Dextra Corporate Launches Residential Fund Focusing on Galicia

2 March 2018 – Eje Prime

The Barcelona-based corporate finance firm has created a fund manager, Swan Real Estate Management, whose first vehicle aims to acquire, renovate and sell on up to ten residential buildings in Galicia.

Dextra Corporate is throwing itself into the housing market. The Barcelona-based finance firm, led by former Deloitte employees Iker Zabalza and Stephan Koen, has created Swan Real Estate Management, a fund manager to invest in the Spanish residential market. Its first investment vehicle, Seagull Real Estate, will get going shortly with €14 million to spend and will travel exclusively to Galicia where it plans to buy up to ten buildings. For this company, Dextra has been supported by Andbank: 90% of the investment is going to proceed from Galician customers of the Andorran bank.

The aim of the project, in which the manager AKM, led by Xavier González, is also involved, is to look for assets in second-tier cities in Spain, which are still in the recovery phase. The plan is to renovate the buildings and sell them on on a home by home basis.

Seagull will focus mainly on properties in central areas of A Coruña and Vigo, which may be of interest to customers with a medium-high purchasing power, according to Expansión. The manager’s forecast is to purchase between five and ten residential buildings.

Although it is going to start off with €14.4 million, Swan hopes to increase the investment figure of its Galician vehicle to €25 million. With the addition of bank financing, the spending capacity of the fund could rise to €50 million.

For Project Seagull, Dextra has teamed up with local businessman Manuel Corbal, who has extensive experience in the Galician real estate sector, in the areas of construction and promotion.

Original story: Eje Prime

Translation: Carmel Drake

Andbank Launches Fund To Invest In Galician Real Estate

13 November 2017 – La Voz de Galicia

(…) The real estate market in Spain is back with a vengeance, above all in the central areas of large cities where, due to a lack of (past) activity in the property development sector, there is now insufficient supply to cover the growing demand (…).

And this business opportunity has not passed unnoticed for the financial sector, which, in an environment of low-interest rates and minimal profitability on the most conservative products, has launched a series of investment vehicle. Their objective is to buy buildings in prime areas, renovate them and then sell the resulting homes on to individuals, whereby generating high returns for investors.

This model, which was first tested, successfully, in Madrid and Barcelona, is now being introduced in Galicia, with the help of Andbank. The entity, specialising in private banking, has launched a real estate investment vehicle, Seagull Real Estate, which is going to acquire residential buildings in the central areas of A Coruña and Vigo, undertake comprehensive renovation work and then sell the homes (individually, in order to maximise prices).

According to Rubén Casales (pictured above), Director of Andbank’s branch in A Coruña, this is the first product that focuses exclusively on the Galician market, and it is being born with the objective of securing investment of €20 million (minimum of €250,000), which it will use to perform between five and ten operations, given that in order to minimise risk, external financing should not exceed 50%.

The appeal of this product for savers is an expected return of 14%, well above the yields they can expect to achieve on fixed income and other conservative products and, which Casales justifies due to the illiquidity of the fund, which obliges investors to maintain their investment for at least five years.

For the execution of this project, Andback has teamed up with two local partners: Ünique Singular Properties and Desarrolla. The first is the only Galician real estate agency specialising in prime residential assets and is the market leader in unique properties; it will help identify investment opportunities and will be responsible for selling the homes once they have been renovated. The second is a construction company known for its renovation work and with a great deal of activity in the autonomous region, which will take care of giving the properties a facelift.

More than 50 properties

According to Andbank, there are lots of investment opportunities: “We have identified some very interesting buildings due to their architectural uniqueness”, says Luis Touriño, territorial director of the entity in Galicia. (…). The bank currently has a team of eight people analysing more than fifty properties, of which between eight and ten will be selected.

Casales explains that the response from investors is proving positive, and so they hope to be able to launch the vehicle before the end of the year (…).

The launch of this fund is another sign of the investor interest in the Galician real estate sector, which, although somewhat lagging behind other parts of Spain, has resumed its upwards path. This news follows the announcement by a group of Galician real estate companies linked to the trade association Fegein that they are going to create a Socimi, which will manage assets in Vigo, Santiago and the north of Lugo, and which seeks to trade on the MAB.

Original story: La Voz de Galicia (by Gabriel Lemos)

Translation: Carmel Drake

Restaura’s Former Directors Launch A €60M Fund

16 August 2016 – Expansión

AKM is transforming itself into an investment entity manager, regulated by the CNMV, and is finalising the September launch of a fund amounting to €60 million, which aims to buy and renovate residential buildings in Madrid and Barcelona.

The firm is led by Xavier González, who was executive Vice President of Restaura. One of its other founding partners is Fernando Conde Arriera, who was Commercial and Marketing Director of the same real estate company. The executive management team of the new management company also includes Lorenzo Abascal and Stephen Koen, both former Directors of Andosins, a holding company owned by the Cerqueda family, which in turn owns the Andorran bank Andbank, together with the Ribas family.

Since 2013, AKM has launched three funds with a combined capital value of almost €63 million and its portfolio contains a dozen real estate assets in Madrid and Barcelona. In the capital of Spain, the firm owns, amongst others, residential buildings located on Calles Francisco Silvela 65 and Menéndez Pelayo 41, as well as a complex of 14 properties on Arganzuela-Santa María de la Cabeza, containing 214 homes, 31 premises and 224 parking spaces.

Original story: Expansión (by J. Orihuel)

Translation: Carmel Drake

Investing In RE Companies: Analysts Share Their Top Picks

11 July 2016 – Expansión

The constraints that several British real estate funds are facing following Brexit has placed the focus on the RE sector once again. “With globalised markets, an event in one country has an impact around the world. In the short term, it is likely that property companies will decline in the United Kingdom, as well as in other European markets”, says Mar Barrero, from Profim, but she is certain that the chances of a contagion, affecting companies and real estate funds in Spain, are minimal.

Indeed, the effects of the result of the British referendum on the real estate market may also be positive. At least, that is according to Pablo García, from Carax Alphavalue. “If companies that are currently headquartered in London change their centres of operation, there will be activity in the sector to mobilise offices in Europe. In this context, Paris, Barcelona and Madrid would be well positioned”, he assured and, for this reason, he is positive about the sector.

Barrero justifies her optimism by the “purge that has taken place in the last 10 years, which has led to a significant cut in property prices”. “In Spain, we are in a different phase of the real estate cycle”, says Rubén de la Torre, from Andbank.

Merlin Properties: The industry giant on the stock market and one of the shares with the highest percentage of buy recommendations, according to the consensus of Bloomberg analysts, with support from 85% of them. After overcoming the risk of a possible interventionalist government, De la Torre points to its size as one of Merlin’s positive features. “Its listing on the Ibex gives it visibility and its merger with Metrovacesa will allow it to enter the orbit of many funds” says the expert. In addition, it has managed to diversify its profile through its latest acquisitions.

And as if that weren’t enough, its shares are trading at attractive prices, given that, according to the analyst, they are being traded at a discount of almost 20% with respect to their net book value. The Socimi has potential, according to the consensus, of 21% following a YoY decrease of 18.5%.

Colonial: This is Pablo García’s favourite security due to the quality of its assets and its exposure to the French market, which allows it to diversify. In any case, he believes that the growth of the company will come from its Spanish assets. According to other experts, the company’s decision to start paying dividends again (at the start of July, it paid its first dividend for ten years) is another of Colonial’s attractive features. 66% of the analysts advise buying this security, which they say has potential to increase by 19%. The share price has fallen by 1% so far this year.

Hispania: De la Torre says he also likes this share, “which is very linked to the hotel sector” (…). The company has recently closed a capital increase amounting to €230 million to finance new investments. 57% of the analysts advise buying this share, which has an upside potential of 18%. Its price has fallen by 9% so far this year.

Axiare: The only Socimi that is unlikely to increase its capital this year, given that its net debt is almost non-existent. (…). 63% of the analysts advise buying this security, which has upwards potential of 13%. This year, the share has fallen by 9.8%.

Lar España: A share that is very dependent on the economic cycle due to its significant exposure to the shopping centre segment. (…). 80% of Bloomberg’s analysts advise buying this share, with an upside potential of 38%. This year its price has decreased by 23%.

Other real estate companies: the stock market is also home to other real estate companies, which, due to their small size or limited monitoring by analysts, are at the mercy of speculative movements. Shares in Inmobiliaria del Sur, Quabit, Renta Corporación and Urbas tend to be highly volatile.

Original story: Expansión (by R. Martínez)

Translation: Carmel Drake

Sabadell To Release 800 New Homes Onto The Market

27 July 2015 – Expansión

The improved outlook regarding the performance of the Spanish economy is reflected in the real estate market, where prices are stabilising and even increasing in certain areas of Madrid and Barcelona. And the stocks of newly constructed homes are drying up in some towns, due to a lack of new developments in recent years.

Against this background, cranes are returning to the domestic landscape and banks are taking on a new role in the market for real estate development, as they aim to generate returns from the land and half-finished construction projects that they foreclosed in exchange for debt payments. And Sabadell is playing a very active role. It will release 800 homes onto the market over the coming months.

The bank led by Josep Oliu is currently developing eleven of its own real estate urbanisations, most of which are located in Barcelona, Andalucía and Levante, but also in País Vasco and Asturias. The construction work will be completed during the remainder of 2015 and 2016, and will culminate in the release of more than 400 homes – flats and houses – onto the market, over several stages, with some of the properties already being sold.

Beside these developments, which spread across the country and whose degree of completion ranges between 15% and 100%, three other new developments will be started after the summer in Madrid – in the towns of Colmenar Viejo and Alcalá de Henares – and Levante. Once finished, these urbanisations will contain approximately 400 homes.

During the first half of 2015, 46% of Sabadell’s property sales were made in cash, whilst 37% were financed by the bank and the remaining 17% were funded using loans from other entities. In fact, the Catalan bank is offering buyers both variable rate and fixed rate mortgages – at Euribor plus 1.6% and 2.9%, respectively.

The entity’s real estate and mortgage offer is in line with those of other banks such as Santander and BBVA, which are developing 600 different urbanisations at the moment, as well as with that of Sareb, which will release 1,200 homes onto the market during the remainder of 2015, in some of the 30 developments that it completed last year and the 42 that it currently has on-going.

Signs of recovery

After an intense and long-lasting period adjustment, both in terms of activity and prices following the burst of the real estate bubble, the sector is now showing clear signs of recovery, to the extent that foreign funds have also entered the sector for the development of homes. But, is there a risk of excess supply?

Residential development is likely to grow over the next few years, says Javier López Torres, the partner responsible for the real estate sector at KPMG in Spain. And there is still room for more new builds without any risk of a new real estate bubble, says an expert from Andbank, Rocío Ledesma. And Sabadell wants to maximise the opportunities in the market through its development company Solvia.

Solvia is dedicated not only to the development of urbanisations owned by the bank, it also works for third parties. It is a servicer with assets under management amounting to €28,000 million, and it offers services ranging from the management of loan portfolios, to the development of land, as well as the management and administration of assets. In fact, Sareb awarded its first asset management contract to Solvia.

Original story: Expansión (by Alicia Crespo)

Translation: Carmel Drake