Apollo Gets Ready To Buy Property Developers & Hotels In Spain

14 March 2017 – El Confidencial

A new player has emerged in the Spanish real estate market. Apollo, one of the largest fund managers in the word, has decided to join the fray between Värde, Castlelake and Lone Star, and analyse the purchase of its own property developer, according to sources familiar with the entity.

The firm led in Spain by Andrés Rubio is tackling this strategy through its new fund (its third), which already has €2,700 million and which plans to raise up to €4,000 million. This money will be used to acquire real estate assets, NPLs and hotel portfolios in Spain, Italy, UK, Ireland and Germany. Our country could receive around €1,000 million of investment, given that Apollo is expected to continue its commitment to the hotel sector, into which it took a giant leap last December, when it acquired two portfolios from CaixaBank and Popular, and looks set to enter the property development business with a bang.

According to the same sources, one of the companies that is on the fund’s radar is Levitt, which has some of the best plots of land and fame in the sector. Its possible sale has been mooted in the market for a while, given the generational change that the group faces and the appeal of the company, which operates in the high-end segment.

Asentia, Colonial‘s former bad bank is one of the other companies that has been making a name for itself in the market; Acciona Real Estate has also been considering its options, which range from an IPO to the entry of a large fund into its share capital; whilst Procisa, the former property developer behind La Finca, has sold 40% of its offices to Värde and continues to control important developments on plots of land in Madrid (Pozuelo de Alarcón and Brunete), Huelva (Cartaya) and Lleida (Baqueira).

In fact, Apollo was previously involved in negotiations regarding a similar operation to the one that Värde ended up signing with the Cereceda family. But the rapid consolidation that has taken place in the market, with the creation of Aedas by Castlelake, the purchase of Vía Célere by Värde and the imminent debut of Neinor on the stock market, has convinced the fund that a window of opportunity has now opened up in the property development sector.

Apollo plans to invest this new €1,000 million fund over the next three or four years, during which time it wants to become a top-tier player in the property development sector, in line with the moves made by its competitors, and to create its own hotel platform.

In the residential sector, it intends to focus on buildable land, located primarily in Madrid and Barcelona, the two provinces where the incipient recovery is being felt most strongly.

In the tourist segment, in parallel to the strategy to purchase loan portfolios secured by hotel collateral, the fund is actively looking for well-located establishments to create a vacation platform along the coast and on the islands, comprising around 20 assets.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Colonial To Pay Dividends Again After 10 Years

23 February 2016 – El Mundo

The Group generated profits of €415 million in 2015, thanks to the revaluation of its buildings.

Its profits in 2015 were 15.6% lower than in 2014, when the figures reflected the positive accounting effect of the deconsolidation of Asentia.

After 10 years, the Colonial Group is going to distribute dividends once again, distributed from its results for the financial year 2015. The real estate company will allocate around €47 million for payment to its shareholders, 59% of whom are individual investors. The rest of the Group’s capital is held by the Villar Mir Group (15%), the Qatar Investment Authority (13%) and Aguila LTD (7%), a fund owned by (the Colombian group) Santo Domingo (…).

Colonial’s share price closed 2015 at €0.62, after improving by 29% during the year. Shareholders will receive a dividend of €0.015 per share. The company, led by Juan José Brugera, generated a net profit of €415 million last year, after receiving revenues from rental income of €231 million, up by 9% YoY, due to a 6% increase in rental prices, as well as the impact of new acquisitions made in 2014 and 2015. The Group’s profits in 2015 were 15.6% lower than in 2014, when the results reflected the positive accounting effect of the deconsolidation of Asentia (which was not repeated in 2015).

The real estate company, which operates in Barcelona and Madrid, as well as in Paris, through its French subsidiary Société Foncière Lyonnaise (SFL) recorded a 20% increase in the valuation of its assets, to €6,913 million, with 4% of that amount relating to its most recent operations in Paris. In 2016, the firm wants to continue its pace of investment, at around €300 million per year, even though that figure rose to €475 million in 2015. It will also continue to operate in the office segment in its three geographical markets, through both renovations and new builds.

Original story: El Mundo (by M. T. Coca)

Translation: Carmel Drake

Colonial Earns 64% Less & Neutralises Effect Of Asentia

30 July 2015 – El Economista

The real estate company Colonial has closed the first half of the year with earnings of €202 million, down by 63.8% with respect to the same period last year, when it recorded earnings of €559 million, due to the deconsolidation of Asentia, its bad bank.

In a statement, Colonial said that its recurring net profit for the first half of the year, i.e. the profit generated by the real estate company’s ordinary activities, amounted to €11 million in H1 2015, an increase of 39.2% compared with the first six months of 2014.

Although Colonial’s accounts for H1 2014 included a positive extraordinary item for Asentia amounting to €704 million, the accounts in H1 2015 also included a €348 million revaluation of the company’s assets. Colonial said that the value of its assets has increased by 21% in twelve months.

Colonial’s business model is simple – essentially, it purchases buildings in prime areas of Barcelona, Madrid and Paris, renovates them for rental and then collects the corresponding rental income. Most of the company’s assets are leased as offices.

In terms of revenues, the real estate company, whose main shareholder is Grupo Villar Mir with its 24% stake, earned €111 million during the first six months of 2015, up by 6%.

So far this year, Colonial has invested €165 million in the acquisition of buildings, including three properties in the centre of Madrid and one in the centre of Paris.

To illustrate the strong performance of the business, Colonial highlights that during the first six months of the year, it has signed rental contracts for space covering 107,692 m2, which is equivalent to the entire surface area that it signed contracts last year as a whole.

Original story: El Economista

Translation: Carmel Drake

Colonial Records Profit Of €5.8M In Q1 2015, Up 132%

8 May 2015 – Expansión

The real estate company Colonial increased its rental income by 3.77% during the first quarter (of 2015) to reach €55 million and its net profit rose by 132%, to €5.8 million. These results do not take into account the €674 million profit recorded last year, due to an accounting entry that resulted form the deconsolidation of Asentia.

Colonial attributed its improved result to the recovery in the real estate market in Paris, Madrid and Barcelona, where it owns (most of its) property. The group has improved the occupancy rate of its buildings as well as the rental income it charges.

Original story: Expansión (by M.A.)

Translation: Carmel Drake

Colonial Repeats Its Sales And Records A Profit Of €492m In 2014

2 March 2015 – Expansión

An extraordinary year for Colonial.

The real estate group closed 2014 with a profit of €492 million, following the loss of €547 million it recorded in 2013. The key driver behind the turnaround in its results was the deconsolidation of Asentia, the subsidiary into which the company grouped its toxic assets. Colonial’s assets were also revalued, by 9.6% in comparable terms, to €5,757 million, which also had an effect on the income statement.

The group’s turnover amounted to €211.48 million, down 0.8%, although in comparable terms, revenues increased by 3.2%.

Colonial’s share price decreased by 2.53% in trading on Friday, to close at €0.655.

Original story: Expansión

Translation: Carmel Drake

Ex-Executives of Altamira & Sareb Buy Asentia

3/03/2014 – Cinco Días

Colonial transferred its real estate branch Asentia to consultant company Eneas, chaired by José Luis Contreras, an ex-executive of Altamira (Santander´s RE platform) with view to restructuring and maintaining the company´s liability.

Also, MainSpring, represented by César Goyache, ex-executive of Sareb and Alvarez & Marsal, has taken part in the transaction.

According to the sources with knowledge of the operation, Crédit Agricole and Colonial hold 20% of Asentia´s capital each.

At the extraordinary meeting in Barcelona in January, the managing board of Colonial agreed upon a €1.000 million capital enlargement, due to its €1.759 million debt expiring this year.

By now, Asentia has been put up for sale with debt equal to €1.428 million. (…).


Original article: Cinco Días (Alberto Ortín)

Translation: AURA REE

Colonial will try to refinance 3.000 million Euros.

The real estate company Colonial faces the year 2013-2014 with important changes in the horizon. After six years of financial and corporate stability, with several banks and international funds leading the company after the exit of the former president and main shareholder Luis Portillo, Colonial is working in a profound change in its structure.

Colonial´s managing director, Pere Viñolas, confirmed Expansión, at the beginning of 2013 that this year would be “problematic” for the company, and therefore a negotiation between banks and shareholders would be necessary.

The current situation of the company, as in any other Spanish real estate company, is serious due to the high debt it drags along since the years of the real estate boom. Its financial liability reached on the 30th June 4.916 million Euros.  A debt which is divided between its different business lines, as 2.100 million Euros correspond to their patrimonial activity in Spain, around 1.400 million Euros to the activity in France and 1.415 million Euros to its subsidiary Asentia, a company created to hold the more problematic residential assets, such as apartments and land, as well as the subsidiary for malls Riofisa.

Colonial established 2013 as the timeline to refinance around 3.000 million Euros of that debt, although only 139 million Euros are due in the second semester. The main problem would be the 1.800 million Euros it needs to pay in 2014, which will be impossible to return with biannual earnings of 100 million Euros.

With this situation in mind, Colonial is studying various alternatives. The first one would be to give way to new investors, with cash, in order to restructure the company. The main candidate is Villar Mir. The businessman, who controls the construction company OHL, has offered the acquisition of 30% of the capital of the company from banks. However, the negotiations which seemed well under way in March, now seem failed, and new candidates, such as Torreal and an international fund, are starting to sound.

The main hurdle for these negotiations seems to be the high debt of the group and in Asentia. For this reason Colonial would like banks to keep this subsidiary, exchanging debt for participative loans. But, in exchange creditors claim that the real estate company should give up the French company SFL, the jewel of its portfolio.

The sale of this subsidiary would mean important earnings for Colonial but would leave it without its main source of income, as 70% of its turnover comes from Paris. 70% of the values of its assets correspond to the French subsidiary. (…)