

On the other hand, fourteen regions signed less mortgages in year-on-year terms with the biggest differences in Murcia (-29.6%) and Andalusia (-22.8%). The only jumps were registered in La Rioja (+80.2%), Navarra (+67.7%) and the Canaries (+9.7%).

The biggest amounts of money borrowed for home purchase piled up in the Community of Madrid (€320.3 million), Catalonia (€302.7 million) and Andalusia (€245.5 million). 

 

Original article: Expansión & Cinco Días

Translation: AURA REE

Cerberus & JC Flowers Negotiate With Cajamar on €350 Mn Capital Enlargement

27/06/2014 – Expansion

Spanish cooperative savings banks cross the limits. At least two huge American funds, Cerberus and JC Flowers are negotiating with Cajamar on possibility to inject €350 million in fresh capital into the entity.

Allegedly, the ampliation would reinforce the branch of Cajamar – Banco de Crédito Social Cooperativo, although the bank claims there is no relation between the two matters. The newly created credit institution associates 32 cooperative savings banks with 4 million customers, 6.500 employees and 1.350 offices.

Cajamar also denies that the funds are the only finalists at the operation, as also insurance firms like Generali and financial groups specilized in cooperatives like Rabobank and Crédit Agricole wish to present their bids. The bank says it seeks long-term investors as in short-term it does not foresee becoming listed.

Cerberus bought two servicing companies from banks, Bankia Habitat and Cimenta2 (from Cajamar itself) through its investment arm Haya Real Estate. JC Flowers at the moment is eyeing the Spanish market without any decisive movements, however it in other countries it owns Italian insurer Eurovita and a part of Northern Rock´s portfolio.

 

Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE

Real Estate Companies Regain Investor Attention

27/06/2014 – Expansion

Yesterday´s interest shown by Colonial about Realia thrilled the real estate sector on the stock market. The company shot up by 10% reaching maximum levels in the last 35 months. At the end, the appreciation post 4.73%, though.

Colonial´s interest has been expressed in the middle of the sales of stakes in the property firm on the part of FCC and Bankia that jointly control 62% of it.

Colonial itself also jumped by 2.55%, pulling behind rise in values of other listed real estate specialists like Urbas and Inmobiliaria del Sur (appreciation of over 4.9%) and Quabit (+2.78%).

The robust movements provoked by the breaking news have given a firm foundation for good 2014 performance on the stock of Colonial which year-to-date gains 130.67%, Realia sells by 86.75% more, while Urbas grew by 32%.

Victor Peiro from Beka Finance assures that beyond the upsurges there stands hidden speculative bet of investors positioning to have better view on IPOs and mergers. “Experienced real estate firms confirm the time has come to return to the sector (…). In fact, certain asset prices in certain cities have already reached the rock bottom level”.

Listed real estate firms were one of the most crippled by crisis. Depression in activity brought many of them down to bankruptcy, while the others´popularity on the stock exchange dropped dramatically.

In spite of the growing interest in them, the companies may face troubles in holdings as great majority of them is held by banks.

Experts highlight that investment in listed realtors shall be considered long-term (min. 10 years).

 

Original article: Expansión (by A. Monzón)

Translation: AURA REE

Investors Dash For Hotels & Offices

26/06/2014 – Expansion

Step by step, the optimism returns to the property sector. “Nowadays, the circumstances are totally different from how they were two years ago when the market recovery was predicted for 2020. There is a certain movement and the foreign capital flow permits the transactions to stand on a pre-recession level”, said Jaime Cabrero, president of Coapis (Spain´s General Council of the Association of Official Colleges for Realtors) during his speech at the 9th Real Estate Asset Management Summit organized by Unidad Editorial and sponsored by CBRE.

According to the expert, the recovery will arrive to large extend thanks to “Asian and US investors”. As an example Cabrero gave the recent acquisition of the iconic Edificio España in Madrid for €265 million paid by Chinese billionaire Wang Jianlin.

“Banks started to lend again. Prices have already bottomed-out in the residential segment but still some margin remains for the tertiary property”, he stated.

The most eye-catching revival has been observed in case of hotels and shopping malls, told Miguel Oñate, director of Magic Real Estate. “In these segments investors fight for the assets and prices went up. Foreign investment plays a crucial role in the transactions as its presence increases likeliness of return of Spanish investors“.

Two recently created vehicles constituted open doors to foreign equity: Socimis and Funds for Bank Assets (FBAs). The first, Spanish REITs, attracted mostly non-resident insititutional investors and national family offices. Right now, they dispose of around €4 billion intended for investment in hotels, office buildings and shopping centers in the downtowns of Madrid and Barcelona which could provide them with a €6 billion deleveraging.

When it comes to the FBAs, they were set up by Sareb to liquidate more risky assets with view to cooperation with professional international investors, e.g. hedge funds. At the moment, there exist only 5 or 6 FBAs.

According to the participants of the summit, Spain shall do its best to create breeding ground for the future investors because once the large funds presently actively purchasing in the country, such as Blackstone, will finish their investment in Spain, they will leave.

 

Original article: Expansión

Translation: AURA REE

Realia Gains Maximum Since 2011 in the Middle of Sale

26/06/2014 – El Confidencial

It has been a very stressful time for Realia. In the middle of the real estate firm´s sale process, it upsurged on the stock market by 9% during one session, closing with a 3.5% jump at 1.48 Euros a share. The price is the highest since 2011.

Apart from the fact that one month ago FCC and old Caja Madrid (now Bankia) received final offers for the property company, the appreciation is due to greater trading activity which reached 5.18 million shares, two or three times more than Realia´s normal average.

Adding yesterday´s surge to the general appreciation in values of the firm, it accumulates 78% in 2014. The overhelming rally allows the price near to 1.81 €/share of its NAV (Net Asset Value). It reaches €556 million now.

At the last stakeholders´meeting held yesterday, the operation of swapping debt with Sareb for shares in the company has been approved. The “bad bank” will inject the amount at 0.24 Euros per share plus premium of 1.77 €/share and in exchange it will obtain a 4.6% stake in Realia.

 

Original article: El Confidencial (by R. U.)

Translation: AURA REE

Soros Offers €1.5 Bn to the Koplowitz For Rescue of FCC & B-1998

26/06/2014 – El Confidencial

George Soros laid his cards on the table. To help Esther Koplowitz to avoid the implementation from the side of her lenders, the US magnate offers a €1.5 billion fresh capital injection in FCC and B-1998.

The capital enlargement for FCC will amount to €1.35 billion with refinancing tranche interest rate of between 11 and 16%. It is very high as it almost quadriples current differentials. The company is unable to pay them.

On the other hand, the equity that Soros is going to pump into B-1998, family office of the Koplowitz controlling 50.1% of FCC, will help the firm to face its €1 billion indebtness.

FCC stopped returning dividents without which Esther Koplowitz will not manage to meet requirements established by BBVA and Bankia (the main lenders).

The only drawback of Soros´s offer is the demand of a 40% discount on FCC´s shares value. Moreover, the investor wants a cut in debt from the creditors justified by the company´s being the FVC.

The proposal is so confrontational that at first both the family and the banks rejected it. However, the situation of the firm is too tough to give the talks up. If B-1998 does not find a new partner before July 31st, BBVA and Bankia will take control over the builder.

 

Original article: El Confidencial (by Agustín Marco)

Translation: AURA REE

Soured Loan Volume in CatalunyaBanc Reaches 22.3% Cap

26/06/2014 – El Confidencial

As per rating agency Moody´s, at the end of the first quarter of 2014, default rate at CatalunyaBanc shot up and stood at 22.3%. The score puts the bank in negative outlook in the light of the ongoing auction of the entity.

The volume consists of non-performing, sub-performing and awarded loans. Nevertheless, Moody´s admits that putting the €6.5 billion NPL portoflio apart might improve the rate which presently ranks the worst among the Spanish banks. The entity has already registered better figures in terms of deleveraging and coverage.

The US agency points out that even though the bank transferred all troubled loans to Sareb, its assets went on loosing their value. “After falling to 16.4% at the end of 2012, the rate jumped again in the first quarter of 2014”, Moody´s justifies the B3 mark . The entity itself told the rate post 13% at the end of 2013 but has not given the exact number of the doubtful loans.

Around 20% of the “Hercules” corresponds to highly demanded loans. Not the default itself is the biggest problem but the dramatically low profitability of the entity. According to the provided by the agency, without the carry trade CatalunyaBanc´s average profitability per benefit before provisions on risk-weighted assets shows a paltry 0.4%.

If that weren´t bad enough, Moody´s warns about the certain risk that the bank might fail the ECB´s stress test.

Given all that, the bidding has been abandoned leaving only Santander and La Caixa on the battle field. Still, the Frob (the Fund for Orderly Banking Restructuring) may count on an interesting price thanks to the merger of Caixa Catalunya, Manresa and Tarragona.

 

Original article: El Confidencial (by Eduardo Segovia & Agencias)

Translation: AURA REE