Month: December 2014

Villar Mir Raises €268 Million Funding For Canalejas Project

29/12/2014 – Cinco Dias

The Villar Mir and OHL Group closed Canalejas Project financing by signing a credit agreement for a maximum amount of EUR 268 million, making it the largest financing operation granted to a real estate development project in Spain over recent years.

Specifically, funding has been signed-on for a period of 10 years – 3 years of construction and 7 of exploitation, according to the company.

This transaction involves a group of Spanish and foreign financial institutions: Banco Santander, CaixaBank, Banco Popular Español, which have acted as mandated lead arrangers in addition to Bankinter, Unicaja Banco, MoraBanc Group, Inmomutua Madrileña and Generali Insurance and Reinsurance.

The Canalejas complex, developed by the Grupo Villar Mir, in a landmark location in Madrid will employ about 4,800 workers and reach an annual sales volume of nearly €200 million.

The project, which seeks to promote urban renewal of the iconic area in downtown Madrid also entails the opening of the first hotel of the Canadian luxury chain Four Seasons in Spain.

The 5-star luxury hotel will have an area of 26,000 sq. m, 215 rooms, banquets and meeting halls, 2 restaurants, a spa, gym as well as an indoor swimming pool. It will also feature between 28 and 30 residences for sale, spread over a total area of 6,000 sq. m.

Canalejas will also feature a shopping mall of 16,000 sq. m. over 3 storeys and an underground parking lot. All this will be complemented with an underground bus station on Calle Sevilla and refurbishment of the existing parking lot, which will be carried out by the City.

The purpose of this complex is to rehabilitate the historic downtown of Madrid and make use of 7 contiguous properties located on Calle Alcalá, Calle Sevilla, Plaza de Canalejas and Carrera de San Jerónimo. Having remained unoccupied for 10 years and some of them dating back to 1887, the properties were sold to Villar Mir Group from Banco Santander in a €215-million transaction.

Since they were acquired in December 2012, restoration work on various protected structures have been carried out as well as interior demolition and facade cladding works.

With respect to protected structures, there are over 130 listed elements of carpentry, locksmith’s works, stonework and stained glass windows. They will be restored and relocated in the future project to be fully operational in 2017.

The Canalejas project involves an important job creation feature. In the construction phase, from 2013 to 2017, 600 direct and 1,200 indirect jobs will be generated. The operational phase is expected to create over 3,000 direct or indirect jobs – 1,200 in the hotel and 1,800 in the shopping center.

Original article: Cinco Dias (by EFE)

Translation: Aura REE

Best Mortgages Before The End Of 2014

29/12/2014 – Expansión

The last few days leading up to the end of 2014 have been filled with the habitual summaries, assessments and balance sheets.

As far as the mortgage market is concerned, over the past 12 months there has been a reduction in differentials that banks add to the Euribor, a reference rate that is added to most adjustable-rate mortgages signed in Spain, which has registered record lows.

These factors have resulted in a higher number of mortgages signed from June to October this year, the last month for which the National Statistics Institute (INE) has released data. The number has exceeded those of the same month back in 2013.

In October, 17,687 mortgages were signed, 18.0% more than a year ago. In September, 19,323 or 29.8% more than in the same month of 2013; in August – 15,040 (23.8% increase); in July – 18,107 (up 28.8%), and in June – 17,137 (19.0% more).

But let’s look over this bit by bit. The average overall differential of banks at the beginning of the year was at 2.788%, according to Bankimia indices calculator, whereas just a few days short of the end of the month, it has dropped to 2.136%. The reason behind this decline is the appearance of new mortgages in 2014 and interest rate reduction in some of the already existing ones.

And according to forecasts, the path of the mortgage for next year will be similar, with steady reductions in differentials.

At the end of November, the Euribor was at 0.335%, as confirmed by the Bank of Spain. This is the lowest level in history and the result of monetary measures taken during the past year by the European Central Bank, with reductions in interest rates, reaching all the way down to 0.05%.

As December comes to a close, the ten most outstanding bank mortgages, according to Bankimia mortgage comparison website, are the following:

1. CajaSur Mortgage, from CajaSur: It starts with a fixed interest rate of 2.50% during the first two years and then Euribor +1.25% for the remaining repayment period. To achieve these conditions, the holder must have their payroll deposited directly to the bank and purchase three insurance plans (payment protection, home and life), plus a card and a pension plan. CajaSur finances up to 80% of the appraised value of a first home.

2. Ahora Mortgage, from Liberbank: No sign-up fee, starts with an interest rate of 1.95% for the first 12 months and then the Euribor is applied at +1.50% for the rest of the repayment period. The bank requires the holder to have their payroll deposited directly or have certified income of above 2,000 euros a month, as well as purchase a comprehensive home insurance plan and each loan holder must sign up for a card issued by the bank. This product is marketed throughout the country except for branch offices in Asturias, Extremadura, Cantabria, Castilla-La Mancha, Avila and Lugo.

3. HipoteCasa db Mortgage, from Deutsche Bank: It has a fixed interest that starts at 2.25% for the first 12 months. For the rest of the repayment period, the interest rate is variable and based on Euribor +1.59%. All this is contingent upon whether the appraised value of the property, a first home, to purchase is equal to or greater than 100,000 euros.

In addition, the holder must set up direct payroll deposit and three basic bills to the bank, plus household income must be over 30,000 per year. It is also required to hire both a credit and debit card, plus three insurances: payment protection, home and life.

4. Hogar Mortgage, from Caja de Ingenieros: It finances up to 80% of the lesser value between the purchase or appraisal of the home being bought, which must be that of primary residence. Throughout the first year a fixed interest rate of 2.35% is applied, while for the rest of the period, the Euribor at +1.59%. To obtain these conditions, the holder must set up direct payroll deposit and three debit of three utility bills, have a minimum account balance of $3,000 and purchase three insurance policies (payment protection, home and life) along with a credit card.

5. Postal Mortgage, from BanCorreos: During the first 12 months a fixed interest rate of 2.5 % is applied, while for the rest of the repayment period, a differential of 1.59% is added to the Euribor. It finances up to 80% of the appraised value of the house with a minimum of 80,000 euros. The holder must be linked with the banks through direct payroll deposit and hiring of a home and life insurance, as well as a credit card and a pension plan.

6. Freedom + Mortgage, from Banco Mediolanum: A variable interest rate based on the Euribor +1.65% is applied throughout the repayment period. For the best terms and conditions, the bank requires mortgage-holders to set up direct payroll deposit, have income above 35,000 euros a year, or purchase a life insurance. It finances up to 80% of the appraised value of the home.

7. Unoe Mortgage, from Unoe: No sign-up fee. It has an interest rate based on the Euribor +1.65% if the payroll is directly deposited to the bank and if a home insurance as well as a single-premium financed life insurance policy is purchased along with it. It provides up to 80% of the appraised value of the property with a minimum of 30,000 euros.

8. Net Fidelis Mortgage, from Caja España-Duero: It can only be hired over the internet. The first 12 months bear interest at 2.25%, while to the rest of the repayment period applies Euribor +1.65%. To obtain this mortgage, the owner has to set up direct payroll deposit, hire insurance (life, payment protection and home), two cards and a pension plan through the bank. It finances the lesser value of 80% of the price of sale and appraisal.

9. Triodos Mortgage, from Triodos Bank: In this mortgage plan, the interest depends also on the energy rating of the house: the more sustainable, the more economical. Interest rate is based on the Euribor +1.65% if the holder also hires home and life insurance, sets up direct payroll deposit and direct debit of three utility bills, and signs up for both a credit and debit card.

10. Naranja Mortgage, from ING Direct: No commissions, the interest is the Euribor at +1.69% if the holder sets up direct payroll deposit or deposits at least 600 euros a month or maintains a minimum account balance of 2,000 euros, among others.

All these mortgages have a repayment period of up to 30 years. In the case of those offered by Unoe and ING Direct, the period goes up to 35 and 40 years, respectively.

The selection of loans was carried out among those offered by banks and did not take into account those aimed at specific target demographics, such as youths or civil servants, among others.

Original article: Expansión

Translation: Aura REE

Formulas To Capitalize On Construction Sector Recovery In Spain

29/12/2014 – Cinco Dias

The housing market has completely transformed since the burst of the housing bubble; it has gone from what had long been an investment sector to avoid to one that is now giving way to new business models with interesting opportunities for private owners as well.

“2015 is going to be, as it has been since 2014, a good time to buy properties to rent,” says Julio Gil, president of the Real Estate Studies Foundation (EIF), who argues that with an average annual return of 4.5%, residential leasing has become “a much more controllable investment for a small-scale investor” and more advantageous than deposits, given the drop in interest rates to historic lows, or equities, and the ups and downs in strong market volatility.

From his point of view, moreover, this approach allows the individual to benefit from the progressive rise of the rental market — the crisis has reduced the traditional preference for homeownership among Spaniards — exploiting the gap left by large buyers.

Experts envisage new business models with investment opportunities in the housing market

Some international investment funds that have been entering the Spanish market over the last year and a half have also chosen to purchase residential property to lease, e.g. Blackstone that acquired 1,860 homes to rent in the Municipal Housing and Land Company of Madrid, or Azora and Goldman Sachs, who bought 2,935 homes from the Housing Institute of the Community of Madrid (Ivima). However, most have opted to implement this strategy in the tertiary sector.

“The prospects for rent growth are somewhat feeble, while still observing an upward trend in prime-location office rents” highlights a recent report from the real estate consulting firm Knight Frank, pointing to Madrid as one of the rising markets with returns ranging from 5.5% to 8% depending on the type of asset.

This market, however, is not off-limits for the small investor. Despite the stagnant results being seen throughout the first quarter, a handful of investment companies in the real estate market, the so-called REITs, have begun trading during this year. These investment vehicles, which spend 80% of their resources on investing in rental property, are exempt from taxes and their shareholders are only taxed on the dividends they earn.

“Their main targets are prime-location offices and shopping centers, although renting houses and hotels is also on their business plans,” states the latest UBS outlook report, noting that at its base scenario, “The annual return for investors will be in a range between 7% and 10% over a three to four years timeframe, a competitive return even compared to the broad Spanish equity market.”

In terms of prices, Swiss bank experts point out that the price of housing in Spain has fallen between 30% and 40% from its previous highs, a decline despite which “the price of houses in Spain is not cheap”.

In light of this development, they expect further reductions of between 1% to 3% in the coming year and price stagnation in subsequent years. Given this situation, on the whole, UBS notes that it sees no investment opportunity in the Spanish residential sector except the rental market.

Thus investment in housing in the wait of a strong appreciation in the medium term is what all consulted experts dismiss at any rate. With that in mind, real estate transactions are still associated with obtaining a mortgage loan for individuals without large financial resources.

Obtaining a mortgage is a path paved with requirements due to a persistent credit crunch but it is beginning to pick up on the bank windows with deals nearing Euribor plus 1.5% variable interest, and a close entanglement with the bank. The conditions are often particularly advantageous on still strong housing properties, appropriated by banks and SAREB and appearing on their balance sheets. A possible opportunity for those who decide to take advantage of the construction sector recovery in the new year.

Original article: Cinco Dias (by Juande Portillo)

Translation: Aura REE

Housing Sector To Improve Region To Region RECOVERY / Large Cities Are Initiating The Climb Out Of The Crisis

26/12/2014 – Expansión

Housing recovery will be asymmetrical, as it is in the real estate market — experts and industry players are convinced. Areas where fewer new homes remain unsold and price adjustments have been significant will take less time to return to normal levels than in the more built-up provinces.

What happens in big cities is often a leading indicator of the coming trend. And in Madrid, housing price adjustment has been more than 40% and things are starting to move again in the real estate market. That is, investors have already become more active, considering that home value drop will not deepen much further. The same thing is happening in Barcelona and major cities in the Basque country. The surprise is that real estate consultants and economists already see the light at the end of the tunnel in Mediterranean tourist destinations such as the Costa del Sol – which always falls and recovers before the average of other Spanish regions – and parts of Levante, the eastern coast.

Specifically, there are already 20 provinces that are on the road to recovery, after seven years of continuous descent. This is much better than the 2013 scenario, in which only eight provinces were showing signs of improvement. This was noted in a report by Deloitte in which the exit speed of the real estate crisis is measured by region.

According to the study, the Spanish provinces with the best real estate score are in order as follows: Madrid, Álava, Barcelona, Guipúzcoa, Vizcaya, Navarra, Cantabria, Zaragoza, Lleida, Baleares, Segovia, Valencia, Asturias, Huesca, Burgos, Valladolid, Palencia and Soria. That is to say, these are the regions where the real estate market will see the greatest recovery, i.e. more and more cranes, construction projects and mortgage subrogation will begin to pop up.

On the opposite end, Almería, Ciudad Real, Toledo and Castellón will take the longest to recover, “due to both their worse relative position in macroeconomic terms and weaker real estate sector activity, heavily penalized by oversupply.” Yes, it is remarkable that this tail-end has shrunk from having 21 provinces in 2012 to only four this year. The remaining areas (25 provinces) are at a midpoint, meaning they will recover in ‘a second phase’”.

It is also important to note that 18 of the 20 provinces that will get out of the housing crisis early are situated in the North. The other two are the Balearic Islands and Valencia (see chart). And none of the southern provinces will recover in the first of the three exit phases of the housing crisis that Deloitte has set. “The North will climb out of the crisis faster than the South, since it is not so contingent upon tourism. Furthermore, in the North, urban residential development has not been as significant as in the South,” said the Director of Deloitte Real Estate, Javier Garcia-Mateo.

The regions with the highest housing stock are Valencia (164,000 homes), Andalusia (102,500) and Castilla-La Mancha (83,700). Together, these three regions account for more than half the housing surplus at the end of 2014, according to the Real Estate Institute Business Practice Pulsometer, which estimates the stock of unsold new homes at the end of 2014 at 652,000, 14.8% less than in 2013. On the opposite side, Extremadura (3,238), Navarra (3,854) and Baleares (7,965) have the lowest number of homes remaining unsold. Catalonia has a surplus of 12,977 homes, less than half that of Madrid (27,198).

Original article: Expansión

Translation: Aura REE

Hispania, Merlin, Lar And Axia Invest €2.4 Billion In Less Than A Year

26/12/2014 – Expansión

SINCE MARCH / The four largest real estate companies listed on the continuous market (known as ‘the trading floor’ or simply, ‘the Floor’ in the US) have bought offices, homes and shopping centers, spending all the capital from their IPOs.

From non-existent to becoming an industry benchmark – listed REITs have become a big business in record time with a total worth of €2.4 billion. Lar España, Hispania Real, Merlin and Axia Real Estate Properties – the four REITs that have made their debut this year on the continuous market – managed to raise 2.5 billion euros in their respective IPOs since March. Nine months later, they have already invested 2.438 billion, exceeding all forecasts.

The successful adaptation of these ‘Anglo-saxon’ REITs started with their going public. The leaders of these companies convinced international funds like Pimco and T. Rowe, prominent financiers such as John Paulson and George Soros as well as investment firms like UBS, JPMorgan and Citigroup, to invest in real estate companies that were founded without any assets. Only Merlin Properties, which went public on June 30, had a preliminary contract to acquire the company Tree Investments, which owns 880 branches and five of BBVA’s office buildings.

Merlin is the REIT that has invested the most and the fastest. Thanks to several large-scale transactions, it has already spent 1.188 of the €1.25 billion it raised in its IPO. Thus, in addition to 739.5 million euros spent on BBVA buildings, Merlin also closed the biggest deal made by a REIT on a single property: the Marineda shopping center in La Coruña, Galicia, for 260 million euros. It also paid 130 million for five office buildings.

The quick closing of these operations has led those in charge of Merlin to start working on raising new funds to undertake further purchases. To do this, they have chosen to refinance the bridging loan they requested before forming the REIT in order to buy the BBVA properties. The company, which has been negotiating for months, could sign the agreement in the first quarter of 2015, financial sources point out.

Hispania

Created by the Spanish consulting firm, Azora, specializing in the management of rental and student housing, Hispania Real Estate Assets company made its debut on the stock market with a corporate structure that was different from that of other REITs. Soon after, the company created a subsidiary, Hispania Real, under this same framework, through which it has channeled much of its purchases.

Among the REITs, Hispania Real boasts the most diversified portfolio, with several office buildings, more than 400 homes, several hotels and the majority stake in several companies, including La Once’s real estate company, Oncisa.

Hispania’s last major transaction has surprised the entire industry: the acquisition of Realia. After allying with Fortress, King Street and Goldman Sachs, the three biggest creditors in real estate history, Hispania Real has launched a voluntary public takeover offer for 100% of Realia at €0.49 per share, i.e. €150 million. Having spent what was left of the 550 million obtained in March to go public in buying 50% of Realia’s debt, it has requested two lines of credit from Santander and CaixaBank worth 250 million euros in order to guarantee the purchase of the company.
While awaiting the close of this acquisition, Hispania is analyzing new 1.5-billion operations, including the purchase of a group of 16 hotels from the Barceló hotel chain for $425 million, as reported by EXPANSION on December 2.
Today, at a special meeting, shareholders will be asked to make a capital increase to address current and future projects.

Funding for projects

The other two REITs present in the continuous market (there are three other smaller REITs trading on the alternative investment market: Promorent, Entrecampos Cuatro and Mercal) — Lar España and Axia Real Estate — have invested €738 million in real estate.

For Axia, which raised 360 million euros in its IPO in July, has not only invested everything it had raised from international funds, but has also resorted to bank financing for its last operation: a portfolio of Credit Suisse real estate assets, which includes four offices and a retail space, costing a total of 180 million euros.
Lar España, which still has 63.57 million of the 400 million it raised, has also resorted to bank financing to acquire an office building in Madrid. In its market debut, the heads of Lar España said they would benefit from an additional 400 million euros from bank financing to deal with their operations.
New companies will soon be added to the list of REITs on the stock exchange. Among those confirmed are GMP and Bulwin, managed by the listed Quabit. Other companies are forecast to join the ranks as well, especially those managed by large international funds that have channeled purchases in Spain through REITs.

Original article: Expansión (by Rocío Ruiz)
Translation: Aura REE

Aktua To Manage Assets Of Greek Alpha Bank

26/12/2014 – Expansión

Greece’s Alpha Bank and Spain’s Aktua Financial Solutions have struck up an agreement to establish a joint venture dedicated to managing “a significant amount” of risk assets of the Greek bank, called Aktua Hellas, in which the Spanish institution will control 55% and the Greek institution, the remaining 45%.

Under the agreement, which is subject to the approval of regulatory authorities and definitive documentation, Aktua Hellas stems from a long-term partnership for the exclusive management of a large volume of (non-performing) toxic assets of Alpha Bank.

Aktua Hellas will be a pioneering platform in the Greek market, specializing in the management of risk assets with the aim of speeding up amicable resolutions as well as mutually agreeable and non-judicial solutions.

“It is an important step forward for the continued recovery of the Greek economy and financial system,” said Demetrios Mantzounis, President of Alpha Bank.

Original article: Expansión

Translation: Aura REE

2015: The Year The Housing Market Will Take Off

26/12/2014- Expansión

THE RESIDENTIAL MARKET’S TURNAROUND IS COMING / Analysts believe that the housing sector is beginning to show signs of stabilization, especially in big cities. Next year, it is predicted that more homes will be sold, more mortgages will be granted and more buildings will be built, although still at low levels. Regarding the change in housing price, experts believe it will move towards stabilization, but fall more in the areas that still have much ‘stock’.

The residential market has hit rock bottom after seven years of freefall. This means two things: first, the sector activity is minimal; and second, it will finally start to go up again. In 2015, more homes will be sold, more buildings built and more mortgages granted, according to all the experts consulted by EXPANSION. There is no unanimity, however, regarding the outlook for housing price behavior. In any case, the consensus is that both the falls or rises will be moderate.

Is it recovery we’re talking about? No, not yet. But it is starting, little by little, to take off. As exemplified by José García Montalvo, Professor of Economics at the Pompeu Fabra, “If 2014 was the year ‘zero’ for the housing market, 2015 will be year ‘one’; we’re starting from a very low ground and everything is subject to the international and domestic economy, but next year will be better than this one for the residential market.”

Indeed, 2014 marked the turning point that the real estate sector was seeking. Sales began to grow again, mortgage lending rose, prices increased slightly in certain provinces, housing became a profitable investment and rent began to gain a few points. Vital signs in residential construction have come round.

Goodbye, housing slump, hello, “sustainable recovery” – explained the director of the research department at pisos.com, Manuel Gandarias, on the outlook for 2015.

“We have seen increasing sales in recent months and we expect 2014 to close with 310,000 household transactions, an increase of about 7% with regard to last year,” said Gandarias, as an introduction to his forecasts for the coming year. “The expectation for 2015 is higher, although there is some uncertainty as to how the new tax reform will affect sales. But all macroeconomic indicators point to growth in sales.”

Jaime Díaz de Bustamante, partner of the real estate agency, Ramón y Cajal, stresses that “there are four factors that will significantly impact the intention of buying a home in 2015.” These are “the general election, the high level of unemployment in Spain – which can lead to a high supply and a much reduced demand –, increased inversion of the age population pyramid – the age bracket for youth between 30 and 40, which is very important for potential buyers, is increasingly limited –, and the increased rental rate.”

In addition, construction activity will rise more than 10%, according to Julio Gil, president of the Foundation for Real Estate Studies. “We’ve hit rock bottom. The possible adjustments will be more and more moderate. Real estate activity will begin to grow again in 2015.” Very slowly, cranes will return to sneak into the country’s urban landscape, but still far from the levels considered sustainable for the construction sector to meet the housing demand (300,000 per year).

In the first three months of 2014, the only months that have official data, the construction of 7,700 homes began, suggesting to many analysts that the year will not close with well above 35,000 homes, a negligible level compared to the 665,000 that began in 2006, when the bubble was boiling at maximum heat. Therefore, it is very easy to exceed that figure of 35,000 in 2015, but this is not a definitive indicator of real recovery.

What can underpin the beginning of the takeoff is mortgage lending, which will play a key role in a year of remarkable macroeconomic growth as is estimated for 2015, according to the predictions of the major brokerage houses (GDP will advance more than 2%). The subscription of bank loans for housing payment has been growing in recent months at rates of 30%, which is a high rate, but only in comparison to a year of near stagnation as was 2013. Today, the mortgage market is still not even 25% of what it once came to be. “Although to a very limited extent, the long-awaited mortgage financing seems to have arrived,” said Beatriz Toribio, head of the research department at fotocasa.es.

As for the prices of apartments, there are more questions, but the consensus tends towards stabilization. There will continue to be discounts in most provinces, but “they will be lower; they will have less bargaining power,” said García Montalvo. The Spanish average home costs 6.2 annual salaries of a family. For its price to be reduced to five annual salaries (which would be considered “sustainable” in the context of wage cuts), then apartment prices should lower another 20%. Thus, in general, the price adjustment might continue.

 “In national terms, they will rise slightly (from 0.1% to 5%), but in some mature markets of Madrid, Barcelona, etc., they will rise higher,” said José Luis Ruiz Bartolomé. This property consultant in 2010 wrote the book, ‘Adiós, ladrillo, adiós’ (in English, ‘Goodbye, Brick, Goodbye’) and now another one called ‘Vuelve, ladrillo… ¿vuelve?’ (in English, ‘Brick is Back… Again?’) That says it all.

Original article: Expansión (by Juanma Lamet)

Translation: Aura REE

Santander Copies ‘Hispania Model’ To Turn Banif Properties Into A REIT

26/12/2014 – El Confidencial

The growing REITs market just got a new tenant – Banif Properties fund, Santander’s historical vehicle that has just turned into a REIC (Real Estate Investment Company) as a first step towards becoming a REIT (Real Estate Investment Trust).

Hispania, managed by Azora, used the same model when it went public as an investment company, a title under which it conducted its first operations, such as the acquisition of Hotel Guadalmina. Then, later on, it developed its own REIT.

The main advantage of this formula –and one of the substantive reasons why they have convinced Santander– is its greater flexibility, as it allows the company to buy debt, an option that is prohibited to REITs. Thus, having established itself first as a real estate investment company, the new Banif may, for example, seize assets of other companies by acquiring their financial obligations, a growing business in which banks are the major players.

Subsequently, once they launch their own REIT, the now defunct real estate fund will benefit from the tax breaks that this legal framework offers property management companies and put an end to six long years of questioning over which was the most important real estate investment vehicle in Spain.

Despite the scandal this entailed back in 2009 – leaving thousands of investors locked in the background, after selling major assets such as the Plenilunio shopping mall and Edificio España in recent years and partially splitting with a monetary fund exactly a year ago – Banif Properties can still boast with assets worth €1.538 billion at the end of November, with a net asset value of €943 million.

On December 1st, just one day after the management fund, Inverco, endorsed these figures, Santander officially approved the conversion of Banif Properties into LURI 6 SII, a change that has already received the green light from Spain’s National Securities Market Commision (CNMV).

BANK TURN

Santander Real Estate will remain the management company of the future REIT, which is currently in the process of readjusting its activities to the new corporate reality. This is a difficult task, since the new REIT will have around 10,000 properties, in addition to the assets it can acquire via debt purchasing operations; it will also have a two-year period to go public in the stock market.

With the transformation of Banif Properties into a REIT, Santander is getting ahead of its competitors that are also working on converting their old real estate funds, but with different plans. An example of this is Sabadell, which is also planning on taking advantage of this opportunity to inject liquidity into certain assets that had been left dry during the crisis and that are under the management of its affiliate, Solvia.

The formula chosen by Santander will allow Banif Properties to purchase debts, something that is prohibited to conventional REITs

BBVA is another institution that has analyzed this possibility, while BNP has been working along the lines of forming such companies as a way to provide another offer for its private banking customers. Bankia just transformed its real estate fund into a corporation, which is a step towards becoming a REIT while it sells its assets selectively, as stated by The Confidential.

The size and importance of Banif Properties, however, makes Santander’s REIT a top player in the market. The institution, chaired by Ana Botín, is proving particularly active in the budding recovery of the national real estate sector, as it was made apparent with the purchase of Metrovacesa from Bankia, for example.

Original article: El Confidencial (by Ruth Ugalde)

Translation: Aura REE

British Real Estate Company Pays 451 Million For Spain’s Largest Shopping Mall

26/12/2014 – lainformacion.com

The British property group, Intu Properties, has struck a deal with the Orion European Real Estate fund to acquire the Puerto Venecia complex in Zaragoza, the largest shopping mall in Spain, for €451 million.

The acquisition of Puerto Venecia mall by Britain’s Intu follows the group’s purchase of the Parque Principado shopping mall in Oviedo last year.

Puerto Venecia has a retail park of 82,600 square meters which opened in 2008, as well as a leisure and fashion area of 130,000 square meters which opened back in October 2012.

The Orion European Real Estate III fund had a 50% stake in the shopping mall since it was built and launched in 2008, and last year British Land acquired the remaining 50% for €144.5 million.

Rental income from Puerto Venecia shopping mall, which houses stores such as El Corte Inglés, H&M and Apple, is estimated at €22.4 million, according to Intu Properties, which estimates a net initial return of 5%.

“The transaction substantially accelerates our activities in Spain, which is a country where we see major opportunities for the type of genuinely regional destination center in which the Group specializes,” commented David Fischel, the CEO of Intu.

In this sense, Finchel highlighted that Puerto Venecia offers an attractive combination of shopping, dining and entertainment experiences, emphasizing that the mall is recording a strong growth in retail sales and provides an “excellent template” for the future development of sites “such as in Malaga,” where the British company expects to make significant progress in 2015.

Original article: lainformacion.com

Translation: Aura REE

Lar Purchases An Office Building In Madrid For €12.7 Million

24/12/2014 – Expansión

The REIT, Lar Spain Real Estate, has closed the sale with the company, Bernal Brothers Pareja, of an office building located in the center of Madrid, on Calle de Eloy Gonzalo, number 27, for a total of €12.73 million.

Built in the 1960s’, the building boasts 6,232 square meters of gross leasable area (GLA) across nine stories, as indicated by Grupo Lar’s listed real estate investment company to Spain’s National Securities Market Commision (CNMV).

The first seven floors, which are currently being used as offices, can be converted for residential use, while the entire ground floor and basement, which represent 23% of the total leasable area with 715 square meters per floor, are leased exclusively as commercial premises.

Currently, the building — just one kilometer away from the Paseo de la Castellana and within the M-30 — has an occupancy rate exceeding 95%.

As pointed out by the director of the company, Miguel Pereda, the acquisition of the building is a strategic investment opportunity for Lar Spain Real Estate, as the property has a large potential for improvement in terms of management as well as overall revenue and capital value.

With this operation, the REIT has invested €330.900 million of the €400 million it raised in the IPO, of which 176.8 million were allocated to five malls; 90.9 million to four office buildings in Madrid; 44.9 million to eight logistics warehouses in Guadalajara; and 18.3 million to three medium-sized shopping centers in Madrid and Cantabria.

Original article: Expansión (by EFE)

Translation: Aura REE