Hispania Buys 2 Office Buildings From Deka For €54.5M

25 June 2015 – Hispania Press Release

Hispania, through its 100% subsidiary company Hispania Real SOCIMI, S.A.U., has acquired two office buildings in Madrid from Deka. (…)

The Foster Wheeler building is located on C/ Gabriel García Márquez, 2, in Las Rozas, to the Northwest of Madrid. It has a Gross Leasable Area (GLA) of 11,058 m2, spread over three floors and 544 parking spaces. The asset has an occupancy rate of 100%, since it houses the headquarters of Foster Wheeler under a lease agreement.

The 4B Cristalia building (pictured above) is located in the Cristalia business park to the Northeast of Madrid, and has a GLA of 10,928 m2, spread over seven floors, plus 202 parking spaces. (…)

The purchase price agreed for both buildings was €54.5 million, which was fully disbursed with Hispania’s own funds. JLL acted as advisor to Hispania in this transaction.

These two acquisitions perfectly fit with Hispania’s strategy for the office segment in consolidated areas of Madrid.

Both buildings are very well maintained and in optimal condition.

Original story: Hispania Press Release

Edited by: Carmel Drake

San José Will Surrender 35% Of Its Capital If It Fails To Repay Loan

25 June 2015 – Bolsa Manía

San José will surrender shares representing up to 35% of its total capital to a group of six banks to repay a €100 million loan, in the event that it fails to repay said loan before its maturity date in October 2019.

The entities that have signed this loan agreement are: Banco Popular, Barclays Bank, Bank of America Merrill Lynch, Deutsche Bank, Sareb and KutxaBank.

To this end, San José’s shareholders’ meeting has approved the issue of “warrants” in favour of these entities. These warrants are securities that include the option to subscribe to shares in the company to offset any debt.

The loan linked to these warrants is one of the tranches that San José restructured after it reached a refinancing agreement at the beginning of the year. This agreement already required the surrender of its entire real estate division to the banks to repay the majority of its liabilities (€1,329 million).

The rest of the debt (€297 million) was divided into three tranches, one of which provides for the repayment of the liability in the event of non-payment of the loan on the maturity date, in four years time.

San José subjected its refinancing agreement to a judicial homologation process, in order to extend the agreement, reached with the majority, to all of its creditor entities.

Thus, Sareb and KutxaBank are included in the agreement and will have “warrants” even through they rejected the restructuring agreement, according to the shareholder documentation provided by the construction, services and renewable energy group.

New growth phase

In its presentation to shareholders, San José said that this refinancing agreement adapts the maturity dates to the cash flow streams and provides the company and its subsidiaries with sufficient financing lines to properly perform their activity and embark on the new growth phase.

The company highlighted the increase in its international business, which now accounts for more than half (59%) of total revenues, and the prevalence of its non-residential construction works, which dominate 87% of the business.

The shareholders of the company led by Jacinto Rey also agreed to appoint José Manuel Otero Novas as an external director of the company.

Original story: Bolsa Manía

Translation: Carmel Drake

Blackstone To List Its Socimi ‘Fidere Patrimonio’ On MAB

25 June 2015 – El Mundo

Blackstone is going to list Fidere Patrimonio on the Alternative Investment Market (‘Mercado Alternativo Bursátil’ or MAB). The Socimi was constituted with a stock of social housing purchased by  the private equity firm in Madrid in recent years. The shares in the new Socimi will start trading on Monday 29 June, at €21.08 per share. This price represents a company valuation of €212 million.

Blackstone created Fidere Patrimonio with a portfolio of 23 social housing developments (rental properties), containing 2,688 apartments, which the fund has bought over the last few years, mainly in the Community of Madrid. (…).

With this IPO on the MAB, Blackstone seeks not only to comply with the rules governing Socimis, but also to acquire a financing mechanism for raising funds, which will to drive the future growth of the company, and will also “raise the company’s profile and attract new shareholders”.

In this sense, Fidere Patrimonio says that it will focus its investment policy on new companies with real estate portfolios owned by Blackstone’s investment funds and on “analysing new investment opportunities that arise in the market”.

‘Solvent’ tenants

However, the Socimi has said that, for the time being, it will focus on managing its current portfolio of homes “with the aim of increasing shareholders’ returns”. To this end, it has revealed that its leasing policy for social housing is based on “selecting tenants who are economically solvent and who have long-term visibility over their income”, in order to increase the occupancy rate of its homes.

Specifically, the company asks its tenants to provide their last two payslips and then checks that the percentage rental spend will not exceed 40% of their (respective) salary; it also performs checks to confirm that prospective tenants are not registered on Asnef’s credit black list. (…).

Blackstone’s Socimi is aiming to secure an occupancy rate of between 80% and 95% for its housing stock, compared with its current rate of 76% and the 2014 year-end rate of 68%.

Profits and dividends

Meanwhile, Fidere Patrimonio closed 2014 with a net profit of €1.6 million, whereby overcoming the “losses” that it had recorded in the previous year. The Socimi’s turnover amounted to €5.54 million, of which €4.6 million was generated by the social housing in Madrid that the fund purchased from the EMV.

In terms of financing, the firm has financial net debt of around €65.7 million, equivalent to 22% of the market value of its assets. The company considers that this “reduced” leverage will encourage the payment of dividends.

Original story: El Mundo

Translation: Carmel Drake

Carmena Commits To Studying Operación Chamartín

25 June 2015 – Expansión

The mayoress of Madrid, Manuela Carmena, has confirmed to the Chairman of the Distrito Castellana Norte (DCN), Antonio Béjar, that she is committed to studying the draft plans for the extension of the Paseo de la Castellana, according to sources close to the company.

Carmena met with the project’s leaders on Wednesday, for around an hour, in an atmosphere characterised by the “utmost cordiality”.

During the meeting, Béjar described the planned development to the mayoress of Ahora Madrid. He explained that the project aims to promote the DCN through its Partial Plan and that it will be one of the most important city projects in Europe.

At the end of the meeting, Béjar seemed optimistic and said that he hopes that the Partial Plan will be approved at an upcoming plenary session, once the Town Hall’s new government has analysed it in detail.

The project will extend the Paseo de la Castellana north by 3.7 km and involve the redesign of an area covering 311 hectares. It will also include the construction of 17,700 homes, 56 hectares of green space – half the size of the Retiro park – and several skyscrapers.

Original story: Expansión

Translation: Carmel Drake

GS & Cerberus Exit ‘Project Elcano’ Due To Political Uncertainty

24 June 2015 – El Confidencial

Banco Popular, led by Ángel Ron (pictured above), is seeking to divest real estate assets worth €500 million (Project Elcano), but the political uncertainty in Spain is making investors nervous.

According to sources close to proceedings, the main candidates in the running to take over Popular’s portfolio – namely, the private equity fund Cerberus and Goldman Sachs – have decided to postpone investment until after the general election in November, by which time the current uncertain outlook in the country should have cleared.

The same sources add that these two candidates have indicated to Popular that, given the situation in the country following the results of the municipal and regional elections and the subsequent (political) agreements being made, they are not willing to pay the price demanded by the bank; i.e. if the entity really wants to sell, then it will have to lower its (price) expectations.

Ron’s response has been negative because he is not willing to assume additional losses over and above the provisions already recognised against this portfolio. Moreover, other parties are interested in the operation, which means that it could still go ahead before the elections. A spokesman for Popular declined to comment on this information.

This withdrawal is not an isolated case. The uncertainty generated following 24-M (the municipal and regional elections held on 24 May) has had a dual effect amongst the large international investors: firstly, it has made them cautious and slam down on the breaks, whereby delaying numerous deals. Secondly, it has made them reduce their bids, which has punctured the emerging bubble that was forming in the Spanish market, particularly with respect to high quality assets. (…).

Nervousness in the market

Thus, Popular is the latest victim of this new environment in the Spanish market. However, investors and asset managers consider that the case of this bank in particular in more concerning. They are worried about Popular’s sizeable exposure to real estate (it holds around €11,000 million of RE on its books, net of provisions), because they consider that it is not sufficiently provisioned and its latent losses may require new capital contributions. As a result, the announcement that it was going to divest an initial package of €500 million assets generated relief in the market.

For this reason, these latest problems around closing the sale have made some players in the market very nervous. Yesterday, that resulted in decreases of 1.16% on the stock exchange on a day of increases for the Ibex. Popular’s share price has increased by around 15% this year, i.e. by more than the rest of the sector, with the exception of BBVA and Sabadell, however its valuation still falls below those of the major players in the sector at 0.76 times its book value. (…).

Original story: El Confidencial (by Eduardo Segovia)

Translation: Carmel Drake

GreenOak Buys 5 Logistics Assets In Madrid For €75M

24 June 2015 – Expansión

GreenOak hereby completes its second major deal in Spain. Over the last few months, the US fund has closed the purchased of five logistics assets in the Community of Madrid, which cover a surface area of 200,000 m2 (100,000 m2 of facilities and 100,000 m2 of land).

Based on the prices of these assets in the market, GreenOak must have paid between €60 million and €75 million for the five assets, according to various real estate sources.

The US fund is planning to continue its growth in this segment and has already agreed to purchase another three logistics assets, also in the Community of Madrid, which will add a further 100,000 m2 to GreenOak’s portfolio in Spain.

The fund plans to continue acquiring assets – in Barcelona, Zaragoza and Valencia as well – to reach (a surface area of) half a million square metres over the next 12 months.

All of the assets purchased by GreenOak are located in Getafe and in the Corredor del Henares and are currently leased out to companies such as Seur, Montfrisa and TransXtar. The vendors have been banks, other funds and family-owned companies.

“Logistics is an asset class where scale and experience make a difference. We are focusing on Spain, where we have the strongest interest”, says John Carrafiell, founding partner at GreenOak.

“Given our resources to undertake investments in the sector, our team on the ground and our real estate due diligence skills, GreenOak can close deals quickly, with investments of between €5 million and €100 million”, says Carrafiell.

The chief executive at GreenOak is leading the fund’s strategy in Spain first hand. Carrafiell is regarded as one of the gurus of global real estate investment. He used to lead Morgan Stanley’s business in this segment and in 2004 he closed one of the largest deals ever in the UK, the purchase of Canary Wharf.

Fund history

After leaving Morgan Stanley, Carrafiell created GreenOak in 2010. Since then, the fund has raised assets under management amounting to €4,751 million and has opened offices in USA, London, Seoul, Munich, Tokyo and Madrid.

GreenOak signed its first major purchase in Spain last year, with the acquisition of seven shopping centres from the Dutch group Vastned Retail for €160 million.

Moreover, in recent months, GreenOak has tried to enter the office market. It was in the running for the purchase of Castellana, 77, which was eventually sold to GMP; and Castellana, 89, which was acquired by Corporación Financiera Alba, owned by the March family. The fund expects to close the purchase of offices and shopping centres within the next few weeks.

 Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

Spain’s CNMV Authorises Slim’s Takeover Of Realia

24 June 2015 – Expansión

The offer presented by the Mexican businessman was competing against a bid submitted at the end of 2014 by Hispania, the Socimi in which George Soros holds a stake.

According to reports yesterday from the market supervisor, Spain’s National Securities Market Commission (CNMV) has approved the public offer for the acquisition of shares (takeover or OPA) that Carlos Slim (pictured above) presented for 100% of Realia, valued at €178 million.

The body led by Elvira Rodríguez believes that the terms of the offer conform with ruling legislation and deems that the contents of the brochure explaining the operation are sufficient (following the latest submission of information by Slim on 16 June).

Slim offered €0.58 per share, compared with €0.49 per share offered by Hispania. Nevertheless, both prices fall below the current market value of the real estate company, which closed trading on Tuesday at €0.685 per share.

Carlos Slim has already taken control of Realia, since he recently bought the 24.9% stake that Bankia held; it used to be the second largest shareholder of the real estate company. The primary shareholder is FCC, and the Mexican businessman is, in turn, the primary shareholder of FCC.

Original story: Expansión (by E.P.)

Translation: Carmel Drake

HIG Capital Buys ‘Plaza Éboli’ Shopping Centre For €30M

24 June 2015 – Expansión

This purchase represents HIG Capital’s eighteenth investment in Europe since early 2013 and its fifth in Spain. The private equity fund is based in Miami. 

The private equity fund HIG Capital has acquired the Plaza Éboli shopping centre in the Madrilenian suburb of Pinto…from the venture capital firm Doughty Hanson.

The company has not revealed the consideration paid, but reports say it amounted to €30 million.

The shopping centre, which opened in 2005, has a surface area of more than 31,000 m2 and its tenants include large retail distributors, such as Inditex, H&M, C&A and Cortefiel.

HIG is continuing to expand its exceptional portfolio of real estate assets in Europe, which span both financing and capital contributions. It places a special emphasis on opportunities in small- and medium-sized companies, its target market.

HIG’s Director, Ahmed Hamdani, says that the purchase of the Plaza Éboli shopping centre “demonstrates” the company’s capacity to “identify assets with strong growth potential” and to close “complex acquisitions” in short time frames. (…)

Since it was founded in 1993, HIG has invested and managed more than 200 companies all over the world. The firm’s current portfolio comprises 80 companies with aggregate annual revenues of more than €22,000 million.

Original story: Expansión (by M. L. Verbo)

Translation: Carmel Drake

Andalucian Gov’t May Exercise Withdrawal Of Eviction Orders

22 June 2015 – Europa Press

At their first meeting on Friday, Susana Diaz’s new Executive Board approved the launch of the proposed draft bill for the withdrawal of evictions, which will allow the Government to exercise the right of withdrawal in the case of mortgage foreclosures conducted over free (non-subsidised) housing by financial institutions.

The decision was announced by Manuel Jiménez Barrios, the Vice-President of the Government and Minister for the Presidency and Local Government, at a press conference. He explained that the Government may exercise the right of first refusal on purchasing homes or buildings that are subject to mortgage foreclosure or the settlement and payment of mortgage-back debt.

“With the legal alternative of withdrawal, our main objective is to obtain social housing for rent, in order to provide a solution for families that have been deprived of their homes as a result of the eviction process”, said the Vice-President of the Government.

Jiménez Barrios insisted that that Andalucian Government is pursuing a “triple objective”, namely: to enable affected families to stay in their homes; to increase the Government’s stock of public residential housing linked to social policies; and to ensure that there is sufficient supply in the hands of the Administration aimed at vulnerable people and those with special difficulties.

The Vice-President also said that the aforementioned legislation will be rooted in the approval of the Regional Housing Plan, which is now in its final stages; according to his estimates, it will be approved “within the next three months”.

The draft bill also amends the penalty regime in terms of social housing in order to strengthen the protection for consumers on the buy-side of transactions. (…).

The bill establishes the creation of withdrawal areas, where the Government may intervene and whose limits are defined in the Regional Housing Plan. These geographical areas are determined on the basis of the economic situation of resident families, demand for housing, the characteristics of the properties and the historical incidence of evictions in those areas. On an exceptional basis and where duly justified, the withdrawal formula may be applied elsewhere as well.

Moreover, the Regional Housing Plan will specify the socio-economic criteria that people affected by evictions must fulfil to activate intervention by the Administration. Once the withdrawal has been exercised, the affected persons will have the right of first refusal to rent the property that has been their habitual residence. (…).

Original story: Europa Press

Translation: Carmel Drake

NH Appoints 2 New Directors Despite Protests From HNA

22 June 2015 – Cinco Días

On Friday, the fund Oceanwood, which controls 7.58% of NH’s share capital, managed to take a seat on the hotel chain’s Board of Directors, despite HNA’s efforts to the contrary. HNA had tried to avoid the appointment of any new directors, by requesting the inclusion of an additional item on the agenda of the shareholders’ meeting, to limit the number of Board members to 11, even through the company’s bylaws provide for a maximum of 20.

The Chinese group HNA, which holds a 29.5% stake in the hotel chain, justified its proposal as being “in the interests of greater legal certainty”, even though the investment funds (other NH shareholders) had requested a seat on the board. HNA’s position meant that the funds’ entry depended on one of the existing seats being vacated.

Although the item (the vote regarding a reduction in the size of the Board) is still on the agenda of NH’s shareholders’ meeting, which will be held on 29 June, the management body decided to appoint two new directors on Friday, in support of their goal to strengthen “their commitment to transparency and good governance”. And so, Alfredo Fernández Agras was appointed as a proprietary director, at Oceanwood’s request, and Koro Usarranga Unsain was appointed as an independent director. These appointments must now be ratified by the shareholders.

Thus, NH has 13 members on its Board of Directors once more; the number had decreased to 11, after Intesa San Paolo’s exit from the hotel chain’s share capital. The company said yesterday that “the new governance structure strengthens the composition of the Board of Directors over the long term and achieves representation of all stakeholders in line with best corporate governance practices”. According to the company, the decision was taken by “unanimous vote of all of its Board members”.

The fund Oceanwood acquired capital in the hotel group after Santander placed 8.5% of its capital in the market. Santander had, in turn, received the stake from Grupo Inversor Hesperia as payment for some of its debt. BlackRock and Henderson then also became shareholders. These funds requested that NH’s Board strengthen the role of its independent directors to prevent the Chinese group HNA from strengthening its stake and position on the management body, without launching a takeover – it is not obliged to do so until its shareholding exceeds 30% – . HNA has four seats on NH’s board, compared with Hesperia, which has two.

Original story: Cinco Días (by L.S.)

Translation: Carmel Drake