11 April 2017 – Cinco Días
Two weeks ago, Neinor Homes debuted on the stock market, the first residential property developer to do so in a decade. (…). Who is behind the current transformation of the sector?
Neinor Homes was created just two years ago by the US fund Lone Star, which purchased the former real estate arm of Kutxabank for €935 million. The Texan firm injected capital, bought land, renewed the image and put its first cranes in place to surf the top of the wave of the recovery in the house construction segment. The company debuted on the stock market, much more quickly than it had initially planned, with a valuation of €1,300 million, and an excess of demand over supply of 4.3 x, from large investors.
The real estate company led by Juan Velayos, as CEO, and Juan Pepa, as Lone Star’s strong man in Spain, has demonstrated investors’ appetite for residential construction – the last segment to recover in the real estate sector. Experts indicate that demand for homes in Spain will amount to around 150,000 properties per year, compared with the 50,000 units that are currently being constructed. This is a space that nobody has occupied in recent years, following the death of classic developers such as Martinsa-Fadesa, Reyal Urbis, Astroc, Nozar and Habitat.
But Neinor is just the first of many. It is being followed by the US fund Värde Partners, possibly the most active in terms of purchases in Spain, which created Dospuntos using its own land and the basis of the former real estate business of Grupo San José. Last month, it starred in its latest large acquisition, purchasing Vía Célere, the property developer created by Juan Antonio Gómez-Pintado, for €90 million. (…).
And following both of them is Aedas, backed by the fund Castlelake, which is also proving very active in creating an enormous bank of land. These three real estate companies alone are expected to invest around €5,000 million in land, purchases and investments. And the latter two may well follow in Neinor’s footsteps with stock market listings.
These new property developers are replacing the Socimis in the newspaper headlines (…), which since 2014 have been active in the first segment to experience the recovery, namely, rental assets: large office buildings, commercial premises, shopping centres, hotels and industrial warehouses.
The leader in that sector is Merlin Properties, which has become one of the leading real estate companies in Europe, with a portfolio of assets worth €9,800 million. (…).
The other large Socimi that has attracted international capital since 2014 is Hispania, managed by Grupo Azora, a Spanish fund backed by Concha Osácar and Fernando Gumuzio. (…). It has become the largest purchaser of hotels in Spain, with a giant portfolio worth €1,800 million.
Lar España, managed by Grupo Lar, and Axiare, chaired by Luis López de Herrera-Oria are the other large Socimis on the main stock market, which have created net assets worth more than €1,200 million in record time. But they are not the only ones. Attracted by the tax benefits, many wealthy families have also used this legal structure to organise their assets. Examples include the Montoro Alemán family with the Socimi GMP (…).
Not to mention the large international real estate funds, such as Blackstone, Cerberus, Iba Capital, TH Real Estate, Orion, HIG and GreenOak, which, together with the Socimis, have been and are the most active players in terms of acquisitions.
The Barcelona-based firm Inmobiliaria Colonial has also undergone a comprehensive clean-up, with the segregation of its toxic land and residential business, to become the second-largest real estate company in the country, after Merlin. (…).
Meanwhile, Metrovacesa has headed in the opposite direction. After transferring its tertiary business to Merlin, it is now getting ready to become one of the major players in the residential sector, with the backing of BBVA and Santander. Similarly, the Mexican magnate Carlos Slim has revived Realia, also giving new life to the dead activity of house construction.
Other key players in recent years have been the banks’ platforms or servicers, such as Aliseda, Anida, Solvia, Altamira and Servihabitat, which have been managing the real estate portfolios of the financial institutions and promoting housing developments. (…).
Original story: Cinco Días (by Alfonso Simón Ruiz)
Translation: Carmel Drake