Savills: Inv’t In Student Hall Market Will Far Exceed €600M In 2017

31 October 2017 – Eje Prime

Between €500 million and €600 million. That was the price paid by a group of international investors to acquire Grupo Resa, the largest platform of student residences in Spain, with 9,309 beds in 19 cities, including in Madrid, Barcelona and Salamanca. AXA Real Assets, CBRE Global Investment Partners and Greystar backed the company, a significant investment that goes hand in hand with the rise of this alternative market in Europe. This operation is a clear example of the boost that this alternative asset is enjoying in the real estate sector in Spain and across Europe.

In neighbouring France, investment in the sector rose by 245% and the forecast is that €250 million will be invested in transactions in 2017. But if there is a country whose student hall market has grown beyond all doubt, it is Germany. The German market has seen a five-fold increase in investment in student residences (380%) and expects to exceed the €1,000 million threshold by the end of this year.

These results all indicate that the whole European continent is now taking this market seriously, although there are still countries where the student hall business is much larger. In 2016, the main players in this sector, the USA and UK, saw a record-breaking volume of transactions involving the purchase of assets of this kind, amounting to €14,100 million, up by 5.4% compared to 2015 (…).

Data from the World Student Housing study, prepared by the real estate consultancy Savills, shows that migration is increasing in the world each year. Almost five million students studied overseas during 2015, which represents an increase of 130% since the beginning of the 21st century. The forecasts indicate that 8 million students will study abroad in 2025.

The Spanish case: great influx and new projects

As a Spanish-speaking country, Spain receives a large volume of Latin American students each year. Of the more than 100,000 international students that it welcomed last year, 10% were from Colombia or Peru. They are, together with the Italians, the overseas nationalities that flock in the greatest numbers to Spanish universities.

This international influx, which accounts for 7% of the total number of students on the state university map, has sparked interest amongst different funds looking to build and buy student halls in the country. The Swiss fund Corestate entered this market last year, with the purchase of a hall of residence in Madrid, for which it paid €13.5 million, whilst Temprano Capital is going to build a 10,000 m2 student residence in Esplugues de Llobregat (Barcelona). Moreover, the multi-national The Student Hotel is now active in Barcelona; and ThreeSixty Developments, a fund managed by Oaktree, sold the Nexo student halls to GSA.

In total, the student hall market in Spain expected to see investment of €600 million in 2017, with a yield on prime residences of 5.75%, above those in countries such as the UK and Germany (5% in both). With the sale of Resa alone, that target has already been fulfilled (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

The Matutes Family Buys Real Cinema In Madrid For €17M

2 October 2017 – Eje Prime

Madrid is still active in terms of real estate transactions. The former Real Cinema, located opposite the Teatro Real de Madrid, is going to pass into the hands of Marc Rahola Matutes, nephew of the former Minister of Foreign Affairs, Abel Matutes, and cousin of Abel Matutes Prats, for €17 million.

The building, which has a constructed surface area of 2,300 m2, will undergo a remodelling, which could see Matutes’ total investment rise to €24 million, according to El Confidencial.

According to sources in the real estate sector, the company that owns the property, Selbridge SL, purchased it in 2003 and has constituted a purchase option over the entire domain of the property in favour of White Land, a company administered by Rahola Matutes. The building occupies a plot of land measuring 900 m2 and houses a performance hall.

Marc Rahola Matutes launched his career at the Palladium Group. In addition, the director manages the investments of the fund Ocean Group Capital, which he created after leaving his role at Matutes’ company, and through which he has bet heavily on the hotel sector.

The fund started out by acquiring the iconic OD Ocean Drive, located in the Marina Botafoch area. Then, it bought three luxury hotels in the Balearic Islands: OD Port Portals, in Mallorca; OD Talamanca (formerly Hotel Victoria) and OD Can Jaume, a holiday farm property, both in Ibiza.

Original story: Eje Prime

Translation: Carmel Drake

The Alternative Asset Boom: Student Halls, Co-Working Spaces & Data Centres Are On The Rise

26 September 2017 – Eje Prime

2017 is going to be remembered in the real estate sector as the year of alternative assets. A large number of corporate operations in the student housing segment and healthcare sector means that investors are looking more carefully at these products. So much so that 44% of international investors say that they plan to spend money acquiring these kinds of assets over the next few years.

One of the main reasons for focusing on these types of investments is geographical behaviour and demand, important for 69% of the international funds surveyed. The next most important reason, for 46% of investors, is the stability of the returns from such investments, according to the Emerging Trends Europe 2017 study prepared by PwC. Diversification and high yields are also reasons for 46% and 45% of investors, respectively, according to the findings of the report.

For 61% of investors, the student housing business has one of the most promising outlooks, in that case, due to the demand from the demographics. “It is important to highlight that this looks like being a secular trend rather than a cyclical one”, explain sources at PwC.

Nevertheless, the corporate operations that have been carried out in recent months in the sector support this trend. The most recent saw Azora, Artá Capital, March Campus (Banca March’s client investor vehicle) and Mutua Madrileña, reach an agreement to sell Grupo Resa to a group of international investors, represented by Axa and CBRE. Even so, and although these kinds of assets are on the rise, only 23% of the funds specialising in real estate hold such properties in their portfolios.

After student halls of residence come hotels. 51% of investors have either acquired or have been exploring the possibility of investing in this kind of asset. In Spain, the Socimi Hispania has decided to specialise in this type of asset, whereby positioning itself as one of the largest companies in the hotel segment in the country.

Nursing homes for the elderly and clinics (healthcare) have also been gaining in importance during 2017 and will be the assets to watch in coming years (…).

One recent operation involving this kind of asset in Spain saw Healthcare Activos Investment acquire the Los Tilos nursing home for €15.5 million, in a transaction brokered by BNP Paribas Real Estate (…).

The most alternative assets

Within the group of alternative investments identified by PwC are some that break the mould due to their lack of history in the real estate sector. One of them is shared offices, also known as co-working spaces. In recent months, they have sparked interest amongst investors of all kinds, with operators such as WeWork and Spaces leading the way (…).

Last week, Spaces, an international workspace company, announced that it is going to open an office measuring 1,511 m2 in Madrid, at number 4 Calle Manzanares, known by the group as Spaces Rio. And within the next few weeks, it will open a new Spaces centre in Barcelona (in the 22@ district).

Meanwhile, WeWork confirmed its arrival in Spain earlier this month. The company, which specialises in the management of coworking spaces, has leased an office building in the 22@ district in Barcelona (…).

Finally, data centres, where data servers are managed and stored, have also seen their profile rise in the real estate business. These types of asset, which are mostly located on the outskirts of major cities, are expected to capture the attention of 15% of investors this year (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

AXA & CBRE GI Buy Resa, The Student Hall Giant

19 September 2017 – El Confidencial

Azora, Artá Capital, March Campus (the investment vehicle backed by Banca March clients) and Mutua Madrileña have reached an agreement to sell 100% of Grupo Resa to a group of international investors. AXA IM – Real Assets and CBRE Global Investment Partners – on behalf of their clients – have acquired most of the portfolio, whilst Greyster, which has acquired the operating business, will act as the asset manager.

The operation is subject to final authorisation from the competition authorities and, although the amount of the transaction is unknown, real estate experts say that it will be one of the most important transactions in 2017 by investment volume.

Grupo Resa, which has been on the market since the beginning of March, has consolidated its position as the largest platform of student halls in Spain, with 9,309 beds in 19 cities, including Madrid, Barcelona and Salamanca. Resa is the largest student hall company in Spain, and in Continental Europe. Managed by Azora since 2011, it has experienced significant growth during that period, increasing its portfolio of halls from 26 to 37, of which 33 are currently operational and the remaining 4 are being constructed. BBVA and CBRE have acted as financial advisors to the vendors and Garrigues has been the legal advisor to the operation.

Resa obtained revenues of €46 million in 2016, which represented an increase of 30% with respect to the figure recorded in 2014 (€27 million), when it generated an EBITDA of €26 million. The occupancy ratio of the properties is close to 100%, according to documentation about the company (to which this newspaper has had access) and also according to its ambitious expansion plans for the next decade, which include doubling in size, to achieve a portfolio of around 17,000 beds across Spain.

Resa currently has four projects underway, which will add almost one thousand more beds to its existing supply, in such a way that, in the short term, it will have almost 10,000 beds. To put that in context, the company has seven times more beds than its next largest competitor in Spain (…).

The sale of Resa is the second operation of these characteristics to go ahead in Spain in a year, given that in March last year, the fund Oaktree put Threesixty Developments – formerly Knightsbridge Student Housing – up for sale. It is one of the largest builders and operators of student halls of residence in the United Kingdom, Ireland and Spain, where it has seven projects – five in Madrid and two in Barcelona – which it manages through the Student Housing Company platform and which contain more than 2,600 beds.

Twenty years of experience

(…). Grupo Resa was founded in 1992 and four years later it opened its first hall of residence in Terrasa. (…). Its stock includes accommodation with everything included to the rental of rooms only.

Original story: El Confidencial (by E.S.)

Translation: Carmel Drake

Urbania & MiCasaInn To Create Student Hall Giant

13 September 2017 – El Economista

Urbania will work together with the manager MiCasaInn to create a new giant in the student halls of residence sector in Spain. The two companies have signed a partnership that will see the construction of 2,500 beds over the next two years, which will be added to the more than 500 beds already underway.

With this plan, the partners expect to have a final portfolio of 3,000 beds, which will position them as one of the largest owners and operators of student halls of residence in the country. For the time being, they are working on the construction of properties that will contain around 700 beds and their forecasts include completing the remaining 1,800 beds during 2018.

“As part of our search for alternative investments at Urbania, we have spent two years studying the international student halls of residence markets in the US and Europe”, explains Tomas Gasset, CEO of the property developer and founding partner of the firm, together with Alberto López and Mark Farber.

The three directors, veterans in the sector, first joined forces to focus on residential development on the Costa del Sol between 2000 and 2008. Subsequently, the forced exile during the years of the property crisis in Spain led them to make the leap to Brazil, where they successfully developed two neighbourhoods and sold 2,200 units. Upon their return, in 2013, they adapted to the new property developer business model in their home country and signed alliances with three international funds to develop several residential projects.

But the firm wanted to diversify its business and for that reason it has decided to back student halls of residence, as it considers that they represent “very robust assets, which complement our residential projects”, says Gasset, who highlights that the business “is relatively undeveloped in Spain, where there are just two or three traditional operators and lots of fragmentation”.

Projects underway

So far this year, and as part of its partnership with MiCasaInn, the company created by the Fernández Luengo family, the firm has already invested around €30 million in the purchase of three assets, which are going to be converted into new halls of residence with around 550 beds. Moreover, it has a total estimated investment of €100 million more in the pipeline.

For the new academic year 2018, the plan is to open two new halls of residence in Madrid, the first in Ciudad Universitaria with 240 beds and the second, known as Madrid-Río, in the Arganzuela area, with 103 beds. The latter, whose construction is already underway, is going to be built in the former Hotel Abba Atocha. Moreover, its other projects underway include the conversion of a hospital located on Calle General Rodrigo, number 13. In that case, the construction work will start at the beginning of 2018 and will give rise to a property with 220 beds. In parallel, the firm will also start a project in Málaga, on Calle Cerrojo, where it will construct a 140-bed hall of residence.

The MiCasaInn group already owns operational halls of residence on some of Madrid’s most central streets, such as Gran Vía, Calle Fuencarral, Plaza de España, as well as in the neighbourhood of Salamanca. According to its website, it also plans to open a student hall soon in the heart of Puerta de Sol.

With these and its new projects, the objective of the new joint venture is to become the largest owner and operator of urban student halls of residence in Spain, given that the other main traditional operators work with residences on university campuses and many of them are concessions.

To achieve its objectives, the group will focus on the main university cities in Spain, which have agreements with overseas universities, such as those in Barcelona, Pamplona, Granada, Valencia and Sevilla, amongst others.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Spain’s First Student Hall Socimi Prepares Its MAB Debut

13 September 2017 – El Confidencial

Student Properties Spain Socimi will be the first listed real estate investment company specialising in student halls of residence to debut on the stock market. And it will do so with an asset that could mark a before and after in this market in the Spanish capital.

It acquired the building at the end of 2016 from the insurance company Mapfre for €13 million. The property is located on Calle Don Ramón de la Cruz, in the heart of the Salamanca neighbourhood, just opposite Nuestra Señora del Pilar school, 200m from the Deusto Business School (the Universidad de Deusto’s business and economics school) and 500m from the IE Business School.

With a total surface area of 5,420 m2, spread over eight floors, of which 3,500 m2 are above ground, the asset used to house one of Mapfre’s private clinics. But its new owner is committed to converting it into a hall of residence for wealthy students. In fact, the property is currently being renovated by the construction company Vialterra Infraestructuras, which was awarded the building contract, with a budget of around €3 million (…) plus indirect costs of €1 million (…).

With those figures on the table, all indications are that the building will end up housing a luxury hall of residence for students, in line with The Lofttown project in Barcelona. The price of rooms is likely to reach €1,800/month. Having said that, all kinds of services will be included: an outdoor gym, a solarium, a co-working room, a private kitchen, weekly cleaning, use of a 3D printer, laundry, a Play Station, a chill-out terrace and a parking area for bikes, amongst other services.

“Projects such as The Lofttown in Barcelona are hard to replicate in many cities in Spain, and above all, they are hard to scale up. That does not mean that they cannot be attractive and even very profitable real estate investments than more standard products, but it does mean that they always have to be marketed and managed by very specialist teams. Moreover, institutional capital will always consider them to be niche products”, says Patricio Palomar, Senior Investment Consultant at AIRE Partners.

Name change and upcoming stock market debut

Don Ramón de la Cruz 37 was acquired by Collie Investment, a joint-stock company that was subsequently transformed into a Socimi. A week ago, that entity changed its corporate name to Student Properties Spain Socimi (…).

The managers behind the company are Altamar Capital Partners, whose President and founding partner is Claudio Aguirre (Goldman Sachs España), Amira Real Estate Asset Management and Orienta Capital, which is chaired by Emilio Soroa, former Director at Seguros Bilbao.

Indeed, one of the directors of Altamar, Miguel Zurita, joined the Socimi just two weeks ago to replace Fabrizio Agrimi, CEO of the firm until 28 August (…).

“In markets such as the USA, Australia, the United Kingdom, the Netherlands and Germany, student halls have gone from being considered as alternative real estate assets to being products that have as much demand and liquidity as hotels and logistics platforms. To the extent that our market converges towards that trend and becomes more mature, we are going to see products of a different quality appearing, designed for a different type of consumer, in the same way that three-star hotels exist in cities alongside super-luxury hotels”, says Palomar (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Altamar, Amira & Orienta Take Their Student Hall Socimi To The Next Phase

12 September 2017 – Eje Prime

The company, which specialises in student halls of residences, is preparing a new phase of growth involving the acquisition of new assets, as well as changes in its management team following the departure of Fabrizio Agrimi, one of the leaders of the project, who has decided to leave the group to embark on new challenges.

One of the most obvious changes is the new name of the Socimi, which had been called Collie Investment until now, and which will now start operating under the brand Student Properties Spain Socimi. Sources at Altamar say that this is “a much more commercial name, which reflects the activity that the group focuses on”.

Another change facing the company created by the three funds is the loss of one of the directors who was leading the project, Fabrizio Agrimi, who until now was the CEO, partner and member of the analysis and investment team at Atlan Capital. The company, founded in 2006 by Altamar Capital and Aguirre Newman, currently has more than €2,500 million in assets under management.

Before joining Atlan Capital in 2007, Agrimi, who for the time being does not want to give any more details about his next move, had already obtained extensive experience in real estate investments and M&A deals in Spain, the UK and Italy (…).

Agrimi’s role in the new Student Properties Spain Socimi will be taken by Miguel Zurita, a director at Altamar since February 2013. Previously, the executive was a partner at Mercapital and Investment Director at Mexcapital.

The Student Properties Spain Socimi project was launched in March. Backed by the Altamar Capital, Amira Real Estate Asset Management, and Orienta Capital, the initial investment to develop the project was more than €11 million.

For the time being, the company owns one asset in Madrid, which it is renovating to turn it into its first halls of residence for students and in which it has invested almost all of the €11 million with which the Socimi debuted. “The idea now is to continue sounding out the market” – explain sources at Altamar – “we currently own just one asset in Madrid, but we are assessing opportunities in Granada, Salamanca, Sevilla and Valencia, in other words, in the main university cities in Spain”.

Altamar, Orienta and Amira

Altamar Capital Partners is an independent financial services group that strives to provide institutional and high net worth investors with access to alternative investments, amongst other services (…).

The firm was constituted in Spain in 2004 and employs a team of 110 professionals at its offices in Madrid, Barcelona, Santiago de Chile and New York (…).

Meanwhile, Amira Real Estate was founded in 2006 by professionals in the real estate market specialising in the management of equity and real estate investments in Spain. (…). The group specialises in advising domestic and international clients with an interest in the Spanish real estate market, who are looking for a management platform to channel and monetise their investments.

Orienta Capital was created in 2002 and operates out of two headquarters in Spain, located in Bilbao and Madrid. The group, led by a team of professionals with experience in the real estate business, is chaired by Emilio Soroa, a former director at Seguros Bilbao. The team is completed by former directors of Safei, Beta Capital Mees Pierson, Merril Lynch, Morgan Stanley and Banif.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Healthcare Activos Buys Nursing Home In Barcelona

2 August 2017 – Expansión 

Healthcare Activos is pushing ahead with the construction of a portfolio of buildings to be used as hospitals and nursing homes for the elderly. The investment vehicle led by Jorge Guarner (pictured above) – former CEO at SARquavitae– and Oaktree Capital has just acquired a nursing home in Barcelona for €16 million, which until now belonged to a Goldman Sachs fund.

It is the Los Tilos nursing home, located in the neighbourhood of Gracia, and it has a surface area of 16,000 m2 – 7,000 m2 allocated to parking – and 258 beds. The facilities, located in a very sought-after area, are managed by Grupo Bastón de Oro and residents pay between €2,200 and €2,500 per month to live there.

Financing

Healthcare Activos has financed 60% of the operation through a loan granted by CaixaBank. The nursing home formed part of a package of assets that Goldman Sachs purchased at the beginning of 2015, through B Capital Partners, from the Barcelona-based property developer La Llave de Oro, in a deal worth €90 million that included 18 buildings. The fund owned by Guarner and Oaktree has invested €62 million since December on the purchase of seven healthcare assets, containing 1,263 beds, across Spain.

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake

Baraka To Build Nursing Home In Barcelona For €300M

18 July 2017 – Eje Prime

Baraka is setting its sights on the healthcare market. At the beginning of July, the real estate investment company completed the purchase of 600,000 m2 of land and a roof spanning 300,000 m2 for €300 million in Montcada i Reixac (Barcelona), where it will build a complex for the elderly.

The area acquired is located in Can Cabanyes, a zone that borders Barberà and Santa Perpètua de Mogoda. According to Manuel Abadía (pictured above, right), the representative in Cataluña of Trabis (the group’s construction company) (…) once the sale has been signed, work will begin to define the project in more detail.

The company does not have any experience managing these kinds of facilities, and so it will have to team up with a partner specialising in hospital care and management, according to Expansión.

“We intend to create a complex for the elderly, with villa-type homes and garden areas, which will be accompanied by personal care and also, one or two hospitals”, explained Manual Abadía. The representative for Trabis in Cataluña said that the construction phase alone will provide work for 400 people and that when the complex begins operating, “we think that it will sustain at least 200 permanent jobs”, he added. For the time being, no dates have been set for the opening of the facilities.

Baraka set up shop in Cataluña a year and a half ago with the intention of becoming a leading company in the real estate market, especially in the industrial and logistics sector. One of its most recent operations was the purchase, in June, of Edificio España from Wanda. The firm wants to grow its residential projects, amongst other initiatives.

Original story: Eje Prime

Translation: Carmel Drake

ICG Buys Spanish Nursing Home Leader From PAI Partners

16 June 2017 – Expansión

Intermediate Capital Group (ICG) is holding exclusive negotiations with PAI Partners to purchase the majority of the capital in HomeVi, a company that owns more than 300 nursing homes in Spain and France.

The British investment fund ICG already holds a minority stake in HomeVi, in which the French businessman Yves Journel also owns shares. The operation, which would value the group at around €2,000 million, would see ICG buy the French private equity firm PAI Partners’ majority stake. Journel would continue as a minority shareholder.

HomeVi is the leader in the nursing home sector in Spain through Geriatros-SARquavitae, which groups together 135 centres with 20,000 beds. PAI Partners bought Geriatros from Magnum Capital through HomeVi in 2015 for around €300 million; and in February this year, it acquired SARquavitae, which was previously controlled by the British fund Palamon, for €440 million. In that transaction, Euro Lagune acquired the real estate assets of SARquavitae for €110 million.

For the overall valuation of HomeVi in the negotiations with ICG, the Spanish activity accounts for almost half of the total. In France, the group operates under the DomusVi brand, and it also has several centres in China.

Two months ago, PAI Partners engaged the investment bank Rothschild to advise it on the possible sale of HomeVi. After analysing its debut on the stock market, it seems to have opted for a rapid sale process in the end, given the interest from ICG.

This fund, with assets worth €23,800 million, has traditionally invested in debt to finance private equity firms. Now it is diversifying to buy companies directly. Last year, ICG invested around €200 million to take control of the La Rioja-based industrial company Garnica.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake