Tag: Aelca

Aelca Invests €80M in Land in H1 & Will Hand Over 800 Homes in 2018

31 July 2018 – El Mundo

Aelca has closed the first half of the year with a good set of result. The property developer, founded by José Juan Martín and Javier Gómez, generated revenues of €54.6 million between January and June and profits of €10.65 million.

Moreover, it has already sold 99% of the homes that it plans to hand over this year, 800 units in total, worth €170.28 million.

In addition, the company has already pre-sold 78% of the units that it is scheduled to hand over in 2019, which amount to 1,185. During the first half of the year, the property developer has continued with its land purchase policy to enable it to continue building new residential developments in different parts of Spain. Thus, during the first half of 2018, it invested €80 million on the acquisition of land, so that its capacity to build currently amounts to 13,965 homes.

Aelca is consolidating its role as one of the property developers created in the heat of the resurgence of real estate activity. At the moment, the company has 2,375 homes that are work in progress.

Original story: El Mundo 

Translation: Carmel Drake

Värde Will Integrate Aelca into Vía Célere to Strengthen the Latter’s IPO

21 July 2018 – El Economista

A new merger operation is on the horizon in the real estate sector, and it is going to star Vía Célere and Aelca. According to confirmation from several sources in the sector speaking to this newspaper, the two entities’ common shareholder, the fund Värde, is working in an active way to integrate the two companies with the aim of strengthening the structure of Vía Célere ahead of its upcoming stock market debut.

The fund and its partners in the real estate company (Marathon, Attestor, Bank of America Merrill Lynch, JPMorgan and Barclays) are currently holding conversations with the founders of Aelca to carry out an operation in which the assets of the property developer would be integrated into Vía Célere’s portfolio. According to the same sources, Värde, which owns around 80% of each real estate company, wants to close a preliminary agreement within the next two weeks, although the operation may not actually be executed until October and November.

The objective of the fund is to close the integration before the end of the year, in such a way that the company will be ready to carry out its debut on the stock market when the next sales opportunity presents itself. Following the debuts of Neinor, Aedas and Metrovacesa, the market has almost exhausted its appetite for the real estate sector, plus there has been some high volatility on the stock market due to political instability.

These circumstances have meant that the fund has not been able to liquidate its investment in Vía Célere so far this year, as it had planned, although, sources at the company say that no specific date had ever been set for the IPO. In the case of Aelca, its founders and shareholders, Javier Gómez and José Juan Martín, have been aiming (to list their firm) in 2019, a step that may now be taken under the umbrella of the Vía Célere brand.

With this move, once listed on the stock market, the firm launched and presided by Juan Antonio Gómez Pintado will be positioned as the property developer with the largest market capitalisation, amounting to €2.3 billion. Similarly, according to the same sources, the target for the delivery of homes by the new company would increase to around 5,000 units per year, thus reaching the figures planned by its competitor Metrovacesa, which also forecasts such volumes for 2021.

Before designing the integration process for the two property developers, Värde has also studied the possible merger of Vía Célere with one of the other large listed companies, although, that formula was giving rise to a giant with a volume of business that was not seen in the property development sector even in the boom years.

With the merger of the two property companies now on the cards, the new Vía Célere will have a land bank with capacity for the development of around 23,000 homes. To this figure, the plots that Sareb will inject into Aelca will have to be added, with an approximate value of €800 million, in the event that the property developer ends up reaching an agreement with the bad bank.

The American fund reached an agreement with the Avintia group in the summer of 2016 to acquire Aelca for around €50 million. Almost simultaneously, Värde launched Dospuntos from the leftovers of the former Parquesol, the real estate subsidiary of the Sanjose Group.

Six months later, it closed the purchase of the property developer led by Gómez Pintado for around €90 million to integrate it with Dospuntos and create a new giant in the sector, retaining the Vía Célere brand, which has become the fund’s new darling.

Created shortly before the real estate bubble burst, the real estate company is one of the few that managed to survive the crisis and if Värde’s plans do crystallise, it could position itself as the largest listed property developer in the country.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Sareb Finalises Creation of a New Company with Aelca to Manage Property Worth €800M

20 July 2018 – El Confidencial 

The Company for the Management of Assets proceeding from the Restructuring of the Banking System (Sareb) has made a change to its property development plan. The so-called bad bank has decided to create a joint venture with a first-rate property developer to manage €800 million in finalist land and developments in progress in several main cities across Spain.

This decision represents a change to Sareb’s initial formula for its property development business, which was going to involve a strategic alliance that would allow the integration of its residential construction and land development businesses into one of the large Spanish property developers. Initially, the chosen entity to form part of this company, according to assurances provided by sources close to the negotiations speaking to El Confidencial, is Aelca.

Sources at Sareb, meanwhile, speaking to this newspaper assure that “at the Board meeting on Thursday, a decision was taken to approve the creation of a vehicle, but the choice of travelling companion and the percentage stakes to be owned by each party in the JV have not been decided yet”.

If the conversations with the property developer founded by Javier Gómez and José Juan Martín prove fruitful, it will end up being responsible for managing so-called Portfolio Casiopea, given that it is the last man standing in the negotiations in which the listed company Aedas Homes has been involved until recently. The future company – likely a banking asset fund – will be owned by Sareb (90%) and Aelca (10%). According to the same sources, the process is in its final phase and the details are being finalised for the signing of the corresponding agreements.

At the beginning of the year, Jaime Echegoyen (pictured above) decided to work on a strategic alliance with a large property developer that would allow Sareb to sell a significant batch of land and compete in the first division of property development in Spain, head to head with the largest players in the sector, such as Aedas, Neinor, Vía Célere and Metrovacesa.

Nevertheless, in recent weeks and after the offers presented by Aelca and Aedas failed to meet Sareb’s price expectations for its land, the bad bank has rethought the whole process, opting for the creation of a joint venture vehicle, in the end, in which it will control the majority. It is in this process in which Aelca has been left alone in the negotiations.

Building 1,500 homes per year

Sareb currently has around 4,300 homes in different stages of development, located in different towns across Spain, which involve a combined investment of around €60 million. Moreover, it is finishing the construction of 2,340 homes that it received unfinished and it is building 2,153 other homes from scratch.

Just over a year ago, Sareb expressed its commitment to become one of the country’s largest property developers by announcing its intention to promote an average of 1,500 homes per year until its liquidation. The company plans to finish building 4,000 new homes, between now and 2020, a clear display of its commitment to residential development (…).

The sources consulted by this newspaper explain that Sareb’s objective is to maximise the value of the assets that it has in its portfolio and, even, in the future, debut the company on the stock market as a way of divesting easily, obtaining liquidity and collecting gains. It is worth remembering that Sareb is already trading on the stock market through its Socimi Témpore Properties, with 1,300 rental homes.

Until now, the formula has been to delegate construction work to different property developers on a project by project basis, however, the strategy to be adopted from now on will generate value from the land to be developed and promotions underway in conjunction with a single partner.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Sareb Quarantines its €30bn Mega-Portfolio Entrusted to Goldmans For The Time Being

11 June 2018 – El Confidencial

The most important operation in Sareb’s history is going to have to wait. Despite the wishes of Goldman Sachs, the bank charged with leading the sale of €30 million in toxic assets, to formally launch the process before the end of June, the entity chaired by Jaime Echegoyen would rather be cautious and have everything locked down, and well locked down, before it gives the final green light to an operation of this magnitude.

Particularly, when its largest shareholders, the State through the FROB, has just experienced an unexpected change of Government. Although sources at Sareb insist that a firm date has not yet been set for this sale and that all of the work carried out to date has been preliminary, during the conversations that Goldmans held with interested funds before the vote of no confidence (in the Spanish parliament), it was understood that the process would begin this month, according to several sources in the know.

Nevertheless, the change in the political panorama, which has resulted in Pedro Sánchez’s appointment as President and Nadia Calviño as the Minister for the Economy, lends itself to prudence, to avoiding any rushed decisions and to allowing time for the new Government to analyse this operation. Above all, when one of the objectives of the PSOE’s economics team has, for months, been to conduct a thorough audit of Sareb to understand the real extent of the public debt as a whole, according to Voz Pópuli.

The sale of the portfolio entrusted to Goldman would allow Sareb to decimate its liabilities in one fell swoop and generate two years worth of revenues in a single operation. The question is at what cost, in other words, what losses would such a divestment generate, given that all of these sales are being undertaken at discounts that the bad bank is finding very difficult to bear.

In fact, in order to play in this league of major operations, Sareb has been analysing for months all kinds of formulae to reduce its losses. One way of mitigating the losses and achieving better offers is to share the ownership of the capital of the new company to which these toxic assets would be transferred, like Santander and BBVA have done in similar cases.

Another lever that has already been analysed is to take advantage of the FAB (Banking Assets Fund) – that Sareb created in its early stages, because that would provide the operation with tax incentives, or associate it with the servicing contract, which has been in the hands of Haya until now.

That “servicer”, which is controlled by Cerberus, manages all of the toxic property that Bankia transferred to Sareb, whose deficit was the largest, in absolute numbers, of the bank rescue, another important argument why the new Government wants to understand in detail the design and consequences of the Goldman operation before giving it the green light, or not.

What is happening with Ebro and the property development plans?

(…) In terms of the entity’s other two star projects: the search for a partner to promote €800 million in residential assets and the sale of a €10 billion portfolio baptised Ebro.

The former has two finalists, Aelca and Aedas, and looks to be on schedule for a winner to be selected ahead of the summer (…).

In the case of Ebro, Sareb’s decision to not go ahead with this portfolio responds to, amongst other reasons, the fact that some of the perimeter proceeded from Haya assets, which are the ones that make up the entire Goldman portfolio, and so a decision was taken to desist from this project to give priority to the Goldman deal.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Aelca Locks Horns with its Owner Värde Over Sareb Mega-Contract

12 June 2018 – Voz Pópuli

An underground war in the heart of Aelca, one of the largest property developers in Spain. The real estate firm founded by José Juan Martín and Javier Gómez is immersed in negotiations regarding a possible alliance with Sareb which has generated unease for its main shareholder, Värde Partners, which owns 80% of the share capital.

Sources at the US fund consider that their investee company is negotiating this agreement behind their backs, something that they are opposed to since it could mean that their stake in the property developer decreases to less than 50%, according to financial sources consulted by Voz Pópuli.

Sources at the property developer declined to comment: “Aelca is continuing to work on the project with Sareb. In this sense, we decline to make any comment”.

Meanwhile, Värde Partners has been assessing a possible merger between Aelca and Vía Célere, the fund’s other property developer in Spain, for some time. They see it as the best way to generate value from their investments in Spain ahead of a possible IPO when the market improves. But neither of the US fund’s partners like the merger option, they would both prefer to continue on their own.

Sareb’s process

The property development alliance with Sareb is making progress, with the recent selection of just two finalists: Aelca and Aedas. The President of the bad bank, Jaime Echegoyen, said yesterday that his entity is in no hurry to close an agreement and nor does it have any obligation to close a deal if the numbers do not work out in the end.

Sareb’s idea is to include land worth €800 million in the agreement. According to financial sources consulted, developments in progress worth another €500 million may also be included. And of all of that, Aelca would want to hold onto around €900 million, or 70% of the total.

One of the options being negotiated is that Aelca and/or Aedas acquire the plots in exchange for allowing Sareb into their share capital. The valuation of the property developer is around €1 billion, and so such an agreement would reduce Värde’s stake to below 50%. Even so, according to the same sources, Aelca would have to obtain approval for the operation at the General Shareholders’ Meeting, which would be tricky if the fund is not in agreement.

Moreover, sources at Värde do not think that the valuations that they are seeing for the possible agreement with Sareb are justified, and they fear that the negotiations will dilute their stake (…).

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Aelca & Aedas Enter Final Round of Sareb’s Property Developer Venture

1 June 2018 – Eje Prime

The bad bank is gradually outlining what its property development venture in Spain is going to look like. Aelca and Aedas Homes are the final candidates in the bid to take over the land portfolio that the bad bank has put on the market in exchange for entering the share capital of one of the house builders. By contrast, Vía Célere has abandoned the competition, leaving the path clear for the other two operators.

According to sources familiar with the process, Vía Célere has decided not to submit a final proposal to Sareb. The property developer, controlled by Värde Partners (51%), together with other funds, decided against going forward to exploit the bad bank’s €1.2 billion portfolio.

The bet by the entity chaired by Jaime Echegoyen is also happening because its property developer partner is listed on the stock market, such as in the case of Aedas, or has the intention of doing so, such as Aelca. That means that the financial institution will be able to divest its shares easily in the future and make a gain. That point is likely to have been one of the reasons that led Vía Célere to back out of the deal, given that it has put the brakes on its stock market debut following the postponements announced by Testa and Azora.

Original story: Eje Prime

Translation: Carmel Drake

Spain’s Large Property Developers Own Land to Build 1,500 Homes in Valencia

16 May 2018 – Levante EMV

The four Spanish property developers backed by investment funds that make up the Big Four have acquired large batches of land in Valencia and now own plots on which to build 1,500 homes over the next few months.

The property developers in question are Neinor, Aelca, Aedas and Vía Célere, and they share financial muscle in common, which has allowed them to outperform the competition. The key is that the four firms are listed or are aspiring to make their debuts on the stock market and so they need to quickly grow their portfolio of homes to attract investors. The latest major operation has just been closed by Aelca, which is going to invest €7.5 million in the construction of 62 homes on the PAI de Moreras.

Sources in the sector warn that there is hardly any buildable land left in Valencia and they lament the fact that this is going to result in a “reheating” of prices. The same sources state that land in Patraix, which cost around €200/m2 two years ago is now being sold for €450/m2 due to the voraciousness of the large property developers. “Aelca purchased land in Patraix for €425/m2 and is now costs €450/m2. The large property developers have driven up prices because they need to take positions ahead of their stock market debuts”, say the experts.

In other areas, such as Malilla, Neinor paid €600/m2 for a plot with capacity for 400 homes, and the US fund Harbet Management Corporation (HMC) and its local partner Momentum Real Estate Investment Management (REIM) purchased 30,000 m2 of land in Nou Campanar and Alfahuir for €800/m2. The problem is the impact that this is going to have on the final prices of those homes, given that, according to the experts, they will have to soar above €2,000/m2 to be profitable. “We are going to see homes costing upwards of €220,000. Who can pay those prices in Valencia? What happens to permanent employees who are 40-years old and who can only be granted mortgages of up to €160,000?” ask the same sources.

Aelca – 368 homes

Aelca is a property developer founded in Madrid in 2012. Four years later, a fund from Minneapolis (USA), Värde purchased 75% of that firm. The company arrived in València with two developments comprising 192 homes in Patraix (own) and Nou Campanar (owned by Sareb). Now it is building 44 homes in Malilla (on Calle Isla Formentera), 70 homes in Nou Moles (on Calle Brasil) and 62 homes in the PAI de Moreres. Aelca is also preparing its stock market debut.

Vía Célere – 22 homes

Vía Célere is another property developer linked to the fund Värde that is also preparing to debut on the stock market. Its first development in València is a 22 home building with a swimming pool at number 55 Avenida de la Petxina. The cheapest home there costs €310,900 (€348,703 including costs).

Aedas – 399 homes

Aedas is a listed property developer, controlled by the US fund Castlelake. The firm currently has three developments underway in València where it is going to build 399 homes. The company is going to construct an urbanisation containing 220 homes on a plot on Avenida Maestro Rodrigo (…). In addition, it is building 59 homes in Quatre Carreres. Also, the company has just acquired another plot on Avenida Antonio Ferrandis to build 120 homes (…).

Neinor – 713 homes

Neinor arrived in València in March 2017 and has become the largest landowner in the city with a portfolio for the construction of 713 homes. The property developer, whose main shareholder is the Israeli fund Adar Capital, is currently marketing a 49-home development in Malilla and another 216-home development in Nou Benicalap. It is also working on a 416-home development in Malilla (…) and a 100-home development on Avenida Antonio Ferrandis in Quatre Carreres.

Original story: Levante EMV (by Ramón Ferrando)

Translation: Carmel Drake

Bain and Cerberus Vying to Take Over Hercesa

27 April 2018

The company, which has more than forty years of experience in the sector, has already attracted the interest of the two investment funds, which would take over a business structure that has a presence in all market sectors.

A long time player in the Spanish real estate market has put itself up for sale. The Hercesa Inmobiliaria group, which has more than forty years of experience in the sector and which has a presence in all market sectors, has received offers for the company starting at 150 million euros. Up to five investment funds have already expressed an interest in the compan. Bain and Cerberus are considered the two principal contenders, industry sources told EjePrime.

The group, of which the Cercadillo family is the majority shareholder, set a deadline for the submission of applications that ended today. That will be followed by analyses of the company, due diligence and negotiations. The company commissioned KPMG for its valuation prospectus. The group declined to comment on the sale.

Hercesa’s real estate activity is primarily focused on the residential sector, although it also has industrial, tertiary and management assets in its portfolio. Also, the company has had a presence outside of Spain since 2004, having carried out projects in Portugal, Romania, Bulgaria, the Czech Republic, Poland, Morocco, Ecuador, Mexico and Panama.

In the residential market, the holding also owns the manager Hi! Real Estate. Created in 2014, it is the base of the group, which in its forty years of experience has delivered more than 21,000 homes and, at present, is selling 2,600 properties in developments distributed between the Community of Madrid, Malaga, Valladolid and Guadalajara, where its headquarters are located.

However, one of the company’s assets that may of the greatest interest for the funds who want to develop in Spain is their portfolio of land mortgaged with banks. Hercesa has land holdings throughout the Spanish Levant, Andalusia, Madrid and Guadalajara.

In addition to the manager, the group has a developer, Hi! Projects, as well as with the construction company Hi! Works and Services. The last known audit of the group, from 2016, shows revenues of 63.6 million euros and assets of €132 million. Also, the prospectus prepared by KPMG highlights a financial debt of fifty million euros, much of it related to the land mortgaged with banks, with which it has recently reached agreements for the creation of developments on the lands, due to the rebound of construction in the residential sector.

As EjePrime has learned, the company’s intention with this valuation prospectus is to sell the company by taking advantage of the upward cycle that the sector is experiencing and from which the investment funds want to take advantage. It would be, therefore, a new corporate operation in which, just as happened with Via Célere, which received an injection of funds from Värde, the future buyer could keep the current management team.

There have been other such agreements, such as the purchase of Aelca, also by Värde and Cerberus’ acquisition of Inmoglaciar. Also, Bain recently paid 220 million euros for Habitat and Baupost entered the prime residential sector with its purchase of Levitt, through Q21.

Original Story: EjePrime – J. Izquierdo

Translation: Richard Turner

 

Aelca Invests €99M in Construction of 468 Homes in Madrid, Cataluña & Andalucía

25 April 2018 – Eje Prime

Aelca is investing almost €100 million to strengthen its portfolio as it prepares for its stock market debut in 2019. The Spanish property developer is spending €99.2 million on the construction of 468 new homes, spread across seven developments in Madrid, Cataluña and Andalucía.

Construction work on all of them already started during the first four months of this year. The land acquired by the property developer spans more than 56,000 m2 of buildable surface area, with the projects that it is going to build in the Community of Madrid standing out in particular.

Not in vain, four of the developments are located on the outskirts of the Spanish capital. In Boadilla del Monte, Residencial Nacari is going to have 96 homes; in Paracuellos del Jarama, Residencial Aquam is going to comprise 36 homes; and in El Ensanche de Vallecas, the Monet and Nueva Gavia urbanisations are going to add 60 and 56 properties, respectively, to Aelca’s portfolio.

Meanwhile, in Cataluña, the property developer is going to build Residencial Aviació, with 42 homes, close to the El Prat Airport, whilst in Andalucía, the company led by Javier Gómez and José Juan Martín Montes is building two projects in the province of Málaga. In the Costa del Sol’s capital, it is constructing the Navis Building with 67 homes and in the town of Torrox, it is working on Duna Beach containing 111 homes.

Currently, Aelca owns a portfolio of finalist land with the capacity for the construction of more than 13,000 homes, after investing €500 million over the last two years. Since its creation in 2012, the property developer has handed over more than 1,200 homes and in 2017, the company generated profits of €25 million.

Original story: Eje Prime 

Translation: Carmel Drake

Sareb Selects Aedas, Vía Célere & Aelca as the Finalists for its Property Development Plan

18 April 2018 – Eje Prime

Sareb is closing the loop in its casting session to find a property developer with which to partner up to develop its large land bank. Aedas Homes, Vía Célere and Aelca are the three companies that have been chosen by the entity as the finalists of the project to which the bad bank is going to transfer a portfolio of buildable land worth more than €800 million; that will represent its contribution to a non-monetary capital increase, and will see it become a minority shareholder in the chosen property developer.

Sareb’s plan is to enter the residential market hand in hand with an established Spanish property developer and that firm must be listed on the stock market. That final point is important for Vía Célere and Aelca, given that neither of which have rung the bell on the stock market yet, although they both plan to make their debuts before the end of 2019.

The operation being managed by the company led by Jaime Echegoyen is the largest by volume of all of those undertaken during the bad bank’s six years of life; the entity’s balance sheet largely comprises assets proceeding from the banks following the crisis, according to Cinco Días.

Sareb initiated conversations with up to six property developers and has cut the shortlist down to these three. The idea is to choose a strategic partner in the residential market within the next few months.

In terms of the distribution of the land bank that will form part of the project, the plots are located in Madrid, Cataluña, the Costa del Sol, Levante and Euskadi, as well as in some of the provincial capitals in Galicia, Andalucía and Castilla y León, amongst others.

If the project goes ahead, the operation will become the largest ever to be carried out by the entity, exceeding the €553 million that it transferred to Goldman Sachs through Portfolio Eloise.

Original story: Eje Prime

Translation: Carmel Drake