Testa Buys 135 Homes From CaixaBank

26 September 2017 – Eje Prime

Testa Residencial has acquired a package of 135 homes located in the Community of Madrid from Buildingcenter (which forms part of Caixabank). The package contains 67 homes located in the municipality of Las Rozas, 51 in Getafe and 17 in Madrid capital, all areas where demand for rental housing is booming, according to the company.

“The operation has been completed after Testa Residencial emerged victorious from the competitive process established by Buildingcenter and managed by Servihabitat”, said the company in a statement. The acquisition has been financed with available cash from the company.

In this way, and following the recent operation to integrate a package of homes from Acciona Real Estate, Testa Residencial has now expanded its portfolio of assets to include 9,219 homes, whereby strengthening its position of leadership in the residential rental market.

According to the company, its portfolio of homes currently has an occupancy rate of more than 90% and is located in areas with the highest demand, led by the Community of Madrid, San Sebastián and Cataluña, which account for 65%, 5% and 5% of turnover, respectively.

Original story: Eje Prime

Translation: Carmel Drake

Acciona & Merlin Finalise Merger Of Their Rental Home Subsidiaries

10 July 2017 – Linked In

Acciona and Merlin are finalising the merger of their respective rental home subsidiaries, Acciona Real Estate and Testa Residencial, in an operation estimated to be worth €350 million, which will give rise to the creation of the largest rental home company in the country. At least that much is clear from the comments made by the President of the construction and renewable energy group, José Manuel Entrecanales, who estimates that the “operation with Merlin” will be completed “before the summer”. “We have been negotiating with Merlin for a long time and I think that we will know whether or not it will go ahead within the next few weeks, probably before the summer; and in my opinion, it will”, said Entrecanales following the company’s General Shareholders’ Meeting.

When the operation materialises, Acciona will fulfil its objective of finding a strategic exit for its real estate business, which it grouped together in the subsidiary Acciona Real Estate in 2015, after it withdrew its plans to debut it on the stock exchange last year.

By virtue of the transaction, Acciona will transfer its portfolio of 1,382 rental homes to Testa and in exchange will become a major shareholder in the resultant company, with a stake “of just under 30%”, according to the President of the group.

This portfolio of homes is worth €350 million and most of them (73%) are located in Madrid. Meanwhile, with this operation, the Socimi led by Ismael Clemente (pictured above) will receive a new boost for the growth of Testa Residencial, the subsidiary that it constituted last year together with Santander, BBVA and Banco Popular with homes that it ‘inherited’ from the merger with Metrovacesa and which it does not consider strategic.

New giant

The integration with Acciona will consolidate Testa Residencial’s position as the largest rental home company in the country. One of its objectives over the medium term is to debut on the stock market. The sum of the assets of the two companies will give rise to a new Testa Residencial, which will have a combined portfolio of around 9,400 homes for rent. Currently, Santander is the largest shareholder of this company, with a 44.3% stake, ahead of BBVA with 33.5%, Merlin (16.10%) and Banco Popular (3.9%).

It will be a new real estate giant, unprecedented in Spain until now, whose birth coincides with the recovery that is being seen in the real estate Sector in Spain, as well as an increase in the rental market with respect to the purchase of own properties.

In terms of the other assets that Acciona holds in its real estate division, including several hotels and office buildings, the company is planning to sell them off gradually. And with its land portfolio, it recently announced its return to the residential sector with the development of new homes.

Original story: Linked In (by Jordi Brun)

Translation: Carmel Drake

Acciona Real Estate Set To Merge With Testa Residencial

22 May 2017 – ABC

Acciona and Merlin are finalising the merger of their respective rental housing subsidiaries, Acciona Real Estate and Testa Residencial, in an operation estimated to be worth €350 million. The deal will result in the creation of the largest rental home company in the country.

That is according to the President of the construction and renewable energy group, José Manuel Entrecanales, who expects that the “operation with Merlin” will be closed “before the summer”.

“We have been holding negotiations with Merlin for a while and I think that we will decide whether or not to go ahead with the deal within the next few months, probably before the summer, although in my opinion, we will”, said Entrecanales following the company’s General Shareholders’ Meeting.

When the operation comes to fruition, Acciona will fulfill its objective of finding a strategic exit for its real estate business, which it carved out into the subsidiary Acciona Real Estate in 2015, and after it decided against listing it on the stock market last year.

By virtue of the transaction, Acciona will transfer its portfolio of 1,382 rental homes to Testa in exchange for becoming a key shareholder in the resultant company with a stake of “just under 30%”, according to the President of the group.

The portfolio in question contains homes worth €350 million and the majority (73%) are located in Madrid.

Meanwhile, with this operation, the Socimi led by Ismael Clemente will give a new boost to the growth of Testa Residencial, the subsidiary that it constituted last year together with Santander, BBVA and Banco Popular, with the homes that it “inherited” from the fusion with Metrovacesa and which it did not consider strategic.

A new giant

The integration with Acciona will establish Testa Residencial’s position as the largest rental home real estate company in the country. One of the entity’s many objectives includes debuting on the stock market.

The merger of the two companies would give rise to a new Testa Residencial, which would own a portfolio of around 9,400 rental homes. Currently, Santander is the largest shareholder of the company, with a stake of 44.3%, ahead of BBVA with 33.5%, Merlin (16.10%) and Banco Popular (3.9%).

This is a new real estate giant, unprecedented in Spain until now, whose creation coincides with the recovery that the real estate sector is experiencing in Spain and the increase in the prominence of the rental market with respect to home purchases.

In terms of the other assets that Acciona holds in its real estate division, specifically, several hotels and office buildings, the company is planning to sell them off gradually. With the land portfolio, it recently announced its return to the residential business through the promotion of new homes.

Original story: ABC

Translation: Carmel Drake

Apollo Gets Ready To Buy Property Developers & Hotels In Spain

14 March 2017 – El Confidencial

A new player has emerged in the Spanish real estate market. Apollo, one of the largest fund managers in the word, has decided to join the fray between Värde, Castlelake and Lone Star, and analyse the purchase of its own property developer, according to sources familiar with the entity.

The firm led in Spain by Andrés Rubio is tackling this strategy through its new fund (its third), which already has €2,700 million and which plans to raise up to €4,000 million. This money will be used to acquire real estate assets, NPLs and hotel portfolios in Spain, Italy, UK, Ireland and Germany. Our country could receive around €1,000 million of investment, given that Apollo is expected to continue its commitment to the hotel sector, into which it took a giant leap last December, when it acquired two portfolios from CaixaBank and Popular, and looks set to enter the property development business with a bang.

According to the same sources, one of the companies that is on the fund’s radar is Levitt, which has some of the best plots of land and fame in the sector. Its possible sale has been mooted in the market for a while, given the generational change that the group faces and the appeal of the company, which operates in the high-end segment.

Asentia, Colonial‘s former bad bank is one of the other companies that has been making a name for itself in the market; Acciona Real Estate has also been considering its options, which range from an IPO to the entry of a large fund into its share capital; whilst Procisa, the former property developer behind La Finca, has sold 40% of its offices to Värde and continues to control important developments on plots of land in Madrid (Pozuelo de Alarcón and Brunete), Huelva (Cartaya) and Lleida (Baqueira).

In fact, Apollo was previously involved in negotiations regarding a similar operation to the one that Värde ended up signing with the Cereceda family. But the rapid consolidation that has taken place in the market, with the creation of Aedas by Castlelake, the purchase of Vía Célere by Värde and the imminent debut of Neinor on the stock market, has convinced the fund that a window of opportunity has now opened up in the property development sector.

Apollo plans to invest this new €1,000 million fund over the next three or four years, during which time it wants to become a top-tier player in the property development sector, in line with the moves made by its competitors, and to create its own hotel platform.

In the residential sector, it intends to focus on buildable land, located primarily in Madrid and Barcelona, the two provinces where the incipient recovery is being felt most strongly.

In the tourist segment, in parallel to the strategy to purchase loan portfolios secured by hotel collateral, the fund is actively looking for well-located establishments to create a vacation platform along the coast and on the islands, comprising around 20 assets.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Demand For Rental Housing Will Soon Exceed 500,000

19 May 2016 – El Mundo

Demand for rental housing from the population cohort aged between 20 and 39 will exceed half a million within the next few years in Spain, in a market in which 15% of homes are already occupied on a rental basis.

That was one of the findings from the XVII Annual Meeting of Esade Alumni’s Real Estate Club, which focused on the residential rental market in Spain and Europe and its viability from the point of view of operations, financing and capital markets. The meeting was attended by more than 150 specialists from the real estate sector.

The President of Esade Alumni’s Real Estate Club, Eduard Mendiluce, said that residential rental properties represent “an investment in the future” and he made reference to the business models that operate in other European countries, where a couple of companies manage stocks of 200,000 and 300,000 homes.

Eduard Mendiluce, who is also CEO of Anticipa, said that the residential rental market “is here to stay” because it responds to structural changes and he said that we do not currently have a stock of residential homes for rent of the quality that meets demand.

Meanwhile, the Professor of Applied Economics at the Autonomous Universiry of Barcelona, Josep Oliver, explained the reason for that demand. According to data from INE, 42% of young people aged between 20 and 39 live with their parents, approximately five million people, of which 2.3 million have a job. “From this group, we can expect to see a demand for 500,000 rental homes in Spain over the next few years”, he said.

Similarly, the Director of Diversified Industries and Real Estate for EMEA at JP Morgan, Guillermo Baygual, analysed the market from the point of view of investors, who “are looking to obtain returns with minimal risk”.

Within the European framework, he made reference to UK legislation, which most protects the interests of owners and Dutch legislation, which is the most favourable towards tenants. In turn, the CEO of Sogeviso, Pau Pérez de Acha, made reference to social rental housing, given that in Europe the average proportion of rental housing allocated for that purpose amounts to 12%, whilst in Spain, that figure ranges between 0.8% and 2%.

Similarly, the CEO of Immeo, Thierry Beaudemoulin, analysed the German rental market, where just 45% of the population live in their own homes, one of the lowest rates in Europe. (…).

Finally, the Director for Strategy and Business Development at Acciona Real Estate, Luis Morena, also predicted a positive future for the residential rental market.

This will involve the elimination of tax incentives for house purchases; the maintenance cost of home ownership, which is similar to rental cost; and the recovery of the labour market, which is increasing geographical mobility and therefore demand for flexibility in terms of the residential real estate market.

Moreno pointed to insufficient financing to buy a home as another one of the key factors that will influence the increase in the percentage of residential rental homes in Spain in the short term. Currently, 15% of Spanish homes are occupied on a rental basis, whilst in 1970 that figure accounted for 30% of the available stock of homes.

Original story: El Mundo

Translation: Carmel Drake

Acciona Delays IPO Of RE Subsidiary Due To Political Uncertainty

11 May 2016 – El Confidencial

Acciona has decided to delay the decision regarding the possible IPO of its real estate subsidiary on the basis that the current “political uncertainty does not favour” the operation, according to the Chairman of the company, José Manuel Entrecanales (pictured above).

“We will wait for a reasonable period of time or we will proceed with the most viable alternative”, he said with respect to the different options that the company is analysing for its new company Acciona Real Estate, the subsidiary into which it has segregated all of its real estate assets, worth around €630 million and primarily comprising homes for rent in Madrid.

The group was weighing up the partial sale of this new company, either by opening it up to a new partner or by listing it on the stock exchange, but “the current political uncertainty does not seem to favour the latter option”, said Entrecanales in a speech to Acciona’s General Shareholders’ Meeting. Nevertheless, the group will push ahead with its goal of reducing the debt linked to these assets.

The group completed the constitution of this real estate subsidiary at the beginning of the year. It was created with assets worth €60 million and debt amounting to €190 million.

63% of the assets comprise 1,382 homes for rent, most of which (73%) are located in Madrid, as well as several retail premises associated with those homes.

Another 22% of Acciona Real Estate’s portfolio comprises tertiary assets, such as four office buildings that it owns in Madrid and Barcelona, two hotels in Marbella and Barcelona, respectively, a 50% stake in the Arturo Soria Plaza shopping centre in Madrid and 54 retail outlets. The portfolio is completed with a batch of 16 plots of land, which are ready to develop, covering a surface area of around 155,000 sqm.

Original story: El Confidencial

Translation: Carmel Drake

Acciona Postpones Sale Of RE Subsidiary

14 April 2016 – El Economista

The delay in forming a Government in Spain, along with the uncertainty surrounding the United Kingdom’s departure from the European Union and the instability in world markets, are delaying the possible IPO or sale to a private investor of a stake in Acciona’s real estate subsidiary.

In an interview with EFE-Dow Jones, the Corporate Development Director of Acciona, Juan Muro-Lara, said that the political gridlock “is part of a cocktail of uncertainty in Europe, driven by volatility in the markets and possible discounts on prices”, which means that now “is a difficult time to close operations at a good price”.

For this reason, he said that it is better to wait “for all those uncertainties to be resolved” in order to have the right market conditions for the sale of Acciona Real Estate and he added that “seeing as we do not need to complete the sale at any price, we would rather wait for the conditions to be right”.

Original story: El Economista

Translation: Carmel Drake

Acciona Values Its New RE Arm At €630M

2 March 2016 – Expansión

Possible conversion into a Socimi / The group is considering selling off its RE arm to an investor, listing it on the stock exchange or a combination of both.

Acciona has done the groundwork to complete the sale of its real estate business this year, one of the company’s non-strategic divisions, together with Trasmediterránea and Bestinver. The group is considering a range of options, including a sale to investors and a private placement, i.e. listing on the stock exchange, or a combination of both.

As a preliminary step, the group has segregated out its development activity from its asset ownership business. It transferred the homes, buildings and land that it rents out to a new company called Acciona Real Estate in the middle of 2015. According to the company, that division is now worth €630 million. “Several investors have expressed interest in this new subsidiary over the last year”, says sources at the company. Morgan Stanley is advising Acciona on this deal.

The new company was created with debt of €199 million. A significant part of the subsidiary is Urbanizadora del Coto (homes and premises for rent in Madrid), which Acciona bought from the Cavero family in 2006. The rest of the new Real Estate company includes a couple of hotels, ownership stakes in shopping centres, such as the Arturo Soria Plaza in Madrid and retail outlets. According to the group’s accounts for 2015, Acciona’s real estate division generated lower revenues, down by 45% to €51 million, but its EBITDA amounted to €6 million, up by €3 million compared to the previous year.

The divestment of the real estate division is one of several possible extraordinary milestones that may be reached in 2016. The most important will be the merger process between Acciona Windpower and the German firm Nordez to create one of the largest manufacturers of wind turbines in the world. José Manuel Entrecanales (pictured above), the President of Acciona, revealed yesterday that that operation is expected to close in April. Acciona will become the industrial partner of the new company, with a stake of just under 30%. The deconsolidation of Windpower will be offset in the 2016 accounts by the global integration of ATLL following the purchase of BTG Pactual’s stake.

Two options that Acciona has definitely ruled out include the debut of its international renewables subsidiary on the US stock exchange and the sale of Trasmediterránea.

The energy company will absorb two thirds of Acciona’s €600 million forecast investment this year for the development of wind and solar farms.

The company expects EBITDA to remain stable, in line with 2015 (€1,174 million), due to the electricity pool prices. Yesterday, Entrecanales pledged to ensure moderate but stable dividend growth (a dividend of €2.5 per share will be distributed this year).

Original story: Expansión (by C.Morán)

Translation: Carmel Drake