Month: June 2018

Resa’s Former CEO Creates 12 Investment Vehicles & Finalises the Purchase of Land for Tertiary Use

27 June 2018 – Eje Prime

Jorge Guarner (pictured below) used to be the boss of the student hall sector in Spain and now he is looking to do the same in the nursing home sector. The director, formerly the CEO of Resa from 1996 to 2002, is guiding the path of Healthcare Activos, a real estate asset manager operating in the healthcare segment, which is pushing ahead with financial support from the fund Oaktree and one aim: to debut on the stock market in 2020. In its process of becoming a Socimi, the company is going to create twelve vehicles to purchase tertiary land throughout Spain.

During the first half of the year, the company has constituted the seventh and eighth of its series of vehicles, whose aim is “the performance, both in Spain and overseas, of property development and construction activities for all kinds of real estate developments, urban planning and land development projects, be they for industrial, commercial or residential purposes”, as noted yesterday in the Official Gazette of the Mercantile Registry (Borme).

Guarner, as the sole representative of the company, has created the companies with the minimum required share capital (€3,000) and he has domiciled them all at the manager’s Madrilenian headquarters, number 26 Calle Raimundo Fernández Villaverde.

Over the next two years, until it debuts on the stock market, a priori, on the Alternative Investment Market (MAB), Healthcare Activos plans to invest almost €500 million in properties in Spain, primarily in nursing homes for the elderly.

The group’s first investment came in December 2016, when Guarner’s firm purchased four buildings that are today leased to the nursing home operator Amavir. Since the first acquisition to date, the group has invested €107 million in eleven assets, of which €62 million were disbursed in 2017 and the remaining €45 million have been spent since 1 January 2018.

The future Socimi also has €14 million committed for the creation of a portfolio of more than forty properties, in different degrees of progress, such as nursing homes, hospitals and clinics, be they fully operational, ready for renovation and launch, or as land development projects.

Guarnar has funds to invest up to €150 million per year until 2021 in the acquisition of assets and development of new nursing homes for the elderly across the country. The latest operation that the manager carried out was the purchase, a month ago, of a property in Vitoria from the specialist operator Abertia-Etxea, for which it paid €5 million.

In addition, in April, Healthcare Activos spent €40 million on three nursing homes in Gijón, Burgos and Valladolid. For that project, the company joined forces with La Saleta Care, owner of the buildings until then, which will continue to manage the properties for the next 25 years.

Guarnar, who was also the CEO of Sarquavitae for twelve years, the main Spanish company in the nursing home sector, has his company central headquarters in Barcelona, where last summer, he invested €15.5 million in the purchase of the Los Tilos nursing home (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Única Real Estate to Invest €10M per Year Buying Commercial Premises

28 June 2018 – Eje Prime

A new roadmap for Única Real Estate following its debut on the stock market. The Socimi specialising in commercial premises has set itself the objective of investing at least €10 million each year in the purchase of new establishments in the Community of Madrid and other large Spanish cities.

Yesterday, the company made its debut on the Alternative Investment Market (MAB) at a price of €25.25 per share, according to Expansión. In addition to its debut on the stock market, the company is also planning to undertake new capital increases.

“Over the last three years we have been investing an average of around €10 million per year in assets and we would like to maintain that rhythm or accelerate it”, explained Andrés Femia, CEO at the Socimi.

Única Real Estate owns 29 commercial premises in the Community of Madrid, worth €32.5 million, which generate annual rental income of more than €1.9 million. Currently, the Socimi’s share capital is owned by 53 shareholders, including the company’s executives.

Original story: Eje Prime

Translation: Carmel Drake

Project Galerna: Sabadell Sells €900M in NPLs to Axactor

29 June 2018 – Voz Pópuli

Sabadell has already completed the first phase of its investment plan. The bank chaired by Josep Oliú has agreed to sell a portfolio of non-performing loans amounting to €900 million to the Norwegian fund Axactor, according to sources at the funds involved in the process consulted by Vozpópuli.

The portfolio known as Project Galerna comprises mainly mortgage tails proceeding from CAM, which form part of the entity’s Asset Protection Scheme (EPA), and so the completion of the operation is conditional upon approval from the Deposit Guarantee Fund (FGD).

Loans that remain after the foreclosure of real estate credits are known as the mortgage tails. According to the sources consulted, the purchase of these types of assets – which tend to be fully provisioned (100%) by the entities, and so typically generate gains – tend to have discounts of between 95% and 97%, and so the offer from the Norwegian fund to acquire this portfolio could amount to between €25 million and €47 million.

In the bid to be awarded this unsecured portfolio, Axactor has fought off competition from other interested parties such as Lindorff and Kurk. The Norwegian fund arrived in Spain in 2015 and, at the end of 2017, purchased a portfolio of non-performing loans amounting to €436 million from Bankinter.

Sabadell’s macro-sale

The award of Project Galerna to Axactor, a process that KPMG is advising, represents the first step in Sabadell’s divestment plan, through which it is seeking to get rid of around €10.9 billion in non-performing assets before the summer.

As this newspaper already revealed, in addition to Galerna, the bank also has projects Challenger and Coliseum up for sale, operations that Alantra is advising, and which together contain €7.5 billion in foreclosed assets. Similarly, Project Makalu, which KPMG is advising, contains €2.5 billion in loans to property developers and SMEs.

Challenger is the only one of the four portfolios that is not subject to approval from the FGD. The other three are linked to CAM’s EPA and so their block sale would generate million-euro losses for the FGD, which will end up increasing its deficit.

Negotiations with the FGD

To avoid that, Sabadell – as well as BBVA – is negotiating with the FGD to transfer the portfolios to new companies created by the entity and the funds that they are awarded to. In this way, the losses would not be assumed until the new companies sell the assets in the market.

In order to offset these losses, Sabadell, as well as BBVA with respect to Unnim’s EPA, has offered the Deposit Guarantee Fund the option of assuming more than 20% of the losses of the EPAs.

Original story: Voz Pópuli (by Pepe Bravo)

Translation: Carmel Drake

Sabadell Receives 7 Offers to Liquidate its Doubtful Debt

28 June 2018 – Expansión

In the end, seven international funds have presented offers to Banco Sabadell to be awarded one or more of the four portfolios that the entity has put on the market this year to liquidate almost all of its problem asset balance. The funds in question are Cerberus, Lone Star, Blackstone, Oaktree, Deutsche Bank, Bain Capital and CPPIB, although not all of them have bid for all of the assets, given that three of the funds are only interested in the foreclosed properties and the four others only want to purchase the non-performing loans (NPLs).

On the advice of KPMG and Alantra, Sabadell has set itself the objective of divesting toxic assets worth €10.8 billion this month, before the summer. That figure is equivalent to 72% of the bank’s total problem assets, which amounted to €14.9 billion at the end of the first quarter. Of that total figure, €7.5 billion are doubtful balances and €7.4 billion are foreclosed.

This volume of non-performing assets, which is weighing down on the entity’s balance sheet, has been packaged into four portfolios called Challenger (€5 billion), Coliseum (€2.5 billion), Makalu (€2.4 billion) and Galerna (€900 million). Just over half, €5.8 billion, are assets inherited from the purchase of CAM, and, as such, they form part of the Asset Protection Scheme (EPA). As a result, the divestment of three of the portfolios (Coliseum, Galerna and Makalu) must first be approved by the Deposit Guarantee Fund (FGD), which is the entity that will cover 80% of the losses generated by those protected portfolios.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

Apple’s Landlord to Build a 20,000 m2 Hotel in Central Madrid

27 June 2018 – El Economista

The Mexican Díaz Estrada family, owner of the Apple store in Madrid’s Puerta del Sol, has decided to launch a new hotel project in the heart of the Spanish capital. It will be a large complex, spanning almost 20,000 m2, which is going to be built on Calle Montera, in two adjacent buildings, one of which used to house the former Acteón cinemas for many years.

According to several sources in the sector, speaking to El Economista, the Latin American group has decided to re-launch this development now, although it has been working on it for several years. In this way, the family acquired numbers 25-27 Calle Montera in 2013 through its company Exacorp One. That building had been owned by the public company Madrid Espacios y Congresos, which purchased it in 2007 for €55.4 million during the reign of Alberto Ruíz Gallardón. The intention of the Administration was to renovate the property and give it a new lease of life as a hotel, but that operation was thwarted by the arrival of the crisis and the plummeting prices. In the end, it sold it for €34 million to Exacorp One, which, in 2015, also acquired the adjacent building (Montera 29-31) where the Acteón cinemas used to be located.

Now the group is going to convert both buildings into a 173-room hotel complex, according to the project plans to which this newspaper has had access. Thus, the company obtained the permits to carry out this project last summer and according to the same sources, may have already reached an agreement with a chain to operate the hotel. According to the experts, this project has sparked interest amongst all operators, especially those who still don’t have a presence in Spain. “It is a very iconic project in the heart of Madrid, where there are few developments of this size underway. Moreover, Calle Montera has undergone a very significant transformation in recent times, to improve its retail and restaurant offer”.

The construction of the new hotel will involve the complete demolition of the building at number 29-31 (the Acteón cinemas) in order to build a new building connected to the adjoining one. The 12-storey establishment will have one of the best terraces in the centre, spanning 654 m2 – housing a restaurant – with a swimming pool (…). The initial plans also include the installation of a gym, a bar, meeting and banquet rooms, as well as a function room for the hotel. In addition, the building will house five commercial premises.

This is not the first hotel project from the Díaz Estrada family, which is also the owner of the new Hyatt Centric, at number 31 Gran Vía. With that opening, the chain returned to Madrid in December 2017 after leaving the management of the Villa Magna nine years ago. The Hyatt name is precisely one that is being suggested as a possible contender to operate the hotel on Calle Montera, under one of the chain’s other brands, given that it could do so by reaching a double agreement with the owners.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Equilis Invests €120M in a Commercial Complex in Esplugues

27 June 2018 – El Mundo

The Belgian real estate firm Equilis is finalising a new shopping centre in Esplugues de Llobregat, which is expected to be inaugurated in November; 90% of the stores in the complex have already been commercialised. The centre, which has received investment of €120 million and which has employed 1,000 people for its construction, will receive up to 8 million visitors per year and will create 500 more jobs once it begins operation, according to forecasts prepared by the company.

The macro-project from the company controlled by the Mestdagh family is a first step in its expansion in Spain, where it expects to begin six projects with a value of €750 million over the next few years, two of which will be in Cataluña, which will receive investment of €200 million – including Esplugues – and four in the rest of the country.

Finestrelles Shopping Center, as the commercial complex in Esplugues is known, is located in the Ca n’Oliveres sector, in the neighbourhood of Can Vidalet, on the plot that exists between Calles Laureà Miró and Sant Mateu. It will have two tunnels that will connect the space with Ronda de Dalt and la Avenida Diagonal.

The surface area of the complex will span 40,000 m2, distributed over five floors, two of which will be dedicated to parking and the rest for commercial use. The centre will contain 110 stores as well as a hall of residence for students with almost 375 beds and a hypermarket. “For the time being, there won’t be any cinemas, but we are not ruling that out”, said Víctor Gómez (pictured above), CEO of the company in Spain.

Original story: El Mundo 

Translation: Carmel Drake

CaixaBank Transfers Servihabitat & €6.7bn in Toxic Assets to New JV with Lone Star

28 June 2018 – El Confidencial

Caixabank has followed in the footsteps of Santander and BBVA, as expected, to create a joint venture company with a large international fund to which it is going to transfer a large proportion of its toxic real estate assets.

Specifically, the entity has reached an agreement with Lone Star to transfer to this new jointly-owned vehicle its entire portfolio of foreclosed assets, whose gross value amounts to €12.8 billion, and which in net terms is worth €6.7 billion, as well as the servicer Servihabitat, whose ownership it recovered on 8 June, when it acquired the 51% stake that it had sold to TPG five years ago, and which takes the final amount of the agreement to €7 billion.

Lone Star will own 80% of the share capital of the new company, whilst the financial institution will control the remaining 20%, a structure that will allow CaixaBank to deconsolidate the assets. The deal is expected to have a neutral impact on the bank’s income statement, but will allow it to improve its capital ratio, the ultimate motivation behind these kinds of operations.

Specifically, the agreement with Lone Star will allow the bank to increase its fully loaded CET 1 ratio by 30 basis points, but, given that the purchase of Servihabitat resulted in a hit of 15 points, the net outcome of these two operations will have a final impact of a 15-point improvement.

Pressure from the European Central Bank on Spanish entities to accelerate the real estate clean up have been the trigger for these kinds of operations, since they allow the immediate deconsolidation of million-euro batches of toxic assets, which will be sold gradually through the joint ventures that are being created with the funds, whereby avoiding the need for the entities to recognise greater losses now.

Gonzalo Gortázar (pictured above), CEO of CaixaBank, highlighted that this “operation allows us to fast forward by a couple of years with our strategic objectives of reducing non-performing assets, allowing CaixaBank to position itself as one of the banks with the most healthy balance sheets in the Spanish market”.

The agreement also stipulates that Servihabitat will continue to render services to the bank for five years and the final signing of the agreement with Lone Star still depends on approval from the CNMC – Spain’s National Competition and Markets Commission – for the repurchase of 51% of the servicer, at which point the financial institution will be able to sell the assets onto the new joint company.

For its 80% stake (equivalent to around €5.6 billion based on current numbers), the fund will pay the valuation that the assets have at the time the transfer is definitively closed, which is still pending the corresponding authorisations, in both Spain and Europe, which means that the parties will have to wait until the end of this year or the first quarter of 2019.

CaixaBank expects to achieve cost savings of €550 million before taxes over the next three years, an improvement that also includes the new servicing contract that will be signed with Servihabitat.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Vbare Acquires 14 Homes in Málaga for €1.35M

28 June 2018 – Eje Prime

Vbare is branching out of the Spanish capital. The Socimi has made the leap to Málaga with the acquisition of a block of residential assets for €1.35 million. This operation forms part of the company’s growth plans after it carried out a €3.2 million capital increase in June.

According to a statement filed by Vbare with the Alternative Investment Market (MAB), this week, the company has signed the acquisition of a batch of fourteen homes on Calle Eugenio Gross in Málaga. The operation, which has been financed using the company’s available cash, was initiated in May when the company signed the deposit agreement.

Twelve of the homes acquired are leased and the remainder are vacant, “but in optimal conditions for their immediate rental”, according to the company. Vbare estimates a return of approximately 5.1% once the building has been fully let at market rents.

So far this year, Vbare has carried out five operations in the residential and commercial sectors. The Socimi ended the first quarter of the year with 210 assets under management and has set itself the objective of expanding its portfolio to include up to 261 residential units under management.

VBare is a real estate investment vehicle specialising in the acquisition and management of residential assets for their rental. The company was constituted in March 2015, is chaired by Fernando Acuña and led by Fabrizio Agrimi (pictured above) as the Director General.

Original story: Eje Prime

Translation: Carmel Drake

Blackstone Formalises Revised Takeover Bid for Hispania

27 June 2018 – Eje Prime

The deal involving Blackstone’s purchase of Hispania has entered the home stretch. This lunchtime, the US fund has asked Spain’s National Securities and Exchange Commission (CNMV) to authorise a modification to the offer presented in its takeover bid for the Socimi, to €18.25 per share, a figure that both parties agreed to last week, according to a statement issued by the stock market regulator in a relevant fact.

The increase in the bid by Blackstone came hand in hand with a commitment from Hispania to accept the new offer, which values the Socimi at more than €1.992 billion. In April, the fund made its first offer of €17.45 per share, following its purchase of 16.5% of the company.

The initial bid fell below the expectations of the real estate company, which specialises in the hotel sector, but it now recommends the acceptance of the operation’s new conditions, which it describes as “attractive”.

All of the directors of the Socimi have reached an agreement to accept this new offer for 100% of its shares, equivalent to 48,108 shares, which account for 0.044% of Hispania’s share capital.

Azora (with 1.1 million shares and 1.070% of the capital) has “irrevocably” committed to accepting the new offer from Blackstone, as has Canepa (as the management company of Row Fund, which controls Tarmelane) on behalf of Tarmelane.

Original story: Eje Prime

Translation: Carmel Drake

INE: The Number of Mortgage Signings Soared by 34% YoY in April

27 June 2018 – Expansión

The number of mortgages constituted over homes in Spain amounted to 28,724 in April 2018, which represents an increase of 34.2% compared to the same month in 2017.

According to data published today by Spain’s National Institute of Statistics (INE), the increase with respect to the month of March was 9%. In terms of the cumulative numbers so far this year, the increase amounts to 11.6%.

Meanwhile, the capital loaned rose by 46.5% in April 2018, compared to April last year, to €3.5 billion. Moreover, the average amount loaned in April of this year amounted to €123,256, up by 9.1% in YoY terms.

By nature of property, mortgages constituted over homes accounted for 64.7% of all the capital lent in April.

For mortgages constituted over homes, the average interest rate in April 2018 was 2.67% (16.7% lower than in April 2017) and the average term was 24 years. 60.6% of mortgages over homes were constituted at floating rates and 39.4% at fixed rates. Fixed rate mortgages experienced a 30.7% increase in YoY terms.

The average interest rate at the beginning of a mortgage term is 2.42% for floating rate mortgages over homes (a decrease of 22.3%) and 3.15% for fixed rate mortgages (6.1% lower).

Fernando Encinar, Head of Research at Idealista, considers that the “significant increase in the volume of mortgages registered in April with respect to last year should be adjusted for the effect of Easter, although even taking the sum of March and April in both years, the increase is still a healthy 12%”.

According to him, “the banks are still willing to grant mortgages, they are opening their hands slightly, but they are not the motors behind the rise in house sales. Fixed rate products are rising slightly with respect to floating rates, and so are the prices of them, undoubtedly the result of more expensive financing. Even so, more mortgages are still being repaid than registered”.

For Ferran Font, Head of Research at pisos.com, these data confirm “that in March, we were not looking at a change in trend, but rather the effect of Easter, which fell in April in 2017. That percentage strengthens the growing trend in recent months, after a month of negative YoY growth”.

By region, the autonomous regions with the highest number of mortgages constituted over homes in April was the Community of Madrid (6,018), Andalucía (5,154) and Cataluña (4,700).

Meanwhile, the highest YoY variation rates were recorded in the Balearic Islands (66.7%), the Community of Madrid (62.4%) and Castilla-La Mancha (54.2%).

The autonomous regions where the most capital has been loaned for the constitution of mortgages were the Community of Madrid (€997.9 million), Cataluña (€708.1 million) and Andalucía (€531.8 million).

In total, 40,005 mortgages over properties were signed in April, up by 36.5% with respect to a year earlier. Of the total, 1,350 corresponded to rural properties (+21.4%) and 38,655 to urban assets (+37.1%).

Original story: Expansión 

Translation: Carmel Drake