Lennar’s Al Breck Continues Disinvestment Strategy

28 July 2019 – Richard D. K. Turner

Al Breck, a socimi owned by the Lennar Corporation, has sold 11.6 million euros of homes, storage rooms and parking spaces in the last two months. The sales led to profits of 2.9 million euros.

Between June and October of last year, the company had already sold 41 assets, pocketing 25.7 million euros (and profits of €10.5 million). The socimi took over the assets, all in central Madrid, when it acquired Segurfondo Investion in 2014.

Original Story: Eje Prime

Lennar Corporation Sells 30 Homes for €14M

22 January 2019 – Eje Prime

Lennar Corporation is continuing to squeeze its Socimi. Since October, Al Breck has sold thirty assets from its portfolio for €14 million. The operations have generated an accounting profit of approximately €5.8 million, according to a statement filed yesterday with the Alternative Investment Market (MAB).

This series of sales follows that of another 41 assets that the Socimi divested between June and October, whose volume amounted to €26 million and which generated a profit of €10.5 million.

The bulk of the divestments have been homes, together with storerooms and parking spaces. The plan forms part of the MAB entry strategy, which the company established when it made its debut. Then, the real estate firm owned around 639 rental homes, all located in the centre of Madrid. The Socimi formed its asset portfolio through a purchase operation from Segurfondo Investion in December 2014.

Original story: Eje Prime 

Translation: Carmel Drake

Lennar’s Socimi Al Breck Sells 14 More Assets for €11M

19 April 2018 – Eje Prime

Whilst last year was marked by investments on the part of the Socimis, this year is being marked by divestments. Lennar Corporation is divesting in Spain again and has closed fourteen operations to sell properties through one of its Spanish Socimis, Al Breck, for €11 million, according to a statement from the company.

The company has carried out the transactions through the company Rialto Capital Management, an investment vehicle headquartered in Luxembourg, which Lennar uses to carry out its real estate operations in Europe and the only one that has a stable structure in Spain.

The company divested the properties between 16 February and 12 April, generating a gain for the company of €5 million. This divestment follows another carried out in January when it sold four assets for €3.5 million.

Lennar Corporation made its debut on the Alternative Investment Market (MAB) with Al Breck at the end of November 2016 (although it commenced activity in Spain in December 2014), with a stock of around 639 rental homes located in the centre of Madrid. The Socimi created its asset portfolio through the purchase of a portfolio from Segurfondo Investion in December 2014.

Specifically, the Socimi’s assets are located in the centre of the Spanish capital (in the Centro, Salamanca, Chamberí and Chueca districts), as well as in La Moraleja and in towns close to Alcobendas and Torrejón de Ardoz. The portfolio also contains retail premises and offices. According to the IPO prospectus, the market value of the asset portfolio at the time of its stock market debut was €110.52 million.

The Socimi made its stock market debut with a business plan that involved generating value from its portfolio, in other words, selling all of its homes within a 5-year period, ending in December 2020. The company has now initiated this divestment process with the sale of these first assets.

Al Breck’s strategy

Specifically, the company’s plan involves investing in improvements in homes “to increase their yields and increase their occupancy rates to stable levels, and then implementing an aggressive rental strategy that includes, where necessary, reducing the rents and making concessions to tenants to improve the cash flow conditions”.

Subsequently, according to the group’s IPO prospectus, “after improving the occupancy rate, the objective is to keep it stable and start to progressively increase the rents in accordance with the improvements made to the properties and market prices”.

Finally, the Socimi plans “to optimise the value of its portfolio by selling assets individually or in batches, when the demand and price so dictate, and once the minimum ownership term of three years has passed in each case”, according to the firm in its brochure.

In addition, the company launched a second Socimi, Ceres Real Estate Socimi, at the end of last year. Although for the time being, that entity’s activity has been very limited (it does not hold any assets in its portfolio), the sole administrator of the company is Rialto Capital.

This new Socimi is, in turn, the heir of Clearfield Invest, a firm constituted just over two months ago and whose administrators form part of the TMF Group’s team in Spain, a company specialising in the provision of services for all kinds of companies.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Lennar’s Socimi Al Breck Sells its first 4 Assets for €3.5M

5 January 2018 – Eje Prime

One of the largest real estate companies in the United States of America is doing business in Spain. Lennar Corporation has sold four properties through one of its Spanish Socimis, Al Breck, for €3.49 million, according to a statement issued by the company. The firm has carried out the transaction through the company Rialto Capital Management, an investment vehicle, headquartered in Luxembourg that Lennar uses to carry out real estate operations in Europe and the only one that has a stable structure in Spain.

The company disposed of the properties in December, whereby generating a profit of €1.79 million. The firm, which has a loan linked to the assets, will have to assume a financial cost of approximately €1.2 million in this regard.

Lennar Corporation debuted on the Alternative Investment Market (MAB) with Al Breck at the end of November 2016 (although it began its activity in Spain in December 2014), with a stock of almost 639 rental homes located in the centre of Madrid. The Socimi formed its asset portfolio by purchasing a batch of properties from Segurfondo Inversión in December 2014.

Specifically, the Socimi’s assets are located throughout the centre of the Spanish capital (in the following districts: Centro, Salamanca, Chamberí and Chueca), as well as in La Moreleja and areas close to Alcobendas and Torrejón de Ardoz. It also owns retail premises and offices. According to its IPO brochure, the market value of its asset portfolio amounted to €110.52 million (in November 2016).

The Socimi made its stock market debut with a business plan that seeks to generate value from its portfolio, in other words, by selling all of its homes within a five-year period, which ends in December 2020. The company has now started this divestment process with the sale of these four assets.

Al Breck’s strategy

Specifically, the company’s business plan involves investing in improvements to its homes, “to increase returns and improve their occupancy rates to stable levels, implementing an aggressive rental strategy that includes, where necessary, decreasing rents and making concessions to tenants to improve cash flow conditions”.

Subsequently, according to the group’s IPO brochure, “having improved the occupancy rates, the aim is to keep them stable and initiate a progressive increase in rental prices, to reflect the improvements made to the properties and market rates”.

Finally, the Socimi plans “to optimise the value of the portfolio, selling assets either individually or in batches, when demand and prices so favour it and having completed the minimum ownership period of three years”, according to details provided in the brochure.

At the end of last year, the company also launched a second Socimi, Ceres Real Estate Socimi. Although for the time being, the activity of that entity is very limited (it does not have any assets in its portfolio), the sole administrator of the company is Rialto Capital (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Al Breck’s Socimi Debuts On The MAB With 300 Rental Homes

30 November 2016 – Cuatro.com

The Socimi RREF II Al Breck will debut on the MAB today (Wednesday 30 November) at a price of €5.40 per share.

The fund Al Breck will debut its new Socimi on the Alternative Investment Market (MAB) today, Wednesday 30 November. The Socimi was constituted with a stock of around 300 rental homes, located in the centre of Madrid. The fund acquired the properties from the Spanish fund Segurfondo Investion in December 2014.

The firm, known as RREF II Al Breck Socimi, will debut on the stock market at a price of €5.40 per share, which represents a company valuation of €28.8 million, according to the BME.

Specifically, the new Socimi owns a stock of 293 homes located in the centre of Madrid (in the following neighbourhoods: Centro, Salamanca, Chamberí and Chueca), as well as in La Moraleja (Alcobendas) and in towns close to Alcobendas and Torrejón de Ardoz. It also owns twelve retail premises and one office.

According to the prospectus for the IPO, the market value of this portfolio of assets, calculated by an independent firm, amounts to €110.52 million.

On the other side, the company’s debt amounts to €70.03 million, and comprises a participative loan granted by the parent fund, i.e. a liability equivalent to 63% of the value of the portfolio. In addition, all of the homes are mortgaged in favour of Banco de Sabadell, the entity that financed their acquisition.

The Socimi will debut on the stock market with a business plan that involves generating value from its portfolio, in other words, forecasts selling all of the homes within a five-year period, which will end in December 2020.

Aggressive strategy

Specifically, the plan involves investing in improvements in the homes “to increase returns and improve occupancy rates to stable levels, implementing an aggressive rental strategy that includes, where necessary, lowering rents and making concessions to tenants to improve their cash flows”.

Subsequently, “once the occupancy rates have increased, we will ensure they remain stable and start to progressively increase rental income, in accordance with the improvements made at the properties and market prices”.

Finally, the Socimi expects “to optimise the value of the portfolio by selling the assets either individually or in batches, when demand and price make such a decision worthwhile and only after the minimum holding period of three years (applicable to all Socimis) has been exceeded”, according to the prospectus.

Original story: Cuatro.com

Translation: Carmel Drake