Ministry of Development: New Housing Permits Rose by 23.2% in October

29 December 2018 – El Economista

The permits authorised for new residential construction in Spain amounted to 83,882 units between January and October 2018, which represented an increase of 23.2% in comparison to the same period a year earlier (68,084 units).

According to data from the Ministry of Development, of the total number of permits approved, 66,032 were for flats in housing blocks (a YoY rise of 27.7%) and 17,831 were for single-family homes, up by 9%. Moreover, 19 permits were requested for other types of buildings.

The new build permits authorised are following a positive path so far in 2018, after four years on the rise to reach 80,876 units in total in 2017, which represented an increase of 26.1% compared to the previous year.

In the past, in 2016, permits rose by 28.9%, after increasing by 42.5% in 2015, which consolidated the recovery initiated in 2014, the year that broke seven consecutive years of decreases with a slight rise of 1.7%.

This real estate indicator reached a historical minimum in 2013 (34,288 units), a figure that represented a slump of 96% from the peak registered in 2006 with 865,561 permits.

Original story: El Economista

Translation: Carmel Drake

Socimi Árima Buys 4 Office Buildings in Madrid for €110M

27 December 2018 – La Vanguardia

The Socimi Árima has purchased its first four office buildings in Madrid for €110 million, operations that it has carried out just two months after making its stock market debut in October without any real estate assets in its portfolio.

In this operation, the firm promoted by the former CEO of Axiare, Luis López de Herrera-Oria, has invested the c. €100 million that it raised from its stock market debut and “is whereby starting its journey”.

The four assets purchased comprise a combined surface area of around 27,000 m2, as well as 460 parking spaces, and are located in the business centre district and northeast of the capital.

The firm, which is going to invest €16.7 million to improve the properties, is convinced that they have “great potential for appreciation”.

Specifically, Árima has purchased one building on Calle María de Molina on the corner with Príncipe de Vergara, and another one on the intersection of Paseo de la Habana with Avenida de Alfonso XIII, for €31 million in total.

Moreover, the Socimi has signed a commitment to acquire another two office buildings, located in the northeast of Madrid, for €63 million, which will materialise in January 2019.

With these two operations, Árima is purchasing its first buildings after it made its stock market debut without any assets in October and through which it raised €100 million, a third of the €300 million initially planned.

“With the purchase of these assets, Árima is reaffirming its business plan presented during its IPO and the good investment opportunities that the Spanish real estate market offers”, said the CEO of the firm, Luis López de Herrera-Oria, in a statement.

Original story: La Vanguardia 

Translation: Carmel Drake

Blackstone Launches its 6th Socimi in Spain with 1,600+ Rental Homes

27 December 2018 – El Diario

Blackstone is increasing its position as the largest landlord in Spain. On Thursday, the vulture fund received approval to list its sixth Socimi, Euripo, on the stock market, which will make its debut with an initial value of €110 million. On its balance sheet, another 1,600 homes that will join the more than 20,000 properties that the fund already owns.

Euripo will make its debut on the Alternative Investment Market (MAB), the secondary market in Spain, where it will join other Socimis owned by the US fund, including Fidere, Albirana, Corona and Torbel. Blackstone also recently took control of 80% of Testa, the largest rental home company in Spain, ownership of which it shares with Banco Santander.

In this way, almost one in ten Socimis in Spain have Blackstone as a majority shareholder. As is usual in the operation of this fund, Euripo is owned by a company belonging to Blackstone that is based in Luxembourg.

In this case, Blackstone is listing a portfolio comprising more than 2,000 real estate assets including homes, garages and commercial premises proceeding from the divestment of two financial entities, BBVA and the now extinct Banco Popular. Of the total portfolio, it has direct ownership of 1,900 assets, whilst another 400 are in the hands of a related company, which will likely end up on Euripo’s balance sheet, according to comments included in the IPO document.

There are currently more than 60 Socimis listed in Spain on the MAB, the main stock market and the Ibex 35. Blackstone has been the most active investment fund, especially in the rental home segment, where it controls almost a quarter of the companies currently listed.

The set of assets that Blackstone is debuting on the stock market with this new Socimi is worth around €215 million, of which half are located in Madrid and Barcelona. The remainder are distributed across 35 Spanish provinces, according to the aforementioned IPO document.

Currently, less than 30% of the properties of this company are occupied. For this reason, the company expects to increase its revenues by improving the occupancy ratios and by increasing the rents charged for each occupied home by between 4% and 5%. Moreover, it says that 7% of its assets are illegally occupied.

Original story: El Diario (by Diego Larrouy)

Translation: Carmel Drake

Ana Botella & 7 of Her Officials Sentenced to Pay €22.7M for the Sale of Flats to Vulture Funds

28 December 2018 – Voz Pópuli

The Court of Auditors has sentenced the former mayor of Madrid, Ana Botella (pictured below) and six high-ranking officials of her municipal Government to pay €22.5 million for the sale of 1,860 publicly owned flats to two companies owned by Blackstone, considered to be a vulture fund, for a price below that stipulated by the market in 2013. Another senior official, Fermín Osle, has been sentenced to pay more than €3 million for his role as the “accountant directly responsible” for the operation.

The ruling, revealed by Cadena Ser, concludes that the eight people now condemned “engaged in serious negligence” by not preventing “damage to public property” by selling the homes for €128.5 million when, according to the calculations of the Court of Auditors, Botella’s Executive could have received proceeds of more than €151 million.

The sentence is based on a claim filed a year ago by the current Government of the Spanish capital, led by Manuela Carmena, through the Municipal Housing and Land Company (EMVS). The ruling determines that the operations carried out by the Municipal Housing Company that reported into the Government “led to an unjustified impairment of public property”, which they estimate amounted to €23 million.

The other condemned officials are Enrique Núñez Guijarro, Diego Sanjuanbenito, Paz González García, Dolores Navarro, Pedro Corral and Concepción Dancausa, former delegate of the Government of Madrid.

They will appeal the sentence

The former mayor and her then municipal government team are going to appeal the sentence, according to sources, after hearing the content of the ruling, since “they do not agree with it”. They also noted that the Prosecutor of the court has already requested the dismissal of this claim “for not having any accounting responsibility”.

In the same way, they have indicated that the previous Governing Board of the Town Hall of Madrid “did not intervene directly or indirectly in the operation to sell the homes” to which the decision by the Court of Auditors refers. “Only, and in its capacity as the General Shareholders’ Meeting of the aforementioned company, did they ratify the feasibility plan that the EMVS’s Board of Directors had already approved”, they highlighted.

Original story: Voz Pópuli (by Carlos Frías)

Translation: Carmel Drake

The Losantos Family Puts Neinver Up for Sale for €500M+

26 December 2018 – Cinco Días

One of the historical names of Spanish real estate, the Losantos family, is putting its real estate firm Neinver up for sale for more than €500 million. Neinver specialises in building and managing retail outlets and is the company that manages shopping centres such as The Style Outlets and the Factory. It has a presence in several countries.

The company, chaired by José María Losantos del Campo, has engaged the bank Credit Suisse to search for interested parties in this multi-national firm that started life in La Rioja, according to four financial and real estate sources familiar with the operation. The financial entity and the company declined to comment about this operation.

The founder of the company, born in 1936, started out in the sale and purchase of tinplate, together with his brother Mario, and later founded Neinver in 1969. Mario would go on to found Riofisa, one of the large real estate empires in Spain (…).

José María Losantos grew Neinver, which is now headquartered in Alcobendas (Madrid), specialising in turnkey projects, for example, in several wineries, and which has opted for shopping centres over the last two decades. His son, Daniel Losantos, serves as the firm’s CEO. The real estate company has, in turn, been controlled by the company Teckel Gestora since 2016, which also owns rural estates in Ciudad Real and which is owned by the patriarch of the family.

Neinver manages 600,000 m2 of commercial spaces, across almost 2,000 stores and in 15 outlet centres under the brand The Style Outlets and Factory, which span a commercial surface area of 300,000 m2.

The company has a joint venture to share ownership of some of these assets with TH Real Estate, the real estate arm of TIAA, the US teachers’ pension fund. Neinver controls a lot of these properties through 23 companies, according to reports from Insight View based on property registry data.

In addition to the centres in Spain, it owns assets together with TH Real Estate and other partners in France, Germany, Italy, Poland, Portugal, the Netherlands and the Czech Republic.

In Spain, it owns The Style Outlets – which are dedicated to the off-season sale of well-known brands – in Las Rozas, San Sebastián de los Reyes and Getafe (all three in Madrid), A Coruña and Viladecans (Barcelona), as well as the Madrilenian shopping centres Alegra and Nassica.

This search for buyers entrusted to Credit Suisse comes at a critical moment for investment in the Spanish real estate market, which is featuring many international funds and Socimis. So far this year, until the middle of December, a record investment figure of €18.719 billion has been registered, according to CBRE, up by 45% compared to 2017, boosted above all by the acquisition of companies. In the case of retail, €4.279 billion has been invested to date this year.

Original story: Cinco Días (by Alfonso Simón Ruis & Pablo Martín Simón)

Translation: Carmel Drake

Metrópolis Buys Hexagon Glòries Building in Barcelona for €50M

27 December 2018 – Idealista

Metrópolis is backing the 22@ district with new purchases. The fund led by Pere Bosch and in which the following Catalan businessmen, amongst others, hold stakes: Miguel de Navas, Oriol Tomas Carulla, Javier Ferrero, Yolanda Bassat, Rafael Tous Godia and Javier Carrasco, has invested €50 million in an office building under construction, promoted by the real estate company Brilten and located in the district of Barcelona.

The asset, known as Hexagon Glòries, due to the shape of its façade, has a surface area of 10,000 m2. Last summer, Brilten announced that it was planning to spend €35 million on the construction of the property, an amount that included the acquisition of the land, according to reports from Expansión.

The building has been designed by the architect firm Batlle i Roig and will be finished by the middle of 2019. In addition, Brilten already owns other assets in 22@ such as, for example, the Twentytú hostel.

This is the first purchase that Metrópolis has made in the Catalan capital’s technology district. The investor vehicle acquired its last property in 2017 when it purchased the Can Ametller business park for €35 million. Nevertheless, all indications are that the fund’s next investments could be in Madrid and even in other European cities such as London or Paris.

Original story: Idealista 

Translation: Carmel Drake

Town Hall of Barcelona Buys a 114-Home Social Housing Block

27 December 2018 – La Vanguardia

On Thursday, the Town Hall of Barcelona announced the completion of the purchase of a building located at number 7 Calle Encuny containing 114 protected homes. The property, located in the heart of the Marina del Prat Vermell neighbourhood, belonged to the entity Proviure CZF Parc d’Habitatges, a company formed by BBVA and the Consorci de la Zona Franca de Barcelona (Consortium of the Zona France of Barcelona). “With this operation, we ensure that the housing block will not be sold to vulture funds”, said the mayor of the city, Ada Colau, who referred to the purchases that such investment groups have been carrying out in various cities.

The acquisition has involved an investment of €5.8 million by the Town Hall. This building is the largest that Ada Colau’s government has purchased to date, which so far in its mandate, has acquired another 21 entire blocks. In total, including this new property, the Town Hall has acquired 661 flats since 2015, which has involved a total disbursement of €64.12 million. “It takes a long time to build social housing units. And we have to respond to a problem that is worrying a lot of citizens”, said the mayor.

According to Colau, of the 114 flats that are going to be incorporated into the Town Hall’s public stock, around 59 are empty, but in a very good condition (the development was built in 2007), and so it is expected that around 30 will be incorporated into the social emergency pool in January, where around 480 family units are still waiting to be assigned a home.

“We need the Generalitat to start making housing policies in Barcelona”, said the mayor Colau, who has accused the regional government of not fulfilling its obligations in this regard. “The Town Hall takes care of 78% of the demand from the social emergency pool when it should be covering 40%. It is assuming a responsibility that corresponds to the Generalitat”, said Colau.

Original story: La Vanguardia (by Raúl Montilla)

Translation: Carmel Drake

Apollo Negotiates the Sale of Altamira to Dobank (Fortress) for €500M

21 December 2018 – El Confidencial

The sale of Altamira, the historical real estate arm of Banco Santander, is facing its most decisive moment. The Italian group Dobank has positioned itself as the primary candidate in recent days to purchase the platform owned by Apollo and Santander, amongst others, by submitting an offer for between €500 million and €550 million, according to financial sources consulted by El Confidencial.

The offer is somewhat lower than Apollo and its other two partners in Altamira’s share capital, the Canadian pension fund CPPIB and the Abu Dhabi fund ADIA, had expected. Between the three of them, they control an 85% stake, whilst the remaining 15% is in the hands of Santander.

The shareholders engaged Goldman Sachs to coordinate the sale with the aim of obtaining proceeds of €600 million. Nevertheless, the lack of competition has decreased the price in recent weeks. The deal was also influenced by the withdrawal of Intrum, which decided not to buy Altamira after winning the bid to acquire Solvia, according to the same sources.

That price difference means that Apollo and Goldmans are taking their time over the completion of the operation. Apollo, CPPIB and ADIA paid €664 million for the 85% stake in the real estate firm back in the day. Despite that, they do not have to reach that figure to recover their investments, given that they have received various dividends in recent years that compensate their profitability figures.

Dobank is the Italian platform owned by Fortress, the US fund that used to operate in Spain in the recovery of financial assets, through Paratus, Geslico and Lico Corporación.

The platform has been interested in entering the Spanish market for a while and regards Altamira as the ideal partner, given that it is the property manager that has been the most committed to internationalisation. It already operates in Portugal, Cyprus and Greece and the next major market into which it wants to expand is Italy.

Santander has not yet decided what it will do with its 15% stake in Altamira, whether to sell it together with the stakes of the other shareholders or to hold onto it to retain some control over the future of the platform, which still manages some of its assets.

Original story: El Confidencial (by Jorge Zuloaga)

Translation: Carmel Drake

CaixaBank Completes the Sale of 80% of its RE Business to Lone Star

20 December 2018 – La Vanguardia

Today, CaixaBank has completed the sale of 80% of its real estate business to two subsidiaries of the US fund Lone Star for around €4 billion.

The operation was formalised on Thursday, after the necessary approvals were obtained, according to reports from CaixaBank, which has specified that this real estate package primarily comprises assets available for sale as at 31 October 2017 and 100% of the company Servihabitat.

All of these assets have been transferred to a newly created company called Coral Homes.

The initial sales price for 80% of the share capital of this company is €3.974 billion, which corresponds to a valuation for 100% of the shares of €4.967.5 billion.

Nevertheless, the initial price will be adjusted up or down over the coming months depending on a series of variables that are typical in these types of operations, said the bank chaired by Jordi Gual and whose CEO is Gonzalo Gortázar.

In parallel to the sale of the real estate portfolio, CaixaBank and other companies in the group have signed a servicing contract with Servihabitat for their real estate assets, present and future, for a period of five years.

The global impact of the operation is estimated to be a loss of €40 million net of taxes.

Meanwhile, the impact of the deal on the fully loaded CET 1 capital ratio is estimated to be an improvement of 15 basis points.

Aura advised Lone Star on this purchase.

Original story: La Vanguardia 

Translation: Carmel Drake

Sareb Invites 20 Investors to Participate in the Sale of its Socimi Témpore

20 December 2018 – El Economista

A formal process is being launched after initial interest was received from three buyers, including one that stood out from the US fund TPG.

On Tuesday, Sareb opened a formal process to sell Témpore, its rental home Socimi, according to confirmation provided by sources in the sector speaking to El Economista. The bad bank, which has not engaged an external advisor for this divestment process, has invited 20 investors to participate.

In November, Nicolás Díaz Saldaña, CEO of the residential company, acknowledged that a Data Room had been enabled containing information about the Socimi and that access had been granted to it for five investors interested in the acquisition of Témpore.

In the end, three offers were received, of which the ones from Ares and TPG stood out, the latter being the highest. In light of the expressions of interest, Sareb decided to raise the matter to its Board of Directors, which yesterday launched an orderly sales process in which investors may participate by invitation only.

According to the same sources, Sareb has not imposed any conditions regarding what percentage of its stake is for sale (it held 98.38% at the end of June), and so it will be open to all offers.

The Socimi has just carried out what will be its last non-monetary capital increase subscribed by Sareb amounting to €150 million to acquire 1,769 assets in total, of which 850 are rental homes. The operation, which forms part of the right of first refusal agreement (ROFO), which Sareb and the Socimi signed, allows Témpore to double in size to reach €325 million.

Growth plan

Before announcing the sales process, Témpore had a growth plan underway with the aim of achieving a portfolio worth €500 million and in this way having sufficient volume to make its debut on the main stock market. That was explained at the time by Díaz Saldaña, who noted that in order to continue growing, “we will have to look for financing, be it from the bank or an alternative, such as a bond issue”.

Amongst the different options, the Socimi is analysing the purchase of whole buildings of rental homes and is also studying the acquisition of developments under construction that are currently in the hands of Sareb. In addition, it is considering buying turnkey projects through delegated promotion. “In the case of the latter, the first projects would be with Sareb, given that at the moment, for the other property developers that we have spoken to, it is more profitable for them to sell in the retail market”, said the CEO.

Meanwhile, yesterday, Sareb announced the sale of some land in the Torre Salses area, in Lleida, for the construction of a large shopping centre, spanning more than 60,000 m2. Eurofund Capital Partners has paid €8.3 million for that plot, whose sale was agreed in 2016.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake