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Blackstone Raises its Bid for Rental Housing …

27 August 2015 – Expansión

The venture capital firm has closed the purchase of the Ferrocarril Intermediación y Patrimonios.

The US fund Blackstone continues to expand its investment property portfolio in Spain. In this case, the venture capital firm has bet on the rental housing business, where it operates through the REIT, Fidere. Blackstone has completed the purchase of Ferrocarril Intermediación y Patrimonios, a company with almost 500 subsidized homes spread over two promotions in the Community of Madrid.

The fund already was a minority shareholder in this company. Specifically, it held 35% after buying Bankia’s holding. This company, until last year controlled by the financial institution, acted as a holding participating with national companies in about twenty partnerships to promote low-cost housing in the Community of Madrid. Ferrocarril Intermediación y Patrimonios was among these companies, with others in the sector participating as well: Hercesa, OHL, and Bigeco Gestesa, among others.

Now, Blackstone has agreed with Ferrocarril to get hold of 100% of the company, which has some 406 subsidized homes under lease in Las Rozas and another 80 in Alcalá de Henares.

Through it, the fund would have paid about 54 million euros, according to market sources, 46.6 million of which would correspond to the promotion of las Rozas and the rest to the homes of Alcalá de Henares.

The operation will be used so that Ferrocarril Inmobiliaria, presided by Rafael González Cobos, could minimize its debt and strengthen its own funds to take on new projects, as the company itself confirmed.

Blackstone has not only managed with the nearly 500 homes; it has also paid the debts that had linked these two promotions. For the construction of these projects, the Ferrocarril company asked Bankia for several loans worth over 47 million euros. These credits passed on to SAREB and after the purchase by Blackstone have been canceled, according to the public entity.

Fidere

The 500 homes will be managed by Fidere. The fund took this company to the MAB (Mercado alternativo Bursatil/Alternative Investment Market) on June 29 with 3,000 homes to rent (now totaling almost 5,000 units), coming from portfolio purchases to the City of Madrid, FCC and Martinsa Fadesa. Then, it was valued at 212 million euros. Yesterday, it closed with a market capitalization of 217.7 million, its shares being worth 21.61 euros.

In addition to residential assets Blackstone boasts of a significant real estate portfolio in Spain. Among offices, stand out several buildings acquired last year, such as the headquarters of Capgemini and Citibank, in Madrid, and central offices of HP and Mediapro in Sant Cugat and Esplugues de Llobregat (Barcelona), respectively.

The US fund has a logistics subsidiary called Logicor, with assets in several European countries, including Spain.

Blackstone also owns a portfolio of doubtful mortgages purchased from Catalunya Banc, which runs through the company Anticipa and several shopping centers controlled by the Multi Development firm.

Original story: Expansión

Translation: James Leahu