Tag: A&G

Morgan Stanley & Gestilar To Build 1,050 New Homes

27 October 2017 – Eje Prime

Gestilar and Morgan Stanley are taking their first steps together in the sector. The property developer and the international fund have invested €120 million in the acquisition of land in Spain, where they plan to construct more than 1,050 homes, according to Javier García-Valcárcel, founder and President of Gestilar, speaking to Eje Prime. The company is currently marketing a portfolio of 1,000 homes, which it expects to complete and deliver in 2018.

For the most part, the land purchases have taken place following the signing of a joint venture with Morgan Stanley. “90% of these new acquisitions form part of the agreement”, says García-Valcárcel. Most of the land recently acquired by the group is located in Madrid, Cataluña, Galicia and the Balearic Islands, according to the director.

This land, which has a combined surface area of 150,000 m2, will be added to the portfolio that the company is already working on. It is constructing around 1,000 homes, which it will deliver during the course of next year and of which almost 80% have already been sold. “Gestilar has completed 600 homes in the last three years”, says the executive.

The roadmap for Gestilar and Morgan Stanley has already been defined, at least the next stage. “We have a pipeline for investing capital for the acquisition of land to build more than 2,000 homes”, explains García-Valcárcel. “That means investing around €250 million more”.

With García-Varcárcel as the sole shareholder, the company launched so-called Project Orizone, with the aim of searching for a strategic partner. Through a process led by A&G, it invited more than a dozen international funds, who had expressed interest in the project, to participate and in the end, the winner was Morgan Stanley’s fund.

“This investor was looking for a partner in Spain and after a year of negotiations, we closed an agreement”, says the executive. “We were never looking for a corporate operation but rather a single strategic partner to work with over the next four or five years”. The long-term objective is to launch 14 or 15 new projects.

Gestilar plans to build 2,500 new homes between 2018 and 2020, with an investment of around €500 million during that period. That will allow the company to place itself amongst the largest real estate businesses in the country in terms of construction volumes.

Morgan Stanley’s return to Spanish real estate  

With this alliance, Morgan Stanley’s fund is backing the Spanish real estate sector once again. In 2006, before the international economic crisis hit, the fund announced that it had €1,000 million proceeding from various funds to invest in real estate assets in Spain.

In line with its plans, Morgan Stanley launched a company together with the real estate group Lar. Moreover, during its time in the Spanish market, the fund joined forced with the real estate firm owned by the Pereda family to build shopping centres and holiday homes on the coast. Nevertheless, it never prospered and ended up shutting down the company after investing in five holiday home projects (with more than 1,500 units) and ten shopping centres.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Morgan Stanley Joins Forces With Gestilar To Build 1000+ Homes

15 September 2017 – Expansión

A new alliance between international funds and Spanish real estate companies has been forged in the market. This time, the stars are the fund Morgan Stanley Real Estate Investing and the Madrilenian property developer Gestilar.

Created in 2009 by Javier García-Valcárcel (pictured above), the real estate company specialising in residential property development has become a leading player in the north of Madrid, following the construction and completion of more than 800 homes in just four years. With García-Varcárcel as the sole shareholder, the company launched the so-called Project Orizone, with the aim of finding a strategic partner. Through a process led by A&G, more than a dozen international funds interested in the project were invited to participate, and in the end, the winner was the fund owned by Morgan Stanley.

“The investor was looking for a partner in Spain and after a year of negotiations, we have reached an agreement. We were never looking for a corporate operation but rather a strategic partner to work with over the next four or five years”, explains Javier García-Valcárcel, President of Gestilar.

The agreement between the fund and the real estate company has materialised in the creation of a joint venture, in which the former will hold a majority stake of the share capital, whilst Gestilar will take care of searching for the land and of the construction and sale of the homes. “The objective is to launch 14 or 15 new projects, with around 1,000 homes”, said the executive.

Currently, Gestilar has a portfolio of 1,000 homes under development, which will generate revenues of €500 million for the company. Its land portfolio has involved investment of more than €350 million.

After closing the agreement with Morgan Stanley, Gestilar has already selected three plots of land to contribute to the joint company, to which it will also incorporate new assets soon, says its President.

“Although our current developments are located in Madrid and Cataluña, following the agreement with Morgan Stanley, we could increase our activity right across Spain”, explain sources at the company.

This is not the first time that the real estate company has reached an agreement with a fund to invest jointly in housing. Nevertheless, on this occasion, it is a long-term alliance for more than one development.

Return to Spain

The agreement between Gestilar and Morgan Stanley represents the return of one of the investors that backed the Spanish real estate market most heavily before the burst of the bubble.

In this way, in 2006, the American fund announced that it had €1,000 million proceeding from various funds to invest in real estate assets in Spain.

As part of its commitment to this market, Morgan Stanley launched a joint venture with another real estate group Lar (managers of the Socimi Lar España). In February 2005, the fund joined forces with the real estate company owned by the Pereda family to construct shopping centres and holiday homes on the coast. In 2009, they closed that company after investing in 5 holiday home projects (comprising more than 1,500 units) and ten shopping centres.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake