Riu Closes the Sale of Edificio España’s Commercial Space to Corpfin

1 February 2019 – Preferente.com

The 15,000 m2 of commercial space in Edificio España now has an owner. The party in question is Inbest Real Estate, the investment vehicle owned by Corpfin Capital Real Estate, which has signed a purchase agreement with the hotel chain Riu Hotels & Resorts, the owner of the property.

In a statement addressed to Preferente.com, the hotel chain explained that this agreement will enable the opening of five flagship stores for retail operators, including restaurant and textile firms, which will complement the opening of the new Hotel Riu Plaza España. “In that way, we will provide an even greater boost to the area through a tourist, leisure and commercial offer”, said the chain (…).

“We believe that having Corpfin Capital Real Estate as an ally to launch the retail space in Edificio España is the best way of getting the most out of the property”, said Luis Rui (pictured above, left), CEO of Riu Hotels & Resorts. Meanwhile, Javier Basagoiti (pictured above, right) Managing Partner of Corpfin Capital Real Estate, highlighted that their idea is “to choose the operators that best reflect the philosophy of the building, in coordination with Riu, respecting the hotel activity and configuring the premises towards the creation of flagship stores for first-rate operators” (…).

Original story: Preferente.com 

Translation: Carmel Drake

CaixaBank Repurchases 51% of Servihabitat from TPG for €176M

8 June 2018 – Expansión

The financial institution, which until now owned 49% of the real estate firm, is going to restore control of 100% of the firm four years after it sold the majority stake to TPG.

CaixaBank has announced an agreement with the fund TPG to repurchase 51% of the real estate manager Servihabitat for €176.5 million. With this operation, which will return full control over the real estate subsidiary to the financial institution, CaixaBank wants to enjoy “greater flexibility and efficiency in the management and marketing” of its real estate assets “as well as a reduction in its costs”.

The operation, which still needs to be approved by the competition authorities, will have a negative impact of around 15 basis points on CaixaBank’s first level capital ratio (CET1 fully loaded) and of around €200 million on the bank’s income statement this year.

Nevertheless, the entity chaired by Jordi Gual expects the impact to be positive over the next few years, amounting to around €45 million per year.

The financial institution sold 51% of Servihabitat to TPG in 2013, in an operation that valued the real estate subsidiary at €370 million and which generated a gross gain of €255 million for CaixaBank, which retained control of the remaining 49%.

The agreement between CaixaBank and TPG included a clause whereby Servihabitat would manage La Caixa’s real estate assets for a decade. Less than five years after that agreement was announced, CaixaBank has decided to recover 100% of the share capital of its real estate servicer.

In January, Iheb Nafaa was appointed as the CEO of Servihabitat to replace Julián Cabanillas, who had been linked to the firm for two decades, and who had served as the most senior executive for the last twelve years.

Nafaa is an Engineer in Statistics, Econometrics and Finance from the École Nationale de la Statistique et de l’Administration Économique in París (France) and has extensive experience as a director of companies such as BNP Paribas, GE Capital and Gescobro.

Original story: Expansión (by J. Díaz)

Translation: Carmel Drake

Vivenio Finalises Purchase of 5 Assets in Madrid for €130M

2 March 2018 – Eje Prime

Renta is pampering the Socimi that it owns jointly with APG. The Socimi Vivenio currently has committed investments worth €130 million in five residential assets in Madrid and is expecting to increase its investments to €250 million in the short term, according to explanations provided by sources at the company. Its objective for the next five years is to reach an investment volume of €1.5 billion.

Although, for the time being, the company does not want to disclose the specific location of its latest assets, they may be located on the outskirts of the Spanish capital, which is where all of the properties that Renta’s Socimi has purchased in recent months are situated.

Last week, Vivenio announced an investment of €13.5 million to purchase more than 100 residential homes in a development by the Suquía Group. The Catalan manager reached an agreement with the Guizpuzcoan property developer, which has been immersed in bankruptcy proceedings since 2015 (…).

Those purchases are in addition to the acquisition plan that Vivenio has underway. The Socimi plans to invest in assets worth €1.5 billion in Madrid and Barcelona, primarily, with a minimum investment ticket per operation of €10 million.

Originally known as Rembrandt, Vivenio has already invested almost €100 million in the purchase of 1,152 homes, exclusively in Madrid and the surrounding area. For the time being, the company, which also plans to undertake operations in Barcelona, has not entered the Catalan capital.

Before the end of 2017, Vivenio purchased three residential buildings in the Madrilenian towns of Alcorcón and Campo Real, comprising 166 apartments in total. The assets acquired are distributed across one building in Alcorcón, comprising 139 homes, and two others in Campo Real, with 27 homes, as well as 173 parking spaces and 141 storerooms.

In addition, Renta Corporación and APG are going to debut their Socimi on the stock market in 2019. The company has already made itself known in the real estate market by hiring Borja Lamana, formerly of Santander and Azora, who it appointed as the Head of Asset Management in January.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Cerberus & Lindorff Compete for Bankia-BMN’s RE Business

14 February 2018 – Real Estate Press

Bankia has started talks with Haya Real Estate (Cerberus) and Aktua (Lindorff) to award the management of all of the real estate assets that it has incorporated into its portfolio following its merger with BMN (…), according to sources in the know. Bankia has been working with Haya since 2013 and BMN with Aktua, the former real estate arm of Banesto, since 2014.

The same financial sources indicate that Bankia is now in a stronger position to improve the conditions of its contract in light of the good times being enjoyed in the real estate sector. Although the technological integration of the two entities will not take place until 19 March, the authorities already approved the merger at the end of December.

In 2013, the entity chaired by José Ignacio Goirigolzarri awarded the business to manage and sell around €12.2 billion gross in real estate assets to Cerberus. That agreement comes to an end at the beginning of 2023. Haya Real Estate, the Spanish subsidiary of the US fund Cerberus, has become a major player in the real estate market in recent years. It manages debt and assets worth almost €40 billion and has engaged Rothschild to handle its upcoming stock market debut later this year. It also holds agreements with Sareb, BBVA, Cajamar and Liberbank.

In its failed attempt to go public, BMN got rid of its property manager Inmare in 2014 to focus on the traditional business. It then signed a 10-year agreement with Aktua.

Subsequently, the Norwegian fund Lindorff purchased Aktua in 2016. That company also manages the real estate assets of Ibercaja, amongst other entities.

Cerberus and Lindorff are re-enacting the battle fought last summer. Then, the funds were bidding to acquire the real estate subsidiary of Liberbank, Mihabitans. In the end, the US won those negotiations and was awarded the contract to manage Liberbank’s foreclosed assets for the next seven years.

Original story: Real Estate Press

Translation: Carmel Drake

AC to Open an Autograph Hotel in Drago’s Property in Sevilla

14 December 2017 – Expansión

Drago has reached an agreement with AC by Marriott to open an Autograph branded hotel in the former headquarters of Banco de Andalucía in Sevilla, according to market sources.

The hotel, which will have 95 rooms, will be located on Avenida de la Constitución in Sevilla, just 200 m from the Giralda. Specifically, the hotel will occupy six of the eight floors in the building that Drago acquired in a joint venture with a private investor in 2016.

Moreover, the building will house a retail space on the ground floor, which will occupy a gross leasable area (GLA) of approximately 1,800 m2. In total, the building has a surface area of 8,300 m2 and it is being marketing by CBRE Sevilla.

The firm plans to spend €35 million, including the acquisition price, on this project, which will result in the creation of at least 56 direct jobs.

The hotel will be the eighth in Spain to be managed under the brand. Currently, there are four Autograph hotels in Madrid – Santo Mauro, Palacio del Retiro, Casino and Circulo Gran Vía–, as well as the Cotton House (Barcelona), the Palacio de Santa Paula (Granada), the Palacio del Carmen (Santiago de Compostela) and the AC Bacqueira Ski Resort (Bacqueira Beret).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Barceló Offers €2.48bn For NH & Sets 3-Month Negotiation Period

21 November 2017 – Expansión

To create a hotel colossus with more than 600 hotels and 109,000 rooms in Europe, Latin America and the USA, and one of the largest tourism companies in Spain. With this objective in mind, the Barceló group has initiated contact with the NH Hotel Group to propose one of the largest hotel mega-operations in recent years in Spain.

Barceló is offering a swap equation that involves valuing each NH share at €7.08. In other words, it is willing to pay €2.48 billion for the company in total. That valuation represents a premium of 27% over the group’s average share price during the three months leading up to 30 October, of €5.56. Moreover, that premium rises to 41% if we consider the company’s closing price last Friday of €5.

Yesterday at 12:30, Spain’s National Securities and Exchanges Commission (CNMV) lifted the suspension on trading that had been weighing down on NH’s shares, but the avalanche of purchase orders meant that it took another 45 minutes for the shares to actually start trading again. By the close of business, NH’s list price had soared by 11.8%, to €5.59. In this way, its market capitalisation rose from €1,751 million on Friday to exceed €1,950 million. So far this year, the hotel company has seen its share price rise by more than 46%, however, it is still well below the €14.70 per share that it reached in 2007, at the height of its stock market boom.

Barceló submitted to the CNMV a letter sent by Simón Pedro Barceló, Co-President of Group Barceló, to the Chairman of the Board of Directors of NH, Alfredo Fernández Agras, in which he proposes considering the merger of the two companies. According to the initial proposal, the Mallorca-based firm would end up owning 60% of the merged group. Barceló explains that his interest in this merger stems from “the great strategic sense and the exceptional potential for the creation of value for the shareholders of both companies”.

The letter also opens the door for the merged group’s corporate headquarters to be located in Madrid and it proposes that the maximum governing body of the merged company, in which Grupo Barceló would hold a majority stake, would have sufficient members to ensure that the existing shareholders of NH are represented.

Barceló proposes a merger, in other words, “the integration of Grupo Barceló and NH through the delivery of new shares issued by NH to Grupo Barceló, keeping the company listed”. “Our intention is to integrate all of the assets and liabilities of Grupo Barceló, including our Hotel and Travel divisions, which we believe could contribute value to the combined group. Nevertheless, we are willing to consider different alternatives regarding the perimeter of the assets and liabilities in order to facilitate the success of the transaction”, said Barceló.

Three months to reach an agreement

The offer, which is non-binding and conditional upon a due diligence (detailed analysis) provides for a period of “up to 3 months for the completion of this work, to reach an agreement between the two parties and submit a transaction to our respective governing bodies for definitive approval”. In fact, Barceló said that he is willing to consider alternatives with respect to the perimeter of the operation to facilitate it.

If the proposal ends up going ahead, it would result in the creation of the largest Spanish hotel group, ahead of Meliá, which at the end of 2016, had 375 hotels and 96,369 rooms. It would become one of the largest players in the sector in Europe, behind only the British firm InterContintental and the French company Accor.

Barceló has engaged Santander as financial advisor for the operation and has not hired any legal advisor.

NH views the offer with suspicion

From the get-go, the offer has been viewed with suspicion by NH, which indicated to the CNMV that it had received “an unsolicited, preliminary and non-binding expression of interest” from Barceló for the merger of the two businesses.

According to this offer, Barceló would have “a majority on the administrative board”. Moreover, NH reminded the regulator that its Board of Directors recently approved a 3-year strategic plan “involving an independent project for significant growth, which is still valid today”.

NH’s largest shareholder is the Chinese giant HNA, which holds a 29.5% stake, but it is not represented on the Board of Directors following its expulsion last year due to a conflict of interest. After HNA is the British fund Oceanwood, with a 12% stake; and Hesperia, the chain chaired by José Antonio Castro, with a 9% stake.

Analysts think the merger makes “strategic sense” 

Analysts at Renta 4 and Bankinter agree with Barceló that the operation makes “strategic sense”.

Original story: Expansión (by Rebeca Arroyo and M. L. Verbo)

Translation: Carmel Drake

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

Cerberus Cools Off Negotiations With BBVA Due To Political Climate

10 October 2017 – Eje Prime

The negotiations between Cerberus and BBVA are being cooled down by the political climate in Spain at the moment. The banking entity acknowledged a couple of weeks ago that it was holding negotiations with Cerberus Capital regarding the sale of its real estate business in Spain. Now, according to sources close to the process, the political instability could lead to a reduction in the price of that portfolio.

Conversations between the two parties were already very advanced; they just needed to agree the price, but then the events of 1 October in Cataluña threw the cat amongst the pigeons on the markets and unleashed an instability that could end up dictating the future of the operation, according to El Confidencial.

Sources at BBVA have declined to comment on how the Catalan market may affect the closure of the sale of the entity’s real estate subsidiary, but observers in the sector speculate that it could trigger a reduction in BBVA’s price expectations. Nevertheless, they don’t rule out that the entity will wait for the waters to temper before resuming the process.

The bank will need an offer of, at least, €8,760 million to be able to transfer its entire portfolio to Cerberus without recording any losses. Nevertheless, the entity indicated that it could not say whether the negotiations will end in an agreement or not, or what the terms and conditions of such an agreement might be.

Original story: Eje Prime

Translation: Carmel Drake

Savills Completes Purchase Of Aguirre Newman For €67M

31 July 2017 – El Confidencial

Savills has confirmed the news revealed on Friday morning by El Confidencial that it has formally agreed to purchase Aguirre Newman. This operation that puts an end to the sales process that was opened by the Spanish real estate company in February.

As a result of the acquisition, the British company has multiplied its size in Spain seven-fold, increasing its workforce from 70 people to almost 500 professionals. Moreover, it has completed the second most important international purchase in its history following its acquisition of Studley in the USA in 2014.

The transaction price has been agreed at €67 million, which will be paid in instalments over five years. The transaction is expected to be completed on 30 November, once all of the standard regulatory conditions have been fulfilled.

Although the exact terms of the agreement are unknown, the selection of Savills as the winning candidate has been based both on that firm’s economic proposal, as well as its commitment to continue to employ the workforce and to respect the roles of Aguirre Newman’s senior management.

In fact, the resulting company will initially operate in Spain under the brand Savills Aguirre Newman. Santiago Aguirre will be the CEO, whilst Stephen Newman and Rafael Merry del Val will occupy the two executive co-vice-president roles.

The senior management team will also include José Navarro, Javier Echeverría, Jaime Pascual-Sanchiz and Ángel Serrano; whilst the office in Barcelona will be led by Anna Gener and Arturo Díaz, as the CEO and President, respectively.

In addition to Savills, other firms that expressed interest in this operation included Colliers and Cushman & Wakefield. Moreover, the latter managed to hold very advanced conversations with a view to closing an agreement, but in the end, it never materialised, which left the path open for Savills to exclusively negotiate its purchase (…).

With its integration into Savills, Aguirre Newman will achieve its long-time goal of forming part of a large international network, a leap in size that it considers critical in the context of the growing weight of multinationals in the real estate market and its desire to work within a network that has operations around the world.

Meanwhile, Savills has managed to grow to a size that corresponds to its status as one of the large global real estate consultants, listed on the London Stock Exchange, with a market capitalisation of GBP 1,300 million (€1,450 million). By contrast, in Spain until now, it has operated as a specialist boutique. One of its most recent major achievements was the sale of Torre Agbar to Merlin, in a deal that was designed and executed by Savills.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Vitruvio Buys Hotel In Madrid For €12M & Approves CPI Merger

9 June 2017 – Eje Prime

The Socimi Vitruvio is adding new assets to its portfolio in the midst of its own corporate changes. The company has just acquired a hotel in Madrid, for which it has paid €12 million. This acquisition is going ahead after the General Shareholders’ Meeting voted on Tuesday to approve a €25 million capital increase and the company’s merger with Consulnor Patrimonio Inmobiliario (CPI), a vehicle managed by Banca March.

On 25 May, Vitruvio signed an “exclusive and binding” agreement to acquire a building dedicated to hotel use in Madrid for between €11 million and €12 million. Although the company did not want to provide more details about the operation, it has explained that the estimated annual rent will be more than €650,000, “which represents a net yield of more than 5.55%”. (…).

“This (capital) increase mechanism is essential for Vitruvio’s philosophy”, say sources at the company – “All of the Socimi’s capital increases are undertaken once investment opportunities have been identified, never before”. “It is a mechanism to prevent the pressure to invest money leading to poor purchase operations. Moreover, it also serves to avoid the dividends of the existing shareholders from being diluted if they decide not to invest in the new acquisitions”, they add.

Another point approved at the General Shareholders’ Meeting was the company’s merger with Consulnor Patrimonio Inmobiliario. “It was approved with 81% of the votes going in favour of the resolution and none against”, explain the group’s sources; “As such Vitruvio has received the green light to absorb CPI as part of its growth strategy”.

In addition, Vitruvio’s Board will be expanded to make way for the participation of four representatives of the Basque group, and other high-profile shareholders will participate in Vitruvio’s advisory committee, although for the time being, the company has not revealed any details of the names of the directors that will be incorporated into the Group’s most senior management body.

The resultant firm, which will retain the name Vitruvio, will manage a portfolio of assets comprising office buildings, homes and retail premises located in Madrid, País Vasco and Barcelona. By virtue of the operation, Vitruvio will absorb Consulnor Patrimonio Inmobiliario through a non-monetary capital increase.

The merger will allow the company to double in size, given that at the end of June 2016, its portfolio was worth €51 million, a figure that will increase to around €90 million following the integration of Consulnor Patrimonio Inmobiliario. Moreover, following the capital increase, which will be undertaken within the next few months, the resultant company will own a portfolio of assets worth €133 million. (…).

Original story: Eje Prime

Translation: Carmel Drake