Month: July 2017

MAB Introduces Tougher Entry Rules For New Socimis

31 July 2017 – Expansión

In August, an amendment to the regulations governing the Alternative Investment Market will enter into force, which has led to a wave of Socimi debuts on the stock market in July to circumvent the new requirements.

Six new Socimis debuted on the stock market in July, an unusually high level of activity compared to previous months. The reason is that on 1 August the new circular published by the Alternative Investment Market (MAB) will enter into force. It introduces changes for debuting on the stock market and will affect all companies wanting to list from next month (August) onwards, in particular, Socimis. The amendment sees a toughening up of the conditions to debut on the stock market, given that it imposes some very demanding requirements for minority shareholders.

The change is very specific: “At the time of listing, companies must have minority investors owning shares that are worth less than €2 million or 25% of the company’s share capital”, explained José Luis Palao, Partner of the Mercantile Department at Garrigues. Minority shareholders are considered to be those that hold less than 5% of the share capital. Until now, the regulations allowed companies a grace period of one year to fulfil this requirement.

Manuel López, Partner of Financial Regulatory Law at Ashurst, considers that some Socimis have formed closed-end funds of sorts that have no interest in allowing access to minority shareholders. The exception to the regulations that existed benefitted this type of company in particular, as they enjoyed additional time to adapt themselves.

In this sense, López understands that the regulations are reasonable and reflect what the Socimis are designed to be – entities with the vocation to expand and attract new investors, aimed at boosting the real estate sector. His colleague, Ismael Fernández Antón, Partner of Real Estate Law at the same firm, considers that “the legislation has not become less flexible, but rather more coherent”.

Although Circular 1/2017 does not explain the reasons for the change, the experts agree that the market for Socimis has reached maturity and does not require any further encouragement. The MAB was prudent at the beginning, offering these companies a certain amount of freedom to promote their growth. Fernández Antón says that “this measure was always going to have a sell-by date”, given that the Socimis already represent an attractive vehicle for real estate investment in Spain. Moreover, the modification represents a guarantee to “limit the desire to use them as a platform for pure fiscal optimisation”, says López.

The change only affects companies that start trading from August, in such a way that those that have debuted recently still benefit from the exception. This has meant that, in the last month, the rate of Socimi debuts on the stock market has multiplied. Those who have acted quickly can enjoy a period of one year to fulfil this requirement regarding the diffusion of shareholders.

Although almost 40 Socimis trade on the stock market, only five are listed on the Main Exchange and only two of those form part of the Ibex 35: Merlin Properties and Colonial. Within the last few days, the entities Numulae, Bay Hotels & Leisure and AM Locales have all debuted on the MAB.

Original story: Expansión (by Jesús de las Casas)

Translation: Carmel Drake

Testa Residencial: Undisputed Leader Of Rental Home Market

31 July 2017 – El Mundo

Testa Residencial is becoming even stronger in the rental home market. The company has approved a €341 capital increase, which is going to be financed through Acciona’s contribution of 1,058 homes, concentrated in 10 buildings located primarily in Madrid, as well as by the contribution by a third party of another 43 units.

In a clear bullish market, with an increasingly higher penetration of rental properties, Testa Residencial is currently the market leader and looks set to become the brand of reference in the sector. The firm is continuing with its strategic plan to grow its portfolio of high-quality assets with the capacity for improvement through management, as well as to optimise the returns from its existing portfolio.

The stock of homes to be contributed by Acciona are characterised by their high quality – 95% of them are located in Madrid; 849 homes are located in Parque Conde Orgaz and 85% of them are unsubsidised properties.

This residential portfolio has an occupancy rate of 94%, generates gross annual income of €12.5 million, has a gross valuation of €400 million and a net asset value of €336 million. It is one of the highest quality portfolios on the Spanish market.

Following the contribution, Acciona will own a 21% stake in Testa Residencial. The other shareholders include Santander (35.7%), BBVA (26.9%), Merlin Properties (12.7%), Popular (3.1%) and others (0.6%).

51% of the homes are in Madrid

After the General Shareholders’ Meeting, which has been convened for September, has approved the capital increase, Testa Residencial’s portfolio will comprise 9,041 homes (concentrated in 118 buildings), of which 51% will be located in the Community of Madrid.

The portfolio’s gross annual income will exceed €70 million, the gross value of the company’s assets will amount to €2,179 million and the net asset value will equal €1,8016 million. Testa Residencial has a very conservative level of indebtedness (17%).

Original story: El Mundo

Translation: Carmel Drake

Taylor Wimpey & La Cala To Build Largest Golf Complex In Southern Europe

31 July 2017 – Inmodiario

The Spanish subsidiary of the British property developer Taylor Wimpey Plc and the Irish hotel chain FBD Hotels and Resorts have signed a strategic alliance for the development of more than 600 homes over the next ten years, with a planned investment of more than €125,000,000.

The collaboration between Taylor Wimpey España and the hotel chain FBD Hotel and Resorts, which manages La Cala Resort, took its first steps back in 2014. As a result of that joint venture, Taylor Wimpey completed the first batch of residential properties (60 contemporary apartments called Miraval) in 2016. Now, it is promoting the project Horizon Golf comprising 48 apartments and 55 terraced houses, some of which will be completed this year and the rest of which will be handed over to their owners in 2018.

Through this alliance, La Cala Resort is consolidating its position as a unique destination for golf and relaxation in Spain, with three 18-hole golf courses, an exclusive 107-room 4-star hotel and a 1,300 m2 spa, tennis, padel and squash courts, and a football field. It also leads the ranking in terms of international residential tourism, with one of the best and most varied supplies of residential housing in low-density complexes, with panoramic views over golf courses, sea and mountains and all just 30 minutes from Málaga airport.

The complex brings together the best facilities demanded by the European public, not only for lovers of golf, but also for those who want to live in an environment that respects the environment, with perfectly kept roads and gardens and a 24/7 security service, just 5km from the town centre and beaches of Mijas Costa (…).

Project Horizon Golf offers two housing formats from potential buyers to choose from. On the one hand, it has terraced houses measuring more than 300m2, with three bedrooms and two bathrooms, plus 90 m2 of terraces and solarium spread over four floors. Owners have the option of installing a private lift for easy access from the underground private car park to the panoramic solarium.

On the other hand, the complex has large apartments and penthouses with two and three bedrooms, and simple lounges leading onto spacious terraces measuring more than 30 m2. The penthouses are duplex spaces with solariums measuring more than 65 m2 (…).

The terraced houses currently have asking prices starting at €399,000 and the apartments are going for €280,000 (…).

Original story: Inmodiario (by Carmen Durán)

Translation: Carmel Drake

Excem Launches 2nd Socimi & Spends €22M On 1st Asset In Madrid

31 July 2017 – Eje Prime

Excem is on a roll. The company has just launched its second Socimi, Sociedad de Inversión Turística (Situr), dedicated to hostels and tourist apartments. The group, led by the Hatchwell family, will invest €250 million on the launch of this new investment vehicle, which will be led by Amir Yerushalmi, former director of the US fund Gaia. Moreover, the new entity has just acquired its first asset in Madrid for €22 million.

In March, as Eje Prime announced, the company activated its second company specialising in hostels for young people, whereby following the roadmap drawn by the group when it proposed the project, which also includes the creation of a third Socimi specialising in assets destined for use as co-working spaces.

The company constituted the hostel business, which operates under the name Excem Capital Partners Hospitality, and which at the time had just one administrator, Philip Hatchwell Altarar.

The investment to be undertaken by this second Socimi will amount to €250 million between now and 2018, approximately. The company has set itself the objective of owning 3,500 beds in a dozen buildings, primarily in Madrid and Barcelona, as well as in other tourist cities around the country.

Excem’s second project responds to a “latent demand”, according to the company, which maintains that each year young people from all over the world spend more than $230,000 million travelling and that there are only six companies in the world specialising in offering them high-quality accommodation at competitive prices.

With the company structure already in place, Excem has acquired its first asset through Situr. The company has purchased an asset located at number 3 on Calle Postigo de San Martín, in Madrid. That property, which is located opposite the Monasterio de Las Descalzas and Puerta del Sol, has a surface area of 4,000 m2 and 400 beds. Excem has spent €22 million on this purchase.

Excem’s second Socimi has been created with the aim of acquiring between ten and fifteen buildings, during the first phase and starting in Madrid, to build up a portfolio of 3,500 beds in the historical centres of the main cities in Spain, Europe and the USA, which will be managed as hostels.

In addition to this first asset in Madrid and a second committed property in Málaga, Situr has already chosen more than 30 buildings in main cities across Spain to continue its acquisition plan. According to the company, “we expect to undertake a capital increase for Excem Socimi Situr between September and December 2017 and start to debut on the MAB in 2019” (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

‘Operación Chamartín’ Becomes ‘Madrid, Nuevo Norte’

31 July 2017 – Expansión

A Solomonic agreement has been reached between DCN, the Ministry of Development, the Town Hall of Madrid and the Community of Madrid to push ahead with the long-standing project, which will see the construction of 11,000 homes (including 4,100 social housing properties) and a large business centre.

But its name is no longer ‘Operación Chamartín’, ‘Distrito Castellana Norte’ or ‘Madrid Puerta Norte’….after almost 25 years since the idea was first floated by the then government of Felipe González, the development in the northern zone of the belt of Madrid’s M30, is going to be called ‘Madrid, Nuevo Norte’.

On Thursday, the Town Hall of Madrid, Adif and DCN (the property developer in which BBVA and SanJosé hold stakes) presented the strategic guidelines upon which the new project is going to be based. It reduces the buildability to 2.68 million m2, down by 20.5% compared to the 3.37 million m2 proposed by DCN, and cuts the total number of homes to 11,000, of which 20% will be social housing properties. On the other hand, the management of the plan has been handed over to the Town Hall of Madrid, which will control the timings and activities.

The players involved announced the 19 points included as the basis of the agreement, most of which are technical, and which also involve resolving the legal actions. The new plan will see a modification to the General Urban Plan (PGOU) and is divided into five areas (Chamartín Station, Business Centre, Fuencarral Malmea, Fuencarral Tres Olivos and Las Tablas) and two large zones: the South of the M30, which will constitute primarily office space and a large CBD, and the North of the M30, which will focus on housing.

A large business centre for Madrid

One of the fundamental axes of the plan will be the Chamartín station and the Business Centre, which will be located next to the new station to allow for sustainable mobility. The event on Thursday was attended by the Minister for Development, Íñigo de la Serna; the mayor of Madrid, Manuela Carmena, and the President of the company Distrito Castellana Norte (DCN), Antonio Béjar. “This initiative has solid pillars and is sustainable over time. It is an avant-garde and recognisable project, which will generate investment and create employment”, said Antonio Béjar.

Meanwhile, the mayor of Madrid, Manuela Carmena, expressed her appreciation for the capacity for “dialogue and consensus” and asked for collaboration from the other political groups to move ahead with the project. “The world is changing. From now on, in Madrid, we are going to be capable of forming part of that change”. For the Minister for Development, Íñigo de la Serna, this is a new project, born out of an agreement that unites the interests of the parties (…).

In this way, the urban planning project, which just six months ago looked to be doomed to failure, seems to be back on track in the critical areas. The property developers said that Madrid does not currently have a recognisable and compact business district. This plan, they said, is designed to fill that gap.

Original story: Expansión (by R. Arroyo, L. Ruiz-Ocaña and C. Galera)

Translation: Carmel Drake

Bankinter & Sonae’s Socimi Buys Retail Asset For €4.7M

31 July 2017 – Eje Prime

The Socimi Ores is continuing its shopping spree in Spain. The real estate arm of Bankinter and the Portuguese firm Sonae Sierra is fattening up its asset portfolio in Spain with the purchase of a new retail space, on this occasion in Cádiz. The acquisition of the property, which is leased to the supermarket chain Aldi, has involved an investment of €4.7 million by the group, which was launched in February when it debuted on the Alternative Investment Market (MAB).

The Socimi, which started out without any assets in its portfolio, has been acquiring different properties over the last two months. The latest is located in Sanlúcar de Barrameda, in Cádiz, has a retail surface area of 2,085 m2 and can be found at number 13 on Avenida de Guzmán el Bueno.

“With this acquisition, which has been financed entirely using own funds, the company is continuing to fulfil the investment objectives set out in its Business Plan and in accordance with the financial parameters agreed with its shareholders”, say sources at Ores Socimi.

Another one of the most recent acquisitions undertaken by Bankinter and Sonae’s real estate investment vehicle involved an asset located in Oviedo that the company purchased in May. Located in the Montecerraro neighbourhood, the retail property is leased to Mercadona and has a surface area of more than 2,700 m2. Ores paid €5.8 million for that asset.

Also in May, the Socimi acquired the establishment that the German electronics chain MediaMarkt leases in Braga, in Portugal. That point of sale has a gross leasable area of 4,986 m2 and was acquired for €5.7 million.

Nevertheless, Ores made its debut purchase in April, when it acquired its first two real estate assets. The company, which invests only in retail premises, bought two stores located in the Artea and Galari retail parks in Bilbao and Pamplona, respectively, for which it paid €18.7 million. Both assets, which have a combined surface area of 8,400 m2, are leased to the sports equipment chain Forum Sport.

Ores is aimed at private banking clients. Although for the time being, its portfolio of assets is relatively small, the Socimi made its debut on the stock market with the aim of investing €400 million in high street premises, supermarkets, retail parks (up to a maximum surface area of 20,000 m2), bank branches and singular assets with long-term rental contracts and solvent tenants (…).

Ores was created from contributions made by Bankinter’s private banking clients (in other words, HNWIs) through a capital increase amounting to €196.6 million. In this way, the private banking clients and some institutional investors control almost 86% of the company’s share capital. The entity led by María Dolores Dancausa, meanwhile, has retained ownership of a 10% stake and Sonae Sierra owns just under 4%.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

UBS Buys Office Building In Madrid For €38.5M

31 July 2017 – Eje Prime

UBS Asset Management has acquired a new asset in Spain. Through its Real Estate & Private Markets (REPM) division, the investment arm of the Swiss bank has completed the purchase of the business complex located at number 56 on Calle Ribera del Loira, in the Campo de las Naciones office district, alongside the Ifema exhibition halls. UBS’s real estate fund has disbursed €38.5 million for the asset.

The building acquired by UBS has a surface area of 11,549 m2, divided into two buildings, separated by a central atrium. Moreover, it has more than 300 parking spaces. The complex houses the headquarters of the hotel group Accor and the dental clinic company Dentix.

The Ribera del Loira operation comes just a month after the Swiss bank’s most recent investment in Madrid when UBS Asset Management purchased two logistics assets spanning almost 35,000 m2 located on the PP10 industrial estate in Leganés. It paid just over €35 million for those properties.

The Swiss bank arrived in Spain with its real estate investment arm. Through seven investment funds, UBS owns a portfolio worth €772 million containing mainly offices, which account for around 50% of the portfolio, as well as retail assets (which represent 37% of the total) and logistics properties.

Original story: Eje Prime

Translation: Carmel Drake

Cerberus Finalises Purchase Of Liberbank’s RE Arm For €85M

31 July 2017 – Voz Pópuli

The sale of Liberbank’s real estate arm will be closed in a matter of days. And the candidate that is most likely to acquire Mihabitans (the name of its property arm) is Haya Real Estate, the platform owned by Cerberus in Spain, according to financial sources consulted by Vozpópuli.

Haya Real Estate and Liberbank are now holding advanced conversations to close an agreement for €85 million after the servicer’s final offer proved to be more convincing than Aktua’s, the former real estate arm of Banesto, which is now owned by the Norwegian group Lindorff. Both the Asturian bank and Haya Real Estate declined to comment.

The agreement includes the sale of Mihabitans to Haya Real Estate as well as an agreement to manage Liberbank’s foreclosed assets for a period of seven years.

Manuel Menéndez, CEO at the bank, explained on Thursday, that the aim of the sale of Mihabitans is to accelerate the divestment of foreclosed assets with a more professional style of management and the generation of business through an agreement for Liberbank to grant new mortgages.

This pact is key for the entity given that it sends a clear message to the market that its objective is to remain independent, despite the pressure from the regulators for a new wave of mergers between the medium-sized savings banks.

Road to independence

Liberbank is doing its utmost this year to convince the market that it is in no way similar to Popular, after the stock market pain it suffered following the rescue of the entity purchased by Santander. After controlling the decline in its share price through a veto on short positions, the group led by Menéndez presented its results on Thursday, which showed that its default rate had registered a decrease of more than 1.5 p.p. to 11.3%, representing an improvement on the objectives announced.

One of the trends to reduce the default rate has been to execute many of the delinquent loans, and so the bank has taken ownership of the corresponding properties. For that reasons, despite registering a record quarter in terms of house sales (€75 million), the volume of foreclosed properties remained stable: €3,115 million.

Liberbank wants to set some ambitious sales targets as part of the agreement that it is now close to signing with Haya Real Estate: the sale of €410 million this year; €625 million next year; and €850 million in 2019. Sales of wholesale portfolios will also be included in this strategy.

Haya Real Estate groups together the management of entities such as Bankia (formerly Bankia Habitat), Cajamar and Sareb. It earned €31 million last year and has almost 700 employees. Two years ago, it negotiated a possible merger with Solvia, owned by Sabadell, and at the end of last year, it evaluated the purchase of Unicaja Banco’s real estate arm.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Hispania Buys 2 Plots In Canary Islands For €13M

31 July 2017 – Idealista

Hispania is pushing ahead with its strategic plan and, to this end, has completed the purchase of two plots of land on which it will build 2 luxury resorts. The plots of land acquired by the Socimi for €13 million are located in the Canary Islands, specifically, in Lanzarote and Fuerteventura.

In addition to hotel resorts, the objective of the investment vehicle, in which the magnate George Soros holds a stake, is to incorporate retail, leisure and sports facilities into the complexes. The project looks set to involve a total investment of around €50 million in the case of Lanzarote alone.

Hispania already owns the Occidental Playa and Barceló Lanzarote hotels, and based on the plans that it has in mind, the five-star complex would contain more than 1,000 rooms, which would make it the largest establishment in Hispania’s portfolio. In Fuerteventura, the Socimi also owns several properties, including two hotels that it purchased in the summer of 2015 for just over €100 million.

Over the last week, Hispania has been in the news for several reasons. Firstly, it is negotiating the sale of 24 office buildings for around €500 million; the insurer Swiss Life is the final candidate in that process.

In addition, the Socimi saw the stock market debut of the investment vehicle that it shares with Grupo Barceló (known as Bay Hotels & Leisure), which started trading on 20 July with a market value of almost €500 million.

Original story: Idealista

Translation: Carmel Drake

Savills Completes Purchase Of Aguirre Newman For €67M

31 July 2017 – El Confidencial

Savills has confirmed the news revealed on Friday morning by El Confidencial that it has formally agreed to purchase Aguirre Newman. This operation that puts an end to the sales process that was opened by the Spanish real estate company in February.

As a result of the acquisition, the British company has multiplied its size in Spain seven-fold, increasing its workforce from 70 people to almost 500 professionals. Moreover, it has completed the second most important international purchase in its history following its acquisition of Studley in the USA in 2014.

The transaction price has been agreed at €67 million, which will be paid in instalments over five years. The transaction is expected to be completed on 30 November, once all of the standard regulatory conditions have been fulfilled.

Although the exact terms of the agreement are unknown, the selection of Savills as the winning candidate has been based both on that firm’s economic proposal, as well as its commitment to continue to employ the workforce and to respect the roles of Aguirre Newman’s senior management.

In fact, the resulting company will initially operate in Spain under the brand Savills Aguirre Newman. Santiago Aguirre will be the CEO, whilst Stephen Newman and Rafael Merry del Val will occupy the two executive co-vice-president roles.

The senior management team will also include José Navarro, Javier Echeverría, Jaime Pascual-Sanchiz and Ángel Serrano; whilst the office in Barcelona will be led by Anna Gener and Arturo Díaz, as the CEO and President, respectively.

In addition to Savills, other firms that expressed interest in this operation included Colliers and Cushman & Wakefield. Moreover, the latter managed to hold very advanced conversations with a view to closing an agreement, but in the end, it never materialised, which left the path open for Savills to exclusively negotiate its purchase (…).

With its integration into Savills, Aguirre Newman will achieve its long-time goal of forming part of a large international network, a leap in size that it considers critical in the context of the growing weight of multinationals in the real estate market and its desire to work within a network that has operations around the world.

Meanwhile, Savills has managed to grow to a size that corresponds to its status as one of the large global real estate consultants, listed on the London Stock Exchange, with a market capitalisation of GBP 1,300 million (€1,450 million). By contrast, in Spain until now, it has operated as a specialist boutique. One of its most recent major achievements was the sale of Torre Agbar to Merlin, in a deal that was designed and executed by Savills.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake