Tag: agreements

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

Operación Chamartín Negotiations: First Agreements Reached

26 January 2017 – Expansión

The Town Hall of Madrid and the Ministry of Development have reached their first agreements regarding the re-development of the north of the city, which will be divided into three different areas. There will be a dedicated financial district and the residential buildings will be six-storeys tall on average.

The first advances have been made in the negotiations between the new Minister for Development, Íñigo de la Serna, the mayoress of Madrid, Manuela Carmena and her councillor for Sustainable Urban Planning, José Manuel Calvo. (…). The points agreed include the division of the area into three sections: south of Calle 30, north of Calle 30 and Chamartín station, which the Town Hall insists must be renovated.

Each one of the developments will “be approached and managed independently”, according to the agreements reached. In the southern section, most of the space will be allocated to economic activities involving tertiary services, in other words, the new financial district, which will be called the Central Business District. It will be located in the Chamartín area and its construction will have to take into account the renovation of the train station.

In the northern section, most of the space will be used for residential purposes, with the presence of “mixed economic activity” as well. The general idea is that the buildings in this area will be six-storeys tall on average (…) although there may be exceptions. (…).

What has not been agreed yet is whether the new Operación Chamartín will include the construction of the tallest skyscraper in the European Union, with 70 floors and another five towers of a similar height to those already at the top of the Castellana, per the plans presented by BBVA and the real estate company San José. (…).

A priori, it seems that the criteria put forward by the Town Hall of Madrid will prevail in terms of the reduction in the number of homes compared the number initially planned. In the version prepared by Manuela Carmena’s government, the figure decreased from 17,700 homes to 4,600. The fact that according to the agreement reached, the residential blocks will be six storeys tall on average, appears to be in line with the height of five and six-storeys proposed by the Sustainable Urban Planning Department for this area. (…)

The parties will hold their next meeting on Friday, when they plan to address “the definition of the basic criteria” for the development of the new financial district, such as the distribution of urban charges and the connection with Calle Agustín de Foxá and Avenida de San Luis. (…).

The aim of the Sustainable Urban Planning Department is to have “a project that has been agreed between all the players” ready by between March and June. Then, the planning instruments will be processed to allow construction to begin”.

Original plan

17,700 homes, of which 1,700 would be subsidised (VPO).

Five office skyscrapers, including the tallest tower in the European Union, with 70 floors.

80% of the land would be dedicated to public spaces. The remaining 20% would be reserved for residential developments, the financial district and businesses.

Carmena’s proposal

4,600 homes. The alternative proposed by Carmena’s Government proposed 1,000 VPO homes and another 3,600 private properties.

Two unique buildings. They would be located in the business district, would be 40-storeys tall and would be accompanied by another two 20-storey towers.

274,000 m2 of green space and plans to increase the surface area dedicated to public services to 254,000 m2.

Original story: Expansión (by R. Bécares and M. Belver)

Translation: Carmel Drake

Spanish Banking Sector Backs Neinor Homes

1 June 2016 – Press Release

Kutxabank, Banco Sabadell, Banco Santander, Bankinter and CaixaBank prove their confidence in Neinor Homes with combined funding of €325 million, which will be added to future commitments of loans to property developers amounting to nearly €400 million.

The transaction represents a new milestone for the sector, showing the willingness of entities to finance residential development projects in accordance with the guidelines of this new cycle: well-managed companies, a very significant shareholders’ funds, good quality assets and moderate debt levels.

On 30 May 2016, Neinor Homes signed bilateral agreements with Kutxabank, Banco Sabadell, Banco Santander, Bankinter and CaixaBank for a total amount of €325 million. These agreements form part of the strategic plan of the company, which anticipated an optimisation of its balance-sheet structure as soon as the Spanish financial institutions were prepared to support the recovery of the sector and believe in the model of business and management of Neinor Homes.

With the support of its financial partners, Neinor Homes aims to further strengthen its leadership in the new Spanish residential development sector, which means continuing with the implementation of its aggressive plan to acquire land and launch new developments.

Original story: Press Release

Edited by: Carmel Drake