Month: November 2017

Mps, the NPL vehicle is ready

29 November, Milano Finanza

For Mps, the timing is perfect, with the new Board of Directors headed by Alessandro Falciai and the start of the clean-up process of assets. By mid-December, in fact, the bank led by Marco Morelli should make the first step of the operation agreed with the ECB: the transfer of the portfolio for 26 billion gross from the bank to the special purpose vehicle that will take care of the securitisation. Frankfurt asked Mps to get completely rid of the bad loans accrued up to 31st December 2016, an operation that will be completed by June of next year. After the stock transfer, the vehicle will issue the notes in the traditional three tranches according to seniority (senior, mezzanine, and junior). Only the mezzanine tranche for over one billion, however, will be transferred to an investor, namely Atlante 2, while the bank will underwrite the other two tranches for a couple months.
In detail, the fund managed by Quaestio sgr will get 95% of the mezzanine tranche, while the remainder will stay with Mps pursuant to the obligation of retention as per the European regulation on securitisations. In the meanwhile, the work to obtain the State guarantee (Gacs) goes on. Already in October, Mps appointed Cerved and doBank as servicers. Once defined the loan data tape, namely the structured archive of the portfolio, in these past few weeks the servicers have been working on the business plan, basically the recovery plan. The completion of the document is expected by the beginning of 2018, considering the dimensions of the portfolio, one of the biggest ever put on the market. It’s true, however, that the experts of doBank know already a good part of the positions since last year Italfondiario made the first assessment on the Mps portfolio. A preview of the business plan will be sent by the end of the year to the rating agencies, even though the final exam will be in 2018. The objective of the bank is to obtain the State guarantee by March-April in order to issue on the market the senior tranche according to the scheduled times. In detail, the public guarantee will be on the A1 senior notes, for a total amount of 3.25 billion, that will be placed together with the A2 notes, while Atlante 2 will get 95% of the junior notes for 686 million with the consequent divestiture of the portfolio. The leverage effect of the senior notes will allow Mps to close the operation with a price higher than the market average, set around 21% more of the initial value. Moreover, an earn-out in favour of Mps equal to 50% of the extra yield is expected, in the case the profit obtained on the junior notes will be higher than 12% yearly. For what concerns the price, the discount is higher than that of the recent operation through Gacs, but it’s not possible to make comparison considered the dimensions. For instance, Creval has securitised a stock of only 1.4 billion, while the operation announced last summer by Carige amounts to 938.3 million.
Particular attention will go the accounting effects of the operations. One of the preliminary conditions of ECB is the exemption on the loss given default models, namely the mechanism that penalises assets triggered by big transfers of bad loans. The exemption should have been negotiated, but it’s certainly relieving that the European Parliament is working on a measure on this matter. The draft involves that a bank could exclude the big transfers from the loss given default. In this case, the bank is to notify the competent authority of the amount, composition and transfer times. The authority will have then a maximum of five days since the notification to oppose to the exemption.
Certainly, the Mps securitisation will be biggest ever put on the market. In these days, in the meantime, a second operation has started, even if of smaller dimensions. It concerns the operation with State guarantee that Unicredit has started on the Fino portfolio, transferred in the first part of the year to Fortress and Pimco.

 

Source: Milano Finanza

Translator: Cristina Ambrosi

Porta Vittoria at risk of inquorate auction. Battle between the funds York and Apollo

29 November, Il Sole 24 Ore

The judicial auction for the Porta Vittoria area in Milan, the property of the developer Danilo Coppola bankrupted under the weight of a 400 million debt, should start today, if everything is fine. The starting price for the auction is set at 152 million. The big international funds should be ready with their offers. Among the names, there are York Capital and Apollo. According to the rumours, the auction might be inquorate and that the potential buyers would show up only at a later phase, in order to negotiate on the price.

York Capital is in pole position, as already anticipated by Il Sole 24 Ore at the beginning of November, being the first evaluating the Porta Vittoria dossier. It seems that York is already negotiating with Banco Bpm to acquire an exposure of about 220 million euro, after the negotiation between the bank and the fund King Street failed. But Apollo too might be ready to participate in the competition.

Concerning the past activity of Banco Bpm in the area, that got bankrupted, a debate has recently started, and the Court of Milan is currently investigating on it. In fact, the role of Banco Bpm is being investigated concerning an alleged management and coordination activity in Porta Vittoria. As ordered by the curators, the credits of Banco Bpm have been placed at the bottom of the list favouring in this way other creditors.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Aedes buys two towers from the fund Obelisco

29 November, La Stampa

Aedes Siiq has signed the preliminary contract for the purchase from the property fund Obelisco, managed by InvestiRe Sgr, of two skyscrapers in Via Richard in Milan. The two towers C3 and E5 extend on approximately 15 thousand Sq m and they’ll be renovated. The investment, considering also the purchase price and the renovation expenses, will amount to 35 million.

The deed will be signed by the end of the year. The negotiation regarding the rent with a big company has already started for one of the two towers. This operation is included in the strategy of increasing the real estate portfolio for rental in the residential and office segments in Milan and Rome.

Source: La Stampa

Translator: Cristina Ambrosi

E-commerce supports supply in logistics

09 November, Il Sole 24 Ore

The magical moment of the industrial real estate in Europe continues, and at the moment there are no signs of a countertrend. Logistical buildings (warehouses, storehouses, logistics hubs) are living a phase in which the demand exceeds the supply by far, whether we talk about lease or sales. The mix between liquidity of the big international investors with generally positive economic fundamentals pushes the market, driving demand and consumptions and, consequently, the necessity of adequate industrial spaces.

The real boost comes, however, from the exponential growth of e-commerce and digital sales technologies, which need the support of an increasingly fast delivery chain, where warehouses and hubs, preferably around the big cities, are the most requested assets.

The take-up volume of logistic buildings works as a market indicator, and according to BNP Paribas, it increased by 22% in Europe during the first half of 2017 (compared to the same period of last year). BNP considers logistical assets bigger than 5k Sqm and it constantly monitors 21 European cities. “We are assisting to a rather stable activity in the Greater Paris area – states the last report by BNP Paribas over European logistic sector – and a real boom in Madrid and in the south of the Netherlands”. Also at a European level, the volume of logistic investments during the first half of the year amounted to 15.8 billion, surpassing the record registered during the first half of 2015. Some important portfolios acquisition operations by Germany contributed to the result, in addition to the Spanish capital and to the south of the Netherlands.

The take-up volume refers both to lease and the sale of surfaces bigger than 5k Sq m (small warehouses and storehouses are in fact are nowadays not considered by big production and logistic chains) and takes into consideration the date in which the transaction itself is concluded, without including renewals of already-existing contracts. “To drive the market is also the strong liquidity of big investors – so continues BNP Paribas’ report – interested in acquiring logistic properties as mere investments. A competence that is being added to the volumes generated by the sector direct operators and that is progressively pushing down this sector revenue, which is, however, superior to the revenue of 10-year government bonds”.

On a geographical level, the biggest logistic market is Germany, which in the first half of 2107 registered a record on investment volumes, equal to 5.646 billion € (+201%), which brought net revenue to 4.9%. Great Britain grew by 18%, at 4.456 billion € of investments, despite the political uncertainty and the pessimism on the macroeconomic level, with a revenue for the prime segment of 4.75% (in Birmingham, London and in the south-east). In the Netherlands, logistic properties market reached 1.1 billion €, representing 18% of the whole non-residential real estate. Prime yields dropped to 5.6% in Amsterdam and to 5.4% in Rotterdam. Spain, although smaller in size, had a volume of 480 billion of investments, decreasing compared to 2016, with prime revenues 5.9% for Madrid and 5.85% for Barcelona.

Italy remains an interesting market for logistical properties, but it’s definitely more limited compared to its European competitors. According to BNP Paribas, the investments in the first half of 2017 were equal to 145 billion, against 194 billion in the same period of last year and with prime revenues for Milan at 6.5%, a level that continues attracting the interest of “pure” investors. The situation seems, however, to be progressively improving, if we look at data of the third quarter of 2017 published by CBRE, reporting investments for 84 million with an increase of 122% compared to the same period of 2016.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Turin tries the relaunch

09 November, Il Sole 24 Ore

After a series of major upgrades, the city seeks a new identity

New luxury stores, entire streets dedicated to food, crowds of tourists walking around the city and investments on apartments for rental.

The new vocation of Turin as a touristic city, as well as a real estate destination for big investors,  goes through an urban transformation that, between 1995 and 2015, redeveloped five million Sq m of an industrial area, turning it into new residential, commercial and office/services spaces. Not only. The subway (line 1 and line 2 coming soon), together with the Spina Centrale area and the railway junction line changed and improved viability.

“The city’s rebirth is linked to the restoration of once dismissed areas like the former Westinghouse, the former Manifatture Tabacchi, the former Fiat Mirafiori, the former Cavallerizza Reale and Parco Dora – states Fabiana Megliola, responsible for Tecnocasa research department-. The city, in addition, discovered a touristic vocation after 2006 winter Olympic games. The “2017 report on tourism in Italy” of Touring Club Italiano and Unicredit puts Turin in the top 10 most visited cities of Italy”.

The Revenue Agency has registered 12,342 transactions in 2017 (+26.4% compared to the previous year), while in the first half of 2017 6,573 sales took place (+5.1% compared to the same period of the last year and aligned with the rest of the Italian market). 22% of the sales are for investment. And what about prices? “In the city, space costs half as much as in Milan, but Turin still doesn’t attract as many people as Milan does”, say the experts. Maybe Turin’s rebirth could get benefit from the proximity with Milan. “For Turin or Genua, a collaboration with Milan might be a possibility – stated in a recent conference Alzo Mazzocco, CEO of Generali real estate-, in order to grow and attract capital”.

Concerning prices, from January to June 2017 values dropped by 1%. Real estate in the city lost 41.5% from 2008, like in the rest of the Country. But the trend is not homogeneous. Alongside central zones in light contraction (-2.4%), there are areas losing 11%, such as Via Roma and Via Lagrange, where a refurbished luxury solution today costs 4,000-5,000 € Sq m. For new buildings, prices can reach 9,000 € Sq m. The area also offers exclusive luxury solutions on the Po riverside and on the hills.

A slight increase in prices concerned, on the other hand, Parco del Valentino Zone. For a two-room apartment 80-85k € are required, and 120-130k € for a three-room apartment. The area has a heterogeneous offer that goes from luxury solutions in Borgo Valentino to more popular houses in via Nizza and Via Ormea. “Let’s bring attention to the restart of the construction site in Via Petrarca, where a new five-meter palace with prices around 4k € Sq m will rise” states Megliola. Prices in the Collina macro area are diminishing. In the first half of 2017, in the Crimea and Gran Madre suburbs, several purchases for rental have been done. People buy to rent also in Madonna del Pilone and Sassi, but they’re willing to spend no more than 70k € for two-room apartments to be refurbished and either re-sell or lease. The favourite areas are Borgo di Po and Madonna del Pilone, closer to the city centre.

The opinions on Turin aren’t, however, unanimous. If the Tecnocasa team is optimistic about the city, there is who, like Carlo Giordano of immobiliare.it, that sees its limits, despite being a Turin local. “The city is still suffering – states Giordano – because the occupation market hasn’t recovered yet and the population is diminishing. Young people direct their demand towards rents”.

Big investors, however, also come to Turin, which is favoured its political stability, its safety and recognized good-quality real estate interventions. “This is not enough in order to recover real estate – he continues -, the population in Turin is diminishing by 2% per year, while in Milan is growing by 5% per year”.

The luxury market sees non-central neighbourhoods growing. “We are talking about Cit Turin, for its proximity to Porta Susa train station, San Salvario, Vanchiglia and Aurora/Regio Parco – states Giuseppe Vagge from Sotheby’s international realty -. This latter is close to the new university campus and it hosts the headquarters of important companies, as well as lofts and start-ups. The average prices, in the central areas (excluded the hills), go from 3k to 5k €/Sq m, with peaks of 6,000-7,000 in case of new properties. With a budget between 1 and 1.5 million, it’s possible to buy a prestigious property between 250 and 300 Sq m in the central neighbourhoods (roof-top apartments with terrace included). While to buy a villa on the hills, even though the market is less dynamic, it takes a higher budget”.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Npl, Unicredit sells other 715 million

28 November, Milano Finanza

Unicredit is going at full speed in the sale of bad loans. While the Fino project is entering the securitisation phase, yesterday the bank guided by Jean Pierre Mustier sold a 715 million portfolio, bringing to 19 billion the gross sold amount in 2017. The portfolio (assisted by the legal firm Freshfields), called Firenze, is composed mainly of unsecured loans plus a small secured component. This dual nature allowed Unicredit to segment the stock to maximize the price: MB Credit Solution (the company of the group Mediobanca guided by Francesco Barelli Terrizzi) bought the unsecured portion of the portfolio for a gross exposure of 450 million while the American fund Cerberus bought the secured part for 265 million. “The impact of the transfer”, explains Unicredit on a memo (the NPL division of the bank is managed by the chief risk officer TJ Lim), “which is part of the current strategy of reducing the impaired exposures, will be registered in the fourth quarter of 2017 statement”. Firenze, therefore, joins Fino, the project launched last year to get rid of 17.7 billion bad loans and gone to Fortress and Pimco. This week the securitisation process has started with the State guarantee. On Wednesday, both Dbrs and Moody’s assigned their definitive rating on class A, B and C instruments issued by the vehicle companies, while the class D instruments will stay with no rating. The operation has been assisted by doBank, the Fortress subsidiary that has underwritten with Unicredit master and special servicing contracts, crucial for the success of the operation.

More generally, these last few weeks of the year are very dynamic with operations on non-performing loans. With two important transfers concluded in 2017, Rev Gestione Crediti is preparing for a securitisation with the public guarantee of a gross amount of 1.5 billion that will be supervised by JP Morgan and Kpmg. While Banco Bpm is closing the transfer of the portfolio Sun for 2 billion, composed exclusively of unsecured loans.  Whereas for next year, the bank headed by Giuseppe Castagna plans a Gacs for about 3 billion for which the due diligence works have already started under the supervision of Prelios. Unicredit too should sell shortly the portfolio Firenze, a stock of almost one billion that follows the sale of Fino for 17.7 billion. In the cooperative credit world, there are a couple of operations of consortium nature, one coordinated by Cassa Centrale and another by Iccrea to disinvest over one billion of bad loans.

There is no doubt, however, that the most awaited operation of 2018 will be the securitisation of 26 billion that Mps is launching. The divestiture of the stock should happen by the end of the year and it will conclude in June as agreed with the ECB. There are also other four/five banks studying the option of securitisation through Gacs whose operations might be announced in the following months.

Source: Milano Finanza

Translator: Cristina Ambrosi

From Bulgari to Loro Piana, the partners of Buaron

27 November, La Repubblica

Excellent partners for Daniel Buaron, already advisor for Dea Capital and active in real estate through Deb Holding. In fact, a couple of weeks ago, Buaron himself before the Notary Monica De Paoli in Milan constituted the newco Atlantic Investments to operate in the sale and the promotion of real estate properties. Buaron is the president and the Board of Directors features Andrea Baggi Sisini, Cristina Bianchi, Luca Mentasti and Giuliano Re. The capital was underwritten by Buaron himself with Deb Investments and the subsidiary First Real estate, and two limited partnerships of Lucia and Sergio Loro Piana and by Nuova Energia Holding of the brother Pierluigi, by Icaria guided by Francesco Baggi Sisini (father of Andrea), the editor of “Settimana  Enigmistica” as well as shareholder of Vittoria Assicurazioni, and by El Greco Venture, a vehicle company for investments in private equity owned by Paolo Bulgari.

Source: La Repubblica

Translator: Cristina Ambrosi

The debts of Porta Vittoria might go to York

28 November, Milano Finanza

Change of scenario for the future of Porta Vittoria. A few hours from the deadline to submit the offers (today by 1 pm) and with the judicial auction scheduled for tomorrow morning at the Court of Milan (the starting price is 152 million with possible minimal price increases of 7 million), the last-minute news might change the course of this vast is (142 thousand Sq m) in the centre of Milan. The land is owned by Porta Vittoria Spa of the developer Danilo Coppola, assigned to the curators on 29th September as per Court’s order. Banco Bpm, the first creditor of the company with an exposure of 220 million on a total debt of 400 million (the bank appealed to the curators’ decision regarding its credit classification), granted a 60 day exclusive on the debt to the American investment fund York Capital. The bank preferred to not comment. York asked not only to work on the credit of Banco but also on most of the exposure (300 million on 400) of the other creditors of Porta Vittoria, such as Colombo Costruzioni and the real estate company Ipi of the Segre family.

The objective of York Capital once defined the agreement with the creditors and, more importantly, with Banco Bpm, is to request to the judges of the Court of Milan to be admitted to the procedure of arrangement with creditors.

This option has been made possible because most of the potential buyers are worried about the issues related to the development of the area. In the past few weeks, the names of Coima, Davide Bizzi, and the funds Varde, Apollo and King Street have been circulating, along with the Italian Kryalos. All these potential buyers have evaluated the dossier in order to make their formal proposal. The main obstacle consists in the legal action started last July by the liquidator of the company owner of a building near the area (allegedly the former nightclub Plastic) with the request to tear down two storeys of the future residential building.

While trying to figure whether the auction will go desert, as it looks like, there is now another possibility for Porta Vittoria. Obviously, the entry of York will be only the first step. Then it will be necessary to find a developer for the whole area. At least in this way, it will be possible to give a future to the project and to repay the creditors.

Source: Milano Finanza

Translator: Cristina Ambrosi

 

Luxury Spa hotels: Il Saraceno in Amalfi to the De Siano family from Ischia

14 November, Il Sole 24 Ore

The hospitality property market is thriving. In the pleasant autumn climate of the Amalfi coast, the rumours are all about the well-known family of hoteliers from Ischia, De Siano, which includes also the Senator Domenico De Siano. The family, in fact, bought for an amount around 30 million the Grand Hotel Saraceno in Amalfi, a Moorish-style hotel with a spectacular view of the sea. The De Siano family already owns four hotels in Ischia (Lacco Ameno): San Montano, San Lorenzo, ViIlla Svizzera, and La Reginella.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

The constant decline of house prices: waiting for the recovery

10 November, Home Rating

A constant decline in house prices, as Italy is still struggling to take off and the recovery is expected for next year.

The debate about the recovery of real estate continues. The various reports of the experts of the industry have often shown a climate of confidence amongst Italians who have resumed buying houses supported by a mortgage market offering very convenient solutions.

The experts predict the impending market recovery with a slight optimism and for next year the outlook is positive. For the time being, at least, we will have to stick to the data registered in the last quarter, showing an average price drop of 1.7%, which means 1,818 for Sq m, a 5.2% decrease compared to the same period of last year.

The recovery phase of Italian real estate is very difficult, so difficult that the country is the least dynamic in the Eurozone, in terms of sales. In the rest of Europe, the increase of real estate prices registered in the last quarter a variation of +4.4%, which is the average for the 28 countries of the European Union. The negative trend in Italy is mostly due to the heavy taxation on properties and the instability around occupation that certainly doesn’t encourage to commit to a very considerable expense for families.

At a national level, Molise is the most affected region by the difficult situation, placed at the bottom of the chart with -3.6%. The trend is negative also for Marche, with -3% and, surprisingly, Lombardy too.

In contrast, Sardinia registers a price increase of +0.6%. Liguria is doing well with a +0.4%, as well as Puglia (0.2%). As always, Liguria leads the chart concerning selling prices with 2,622 €/Sq m. Val d’Aosta (2,466 €/Sq m) and Lazio (2,429 €/Sq m) follow. In Molise, 998 €/Sq m are needed in order to buy a house; while in Calabria only 930 €/Sq m are needed. If these real estate quotations are disappointing for those intending to sell their house, they certainly aren’t for those who want to buy, favoured by the current situation.

Source: Home Rating

Translator: Cristina Ambrosi