Overview – November
November was a busy month that saw multiple deals closed across all sectors and regions. The uncertainty over Cataluña’s future continued, but regional elections have now been called for 21 December and campaigning has begun.
Cerberus starred in the second largest deal of the year in the real estate sector, after it successfully negotiated the purchase of an 80% stake in BBVA’s real estate portfolio for €4 billion. That price represents a discount of 61.5% of the portfolio’s gross value and is a welcome coup for the US fund after it was left out of Santander’s mega sale of Popular’s portfolio in the summer. Cerberus’s servicer in Spain, Haya Real Estate, will manage and administer the portfolio going forwards.
Meanwhile, another US firm, Bain Capital, completed its purchase of the Catalan property developer Habitat for €220 million, despite the political uncertainty in the region. The final terms of the operation still need to be agreed but the private equity firm will be delighted have fought off competition from Oaktree and Apollo, to acquire Habitat’s 2.5 million m2 of land and capacity to complete 2,000 homes between now and 2021.
In the hotel sector, Barceló launched a bid for NH Hoteles, which would result in the creation of a hotel colossus, with more than 600 hotels and 109,000 rooms. The offer price of €2.48 billion values each NH share at €7.08, which represents a 27% premium over that group’s average share price during the last 3 months. The Mallorcan hotel chain has set a 3-month period for negotiations to take place.
Finally, in the office segment, Colonial acquired an additional 13.3% stake in Axiare whereby increasing its shareholding to 29% and, in parallel, launched a takeover bid for the Socimi at a cash price of €18.50 per share. That figure represents a premium of 13% above Axiare’s current share price and if the deal goes ahead in the end, it would see the creation of a Spanish giant with assets worth €10 billion.
In the hotel sector, Axa Real Estate purchased the remaining 45% stake in Hotel Diagonal Mar in Barcelona from Iberdrola Inmobiliaria for €70 million; Hispania sold one of its hotels, the Hotel Sandos San Blas, to the Socimi that it owns jointly with Barceló, Bay Hotels & Leisure, for €26.6 million; Arcano purchased Hotel La Moraleja in Madrid for €12.15 million, which it plans to demolish to make way for a new office block; and Hotusa purchased the 31-room Hotel Eurostars Asta Regia in Jerez from Banco Sabadell for an undisclosed sum, to take the total number of establishments that it now owns in Andalucía to 24.
In the office sector, despite the uncertainty surrounding its own future (see above), Axiare pushed ahead to purchase an office building under construction in Madrid from Metrovacesa for €30 million. Meanwhile, Canal II auctioned off a building on c/Buen Suceso in Madrid to an unknown buyer for €16.5 million; and Optimum III purchased several office-used floors in a building on c/José Abascal in Madrid for €10.2 million. Nevertheless, the uncertainty in Cataluña caused Hispania to postpone what would have otherwise been the operation of the year, namely, the sale of its €500 million office portfolio to the insurer Swiss Life; the Socimi hopes that the deal will still go ahead in Q1 2018.
In the retail sector, Meridia Capital acquired the Barnasud shopping centre from the retail real estate giant Unibail Rodamco for €35 million; KKH Capital bought the Art Montfalcó building, located in the historical centre of Barcelon, from the Güell family for €24 million; and the Town Hall of Barcelona approved the expansion of the Pedralbes shopping centre, owned by Colonial on the city’s Avenida Diagonal. Finally, the Plaza Río 2 shopping centre on the banks of the Manzanares River in Madrid reported record visitor numbers, with more than 1 million shoppers passing through its doors during its first month of operation.
In the residential sector, Twin Peaks Capital purchased the top 6 floors of the building at Paseo de Gracia, 30 from Agrupació Mútua for €25 million. Meanwhile, Renta Corporación bought a residential property in the gothic quarter of Barcelona and the Aligrupo family office acquired a residential building in Chamberí for an undisclosed sum; both plan to convert their respective properties into new housing developments. In addition, the ratings agency Moody’s published a report forecasting that house prices will rise by 8.6% in Spain over the next three years, driven by low interest rates, an improvement in economic conditions and an increase in the proportion of the active young population. However, in the new home segment, Spain’s top four property developers (Neinor, Aedas, Metrovacesa and Vía Célere) are going to have handed over just 680 finished properties this year.
In the land sector, Valencia was in demand this month: Aelca bought more than 200,000 m2 of developable land across several sites in the Mediterranean city and Neinor purchased a residential plot in the Quatre Carreres neighbourhood of Valencia from Meridia Capital for an undisclosed sum, for the construction of 96 homes. Meanwhile, in the Spanish capital, Gestilar and Morgan Stanley purchased 3 residential plots in Valdebebas from Baraka Group.
Finally, in the logistics sector, Barings acquired an Eroski logistics centre in Zaragoza from Deka Inmobilien for €17.6 million and Merlin Properties signed the largest logistics deal of the year, with the leasing of its Meco logistics platform, measuring almost 60,000 m2, to the DIY and furniture retailer Leroy Merlin.
One month to go until year-end
With just a month to go before year-end, negotiations are intensifying as investors and vendors alike seek to close their final deals of 2017. Tertiary investment in the real estate sector looks set to break the €10 billion barrier for the third year in a row.