KKR, Centerbridge, Cerberus, Lone Star, Apollo, Blackstone, Colony Capital or Green Oak. Their names sound more and more often in Spain, as the list of international funds interested in finding a real estate bargain continues growing. The traditional Spanish venture capital is out of the equation, not only due to lack of cash, but also because of the legal limitations to invest in this kind of assets. Only certain firms, such as Atitlan, from the Roig family, or Altamar have the possibilities of participating in the real estate sector.
These great funds have nearly 13.000 million Euros to invest in Spain and a great part of this capital is for the real estate sector that is now considered a priority. Nevertheless, the search for assets is very specific.”The foreign investors focus on a liquid and good quality product, preferably in rent; the search for high profits implies important discounts, which reduces the volume of operations”, Jesús Conde, partner in the real estate department at Baker & McKenzie.
The operations in the sector depend on the market of each asset. In the residential one, “the foreign funds are waiting for Sareb to organize and package the portfolio of the nationalized banks, so as to offer then a very reduced price for a set of assets with a similar level of liquidity and risk, with discounts of up to 90% of the original valuation”, Eduard Saura, managing partner of the financial assessment company Accuracy, explains. In his opinion, the Anglo Saxon opportunistic funds are the ones keeping an eye on these assets.
This expert considers there is less interest on the segment of shopping malls. However there are still operations. For example, the bid organized by Morgan Stanley for the three malls that its fund Msref has in Spain was attended by many funds that are not present in the country. Only foreign funds have reached the final stage: Bau Post, Drago Capital and the one that is best positioned, Incus Capital.
At the end of the year, another foreign investor made its debut in Spain: the North American Autonomy, which acquired two buildings in the business park Omega, in Alcobendas (Madrid). In Barcelona, other funds, this time European ones, Värde and Anchorage, took part in the Operation Copernico, with the acquisition of five buildings in the centre of the Catalan capital and in Madrid for around 100 million Euros.
If the first ones to arrive to Spain were the Anglo Saxon funds, in the last few months other funds with a Latin American origin, have arrived to the market with a lot of liquidity. “Up to now, the Latin American capital fled the volatility of its countries and bet on the United States to invest. Now they are searching in Spain”, Francisco Machón, in charge of Investments of BNP Paribas Real Estate, assures. One example is the tycoon Carlos Slim, who acquired six months ago properties from CaixaBank for more than 400 million Euros, or the acquisition of a building in Recoletos street, closed last week, by a Latin American family.
“The investors are much more active, although they search for an adjustment in prices in view of the uncertainty of the awaited flow of cash for the next three years”, Javier García-Mateo, in charge of Real Estate at Deloitte, declares.