Author: aura

Morgan Stanley gets rid of its shopping malls.

The market starts to brighten up. Last week, Morgan Stanley closed the sale of its three shopping malls in Spain, christened in the market as the good, the ugly and the bad. The operation, which had been looking for a buyer for a long time, has ended in the hands of Incus Capital, a newly created investment fund that has taken the opportunity of acquiring the first portfolio of assets in the Spanish market, as confirmed by official sources.

The decision taken by Morgan Stanley Real Estate Investment (MSREI) of liquidating its European real estate fund has favored the sale of El Mirador de Cuenca (Cuenca), Los Alcores (Alcalá de Guadaira-Sevilla) and Alzamora (Alcoy-Alicante) for nearly 30 million Euros. This price represents a discount of 75% on the 116 million Euros paid by Morgan Stanley and Grupo Lar in May 2007, just before the real estate bubble burst, in order to acquire the malls owned by the German fund SEB Immobilien Investment.

That operation was part of the investing alliance agreed by Grupo Lar and Morgan Stanley to position themselves in the booming sector of shopping malls, where one of the parts acted as a developer and the other one as a financer. The union of interests went even further, as the investment bank, through its funds, acquired 16,8% of the real estate company for 124 million Euros, as also done with Fadesa, expecting to participate in its initial public offering.

Before the collapse of the market, Grupo Lar had 15 medium-sized (with a maximum 20.000 square meters) shopping malls, most of them located in secondary cities and most of them in a joint investment with the funds of Morgan Stanley (Puente Genil-Córdoba, Navalmoral de la Mata-Cáceres, Puertollano-Ciudad Real, Los Palacios-Cádiz and Arcos de la Frontera-Cádiz). The commercialization of these assets is managed by Gentalia, the consulting and patrimony management firm developed as a line of business by Grupo Lar.

In order to carry out the sale of these three shopping malls, Morgan Stanley has carried out a restricted process, with the participation of funds such as Drago Capital or Baupost, investors with an opportunistic profile attracted by the existing price discount. According to sources in the market, the transaction was finished last week and the final buyer has been the unknown firm Incus Capital Advisors.

In spite of its recent constitution, there are veterans in the financial sector behind Incus Capital, specialists in managing credit and real estate investment portfolios. The drivers of this vehicle are Andrew Newton (ex Lehman Brothers) and Alejandro Moya (ex Morgan Stanley), who have developed the fund as a project parallel to Hipoges, a independent platform for the management and recovery of complicated credits with presence in Spain, Portugal and Brasil.

Source: El Confidencial

Foreign millionaire acquires a home in Spain in exchange for a visa.

The British citizen Alex Vaughan, co-owner of the real estate agency Lucas Fox, with headquarters in Barcelona, has been managing for many years the investments from foreigners in the Spanish luxury residential market. He assures that, since last October, the agency receives between 20 and 30 daily requests from people from all over the world and a high buying power interested in acquiring in Spain in exchange for a residence permit. Vaughan declares that his agency already has 200 investors with committed houses in Spain who are ready to buy when the law comes into force.

Since the Government announced last October that it would grant the Spanish residence to those investing in real estate assets, there have been thousands of millionaires from all over the world that have shown their interest in Spain. The fear of the country risk and the real estate bubble have shifted to the background, eclipsed by the promise of papers that will allow to live not only in Spain, but also to travel around the Schengen territory.

Most of the interested investors come from China, where Lucas Fox is in contact with twenty real estate investment firms (such as SQFT), which have a total of 500 Chinese citizens ready to buy. They have also received hundreds of requests from the United States, South America, Russia and India. Some of the interested investors come from more exotic countries, such as Ghana, Nigeria, Senegal, South Africa, Indonesia, Thailand, Egypt and Australia.

The draft of the Law of Entrepreneurs driven by the Government establishes that it will grant the residence permit to those buying properties for more than 500.000 Euros (with no charges) and also to those investing two million Euros in public debt, in shares of Spanish companies or in bank deposits, as well as to those assigning capital to general interest projects. The exact conditions are still unknown. “If the procedure is easy, we will see a huge number of acquisitions of properties”, Vaughan assures. The managing director of the real estate company Coldwell Banker in Spain, François Carrière, assures that some owners have rounded off upwards the properties which did not reach 500.000 Euros in order to attract these investors.

Lucas Fox has teamed up with the law firm Ecija in order to create a one–stop company window where investors will be able to manage the acquisition of a property and the obtaining of the residence permit as well. The lawyer in charge of this project, Gabriel Nadal, explains that even though the law has not been passed yet, it is planned that the buyer and its family will receive a permit for two years, renewable while they keep the property.

The foreigners that will invest in Spain in order to obtain the visa all meet the same traits: they have money, they believe that prices have reached their rock bottom level and they consider that prices are cheap, as they compare Barcelona or Madrid with cities such as London, Bombay and Shanghai. It could seem the dream of any real estate agent, but all agree that the investors have something else in common: “They are rich, but they are not stupid”.

The specialized agencies awaiting international investors assure that they know the current price level of the market and that they will not pay more than usual.

The star asset is a property in Barcelona, as most of the investors until now are Asians and have arrived attracted by the climate and the modernist architecture. The director in Shanghai of the real estate consulting company Singapur Squarefoot Global Properties (SQFT), Sylvan Ma, is specialized in the investments of Chinese families abroad. He explains that in order to buy in London, Chinese citizens do not need to visit the property: they can buy from Shanghai. But they show more reluctance when it comes to Spain. Sylvan Ma has been twice in Barcelona this year and he will travel there four more times. In each visit, he comes with ten Chinese citizens, “only those who are about to buy”, he explains. “When they land here, they see the sun, Paseo de Gracia, the architecture, the beach….. and they get crazy: think that in Shanghai they see the sun only five times per year”. Apart from Barcelona, they have visited country houses and castles at the Costa Brava and houses in Ibiza of more than six million Euros, but most of them will choose Barcelona.

The residence is also the main motive for the Egyptian Amr Shamel. He studied a master degree in Barcelona and now lives between Spain and Egypt. “I need the residence”, he says, while he visits a property at the Barceloneta beach, valued at 1,1 million Euro. “I will invest a bit more than 500.000 Euros, but I am also looking for my father, my uncles and friends”, as he works in an investment company. He thinks that prices are reasonable. “We will buy abroad because you are aware of the situation in our country”. The Indian investor Raj Airy sees a property in Barcelona as the entrance to Europe. “It is difficult for an Indian to get a visa, so we will invest here because the access is now easier”.

The investors from South America, however, have always preferred Madrid and it is foreseen that they will choose the capital.

 

Source: Expansión

BBVA will also finance the properties from Sareb.

After Santander, CaixaBank, Sabadell and Popular, also BBVA, the only healthy bank that has not entered Sareb´s capital, has reached an agreement with the bad bank to finance the sale of its properties. In line with what has been done by the other institutions, the bank presided over by Francisco González puts at the disposal of these credits 1000 million Euros.

According to the agreement signed today by the director of BBVA for Spain and Portugal, Jaime Saenz de Tejada, and the managing director of Sareb, Walter de Luna, the mortgage launched by the bank will finance any individual wishing to acquire properties, trade premises or storage rooms included in the portfolio of the bad bank. The financing will also reach those properties that appear as guarantees of loans to developers in the hands of Sareb and the assets transferred by the bad bank to another vehicle, such as the Banking Assets Funds (BAF).

For the purchase of a principal residence, BBVA offers a loan at a maximum of 30 years,  with a loan to value that does not exceed 80% and an interest rate of Euribor plus a minimum of 2,25%, for the customer with the maximum link with the bank. BBVA, however, does not inform what would be the differential applied to a non linked customer. When the loan is intended to finance a secondary home, the maximum amount it is financed is 60%, the deadline 25 years and the minimum differential over Euribor would be 3,25%.

Source: Expansion

Summer sales in properties from banks.

Hundreds of properties at less than 700 Euros per square meter. This is an example of the offer of properties at the seaside that can currently be found in the Spanish market.

Five years after the end of the real estate bubble, banks and developers have decided to accelerate the absorption of the stock of properties that floods the market, mainly in coastal areas. According to the last report from the valuation company Tinsa, instead of selling the 100.000 properties that were sold in 2005 and 2006, there have been sales of 20.000 properties in 2013, figures that should not increase until, at least, 2015.

This is why, real estate companies and above all, financial institutions, have decided to apply great discounts on the prices of their properties. “Generally speaking, we are currently at price levels from 2003 with descents since the years 2007 and 2008”, María Monasterio, director of the office of Aguirre Newman Andalusia, explains.

Tinsa assures that the prices of properties have dropped by 18% only this year, nearly 30% since the maximum levels, a descent that reaches up to 38% if we talk about holiday residences. “Prices have dropped around 50%, especially in Levante and Andalusia, although it is also true that this is an average figure. But, in general, there are very attractive prices in all the coastal areas in Spain”, Luis Corral, managing director of Foro Consultores.

At the Mediterranean coast and, especially in Casares and Estepona (Málaga); and El Egido, Vera and Roquetas de Mar (Almería), the descent has been higher than 50% from maximum levels. “In the case of Andalusia, there have been important price reductions in Manilva, due to the oversupply, and right now it is possible to find one bedroom apartments for 50.000 Euros and two bedroom apartments from 70.000 Euros. Or in Almeria, in the area of playa de Vera, it is possible to find them from 50.000 Euros, the managing director from Foro Consultores assures.

The main forerunners for these great discounts have been the financial institutions.

The need of getting rid of the awarded homes, originated from foreclosures and exchanges with developers, have obliged them to make very aggressive offers. “Most of the properties we commercialize have a price around 692 Euros per square meter, much less than half of the current cost of the square meter (1519 Euros, according to the Ministry of Infrastructure, in the first quarter of 2013)”.

In spite of these sales, the level of sales continues being low to absorb all the stock from the real estate boom.

For this reason, banks and real estate companies have concentrated in the foreign buyer. “The foreign demand has increased and it will continue doing so each year. It comes mainly from Russia, United Kingdom, Germany, Scandinavian countries, Netherlands and France”, Carlos Ferrer-Bonsoms managing director of Jones Lang La Salle España explains. “In the Balearic Islands, the strongest demand comes from the Germans and the Russians, followed by the British, very similar to the percentages at the Costa del Sol”, he adds.

Source: Expansion

Popular will also support the sale of properties from Sareb with 1000 million Euros.

Banco Popular joins the list of institutions that will support the sale of properties in the hands of the “bad bank”, Sareb, and will launch a specific mortgage which will have the availability of up to 1000 million Euros.

The bank presided over by Angel Ron becomes  therefore the fourth institution to help Sareb with the financing for the acquisition of homes and trade premises owned by the asset management company, after Santander, CaixaBank and Sabadell. These three institutions had already signed similar agreements to the one signed today between Popular and Sareb, for the same amount and with a deadline on the 31st December 2014, even though there is always a possibility for a renovation.

The next institution to join in could be BBVA which, according to financial sources consulted by Efe, is also thinking of supporting the acquisition of properties from Sareb with a similar agreement. With Popular´s mortgage it will be possible to finance up to 80% of the value of principal residences at a maximum deadline of 30 years and with an interest rate of Euribor plus 3,50 percentage points, although it can be reduced to 2,50 depending on the bonus applied.

When it comes to secondary residences, Popular offers an interest rate of Euribor plus 3,75 percentage points to finance up to 60% of the value of the property in 30 years, although if the buyer does not have its residence in Spain, the maximum deadline is 20 years and the mortgage reaches Euribor plus 4,25%.

The portfolio of properties from Sareb is made of around 55.700 properties and another 30.000 other assets, such as garage spaces and storage rooms. It also owns more than 185.000 square meters of office space, thirty hotels and 150.000 square meters of rental spaces in shopping malls.

Source: Expansión

Sareb puts five new lots of assets on sale.

It is possible that some international investors interested in the Spanish market do not take any holidays in August, because Sareb has just placed five new real estate lots in the market. The funds have the possibility of analyzing simultaneously seven great packages of very heterogeneous assets.

These lots include shopping malls, tourist complexes, offices to rent, finished properties and under construction ones, and rural land, as advanced yesterday by Expansión Directo Banca. The company presided over by Belen Romana has just opened the sale process of its first package of shopping malls, named, Runner, while the package of tourist complexes has received the name Blue. It has also place in the market, under the name of Harvest, a package of rural land that includes 22 assets scattered in 5200 hectares. For the moment, Bankia Habitat is in charge of this disinvestment, although Sareb has just started the selection to hire another broker that participates in the operation.

Apart from these three disinvestment processes, Sareb offers another four lots of assets with a nominal value of around 2000 million Euros. The operation Corona includes offices to rent located in seven of the best buildings in Madrid, with a market price of around 450 million Euros. An important real estate consulting company is in charge of finding investors interested in the buildings, which originated from the portfolios of Bankia and Catalunya Banc and which are located northeast from the city, like Campo de las Naciones, Montecarmelo and Manoteras. Sareb hopes to receive the first offers in September so as to close the sale in October or November. The project Teide is also open, which includes finished apartments and under construction ones, with a market value of 150 million Euros.

Apart from trying to seduce the investors with its real estate assets, Sareb is also trying to do so with the financial ones, that make up 80% of its balance. Several weeks ago, it started the project Bermuda, made up of credits to developers from Metrovacesa, Realia and Colonial, with a joint nominal price of 1200 million Euros. At the same time it advances in the sale of its first lot of assets for wholesale investors, the project Bull. The negotiators of the bad bank are in contact with the international funds that have presented offers, among them Lone Start and Centerbridge. Their target is to finish the disinvestment in the next few weeks.

Officials sources from Sareb avoided any comments on these operations, but insisted that their activity “will be intense in the second half of 2013”, after a first half devoted to the opening of different sale channels and the classification of assets, which has still not finished. They specified that the operations of Sareb are not common sales, as they will be channeled through investment vehicles, either through joint risk companies or Socimis, among others.

Source: Expansion

Bankia sells the hotel Westin in Valencia to the German company Seaside.

One of the most luxurious hotels in Valencia, the Westin, which opened during the touristic development of the city for the hosting of the Americas Cup, has changed hands. Bankia has transferred Hotel Alameda, the company owning the rights to the concession during 75 years of an old modernist building, to the German hotel chain Seaside Hotels, in the hands of the Gerlach family.

The new owner of the Westin Valencia was already present in Spain, although in the sector of holiday hotels. The German group owns four tourist resorts on the Canary Islands with the hotels Grand Hotel, Palm Beach and Sandy Beach on Gran Canaria and Los Jameos Playa on Lanzarote. Also the chain has a line of business for urban hotels, which until now had concentrated in Germany with four establishments in emblematic buildings in Hamburg, Leipzig and Chemnitz.

The operation is included in the sale of participations by Bankia so as to comply with the conditions established by Brussels for its rescue. In the case of the Hotel Alameda, this ownership had been inherited from Bancaja. The former Valencian savings bank assumed the hotel in 2003 when it was still a project, after its initial awardee, a subsidiary of The Saudi European Projects, did not comply with the deadlines to start the works that would create a hotel full of glamour in the city.

The five star hotel and grand luxury qualification has 135 rooms and suites and employs 100 workers. It was opened in 2006 after an investment of 30 million Euros that allowed the conservation of the façade of the old factory La Lanera. Since its opening, the management has been in the hands of the chain Starwood, owner of some other brands such as Sheraton.

Source: Expansión

Blackstone pays 128 million Euros for the properties in Madrid.

The sale is a consequence of the process of reduction of the debt of the Council of the capital, as explained by sources of the Town Hall in Madrid last Tuesday. Through a public bidding, the Council of Madrid started the sale process on the 6th May. Since then, it has received offers from different funds for this lot of properties classified as subsidized homes and with rental agreements. Among those interested there were important firms such as Cerberus, Morgan Stanley and LoneStar.

Finally, Blackstone has acquired this lot of 18 developments located in Carabanchel, Centro, Vallecas and Villaverde for 125,5 million Euros. 1208 properties included in 12 developments are properties on rental agreements and the rest, located in six buildings, are for rental with a purchase option.

Blackstone has taken part in the bidding along with Magic Real Estate, a firm with experience in the management of properties in Spain and in areas of Northern Africa. The fund will not manage the lot of properties as Blackstone, but through a subsidiary called Fidere.

The awardees have paid three million Euros more to acquire 51 parking spaces, 25 trade premises and 2 storage rooms. The new owners have assured that they will maintain the conditions of the agreements with the current tenants, as the purchase agreement included the substitution in the current rental agreements.

Blackstone is present in the sector since 1991. It is currently the world leader in real estate investment of venture capital, with an invested capital of 60.000 million Dollars. The portfolio of Blackstone includes hotels, offices, shopping malls, industrial units and homes in the United States, Europe and Asia. Among its most important assets there are the Worldwide Hilton hotel chain, the Brixmor shopping malls, and the office complex Broadgate, in London. In Spain, they are the owners of the packaging manufacturer Mivisa.

Source: Expansión

Sareb puts its first two portfolios of rural land.

Sareb intends to make its real estate assets, its land and credits related to the developing sector profitable as soon as possible. It is now preparing the sale of two portfolios of rural land, initially in the hands of Bankia, made of 22 assets with a surface of 5700 hectares, although this number could be increased. This is the so called Harvest project, which will be commercialized through Bankia Habitat and two real estate companies.

A complete challenge. Sareb has decided to accelerate so that its shareholders, included the State with 49% of its capital, may obtain a profit from their investment and thus end the critics not only from the market, but also from the troika and mainly from the International Monetary Fund (IMF). Sareb wishes to reached its cruising speed in the second half of this year, as explained by the firm to its shareholders.

After promoting the sale of home to retailers, and while it finishes its first great sale of real estate assets to international funds – known as project Bull -, and the sale of a package of credits to developers for 1200 million Euros – under the name of operation Bermuda – the firm presided over by Belén Romana has created the project Harvest. It is the first package of rural land it places on the market.

The project Harvest is made of 22 assets divided into two portfolios with a total of 5700 hectares, although this is an initial figure and could be increased once Sareb ends the classification of all its portfolio of rural assets.

The first of these two portfolios will be commercialized by Bankia Habitat, as most of its assets have been transferred by BFA, the parent company of Bankia. This package is made of eight groups of estates located in Cordoba, Murcia, Teruel, Madrid, Valencia and Navarra. The second portfolio will be commercialized by two important real estate brokers whose agreement is being finalized. These firms will sell rural land to the rest  of institutions that have transferred is toxic assets to Sareb, which is located in Badajoz, Caceres, Tarragona, Murcia, Alicante, Ciudad Real and Soria.

Sareb´s technicians have detected transferred rural land which is located in natural settings with a high value. Among them Cabo Cope, Sierra de Irta or Sierra Tivissa stand out. Arrangements are being made to proceed with the immediate disinvestment of this land.

There are, in fact, offers for land in Cabo Cope with a surface of 200 hectares.

These real estate firms have agreed to reinforce their web sites and carry out aggressive commercial actions with rural unions, as well as with real estate agents specialized in the areas where these plots are located. Initially Sareb studied more than 200 rural plots, with a surface of 9700 hectares, although in the end 22 assets have been selected, as these ones can be commercialized “right away”, as explained by sources related to the bad bank.

The land put on sale will not be for building purposes, although some plots could be finally change their land use, the same sources explain.

The sale of rural land is one of the main pending issues within the sector, and mainly within the nationalized institutions, the main sources of transfer of rural assets to Sareb.

One of the most important problems for their sale is that they do not have the appropriate channels for their commercialization. And also that the transferring institutions have not carried out active disinvestment strategies.

Source: Cinco Dias

Bantierra sells an unpaid credit portfolio to H.I.G. Capital.

Bantierra (Caja Rural de Aragón) and the U.S. fund Bayside Capital, an affiliate of H.I.G. Capital, have undersigned the first default credit portfolio in Spain. The portfolio, valued at €150 million, consists mostly of the SMEs´and individual customer credits.
Due to scarcerity of such operations, Bantierra leaves behind its competitors, showing itself as dynamic and innovatory.
“A long list of domestic and foreign investors expressed interest in the portfolio”, finally financed by Analistas Financieros Internacionales (AFI), MaC Group and advised by De Castro Morenilla. On the part of H.I.G., the assesory has been carried out by Pérez-Llorca office.
 
Source: EuropaPress