doValue Finalises Acquisition of 85% of Altamira for €360MM

28 June 2019

doValue, the Italian NPL specialist, acquired 85% of Altamira Asset Management from firms controlled by Apollo Global Management, Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority. The Italian firm paid 360 million euros.

The operation had been originally announced in December. doValue finalised the acquisition this month after Banco Santander decided not to exercise its tag-along rights, maintaining its 15% stake. DoValue had offered to acquire 100% of the firm.

After the acquisition, DoValue will have €130 billion in assets under management.

Original Story: EjePrime

El Corte Inglés Closes Los Arcos & Bahía Sur Shopping Centres and Sells Them to Castellana Properties

27 May 2019 – Cinco Días

El Corte Inglés has reached an agreement with Castellana Properties to sell two shopping centres in Andalucía, specifically Los Arcos (11,000 m2) in Sevilla and Bahía Sur (12,000 m2) in Cádiz, for €36.8 million.

The deal will become effective on 30 September, on which date both the El Corte Inglés store in Bahía Sur and the Hipercor in Los Arcos will be closed. The department store group will use the funds to reduce its debt, which amounted to €3.7 billion at the end of the first half of 2018.

The operation does not form part of Project Green, the portfolio containing 95 non-strategic real estate assets that ECI has entrusted to PwC, and whose sale is still on-going. According to market sources, the only bid received so far for the entire portfolio has come from the US fund Apollo.

Meanwhile, the Socimi Castellana Properties, which is listed on the Alternative Investment Market (MAB), is controlled by the South African group Vukile, and has 17 assets in its portfolio including shopping centres, retail parks and offices spanning a combined leasable surface area of 317,106 m2, worth €916 million.

Original story: Cinco Días (by Alfonso Simón Ruiz & Javier García Ropero)

Translation/Summary: Carmel Drake

Apollo Submits an Offer for El Corte Inglés’s Entire Real Estate Portfolio

23 May 2019 – Eje Prime

According to financial sources, in April, the fund Apollo Global Management submitted a bid for the whole real estate portfolio that El Corte Inglés has had on the market since the beginning of the year. However, the offer did not convince the management team of the department stores.

Since then, the ECI group has opened up the possibility of allowing interested parties to bid for part of the portfolio so as to maximise the value of the properties. However, the risk with that option is that some properties will end up being left unsold.

With the deadline for bids closing today, nothing is being ruled out. In fact, Apollo could still win if it was willing to increase its offer.

The portfolio contains 95 assets and includes shopping centres, offices and other types of assets such as parking lots, land and homes.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

S&P Encourages Spain’s Banks to Divest More Property & NPLs

18 April 2019 – Ya Encontré

Spain’s banks got rid of €90 billion in foreclosed assets and doubtful loans last year, almost doubling the transaction volume recorded in 2017 (€52 billion) and setting a new annual record. But they still have a lot of homes left to sell and Standard&Poors is encouraging them to divest more of those properties, with a view to restoring their pre-crisis risk levels of 4% within two years.

According to the ratings agency, the banks still hold properties worth €80 billion, representing one of the highest stocks in Europe and accounting for 7% of the balance sheets of the domestic financial sector. In this context, S&P considers that the banks still need to get rid of another €30 billion in assets, at least, if they are to properly clean up their accounts.

The active buyside players in the market include many overseas investors and funds, such as Lone Star, TPG, Apollo, Blackstone, Bain Capital and Cerberus, which have played an important role in reducing the stock of major financial institutions, such as Santander, BBVA, CaixaBank and Banco Sabadell.

S&P is not alone in its stance. Both the European Central Bank (ECB) and the International Monetary Fund (IMF) are also urging Spain’s banks to divest the last of their property portfolios as quickly as possible to ensure financial stability ahead of the next recession.

Original story: Ya Encontré

Translation/Summary: Carmel Drake

Cerberus & Oaktree in the Final Round to Buy ‘Solvia Desarrollos Inmobiliarios’

5 April 2019 – Expansión

Banco Sabadell is on the home stretch for the sale of 100% of its property developer, Solvia Desarrollos Inmobiliarios (SDIn). The funds Cerberus, through its property developer Inmoglacier, and Oaktree have made it through to the final round of the operation, which could be closed within the next few days or weeks.

The consultancy firm Savills Aguirre Newman has estimated that SDIn’s assets are worth more than €1.3 billion and the entity chaired by Josep Oliu (pictured above) is hoping to record proceeds of around €1 billion from the sale.

The portfolio comprises 270 buildable plots for the construction of around 15,000 homes, half of which are in Cataluña, although it also contains plots in Madrid, Andalucía and Valencia.

It has been reported that two other investment funds may have also been selected for the final round (out of Apollo, Goldman Sachs and CPPIB) but Oaktree is understood to be the favourite. Rothschild is advising the divestment process.

Original story: Expansión (by R. Sampedro and S. Saborit)

Translation/Summary: Carmel Drake

Blackstone Enters the Bidding for Solvia Desarrollos Inmobiliarios

26 March 2019 – Ok Diario

Banco Sabadell is on a mission to divest the land from its property development arm Solvia, worth more than €1 billion. The firm, Solvia Desarrollos Inmobiliarios (SDin), is sparking a great deal of interest in the market, not least from the US investment bank Blackstone.

That firm faces stiff competition from the property developers Aedas and Merlin Properties, as well as 10 other interested parties, who have been whittled down from an original list of almost 30 candidates.

Given the huge interest in Solvia Desarrollos, Sabadell has extended the original deadline by one month to the end of May, at which point it will choose the buyer.

Besides the firms already mentioned, funds such as Cerberus, De Shaw, Värde, Apollo and Oaktree are also reportedly participating in the bid.

Most of the land owned by Solvia Desarrollos Inmobiliarios is located in Madrid, Barcelona and several places along the Mediterranean Coast.

Original story: Ok Diario (by Borja Jiménez)

Translation/Summary: Carmel Drake

Apollo Returns to Spain with the Purchase of Properties from Santander for €200M

13 February 2019 – Expansión

The US fund, which barely has any financial assets left in Spain, is acquiring offices in secondary areas of Madrid and Barcelona.

In recent years, Apollo has dedicated itself almost exclusively to the sale of assets in Spain, which caused experts to speculate that it might be leaving the country. But the fund led in Spain by Carlos Colomer and Pablo Crespo is still present and is very much backing Spanish assets once again.

According to reports from financial sources speaking to Expansión, Apollo reached an agreement with Santander in December (…) to purchase a portfolio of so-called tertiary assets (commercial properties) worth €200 million. The transaction, according to the same sources, will be definitively closed at the end of February.

A large part of these assets are offices located in secondary areas of Madrid and Barcelona. “Half of the value of the portfolio acquired corresponds to large office buildings located in secondary locations. All of the assets are in Madrid, except for one building that is in Barcelona”, they said.

Apollo is acquiring this portfolio because it considers that rental prices in secondary markets have not recovered yet. The sources consulted believe that “the rental prices of core (higher quality) buildings are recovering, but, as prices in the city centres rise, so tenants will consider moving to more secondary locations”.

The fund’s plan goes beyond this purchase. In fact, it wants to acquire new assets to incorporate into a new vehicle to generate value from them, through capex investment, with the aim of selling them a posteriori.

The rest of the portfolio

The rest of the portfolio that Apollo has purchased from Santander comprises a mix of more heterogeneous properties, some with an industrial component, other smaller offices and other premises that they intend to sell to retail investors.

This purchase is the first that Apollo has undertaken with its latest fund called European Principal Finance III, which it raised in December 2017 with USD 4.6 billion (almost €4.1 billion). It is also the first investment that it has made since the departure of its main executive in Spain, Andrés Rubio (…).

Apollo, led by Andrés Rubio, the executive who left the firm in September last year, arrived in Spain in 2011 to take advantage of the opportunities that were emerging as a result of the financial crisis. Since then, the fund has made purchases in Spain amounting to more than €1 billion (plus debt), such as the acquisition of 85% of Altamira, Evo Banco, the credit cards of Bank of America, the mortgage business of Citi and General Electric, and the hotels that had been awarded to CaixaBank and Popular (…).

Original story: Expansión (by Daniel Badía)

Translation: Carmel Drake

Aedas, Neinor & Merlin Properties Put €1bn on the Table for Sabadell’s Land

29 January 2019 – OK Diario

Banco Sabadell has now opened the sales process for Solvia Desarrollos Inmobiliarios, its real estate developer, for which the entity expects to obtain €1 billion. To date, the entity chaired by Josep Oliu has already sent the teaser to almost 30 interested parties. But there has been an important development, and that is that it is not only the typical funds that tend to participate in these types of auctions that are interested in the company, property developers are also keen, including Neinor, Aedas and Merlin Properties.

It is worth remembering that when Sabadell decided to sell Solvia, it separated the house-sale business and the real estate development business into two different companies with the aim of achieving a better offer. The land, which is owned by the second firm, forms part of the bank’s balance sheet and that is what is now up for sale.

According to sources speaking to OK Diario, the deadline for non-binding offers will finish in March; it will be after that when Banco Sabadell will start to receive binding offers. Sources in the know indicate that the operation will be closed in the second quarter. And, moreover, in addition to the aforementioned property developers, funds such as Cerberus, De Shaw, Blackstone, Värde, Apollo and Oaktree have also received the teaser (…).

The main plots of land owned by Solvia Desarrollos Inmobiliarios are in Madrid, Barcelona and several places along the Mediterranean Coast. The portfolio includes plots that the buyer will have to reclassify in order to be able to sell, resell or transform them, as well as plots that are ready for development. It is precisely in those assets that so many property developers have expressed their interest.

Banco Sabadell obtained a profit of €138 million from the sale of 80% of Solvia, its real estate subsidiary, to Lindorff, a company that belongs to the Intrum AB group, for €300 million. With that operation, Sabadell, which has retained ownership of the remaining 20% stake in Solvia, achieved a positive impact on its Common Equity Tier 1 (“fully loaded”) capital ratio of 15 basis points.

The completion of that operation, which is subject to obtaining the corresponding authorisations, is also scheduled for the second quarter of 2019 (…).

Original story: OK Diario (by Borja Jiménez)

Translation: Carmel Drake

Merlin Finalises its First Major Property Sale & Negotiates with Apollo, Amongst Others

22 January 2019 – Voz Pópuli

Merlin Properties has been negotiating the sale of a portfolio of assets with Apollo for several months and it looks like the operation is beginning to take shape. Project Juno comprises assets in secondary locations, which the Socimi does not classify as core, according to financial sources consulted by this newspaper.

The portfolio includes assets such as Miniparc, in La Moraleja; Európolis, in Las Rozas; a building on Calle Josefa Valcárcel and another one on Ronda de Poniente. The portfolio has a market value well below €300 million, given that it comprises assets that are not located in the financial centre of Madrid.

In parallel, the Socimi has created Project Jupiter, a better quality portfolio than Juno, but “very dry”, worth around €300 million.

In that portfolio, Merlin has included the Trianon business park, on Vía de los Poblados; another business park in Las Tablas on Calle Federico Mompou; another building located in Campo de las Naciones; the Elipse building (Manoteras) and the Ulises building, in Arturo Soria.

Merlin Properties is also looking to create a third portfolio following the sale of those two portfolios and whereby unify it with the assets that it does not manage to sell. The Socimi has decided not to award a mandate for these portfolios in order to market them with the greatest discretion possible.

Merlin’s plan

Merlin Properties wants to increase the presence that it has in the office market in Lisbon and acquire other buildings to add to the six properties that it already owns in the Portuguese capital.

The commitment of the Socimi led by Ismael Clemente to the Portuguese market forms part of the slight rethink in the structure of the assets owned by the group.

Currently, office buildings account for 46% of the company’s assets, followed by commercial properties, which represent 40%, and logistics assets, which represent 14%. But given the pull of the logistics market right now (…), Merlin expects to increase the weight of its logistics division to 20%.

At the time of its IPO, four years ago, Merlin reported that logistics assets would account for 15% of its total portfolio.

Original story: Voz Pópuli (by David Cabrera)

Translation: Carmel Drake

Apollo Sells Altamira to DoBank (Fortress) for c. €500M

31 December 2018 – Expansión

Apollo has sold its 85% stake in Altamira Asset Management to doBank, a firm constituted by the US fund Fortress. Market sources state that the operation amounted to around €500 million.

Expansión revealed in October that Apollo had engaged Goldman Sachs to sell the servicer that manages the real estate assets of Santander and Sareb for around €600 million.

Altamira has assets under management amounting to approximately €55 billion and operates in Spain, Portugal, Cyprus and Greece. The company’s estimates indicate that it will obtain revenues of around €255 million in 2018 and an operating profit before amortisation (EBITDA) of €95 million.

Altamira’s main value stems from the long-term contract that it holds with Santander, as well as the management of Sareb’s assets (the latter account for almost 30% of the total value of its assets under management).

At the moment, Sareb is analysing whether or not to renew its contracts with all of the servicers with which it works, but Altamira has been diversifying its client base for months, incorporating domestic and international players alike.

Apollo in Spain

During the last quarter of 2018, Apollo Global Management has exited two of the major investments that it has made in Spain over the last four and a half years: Evo Banco and Altamira.

Despite that, Fred Khedouri, a senior partner at Apollo, President of the Investment Committee of the European Principal Finance Fund and President of the Board of Altamira, has already told Expansión that the European Principal Finance Fund III is “going to invest in Spain”, with almost USD 5 billion at its disposal.

Original story: Expansión (by D. B.)

Translation: Carmel Drake