Carmena: Town Hall In Talks With Wanda Over Edificio España

27 January 2016 – El Economista

At a press conference yesterday (Tuesday), the mayoress of Madrid, Manuela Carmena, announced that the Town Hall of Madrid has made “a new proposal” to Wanda regarding its Edificio España project…and she added that she does not expect the Chinese investor group to abandon the project, given that it is continuing to participate in negotiations. (…).

Representatives from the Town Hall of Madrid reportedly met with the Chinese investor group last week and the conversations are on-going. (…).

At no point has the possibility of demolishing the façade and rebuilding it brick by brick been entertained, given that it is something that is actually technically unfeasible. The solution involves aligning legal compliance and maintaining the protected features, with the transformation of building that Wanda wants to undertake. (…).

Lots of options

In light of the widespread media attention, Carmena said that “our conversations with the group are on-going” and she added that the Town Hall “is very interested in the fact that this group may construct a hotel in Plaza de España”. (…).

The delegation pointed out that the protected features are not determined by the Town Hall, but rather by the Local Heritage Committee, in which the Town Hall participates and which is chaired by the Community of Madrid, which holds the majority. At the time, thhat body ruled that “it was feasible to undertake the building work, whilst maintaining the protected features”, in other words, it ruled that the proposal to demolish the façade was not an option. (…).

José Manuel Calvo, from the Department for Sustainable Urban Planning, insisted that the project was progressing “as normal”, given that talks are on-going with the company, just as they are with other companies. This normality manifests itself by the fact that the Town Hall has already prepared the compulsory detailed study and that it will process the initial approval as soon as the investor group gives them the go ahead. The Town Hall “will be delighted” to proceed. Following that approval, construction work may begin within two or three months.

The representative of the Department for Sustainable Urban Planning added that if the construction work begins, the Town Hall reserves the right to “secure guarantees” from Wanda to ensure the progress of the work. (…).

Meanwhile, Manuela Carmena answered that “of course she was unable” to guarantee that the renovation of Edificio España would be completed before the end of her term in office because she doesn’t even know how long the construction work will take. (…).

When asked about whether the Town Hall would be more flexible in the face of the hypothetical exit of the investor, Carmena answered that the Town Hall “is not afraid”, but does have a “responsibility” to ensure that Madrid is a more “beautiful and prosperous” city. (…).

Original story: El Economista

Translation: Carmel Drake

Metrovacesa Creates RE Developer With Assets Worth €1,040M

27 November 2015 – Expansión

The real estate company Metrovacesa, controlled by Santander (owner of 72.5% of the share capital), BBVA (19.4%) and Popular (7.9%) is going to be divided into two companies.

The historical real estate company has announced a demerger project, which was approved by the Board of Directors on 24 November and which will be presented to the ordinary shareholders’ meeting for approval on 29 December.

The project includes the creation of a new company into which Metrovacesa will place its land and home development businesses; meanwhile, the existing company will continue to hold the properties linked to its real estate business, in other words, the offices, shopping centres and homes that generate rental income. “We are looking to carry out a business restructuring process to add value to the company, as well as a potential refinancing of our financial liabilities, to ensure the feasibility and profitability of the businesses in the future, by separating out the property business from the land and home development businesses”, explains the company.

The new company, called ‘Metrovacesa Suelo y Promoción’, will be 100% owned by the current shareholders of the real estate company, in “exactly the same proportion as their existing stakes in Metrovacesa”. The company led by Rodrigo Echenique will create a new company with assets worth more than €1,040 million. “The new company will issue 3,075 million new shares, with a nominal value of €0.16 – a total share capital of €492 million – with a premium of €547.8 million, taking the total value to €1,039.85 million”.

Three capital increases

To create the new company, the Board will propose three successive capital increases to its shareholders. The first one will be non-cash and will involve “specific major shareholders”, which will contribute “assets that will form part of the company’s equity”. The second will involve the capitalisation of financial loans, leaving the new company with hardly any debt; and the third will take place to ensure that there is no dilution of the minority shareholders’ stakes. “In the event that the capital increases are fully subscribed, Metrovacesa’s share capital would amount to €1,261 million”.

Following the demerger, the real estate company will have share capital amounting to €769 million, in other words, around 61% of its current value, and the remaining 39% will be transferred to the new company. The real estate company indicates that its indebtedness is associated “primarily” with its property business and a “significant” portion of it is due to mature in Q3 2016, which it will be able to refinance more effectively following the execution of this process.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Carmena Commits To Studying Operación Chamartín

25 June 2015 – Expansión

The mayoress of Madrid, Manuela Carmena, has confirmed to the Chairman of the Distrito Castellana Norte (DCN), Antonio Béjar, that she is committed to studying the draft plans for the extension of the Paseo de la Castellana, according to sources close to the company.

Carmena met with the project’s leaders on Wednesday, for around an hour, in an atmosphere characterised by the “utmost cordiality”.

During the meeting, Béjar described the planned development to the mayoress of Ahora Madrid. He explained that the project aims to promote the DCN through its Partial Plan and that it will be one of the most important city projects in Europe.

At the end of the meeting, Béjar seemed optimistic and said that he hopes that the Partial Plan will be approved at an upcoming plenary session, once the Town Hall’s new government has analysed it in detail.

The project will extend the Paseo de la Castellana north by 3.7 km and involve the redesign of an area covering 311 hectares. It will also include the construction of 17,700 homes, 56 hectares of green space – half the size of the Retiro park – and several skyscrapers.

Original story: Expansión

Translation: Carmel Drake

Spain’s CNMV Authorises Slim’s Takeover Of Realia

24 June 2015 – Expansión

The offer presented by the Mexican businessman was competing against a bid submitted at the end of 2014 by Hispania, the Socimi in which George Soros holds a stake.

According to reports yesterday from the market supervisor, Spain’s National Securities Market Commission (CNMV) has approved the public offer for the acquisition of shares (takeover or OPA) that Carlos Slim (pictured above) presented for 100% of Realia, valued at €178 million.

The body led by Elvira Rodríguez believes that the terms of the offer conform with ruling legislation and deems that the contents of the brochure explaining the operation are sufficient (following the latest submission of information by Slim on 16 June).

Slim offered €0.58 per share, compared with €0.49 per share offered by Hispania. Nevertheless, both prices fall below the current market value of the real estate company, which closed trading on Tuesday at €0.685 per share.

Carlos Slim has already taken control of Realia, since he recently bought the 24.9% stake that Bankia held; it used to be the second largest shareholder of the real estate company. The primary shareholder is FCC, and the Mexican businessman is, in turn, the primary shareholder of FCC.

Original story: Expansión (by E.P.)

Translation: Carmel Drake

Bankia Sells Its 24.9% Stake In Realia To Slim For €44.5M

5 June 2015 – Cinco Días

The Tax Authorities approve Bankia’s sale of its 24.5% stake in the real estate company for €44.5 million, as the Mexican magnate’s takeover bid for the company gathers strength.

On Tuesday, the Tax Authorities approved the sale of Bankia‘s 24.5% stake. The bank required this approval, since it is controlled by the Fund for the Orderly Restructuring of the Banking Sector (the FROB), to execute the transfer of its shares to Inmobiliaria Carso, the property development company owned by Carlos Slim.

As a result, the Mexican magnate now holds 61.3% of Realia, since he indirectly controls the 36.8% stake owned by FCC. Slim is, in turn, the main shareholder of the construction company. The sale paves the way for the second richest man in the world to take ownership of 100% of the Madrilenian real estate company.

The transaction has been closed for €44.5 million, which represents net profits of €9.6 million for Bankia, according to reports submitted by the entity to the CNMV.

There are currently two takeover bids underway for Realia: one from the Socimi Hispania and the other from Slim himself, to take control of 100% of the company.

Hispania submitted the first bid, at a price of €0.49 per share. In March, the Board of Directors of the real estate company rejected that offer from the Socimi, in which George Soros holds a stake, which valued the company at €150.61 million, since it believed that the consideration offered was unreasonable. Moreover, the Socimi conditioned its offer on controlling at least 55% of Realia, which means that its road is now closed.

Meanwhile, the Mexican firm takes control of this stake whilst it waits for the CNMV to approve the takeover that it launched in March, at a price of €0.58 per share. Once this transaction has been authorised, an acceptance period for the two bids will begin.

Slim expressed his interest in the real estate company soon after he became the primary shareholder of FCC at the end of 2014. At that time, the construction company suspended the sales process that it had opened for its 36.8% stake in Realia; a representative of the magnate sits on that company’s board.

In his takeover statement, Slim revealed that his goal is to take control of Realia and clean it up in order to “fully develop the opportunities that it has within its reach, as a leading company in the sector”, which will continue to trade on the stock exchange. Realia refinanced debt amounting to €792 million, relating to its development activity at the end of 2013, whereby extending the repayment period to June 2016.

Original story: Cinco Días (by A. Simón)

Translation: Carmel Drake

The Electoral Shift May Undermine Operación Chamartín

27 May 2015 – El Mundo

The Ministry of Development fears that the electoral shift may undermine the plans for the project known as Distrito Castellana Norte, which is worth more than €6,000 million.

From June, the new municipal political map in Spain will face decisions regarding the future of dozens of urban development projects in the country’s large capital cities, worth thousands of millions of euros, many of which are still awaiting licence approvals from their respective town halls.

The largest one is Operación Chamartín, in Madrid, the largest urban development plan in the capital. The project has been in the pipeline for 20 years – four less than the Partido Popular held office for at the town hall – and was accelerated in recent months by the incumbent mayoress, Ana Botella, in an effort to obtain the final approvals.

The inability to comply with all of the procedures required for the operation, located in the North of the capital, covering 3.7 km in length and three million square metres in surface area, with plans to build 17,000 homes, as well as offices, retail areas and green spaces, forced Botella to leave the final approval (of the project) in the hands of her successors at the Town Hall. Specifically, to the resolution of around 1,800 claims and above all, to the approval of a partial plan for the extension of the Paseo de la Castellana.

Until 24 May, it was expected that a new municipal team led by the Partido Popular would continue the project, which promises to transfer the centre of the city from Puerta del Sol to the North. But the setback suffered by the Partido Popular in the capital last Sunday leaves the project in the air. The most likely option, that of a left-wing coalition between Ahora Madrid and the PSOE, is raising concerns amongst the stakeholders. The focus of the likely team, led by Manuela Carmena, would centre on social housing rather than on million-euro urban developments.

The project known as Distrito Castellana Norte is estimated to be worth more than €6,000 million; BBVA and the construction company Grupo San José are the main partners in terms of financing and development. The operation also includes municipal and regional land, but the majority is owned by the Ministry of Development, and in particular, its two largest companies: Renfe and Adif.

The urban development plan that Ana Botella was unable to finalise involves covering over the train tracks at Chamartín station. The value that the sale of this land to BBVA and San José would have for the companies owned by the Ministry of Development amounts to €1,200 million, most of which would be paid to Adif, whose debt amounts to €18,000 million this year, making it the State’s most indebted public company, behind only the FROB (Fund for the Orderly Restructuring of the Banking Sector). Given the financing needs of the conventional railway infrastructure companies and the lack of funds available for such investments, the minister Ana Pastor has publicly backed the plan. In fact, Adif was already counting on the payment of €200 million this year based on the approval of the pendingpartial Plan.

Now the deadlines are being called into question, at least the fast-track option is, which carries the support of the incumbent town hall. But the amendment, rejection or definitive approval of the largest chapter in the capital’s urban planning cannot be left on the sidelines for long.

After its launch in 1995, with the granting of land to the current BBVA, the project has survived (changes in) municipal teams, real estate bubbles and judicial processes, which have delayed its approval and halved the value that the property developers were guaranteed to generate.

In the end, last year, the grant was awarded, but BBVA and the Grupo San José extended their offer up to a maximum deadline of 2016. If there is no partial plan by the new Town Hall and the new extension expires, the Ministry of Development will see its largest urban development project die, although it is likely to be a legacy that another Government will pick up in due course.

Original story: El Mundo (by César Urrutia)

Translation: Carmel Drake

Barceló Acquires 42.5% Stake In Occidental Hoteles

5 May 2015 – Expansión

42.5% shareholding / The tourism group acquires the stakes held by Amancio Ortega, owner of Inditex, and several minority shareholders, and continues to negotiate with BBVA to take control of the chain.

The sale of Occidental Hoteles has been unblocked with Barceló’s purchase of a share of its capital. The tourist group has acquired a 42.5% stake from Amancio Ortega, owner of the textile empire Inditex, and several minority shareholders. In parallel, it is also negotiating with BBVA, which controls the remaining 57.5%, to gain control of 100% of Occidental and strengthen its position in the Caribbean.

Although the exact amount of the transaction is unknown, it has been closed with a discount of between 40% and 50% with respect to the €700 million that BBVA and Ortega paid in 2007. That was the figure that the shareholders hoped to obtain through the divestment process launched in 2013, which was thwarted last December, with Barceló as the favourite, due to differences over price.

Then, Barceló was bidding together with the fund Caribbean Property Group (CPG). Now, the tourism group is going to single-handedly undertake the purchase of the shares held by Ortega (who holds 23.63% through his company Partler 2006), Gregorio de Diego (who controls 13.5% through Tamar International) and the Miarnau family (whose company Iosa Inmuebles holds 5.26%).

Competition

The transaction, which is pending approval by the Mexican competition authorities, will be structured as a financial investment, and so Barceló will not take over the management of Occidental’s hotels. The chain operates 13 properties in the Caribbean and owns the majority of those establishments.

Nevertheless, sources in the sector are convinced that BBVA will end up selling a non-strategic stake. In fact, that is the joint position that the entity chaired by Francisco González and Amancio Ortega held until the end of 2014. The only thing that has separated them has been the timing (of their respective exits).

The textile businessman wanted to accelerate his exit from Occidental before the company looses value, since there is no growth plan on the table. In contrast, BBVA was keen to wait for a better offer and set a limit below which it was not willing to divest. In the end, the partners have broken their shareholders’ agreement, which has opened the door to Occidental for Barceló.

In terms of convincing BBVA, the close ties that unite the companies work in the tourism group’s favour. Barceló, BBVA and FCC created an asset company Grubarges in 1998, with the aim of channelling its surplus investors and growing in the hotel sector. Grubarges was dissolved in 2004 due to strategic differences between the partners, but the relationship is still strong.

If Barceló acquires 100% of Occidental, it will strengthen its position in the Caribbean, one of the priorities on its roadmap to become the world leader in the holiday hotel sector. Through the integration, Barceló would obtain a presence in new countries – Colombia, Aruba and Haití – and would strengthen its position in the Dominican Republic, Mexico and Costa Rica. Furthermore, the transaction would involve an investment plan to reposition Occidental’s properties.

Barceló currently operates 94 hotels and 30,000 rooms in 16 countries. In 2014, the company generated profits of €46.4 million, up 85.6% and turnover of €2,056.6 million, up 6.2%.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Carlos Slim Joins Realia’s Board

2 March 2015 – Expansión

Gerardo Kuri Kaufmann will take on the role as Slim’s representative.

Carlos Slim is taking a role on the highest management body of the real estate company Realia, after he became a shareholder of FCC and it (FCC) decided to suspend the sale of its stake in Realia. Carlos Slim’s ‘vocal representative’ will fill the vacancy resulting from the departure of FCC’s former Chairman, Rafael Montes.

In February, FCC decided to suspend the sales process of the real estate company (Realia), in which it holds a 36.88% stake, as it wanted to rethink its strategy. The company, chaired by Esther Alcocer Koplowitz, took this decision after the Mexican acquired a stake in FCC and expressed his own interest in the real estate company.

In November 2013, FCC and Bankia announced their intention to sell Realia and since then, the company has received interest from a number of investors, including Pontegadea (the real estate company owned by Amancio Ortega), Juan Abelló, Colonial (owned by the Villa Mir Group) and several international funds.

In this regard, Hispania launched a takeover bid for 100% of the group in November last year and reached an agreement with three funds who are currently (the real estate) company’s primary creditors. Nevertheless, this transaction is currently pending approval by the CNMV.

Original story: Expansión

Translation: Carmel Drake

Construction To Resume In Valdebebas

30 January 2015 – Cinco Días

The Governing Board of Madrid’s City Council has finally approved the “Project for the Economic Redistribution of Plots in Valdebebas”, once all of the necessary administrative processes have been completed. “This is a particularly important milestone for Valdebebas, since it will allow not only for new building permits to be granted once more, but also for a return to normality for the first occupancy licences and building permits that have been already granted; the latter have been affected by litigation claims”, said the team responsible for the complex, located to the North of central Madrid.

Following the administrative decision, construction of almost 1,000 new homes (mostly non-subsidised dwellings) will begin in the next few months, adding to the stock of more than 4,000 homes that have already been built. “In terms of social housing, and once the existing supply of land has been used up, around 350 of the 1,000 new homes will be subsidised”. In addition to this new supply of housing, the urban restructuring will be completed with a shopping centre, comprising 56,000 constructible square metres, and a plot of land destined for private educational use, where the Joyfe Valdebebas College will be built. The parks in the area, which will occupy 1,000 hectares, are due to be opened between March and April.

The plans permit the construction of 12,500 homes, of which almost 4,200 have already been build and a further 800 are in the final phase of construction. Around 5,000 people currently live in Valdebebas, but it is estimated that the neighbourhood will have a residential population of between 30,000 and 40,000 people once the project has been completed. If we add the people that are expected to work in the nearby offices and shops, then estimates indicate that more than 100,000 people will pass through Valdebebas on a daily basis. The average price of non-subsidised housing in the new neighbourhood amounts to around €2,550 per square metre.

Original story: Cinco Días (by Alberto Ortín Ramón)

Translation: Carmel Drake