Month: September 2014

Merlin Buys Imaginarium’s Logistics Centre For €10.7m

30 September 2014 – Europa Press

Merlin Properties has acquired the complex of warehouses that house the logistics centre of the toy company Imaginarium in Zaragoza, for €10.7 million, according to reports by the Socimi.

The complex comprises three buildings: two for logistics and storage plus one for use as offices. The toy company rents the buildings, which are located in the ‘Plaza’ logistics area of Zaragoza, one of the largest of its kind in Spain.

Similarly, the Socimi has purchased another warehouse located in Almussafes (Valencia) in the same area as Ford’s factory in Spain for €12.2 million.

This warehouse, which it acquired from a fund managed by CBRE Global Investors, occupies a surface area of 26,613 square metres and is leased in its entirety to Ford, Johnson Controls and Truck & Wheel.

Merlin Properties said in a statement that these two investments “consolidate” its entry into the industrial asset sector.

Moreover, following these purchases, the listed real estate company now has property investments amounting to €1,069 million, i.e. it has spent almost all of the €1,292 million it raised through its IPO.

Original story: Europa Press

Translation: Carmel Drake

Generali to Convert Its Gran Vía Building Into a Vincci Hotel

The Gran Via street in the capital of Spain extends its hotelier offer. The heart and soul of tourism and shopping is going to see a new 4-star, 88-key hotel establishment opening its doors in the building number 10, located between the Alcala and the Montera streets, as soon as in 2016.

The owner of the property, insurer Generali, decided to award management of the new hotel to Spanish chain Vincci, controlled by the Calero family.

Before, the building housed local Ministry of Education.

Renovation cost of the property is said to oscillate between five and seven million euros.

Generali’s real estate portfolio includes 28 buildings in Spain. Through its property managing arm, the insurance company administers 2.500 assets scattered all around the world. Their market value totals at €28 billion.

Thanks to the alliance with Generali, Vincci will open its sixth establishment in Madrid and the third on the Gran Via street. One of the 4* hotels is situated between the Callao and the Espana squares, at number 41. Hotel Vincci Capitol is hosted by the old Edificio Carrion building, easily recognized by the Schwepps illuminated sign on its facade. The other establishment, Hotel Vincci Via, stands farther up the street, at number 66.

Apart from these establishments, the Caleros share ownership of four hotels more on the Gran Via with Antonio Briones and Max Mazin. Three of them are operated by Tryp (Melia), while the fourth, Hotel Rex, was taken under the wings of  Keytel (Hotusa).

At the end of 2013, Vincci’s results showed a €144 million turnover, proceeding from 34 hotels and 4.897 rooms found in Spain, Portugal and Tunisia.

Not long ago, another Gran Via hotel, the Ada Palace, has changed the operator for Unico Hotels.

In the last years, the artery of Madrid has significantly improved its image as the shopping spot. In 2013, Inditex opened thereon a Zara store at number 34. Some time later, C&A added a shop of 2.500 square meters inside the brand-new building designed by Rafael de la Hoz at number 48. Likewise, in 2015, Irish chain Primark will open its new 9.000 square meter, three-storey department store at number 32.

 
Original article: Expansión (by Yovanna Blanco)
Translation: AURA REE

Banks No More Fear Lending, 100% Mortgages Are Back

30/09/2014 – El Economista

The latest updates indicate a constant rise in new mortgage approvals. And the nearly impossible has happened: some of them were lent at 100% of the value of a property. Two entities grant the loans for the total value and around a dozen include this option in their mortgages. Of course, in all cases they are tied to strict requirements and obligations.

Until now, the privilage was reserved only for foreclosures but now it starts to change due to more intensive assets transfers by Sareb and the arrival of investment funds that absorbed many real estate servicing branches of banks.

Moreover, banks like Santander or BBVA still offer these conditions for purchase of the homes traded in their offices and stands.

Ibercaja & Caja de Ingenieros

These two entites offer loans equal to 100% of the value of a property provided that the customer also accepts ‘high interest rates and loyalty products’.

Ibercaja’s mortgage called ‘Superhipoteca 2014’ is being lent for a 40-year term. The borrower shall place a salary deposit and three bills, as well as to buy several insurances and credit cards, maintain fixed amount on the savings account and ‘invest in a fund managed by the bank’.

Caja de Ingenieros sells the ‘Hipoteca Hogar’ mortgage, asking for the salary deposit, purchase of an insurance and any product ‘for over €3.000’.

Speaking of interest rates, Ibercaja applies 3% in the first year and 2% + Euribor in the following, while at Caja de Ingenieros it changes from 4.5% to 2.74% respectively.

 

Original article: El Economista

Translation: AURA REE

High-End Property Sales Hit Best Since 2007

30/09/2014 – Cinco Dias

Spain’s real estate market recovers. This is a fact supported by such arguments as creation of more jobs, fall in prices, shy return of lending and more property sales. Even construction pulled up with new housing developments.

When sales go up, usually the luxury market reflects it as one of the first. High-end properties are defined as those which cost more than €500.000. According to the data published by the General Council of Notaries, such an amount was crossed in 2.345 real estate transactions sealed in the first half of the year. It means a 10% rise in comparison with H1 2013.

Thus, it turns out that this year will see the best luxury home sales volume since 2007, when it post 2.659 properties changing hands. Experts reckon that the advance shall be associated with better tourist flow and general recovery of the Spanish economy, as now the country has become one of the most desired investment destinations in the world.

However, so-called Golden Visa, the permanent residency given to foreign buyers who purchase real estate properties for over €500.000, has had none or very little impact on the overall sales. The Ministry of Economy informed that during the first half of the ongoing year, only 260 visas have been issued, representing mere 11% of the high-end house sales. Still, if compared to their number (43) in the first quarter of 2014, the exponential growth went through the roof with 504% more.

Who Buys the Homes & Where?

The British lead in the ranking with 400 transactions and an average expenditure of €981.000. Second come the Russians, who buy less (321 properties) but pay more (€1.06 million on average). The German take the third place with 288 purchases and a mean of €1.14 million. The French, the Chinese and the Swedish close the list of top nations that sealed more than 100 deals.

When it comes to investment destinations, 99% of all sales are concentrated in only six Spanish regions: Andalusia, the Balearic Islands, the Canaries, Catalonia, Madrid and Valencia. The British poach homes in Andalusia, while Russians would rather pick dwellings in the Canaries, Valencia and Catalonia. Madrid is very popular among the French and the Chinese.

 

Original article: Cinco Días (by Raquel Díaz Guijarro)

Translation: AURA REE

Acciona Hires Walter de Luna, Ex-CEO of Sareb

Walter de Luna, former general director of Sareb, has been just warmly welcomed as the best signing for Acciona Inmobiliaria. The group controlled by the Entrecanales family hires Mr. De Luna only eight months after the director quit from the bad bank due to dissent between him and the chairwoman, Belen Romana.

After leaving Sareb, Walter de Luna opened a consulting office named Iberian Real Estate Opportunities and he started working in there just before the summer, joined by several collegues from his old team in the bad bank who had also decided to quit. For example, Luis Moreno, who used to lead the financial assets department for Sareb.

The bad bank substituted Mr. De Luna with Jaime Echegoyen, ex-CEO of Bankinter.

Although the property managing firm is not one of the core businesses of Acciona, the company positions itself among the sector’s leaders in residential and management (mostly offices and shopping parks) fields.

However, the division contributed to the total turnover of Acciona with €66 million in 2013 (1%), while its Ebidta showed €3 million (0.25% of the group’s total).

 
Original article: Vozpopuli
Translation: AURA REE

Most Fashionable Plot in Madrid Available From €40 Mn

30/09/2014 – El Confidencial

This is the most wanted retail plot in Madrid. Located in the middle of the Paseo de la Castellana avenue, between the tower of BBVA and the Nuevos Ministerios stop of the Cercanias light railway and just in front of a El Corte Ingles department store, the spot is perfect for grand commercial brands, above all the fashion ones.

Current owner of the property, public railway firm Adif, has been granted a permission from the Government to sell the piece of land. The sale process is expected to conclude in November.

With an asking price of €40 million, an excellent location at few minutes walk from the Santiago Bernabeu stadium, the 10.200 square meter plot may become the battlefield for textile giants.

Moreover, the land includes 25.000 square meters more underground, which may be converted into a huge parking in the Azca Complex in the heart of the capital, adjacently to such iconic skyscrapers as the Torre Picasso tower (also known as the Torre BBVA, although the bank had sold it before moving to the Las Tablas neighborhood), the Torre Europa tower or the Edificio Mahou building.

‘The location is unbeatable for any fashion retailer. All the more that, according to a survey carried out by portal Modaes.es, 90% of clothing brands declared an intention of increasing sales in Spain’, says Patricio Palomar, research and investment strategy director at CBRE España.

Real estate market points at Inditex, Mango or H&M as the sure competitors for the plot. El Corte Ingles already has got an enormous establishment at the location and the odds are almost null that it will submit any bid.

Mango, owned by Isak Andic, has lately purchased another extremely attractive property in Madrid, at the corner of the Orense and the Raimundo Fernandez Villaverde streets. When it comes to Zara and H&M, they have also dominated the Golden Mile (the Orense st.).

The Buyer Profile

So, what kind of buyers will attend the tender? Basically, there are two options. Firstly, the purchaser will directly develop the real estate project with their own funds or with external financing provided by a bank or an investment fund. Secondly, the developer will be also the owner of the project and they will rent the building to an interested operator in exchange for a share in profits.

However, also a forward funding project strategy could work out in this case. One one hand, there would be an agreement between the developer and the retailer. The first would implement a turn-key project for the latter. Simultanously, there would be a settlement between the investor and the developer to buy the project once finished and occupied by the retailer. Then, the investor would acquire the property bringing sure return and they could participate in the operation financing.

Nowadays, there are operators like H&M, Primark or Fnac which could be interested in purchasing the plot but land and developing are not their core business. Almost none of them owns the property they rent, except for singular units. Unlike Mango or Inditex, they have no family office to buy assets.

Potential Lenders

Who could finance the operation? Well, only several investment funds are presently able to assume the developer risk: AXA REIM, Meyer Bergman, LGSI, British Land, Rodamco, Redevco, ING Real Estate, etc. Also, Adif as a Public Private Partnership (PPP) could do that. Together with Riofisa and under the name of Vialia, the railway firm has developed many shopping centers at various train stations.

However, it is highly likely that Amancio Ortega himself will attend the bidding. Reasons are few. Firstly, because the Nuevos Ministerios spot has been the must for a Zara shop for long. Secondly, because the future property fits in Inditex’s stretegy to invest in major buildings. Thirdly, because the plot is situated on the other side of the Paseo de la Castellana avenue, on the Paseo de la Habana avenue, where the group’s Massimo Dutti clothing brand already exists. Furthermore, the purchase would mean a knock-off to El Corte Ingles, standing just next to the terrain. And finally, because Azca has become one of the favorites of Pontegadea, the investment arm of Mr. Ortega which bought the Torre Picasso tower and is the landlord of Fnac, having a store in front of the plot on sale.

 

Original article: El Confidencial (by R. Ugalde & E. Sanz)

Translation: AURA REE

Ministry of Economy Suspects Fortress of Money Laundering at Purchase of Lico Leasing

29/09/2014 – El Confidencial

Fortress, a vulture fund that made a real deal on buying non-performing loans and unpaid debt in Spain, is now being interrogated by Money Laundering and Monetary Offences Prevention Commission of Spain (abbreviated to Sepblac), a department of the Ministry of Economic Affairs.

The authority demands a report on the identity of investors who put the equity for purchase of a financial division of savings banks – Lico Leasing. According to a notice sent by the Ministry, Fortres is obliged to prove internal proceedings applied to prevent money laundering and terrorism financing.

The investigation of Spain’s Central Bank has been triggered after finding out that the eleven affiliates through which Fortress is going to acquire Lico are based in Delaware (the U.S.A.) and the Cayman Islands – tax paradises witnessing transfers of money of suspicious origin. Most of the European countries excluded these murky areas in order to avoid tax evasion.

The transaction is going to be sealed through Valdivia Leasing Limited, a newly created Irish holding owned by some investment funds managed and controlled by Fortress Investment Group. Lico Leasing belonged to BBVA, Banco Sabadell, Mapfre, Ibercaja, Unicaja, CECA, Novagalicia, CatalunyaCaixa and Bankia.

Among the vehicles of Fortress supposed to pay €127.26 million for Lico, one may find Fortress Credit Opportunities Fund III and its five arms named A, B, C, D, E, as well Super FCO MALP,  FCO MA Centre Street and Worden Master Fund. The Ministry of Economic Affairs wants to know who really stands behind these funds. ‘The report must include information about banking entites, accounts and countries or jurisdictions through which the final equity injection will be done, from the beginning to the end’, Sepblac explains.

A Controversial Fund

Not only has Fortress acquired Lico Leasing but also Geslico, a debt collection affiliate for €220 million. Another noteworthy operation by the fund was the purchase of delinquent portfolios from Banco Santander for €1.1 billion in 2012. Furthermore, Fortress has become the principal lender of Realia by buying a €540 million debt share from Santander, CaixaBank, BBVA and Sareb.

Vulture funds like this one have transformed themselves into new owners of heaps of unpaid loans – estimated at €50 billion – proceeding from Spanish banks balance sheets, transferred at price much lower than their face value.

 

Original article: El Confidencial (by Agustín Marco)

Translation: AURA REE

Meridia Capital Buys a Shopping Park For €21Mn

29/09/2014 – Expansion

Brand-new transaction on the Spanish real estate market. Investment company Meridia Capital has bought the Albufera Plaza shopping center, situated in the south-east of Madrid, for the total of €21 million from fund General Electric.

The shopping mall of 27.780 built square meters and of 7.700 square meter GLA houses shops like Mercadona (2.000 square meter supermarket) and the main brands of textile chains of the Inditex group. Opened in 1991, the center offers 250 outdoor parking spaces.

The buyer, Meridia Captial led by Javier Faus, has recently welcomed Juan Barba in its team. In May, Meridia established a joint venture with Patron Capital, disposing of €800 million in funds ready to invest in Spanish property.

From January to August, investment in commercial centers in Spain exceeded €1.26 billion in 24 transactions.

 

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE

Blackstone’s Stake On Spain Opens Doors to Squatters

29/09/2014 – Expansion

A 40-year old economy professor lives in an empty home repossessed by one of the Spanish banks. He does not pay any rent or bills. Him, and many more like him have been squattering banking foreclosures in protest against massive evictions and upsurge in empty dwellings in the last years. Now, the Blackstone Group’s acquistions in Spain are at the gunpoint. In July, the U.S. private equity fund purchased 40.000 mortgages in Barcelona.

For the squatters, arrival of Blackstone means a ‘great opportunity to legitimate their fight against speculation’.

Housing prices in Spain rose 0.8% in the second quarter of 2014, representing the first year-on-year incrase since 2008. The rebound is a sign of the value stabilization after an over 35% slump registered in the last six years. However, Spanish banks still have to tackle huge amounts of defaulting loans, whose delinquency hit a record high of 13.6% in December 2013, the Bank of Spain informs.

Blackstone believes that the Spanish economy will improve and the company will be able to collect the debt better than its issuer, Catalunya Banc SA, the bank bailed-out with €12 billion taken from public funds in 2011.

Blackstone paid €3.6 billion for the €6.4 billion worth of mortgages backed by dwellings in Catalonia at a governmental auction, also attended by Oaktree Capital Management and Apollo Global Management.

The U.S. fund is carrying out talks on sale of a part of the soured portfolio. If Blackstone does not manage to collect the mortgage debt, it will rent or sell the houses.

What is more, foreclosure of such properties will not be an easy task due to the moratorium on evictions established by the Government of Spain in November 2012, to remain in force by May 2015. The law includes low-income families and single-parent families with two children or more that earn less than €1.598 monthly. Blackstone accepted it while buying the NPL portfolio from Catalunya Banc.

‘Those who squatter today were your neighbors yesterday’, says real agent Vicente Beltran from Valencia. He no more hangs the ‘for sale’ signs on listed properties to avoid potential squatters.

Local anti-eviction organization known as PAH by its abbreviation in Spanish has taken many actions demanding the moratorium which could prevent thousands of people from being thrown out from their homes. In March, the association occupied over a dozen of BBVA branches in the city of Sabadell.

Some lenders prefer to negotiate with debtors, or even buy plane tickets for foreigners who cannot pay their loans. In Spain, home mortgages are classified as outstanding loans, meaning  that even if the foreclosed property is sold, the borrowers must redeem their debt.

Another problem faced by Blackstone is the independence movement in Catalonia which adds to uncertainty among real estate investors.

 

Original article: Expansión (by Jeannette Neumann)

Translation: AURA REE

Sareb to Obtain €1 Bn For Giving In Asset Management to Funds

According to sources with knowledge of the bidding, the competitors running for trading the real estate and asset load of Sareb (Spain’s bad bank) will possibly have to pay around €1 billion for one of the management contracts. The process is at the verge of closing.

The calculous, though, is only an extrapolation of the €196 million amount paid by Sareb for the asset commercialization to transferring entities during the first year of its lifespan. Now, the formula will be just reverse. The funds will be the ones to pay a prime to the bad bank initially, and earn some juicy sales commissions afterwards.

Sareb will sign the service providing contracts for three, five and seven years, meaning an average of €200 million per year earned from outsourcing.

The auction started in June with non-binding offers and a month later, the binding proposals arrived. The management is expected to be definitely awarded in October.

In order to conduct the tender smoothly, the bad bank split the €50 billion worth of assets among ten portfolios (one for each entity which transferred its REO properties to it) and then it grouped them in four large packages, the subject of the bidders. Precisely, first portfolio contained real estate and loans of Banco de Valencia and credits to developers lent by Bankia. The second comprised repossessed properties of Catalunya Banc, BMN and Caja3. Next one those of Novagalicia and Liberbank. And the last again included Bankia’s loans, apart from an asset load inherited from Banco Gallego and Ceiss.

At the moment, Apollo, that purchased a 85% stake in Banco Santander’s Altamira for €664 million, and Texas Pacific Group (TPG), which acquired 51% in Servihabitat for €158 million from CaixaBank, are said to be the favorites. However, also Haya, the platform set up by fund Cerberus, has got a considerable chance of being the chosen one as it currently manages a part of properties and loans of Bankia.

Furthermore, Centerbridge could be awarded the second portfolio given that it bought the real estate servicer of BMN, while the last could end up in hands of Solvia for its experience and magnificent results in administering the REO assets of Banco Gallego. The rest of the bidders, Blackstone, Abanca and Ceiss, have lost in importance in the final stretch.

 
Original article: Cinco Días (by Juande Portillo & Ángeles Gonzalo Alconada)
Translation: AURA REE