Forcadell: RE Investment Fell by 3.5% in 2017 to €13.5bn

27 February 2018 – Eje Prime

Investment in real estate continued to perform well last year but actually fell with respect to 2016. In total, €13.5 billion was invested in the domestic real estate market in 2017, which represents a decrease of 3.5% compared to the €14 billion that was registered during the previous year, according to data from the consultancy firm Forcadell.

Spain was the fourth-ranked country in Europe in terms of the most money received in the sector, behind only Germany, France and the United Kingdom, in that order. Moreover, Madrid and Barcelona were the two cities that received the most demand, accounting for 85% of the total capital invested in the domestic real estate market last year.

The office market was the sector that stood out the most in terms of investment volumes. And within that sector, Madrid and Barcelona, which together captured €2.455 billion of investment, were the main drivers of the segment, accounting for 95% of the total. In those two cities, prime rents reached 4.25% in Madrid and 5% in Barcelona.

On the other hand, the good performance of the housing sector also allowed an upturn in the residential sector, which saw investment of €3 billion in 2017, a level of activity not seen in that market since 2008, according to the consultancy firm. Besides the two major capitals, Valencia, Sevilla and Bilbao were the three cities that saw a significant increase in the field of residential development.

The logistics sector was the most profitable

One of the areas that is growing by the most at the moment in the Spanish real estate market is the logistics sector. Despite having the lowest rents per m2, the segment offers great returns from the point of view of real estate investment. The strong leasing figures and scarce supply close to large cities are generating interest from funds, primarily international players, who want to build new large industrial spaces measuring between 3,000 m2 and 50,000 m2, to rent them out.

Retail, on the other hand, continued its record figures from 2016 throughout last year with an investment volume that reached €4 billion. Moreover, land became very sought-after once again in the real estate sector, which had great demand, above all, in the residential market.

Looking ahead to 2018, Spain is expected to continue to represent a country of great interest for real estate investors, both domestic and international. Moreover, Forcadell forecasts that fundraising will increase significantly, both in terms of the number of players involved and the volume disbursed.

Original story: Eje Prime

Translation: Carmel Drake

Meco’s Town Hall Approves Occupancy of 1.9 million m2 of Industrial Land

27 February 2018 – Eje Prime

Madrid has a new batch of industrial land. The Town Hall of Meco has approved the occupancy of the largest surface area of industrial land in the whole of the Community of Madrid, placing at the disposal of companies a space spanning 1.9 million m2 in total.

The design of the new industrial estate, which is equivalent in size to 266 Santiago Bernabéu football pitches, has been approved, and now is the time to develop the land and promote it. The development of the land has been “claimed by and agreed with the public company Obras de Madrid”, which is the sole owner of one of the sectors of new industrial space and, therefore, “may start its development and promotion from tomorrow”.

Large companies such as Carrefour, Inditex and ICP Logistic are just some of the firms that have expressed their interest in setting up activity on the land that has just been approved, according to the Town Hall.

Original story: Eje Prime

Translation: Carmel Drake

Corpfin Appoints Ana Granado as New CEO

27 February 2018 – Eje Prime

Corpfin Capital Real Estate has opted for an expert in corporate finance to lead the three investment vehicles that it has in place. The Spanish Socimi has hired Ana Granado (pictured below) as the new CEO of the company.

Granado previously held positions of responsibility at Aguirre Newman and Deloitte. At the real estate company, the director led the corporate finance team for six years and at the consultancy firm, she served for five years as a director of financial advisory in the real estate sector. Moreover, the executive previously worked as an analyst at Santander Investment in the corporate finance department.

Granado is a RICS member and holds a degree in Business Administration and Management, as well as a Masters in Management Skills, both from the Universidad Comercial de Deusto. Moreover, she has completed the Advanced Program in Corporate Finance at the IE Business School.

Corpfin finished 2017 by making new asset purchases for its portfolio. In December, through its vehicles Corpfin Capital Prime Retail II Socimi and Corpfin Capital Prime Retail III Socimi, it acquired two commercial premises, located in Madrid and Vitoria, as reported by Eje Prime. The company is going to invest in up to fifteen more assets and thus plans to spend €100 million between the two vehicles.

Moreover, the company also operates in the real estate business with its vehicle CCPR Retail Parks. That fund targets retail products, primarily medium-sized spaces, with a high management component. According to the group, for that fund, the estimated diversified investment will involve between 12 and 14 operations with an average investment volume of €3 million for each operation, including land, capex, acquisition and marketing costs. Until now, the fund has committed half of its planned investment.

Original story: Eje Prime

Translation: Carmel Drake

Lar’s Assets in Valencia Now Worth 34% More than Purchase Price

26 February 2018 – Expansión

The Socimi Lar España values its assets in the Community of Valencia at €210.5 million, up by 34% compared to their combined purchase price. The value of the Vidanova project in Sagunto has appreciated by 77% in two years.

At the presentation of its annual accounts, the Socimi Lar España said that the land that it purchased less than a year ago from Bertolín, next to the Cheste circuit (in Valencia), is already worth more than twice the amount that it paid for it.

According to the Socimi, the logistics plot, measuring 112,813 m2, named Newlogis, which it acquired in May, had a market value of €5.2 million at the end of 2017. In other words, it had appreciated in value by 136% in just eight months.

With those percentages, it is hard not to remember the last real estate bubble of just a decade ago when expressions such as “pelotazo” were so typical in the property sector.

According to the detailed information about the project, the cost of the land has increased significantly because it also includes the urbanisation costs. In this way, the total cost of the land has increased to €16.5 million by including the amount of the urbanisation works that correspond to it and which are in fact being undertaken by a company belonging to the Bertolín family. The Socimi expects that the first warehouses may be ready by the end of 2019.

Lar España has also accumulated significant latent gains on the rest of its investments in Valencia, according to the market value attributed to them by reports from JLL and Cushman & Wakefield. The Socimi owns five assets in the region, specifically, three shopping centres and two industrial properties. At the end of 2017, Lar España valued them at a market price of €210.5 million, compared to the €156.3 million that it paid for them between 2014 and 2016.

The largest asset is the Portal de La Marina de Ondara shopping centre (Alicante), which generated €7.6 million in rental income last year, making it the Socimi’s third best-performing asset by revenues. According to the valuation, it is now worth around €120 million; the Socimi paid almost €90 million for it between 2014 and 2016.

Meanwhile, the Vistahermosa de Alicante shopping centre is now worth €50 million, when it was acquired in 2016 for €42.5 million.

Another asset that has multiplied in value in the Vidanova commercial development in Sagunto, which is worth €24.8 million, up by 77% compared to the purchase price of €14 million.

Finally, the Socimi’s logistics platform in Almussafes has seen its value increase from €8.4 million to €10.3 million in two years.

Original story: Expansión (by A. C. A.)

Translation: Carmel Drake

Via Célere Expands in Portugal Building 60 Homes in Porto

27 February 2018 – Eje Prime

The developer began operations Portugal last September with the launch of its first venture in Lisbon, where it is building a development of 276 homes.

Vía Célere now intends to expand its footprint in the Portuguese real estate market. This time the developer headed to the north of mainland Portugal, setting its sights on the city of Porto. The Spanish real estate company will build 60 homes on land that it had previously acquired through a merger.

The company, chaired by Juan Antonio Gómez-Pintado (pictured above), will launch the development on a 6,144-square-meter site that was incorporated into Vía Célere after its merger with Dospuntos. The project will be implemented in Lordelo do Ouro, a neighbourhood that is four kilometres from the city centre, according to El Economista.

The Vía Célere development in Porto reinforces the commitment, not only of Gómez-Pintado’s real estate firm but also of Spanish real estate developers in Portugal. “It is the right time to move forward with the development of new projects in Portugal. Because of its sustained economic growth and the growing confidence and purchasing power of its consumers, in an environment of greater access to finance and low-interest rates, the Portuguese market is an excellent opportunity for real estate investment,” via Célere’s chief executive stated during a presentation of the project in Lisbon.

The Lisbon development will begin construction during the second semester of this year and will be divided into four phases. In the first phase, a residential area encompassing 15,800 buildable square meters will be built, together with up to 120 multi-family homes. The land for this project also originated with Via Célere’s merger with Dospuntos.

Original story: Eje Prime

Translation: Richard Turner

Aedas Recorded Losses of €40M in 2017 Mainly Due to IPO Costs

28 February 2018 – Expansión

Aedas, the property developer controlled by Castlelake, which debuted on the stock market in October, closed last year with net losses of €40 million, due primarily to non-recurring expenses relating to its IPO process, which resulted in a negative impact of €31.55 million.

That result also includes a cost of €26.2 million associated with the director incentive plan, which was paid for in full by Castlelake, and which is reflected in personnel expenses.

The property developer highlights that, excluding extraordinary operations and expenses, its losses for the year as a whole amounted to €8.55 million. Of that amount, €8.27 million corresponded to the first half of the year, “an amount that was already reported and discounted by investors from the price of the stock market debut”, says the company. By contrast, the firm closed the second half of the year with losses of €280,000 and an EBITDA of €3.3 million.

Aedas, which was created in July 2016 and which started to market its first homes in March 2017, reported revenues of €38.6 million in 2017. The gross value of its assets (GAV) amounted to €1.475 billion, which represents an increase of 7.2% with respect to its IPO valuation.

The property developer indicated that from 2018 onwards, it will start to register its first “significant” revenues through the delivery of its first large batch of homes and said that the 915 commercial sales that it has closed represent gross revenues of €310 million.

Original story: Expansión (by R. Arroyo and J. Díaz)

Translation: Carmel Drake

Aelca to Invest €200M Per Year in Land Purchases

28 February 2018 – Expansión

Aelca is moving forward with firm steps and already forms part of the new generation of listed property developers controlled by funds or, in its case, is on the verge of making its stock market debut. The firm constituted in 2012 by Javier Gómez and José Juan Martín, now the joint CEOs of the group, closed last year with a profit before tax (PAT) of €25.5 million, up by 154% YoY, and revenues of €132.2 million, up by 27%. And, it is preparing to continue growing through purchases.

“In 2018, we are going to have a production capacity, both in terms of construction work as well as pre-sales, of around 6,300 homes and, in 2019, we should reach cruising speed, with the delivery of around 2,000 or 2,500 homes. We have been working on and handing over developments since 2014, and growing at sustainable rates”, explains Javier Gómez to Expansión.

Specifically, the company sold 1,118 units in 2017 and handed over almost 500 homes. This year, pre-sales are expected to exceed 1,600 homes and revenues are expected to amount to around €160 million or €170 million.

Aelca wrote a new chapter in its history in the middle of 2016 when the US fund Värde purchased a 75% stake in the property developer from Avintia for €50 million and gave a boost to the business. “Investment in the company over the last 18 months since then has been significant, with more than €400 million spent on land purchases. Over the next few years, we plan to invest between €150 million and €200 million per year in land”, explains the director.

After several capital increases, Värde currently controls 80% of Aelca, whilst the remaining 20% remains in the hands of the founders.

In terms of the stock market debut, Gómez acknowledges that going public is a natural exit for the funds and expects that it could be an option in 2019. For the director, although Aelca is already the right size to list, the group’s plans involve continuing to grow and taking advantage of opportunities.

Gómez acknowledges that to debut on the stock market after its competitors may be a risk, but adds “we have a history of deliveries, a strong track record and a set of results that support us”.

Madrid and Andalucía

Specifically, the group has purchased land in Dos Hermanas (Sevilla), mostly from CaixaBank, for a mega-project involving 2,100 homes.

Moreover, like its rivals such as Neinor, Aelca is looking at the possibility of buying up non-finalist land and is analysing operations worth between €50 million and €70 million. “We are analysing the option of acquiring land under development, at the most advanced stage possible, in Madrid and Andalucía”, he explains.

Currently, Aelca has a land portfolio spanning 1.3 million m2, worth more than €1 billion and with capacity to launch around 13,000 homes.

The company has six regional offices in País Vasco, Cataluña, Madrid, Málaga and the Comunidad Valenciana and is not planning to expand its footprint at this stage. “There are still great opportunities in those locations”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Colonial Concludes that Axiare Holds Non-Strategic Assets Worth €300M

26 February 2018 – El Confidencial

Axiare has assets susceptible to divestment worth €300 million”. That is according to the President of Inmobiliaria Colonial, Juan José Brugera (pictured below, left), and his CEO, Pere Viñolas (pictured below, right), at the presentation of the company’s results.

“We are least interested in the Socimi’s logistics and retail assets, but that does not mean that we are going to sell off all of those assets or that said divestment is going to be undertaken this year. We have not yet been able to determine whether the assets will be sold in the end or when, due to the fact that we are not yet involved in the ordinary management of the company”, they said.

What assets are we talking about? As at September 2017, Axiare held logistics assets with a net value (GAV) of €192.6 million, spanning more than 466,235 m2. The vast majority are located in Madrid and the rest in Barcelona and other markets. To give us an idea, Axiare’s portfolio at the end of the third quarter of last year comprised 74% offices (50% in prime areas), 18% logistics platforms and 8% commercial assets (…)

Colonial, which registered a record net profit of €683 million in 2017, more than doubling (+149%) the figure obtained in the previous year, boosted by growth in the rental income of its office buildings and the appreciation in value of its assets, also estimates making net future investments of between €300 million and €400 million, in line with those undertaken to date.

In other words, between investments and investments, the net result is going to hover around the €300 million mark. These investments are going to focus on those markets where the firms already have a presence and so they will strongly back Madrid, Barcelona and Paris. Moreover, they are expected to be financed, to a large extent, through the traditional mature asset rotation policy. “We are going to continue investing, and also selling”, said both directors.

The merger will be ready in H2 2018

In this way, the real estate company is going to continue with the organic growth strategy that it has been pursuing since 2015, whilst working on the integration process with Axiare, which it estimates will take between four and five months to complete. As such, Colonial expects to close its merger with the Socimi during the second half of the year, which will materialise through a share exchange to take around 13.1% of the firm that it does not control yet.

“Of the possible alternatives, a merger is the most likely”, although both Bruguera and Viñolas have said that all of the options are currently being evaluated and that there will not be any decision in this regard until the second half of the year. Similarly, they said that they are “in conversations with Axiare to join its Board of Directors”, where they do not have a presence yet even though they increased their stake to 86.86% through the takeover, so as to take part in the Socimi’s management whilst the merger goes ahead (…).

New real estate giant

For the time being, the integration between Colonial and Axiare, which constitutes the first merger between the new generation of Socimis, will give rise to a company with real estate assets worth €11.079 billion, thus surpassing Merlin Properties. Of those assets, €9.282 billion will correspond to office buildings that Colonial owns in the centre of Madrid, Barcelona and Paris, spanning a surface area of 1.36 million m2, and the remaining €1.797 billion will correspond to assets contributed by Axiare, most of which are also offices, according to the year-end valuations completed by both companies.

In addition, the two companies generated a joint net profit of €700 million and turnover from rental income of €355 million in 2017. Nevertheless, Colonial calculates that the combined group’s revenues will increase to €500 million once the projects it currently has under development come onto the market.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Colliers International Acquires Spanish RE Consultancy Irea

27 February 2018 – El Confidencial

There’s a new marriage in the market for real estate consultancy firms. Colliers International Group has acquired the independent Spanish firm Irea. This move comes just a few months after Savills purchased Aguirre Newman, a firm that Colliers also expressed its interest in.

Following this integration, the new company will have a team comprising more than 100 professionals, with offices in Madrid and Barcelona, a turnover of €25 million, and will provide services in the following fields: advisory, capital markets, consulting, valuation, workplace solutions and project management. The objective of the new group is to be one of the top three firms in the sector within five years.

The operation has been structured through the purchase of the majority of Irea’s share capital by Colliers International, a listed company with a global turnover volume of €27 billion, a move that has been followed by a merger, whereby Irea has acquired the Spanish subsidiary of Colliers.

Mikel Echavarren, Founding Partner at Irea, is going to be the CEO of Colliers in Spain. Meanwhile, the rest of the management team is going to comprise: Ignacio M. Iturriaga, Joan García and Álvaro Alonso as the Heads of Corporate Finance; Neil Livingstone and Antonio Pan de Soraluce as the Heads of Capital Markets; and Miguel Vázquez and Laura Hernando, as the Heads of the specialist hotel services division.

In addition, in accordance with the model that characterises Colliers, which teams up with local partners, Echavarren, Livingstone and Pan de Soraluce will hold onto 20% of the share capital of the Spanish subsidiary.

“The Spanish real estate and hotel markets have experienced significant growth in recent years, and having the opportunity to expand our business with Irea’s excellent team of professionals is going to allow us to offer high added value services for our clients”, said Chris McLernon, CEO at Colliers International for the EMEA region.

“Our integration into Colliers represents a natural evolution for Irea, given that both companies share the same business culture and a strong commitment to excellence”, said Echavarren. “We consider that integrating ourselves into a global brand that has an unparalleled international platform is the key for strengthening our growth strategy and continuing to offer the best service possible to our clients, wherever they are in the world”, he added.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Property Developers Eagerly Await Blackstone & Cerberus’s Major Land Sales

26 February 2018 – Cinco Días

The residential market is going to undergo a real shake-up over the coming months. From the summer onwards, Spain’s residential property developers expect the main investment funds to place on the market the large land banks that they have been stockpiling following their purchases from the banks, whereby alleviating the shortage of plots for construction in those areas where activity has resumed. Thousands of millions in investments are at stake.

Specifically, the major stars are going to be Blackstone, which took control of Popular’s toxic property portfolio last year, and Cerberus, which did the same with assets from BBVA. Moreover, managers such as Bain Capital, with land proceeding from Liberbank, will also play a significant role.

The other major player that is going to star in this market over the coming months is Sareb, which is preparing its largest-ever land transaction under a new formula. It is looking to team up with a large property developer to contribute plots worth €800 million and integrate its residential business in exchange for entering the share capital of a company that will be listed on the stock market in the medium term. In fact, large funds are arriving to compete with the bad bank to supply land (…).

“Expectations are high”, says Pablo Méndez, Director of Capital Markets at the consultancy firm Savills Aguirre Newman. “We expect the funds to bring products onto the market during the course of this year. They are going to want to maximise the value of their land, and so they will sell it on a piecemeal basis. We do not expect to see large portfolios for sale, at least not in Madrid, Cataluña or Levante”, he explained. “Nevertheless, I think that we may see portfolio sales in other areas that are starting to reactivate and that are of interest to real estate companies, such as Galicia, Asturias, Santander, Burgos, Tarragona and other large cities”.

House building activity has reactivated timidly in Spain, with 80,000 new house starts last year and with the objective for the sector of reaching around 150,000 new homes per year as the healthy cruising speed. New companies, such as the listed firms Neinor and Aedas, together with others such as Aelca, Vía Célere, ASG, Amenabar and Metrovacesa (which returned to the stock market earlier this month) have boosted activity. But there has been a shortage of buildable land (plots with the necessary permits) in Spain’s large cities, above all in Madrid and Barcelona.

Simultaneously, the banks have been forced to divest property from their balance sheets, under pressure from the regulations set by the European Central Bank, like the entities that received public help did back in 2012, when they transferred their toxic assets to Sareb. In the funds, the banks have found the best partners for getting rid of their properties to start putting them on the market (…).

“We estimate that the large funds have land worth more than €15 billion”, calculates Samuel Población, Director of Residential and Land, at the consultancy firm CBRE.

Blackstone is going to become one of the key players over the next few months. The US fund purchased 51% of Popular’s portfolio worth €10 billion from Santander. Of that total, 42% corresponds to land. The agreement is not expected to be definitively closed until March. From then on, Aliseda will start to sell those plots. The new CEO of that servicer is Eduard Mendiluce, who is also continuing to serve as the head of Anticipa, the company that Blackstone uses to manage its housing portfolios.

Meanwhile, Cerberus acquired 80% of BBVA’s real estate portfolio for €4 billion. Almost 80% of those assets comprise plots of land. In that case, they are waiting until June, for the operation to materialise, before starting to place any portfolios on the market. That sales mandate will be entrusted to Haya Real Estate, the servicer that Cerberus is planning to list on the stock market. Note, the US fund also acquired a majority stake in the residential property developer Inmoglacier, which is expected to receive a small proportion of the plots to make it grow and become one of the new stars of the sector.

Finally, Bain Capital, on a smaller scale, acquired around €144 million of land from Liberbank, at the same time as taking over the Catalan property developer Habitat (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake