Tag: Aedas

Spain’s Newest RE Companies Have Assets Worth €4,900M+

24 April 2017 – Expansión

The Spanish real estate sector is enjoying a new phase of growth following its unprecedented crisis. Whilst over the last two years, we saw the boom of the Socimis, specialising in rental properties, 2017 looks set to become the year that the property developers bounce back.

Or at least that is according to the ambitious business plans that the six large companies –Neinor Homes, Aelca, Vía Célere, Aedas, Kronos and Metrovacesa Promoción y Suelo – have put in place, with the aim of benefitting from the growing increase in house sales, and the significant demand from buyers.

To that end, the companies have not hesitated to invest several thousands of millions of euros to create portfolios of land on which to begin their developments. These six developers alone now own assets worth €4,924 million, mostly buildable land, ripe for development. In total, these companies own 6.9 million m2 of land.

Leadership

The entity Metrovacesa Promoción y Suelo stands out on this list of new property developers. The real estate company is looking to recover its sceptre as the Spanish real estate king, after selling its property portfolio to the Socimi Merlin Properties. Owned by Banco Santander, BBVA and Popular, the company currently has 472 homes under construction across 17 developments. Nevertheless, its greatest strength lies in its portfolio of land, which, spanning 2.3 million m2, makes it the largest owner of that type of asset in Spain. Moreover, sources at the company state that its portfolio may increase “considerably this year”, following the contribution of “high-quality land” by the shareholders.

Currently, the land allocated for residential use only is worth €1,050 million. Moreover, it has a portfolio of tertiary land (for offices and shopping centres) worth €325 million and it is already developing a 10,000 m2 office building in Madrid.

Meanwhile, Neinor Homes stands out for its asset value and because it has the largest volume of development activity. Last month, the company, led by the investment fund Lone Star, became the first real estate developer to debut on the stock market in a decade. It did so with a portfolio of assets worth €1,120 million, including land with a surface area of more than 1 million m2. The bell first rang on 29 March, with 4,002 homes under construction across 60 developments.

Vía Célere is following a similar strategy to Neinor. The Madrilenian real estate company is set to become one of the large property developers after it was acquired by five funds, led by Värde Partners, and following its merger with its counterpart Dos Puntos. The new Vía Célere has a portfolio of land spanning more than 1 million m2, with 2,494 homes under construction.

Meanwhile, Aedas Homes, with 1.35 million m2 of land and assets worth €1,100 million, has positioned itself as one of the leading players in the sector after just a few months of life. Led by the fund Castlelake and advised by the team at Merlin, Aedas is currently building 1,510 homes. This year, Aedas has set itself the objective of launching 28 developments and continuing to invest in land purchases. (…).

Another one of the new companies aspiring to the throne of the large property developers is Aelca. Created in 2012, the fund Värde owns a 75% stake in this property developer, which, in turn, owns a portfolio of land measuring between 700,000 m2 and 800,000 m2. Aelca currently has 2,200 homes under construction across 43 developments.

Finally, Kronos Homes is, currently, the company with the smallest portfolio of land. Nevertheless, its shareholders (a group of overseas investors) plan to invest €1,000 million before the end of the year purchasing land on which to build 4,000 homes.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Who Are The New Owners In Spain’s RE Sector?

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

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

International Funds Rule Spain’s Residential Sector

10 March 2017 – Expansión

The recovery in the market is fuelling investors’ interest in housing. International funds such as Lone Star, Värde and Castlelack are the new stars.

The recovery of the residential market is starting to take shape in certain autonomous regions and international investment funds are positioning themselves to benefit as the boom takes hold. According to data published on Wednesday by INE, the price of private (unsubsidised) housing rose by 4.7% on average in 2016, which represents the third consecutive annual increase following six years of decreases and the highest rise since 2007.

And as they await the reactivation of the sector, several of the funds have made in-roads. Värde, Lone Star, Castlelake, Texas Pacific Group, Apollo, Cerberus and Kennedy Wilson are just some of the stars of the new residential market.

These funds maintain their presence in the residential market in several ways: as holders of debt, as servicers and as owners of the new generation of property developers, which are much more professional than their predecessors.

Specifically, Värde has been one of the firms that has staked the most on the real estate sector in Spain in recent years. The fund recently announced the purchase of the property developer owned by Juan Antonio Gómez-Pintado. That followed its purchase two years earlier of the real estate subsidiary of Grupo SanJosé (formerly Parquesol), which it subsequently renamed Dospuntos. The fund’s plans now involve integrating those two companies into a single firm, which will have more than 1 million m2 of land and more than 10,000 homes in progress or in its portfolio. In addition, Värde plans to list this firm on the stock market in the medium term.

Moreover, in 2014, the US fund purchased 51% of Banco Popular-e’s credit card business, for which the entity generated gains of more than €400 million. And as Expanión revealed, in December 2016, the fund acquired 40% of La Finca Global Assets, a division of the group owned by the Cereceda family, which specialises in the management of premium offices in Madrid.

Another fund that has been seduced by the residential market is Lone Star, which controls the property developer Neinor. The former real estate subsidiary of Kutxabank will be the largest exclusive property developer to debut on the stock market since Realia in 2007 (the large Socimis that have also debuted since then invest in tertiary assets). The fund is looking to place up to 60% of the company’s shares on the stock market, through the issue of new shares and the placement of existing shares. Lone Star, which will see its stake diluted as a result of the operation, will use the funds raised to reduce debt and continue with its plans to reach cruising speed by 2020 with the completion of between 3,500 and 4,000 homes per year.

Another fund that has positioned itself well in this market is Castlelake with Aedas. The group specialising in the residential segment, controlled by the US fund, has a portfolio of developable land worth €1,000 million, which will allow for the construction of more than 12,000 homes. The fund decided to back the house building segment and, on the advice of Merlin Properties, has launched fourteen developments in Alicante, Barcelona, Madrid, Málaga, Sevilla and Valencia.

Similarly, the funds have known how to gain a foothold in the market through the servicers. Servihabitat, Altamira, Haya and Aliseda are all controlled, in whole or in part, by international investors. These companies, created by the banks during the crisis to accelerate the divestment of assets from their balance sheets, have evolved into multi-service platforms, with financial and real estate assets.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Neinor, Dospuntos & Aedas Invest €5,000M In Homes

26 January 2017 – Cinco Días

The fund Castlelake is backing the same market as the funds Lone Star and Värde Partners by resuming construction of new homes. Between the three of them, the US entities have now invested almost €5,000 million in the sector. The latest player to join the party has created the company Aedas Homes, with a land portfolio worth €1,000 million and the capacity to construct 12,000 homes. (…).

Castlelake has been purchasing land in Spain since 2013, when the property crisis was more acute and few international investors were interested in the real estate sector in Spain. In the end, the fund has created an independent company to construct its homes, into which it has placed 1,350 million m2 of land. 90% of those plots are ready to be built on (with permits) and the firm’s strategy is to continue buying.

For this operation, the fund has been advised by Merlin Properties, which is listed on the Ibex 35. The heads of the fund were looking for a recent real estate success story that did not present any conflict of interest – the Socimi is not involved in the residential sector –and so they asked its directors for help. Moreover, of the 45 people that work for the new company Aedas, seven come from the Socimi, specifically, from the former Testa (acquired by Merlin in 2015), given that they had experience in residential development at the now extinct Vallehermoso.

Castlelake is a firm from Minneapolis that manages €8,600 million in assets around the world. (…).

The new real estate company’s plans

Aedas – the name has Latin roots, stemming from the word to build – will construct homes in seven provinces: Madrid, Barcelona, Alicante, Valencia, the Balearic Islands, Málaga and Sevilla. “We are committed to the areas where there is clear residential demand”, said David Martínez Montero (pictured above), Director General at Aedas. Martínez Montero previously led the Operación Chamartín project between 2013 and 2016, the Valdebebas Compensation Board and the Cuatro Torres project in Madrid.

The new company is going to launch 14 developments to construct 1,000 homes, with the aim of finishing them by the end of the year and handing them over between 2018 and 2019. These homes will be located in Madrid (capital, Boadilla and Las Rozas); Barcelona (Hospitalet, Sabadell and Vilanova i la Geltrú); Sevilla (in the capital and in Dos Hermanas); Valencia (capital and Denia); and Estepona (Málaga).

Aedas is not proposing a pre-determined rate of investment or committing to building a specific number of homes per year. “It will depend on how the market absorbs our first 1,000 homes. We are not going to make the same mistakes as in the past”, said Martínez Montero. The company’s strategy involves tackling the primary residential market with urban products for middle class buyers, a segment where demand exists. (…). The directors of the company believe that there is a need for new builds given that hardly any new homes have been built in the last decade.

The arrival of the funds

It is the same theory that the other funds that have burst onto the residential scene are applying. The first was Neinor Homes, owned by the Texan firm Lone Star, with the plan to invest €2,000 million in land and building homes. That company was created from the business purchased from Kutxabank (…).

The next to emerge was Dospuntos, created by Värde Partners, from the ashes of the San José Group’s real estate division, which plans to invest €2,000 million between now and 2021. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake