Year: 2017

Sabadell Seeks Investors to Develop More Than 2 million m2 of Land

28 December 2017 – Expansión

The bank, through Solvia, has spun off the management of assets worth €600 million into a new company, which will be headquartered in Madrid.

Solvia, the real estate management company of Sabadell, wants to replicate the operation that it carried out in the hotel sector earlier this year, when it sold its hotel business to Blackstone for €630 million, generating profits of €55 million.

As such, the entity has decided to carve out its activity relating to the development of land into a new company called Solvia Desarrollos Inmobiliarios. That company will manage 2.22 million m2 of land in total, equivalent to almost 300 football pitches. The construction of 4,000 homes, across more than 84 developments, is already underway.

The portfolio of assets under management amounts to €600 million, equivalent to approximately 15% of Solvia’s total income. That size places it in the second division in the sector, just behind the listed real estate companies, led by Metrovacesa, Neinor, Aedas and Vía Célere. The largest owner of land in Spain is Sareb.

This new company will be headquartered in Madrid and will be led by Francisco Pérez, former CEO of the Catalan property developer Vertix. “The idea is to grow hand in hand with the large overseas investors that are looking for high returns in Span, but which do not have any structure here. Most of the funding will come from outside of the country”, explains Javier García del Río, CEO of Solvia (pictured above).

The plans

Solvia Desarrollos will develop not only Sabadell’s land – the bank owns 83% of the portfolio – but also plots owned by family offices that the bank manages and the developments that Sareb is granting it. Solvia was one of the four entities chosen by the bad bank in 2014 to help it sell its homes to the general public. Specifically, it took over the problem loans proceeding from Bankia, Ceiss and Banco Gallego.

Sabadell has been developing land since 2013 and has grown a considerable business in that time. It was the first bank to get back on the horse after the real estate bubble burst. “Land is behaving magnificently, although we do not expect to see any abrupt growth. Areas that were very risky in 2013, such as Huelva, are no longer”, said García del Río.

The experts in the sector endorse his opinion. “The turning point in this market came in 2015 and 2016. This year has been exceptional, with more than 20,000 transactions involving land”, explains Samuel Población, National Director of Residential and Land at the consultancy firm CBRE. He calculates that property developers are capable of generating margins of between 18% and 22% from the construction of private housing blocks in Spain.

“The funds that left Spain have returned and investors are interested in buying land”, says José García Montalvo, Professor of Economics at the Universidad Pompeu Fabra and an expert in the real estate sector.

Solvia manages a portfolio of 148,000 real estate assets, whose value exceeds €31 billion. Last year, it generated a gross profit of €57.8 million and brokered the sale of 20,321 properties. Between 2011 and 2016, it sold more than 91,000 assets.

Sabadell granted new financing of €1.35 billion to property developers in 2016, up by 56%. Last year, it started granting property developer loans again in CAM’s area of influence after four years of restrictions imposed by Brussels.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

Testa Residencial Acquires 26 Homes in Ensanche de Vallecas (Madrid)

28 December 2017 – Inmodiario

Testa Residencial Socimi, S.A., the largest real estate company in Spain specialising in the residential rental market, has acquired 26 new homes in a building located in the Ensanche de Vallecas in Madrid. The homes, most of which have one bedroom, are located in an area of the Spanish capital where the rental market is booming.

In this way, Testa Residencial is continuing to pursue its strategic growth plan, by expanding its portfolio of assets to include 9,245 homes, whereby strengthening its position of leadership in the residential rental market.

Currently, the company’s portfolio of homes has an occupancy rate of 90% and is located in areas with the highest rates of demand, most notably, in the Community of Madrid, San Sebastián and Cataluña, which account for 65%, 5% and 5% of its turnover, respectively.

The company is continuing to consolidate its position as an efficient platform for residential rental properties, which adapts to the needs of its tenants, in line with the largest residential real estate companies in Europe. Moreover, the corporate loan signed recently grants it considerable growth capacity, which will allow it to gain weight and secure its place as a key player in the country.

Original story: Inmodiario

Translation: Carmel Drake

Haya Signs Agreement with ING to Manage its Foreclosed RE Assets

28 December 2017 – Voz Pópuli

Haya Real Estate is continuing to expand its real estate network in Spain. In just two months, Cerberus, the owner of the platform, has purchased 80% of BBVA’s real estate, acquired the property developer Inmoglacier and signed a new alliance with a bank: ING.

This latest agreement was signed in November and establishes that, from now on, Haya RE will be responsible for the management and sale of ING’s foreclosed assets, including not only those properties the bank already controls but also those that it inherits in the future due to defaulted loans. Although the real estate exposure of the Dutch institution in Spain is low (no figures were revealed), the deal shows that Haya Real Estate is continuing to win clients in a highly competitive market.

Cerberus España already controls the assets of BBVA (once Project Marina is approved in the middle of the year), Sareb, Bankia, Liberbank, Cajamar and those of other funds such as Waterfall. In total, it has property worth more than €50 billion under its management.

Another contract won by Haya recently was Waterfall’s, comprising 400 assets worth €57 million, purchased from Cajamar. That agreement made amends for the fact that Altamira won the contract to manage the assets of Liberbank that were acquired by Bain Capital.

Mergers

All of the real estate platforms (also known as servicers) are trying to win business ahead of a possible consolidation in their market in 2018. Haya Real Estate, Servihabitat (in which TPG and CaixaBank hold 51% and 49% stakes, respectively), Altamira (owned by Apollo 85% and Santander 15%), Aktua (Lindorff) and Anticipa-Aliseda (Blackstone) are the largest.

Another recent move in the sector saw the entry of Axactor, with the acquisition of Unicaja’s assets.

Solvia, the real estate arm of Sabadell, is one of the major unknowns in the sector. Two years ago, it negotiated a possible merger with Haya Real Estate, which has still not been ruled out as we head into 2018.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

 

Deloitte: Tertiary Real Estate Inv’t Amounts to €9.7bn in 2017

27 December 2017 – Expansión

An increase in property prices has led to a 22% reduction in the purchase of non-residential assets in 2017 with respect to 2016.

The boom that has marked the real estate investment sector in Spain since 2014 is starting to show signs of slowing. That is according to the most recent non-residential investment figures, which, with just a few days to go before year-end, are reflecting a decrease of 22% with respect to 2016.

According to a market study performed by Deloitte Real Estate, investors spent €9.7 billion this year on tertiary properties (offices, hotels, commercial and logistics assets) compared with €12.4 billion in 2016 and €11.8 billion in 2015.

“With just a few operations still left to close before 31 December, which will amount to between €0.5 billion and €0.6 billion, tertiary investment has fallen by 22%. This decrease in activity is a sign that we have crossed the equator of the bullish cycle and that we are possibly starting a period of greater stability”, explained Javier García-Mateo, Partner in Financial Advisory at Deloitte.

The 22% decrease is due to a weaker second half of the year in terms of the rate of investment (…). During the third quarter, investment fell from €6.6 billion in 2016 to €1.6 billion this year, says Deloitte in its report. During the fourth quarter, the difference was a decrease of 42% (€2.8 billion compared with €1.8 billion). The decrease is more pronounced in the property segments that tend to lead absolute investment, namely, offices and retail assets. In the case of the former, investors have spent €2.3 billion in 2017, less than half the amount recorded in 2016 (€4.9 billion) and 2015 (€5.3 billion) (…). “Offices tends to be the segment that traditionally leads investment, but this year it has decreased by 55%. This is not due to a lack of supply, but rather the gap between the expectations of sellers and the offers from buyers. Moreover, some operations have been abandoned, such as the sale of Hispania’s portfolio”, said García-Mateo.

In this way, unlike in previous years, where large operations were closed during the final quarter of the year, such as Torre Foster – sold for €490 million at the end of 2016-, Torre Espacio – sold in November 2015 for €550 million – and Torre Picasso – sold for €400 million in December 2011 – this year, the most significant operation has been the sale of 50% of Torre Caleido on Paseo de la Castellana, for around €150 million, closed during the first quarter of the year.

In the case of retail assets, investment in shopping centres fell by 29% to €2.7 billion, despite record operations such as the one involving Xanadú, whilst the purchase of shops fell by 36% to €421 million.

“After 4 years of increases in valuations and the consequent decrease in yields, investment in offices and retail property is significantly less attractive than in the hotel and logistics segments, where there are up to 3 points of differential per year”, say the sources at Deloitte. The large hotel operations this year have included the purchase of Edificio España by the Riu Group and the sale of HI Partners, along with its 14 establishments, by Banco Sabadell to Blackstone for €630.73 million.

Cataluña

The 22% decrease comes at a time that is being characterised by the independentist challenge in Cataluña, although the uncertainty being generated in that region does not seem to have had an impact on real estate investment, at least not yet, according to García-Mateo. “In Cataluña, the absorption of office space has fallen and sales in shopping centres have also decreased, by around 10% with respect to Q4 2016, but investment has not been hit, as evidenced by Meridia Capital’s recent purchase of the Barnasud shopping centre and Invesco’s acquisition of the Mango facilities in Palau de Plegamans (Barcelona)”, he added.

In this way, the experts justify that the decrease in investment is due to a change in the cycle, following four years of rapid growth (…).

Nevertheless, the €9.7 billion spent during 2017 represents the fourth-highest figure in the historical series (dating back 13 years).

It was only in the last two years, as well as in the record year for the sector (2007), when investment amounted to €12.6 billion, that investment in non-residential assets exceeded the €10 billion threshold, according to Deloitte.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Idealista: Second-Hand House Prices Rose by 2.4% in 2017

27 December 2017 – El País

Despite the Catalan crisis, this year, Barcelona has managed to dislodge San Sebastián from the top of the ranking as the most expensive capital city in Spain.

During 2017, buying a second-hand home has become 2.4% more expensive. Owners have paid an average price of €1,586/m2 in 2017, compared to €1,553/m2 in 2016, according to the latest price index from the real estate portal Idealista.

Nevertheless, not all of the markets have behaved in the same way; some have grown at double-digit rates, whilst others have expanded at more moderate rates, and others have seen price continue to decrease, still not reaching rock bottom.

Thirty of the provincial capital cities have seen price rises, although the most marked increase was recorded in Palma de Mallorca, with a rise of 29.1%, taking the average second-hand house price there to €2,667/m2. It was followed by the city of Málaga, where prices have risen by 16.7% to €1,934/m2. By contrast, Soria is the capital where prices have fallen by the most (-8.3%), followed by Ávila (-6.9%) and Almería (-5.1%).

Despite the Catalan crisis, which “will affect the final result for the year”, according to Fernando Encinar, Head of Research at Idealista, this year, Barcelona has managed to dislodge San Sebastián from the top of the ranking as the most expensive Spanish capital, at €4,284/m2, compared to €4,052/m2 in the Guipuzcoan capital. Those two cities are followed by Madrid (€3,285/m2) and Bilbao (€2,871/m2).

By autonomous region, the largest increase was recorded in the Balearic Islands, where owners are now asking 25.3% more for their homes than they were a year ago. It is followed by increases in Cataluña (9.5%), the Canary Islands (8.4%), the Community of Madrid (7.1%), Aragón (2.3%), the Community of Valencia (1.9%), Andalucía (0.8%) and País Vasco (+0.5%). At the other end of the spectrum, the largest decreases were recorded in Navarra (-4.8%), Asturias (-3.2%) and Castilla La Mancha (-2.4%).

The Community of Madrid is the most expensive autonomous region, at €2,544/m2, followed by País Vasco (€2,519/m2), the Balearic Islands (€2,472/m2) and Cataluña (€2,082/m2), whilst the regions with the most affordable prices are Castilla-La Mancha (€897/m2), Extremadura (€932/m2) and Murcia (€1,019/m2). The provinces with the most expensive homes are Guipúzcoa and Vizcaya, at €2,760/m2 and €2,591/m2, respectively. They are followed by Madrid (€2,544) and Barcelona (€2,544/m2). Toledo is the most affordable province (€770/m2), followed by Avila (€801/m2) and Ciudad Real (€840/m2).

Original story: El País (by S. L. L.)

Translation: Carmel Drake

Basque Gov’t Sells Listed Property in San Sebastián for €10.4M

27 December 2017 – El Diario Vasco

The auction of the building located on Plaza de Bilbao in Donostia will generate 48% more than the asking price for the Basque Government.

The former headquarters of the Chamber for Urban Property, which has not been used for six years, was sold by the Basque Government last week for €10.4 million in an auction process. The firm that has acquired the attractive property is a shell company headquartered in Madrid, which was constituted a month ago with the aim of acquiring and operating real estate properties and which will likely convert the building into homes.

The property is one of the three buildings whose curved façades give Plaza de Bilbao its shape. They were designed between 1901 and 1905 by Pedro Arístegui and Carlos Ibero as the finishing touch to the thoroughfare comprising Estación del Norte and the María Cristina bridge. Although the internal layouts of the three homes are different, the façades are the same and the Special Protection Plan for Constructed Urban Properties (Peppuc) protects them – they have been granted grade B status (…).

Ownership of the property was transferred from the (Spanish) State to the Basque Autonomous Community when it became the offices of the Chamber of Urban Property and, following the liquidation thereof in 2006, the building has been in disuse since 2011. The property comprises seven storeys (a ground floor, five normal floors and an attic) and has a surface area of 324 m2 per floor (except the attic, which is slightly smaller). A study performed by the Chamber of Urban Property at the time estimated its economic value at around €18 million.

The Treasury Department of the Basque Government decided to divest this property in light of the expenses that it was generating without any prospects for future use (…).

Seven companies submitted bids, after having deposited a guarantee of €350,347 (equivalent to 5% of the tender amount) and on Thursday last week the bid envelopes were opened and the sale was confirmed.

According to sources, the firm that has acquired the building is a shell company, headquartered in Madrid, and constituted on 21 November 2017, that goes by the name Boyton Invest S.L. (…). The price paid, €10,375,000, is 48.06% higher than the initial asking price (…).

Original story: El Diario Vasco (by Aingeru Munguía)

Translation: Carmel Drake

Hispania Completes Purchase of Barceló’s Remaining Stake in Bay for €172.4M

27 December 2017 – El Economista

Hispania has acquired the 19.5% stake that the Barceló Group still held in the Socimi Bay Hotels & Leisure (BAY) for a total amount of €172.4 million, according to a report filed by the company on Wednesday with Spain’s National Securities and Exchange Commission (CNMV).

As such, the Socimi in which George Soros holds a stake now owns 100% of BAY, given that in October 2015, it acquired 80.5% of the company from Barceló.

As a result of the transaction, the parties have agreed to extinguish the contract between the shareholders relating to BAY and to novate certain terms of the investment contract signed when Hispania first entered BAY’s share capital.

The amount of the transaction also includes: the settlement of an incentive detailed in the contract between the shareholders for an approximate amount of €155 million; the expected dividend to be paid by BAY for 2017 amounting to €10.7 million; as well as certain compensation and/or liquidation payments resulting from the termination of the shareholder contract and the novation of the investment contract.

The total price of the operation shall be made in two payments: a first payment amounting to €80 million, which was paid at the same time as the shares were transferred to Hispania; and a second payment, amounting to €92.4 million, which will be paid on 28 February 2018.

The Socimi has specified that the sale and purchase contract anticipates certain upwards movements in the price, agreed in the case of the subsequent resale by Hispania of the acquired stake and only provided certain circumstances arise.

At the same time, the Barceló Group has notified BAY that it is exercising the sale option that it holds over the Hotel Barceló Marbella for €19 million. That transaction is expected to be executed before 28 February 2018.

Original story: El Economista

Translation: Carmel Drake

Kronos & King Street Buy Land in Madrid from Sareb

27 December 2017 – El Confidencial

The scarcity of land that is starting to be seen in cities such as Madrid and Barcelona, and the increase in property prices there, is forcing property developers to sign partnerships with international funds and expand their areas of operation outside of the large capitals, towards peripheral towns and dormitory cities.

One example of this growing trend is the recent deal signed by Kronos Homes, a high standing real estate company that has just joined forces with King Street to buy two important blocks of land from Sareb in the belt around Madrid. Specifically, they have acquired 128,000 m2 of land in Colmenar Viejo, a town located 30km to the north of the capital, where it plans to build 200 homes, according to a statement issued by the property developer.

Moreover, according to sources consulted by El Confidencial, it has also agreed to acquire 230,000 m2 of land in Torrejón, which is located 20km to the northeast of the capital. Both of these operations have been advised by Cuatrecasas and Almar Consulting.

Given their location, these acquisitions contrast with the steps that Kronos has taken in Madrid to date, where it has limited its activity to the centre of the capital. Moreover, they represent the first sales of land under management, for development over five or six years, that Sareb has made to a fund like King Street, according to the same sources.

A property developer born out of the recovery

Kronos Homes is a property developer created at the beginning of this real estate cycle to focus on exclusive homes, many of them accompanied by the stamp of famous architects such as Rafael de la Hoz and Joaquín Torres.

The latter has put his signature on the development of 82 homes that the property developer is currently building in the exclusive Madrilenian district of Puerta de Hierro, whose prices range between €488,000 and €1.4 million. Meanwhile, Kronos is working on a less elitist development in Cuatro Vientos, to the south of the capital, where it plans to build 2-, 3- and 4-bedroom homes.

With the acquisitions in Colmenar and Torrejón de Ardoz, Kronos is pushing ahead with its objective of acquiring a land portfolio for the construction of 4,500 homes over three years. Last March, the company said it already owned land worth €200 million, with capacity for the construction of 3,000 homes, and that it planned to invest another €100 million acquiring more plots.

Since it started operations in 2014, the company has closed several operations both with Sareb, as well as with financial institutions and has participated in the acquisition of non-performing loans backed by residential assets of interest.

Meanwhile, King Street is an international investment giant, which, in Spain, has been behind important debt operations, such as the one linked to Realia and the deal involving the radial highways. Currently, it is a shareholder of Neinor, in which it owns a 3.5% stake.

Original story: El Confidencial (by R. Ugalde & C. Hernanz)

Translation: Carmel Drake

Two Sought-After Plots in Pamplona Awarded to ACR & Allegra Holding

26 December 2017 – Observatorio Inmobiliario

ACR Grupo and Allegra Holding are continuing to strengthen their alliance after they were awarded two sought-after plots of land known as “Salesianos” in Pamplona.

The plots, which span a surface area of more than 15,000 m2, are going to be home to the tallest two towers in the area. More than €40 million is expected to be invested in the development of between 120 and 140 two-, three- and four-bedroom homes.

The plots, located in Salesianos, one of the best locations in the city, just a stone’s throw from the Plaza de Toros and close to the Carlos III shopping area, were owned until now by the Salesianos religious order. Their public auction has sparked a great deal of interest as it represents one of the most high-profile and important projects in Pamplona in recent years.

This ambitious urban planning project will allow access to housing in an area of scarce supply and which until now did not have any new build developments. Moreover, it will incorporate services such as a civic centre, a large open square and retail premises.

Residencial Nature, consolidating a successful alliance

This development is the product of the alliance between ACR Grupo and Allegra Holding, two prestigious and solvent companies in the Spanish real estate sector, through Residencial Nature, a concept that is continuing to grow following the experience it has accumulated through the more than 750 homes managed primarily in the Community of Madrid.

“This is the first project that we have undertaken together with Allegra Holding outside of Madrid, which reflects the solidity of the concept that both companies are backing with the development of unique projects in different cities”, said the Director of Property Development at ACR Grupo, David Botín.

The success of the Residencial Nature developments allows the alliance to evaluate new investments in Madrid, as well as in other locations such as Barcelona, Málaga and Levante, with the aim of expanding its activity to other regions.

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

Idealista: Hotel Inv’t to Reach Record Figure of €3.2bn in 2017

26 December 2017 – Idealista

The year-end forecasts for hotel investment are marking record highs, exceeding the €3.2 billion threshold. This represents an increase of 45% with respect to 2016 and of 25% with respect to 2015, the record year to date when investment amounted to €2.55 billion. The large operations completed during the year include the 14 assets (HI Partners) that Sabadell sold to Blackstone for €630 million and the purchase of the iconic Edificio España building (pictured below) in Madrid by the hotel chain Riu for €380 million.

The hotel segment has risen to prominence in 2017 in terms of real estate investment, accounting for 30% of the total market share, exceeded only by retail. During the first six months of the year, €1.655 billion was invested in hotel purchases.

Madrid and Barcelona are the two cities that recorded the majority of the real estate operations: the Spanish capital accounted for 19% of total investment and the Catalan capital 12%. Nevertheless, markets such as Valencia, Sevilla and Bilbao also started to spark interest amongst investors. Meanwhile, in terms of holiday markets, the Canary Islands, Andalucía and the Balearic Islands led the investment ranking, accounting for 23%, 13% and 9%, of the total investment, respectively.

Between January and November 2017, 94 operations were closed, with 109 hotels changing hands. The most significant operation was completed by Blackstone, with its purchase of the HI Partners portfolio from Sabadell (…).

Another important deal was closed in June with the sale of a portfolio of 3- and 4-star Meliá Hotels, located in Ibiza, Lanzarote, the Balearic Islands and Torremolinos to London & Regional for €230 million.

In 2018, the investment figures in the hotel sector could soar once again if Barceló’s plan goes ahead to take over the NH Hotel Group, worth €2.48 billion. That deal would create a new market leader with more than 600 hotels and 109,000 rooms.

Original story: Idealista 

Translation: Carmel Drake