Goldmans & Oaktree to Bid for €100M Land Portfolio that Iberdrola will Auction on 28 Feb

22 February 2018 – Voz Pópuli

On Wednesday 28 February, Goldman Sachs and Oaktree are scheduled to submit binding offers for a portfolio of land owned by Iberdrola Inmobiliaria. The subsidiary of the multinational energy company has thus started one of its largest asset sales processes in recent years, coinciding with the recovery of the sector and the voracious appetite shown by international funds for land in the Spanish market.

The two US investment banks have expressed their interest in what is considered, in the Spanish real estate sector, to be a very good portfolio of land. It is ready for the construction of more than one thousand homes in locations such as Madrid, Málaga and Granada (more than half), as well as Navarra, Salamanca, Murcia, Cantabria and Valencia. The valuation of the plots amounts to around €100 million, according to sources familiar with the negotiations.

The sources consulted warn that if the offers prove to be unsatisfactory, the door will be opened to other investment funds “who are queuing up to participate in the operation”. In total, the plots, owned by the subsidiary of the group chaired by Ignacio Sánchez Galán, that have been put up for sale span a buildable surface area of 126,000 m2.

Iberdrola Inmobiliaria, with which Vozpópuli made contact yesterday, denies the existence of this operation. Nevertheless, two different sources consulted by this newspaper confirm that Banco Sabadell is also participating in the process. According to the sources, Solvia Desarrollos Inmobiliarios, the subsidiary of the financial institution, is going to create a joint venture with the buyer of the land to construct homes, whilst Iberdrola Inmobiliaria is expected to retain a minority stake in the new company.

The Spanish energy group created Iberdrola Inmobiliaria in 1991. The company managed to survive the greatest crisis in the history of the Spanish real estate sector – the one suffered following the burst of the bubble at the end of 2007 – and now owns a portfolio of assets worth more than €1.7 billion. Moreover, it is a highly respected manager in the sector.

Just before the start of the economic and financial crisis, Iberdrola Inmobiliaria undertook significant investments in projects in Spain, Mexico and Bulgaria. In 2015, Iberdrola injected €616.7 million into its real estate subsidiary through a capital increase of €154.2 million and the rest as an issue premium. In 2016, Iberdrola Inmobiliaria recorded revenues of €63.8 million and profits of €3.2 million, according to the latest accounts filed in the Mercantile Registry to which this newspaper has had access through Insight View.

According to those same accounts, the Board of Directors of Iberdrola Inmobiliaria, chaired by José Sainz Armada, led by Emilio Sánchez Castellano and in which Ignacio López del Hierro participates as director, did not receive any remuneration in 2016, but they were paid for out-of-pocket expenses amounting to €196,000 (€206,000 in 2015). The CEO and four other directors earned €1.25 million

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake