Year: 2018

UBS Finalises Purchase of Torre Titán from España-Duero for €50M

29 December 2017 – Voz Pópuli

UBS is on the verge of closing one of the largest real estate operations of this year-end. The Swiss entity is negotiating the purchase of one of the two Titán towers, owned by Banco Ceiss (España-Duero), a subsidiary of Unicaja. The sale is in its final phase and could be closed within the next few days, for more than €50 million, according to financial sources consulted by Vozpópuli.

The final consideration may even reach €55 million, which is exactly the price that España-Duero paid Nozar for the tower in 2008. That acquisition caused a great deal of controversy at the time to the point that some of the former directors of Caja Duero were subjected to investigations, but the case was archived in the end.

The Titán towers are two 13-storey buildings constructed by Nozar in 2008. One of them is owned by Invesco (which acquired it in 2011 for €40 million) and leased to the state-owned firm Adif. The other one is owned by España-Duero and it not only houses the headquarters of Unicaja’s subsidiary but is also home to Nozar and Enagás.

Ceiss continues

This process has been led by Irea, according to El Economista, and two other consultancy firms, Knight Frank and Aguirre Newman, have also been involved, in the search for tenants for the 30,000 m2 of available space. The useful surface area for offices is 10,722 m2.

According to sources close to the operation, España-Duero is expected to commit to continue to occupy the offices. The entity is in the middle of a merger with Unicaja, after the Malagan entity acquired the 12.5% stake that it did not own in the subsidiary from the Frob.

During the IPO in the middle of this year, the heads of Unicaja expressed their intention to merge the two companies (Unicaja and Banco Ceiss). As such, observers in the market speculate that Torre Titán will serve as the new headquarters for the central services team in Madrid.

The sale of Torre Titán will be added to the list of divestments that the Unicaja Banco group has been carrying out in recent weeks. Earlier this month, it sold a portfolio of foreclosed assets to the fund Axactor, as this newspaper revealed.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Neinor Expands Overseas & Finalises Purchase of 3 Plots in Lisbon

26 December 2017 – El Confidencial

The dream of making the leap overseas is increasingly closer to becoming a reality for Neinor. The property developer led by Juan Velayos is holding advanced talks to acquire three plots of land in Lisbon, according to sources familiar with the deal. Provided nothing goes awry, the deal is expected to close between the end of January and the beginning of February.

With this move, the company will fulfil its objective of entering the Portuguese market, where it first placed its focus several months ago in order to take advantage of the recovery happening in the country. The evolution there is expected to be similar to the recovery that Spain has been enjoying in recent times.

Neinor’s objective is to acquire sufficient plots of land to enable it to build 300 homes per year, a volume that would justify the opening of a dedicated office in Lisbon.

The acquisitions that the property developer currently has on the table would justify its debut in the neighbouring country, although the same sources also indicate that, currently, Neinor is in the “due diligence” phase and that all three plots must pass the test for it to go ahead with the agreement.

Although the entry into the Portuguese capital would represent Neinor’s international debut, the property developer regards the move in the context of the entire Iberian Peninsula representing a single market, albeit taking account of the Portuguese cultural, legal and regulatory rules.

In light of this commitment to urban housing, Neinor and its main shareholder, Lone Star, have taken the decision to not transfer to the property developer the plots of land that the fund acquired two years ago in the Algarve from Catalunya Banc.

The plots in question house the Vilamoura tourist complex, which spans a surface area of almost 2,000 hectares and a buildable area of 700,000 m2. More than 5,000 apartments and homes are going to be constructed there and the US fund engaged CBRE last autumn to start selling them.

During the first nine months of 2017, Neinor invested €275 million in buildable land, which means that it now has land for the immediate development of around 12,000 homes. It also generated revenues of €169.4 million, with a gross margin of €40.7 million.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

CBRE: Hotel Inv’t Reached Record Figure of €3.75bn in 2017

29 December 2017 – Europa Press

Investment in the hotel sector in Spain grew by 83% in 2017 compared to the previous year, to reach a total transaction volume of €3.75 billion, according to data from the consultancy firm CBRE Hotels.

The cumulative figure represents a historical record in the Spanish market, exceeding the previous record set in 2015. The increase is primarily due to strong demand from investors to buy and capitalise hotel assets, whereby taking advantage of the economic and real estate recovery in Spain.

According to CBRE Hotels, 190 hotel assets were sold in Spain in 2017, up by 23% compared to 2016, which represented an increase of 25% in terms of the number of rooms sold (28,000). Moreover, a further 2,200 future rooms were also sold last year in buildings and projects still under construction.

The most sought-after hotel assets were 4-star establishments, accounting for 42% of all investments.

The Canary Islands and the Balearic Islands accounted for almost 40% of all investments

In terms of the main investment destinations in the hotel sector, the Canary Islands (21%) and the Balearic Islands (18%), together with Madrid (17%) led the ranking, followed by Barcelona and Málaga. The most significant changes compared to 2016 were seen in Barcelona and the two island regions, which went from accounting for 36% to 15% in the case of the former and from 24% (combined) to 39% in the case of the latter.

In terms of the type of properties, holiday hotels accounted for 60% of the total compared with 40% urban properties. On the other hand, buyers invested in individual assets in 60% of cases, rather than in portfolios (40%).

Regarding the type of buyers or investors that acquired the most hotel assets last year, including not only hotels but also tourist apartments, aparthotels and land and buildings destined for hotel use, institutional investors participated in 55% of operations, followed by private entities and family offices, with 22% of transactions, and other hotel chains, with 21%.

Main operations

The largest operation of the year involved HI Partners, the hotel platform that Banco Sabadell recently sold to Blackstone for more than €630 million. The change of owner of Edificio España also hit the headlines – it was acquired by Riu Hotels & Resorts for €272 million. And finally, the Wave portfolio, owned by Starwood Capital and Meliá, comprising 4 hotels in Lanzarote, Ibiza, Torremolinos and Mallorca, was sold in the middle of the year to London & Regional Properties, on advice from CBRE (…).

“The excellent performance of the main tourism markets and the excess liquidity in the capital market have led to a historic year with more than 150 transactions and where institutional players have been the protagonists once again”, explained the National Director of CBRE Hotels, Jorge Ruiz.

Moreover, he added that “the outlook is very positive and we expect to see more concentration in the market in 2018 and a renewed interest in the tourism industry in our country”.

Original story: Europa Press

Translation: Carmel Drake

Barcino Buys Building in Barcelona for €1.6M

29 December 2017 – Eje Prime

Barcino is already going on shopping sprees as a listed company. Just 48 hours after making its debut on the Alternative Investment Market (MAB), the Catalan Socimi has purchased a building in the centre of Barcelona for €1.6 million.

The company, which specialises in the management of rental homes, has executed a purchase option, amounting to €1,227,000, which it signed over this property located at number 92 Calle Girona in November, after paying €493,000 for the transfer of the rights to acquire the asset, according to a statement made by the Socimi to the MAB.

The building comprises two commercial premises and seven homes in total, all of which are currently occupied. For the operation, the company has made use of its available own funds, without having to resort to additional financing.

Barcino, whose assets are concentrated in the Metropolitan area of Barcelona, made its debut on the stock market last Wednesday with a share price of €1.33 and a portfolio value of €19.1 million.

Original story: Eje Prime

Translation: Carmel Drake

Mercabarna Awards Plot to General Càrnia for €4.7M

28 December 2017 – Eje Prime

Mercabarna has hung up the ‘no vacancy’ sign just before the end of 2017. The central Barcelona market has sold the only plot that was without an owner in the complex for €4.7 million. Until now, the hypermarket for Makro professionals was located on the plot.

The buyer, the meat company Companyia General Càrnia, has paid 30% more than the original asking price stipulated by Mercabarna for the warehouse. It was also the only firm that participated in the public tender, according to Expansión.

The awarded land spans a surface area of 20,420 m2 and houses a two-storey building. The meat company has the right to lease the asset for the next 20 years.

Original story: Eje Prime 

Translation: Carmel Drake

Spain’s Listed Property Developers Will Be Worth More Than €6.5bn in 2018

1 January 2018 – La Vanguardia

The market capitalisation of Spain’s property developers will exceed €6.5 billion in 2018, after a year of recovery in a sector whose activity was “almost paralysed” following the burst of the real estate bubble, according to forecasts from investors and financial analysts shared with Europa Press.

Analysts consider that the two large property developers that began their stock market lives in 2017, Neinor and Aedas Homes, will consolidate their businesses this year. Moreover, Metrovacesa and Vía Célere will make their stock market debuts, and Aelca may debut too.

The current market capitalisation of the property developers that have listed on the market exceeds €3 billion. With the new joiners, the financial analysts expect that figure to more than double in 2018, to reach €6.5 billion.

In terms of the debutants expected in 2018, Metrovacesa, which wants to be the first to make the leap onto the stock market, will do so as a “completely transformed” company. In this way, the analysts agree that it will likely be the largest stock market debut of the year and will become the largest listed property developer, with a portfolio worth €2.6 billion.

Moreover, the analysts state that Neinor and Aedas Homes have upside potential of around 20% and solid shareholders, and so they present them as “clear buy recommendations”, whereby reinforcing the strength of the sector. The experts also highlight that both companies represent “an opportunity” to join the first stages of recovery of the Spanish real estate market, an assessment that will be extended to the new companies that plan to make their stock market debuts this year.

Specifically, the analysts highlight the quality of Aedas Homes’ land portfolio, which has potential for the construction more than 13,000 homes and which is located in the provinces that have seen the greatest recovery in the real estate market and a positive evolution in terms of prices (Madrid and Barcelona, according to the most recent report from Tinsa).

On the other hand, Neinor stands out due to the “discipline” of its balance sheet, which has meant that the company is in a strong position to purchase plots of land with attractive margins. Moreover, its EBITDA is expected to grow from €19 million in 2016 to €320 million in 2021.

Original story: La Vanguardia

Translation: Carmel Drake

Sareb Sells Parque Corredor Shopping Centre to Redevco & Ares

2 January 2018 – El Confidencial

In the end, there will be a sale. Sareb has managed to reach an agreement with Redevco and Ares to sell them the Parque Corredor shopping centre, in an operation that is expected to be closed within the next few days, according to sources familiar with the transaction. This deal will fire the starting gun for the complete transformation of the Madrilenian shopping centre.

As El Confidencial revealed, the entity chaired by Jaime Echegoyen had joined forces with Perella to complete one of the operations that has been on Sareb’s desk for the longest, but which has never ended up being signed (until now) for various reasons, including the dispersed shareholding of Parque Corredor and the divergent interests of those shareholders.

The sum of Sareb and Perella’s forces guaranteed that Redevco and Ares would take a majority stake in the shopping centre, given that the former holds 40% of the share capital and the latter holds 20%. But, more support was always needed to enable it to undertake a complete transformation and whereby compete with the neighbouring Open Sky, a shopping centre that is currently being constructed just four kilometres away.

In the end, both El Corte Inglés, the owner of just under 4% of Parque Corredor, which has an outlet store there, and Alcampo, owner of just over 20%, have decided to join the sale initiated by Sareb, according to the same sources (…).

The offer from Redevco and Ares values the whole centre at around €200 million, an amount that will be added to the planned investment of €20 million required to renovate the centre. The renovation project that has been entrusted to the Chapman Taylor studio.

Parque Corredor is a shopping centre giant with a retail surface area of 123,000 m2 and 180 stores, located in the Madrilenian town of Torrejón de Ardoz. Its tenants include the Spanish firm Mango, the Swedish retailer H&M, the Irish firm Primark and the French retailer Kiabi, all direct rivals of Zara.

This shopping centre went through its toughest time four years ago when Inditex decided to vacate because of the poor upkeep of the complex. Nevertheless, in recent times, confidence in the centre has been returning, with some of the retail group’s brands opening stores there, such as Bershka, Pimkie and Stradivarius. To date, there is no sign of the flagship brand Zara returning just yet.

Sareb has been advised in the operation by Knight Frank, Perella has received the services of Cushman & Wakefield, whilst Redevco and Ares have been working with Deloitte.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Santander & Blackstone Launch Spain’s Largest Financing Deal Since the Crisis: €7bn

2 January 2018 – El Confidencial

The largest real estate operation in Europe is going to also bring with it the largest financing deal the sector has seen in recent times. The sale of €30 billion in Banco Popular assets that Banco Santander agreed with Blackstone last summer is going to mark another milestone in January when the two partners plan to close a mega-loan amounting to €7 billion.

This debt will be assumed by the joint venture created ad hoc to buy the portfolio of assets. It promises to be backed not only by Spanish entities but also by large international investment banks and funds that invest in debt, some of which may include entities owned by Blackstone. According to sources familiar with the operation, the net value of the assets amounts to around €10 billion.

To finance that property portfolio, the liability structure of the new company (the assets and liabilities of which will be equal by definition) will consist of 30% capital and 70% debt. Given that Blackstone is going to control 51% of the share capital and Santander 49%, each shareholder will have to contribute around €1.5 billion to the vehicle (the former will have to contribute slightly more given its slightly larger stake), whilst the remainder of the joint venture’s balance sheet will comprise the aforementioned €7 billion in debt that is expected to be signed this month.

The fact that the joint venture is going to have such a high percentage of debt allows the return on capital to increase: the lower that is, the greater the return with the same profits. That is what is called leverage and it is normal for it to be even higher in vehicles of this kind. By way of example, Sareb (the semi-public bad bank that absorbed the properties of the rescued savings banks) comprises 90% debt and just 10% capital.

Santander deconsolidates Popular’s real estate

After increasing the provisions against this portfolio to 63% in the case of foreclosed assets and to 75% in the case of the loans, the net valuation of all of the toxic real estate that the new company will own amounts to €9.7 billion. To that figure, we have to add the final valuation of Aliseda, the former real estate manager of Banco Popular, which also formed part of the operation. Almost half of the assets sold are land (€12.6 billion gross), followed by residential (€8 billion), retail (€2.1 billion), industrial warehouses (€1.5 billion) and hotels (€0.8 billion), as well as €4.9 billion split between offices, garages and other types of real estate assets.

This company was created because Santander wanted to remove (deconsolidate) Popular’s real estate from its balance sheet after it purchased the entity in June. It could have sold it in its entirety, but it chose to create a vehicle in which the majority was held by another shareholder – Blackstone, which fought off Lone Star and Apollo to win the auction and pay €5.1 billion – and retain a 49% stake. In this way, it will be able to obtain additional profits if the recovery continues in the real estate market and the company sells the assets for more than their current value. For the time being, it will have to inject the aforementioned share capital, amounting to €1.5 billion.

Although the small print of the conditions associated with this financing still needs to be confirmed, the deal underlines the growing business that is currently being seen in terms of real estate loans and debt funds. In the last month alone, Metrovacesa has closed a loan for €275 million and Testa has raised €800 million with the bonus of not having to mortgage any of its buildings.

Original story: El Confidencial (by E. Segovia & R. Ugalde)

Translation: Carmel Drake

CNMV Approves Colonial’s Takeover of Axiare

28 December 2017 – Eje Prime

Colonial is getting closer to the finishing line in its race to create a real estate giant. Today, Spain’s National Securities and Exchange Commission (CNMV) approved the takeover bid launched by the real estate group for the Socimi Axiare on 13 November 2017; given its size, the potential deal has had the sector on tenterhooks for the last month and a half.

The market supervisor has valued the operation to purchase the 71% of the share capital in the Madrid-based company that Colonial does not control yet at €1.033 billion. If the transaction goes ahead, the Socimi will sell non-strategic assets worth around €300 million, as Eje Prime revealed.

Through this merger, the Socimi led by Pere Viñolas, one of the real estate sector’s stars this year, is seeking to generate a giant with almost €10 billion in assets, which would threaten the position of leadership in the market currently held by Merlin.

According to the details of the takeover offer accepted by the CNMV, Colonial will pay €18.36 for each one of Axiare’s 56.30 million shares. In theory, the real estate company offered the firm led by Luis López de Herrera-Oria a payment of €18.50 per share, to which the Socimi responded by calling the operation “hostile”. Nevertheless, the distribution of Axiare’s dividend has led to a reduction in that final offer, after Colonial warned the Socimi that this fact would change the conditions of the takeover bid.

Following the approval of the stock exchange supervisor, and with CaixaBank’s bank guarantee at the ready, the period will open on Friday (29 December) for Axiare’s shareholders to take a stance, as well as for the issue of a report about the operation by the target Socimi’s Board of Directors. This period to accept the takeover bid will run from 29 December until 29 January, both inclusive. Colonial needs the support of 21.21% of the shareholders, in addition to the 28.7% stake that it already controls, which would allow the company led by Viñolas to exceed the 50% threshold in terms of its stake in the rival company.

Original story: Eje Prime

Translation: Carmel Drake

Sareb Sells €150M NPL Portfolio to Oaktree

30 December 2017 – Expansión

The bad bank has closed the sale of several non-performing loan portfolios during the last few days of the year. A week ago, it announced the sale of a package of loans secured by properties to Deutsche Bank, whose nominal value amounted to €375 million. That was its largest sale of the year.

And yesterday, Sareb reported that it has reached an agreement to sell the so-called Project Tambo to the US fund Oaktree for a nominal value of €150 million. The debt is secured by residential assets and land located in the Balearic Islands, the Canary Islands, Cataluña, the Community of Madrid, País Vasco and the Community of Valencia.

Sareb has been advised by CBRE and Ashurst in this process, whilst Oaktree has awarded its mandate to JLL and Herbert Smith Freehills.

The bad bank, where the toxic assets of the rescued savings banks were parked, closed 2017 with a lower volume of transactions of this kind compared to 2016. Nevertheless, it has launched a trial to test an online sales channel, which may allow it to intensify its activity over the next few months.

Having said that, 80% of the revenues that Sareb obtains do not proceed from the institutional market, but rather from the direct sale of properties in the retail market.

In five years, Sareb has divested 27% of the 200,000 assets that it received initially and has repaid debt amounting to almost €13 billion. It has ten years left to liquidate the rest of its balance sheet. The entity’s cumulative losses amount to €781 million.

Original story: Expansión (by R. L.)

Translation: Carmel Drake