Apollo Warns Of Slowdown In Investment Activity In Cataluña

19 October 2017 – Expansión

Andrés Rubio, Head of Europe for Apollo Global Management, one of the largest funds in the world and one of the most active in Spain, has said in London that the Catalan crisis “is not good” for Spain or for Cataluña and that investors are already taking into account the risk caused by the political instability.

At a conference organised by EY and the Spanish Association of Capital, Growth and Investment (Ascri) in the British capital, Rubio explained that “Spain is a model country in Europe for how it has dealt with the (financial) crisis and for the reforms that it has undertaken, above all in the employment, taxation and banking fields”. Nevertheless, “what we are seeing now is not good at all, either for Spain or for Cataluña”, he said. “Any investor looking at Cataluña now is analysing the risk”, explained Rubio, who acknowledges that he has seen a sharp slowdown in the market. “There is less activity in Cataluña now than there was a month ago, that’s for sure”.

Apollo Global Management has been one of the funds that has invested the most in Spain in recent years. Since it decided to back the Spanish market at the height of the (financial) crisis, it has invested around €1,000 million. Its main assets include an 85% stake in Altamira Real Estate, a real estate manager purchased from Banco Santander in November 2013 for €664 million, and Evo Banc, which it acquired from Nova Caixa Galicia for €60 million. It also owns a portfolio of hotels purchased from La Caixa and it wants to grow further in that segment.


Rubio’s comments echo the opinion of the other major funds meeting in London to analyse investment opportunities in Spain. Many expressed their concern for the situation in Cataluña and said that it may affect their investment decisions over the medium term. “Uncertainty is never good”, said Fernando Chueca, Director at Carlyle. “Nobody likes instability”, explained Nader Sabaqqian, from 360 Capital Partners, a technological fund that currently holds investments in two companies headquartered in Barcelona – Xceed and 21 Buttons – and which wants to make more purchases in Spain.

Above all, investors fear the political instability that may be created within the central Government, as well as the social discontent that is growing in Cataluña as the political tension rises. The heads of most of the large funds with interests in Spain say that, for the time being, they are not going to take any drastic decisions, but if the uncertainty continues, they will have to start to take action. “International investments have been suspended in Cataluña for a year now”, said another director.

Rubio, who is a Spanish citizen, but who was raised in New York, praised the clean up of the Spanish banking system during his speech at the conference. He explained that the sector has seen a reduction in the number of banks from 49 to 12 since the start of the crisis. He added that “Spain has a tailwind” and that Apollo is satisfied with the investments it has made. “We believe in Spain and we will continue investing”, he said.

Original story: Expansión (by Amparo Polo)

Translation: Carmel Drake

CBRE: RE Inv’t In 2017 Will Exceed €13,600M

16 January 2017 – Cinco Días

Merlin’s purchase of Torre Agbar in Barcelona and the agreement signed between the Baraka group and the chain Riu to open a hotel in Edificio España in Madrid, both announced last Thursday, are major real estate operations that are not only defining the start to 2017, they are also marking the sector’s entry into a new cycle. That is one of the conclusions of the Real Estate Trend Barometer compiled by CBRE and published on Friday, which calculates that non-residential real estate investment in 2017 will exceed the figure recorded in 2016 (€13,600 million).

The reasons given by the consultancy firm for this optimism include the economic recovery and the political stability following the formation of the Government. Nevertheless, it alerts that there are also risks for the sector from the volatility on the international stage and specifically due to Brexit. “There is no reason to think that 2017 will be worse than 2016”, said Adolfo Ramirez-Escudero, President at CBRE, who forecasts a “very active” investment market this year. That situation results from improvements in rental income for all assets: offices, retail, residential and logistics.

In this sense, the office market offers the greatest possibilities. Although in 2016, the amount of new space leased decreased (with only three operations exceeding 10,000 m2, compared with nine in 2015), CBRE considers that it was the political uncertainty that caused that downturn. Now that that uncertainty has been resolved, the operations that were not signed last year will be completed instead in 2017.

The logistics segment occupies second place in terms of the opportunities it offers investors, given the strength of ecommerce and the needs of companies in the sector such as Amazon. Next comes the hotel sector, where the specialist consultancy firm Irea forecasts investment of €2,000 million over the next year. In this context, the residential market also stands out and CBRE expects to see a recovery there for the first time since the crisis. In fact, it predicts that demand for new homes will increase by 180,000 units between 2010 and 2025. (…).

This improvement in residential housing will force real estate developers to play an important role. (…). That will be the case, for example, of the new real estate companies created from scratch by international funds, including Dospuntos (owned by Värde Partners) and Neinor Homes (owned by the fund Lone Star).

In terms of investor profile, family offices and private investors will gain weight compared to last year, Socimis will continue to play an important role for another year. Value added funds (which invest in renovations) and institutional entities (such as insurance companies) will also be key players. Nevertheless, opportunistic investors – those who look for bargains – who were very active in the depressed market of 2014 and 2015, will now exit the arena. According to Ramírez-Escudero, that shows that the market is now more mature. (…).

Original story: Cinco Días (by Álvaro Bayón)

Translation: Carmel Drake