Category: Industrial & Logistics

Galician Gov’t Sells 24% Of Its Discounted Industrial Land In 2 Years

23 January 2017 – La Opinión A Coruña

The Galician regional government (La Xunta) has recorded turnover of €31 million from the sale of 304 plots over the last two years, after applying a discount of €23.7 million. Its sales increased ten fold during the first year, but decreased by 55% in 2016.

The sale of industrial land by La Xunta decreased by 55% last year, despite significant reductions, of up to 50%, on the initial prices. Acquisitions of plots of land in public business parks have slowed, even though the large discounts and payment facilities have continued. Two years ago, the Executive launched a plan to lighten its stock of industrial land. The result is the sale of 24% of the land it put on offer.

In 2015, the Galician autonomous government, through Xestur and IGVS, managed to sell off 200 plots of land, covering 491,140 m2, after it launched its industrial land sales plan. It was a wake up call, given that it multiplied the surface area sold in the previous twelve months almost ten-fold, up from 53,515 m2 to almost 500,000 m2. Nevertheless, one year later, only 104 plots were purchased, covering a surface area of 195,722 m2. As such, four times more land was sold than before the discount plan was launched, but half as much than during the debut year.

Why the decrease? “There was a significant amount of activity in 2015 because business people made a huge effort to buy, as they expected the discounted prices to apply for one year only. In 2016, they realised that the discounts were permanent and so they were no longer in such a hurry to buy”, say sources at the Regional Ministry of Infrastructure. (…).

After two years, the Galician regional government has sold 304 plots, covering a combined surface area of 686,863 m2, which represents 23.8% of the total space it initially put up for sale. (…).

674 more plots are still on the market, covering a total surface area of 2.1 million m2 and with a global sales price of €139 million.

The sales volumes of plots in industrial parks vary by province. A Coruña was ranked second in terms of the number of operations (19.4%), behind Lugo (46%). It was followed by Ourense (18.6%) and Pontevedra (8%). (…).

Original story: La Opinión A Coruña (by P. Pérez, I. Bascoy and J. Carneiro)

Translation: Carmel Drake

Grupo Zeta Puts Its Barcelona Printworks Up For Sale For €19.5M

18 January 2017 – Economía Digital

(…). Grupo Zeta has put its brand new industrial print warehouse up for sale for €19.5 million, according to several classified advert websites. It is the company’s final real estate asset, given that it already sold its editorial buildings in Barcelona and Madrid.

The group chaired by Antonio Asensio Mosbah has engaged CBRE and Activa Properties to coordinate the sale. The former has placed an advert for the warehouse on its website, albeit without any indication of the price; the latter has posted adverts on several real estate portals. The property was initially put on the market last summer for €23 million, but the price has now been reduced to €19.5 million.

Although the print press is still functioning and more than 50 people are working at the site, the adverts have already written off the continuation of any similar activity: the warehouse is advertised as “previously the print press, storeroom and offices of an editorial group”. The property has a constructed surface area of 35,000 m2 on a plot measuring 58,400 m2.

The Grupo Zeta’s print press, which is located in Parets del Vallès (Barcelona), prints El Periódico, La Razón and ABC for the Mediterranean area, as well as several other smaller publications. (…).

Original story: Economía Digital (by Xavier Alegret)

Translation: Carmel Drake

CBRE: House Prices Will Grow By 3%-6% In 2017

16 January 2017 – El Mundo

One out of every two directors in the real estate sector in Spain believe that house prices at the national aggregate level will rise by between 3% and 6% in 2017, compared with only 21% that thought the same in 2016. That is one of the main conclusions of the Real Estate Trends Barometer compiled annually by CBRE, the largest international real estate consultancy and services firm. For the preparation of the Barometer, CBRE has surveyed the 100 main experts in the sector in our country.

This indicator is particularly important because it is the first time since the outbreak of the crisis that experts in the sector forecast an overall increase in prices in the Spanish residential market. That, together with other data, is evidence of the recovery in the housing market. In fact, 56% of the experts surveyed believe that the absorption of housing will gradually increase and half of them think that prime yields will grow in the residential sector.

Similarly, after property developers experienced a revival in 2016, 36% of those surveyed consider that most opportunities will be found in renovations within the residential segment in 2017, followed by new build homes, which means that the number of cranes should continue to follow the rising path that has already begun.

The awakening of property developers and real estate companies

Almost 60% of the experts consulted forecast that private investors and family offices will be more active in 2017 than last year, followed by core plus funds (according to 44%) and institutional investors (30%). Moreover, 58% of the directors in the sector think that opportunistic investors will decrease their activity in the market in 2017, an important change compared to recent years.

Nevertheless, the most striking conclusion is the perception that the people surveyed have of the role that property developers and real estate companies will play this year. In fact, 32.2% of those surveyed think that property developers will play a key role, compared with 6.6% who thought the same last year. Similarly, 44.4% (compared with 26.3% last year) think that their role will increase although in a less marked way.

Meanwhile, in terms of other players, the Socimis are expected to continue to play a key role according to one out of three experts. International investors will also be significant players in 2017, according to 31.5% and finally, domestic investors will remain stable with respect to last year or may even slightly increase their presence according to the vast majority.

Adolfo Ramírez-Escudero, President of CBRE Spain, added that “these forecasts seem to show a continuous line with respect to 2016, a year in which, according to our data, more than 40% of the €13,850 million invested in the real estate sector in our country came from overseas and when Socimis accounted for around 40% of the total capital invested”.

Offices will continue to attract most attention in the market

Like in the previous two years, the office sector will continue to be the most attractive in 2017. Whilst last year, 32% of those surveyed focused their real estate activity in Spain on that segment, this year 35% expect to do so, followed by 19% who are committed to the residential sector. Moreover, interest in the industrial-logistics sector has increased, up from 12% last year to 16% this year. (…).

Original story: El Mundo

Translation: Carmel Drake

French Group Sermeta Buys Gran Hotel de Sóller For €10M

4 January 2017 – Última Hora

The French business group Sermeta, led by Joseph Le Mer, has just acquired the centrally located and iconic Gran Hotel Sóller (on the island of Mallorca) for €10 million from the Sóller-based businessman Andreu Gelabert.

Gelabert confirmed that the completion of this operation will ensure the continuity of this luxury establishment, located just a stone’s throw from Plaza Constitució and the municipal market. He also reported that he will continue to be involved with the property as advisor to the new owner. According to Gelabert, “the good news is that all of the staff at the hotel will continue at the establishment, working for the new owner”.

It has long been rumoured in Sóller that the Gran Hotel may be sold and Andreu Gelabaert himself said just a few days ago that “offers had been received and were being considered”. On Monday, he confirmed that a deal had been reached, along with its price. “The new owners intend to acquire three more hotels on the island (of Mallorca)”, said the Sóller-based businessman “and expansion plans are in the pipeline for the Gran Hotel, but I cannot reveal any more details for the time being”. Even so, Gelabert reported that the property “will open for business on 10 February 2017, like it does every year”.

The building

The Gran Hotel Sóller occupies a single historicist-style building – known as Can Cremat – whose façade was designed by the architect Joaquim María Pavía Birmingham. Built at the end of the 19th century, the property was originally a residential building and then used for industrial purposes until Josep Maria Vicens Casasnovas turned it into a B&B in the 1960s and then into Hotel Sóller.

Andreu Gelabert acquired the property in 2002 after it had been closed down for years. He undertook a comprehensive renovation to turn the building into the first five-star rated property in the area; it re-opened in 2004 with 38 rooms. Gelabert is a highly valued businessman in Sóller. In 2007, the Town Hall awarded him the Escut d’Or for his entrepreneurship and support for tourism and sport.

Original story: Última Hora (by Lluc García)

Translation: Carmel Drake

Sareb Sells 2 Portfolios To Deutsche For €160M

30 December 2016 – Expansión

Sareb has sold two debt portfolios to Deutsche Bank for €160 million. One, worth €80 million, called Sevilla, contains debt secured by residential assets (homes) located all over Spain. The other, called Marina, is a debt portfolio secured by industrial logistics assets located in Madrid and Toledo.

The two operations have been advised by Dentox and Copernicus. These sales come after Project Eloise, which was closed by Sareb earlier in the week for €600 million, for which it received legal advice from Ramón y Cajal. That operation was the largest in Sareb’s history. It was secured by homes, located above all in Cataluña, Madrid, Andalucía, Galicia and Valencia. The financial advisor in Sareb’s three sales has been CBRE.

The transactions have been made more challenging since the Bank of Spain introduced its accounting regulations, which oblige the bad bank to update its assets to market prices each year. In March, for example, the entity sold a package of loans whose collateral included industrial logistics assets, hotels and offices. In September, it divested another portfolio secured by residential buildings in Madrid.

The entry into force of the Bank of Spain’s new accounting circular forced Sareb to undertake a clean up of €2,044 million during the first half of the year, which was added to provisions amounting to €968 million from the previous two years. The four real estate companies that sell Sareb’s assets are Altamira Asset Management, Haya Real Estate, Servihabitat and Solvia.

Between January and September, the bad bank sold 8,930 properties, up by 12% compared to the same period last year. Of those, 5,109 were its own properties. Another 3,821 came from the balance sheets of property developers.

Original story: Expansión

Translation: Carmel Drake

Axis: Spain’s Servicer Sector Is Being Redefined

23 December 2016 – El Mundo

In order to understand the current situation in the Spanish real estate market, beyond the reactivation of the construction of homes in certain specific areas, it is worthwhile looking at the amount of debt and real estate assets, left over from the bubble, that are still sitting on the balance sheets of financial institutions and other major owners, such as investment funds.

This real estate indigestion, which led to the restructuring of the financial system, the creation of Sareb (popularly known as the bad bank) and the launch of the bank’s servicers (which are now mainly owned by funds), has drawn a new real estate reality. The involvement of these new players has changed the rules of the market. They have and will continue to play a key role.

The Asset Under Management Report, which the consultancy Axis Corporate has just prepared and presented, is an extremely useful tool for understanding this business, which is being completely redefined. Axis Corporate specialises in advising these new players in the sector.

Regarding the role of the servicers, the study explains that, once each one has established itself in the market and following the Íbero tender whereby Sareb awarded the management of its assets, they must consolidate or adapt their respective models.

In this sense, and taking into account what is happening in other countries, Luis Fernández, Managing Partner of Financial and Real Estate Services at Axis believes that “over the medium term, the number of servicers will be reduced to two or, at the most, three”. Corporate movements forecast not only the “inevitable” concentration process, but also the repurchase of these platforms by financial institutions, their sale to industrial partners and international growth.

This will happen in a context in which the major investors, which are currently their main shareholders, will have their interest diverted to other problem economies such as those of Greece, Cyprus and Italy, where financial restructuring processes, such as the one undertaken in Spain, are still pending and where they may try to replicate the asset management model as servicers.

“The funds entered this business three years ago and their perspective as investors tends to be fixed for four years, which means that we are now approaching the divestment phase”, said Fernández. In this process, sources at Axis expect that the exit of funds with a more opportunistic profile will make way for others, with a more industrial focus”, who are committed to creating value more over the long term”.

In this regard, José Masip, Partner at Axis, draws our attention to the rental market, which is going to be “highly attractive” over the next few years and he predicts that we will see a “clear commitment” from the latter type of funds to obtaining profitability, not only from the value appreciation of their assets, but also from their rental.

“Both banks and funds are going to continue removing assets from their balance sheets through Socimis or by means of other vehicles specialising in rental”, said the expert. In this context, sources at Axis estimate that “over the medium term, it will not be unusual to see companies managing volumes of up to 50,000 homes for rent”.

Original story: El Mundo (by L.M.C.)

Translation: Carmel Drake

Andalucía’s Regional Gov’t Sells 2 Residential Plots For €10.3M

20 December 2016 – Es Andalucía

The latest offer from the Ministry of Development and Housing to sell off the industrial and residential plots launched by the Andalucían Agency for Housing and Renovations on 18 October, has ended with the sale of two plots of residential land, one on in Costa Bellena, Chipiona (Cádiz); and another through a purchase option in Camas (Sevilla).

Thus, in total, residential land amounting to €10.3 million and industrial plots with a sales value of €1.2 million have been awarded in the latest offer, according to reports from the Regional Government of Andalucía in a statement.

In terms of the site in Costa Ballena, a plot of land measuring 27,243 m2 with the capacity to build 131 homes has been sold for €6,893,227; and in Camas, the other site has been sold through a purchase option for a plot of land measuring 15,188 m2 as part of the Poeta Muñoz Sanromán Partial Plan, with capacity for 227 homes and a price of €3,456,029.

In this way, most of the residential plots sold are located in the province of Cádiz, in the town of Chipiona (…) which will equip the Regional Administration with the resources it needs to construct subsidised housing in the province of Cádiz.

Therefore, the sale of residential land in this final offer of the year, the fourth in 2016 and the fifth since the decision was taken to reactivate the sale of land at the beginning of the legislature, will allow 358 homes to be built in total in the towns of Chipiona and Camas. (…).

Original story: Es Andalucía

Translation: Carmel Drake

Aguirre Newman: RE Inv’t In Barcelona Amounts To €2,500M In 2016

19 December 2016 – La Vanguardia

The real estate market in Barcelona is on course to break records again this year. It is expected to end 2016 with total investment operations amounting to €2,500 million, compared with €1,978 million last year, according to data presented by the real estate consultant Aguirre Newman on Thursday.

2016 will also be a “historical” year for Spain as a whole, with investment figures once again exceeding the level recorded in 2007, the year before the outbreak of the crisis. Investment operations worth almost €14,000 million are forecast to be closed.

Cataluña accounts for 20% of Spain’s total investment in this sector, although that figure is set to increase to 25% in 2017, given the significant potential of Barcelona.

The Director General of Aguirre Newman in Barcelona, Anna Gener, explained that; demand in Barcelona is still very active; there is still a lack of available land for sale; international demand is very active; and the real estate market is regarded as an attractive sector for investment.

Of the total investment volume expected this year, €860 million correspond to offices, down by 2.8% compared to last year, given that 2015 was a year of “blossoming”, when several major corporate operations were recorded after years of crisis.

The residential market will reach €120 million this year, shopping centre investment will amount to €865 million, retail investment will reach €100 million and investment in the industrial sector will amount to €144.1 million, up by 61%, due to the scarcity of land.

Around 80% of the investment volume has been made by international buyers; and domestic investors “are back again” after years away, according to Hipólito Sánchez, Director of Investments.

57% of the investments were made by funds, 26% by Socimis, 10% by private equity firms, 3% by institutional investors and 2% by insurance companies.

The leasing of office space continues to be a very active market; the availability rate has been decreasing since 2012 and now stands at 9.9%.

Construction activity is continuing to recover, with a 40% increase in the number of new construction permits compared to 2016.

The average price of free (unsubsidised) housing increased by 9% in Barcelona this year and by 4.5% across Cataluña. There was also a great deal of interest in renovation projects and in changes of building use status towards high standing residential properties in the centre of Barcelona, where more than 60% of buyers are foreign. (…).

The retail sector has continued to receive interest from investment funds and private equity firms in the main areas of the centre of Barcelona.

La Diagonal has established itself as an area of expansion following its renovation, with a 30% increase in rental income in just two years and the opening of megastores by certain brands, such as Massimo Dutti, Zara, Uniqlo and H&M.

The most important operation in the shopping centre sector was the sale of Diagonal Mar to Deutsche Bank for €495 million.

Another sector that continued to attract investors was logistics, whose investment volume increased by 60% with respect to last year, due to the shortage of land. (…).

The hotel sector has also continued to perform very well, given that prices per room have increased, thanks in part to the fact that there are no new competitors.

The forecasts for 2017 indicate that the real estate sector will continue to attract international investors, demand will continue to be very active, and products will continue to be scarce, although prices are not predicted to rise by very much.

Original story: La Vanguardia

Translation: Carmel Drake

Sogepsa Has Sold 3 Ha Of Industrial Land For €1.8M In 2016

13 December 2016 – Finanzas.com

This year, the Company for the Management and Promotion of Land in Asturias (‘La Sociedad de la Gestión y Promoción del Suelo de Asturias’ or Sogepsa) has sold almost three hectares of industrial land, spread over 22 plots of land, for which it has recorded revenues of €1.8 million. However, it has not sold any residential land.

This data has been provided by Belén Fernández, the Minister for Infrastructure and the President of Sogepsa, in her appearance at the budgetary meeting of the General Meeting of the Principality.

Fernández also said that the Principality currently has €92.8 million of avals with this company and that since 2013, it has disbursed loans amounting to almost €43 million.

Nevertheless, in response to questions from the Partido Popular MP José Agustín Cuervas-Mons, she said that the level of sales is a debate that has nothing to do with the future of this company.

In fact, she confirmed that, whatever happens with Sogepsa, the industrial and residential land that it has generated exists and has value, although it will be harder to sell it now than during the boom years.

The Minister also appeared convinced that the Bobes industrial estate in Siero, where construction has been suspended and whose debt caused Sogepsa to file for creditor “pre-bankruptcy” (preconcurso), may be sold, although she acknowledged that the site is not very attractive because it has not been finished yet and completion of the works will require an investment of several millions of euros.

Original story: Finanzas.com

Translation: Carmel Drake

The Monje Family Puts Assignia Construction Group Up For Sale

9 December 2016 – Expansión

The Monje Tuñón family, the controlling shareholder of Assignia Infrastructuras, has launched a feasibility plan to refinance the construction company’s debt and resolve the collapse of the group that has, amongst other consequences, resulted in the delayed payment of the last three months salaries to the workforce of 1,600 employees and which may force the company to suspend its payments it it fails to reach an agreement over the next few weeks.

The owner, which has stepped up talks with its financial creditors, is considering several measures to comply with the banks’ demands and access new lines of financing. In addition to the sale of several smaller assets, the Monje family has put the construction company up for sale, after identifying interest from several investment funds and two Asian industrial groups. The aim is that, with the entry of a new shareholder through a capital increase, the company’s balance sheet would be strengthened and an agreement would be facilitated with the banks to refinance a €60 million debt, which matures in December this year. (…).

The construction company forms part of the group of medium-sized companies in the sector, it is geographically diverse (with operations in 14 countries) and has several valuable assets, especially those granted under concession agreements. Assignia recorded turnover of €250 million in 2015, up by 12% compared with the previous year, and an EBITDA of €18 million. Its result was negative (-€4 million) due to its significant financial expenses, which amount to €12 million per year.

The group’s production portfolio currently amounts to around €700 million, but some of that amount is doubtful, given that Assignia, like all of the other companies in the sector has fallen victim to non-payments by debtors. (…).

As such, the company is preparing to implement an ERE redundancy plan in Spain, which will affect around 150 people, equivalent to almost 10% of its workforce. (…).

In the meantime, negotiations with the banks continue. The aim is that the banks will facilitate new maturity periods and open new lines of credit to ensure the continued operation of the company. Assignia’s financial debt is distributed between 10 banks through a syndicated loan that had to be renegotiated in March this year. Santander is the agent bank and Bankia is the entity with the highest exposure (around €20 million). CaixaBank and Sabadell, amongst others, also participate in the syndicate.

Original story: Expansión (by C. Morán)

Translation: Carmel Drake