Transaction / AssetsTertiary asset portfolio SellerSantander BuyerApollo € MM200
Apollo Returns to Spain with the Purchase of Properties from Santander for €200M
13 February 2019 – Expansión
The US fund, which barely has any financial assets left in Spain, is acquiring offices in secondary areas of Madrid and Barcelona.
In recent years, Apollo has dedicated itself almost exclusively to the sale of assets in Spain, which caused experts to speculate that it might be leaving the country. But the fund led in Spain by Carlos Colomer and Pablo Crespo is still present and is very much backing Spanish assets once again.
According to reports from financial sources speaking to Expansión, Apollo reached an agreement with Santander in December (…) to purchase a portfolio of so-called tertiary assets (commercial properties) worth €200 million. The transaction, according to the same sources, will be definitively closed at the end of February.
A large part of these assets are offices located in secondary areas of Madrid and Barcelona. “Half of the value of the portfolio acquired corresponds to large office buildings located in secondary locations. All of the assets are in Madrid, except for one building that is in Barcelona”, they said.
Apollo is acquiring this portfolio because it considers that rental prices in secondary markets have not recovered yet. The sources consulted believe that “the rental prices of core (higher quality) buildings are recovering, but, as prices in the city centres rise, so tenants will consider moving to more secondary locations”.
The fund’s plan goes beyond this purchase. In fact, it wants to acquire new assets to incorporate into a new vehicle to generate value from them, through capex investment, with the aim of selling them a posteriori.
The rest of the portfolio
The rest of the portfolio that Apollo has purchased from Santander comprises a mix of more heterogeneous properties, some with an industrial component, other smaller offices and other premises that they intend to sell to retail investors.
This purchase is the first that Apollo has undertaken with its latest fund called European Principal Finance III, which it raised in December 2017 with USD 4.6 billion (almost €4.1 billion). It is also the first investment that it has made since the departure of its main executive in Spain, Andrés Rubio (…).
Apollo, led by Andrés Rubio, the executive who left the firm in September last year, arrived in Spain in 2011 to take advantage of the opportunities that were emerging as a result of the financial crisis. Since then, the fund has made purchases in Spain amounting to more than €1 billion (plus debt), such as the acquisition of 85% of Altamira, Evo Banco, the credit cards of Bank of America, the mortgage business of Citi and General Electric, and the hotels that had been awarded to CaixaBank and Popular (…).
Original story: Expansión (by Daniel Badía)
Translation: Carmel Drake