8 August 2017
Atitlan, a firm headed by Roberto Centeno, son-in-law of the president of Mercadona, and a group of investors have bought the land at for next to nothing, which also received several ‘ghost’ offers. The plot of land was sold by a subsidiary of the failed bank Bankia, which paid €300 million for it a decade ago.
Most of the land belonging to what was once the urban circuit of Formula 1 Valencia just changed hands. The investment firm Atitlan, founded and directed by Roberto Centeno – the son of Mercadona’s president Juan Roig, and Aritza Rodero, have joined together with a group of investors to buy the land, which has been abandoned for years.
Just a decade ago, those same properties broke all records in the Valencia real estate market, when the land, with 103,000 square meters of surface area, sold for 300 million euros.
That figure was what Acinelav Inversiones paid at the end of 2006 to Compañía Logística de Hidrocarburos (CLH) for its old warehouses close to the port of Valencia. The buyer’s primary shareholder was Bancaja, holding slightly more than 25%, together with several well-known real estate developers from Valencia: Lubasa, Valencia Valencia Constitución, Salvador Vila, and the Ferrando and Quesada families.
From jewel to toxic asset
That plot of land was considered one of the jewels of new Valencia, located halfway between the City of Arts and the new marina. In addition, an announcement was made shortly after the sale heralding the arrival of Formula 1. Rita Barbera, the mayor of Valencia at the time, had convened an international competition of ideas for that area, which finally gave birth to an ambitious urban program, PAI del Grao. The project was to include some 3,000 dwellings and create several water channels to recover part of the original course of the mouth of the Turia river. Like many large-scale projects that were drawn up before the crisis, it still exists only in virtual models and images. Today the area is a huge, very degraded and partially asphalted esplanade in which there are still fences and concrete blocks that belonged to the old circuit.
Given the lack of land development and income, Acinelav was declared bankrupt in 2014, drowned by €270 million in debt, as reported by EXPANSIÓN. In addition, the government was claiming part of the urban development fees due for the cost of the circuit layout.
The main creditor was a syndicate of several banks, in which BBVA is listed as an agent. In addition, Sareb was also affected, having assumed the more than 68 million in equity loans that Bankia, in turn, had inherited from Bancaja.
During the judicial proceedings, the designated bankruptcy administrator, the law firm Rossaud Costas, initiated a private auction of the company’s greatest asset, those same 103,000 square meters, according to El Confidencial.
It was during those proceedings that Atitlan and its partners managed to acquire the land, according to sources confirmed by the investment firm, without disclosing more details. However, the offer made by the investment group led by Centeno and Rodero was by no means the highest.
According to Valenciaplaza, the amount offered is less than 30 million euros. Two other offers were for 40 and 35 million euros. However, these proposals were led by intermediaries who, despite the supposed support of funds from Dubai and other countries, in turn sought to reposition the land among other investors. When it came time to deposit the funds required finalize the purchase, they were unable to even cover the required advance.
In the end, the guarantees that Atitlan offered the financial institutions, which had kept the toxic assets on their books for years, seem to have been decisive. And this is even though the price they accepted was 10 times lower than the bankrupt Acinelav paid for it.
Even if the commercial court that handles the bankruptcy of Acinelav were to approve of the sale, the the imminent development of the land is not seen as likely. The current municipal authority has determined that the PAI shall be reviewed and processed again. Considering the size of the property, the buyer had many parties interested in acting as the developer, but the City Council, currently chaired by Joan Ribó, prefers it to be the municipal company Aumsa.
New Real Estate Actor
This benchmark deal confirms the turnaround in Atitlan’s investment strategy and its commitment to real estate. The investment firm created in 2006, which initially specialized in companies that supply Mercadona, has closed several purchases and alliances in the Valencian real estate sector in the last year.
Thus, it supported the Ferrando family’s bid to acquire the percentage that Bankia had in NAU, one of the largest owners of tertiary assets and land in the city. The group has shopping malls, hotels and the Cirsa casino building.
The new purchase is a clear sign that Atitlan believes that the housing crisis in Valencia has already ended and is now in full recovery.
Original Story: Expansión / A.C.A. Valencia
Translation: Richard Turner