Tag: Ares

Ares Creates a Socimi to Invest up to €1bn in Rental Housing in Madrid

7 March 2019 – Idealista

The US fund Ares Management is creating a Socimi to invest up to €1 billion in residential assets for rental in Madrid. The firm wants to benefit from the boom in the rental market in Spain and has already raised €250 million to invest.

Ares first expressed its interest in the market last year when it submitted a bid to acquire Sareb’s rental home Socimi, Témpore. However, that operation was called off by the bad bank in favour of a more orderly sales process (now underway).

Ares is a listed company, founded in 1997, which manages alternative assets worth around USD 88 billion. It has 15 offices in the USA, Europe and Asia.

Original story: Idealista (by C. Pareja & P. Martínez-Almeida)

Translation/Summary: Carmel Drake

The ‘Mercado de San Miguel’ Goes up for Sale Again for a Record Price: €100M

1 March 2019 – El Confidencial

The Mercado de San Miguel is up for sale again almost two years after being acquired by the joint venture between Redevco and Ares, which paid more than €70 million for the property. After repositioning the asset and increasing the rents, Ares has decided to exit the operation and reap the rewards of its investment (…). Nevertheless, the Dutch manager is not willing to divest its stake in this unique asset.

The expectations of the US fund in terms of the market value of the asset amount to around €100 million, which would represent a gain of 30%. If achieved, that figure would once again shatter all of the records in the real estate market. It is worth noting that the previous sale was the most expensive transaction per square metre ever paid in the Spanish real estate market.

For each one of its 1,200 square metres, the purchasers paid €60,000 (…). If another sale is signed, the records would be smashed again: at more than €80,000/m2.

The sources consulted by this newspaper explain that Ares has decided to divest the asset and that if Redevco wants to continue, then it will have to find another partner or acquire the fund’s stake. There is not going to be an organised sales process, but rather the operation is moving off-market (…).

Revaluation of the asset

As both companies announced in a statement in October last year, the joint venture has improved the yield on the property through their active management and has added value to the asset by attracting new gastronomic offerings, such as Rocambolesc by Jordi Roca, a 3-Michelin star pastry chef; Paella, by Rodrigo de la Calle, another chef with 1 Michelin star (…); Kirei, by Ricardo Sanz (…) and Tacos, Margaritas & Punto, by Roberto Ruiz, chef at Punto MX (…).

Those gastronomic offerings are provided alongside the traditional meat, fish and fruit stands, which offer first-rate products for which the market is so well known (…).

Original story: El Confidencial (by E. Sanz & C. Hernanz)

Translation: Carmel Drake

Sareb Invites 20 Investors to Participate in the Sale of its Socimi Témpore

20 December 2018 – El Economista

A formal process is being launched after initial interest was received from three buyers, including one that stood out from the US fund TPG.

On Tuesday, Sareb opened a formal process to sell Témpore, its rental home Socimi, according to confirmation provided by sources in the sector speaking to El Economista. The bad bank, which has not engaged an external advisor for this divestment process, has invited 20 investors to participate.

In November, Nicolás Díaz Saldaña, CEO of the residential company, acknowledged that a Data Room had been enabled containing information about the Socimi and that access had been granted to it for five investors interested in the acquisition of Témpore.

In the end, three offers were received, of which the ones from Ares and TPG stood out, the latter being the highest. In light of the expressions of interest, Sareb decided to raise the matter to its Board of Directors, which yesterday launched an orderly sales process in which investors may participate by invitation only.

According to the same sources, Sareb has not imposed any conditions regarding what percentage of its stake is for sale (it held 98.38% at the end of June), and so it will be open to all offers.

The Socimi has just carried out what will be its last non-monetary capital increase subscribed by Sareb amounting to €150 million to acquire 1,769 assets in total, of which 850 are rental homes. The operation, which forms part of the right of first refusal agreement (ROFO), which Sareb and the Socimi signed, allows Témpore to double in size to reach €325 million.

Growth plan

Before announcing the sales process, Témpore had a growth plan underway with the aim of achieving a portfolio worth €500 million and in this way having sufficient volume to make its debut on the main stock market. That was explained at the time by Díaz Saldaña, who noted that in order to continue growing, “we will have to look for financing, be it from the bank or an alternative, such as a bond issue”.

Amongst the different options, the Socimi is analysing the purchase of whole buildings of rental homes and is also studying the acquisition of developments under construction that are currently in the hands of Sareb. In addition, it is considering buying turnkey projects through delegated promotion. “In the case of the latter, the first projects would be with Sareb, given that at the moment, for the other property developers that we have spoken to, it is more profitable for them to sell in the retail market”, said the CEO.

Meanwhile, yesterday, Sareb announced the sale of some land in the Torre Salses area, in Lleida, for the construction of a large shopping centre, spanning more than 60,000 m2. Eurofund Capital Partners has paid €8.3 million for that plot, whose sale was agreed in 2016.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Sareb to Sell its Rental Home Socimi Témpore to TPG & Ares

2 December 2018 – Tercera Información

Sareb, the financial institution that has a large volume of public capital is going to sell one of its Listed Real Estate Investment Companies (Socimis), Témpore, which manages a stock of thousands of rental homes, to the US vulture funds TPG and Ares. The operation comes at a time when the experts are warning about the emergence of a new speculative bubble in the real estate sector.

The Company for the Management of Assets proceeding from the Restructuring of the Banking System (Sareb), known as the “bad bank”, an entity financed using public capital, which is responsible for managing the toxic assets of the financial entities created during the bubble, has announced the imminent sale of the Socimi Témpore. That corporation was created just a year ago and owns thousands of rental homes.

The Socimis, Listed Real Estate Investment Companies, are a resource created to manage enormous batches of housing in the hands of private investors. Témpore is one of the large companies created by Sareb to manage the rental properties it inherited during the so-called bank restructuring process. Created just a year ago, Sareb has always announced its intention to resell the properties in the private market.

The buyers are the private equity firms TPG and Area, according to reports from financial newspapers yesterday. The agreement at a time when Témpore is on the verge of incorporating a large batch of homes, which means that it will have 3,357 flats in total, making it the third largest company with most properties in the market.

Similarly, according to the information published about the agreement, Sareb is going to continue to transfer homes to the Socimi until November 2020.

The sales process is particularly significant at a time when the real estate market seems to occupy the centre of attention of the large investment volumes in the country’s economy. Far from the fear of a repeat of the collapse of the market similar to that experienced at the start of the economic crisis and becoming immersed again in a dynamic of using land and properties as main investment assets, the financial institutions of private equity firms, such as the US player Blackstone, are acquiring large volumes of homes through the purchase of these Socimis (…).

Original story: Tercera Información (by Christian Zampini)

Translation: Carmel Drake

Redevco & Ares Invest €45M in the Renovation of Parque Corredor

26 September 2018 – Eje Prime

Redevco and Ares are pampering their new asset. Redevco Iberian Ventures, the joint venture between the two companies, is going to spend €45 million on the renovation of Parque Corredor, the retail complex in Torrejón de Ardoz (Madrid) that it purchased at the beginning of the year.

The owner expects the work to completely renovate the asset, which spans a surface area of 123,000 m2, to begin in 2019. Moreover, the company has already signed the renewal of Primark’s rental contract in the centre and is closing agreements for the incorporation of new chains.

The project will focus initially on the fashion area, creating new façades and accesses. It will also modernise the parking lot, which contains 4,000 parking spaces, and will renovate the common areas and the lighting.

The new design has been created by the architecture studio Chapman Taylor. The execution of the project will be led by the architecture studio Arpv and coordinated by Gleeds. Cushman&Wakefield is managing and marketing the retail spaces.

Redevco Iberian Ventures acquired 70% of Parque Corredor in February for €140 million. Another 20% is controlled by Alcampo and the remaining 10% is in the hands of small owners. Over the last twelve months, the complex has received 11 million visitors, 4% more than during the same period in the previous year. Its offer includes several Inditex chains, H&M, Mango, Kiabi and C&A.

Original story: Eje Prime

Translation: Carmel Drake

Savills Aguirre Newman: Tertiary RE Transactions Soar in January to Reach €910M

6 February 2018 – Eje Prime

The sales of the Parque Corredor shopping centre in Madrid and the 16 Inditex stores in Spain and Portugal have boosted the sector, which has already registered 40% of the total amount invested during the first quarter of 2017.

Operations in the retail segment have stepped up a gear. The Parque Corredor shopping centre in Madrid, and the portfolio of stores that Inditex put up for sale in Spain, represented a boost for the investor boom in the sector during the first month of the year. In total, those two operations accounted for €660 million of the €910 million that was spent on the sale and purchase of non-residential real estate assets in Spain during the month of January.

For the Inditex portfolio, which contained 16 stores located across Spain (14) and Portugal, the German fund Deka paid more than €500 million. That transaction was followed by another major retail deal, specifically, the purchase by the joint venture between Ares and Redevco of 70% of Parque Corredor, whereby absorbing the 40% stake in the centre that Sareb held, for €140 million.

Thanks to those two sales and others that were closed during the first month of 2018, the investment quota for the year has already reached 40% of the total figure spent during the whole of the first quarter last year, according to data from Savills Aguirre Newman.

Following a month of considerable activity, the forecast for the rest of 2018 is optimistic. Sources at the consultancy firm predict a year of “significant investment”. In this way, the volume of operations forecast for the office sector could exceed €2.0 billion, after investment in that segment amounted to €210 million in January.

Original story: Eje Prime

Translation: Carmel Drake

Redevco & Ares Purchase 70% of Parque Corredor Shopping Centre

2 February 2018 – Expansión

Yesterday, after more than a year and a half of negotiations, Redevco Iberian Ventures – the joint venture formed by Redevco and Ares – closed the purchase of 70% of Parque Corredor (located in Torrejón de Ardoz, Madrid) for €140 million. The new owners are preparing to give the asset a makeover, with an additional investment of €40 million, which will be used primarily to renovate the asset. Until now, Parque Corredor had a very fragmented ownership structure (…) and although the asset has an occupancy rate of 95% and receives more than 10 million visitors per year, investment is required for its repositioning.

With the completion of this operation, which has been advised by Deloitte, Cushman & Wakefield and Simmons & Simmons, Redevco Iberian Ventures has acquired the 40% stake held by Sareb – the largest shareholder until now -; the 14.5% stake held by Aermont (previously Perella Winberg); the 3.6% stake held by El Corte Inglés; and the 3% stake held by Bowling, as well as almost 10% held by smaller shareholders. On the other hand, Alcampo will retain its 24% stake in Parque Corredor, as will the Town Hall of Torrejón de Ardoz, which owns a municipal court there, and Toys R’ Us.

Parque Corredor is the third largest shopping centre in the Community of Madrid, behind Xanadú and Parquesur, and one of the largest in Spain, with a surface area of 123,000 m2 and 3,800 parking spaces. In the past, the centre was controlled by CatalunyaCaixa, which foreclosed a loan that had been granted to Testa. That stake was subsequently passed onto Sareb.

The new owners plan to reposition the shopping centre, which opened its doors in 1996. Redevco and Ares plan to spend €40 million on the complete renovation of the asset, which will be undertaken in stages and will not result in the temporary closure of the shopping centre. The remodelling plan, approved in July last year by the community of owners of the centre, is supported by the tenants.

Renovation

The proposed renovation will involve increasing the size of the stores so that some of its main tenants can open flagship stores there and making the leisure area more attractive to increase the number of visitors. The renovation work may take between 12 and 18 months. Parque Corredor is home to 180 establishments, an Alcampo supermarket measuring 24,000 m2 and nine cinema screens managed by Cinesa. Currently, the fashion and accessories section accounts for 24% of the shopping centre, with tenants such as Primark, H&M, El Corte Inglés, Sfera and Mango, amongst other brands. Next comes the Alcampo hypermarket (24%), the restaurant area (14%), leisure (10%), services (9%) and food, perfume and cosmetics (9%).

Competition

Inside Parque Corredor’s area of influence, the French firm Compañía de Phalsbourg plans to open the Open Sky shopping centre, measuring 85,000 m2. The construction work on that centre started in October last year.

Redevco Iberian Ventures, created in September 2015, acquired the Mercado de San Miguel in Madrid last summer for €70 million. In addition, last year, the joint venture company sold a portfolio of nine shopping centres to Vukile Property Fund, a company listed on the Johannesburg Stock Market (South Africa) through its Socimi Castellana Property for €193 million.

The company owned by Redevco and Ares has funds amounting to €500 million allocated for identifying and acquiring assets.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Sareb Sells Parque Corredor Shopping Centre to Redevco & Ares

2 January 2018 – El Confidencial

In the end, there will be a sale. Sareb has managed to reach an agreement with Redevco and Ares to sell them the Parque Corredor shopping centre, in an operation that is expected to be closed within the next few days, according to sources familiar with the transaction. This deal will fire the starting gun for the complete transformation of the Madrilenian shopping centre.

As El Confidencial revealed, the entity chaired by Jaime Echegoyen had joined forces with Perella to complete one of the operations that has been on Sareb’s desk for the longest, but which has never ended up being signed (until now) for various reasons, including the dispersed shareholding of Parque Corredor and the divergent interests of those shareholders.

The sum of Sareb and Perella’s forces guaranteed that Redevco and Ares would take a majority stake in the shopping centre, given that the former holds 40% of the share capital and the latter holds 20%. But, more support was always needed to enable it to undertake a complete transformation and whereby compete with the neighbouring Open Sky, a shopping centre that is currently being constructed just four kilometres away.

In the end, both El Corte Inglés, the owner of just under 4% of Parque Corredor, which has an outlet store there, and Alcampo, owner of just over 20%, have decided to join the sale initiated by Sareb, according to the same sources (…).

The offer from Redevco and Ares values the whole centre at around €200 million, an amount that will be added to the planned investment of €20 million required to renovate the centre. The renovation project that has been entrusted to the Chapman Taylor studio.

Parque Corredor is a shopping centre giant with a retail surface area of 123,000 m2 and 180 stores, located in the Madrilenian town of Torrejón de Ardoz. Its tenants include the Spanish firm Mango, the Swedish retailer H&M, the Irish firm Primark and the French retailer Kiabi, all direct rivals of Zara.

This shopping centre went through its toughest time four years ago when Inditex decided to vacate because of the poor upkeep of the complex. Nevertheless, in recent times, confidence in the centre has been returning, with some of the retail group’s brands opening stores there, such as Bershka, Pimkie and Stradivarius. To date, there is no sign of the flagship brand Zara returning just yet.

Sareb has been advised in the operation by Knight Frank, Perella has received the services of Cushman & Wakefield, whilst Redevco and Ares have been working with Deloitte.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

South African Fund Vukile Acquires 9 Retail Assets For €198M

4 July 2017 – Expansión

A new institutional investor has arrived in Spain. And it comes from an unusual place for large investors in the Spanish real estate market: South Africa.

The South African real estate investment fund (REIT) Vukile Properties has completed its first operation in Spain by purchasing nine commercial assets located all over the country. The South African firm has disbursed €198 million for the properties, which have a combined surface area of 117,700 m2.

Of that amount, €193 million will be paid to the owner until now, the company Redevco Iberian Ventures, a joint venture created in 2015 by the groups Ares and Redevco to invest in the Iberian Peninsula.

Vukile has completed its purchase through the Spanish company Castellana Properties. This company, previously known as Vinemont Investments, changed its corporate structure last summer, to become a Socimi, after completing a capital increase of €12.6 million.

The first properties acquired by this Socimi form part of the portfolio that the Dutch company Redevco has been creating in the Iberian Peninsula over the last few years. The assets include five stores in the Parque Principado de Asturias complex and Parque Oeste, in Alcorcón (Madrid), spanning a surface area of 13,600 m2. The largest property is the Kinepolis complex, in Pulianas (Granada), measuring 25,900 m2 distributed over six stores.

97% of these retail spaces are leased to operators such as Mercadona, Día, Media Markt and fashion labels such as C&A and Kiabi.

For its first operation in Spain (and Europe), the South African REIT, which is listed on the Johannesburg and Namibia stock exchanges, has joined forces with the brothers Lee and Chad Morze, who it defines as “well-known and successful businessman living in Spain”. According to the commercial registry, Chad Morze is the administrator of Diversified Real Estate Asset Management, a company whose primary activity is the provision of tax, audit and accounting advice. Created at the end of 2015, the company has not filed any annual accounts yet. Lee Morze is also registered as an administrator of the same company.

Of the total amount disbursed (€198 million), Vukile has announced that it will contribute own funds amounting to €103 million, whilst the other almost €95 million will be obtained through a bank loan to Castellana Properties from the entities Santander, CaixaBank and Bankia, amongst others.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Savills: RE Inv’t In Retail Parks Reaches Historical Peak

3 May 2016 – Mis Locales

Retail parks are sparking interest in the real estate investment market in Spain. In 2015, investment in this type of asset amounted to €500 million, i.e. seven times more than in 2014. In the context of total retail investment, that figure represented 21% of total volumes in 2015 and accounted for 20% of the total amount invested in this segment since 2000, according to a specialist report about the market, which the international consultancy firm Savills publishes each year.

So far this year, investment in retail parks already amounts to €122 million, i.e. 18% of the total amount invested in the retail sector. Although the majority of that figure relates to the sale of six retail parks by Bogaris to the JV created by Redevco and Ares for €95 million, Luis Espadas, Capital Markets Director for Savills Spain, says that “this operation is evidence of the interest being generated by these types of assets, which are attracting both new profiles of investors and new property developers. The investment figures registered so far this year exceed those recorded during the same period in 2015.”

From the point of view of real estate investors, this sector, which generates returns of 6% for prime products and which is prone to decrease due to the imbalance between supply and demand, is very interesting in the context of the recovery in consumption, given that it requires only moderate investment volume and generates higher levels of profitability than for other retail products. Moreover, it is “safe”, due to the quality of its tenants and the fact that it barely requires any management following the purchase.

Retail space in retail parks, just over 1.85 million sqm, now accounts for 12.5% of the retail real estate market and construction activity is continuing to grow, boosted above all by traditional domestic players in this segment in the retail sector, although other investor profiles, such as the Socimis, have also started to develop retail parks, such as the complex that Grupo Lar has announced that it will construct in Sagunto. In addition, international property developers are expected to enter the market, especially from France, to actively seek out land.

According to the consultancy firm, all of this will boost investment forecasts, on the one hand, along with the arrival of new operators to the format in the retail sector, on the other hand.

For the time being, the expansion plans of operators familiar with this format, such as Leroy Merlin, which expects to open 25 new stores between now and 2020; Ikea, with new formats such as the new delivery point in Navarra; Media Markt, Sprinter and supermarkets such as Lidl and Aldi, as well as the entry into retail parks of less typical brands, such as H&M, C&A and Mustang, are proof of the consolidation of the retail park segment. (…).

The report also identifies which provinces have the greatest potential for the construction of retail parks, based on retail density and the spending capacity of each population. País Vasco, Cataluña, the Balearic Islands and Castilla León are the regions with the most suitable provinces for this business niche.

Original story: Mis Locales

Translation: Carmel Drake