Tag: appraisal value

Argia’s Bankruptcy Leads to Oviedo’s Largest Ever Land Auction

10 December 2017 – El Comercio

The bankruptcy of the property developer owned by the businessman Blas Herrero, Argia Inversiones Inmobiliarias, and the lack of interest in most of its assets from its banker, Liberbank, have made way for the city’s largest-ever auction of private land. In total, 159 lots worth more than €30 million will go under the hammer, ranging from buildable estates in Cerdeño, to buildable land in Prados de la Fuente, to around fifty finished homes also in Prados de la Fuente.

In reality, the investments are very recent. Herrero did not seek to obtain any returns from the land and housing sectors in Spain until 2005 when he took control of Inverural Capital and turned it into Argia Inversiones Inmobiliarias. After a few years of activity, the company stopped filing its annual accounts – in 2009 – and went off the radar.

In Oviedo, the firm had promoted one of the largest plots of land in Prados de la Fuente, under the commercial name Galana Residencial. The work on that group of buildings…did not go well…The first buyers reported problems with the finishes, as well as humidity in the garages and the poor quality of the padel court.

Eight years after the homes were handed over, 51 apartments in different parts of the development are now going on the market, with appraisal values ranging from €155,484 for a first floor 3-bedroom property to €250,000 for homes that are bigger and higher up (…).

House prices in the city of Oviedo in Q3 2017 amounted to €1,264/m2, according to the appraisal company Tinsa. In YoY terms, they rose by 1.5%, but the number of transactions was still very low and, in 2016, prices fell by 0.8% in YoY terms. Since the middle of 2008, each homeowner in Oviedo has lost 37% of his/her property value, on average (…).

Volatility and low returns are two of the factors that have ended up causing the Asturian businessman Blas Herrero to surrender his real estate ambitions just ten years after launching them and after more than five years of unremarkable activity. In 2015, Argia Inversiones Inmobiliarias filed for voluntary creditors’ bankruptcy. The liquidation plan…was approved in January.

A peaceful end is anticipated with the voluntary auction that is due to be held on 20 December. The 159 lots, which will be bid for independently, include some mortgage charges in favour of Liberbank, who has most at stake in terms of the success of these disposals (…).

Prices and lots

The data is not encouraging. In the last year – between July 2016 and June this year – 633 homes were sold across the whole of Asturias (…). The figures indicate that the crisis is still on-going. A decade ago, the General Council of Notaries recorded three times as many real estate transactions per year. Moreover, some of the lots are far from the reach of most (…). Specifically, three plots from the special plan are together worth €10.5 million (…).

Original story: El Comercio (by Gonzalo Díaz-Rubín)

Translation: Carmel Drake

Insurers’ Interest In Real Estate Investments Rebounds

10 November 2017 – Grupo Aseguranza

Needs must. That is the main reason that has led – indeed, almost forced – Spain’s insurance companies to look at real estate assets as another, better alternative to achieving additional returns, which are not currently being generated in the financial markets (…).

The second reason that has caused the insurance sector to focus more intently on investment in the real estate sector has been the recovery of the rental market, primarily the office segment, which is where the majority of investments from the insurance sector are targeted (…).

The third reason for the increase in real estate investments stems from the Solvency II regulations. According to this regulation, properties require a provision equivalent to 25% of their appraisal value for capital consumption purposes, which is below those required for other formulae such as variable income, which need almost 50%.

More in Madrid than Barcelona

These 3 reasons have served as fuel to boost investment by insurance companies in properties. (…) In this sense, the stock of properties, measured in square metres, increased by 2.8% during 2016, from 3 million m2 in 2015 to 3.27 million m2 in December 2016. The growth in Madrid amounted to 7.5%, whilst in Barcelona, the figure decreased by 0.3%; in the rest of Spain, it increased by 0.4%.

According to data from ICEA, the Spanish insurance companies hold €287,000 million in their investment portfolio: of those, 3 out of every 4 euros are invested in fixed income and 3.7% is invested in property.

2017 will depend on the buffer required

Miguel Ángel Rodríguez, the ICEA’s external collaborator, in conversation with Aseguranza, highlighted that the increase in real estate investments this year will depend to a large extent on the capital buffer that the insurance companies need to have. The economic conditions are ripe, but the insurance sector is always conservative. The only numerical reference is the survey performed for the report “Real estate investments in the Spanish insurance sector. Data as at 2016”, which shows that only 7% of companies are considering divesting their properties, whilst almost 40% are planning to increase this kind of investment.

The report also asks how the entities are planning to undertake these new property purchases: more than half of them, 52%, are inclined to invest directly, compared to 12% who would do so indirectly, in other words, through investment vehicles. The remaining 36% would combine both methods (…).

Returns of 3%

Another fact that the report measures is the annual operating return on the appraisal value that insurance companies can expect to obtain from their real estate. On average, the figure amounts to 2.9%, with the highest yield being reported in Barcelona (+3.4%), compared to Madrid and the rest of Spain (+2.8%).

By type of property, the highest returns for insurance companies are generated by parking spaces (+4.5%), followed by commercial properties (+4%), offices (+2.8%) and homes (0.1%).

Along with profitability, appraisal values also rose in 2016, by 1.7% per m2. They grew by 1.3% more in Barcelona than in Madrid. Similarly, the vacancy rate stood at 18.8%, almost the same as in 2015. Meanwhile, the average rental income on properties owned by insurance companies rose by 0.3% to reach €12.27/m2/month. In Madrid, rents cost €18.60/m2/month and in Barcelona €12.80/m2/month.

Original story: Grupo Aseguranza (by Manuel Chicote)

Translation: Carmel Drake

Sabadell Engages Lazard To Evaluate Future Of HI Partners

29 August 2017 – Expansión

Banco Sabadell is studying the best solution for its hotel manager HI Partners. To this end, the financial entity has engaged the investment bank Lazard to analyse the private sale of its subsidiary or to search for a shareholder to acquire a majority stake in the company, according to market sources.

In this way, Sabadell is opening a window of opportunity to those who may be interested in taking full or majority control of its hotel management company, whilst it continues, in parallel with the IPO of the same entity.

These two options will allow Sabadell to make cash on the one hand and undo its positions, taking advantage of the current investor appetite in the real estate sector and, specifically, the interest in hotel assets, and secondly, to find a partner to take a majority stake and whereby deconsolidate the business from its balance sheet.

The operation, known in the market as a dual-track deal, allows the company to launch a sale and the search for interested parties in parallel to and at the same time as it undertakes the stock market debut process.

In this way, Lazard’s commission is independent of the contract that HI Partners signed to evaluate the feasibility of listing the company on the stock market.

Opportunities

Sources at the bank consulted by Expansión have indicated that this represents a “very preliminary sounding out” of the various deconsolidation and value-generating options. (…).

In this sense, the CEO of Sabadell, Jaime Guardiola, said during the presentation of the bank’s most recent results that the vocation of the financial entity is not to remain as managers over the long term: “we want to exit and we have a very good opportunity ahead of us”, he explained.

HI Partners is led by Alejandro Hernández-Puértolas (pictured above centre), CEO of the company, who, together with Sergio Carrascosa (pictured above left) and Santiago Fisas (pictured above right), two other former executives of Reig Capital, comprise the management team.

The group was created in 2015 following the transfer of around twenty hotels by Banco Sabadell. The financial entity had foreclosed those assets during the crisis following the non-payment of debts. Moreover, HI Partners is responsible for managing the bank’s hotel debt.

IPO

To control these assets, the hotel investment and management arm of Banco Sabadell created two companies: one to hold the best hotels in the chain, HI Partners Holdco Value, and another containing smaller hotels in secondary locations, HI Partners Holdco Gestión Activa, with the intention of improving their management to then sell them on.

For the time being, Sabadell is not ruling out any of the options and is continuing to analyse the debut of its hotel management and investment subsidiary on the stock market.

Before the summer, the bank engaged the investment banks Citi, JPMorgan and Credit Suisse to sound out the market and analyse the feasibility of listing its hotel management subsidiary on the stock market (…).

In the event that the bank decides to debut the company on the stock market, the operation will focus on the company that controls the most strategic assets: 14 high-end hotels located in the main tourist areas and which, as at 30 June, had a combined appraisal value of €689 million, with more than 3,700 rooms in the portfolio.

Original story: Expansión (by R. Arroyo and J. Orihuel)

Translation: Carmel Drake

Sareb Puts 209 Assets Up For Sale, Including 37 Hotels

21 July 2017 – Cinco Días

Sareb has launched a campaign to sell a portfolio of 209 properties. The portfolio includes commercial premises, warehouses, offices and 37 hotels, located primarily in the interior of Spain.

The entity has already taken advantage of the increasing interest in the hotel sector to sell Hotel Parque Central de Valencia this week to the Hoteles Playa Senator chain. The four-star complex, located in the capital of Valencia, has 192 rooms and 128 parking spaces.

The entity has launched the so-called “Your business project…starts here” campaign and has also created a website www.sarebterciarios.com, with information about the 209 assets up for sale. The properties are located across 15 autonomous regions, although the majority can be found in Madrid and Castilla y León.

Most of the hotels are actually located in the latter region. The cheapest is located in Mombeltrán, a small town in Ávila; the so-called Real Posada estate is on the market for €528,000. At the other end of the spectrum, the tourist complex with the highest price is located in Las Palmas, comprising 103 apartments; its asking price exceeds €6 million.

The most expensive asset up for sale as part of this campaign is located in the north of Madrid: an office building worth €18.9 million. In the same autonomous region, the bad bank is also selling the cheapest office of the 33 on offer: a unit close to the Plenilunio shopping centre, which has an appraisal value of €80,000.

In terms of the 97 commercial assets, Madrid is also the autonomous region that is home to the most, with 14. Noteworthy properties include the former Cines Cristal on Calle Bravo Murillo, which is being sold for €6.7 million. Behind the capital in this ranking comes Cataluña with 13 assets and Valencia and Andalucía with 12 properties each. The most affordable commercial space is located in Las Palmas; that property is worth €160,000.

Of the 42 industrial warehouses up for sale, half are located along the Mediterranean Coast, 12 are in Cataluña and 9 are in the Comunidad Valencia. The most expensive warehouse is located in Polinya, Barcelona, and its asking price is €7.6 million. By contrast, the cheapest is being sold for €11,003 and is located in Betera, Valencia.

Original story: Cinco Días (by Fernando Cardona)

Translation: Carmel Drake

Hispania Sells Office Building In Madrid For €37.5M

26 June 2017 – El Mundo

The real estate investment company (Socimi) Hispania has commenced its office divestment process with the sale of the Aurelio Menéndez building in Madrid for €37.5 million, according to a statement issued by the company.

The sales price – which is equivalent to a cost of €7,800/m2 – represents an increase of 39% over the property’s most recent appraisal value, including the pending investment.

The building, acquired by Hispania in October 2015, has a gross leasable area (GLA) of 4,700 m2. With the sale of this building, the Socimi has begun the divestment of its portfolio announced in February 2017 and as such to fulfil the commitment acquired with its shareholders.

The property, which is located in the Principe de Vergara area, one of the capital’s business districts, is currently being renovated.

Moreover, Hispania signed a lease contract with the law firm Uría y Menéndez to occupy the whole building for a duration of 17 years, of which it is obliged to fulfil 7.5 years.

The director of the Socimi, Concha Osácar, has highlighted that the sale of this property “shows Hispania’s capacity to identify buildings in prime locations, reposition them to a higher level and attract first-rate tenants with stable, long-term contracts.

“We are satisfied with the result of this investment and of the significant profitability it has generated for our shareholders”, she concluded.

Original story: El Mundo

Translation: Carmel Drake

BBVA Sells 9 Properties From CX RE Fund For €37M

2 June 2017 – Europa Press

BBVA Asset Management has sold nine properties from the CX Propietat real estate fund for €37 million in total. That price is 20.96% lower than the most recent appraisal value of the aforementioned assets.

According to a statement filed by the asset manager with Spain’s National Securities and Exchange Commission (CNMV), this sale represents an “important step forward” in the liquidation of the CX Propietat fund. The fund filed for liquidation in September 2013, before BBVA acquired the former Catalan savings bank Catalunya Banc (CX).

The asset manager is going to continue making “its best efforts” to facilitate the complete liquidation of this fund “as soon as possible”, said the company to the supervisor.

According to sources at BBVA, once the sales process for the fund’s entire portfolio has been completed, the definitive liquidation value will be calculated.

Original story: Europa Press

Translation: Carmel Drake

Värde Buys Up Reyal Urbis’ Debt To Exchange For Its Assets

22 May 2017 – Expansión

The American fund Värde Partners, which owns the property developers Vía Célere and Aelca, has become one of the main creditors of the real estate company Reyal Urbis. It is negotiating to take over more loans, which it plans to exchange for land.

The fund Värde Partners is competing with Lone Star to become the largest residential investor in Spain. The fund, which first entered the Spanish market in 2013, is progressing with its investments in the country and has placed its focus on one of the most important property developers from the previous boom: Reyal Urbis.

The real estate company emerged from the fusion between the construction company Reyal, owned by Rafael Santamaría, and Urbis, the real estate arm of Banesto, and it filed for creditor bankruptcy in 2013. With a liability of €4,660 million and negative own funds of €3,449 million, the company is negotiating against the clock to obtain support for its proposed agreement, which will allow it to avoid liquidation. The deadline to secure the backing of at least 75% of the creditor mass expires on 31 May.

In this process, which affects large banks such as Santander, Sareb (which is owed €1,000 million) and the Tax Authorities (which are owed more than €400 million), a new player has emerged: the fund Värde Partners. According to sources close to the operation, the fund has acquired a significant amount of Reyal’s debt, to place itself amongst the real estate company’s largest creditors. (…).

The purchase of this debt, which is backed by mortgage guarantees, allows Värde to have rights of Reyal’s real estate portfolio that, according to the latest appraisal, has a market value of €1,170 million. Of that figure, €863 million corresponds to land and finished assets (it owns 217 homes in stock).

After four years of bankruptcy and more than five years of losses, Reyal Urbis’ main asset is its land portfolio. The company owns plots of land spread across 30 cities, the majority of which is buildable (planning permission has been granted for it). This type of asset fits perfectly with the US fund’s investment profile, which owns two of the most active property developers in the country at the moment: Vía Célere and Aelca. (…).

Proposal

Reyal Urbis is currently proposing a series of discounts to the outstanding debt that it owes (…), but its creditors are not convinced by the high level of those discounts and according to sources close to the process, they are currently leaning towards rejecting the proposal, which would mean that company would end up filing for liquidation. (…).

However, the company’s entry into liquidation would not put a brake on Värde’s plans, given that it could acquire the assets that it is interested in a subsequent process. If Reyal does not obtain the support of its creditors, it will follow in the wake of its former competitor Martinsa Fadesa, which is in the process of liquidation and which is selling off its assets through periodic auctions.

During the first quarter of 2017, Reyal Urbis recorded revenues of €8.9 million, of which €45,000 came from its residential department (which, in turn, generated expenses of €421,000). These revenues are 2% higher than those obtained during the same period in 2016. During 2017, Reyal has so far recorded losses of €34.35 million. Since 2013, when the company filed for bankruptcy, it has accumulated losses amounting to €1,847 million.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Will 2017 See The Consolidation Of The RE Sector?

30 April 2017 – Expansión

Outlook / The experts believe that house prices will rise by around 5% and sales by more than 10% this year.

The recovery in the housing market is unequivocal and so the question that the real estate consultants are now asking is: “Will 2017 be the year of consolidation?”. In other words, “Will the recovery extend across the whole country and will the sector reach cruising speed?”. That is the million-dollar question.

The consensus of the real estate experts consulted by Expansión reveals that house prices are expected to grow by between 4% and 6% in 2017. Similarly, the overall forecast is that the number of residential property sales could reach 500,000 this year, which is regarded as the “healthy” or “normal” level for a market such as Spain.

There is also consensus that the number of operations involving new and second-hand homes will rise by around 10%, at least. Spain’s National Institute of Statistics (INE) certified that 403,866 homes were sold last year, up by 13.6% compared to 2015. It was the first time since 2010 that the figure had exceeded the 400,000 threshold, and this year will be even better, in the opinion of the analysts. House sales will grow in every single autonomous region in 2017, above all in Cataluña, the Balearic Islands, the Canary Islands and Madrid, which are the four regions that are setting the trend for the sector as a whole.

Something similar is happening with average house prices. The boost from the large cities is now having an effect on medium-sized (provincial) capitals, the majority of which are clearly recovering in 2017. Not in vain, Tinsa reported a few weeks ago that the appraisal value of residential properties experienced a YoY increase of 2.7% in March, but rose more than twice as much, by 5.5%, in the provincial capitals and major cities.

Almost all of the forecasts from the major real estate analysts place the rise in prices at around 5%, and underline the disparity in the various real estate markets in the country. Servihabitat thinks that residential property prices will rise by 4.3%. The consultancy firm Aguirre Newman estimates “growth of around 6%”. JLL predicts that prices in city centres and in exclusive locations along the coast will see “increases of more than 6%”. CBRE forecasts that house prices will rise by between 4% and 5% in 2017 and by more than 6% in Madrid and Barcelona”.

The creation of new households and, above all, the significant increase in purchases by investors is spurring on demand. These two variables, combined with the significant rise in the rental market, mean that Madrid and Barcelona are still the major drivers of the market. During the first quarter of 2017, prices rose by 12.1% in the Catalan capital and by 7.7% in the Spanish capital.

The data from the other three large cities is much less extreme. The price of homes rose by just 1.1% in Valencia, fell by 1.1% in Sevilla and increased by 2.5% in Zaragoza. Other capitals saw higher increases in house prices, including Alicante (+11.7%), Vitoria (+9.3%) and Las Palmas de Gran Canaria (+7.8%). (…).

Original story: Expansión (by J. M. Lamet)

Translation: Carmel Drake

March Family Sells Vodafone TV’s HQ In Madrid For €13.3M

26 April 2017 – El Confidencial

Last Tuesday (18 April), the March family closed its first major sale of an entire building, in an operation that forms part of the asset sale plan that it has been immersed in for several years now. After taking the decision, in the spring of 2015, to rotate some of its property portfolio, the Mallorcan dynasty has now completed the divestment of an office building located in the elitist Madrilenian urbanisation of La Florida.

The building in question houses the headquarters of Vodafone TV. It has a surface area of 4,900 m2, spread over five floors (basement, -1, ground, 1st and 2nd) and 140 parking spaces. The telecommunications operator recently renewed its rental contract there for another 10 years.

The purchaser is the Mutualidad de la Abogacía, which has been advised by Cushman & Wakefield and which has paid €13.3 million for the building. It is the fifth property that the buyer has acquired in just over a year, after taking control of properties such as number 12 on the Madrilenian Calle O’Donnell last June.

Corporación Financiera Alba, the holding company owned by the March family, which has been advised during the operation by Aguirre Newman, valued this building on its books at €11.2 million, which means that it has managed to close the transaction at a substantial profit. In fact, this asset was the eighth most valuable in the entire portfolio of Alba Patrimonio Inmobiliario, the direct holding company of these properties, whose jewel in the crown is number 89, Paseo de la Castellana, which it acquired two years ago for €147 million.

Despite having put the “for sale” sign up over a significant number of subsidiaries and investments, until now, the March family had barely moved an inch in the real estate market. The only exception to that rule was the sale of three floors and several parking spaces on Calle Miguel Ángel, 23 to Axiare, in a complex operation handled in four parts back in February, whereby the Socimi managed to acquire the entire building.

The March family is stepping on the accelerator

The sale of Vodafone TV’s headquarters, located at numbers 3 and 5 on Calle Basauri, comes just three weeks after Artá Capital, one of the investment arms of the Mallorcan dynasty, completed its exit from Flex, in which it used to hold a 26.3% stake, for €80 million.

The March family’s manager has also put its stakes in Mecalux and Panasa up for sale; meanwhile, Corporación Financiera Alba has been reducing its stake in ACS for several years, to bring it below the 3% threshold for the first time this month; and it is finalising the sale of Clínica Baviera to the Chinese group Aier Eye.

Following this operation, the appraisal value of the real estate portfolio owned by the Mutualidad de la Abogacía amounts to €701.5 million and its book value stands at €575 million, comprising 44 assets in total.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

BBVA Puts 2,900 Homes Up For Sale With Discounts Of <50%

20 January 2017 – Expansión

BBVA’s real estate unit, Anida, has launched a new campaign in which it is offering discounts of up to 50% on a selection of homes spread across the country.

The campaign, which has been baptised “Nuestras casa se van de rebajas”, will run until 28 February and includes 2,287 flats and 584 houses, both second-hand and new developments. All of the information about the development can be found on Anida’s website.

Most of the homes are located in Cataluña, the Community of Valencia, Murcia, Andalucía, Castilla-La Mancha and Madrid. BBVA is also offering its clients financing of up to 100% of the purchase value, provided that figure does not exceed 100% of the appraisal value.

Original story: Expansión

Translation: Carmel Drake