Month: October 2014

Singapore Sovereign Wealth Fund Acquires a 30% Share in Gmp

Spanish GMP group is specialized in development, investment and real estate asset management. An affiliate of the sovereign wealth fund of the Government of Singapore (GIC) decided to buy a minority stake of 30% in this precise company.

For the stake, allowing Singapore to reinforce its position among core investors snapping up offices and business parks in Madrid and Barcelona, the fund will pay more than €200 million.

Gmp has currently got under operation over 410.000 square meters which include almost 4.200 parking spaces and a new project land reserve disposing of a buildable area of 86.601 square meters.

New Route

With the capital injection from GIC, the Spanish group can now run its development path based on three fundamental points. Firstly, selection of office buildings which could boost advantage from the reviving market. Secondly, maintenance works, as well as improvement of sustainability and energy efficiency of its real estate. Finally, the firm will sell a series of non-core assets with view to investment in the core ones.

Thus, following the strategic plan, in mid-July last year GMP purchased the old headquarters of Altadis, offering more than 13.000 square meter GLA above the ground level of office space.

As the CEO of the property management group, Francisco Montoro, says, GMP is pleased with the alliance with GIC which is a reputable and highly experienced global investor oriented on the long-term projects. ‘We share an objective of constant adding value to our portfolio’, Mr. Montoro concludes.

On the other part, the Europe head of GIC Real Estate Chris Morris states that ‘buying a stake in GMP proves our strong interest in the Spanish office buildings and trust in the property quality and management skills of our ally’s team’.

 
Original article: El Economista (by A. Muñoz)
Translation: AURA REE

Banco Popular Transfers 51% of Its Credit Card Business to Värde

2/10/2014 – El Mundo

Banco Popular and Värde Partners signed an agreement on the sale of 51% of credit card issuing business to the U.S. fund. The Spanish bank may obtain over €400 million in capital gain proceeds from the operation.

Precisely, as per the deed provided by Popular to the National Stock Exchange Market Commission (the CNMV), the deal assumes sale of a 51% share in Bancopopular-e.

Due to lack of information about the adjustments which may occur before the deal is sealed, the transaction will bring ‘more than €400 million capital gains’ to Popular.

Minneapolis-based Värde Partners, having operation centers in such key cities as London or Singapur, is specialized in alternative investment and providing services to restricted groups of global investors.

 

Original article: El Mundo

Translation: AURA REE

Building Permits For New Houses Up For First Time Since 2011

2/10/2014 – El Mundo

The number of new residential building permits in Spain allowed construction of 22.624 houses from January throughout July 2014. If compared to the same period of time last year (22.316 housing units), it improved by 1.3%. It is necessary to look back to 2011 to see the last statistical rise.

According to the latest update by the Ministry of Public Works, out of the total of the permits handed over during these seven months, 15.383 corresponded to apartments in blocks (up 1.2% year-on-year) and 7.229 to single-family homes. Moreover, there were 12 building permit applications concerning non-residential building construction.

The rise in the permits number has broken the downward tendency haunting the housing market of Spain over the last years. This fact makes the building permits another indicator confirming the market recovery.

In 2013, the index showed a record low (33.869 units) and linked seven years of an uniterrupted slump. Since the 2006 peak, when 865.561 permits were issued, the decline hit 96% at the end of 2013.

 

Original article: El Mundo

Translation: AURA REE

2015 Budget on Public Housing Cut by 26%

2/10/2014 – El Confidencial

The 2015 budgetary appropriation for housing has been established at €587.1 million, by 26% less than a year before. Furthermore, 94.7% of the amount corresponds to development, administration and access and refurbishment assistance programmes.

For the basic emancipacion allowance for young people, lifted in January 2012 but still paid-out to the young who were admitted right to it, the Government intended €14 million – only half of what it had granted for the year 2014.

On basis of covenants, Spanish regions and local administrations are going to receive €17.21 million in 2015.

These measures are completed with tax deductions, more favorable for landlords and tenants, and foreseeing tax relieves for construction of homes destined for rent.

In fact, the Government puts an enormous pressure on the rental by granting assistance for the aforementioned construction, development and projects on mobilizing empty homes, as well as co-financing public housing for rent.

The 2015 Budget Plan also assumes facing specific problems by giving subventions for neighborhood remodelation pledged by local administrations.

Moreover, other lines that have been included in the Scheme range from supporting research and development in architecture and housing to architectural actions at heritage refurbishment and maintenance works.

When it comes to urban planning and land, in 2015 new projects and activities related to recent approval of the Urban Rehabilitation, Regeneration and Renovation Law and the Rental Market Flexibilization and Development Measures Law will be supported technically and by means of aids.

 

Original article: El Confidencial (after Efe)

Translation: AURA REE

Over 11 Mn Spanish Households Ineligible For Cheap Mortgages

1/10/2014 – El Mundo

The income requirements for being eligible for a mortgage loan close the door to 11.3 million of families in Spain. Allegedly cheap credits demand €2.300 on average to be earned monthly by a household.

The data has been drawn by comparator company kelisto.es. In the further part of the report one learns that almost 75% of these households (8.33 million) does not earn enough to apply for one of the mortgages offered by 10 biggest banks in the country whose income requirements average at minimum €1.549 per month.

Year-to-date, new mortgage approvals posts around 18.000 monthly, meaning a 85% fall if compared to the May 2007 peak, just before the rel estate bubble burst, when 116.550 loans were granted. The numbers go along with decline in average amount lent, driven by depreciation in housing prices.

Thus, while a regular mortgage approved in May 2007 showed €150.810, those in 2014 shrink by one third to €99.164.

Estefania Gonzales, speakswoman of the Personal Finance department at kelisto.es, points out that many Spanish entities launched low-interest mortgage offers. ‘The problem is that not only presently banks apply higher interest rates than before the recession (ranging from 1.65% to 1.89%) but also demand purchase of additional products and a considerable income’, she says.

Cheap Mortgage? Yes, On Condition That…

Kelisto.es’s analysts indicate that out of the top 10 most economical mortgages in the market, five of them establish an income floor ensuring access to the attractive conditions. Precisely, they require €2.300 earned monthly. About 11.3 million Spanish families earn less than €2.000 and those which earn between €2.001 and €2.299 have not been included in the official statistics but they should be counted as well.

Other economical loans of large banks require a minimum income of €1.549,06 monthly, keeping away another 8.43 million families that earn less than €1.500. The most demanding mortgage is the Prestamo Hipotecario of Banco Popular which sets up floor differential at 2.25%.

The market also offers loans for home purchase said to be adapted to current circumstances and situation of Spanish households. However, their interest rates exceed Euribor by 2.21%.

Mortgages ‘For Everybody’ But With Worse Conditions

The inconvenience of the mortgages ‘for everyone’ rests in the fact that their conditions are generally less attractive than the best offers in the market. On average, these loans apply an interest cap of 2.98% (the economical: 2.60%) and a floor of 2.21% (1.80%).

The report by kelisto.es concludes that the present mortgage offer sentences lower-income families to paying more expensive loans. In practice, if a household files for a Spain average mortgage (i.e. €99.164 for 21 years), they would have to pay 520.92 euros monthly, totalling at 6.251,04 euros per year.

In turn, if someone is eligible for one of the cheap loans, they will have to pay €500.87 monthly and €6.010,44 annually. This means that a customer with smaller income would have to spend €240 more (4%) for their mortgage.

 

Original article: El Mundo

Translation: AURA REE

Merlin Properties Buys an Industrial Warehouse in Almussafes (Valencia) For €12.2 Mn

1/10/2014 – Expansion

Merlin Properties, a freshly listed real estate investment trust known as a Socimi in Spain, has bought a unit in the Sollana industrial area in the municipality of Almussafes (Valencia) for €12.2 million from CBRE.

The building of a 26.613 square meter GLA (gross lettable area) was constructed in 2008. Presently, the property houses companies like Ford, Johnson Controls or Truck & Wheel.

Adding this transaction up to the total of Merlin’s investments, year-to-date the Socimi spent nearly €1.07 billon out of its €1.29 billion funds raised on its flotation day.

 

Original article: Expansión (after EFE)

Translation: AURA REE

Foreclosures on Primary Residences Rise 8.4% in Q2

1/10/2014 – Expansion

The total number of foreclosure processes run in the second quarter of 2014 showed 32.960 cases, meaning a 1.2% advance over the first quarter of the year and a 14% upsurge if compared to Q2 2013. Out of all, 9.611 lawsuits concerned principal residence, by 8.4% more than in the same period of time in 2013, reports the Spanish Statistics Office (abbreviated to the INE by its name in this language).

Furthermore, 2.756 homes belonging to natural persons were not their primary residences, an appreciation of 1.3%.

If the data analyzed as a whole, seizure of dwellings accounted for 58.1% of all foreclosures. Specifically, 29.1% corresponded to principal residences of natural persons, 20.6% to houses owned by legal persons and 8.4% were other dwellings of natural persons.

According to the INE, a mere 0.052% of all main homes found currently in Spain (18.331.400 units), started a foreclosure process between April and June this year.

The statistical report also reveals that the second quarter of 2014 witnessed 21.7% of the total foreclosures on homes resulting from mortgages signed in 2007, 17.6% approved in 2006 and 13.3% – in 2005. In the meantime, the approval period 2005-2008 concentrates 63.4% of the total of lawsuits pursued in the second quarter of 2014.

Foreclosures Geographically

Considering the foreclosures by Spanish regions, one may discover that great majority of them was initiated in Andalusia (7.703 cases), Catalonia (5.696) and Valencia (5.365). On the other end, there rank La Rioja (101), Navarre (199) and the Basque Country (201) with the smallest number of seized properties.

More than a half (58.1%) of all foreclosures run in Q2 2014 was assigned to dwellings. The lawsuits were most frequent in Catalonia (3.994), Andalusia (3.981) and the Valencian Community (3.342), while not so much in La Rioja (61), the Basque Country (94) or Navarre (118).

The official statistics department reminds that not all foreclosure processes eventuate in eviction of the property owners.

 

Original article: Expansión

Translation: AURA REE

Sabadell’s Property Fund to Join the List of Socimis

1/10/2014 – Expansion

Banco Sabadell progresses on its plan to float several REIT firms, known as Socimis in Spain. By converting the real estate fund into such an investment vehicle, the entity aims at opening doors to institutional investors.

Sabadell BS Inmobiliario, since it is referred to, is one of the market veterans: set up in 2004, the fund manages a €1 billion worth of property. Today, the bank is the only owner of the holding as all shareholders left in March this year. Instead of closing and liquidating its fund, like other entities did, Sabadell decided to hand out equity to stakeholders.

Now, the bank preps the fund for listing it as a Socimi, possibly still before the year ends. With view to the move, Sabadell filed for an appraisal of the fund’s properties which include mostly tertiary (hospitals and offices), residential and industrial assets for rent.

Solvia – the Manager

If the plan comes true, the new Socimi will be administered by Solvia, the REO servicer of the bank. Solvia is also forging a fund intended for 30 hotel assets worth €1 billion in total. Odds are high for the vehicle to go public one day, too.

At the end of 2013, Sabadell BS Inmobiliario possessed 24 office complexes, three hospitals, 1.600 dwellings, 3.200 parking spaces, 69 retails and three industrial warehouses. Total area of these properties spreads over almost half a million of lettable square meters. Among the rented buildings one may find the Quiron hospitals in Barcelona, San Sebastian and Bilbao, the headquarters of Telvent (now Schneider Electric) and Urbaser in Madrid and Faurecia manufactures in Barcelona, Navarre and Valencia. One of its units stands in Paris.

Original article: Expansión (by S. Saborit)

Translation: AURA REE

Bankia to Close the Sale of €1.2 Bn in Big-Volume Loans

1/10/2014 – Expansion

Bankia is putting a lot of efford into two of the biggest divestments it is obliged to carry out due to nationalization. The group chaired by Jose Ignacio Goirigolzarri (pictured) will seal deals on two huge real estate-backed loans lent to developers and hotel owners amounting to €1.2 billion in total. According to sources close to the operation, the bank may receive between five and six hundred euros for them.

In contrast to the previous transactions, these loans are not non-performing, but sub-performing and refinanced. Thanks to the sale, Bankia will reduce default rate and obtain liquidity.

On one hand, Bankia is at the verge of closing the sale of €800 million in hotel and other credits with collateral properties, grouped in the Amazonas Project. On the other hand, the entity sells a €400 million worth of developer loans inside the Sky Project. Negotiations on the latter are now well under way.

The Amazonas

The project nears to changing hands. Bankia and its advisor Deloitte have selected the bidding finalists and the following days will reveal the name of the winner. They are two: Cerberus and Starwood Capital. The sector estimates that they may pay around €400 million for the portfolio.

Last year, Cerberus, advised by Irea, bought Bankia Habitat, the real estate servicer of the entity. Moreover, the fund developes its Spanish property portfolio with such jewels as Sotogrande, real estate branch of the NH Hotel Group, for which it had paid €225 million.

If it comes to Starwood, a partner of it participates in the auction on behalf of the fund. Starwood has got wide experience in the hospitality sector. It left its own hotel business (Starwood Hotels & Resorts) in 2000.

 

Original article: Expansión (by J. Zuloaga & Y. Blanco)

Translation: AURA REE