Axiare Invests €173M In RE Assets In Madrid & Cataluña

11 August 2015 – Expansión

The Socimi Axiare has purchased eight real estate assets in Madrid and Cataluña for €173 million. That quantity represents 45% of the proceeds the company obtained from its recent capital increase.

Specifically, the company has purchased two office buildings in Madrid (one on Calle Ramírez de Arellano, 15 and the other on Calle Don Ramón de la Cruz, 82), a retail store located in the Velazquez building (central Madrid), a portfolio of four buildings also located in the capital, comprising three office buildings and a larger retail outlet, and two logistics warehouses in the Les Puntes industrial estate, in Constantí (Cataluña).

Axiare has invested €761 million in total in just one year. With this transaction, the Socimi adds 108,654 m2 of surface area to its portfolio and increases its gross leasable area to more than 550,000 m2.

Capital increase

The transaction announced yesterday involves the investment of 45% of the funds the Socimi obtained from its recent €395 million capital increase, in June, which was fully subscribed. The company doubled in size as a result of that increase.

Axiare has said that it plans to invest the remaining funds “in new acquisitions with the aim of continuing to increase its portfolio of high quality properties in established locations”.

Since its debut on the stock exchange, the Socimi has closed 18 transactions, acquiring 28 properties in total, with an investment value of €761 million.

Original story: Expansión

Translation: Carmel Drake

Brussels Authorises CPPIB’s Investment In Puerto Venecia

10 August 2015 – Expansión

Brussels has authorised the transaction on the basis that it will not have a negative impact on Europe’s economic environment.

The European Commission has authorised the joint acquisition of the largest shopping centre in Spain, Puerto Venecia in Zaragoza, by the Canadian pension fund CPPIB and the current owner, the Luxembourg holding company Intu, on the basis that the transaction will not have a negative impact on Europe’s economic environment.

The company created by CPPIB and Intu already controls the Parque Principado shopping centre in Oviedo, but the European Commission considers that the new operation does not threaten competition in the EU, because it will have a “limited impact” on the structure of the market.

The case, which was referred to Brussels on 10 July, has been examined in accordance with the simplified procedures that apply to less problematic deals.

Original story: Expansión

Translation: Carmel Drake

Lar Completes €134.9M Capital Increase

10 August 2015 – Expansión

The Socimi Lar España has completed a capital increase for 19.9 million shares, representing 50% of its capital, with demand exceeding supply by 9.2 times.

According to the company’s report to Spain’s National Securities Market Commission (CNMV), Lar España Real Estate’s shareholders subscribed 98.49% of the new shares during the preferential subscription period.

The Socimi has issued the shares with a nominal value of €2.00 and a premium of €4.76, and so has secured additional funding of €134.9 million in total, which it has earmarked for further investment.

During the preferential subscription period and the period for assigning additional shares, requests were received to purchase 183.5 million shares, however supply amounted to just 19.9 million shares.

The new shares will begin trading today (Monday 10 August 2015).

Original story: Expansión

Translation: Carmel Drake

Colau Wants To Turn Tourist Flats Into Social Housing

7 August 2015 – Expansión

Tourism in Barcelona / Colau will forgive 80% of the fines imposed on the most centrally-located unlicenced apartments if their owners agree to allow the properties to be used by the town hall (for social housing) for three years.

Curbing tourist “speculation” was one of the most-repeated slogans quoted by Ada Colau, the mayoress of Barcelona, during her election campaign. After suspending the opening of new hotels and hostels for a whole year across the entire city, now it is the turn of a new battery of measures, which will affect a key sector for the Catalan capital’s economy, tourism.

On Wednesday, the town hall reported that it is going to launch a pilot plan in the Ciutat Vella district – the most central area of the city – aimed at the owners of unlicenced tourist apartments who have been fined repeatedly in recent years.

In exchange for writing off 80% of their cumulative fines, the town hall will offer them the opportunity to place their apartments at the disposal of the town hall for a period of three years, which will then award them to families in situations of social emergency under rental agreements. If owners grant their properties for a longer period, then the town hall may write off 100% of their fines. Once the fines have been repaid, the apartment owners will receive the rent directly from the families.

From 15 September, the town hall will start to inform fined owners about this option for dealing with their penalties.

For the time being, the initiative will focus on 330 property owners, whose fining procedures have been completed. There are more illegal apartments whose penalties are still being processed, but for now the initiative will not affect them. On average, fines amount to €15,000 per property owner, but according to the law, they may reach up to €90,000.

As part of its measures to combat the new “speculative bubble”, the town hall has also announced that it will fine any digital platforms that advertise tourist flats without a licence from September.

The town hall explicitly cited two websites that account for 80% of the supply, Airbnb and Booking, and asked them to provide information to identify the apartments they advertise, so that checks can be completed to see which properties have licences and which do not.

Ada Colau’s team also warned the online platforms that they should include the licence numbers of the apartments they advertise. If they do not collaborate, they will be subject to significant fines, in accordance with the ruling legislation. They also stated that not all illegal apartments have been fined yet due to a lack of “political will”.

Reactions

The platform Airbnb said in a statement that the fines that have been announced “create confusion” and represent “a step back” in terms of the regulation of the sector.

The opposition parties, CiU and PP described the measures announced as “smoke (and mirrors)” and accused Colau of taking decisions for show (i.e just for the sake of being seen to do something) and C’s asked the town hall not to “blackmail” property owners. ERC rejected the idea to write off fines because it “rewards” those who have not held licences for years. The PSC saw the announcement as a positive move, but called for more inspections.

Original story: Expansión (by David Casals)

Translation: Carmel Drake

Värde Buys San José’s RE Arm & Will Build 1,500 Homes

7 August 2015 – El Confidencial

After months working on the sidelines, the private equity firm Värde Partners has finally taken control of San José Desarrollos Inmobiliarios, the real estate arm of the Galician group. The US fund has purchased a 25% stake in the company from Banco Popular for €90 million, in a deal signed on Wednesday, taking its ownership stake to 51%.

From this position of power, Värde expects to immediately carry out a €60 million capital increase, in a move aimed at shoring up the company and laying the necessary foundations to start developing properties. The aim of the fund, which will invest €150 million in the company in total, through its purchase from Popular and the subsequent capital injection, is to start the construction of 1,500 homes across Spain, clearly underlining its commitment to the Spanish property market.

The US firm is one of the most active foreign investors in the sector, where it has now made three major investments. It all began in the Summer of 2013, when it partnered up with Kennedy Wilson in an agreement to acquire Catalunya Banc’s real estate management platform for almost €30 million, although the two parties ended up breaking that pact a few months later.

The two firms crossed paths once again at the end of 2013, when they pipped Centerbridge at the post, to acquire Aliseda, the real estate arm of Banco Popular, for €815 million. That operation allowed them to take over the management of mortgage-backed loans with a net value of €9,350 million and foreclosed assets worth €6,500 million.

Far from being content with that transaction, Värde then began to acquire stakes in San José Desarrollos Inmobiliarios through the back door, by purchasing loans from its creditor entities. It signed those purchase agreements with discounts of around 90% and whereby became the company’s main creditor, just when the parent company of the Galician group was finalising the refinancing of its €1,600 million debt with the banks.

The final agreement was signed at the end of 2014 and involved dividing the company chaired by Jacinto Rey (pictured above) into two: on the one hand, the construction business, and on the other hand, the real estate company, which it was agreed would pass into the hands of the creditors to repay €743 million of the debt.

Sources state that Värde does not currently have any plans to integrate Aliseda with its recent purchase of San José Desarrollos Inmobiliarios…(…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Popular Sells Its Portuguese RE Manager For €72M

7 August 2015 – Expansión

Banco Popular is replicating the model it adopted for Aliseda in Portugal. The entity chaired by Ángel Ron has decided to sell a majority stake in its real estate and debt management company in the neighbouring country. Popular closed the operation on 9 June by selling the business to Quarteira, a company owned by funds of the US firm Carval, for €72 million.

The Spanish entity will maintain a 20% stake in the new company – Recovery to Business (Recbus) – which will take over the management of the real estate assets of the Portuguese banking subsidiary.

This operation has generated capital gains of €69.5 million for Popular: €55.6 million from the sale of the 80% stake in Recbus to Carval and €13.9 million from the revaluation of its retained 20% stake.

Sources at the Spanish entity stress that this transaction is positive for two reasons, since: “it makes the most out of the management of the real estate business in Portugal, benefitting from the experience of the partner”; and “it allows Banco Popular Portugal to focus on its traditional commercial banking activity”.

This agreement replicates the deal that the bank reached with Värde Partners and Kennedy Wilson at the end of 2013, when it sold a 51% stake in Aliseda for €810 million.

The growth of Aliseda

Aliseda is currently in an expansion phase after earning €68 million last year. Its shareholders – Värde, Kennedy and Popular – have signed an agreement to increase its capital, to repay debt.

Aliseda Inmobiliaria recorded revenues of €1,127 million during the first half of the year, according to Efe. The company sold more than 6,400 properties and hopes to generate record breaking revenues of €2,000 million in 2015.

Last year, the company sold more than 8,600 assets.

Of the assets sold, 44% were new build properties, 26% were second hand….and 14% were land.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

INE: País Vasco & Aragón Led Rise In House Sales In June

7 August 2015 – Expansión

Recovery / The real estate sector consolidated its recovery in June, thanks to the second hand market. The Páis Vasco and Aragón were the regions that saw the highest increases in the number of house sales.

“If the current trend continues, 2015 will be the year that marks the before and after in the real estate sector”. The residential market is continuing to build on its stabilising trend, after seven years in decline.

Yesterday, the National Institute of Statistics (INE) confirmed that: house sales soared by 17% in June to record ten consecutive months of increases. According to Manuel Gandarias, Research Director at pisos.com, if the trend continues, 2015 will signal the start of the recovery in the sector.

This increase, which is the largest since March 2014, is due to strong growth in the sales of second hand homes (27,947 transactions), which shot up by 44.5% YoY. By contrast, the sale of new homes (6,631) plummeted by 30.6% compared with the same month last year.

Experts say that the second hand market, which accounts for 80% of all sales, is the true barometer of the current health of the sector. They also explain that the data recorded in June relates to transactions signed in April and the beginning of May.

Thanks to this surge in the sale of second hand homes, increases have been observed across the whole of Spain, except for in Galicia, where sales decreased by 6.5%. The greatest increases were recorded in the País Vasco (40.5%), Aragón (35.3%) and the Canary Islands (31.8%), although the region with the highest number of sales per 100,000 inhabitants was Castilla y León (718), followed by Aragón (639) and La Rioja (605). At the other end of the spectrum, Asturias and Galicia were the regions with the least activity, recording just 46 sales each per 100,000 inhabitants, followed by Castilla-La Mancha, with 53. In absolute terms, Andalucía led the market, recording 6,129 transactions in total, up by 13.9% from a year earlier.

Positive climate

Real estate experts believe that the positive sentiment in the residential market has now taken root and that the end of the crisis is near. (…).

According to Gandarias, “the granting of mortgages, which is fundamental for the increase in house sales, is flowing better than expected. Households have become less indebted and now have more (disposable) income”. In fact, according to INE, the signing of mortgages to purchase homes increased by 10.9% in May and has now recorded a whole year of consecutive increases. Moreover, residential prices increased by 1.8% in 2014 and by 1.5% during Q1 2015.

In monthly terms, house sales grew by 3.8%, the first increase in the month of June since the start of the crisis. Almost 90% of transactions related to unsubsidised homes, which increased by 16.4% (27,493 transactions). Sales of social housing properties grew by 22.8% (3,085).

Original story: Expansión (by Juanma Lamet) 

Translation: Carmel Drake

Merlin Completes Its €1,000M Capital Increase

7 August 2015 – Expansión

Demand for the Socimi’s capital increase exceeded supply by 8 times.

The Socimi Merlin Properties has successfully completed a capital increase amounting to €1,033.7 million – the company intends to use the funds to finance its purchase of Testa, the real estate subsidiary of Sacyr.

According to a statement issued by Merlin to Spain’s National Securities Market Commission (CNMV), 129.21 million shares were subscribed in total, after demand for the capital increase exceeded supply by 8 times, during the preferential subscription period and the period for assigning additional shares.

Merlin launched a takeover bid for 100% of Testa’s share capital on 23 July, after taking a 50.1% stake in the real estate company and acquiring an additional 25% stake in the company from Sacyr for €861 million.

The takeover, which was obligatory, as it exceeded the quota of 50% of the share capital, is effectively aimed at just 581,609 of Testa’s shares, which represent the 0.38% stake of its capital that is listed on the stock exchange.

Merlin is offering these minority shareholders €13.54 per share, the same average price at which the Socimi will acquire 100% of Testa, which is 1.7% higher than the company’s current share price (€13.31 at the close of trading on Wednesday).

The Socimi will thereby exclude Testa from the stock exchange, since it plans to merge the two companies (Merlin and Testa). To do so, it will have to first convert Sacyr’s current subsidiary into a Socimi – that step is expected to be completed before the end of September.

All of this forms part of an agreement that Merlin reached with Sacyr at the start of June, to purchase Testa in several stages over a maximum period of one year, for €1,793 million.

The operation will result in the creation of the largest property company in Spain, with assets worth €5,000 million, including one of the four skyscrapers in the Cuatro Torres business district of Madrid.

Original story: Expansión

Translation: Carmel Drake

Socimis Raise A Further €2,600M As They Lead RE Purchases

7 August 2015 – Expansión

Merlin Properties, Axiare, Hispania and Lar España have now spent all of the money they raised through their IPOs last year, after investing almost €5,000 million in assets between them.

The Socimis are gaining financial muscle as they continue to lead the new property boom. Merlin Properties, Axiare, Hispania and Lar España, the four large Socimis, have increased their share capital by almost €2,600 million in recent months, attracting funding from several major investors.

The companies, which have invested almost €5,000 million in the acquisition of all kinds of assets, have already spent all of the money they raised from their debuts on the stock exchange last year. The Socimis are the stars of the recent significant increase in investment in real estate assets, which reached a record figure of €5,264 million during the first six months of 2015.

The first company to list on the market was Hispania. The real estate company controlled by Azora requested a capital increase at its shareholders’ meeting in December to finance its purchase of Realia. At the time, Hispania planned an initial round to raise funds from its shareholders, but that transaction was foiled after the Socimi’s bid for Realia was exceeded by a counter-bid from Carlos Slim. In April, Hispania proposed a further extension of up to 50% of its share capital in order to purchase new properties. It achieved its objective of raising €337 million in just three hours.

Hispania has made investments worth €1,107 million, since its debut on the stock exchange in March 2014, including Project Bay, the hotel Socimi that it is developing jointly with Barceló.

A few months ago, Merlin Properties, the largest Socimi on the Spanish stock exchange, raised €613.8 million. Merlin, which already had a portfolio worth more than €1,250 million at that stage, was planning to continue with its acquisition of properties, mainly offices and retail assets. Nevertheless, in the midst of this strategy, the Socimi decided to embark on an ambitious corporate transaction: the purchase Testa, the real estate arm of Sacyr. The acquisition turned Merlin into the leader of the office business in Spain, as it took ownership of a portfolio worth €3,231 million, containing assets such as Torre Sacyr in Madrid.

In the end, the transaction closed for almost €2,000 million, of which €1,793 million was paid to the construction company and €183 million was injected into Testa as cash. Merlin has recently completed a new capital increase amounting to €1,034 million to finance this purchase. The Socimi is funding the transaction through its own shareholders, which have already expressed their support for the transaction, according to sources close to the company.

The other two Socimis on the Stock Exchange, Axiare and Lar España, also announced their own capital increases, in June and July, respectively. (…).

Other capital increases

The Socimis are not the only entities that are taking advantage of the international funds and management companies to invest in the Spanish real estate sector. So too are the traditional companies in the sector.

Quabit, the real estate company controlled by the construction group Rayet announced its own capital increase in June amounting to €70 million with the aim of raising funds to start new projects.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Patrizia Buys “Plaza de Félix Sáenz” Retail Property In Málaga

6 August 2015 – Property Magazine

Patrizia Immobilien AG has taken over the retail space in the prestigious “Plaza de Félix Sáenz” residential and commercial building in Málaga. The listed corner building, which underwent a complete renovation as recently as 2011, is located in the middle of the pedestrian area of the Andalusian city, which has a population of around 570,000. “The retail space, totalling 1,824 square metres, is leased on a very long-term basis to a renowned European fashion retailer,” reports Borja Goday, Managing Director of Patrizia Activos Inmobiliarios España, the national subsidiary responsible for Spain and Portugal.

The interior of the “Plaza de Félix Sáenz” building has been developed to a high standard and also delivers a high degree of space efficiency. The total floor space of 1,824 square metres is divided approximately equally between the ground floor and the first floor. “This property is something special, as Spanish city centres are generally characterised by small spaces. Large spaces such as the one that has just been acquired are therefore in high demand with large chain store operators and accordingly are very lettable,” Goday continues. The purchase was made for a real estate fund launched by Patrizia as part of an individual mandate from a professional superannuation scheme in Germany. Confidentiality has been agreed with the seller, a private investor, in relation to the purchase price.

Patrizia has been monitoring the Spanish real estate market for a very long time now. In the last 12 months, the market has shown extremely positive development. After seven crisis years, the recovery is occurring more quickly than expected and the interest of many investors has returned.

Original story: Property Magazine

Translation: Carmel Drake