Meliá, Barceló and NH Implement Asset Light Model

2 September 2019

The major hospitality groups Barceló, Meliá and NH are taking advantage of the fervour in the Spanish real estate market to sell off some of their real estate holdings to interested funds and socimis. Many of the firms are implementing an asset rotation policy, shedding capital-intensive investments and looking to switch to a policy of hotel management and leasing.

To this end, Meliá, Barceló and NH have sold hotels worth approximately 500 million euros over the last two years as a wave of new investors, many socimis, have entered the market. Meliá began its asset-light policy a decade ago, and it is looking to increase the percentage of its EBITDA from its current 32% to 50% by 2024. In 2019, it accounted for just 2%.

Barceló is following the same sort of strategy, selling a hotel in Marbella to Hispania for €19 million. In 2017, Barceló sold 24% of its hotel sector Socimi Bay for €172 million, holding into long-term leases on the hotels.

NH, now part of the Thai group Minor, sold the NH Collection Barbizon Palace in Amsterdam to the German asset manager Deka for €156 million earlier this year, while also maintaining a 20-year lease on the property. NH has assets valued at €2.1 billion, including 350 hotels, with 54,000 rooms. Of those, NH only owns 76. The rest are leased or managed by the hospitality group.

Original Story: Expansión – Rebeca Arroyo

Adaptation/Translation: Richard D. K. Turner

Colonial, Merlin and Lar Rotating Assets Worth €2.5 Billion

20 August 2019

Spain’s largest socimis have all been taking advantage of the benign economic climate to implement a strategy of asset rotation, selling off non-strategic assets to raise funds for further investments. Colonial, Merlin and Lar España have completed more than 2.5 billion euros in divestments over the past two years.

Of the four, Colonial has been most active in this regard. The socimi has sold assets worth approximately €1.5 billion in the last two years, more than half stemming from its acquisition of Axiare. In October 2018, Colonial sold seven office buildings to Tristan Capital Partners and Real IS, as well as a development under construction in Madrid to Grupo Catalana Occidente, for 441 million euros. Of the seven properties sold, five originated with Axiare.

Colonial also recently sold a portfolio of 18 logistics assets, covering an area of 473,000 square meters, to Prologis for an estimated €425 million. What’s more, the socimi sold an office building in Paris for €450 million in mid-2017. The firm is investing the proceeds of some of its sales, allocating €468 million in twelve projects under development in Madrid, Barcelona and Paris, the three markets where the company operates.

Merlin, for its part, sold its 17% stake in Testa to Blackstone last September for €321 million. The firm also sold its portfolio of hotels to Foncière des Regions for €535 million. Lar has also sold €425 million of assets in the last 18 months. Of that, €120 million stemmed from the sale of a logistics portfolio to Blackstone, while another €190 million resulted from the sale of four office buildings in Madrid and Barcelona and some small retail assets.

Original Story: Expansión – Rebeca Arroyo

Adaptation/Translation: Richard D. K. Turner

Blackstone Announces Sale of €200-Million Portfolio of Homes

5 August 2019

Blackstone has put up for sale a portfolio of residential assets that contains free and protected housing worth 200 million euros. The US-firm has initiated a process of asset rotation after five years of acquisitions.

The American fund finalised its first major sale in Spain in July. The loans it sold were part of a €5.5-billion portfolio of mortgages the fund acquired from Catalunya Banc in 2014.

Original Story: Idealista

Adaptation/Translation: Richard D. K. Turner

Blackstone Selling More Than €900 Million in Assets

9 July 2019 – Richard D. K. Turner

The U.S. giant Blackstone, following an asset rotation policy, has begun to sell some of the assets it has acquired since it began operations in Spain in 2012. Specifically, Blackstone is selling off some of the portfolio it took on upon its acquisition of Hispania.

So far, Blackstone has accumulated a portfolio valued at more than 23 billion euros. After its acquisition of Hispania, the US investment giant has already sold several office buildings. Blackstone is also analysing the sale of some of the residential assets it controls through its socimi Fidere, which is listed on the Alternative Stock Market (MAB). In total, counting completed and expected sales, the American fund will pocket more than €900 million.

Ilunion is one of the principal portfolios of assets Blackstone has sold so far this year. The assets include five office buildings in Madrid, which sold at the beginning of the year to a subsidiary of Zurich Seguros, Rex Spain ZDHL, for €163.6 million.  The American giant is analysing further investment opportunities in the country.

Original Story: Expansion – Rebeca Arroyo

Elaia to Sell Seven Tourist Apartment Complexes in Spain

25 June 2019

Looking to rotate its asset holdings, the socimi Elaia announced that it is looking to sell a portfolio of seven tourist apartment complexes in the Balearic Islands, Catalonia and the Costa del Sol. The French company Pierre & Vacances is currently leasing all seven.

The portfolio consists of a 150-flat complex in Sant Lluís, Menorca, two assets in Mallorca, two on the Costa del Sol, one in L’Estartit, Girona, and one in Barcelona.

The firm is looking to attract small and medium investors that would be interested returns of between 4% and 5% per year.

Original Story: EjePrime

Blackstone Puts a Portfolio of FIdere’s Homes Worth €150M-€200M Up For Sale

25 April 2019 – Expansión

The US fund Blackstone has launched the sale of a portfolio of homes belonging to its Socimi Fidere worth between €150 million and €200 million.

According to sources, several interested parties are already analysing the portfolio, whose perimeter may vary depending on the offers received. This sale forms part of a wider initiative by Blackstone to rotate some of the assets in its portfolio. The US fund has already put some of the offices owned by another Socimi Corona up for sale.

Since 2012, Blackstone has invested almost €24 billion in real estate in Spain, where it is the owner of several investment vehicles and management companies, including the Socimis Testa, Albirana and Torbal, as well as Hispania.

Original story: Expansión (by R. A.)

Translation/Summary: Carmel Drake

Blackstone Prepares a Series of Portfolio Sales Following its 6-Year Spending Spree

27 March 2019 – El Confidencial

The US fund Blackstone, which has been so busy on the buy side in recent years, is getting ready to put the for sale sign up, over some of its assets at least. It is preparing the sale of several portfolios, including the Socimi Corona, the homes of Fidere and also some of the former assets of Popular that it acquired from Santander.

Several sources have confirmed that the US fund is currently designing portfolios for sale in order to rotate some of the €20 billion in property that it now owns in Spain. Most of the portfolios are expected to be small, between €50 million and €300 million, although the fund is reportedly also working on some larger deals that could reach €600 million. The plan is to put the portfolios on the market before the summer.

Blackstone’s target market includes pension funds and insurance companies, which operate with lower costs of capital and which, therefore, can afford to pay more. It already trialled that strategy with the sale of Hispania’s offices to Zurich, to great success. But Blackstone will also target other funds looking to grow or complement their existing investments.

Despite this vendor activity, the US giant is still committed to buying assets in Spain. It simply wants to rotate its most mature assets, given that it started making investments in the country in 2013.

Original story: El Confidencial (by R. Ugalde and J. Zuloaga)

Translation: Carmel Drake

Emesa to Increase Asset Rotation & Invest Beyond Barcelona

9 December 2018 – Eje Prime

Emesa is having a change of heart in the real estate sector. The business corporation, which has just created a Board of Directors to govern the company, is changing its mentality for investing in the real estate market, by reducing its portfolio part and committing to a higher rotation of assets.

The objective of this change is to look for higher returns in the real estate business. Moreover, the company, specialising in the office market in Barcelona, does not rule out diversifying its investment into other types of assets or its expansion into other cities in the country, such as Madrid and Valencia, according to Expansión.

In 2017, Emesa disbursed €38.5 million in the purchase of land for new developments in Barcelona. In the office segment alone, the company incorporated 52,000 m2 of space to the portfolio of properties that it already owned in the Catalan capital. In this sense, last year, the corporation purchased a building at number 632 Avenida Diagonal.

The next most important projects for Emesa are located in Finestrelles and El Empordà, with a combined investment of approximately €105 million. In the first of those areas, the company is going to develop an important office project, whilst in the second, it is going to develop Empordà Golf Club, a complex that it acquired from Habitat last May for €20 million.

Original story: Eje Prime

Translation: Carmel Drake

Elix VRS Purchases a Building in Barcelona for €4M

3 December 2018 – Eje Prime

Elix Vintage Residencial Socimi is continuing to back Barcelona. The company, led by the businessmen Jaime Lacasa and Jorge Benjumeda, has purchased a building in Barcelona for €4 million, according to a statement filed by the company with the Alternative Investment Market (MAB).

The purchase of the asset, located on Calle Tamarit in the Catalan capital, has been financed in part (42.5%) by own funds and in part (57.5%) by a loan. The loan, granted by CaixaBank, has a duration of five years with a quarterly repayment schedule.

This operation follows the purchase of another residential property that the Socimi carried out at the end of October. On that occasion, Elix VRS acquired a building on Calle Consell de Cent for €4.1 million, according to a report filed by the company with the MAB. Moreover, in August, the firm purchased a portfolio of four assets in the centre of the Catalan capital for €34 million.

The Socimi, controlled primarily by the property developer Elix and the funds KKR and Altamar Capital Partners, has a portfolio containing more than 25 assets located in Madrid and Barcelona. The company’s plans involve purchasing around forty buildings between now and 2021 to subject them to comprehensive renovations and then put the homes up for rent. That rental income will sustain the Socimi, which plans to rotate its portfolio of assets every three years.

Elix VRS made its debut on the stock market in July. The company, which is headquartered in Barcelona, was created with a share capital of €100 million, the majority of which was contributed by KKR and a group of international and domestic investors including Altamar and Deutsche Finance Group. The rest of the shares are owned by Jaime Lacasa and Jorge Benjumeda, the founders of the Socimi.

Original story: Eje Prime (by B. Seijo)

Translation: Carmel Drake

Mapfre Accelerates its Divestments: 250 Properties Up For Sale

9 November 2018 – Economía Digital

Mapfre acknowledged in its annual report for 2017 that its real estate strategy “was focused on the divestment of non-strategic assets”. That strategy has intensified in 2018: the Spanish insurance company has started a major sales operation, involving more than 250 assets, which now have a “for sale” sign hanging over them. The divestment will materialise next year.

According to sources speaking to Economía Digital, Mapfre has engaged Solvia, the real estate firm still owned by Banco Sabadell – which is up for sale itself and which is expected to change hands before the end of the year – to exclusively market 256 real estate assets located across Spain, although they are particularly concentrated in Barcelona, Valencia and Madrid.

The most important assets in this portfolio are six plots in Madrid, Las Palmas and Mallorca, whose sale is expected before the end of this year. The other assets are essentially commercial premises that Mapfre owns as investment assets and leases to third parties. The divestment period will run until 31 December 2019.

The plots and offices that the insurance company wants to sell are located in around a dozen Spanish provinces. Approximately, half of them are situated in three autonomous regions: the Community of Valencia, Cataluña and Madrid, although the firm also has assets in Galicia, Andalucía, Aragón and Navarra.

When consulted by this newspaper, Mapfre and Solvia did not deny the operation but they did decline to comment. Sources at the insurance company have explained that the company is constantly rotating its real estate assets and searching for others of more value, although they have not explained whether the company is currently investing or not.

Mapfre’s real estate sales

The truth is that in 2016 and 2017, Mapfre completed some major real estate divestments, but it did not get rid of anything close to 250 assets in either year. Last year, it sold properties for €130 million, mainly corresponding to four large assets: a plot in Madrid for €5.5 million; a building also in Madrid for €72 million; and two plots in Palma de Mallorca for €22.5 million. With these sales, the company chaired by Antonio Huertas (pictured above) obtained capital gains of €65 million.

In 2016, the entity’s property sales were clearly impacted by the sale of a majority stake in Torre Mapfre in Barcelona. First, it tried to sell that property to an investor who wanted to convert it into a Four Seasons hotel, but after failing to obtain the necessary permits due to Ada Colau’s moratorium, it sold 66% to the Fundación Mapfre for €175.4 million and renovated it.

Mapfre’s real estate risk amounts to around €3 billion. Specifically, it closed 2017 with properties that had a market value of €2.945 billion, around €170 million lower than in 2016. More than €1.2 billion correspond to own-use properties, such as headquarters and offices, whilst almost €1.7 billion are investment assets, including the portfolio that the entity has put up for sale through Solvia (…).

Original story: Economia Digital (by Xavier Alegret)

Translation: Carmel Drake