Haya Reactivates its IPO After Protecting its Mega-Contract with Sareb

8 November 2018 – Cinco Días

One of the IPOs scheduled for this year is going to be executed next year, most likely in the window that will launch in May. The bane that was weighing down on Haya Real Estate, the end of its mega-contract with Sareb, has almost been lifted. The contract was signed in January 2015 and expires in December 2019, but financial sources are now certain that it is going to be renewed. Nevertheless, Sareb is likely to pay lower commissions to the real estate asset manager (servicer, in the jargon). The appraisal value of the firm ahead of its stock market debut amounts to around €1.2 billion.

Last May, Sareb put assets worth around €23.5 billion up for sale, comprising property developer loans and real estate assets. They accounted for 60.6% of the €38.8 billion that Haya had at the end of June.

That caused investors to panic about their bonds, whose yield soared to 8.5% (refer to the graph) and put in doubt Haya’s stock market debut this year, as Cinco Días published on 4 June. Now, the yield on that debt amounts to less than 7%. Haya has engaged Rothschild as its chief IPO advisor and Citi and JP Morgan as the coordinators.

But last summer, the so-called bad bank decided to suspend that operation and opt, in all cases, for smaller sales. Thus, the firm controlled by Cerberus was going to manage those assets until the end of the year. The sources consulted indicate that, after the divestment was ruled out, the negotiations between Sareb and Haya progressed at a good pace and the likelihood of the contract being extended now exceeds 90%. Barring a last-minute change of heart, the two entities will announce the extension of the agreement before 30 June 2019. Nevertheless, a spokesperson for Sareb clarified that a decision has not yet been taken. A spokesperson for Haya declined to comment on the information.

The final discussion points relate to the commission that Sareb is going to have to pay Haya. By contrast, the servicer is not going to pay any upfront payments, like it did in at the start of the current contract, for €235 million.

The other question that must be resolved in parallel to the stock market debut is that of a possible merger. Sabadell has put its asset manager, Solvia, up for sale for around €400 million, and Cerberus (Haya’s main shareholder) is the main interested party. In fact, Cerberus has already acquired 80% of Sabadell’s real estate assets with a book value of €9.1 billion. Santander and Apollo are also in the process of selling Altamira, and Haya is exploring possible business opportunities outside of Spain.

In addition to Sareb’s assets, Haya Real Estate is also likely to manage the majority of the assets that BBVA has sold to Cerberus for around €4 billion (with a book value of around €13 billion). It has also already been agreed that Haya Real Estate will manage the future flows of toxic property from BBBA. Haya will also add the so-called Ágora portfolio to its assets, comprising €650 million purchased by Cerberus from CaixaBank.

Until the amount of assets managed is increased, it already has a Bankia portfolio amounting to €5.5 billion under management, thanks to a contract signed in May, as well as portfolios from Cajamar (€5.9 billion), Liberbank (€2.9 billion) and other firms (€1 billion). Between January and June, Haya recorded revenues of €130.2 million, of which €64.9 million was converted into EBITDA. On Thursday 15 November, the firm will publish its accounts to the end of September.

Original story: Cinco Días 

Translation: Carmel Drake

Cerberus & Blackstone Compete to become Largest RE Firm in Spain

16 October 2018 – Expansión

The US funds Cerberus and Blackstone are battling it out for first place on the podium in the Spanish real estate sector. Cerberus, which has just completed the purchase of 80% of BBVA’s real estate business, has invested more than €10 billion in real estate transactions in the country over the last year. Specifically, Cerberus will now control 80% of Divarian Propiedad, the company to which BBVA has transferred its real estate business and in which the bank will retain the remaining 20%. The groups have not disclosed the price of the transaction or the value of the assets included in Divarian, although the bank did indicate at the time that its intention was to transfer assets with a gross accounting value of approximately €13 billion at an estimated price of around €4 billion.

Anida’s workforce

Divarian, which is going to be managed by Cerberus, will incorporate the specialist staff from BBVA’s former real estate platform, Anida, comprising 400 professionals, into its team.

In addition to this operation, known as Project Marina, Cerberus reached an agreement with Santander in the middle of September to purchase a portfolio of residential properties for around €1.535 billion comprising 35,700 properties, including parking spaces and storerooms. This transaction followed Project Jaipur – a portfolio of property developer loans also acquired from BBVA -; the portfolios Challenger and Coliseum, with a combined gross value of around €9.1 billion, acquired from Sabadell; and Ágora, the portfolio that Cerberus purchased from CaixaBank.

In addition to the purchase of real estate portfolios, Cerberus is the owner of: Haya Real Estate, the largest independent Spanish servicer with €40 billion in assets under management; the property developer Inmoglacier; the online real estate agency between individuals Housell; and Gescobro, the debt recovery company.

The fund, which has not specified how much it has invested since it arrived in the country, has become, together with Blackstone, one of the most active players in the purchase of doubtful debt portfolios (NPLs) and foreclosed assets (REO) with real estate collateral, and has closed more than 30 transactions in Spain over the last five years, even before the recovery of the sector.

Testa

Meanwhile, Blackstone has acquired around €20 billion in property since 2012, to which the Socimi specialising in residential rental assets, Testa, must be added, given that the US fund now controls 70% of that firm’s share capital. The fund marked a milestone last year when it purchased 51% of Banco Popular’s real estate business from Santander, with a book value of around €10.3 billion. To group together the assets, Blackstone and Santander created Project Quasar Investment, a company that includes Aliseda.

The fund is also the largest owner of hotels in Spain through HI Partners and Hispania, one of the leaders in the logistics and office ownership market in Spain.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake