Tag: asset value

Quabit Creates a Corporate Network to ‘Attack’ the Rental Market

24 April 2018 – Eje Prime

Quabit is looking to the future and is organising its business to respond to the new trends in the residential market. The company, chaired by Félix Abánades, has started to create a new corporate network under the activity of freehold properties, a business concept that is used for asset management with ownership rights. The constitution of these companies comes in response to “the evolution of the market and the importance of businesses such as the rental market”, according to explanations provided by Quabit to Eje Prime.

Specifically, the property developer has recently created four companies: Quabit Freehold Properties, Quabit Freehold Properties Levante, Quabit Freehold Properties Centro and Quabit Freehold Properties Sur, whereby covering a large proportion of the Spanish peninsula. All of the companies have their registered addresses at number 1 Calle Capitán Haya in Madrid, which is also home to Quabit’s headquarters.

In this way, the company is getting its business ready to meet the needs of new generations, who see renting as a more feasible option. These types of companies may also be the seed of a future Quabit Socimi, although sources at the company say that this option has been “parked” for the time being (…).

Quabit, recent steps

Last year and the beginning of 2018 have been very positive for Quabit. The property developer bid farewell to 2017 with a net profit of €14.4 million, which represented an increase of 80% compared to the €8 million it earned in 2016.

Moreover, the company recorded turnover of €535.7 million in 2017, although its sales fell by 83% due to a reduction in stock during 2016 and because new developments will start to be handed over this year, according to the real estate company. The market value of Quabit’s assets (GAV) as at 31 December 2017 amounted to €399.3 million.

Moreover, the group’s plans involve continuing to fatten up its portfolio with the purchase of new land to continue growing. In April, the company signed a line of credit for up to €50 million with the aim of financing the acquisition of buildable land focused on the construction of residential real estate assets.

The real estate company signed that loan with several funds advised by Taconic Capital Advisors UK and Grupo Royal Metropolitan España. Specifically, according to the agreement, the line will be used to finance 70% of the amount corresponding to the acquisition of land and taxes, whilst the remaining 30% will be financed by Quabit.

The signing of that line of credit formed part of the new investment financing scheme set out by Quabit in its Business Plan for 2017-2022 (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Lar España Secures Financing To Build Vidanova Parc Shopping Centre

22 September 2017 – Observatorio Inmobiliario

Lar España Real Estate has signed an agreement for the financing of the Vidanova Parc shopping centre located in Sagunto (Valencia). Under the terms of the contract, CaixaBank has granted the Socimi a €24 million loan to fund the construction of the shopping centre.

Building work on the shopping centre started in August last year, once the necessary preliminary phases had been completed to clean, prepare and urbanise the land. Vidanova Parc is expected to open its doors during the first half of 2018. The shopping centre will have a surface area of 120,000 m2, of which 44,252 m2 will be dedicated to retail and leisure. The centre will also have a car park with space for more than 2,300 vehicles.

Lar España says that more than 85% (of the space) at Vidanova Parc has already been leased. Specifically, the shopping centre’s future tenants include Leroy Merlin, Decathlon, C&A, Worten, Norauto, Burger King, Fifty Factory, Yelmo Cines and Urban Planet, along with another 30 brands to complement the food, sport, DIY, fashion, entertainment and leisure offering.

Sergio Criado, CFO at Lar España, highlighted his “satisfaction at having secured this new financing agreement, which is one of several to have been signed over the last few months, and which demonstrates the appeal of Lar España’s properties. In the case of Vidanova Parc, it also represents support for what is going to be one of the most important shopping centres in the region”.

Lar España’s investment in the project will amount to €53 million in total, in addition to the €40 million that the operators moving into the shopping centre are planning to invest. The complex will generate 1,000 jobs in total, split between direct and indirect roles, and the construction phase will create another 200 jobs.

Lar España Real Estate currently owns 31 real estate assets, whose value amounts to €1,448.2 million, of which €1,040.8 million corresponds to shopping centres, €178.6 million to office buildings, €83.3 million to logistics assets and €145.4 million to assets under construction, such as Vidanova Parc.

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

La Finca Goes On Market For €700M: A Chinese Fund Is Interested

22 September 2016 – Ok Diario

Procisa, the property developer behind the business and residential complex La Finca, located in the northwest of Madrid, has put the “For Sale” sign up. Its Board of Directors is now listening to offers for the purchase of 100% of the company’s share capital, which is currently controlled by the heirs of Luis García Cereceda, founder of the family empire who died in 2010. There are already several investors interested in negotiating the purchase of the group.

According to sources close to the company’s Board of Directors, the objective right now is to continue depreciating the assets and to close the sale before the crisis that the company is undergoing hinders the operation.

According to data from the Commercial Registry, the value of Procisa’s assets decreased to €890 million at the end of 2014 (the last year for which accounts are available), an figure that falls well below the more than €1,000 million recorded in 2010. In fact, according to the sources consulted, the firm is currently reported to be worth around €700 million, a figure that concerns the company’s directors.

The key behind the success of this operation is for the majority shareholder, Susana García Cereceda, to give her approval for the sale of 100% of Procisa, something which has been denied until now. In fact, in June, the General Shareholders’ Meeting approved the carve out of the company into several companies, to allow the US fund Värde, which is investing in the Spanish real estate market, to enter the business. The majority shareholder wanted Värde to acquire 40% of the office business and for the entirety of the residential business to remain in the hands of the García Cereceda family.

According to the plans designed by the main shareholder, Procisa’s assets were going to be distributed between the new company La Finca Global Assets (which was going to manage the rental of offices and retail premises), the company Finca Somosaguas Golf (which was going to focus on building a luxury residential area under the Casablanca brand) and La Finca Promociones y Conciertos Inmobiliarios (into which the other assets and debts from the current Procisa company were going to be integrated).

Nevertheless, that operation was blocked by the Commercial Court number 11 of Madrid, in light of the opposition filed by Yolanda García, the sister of Susana and owner of 49% of Procisa. It was in this context that the company’s change of strategy arose, which is now “to listen to offers” in order to complete the sale of all of the company’s share capital. (…).

According to sources, a Chinese investment fund is already willing to make an offer for Procisa, although the sources consulted preferred not to give any more clues about the deal so as not to jeopardise the potential sale. The trump card that the company’s Board of Director have to close the operation is the recovery of the Spanish real estate sector, and the fact that a number of major companies are located in La Finca, both Spanish and multinationals. In addition, the company owns a luxury residential area, which has great potential to appreciate over the medium term.

Original story: Ok Diario (by L. Ramírez and Jaime Acero)

Translation: Carmel Drake

The Socimi VBA Will Debut On The MAB In November

16 August 2016 – El Confidencial

Another new Socimi, VBA Real Estate, is planning to list on the stock exchange and has decided to accelerate its debut. It is now working against the clock ahead of its listing on the MAB (Alternative Investment Market) in November. But that is just the beginning, given that the company hopes to move onto the main stock market and to start competing with the large Socimis in the field, in other words, with Merlin, Hispania, Lar and Axiare.

In fact, its strategy on the stock market partially replicates those adopted by these large vehicles, given that the reason why VBA is debuting on the MAB is not just to comply with the legal requirements imposed on Socimis to benefit from their special tax regime. In this case, VBA also wants to raise money to finance new purchases and grow in size, a policy that would involve future capital increases, and that means that its upcoming debut on MAB will be structured as an IPO (Initial Public Offering or Oferta Pública de Suscripción or OPS).

To accompany it on its stock market debut, the Socimi has hired Renta 4 and Aguirre Newman, and has also hired professionals from firms such as PwC and McKinsey to comprise its management team, with David Calzada at the helm, as the CEO of VBA.

The Socimi already owns assets for rent in its portfolio, comprising 166 homes, 17 parking spaces and 68 storerooms, spread over four complete buildings; as well as others, scattered across several properties. It has performed these operations with a net direct profitability of 5%, without gearing, and a discount of between 10% and 30% on the market value, which has allowed it to accumulate an increase in its asset value of 34%.

To build this portfolio, VBA has invested €14 million, after having analysed operations worth €420 million and having raised €16.2 million, as well as having closed financing amounting to €3 million. With its upcoming debut on the stock market, the Socimi hopes to secure another €15 million, which will allow it to continue to progress towards its investment objective of €100 million.

According to its roadmap, the company hopes to have a gearing or Loan to Value (LTV) ratio of close to 50%, an ambitious challenge, given that it currently amounts to 16%.

Diversified shareholding

To give credibility and transparency to these numbers, VBA subjects its accounts to a quarterly review and publishes the corresponding financial statements, along with a valuation of its assets, a policy that adopts in order to provide a period point of references to investors interested in investing in its shares. This approach means that it is already complying with the practices of the (main) stock market, even though the obligation does not apply to MAB-listed companies.

Currently, the Socimi’s share capital is owned by 35 different shareholders, from Israel, USA and Spain, and none of them owns more than 15% individually. Part of its decision to accelerate its debut on the stock market (it could have waited until 2017) was based on the fact that several investors are interested in buying its share capital, but they will only do so once the company is listed.

Madrid, Málaga, Valencia, Sevilla and Bilbao are the cities where VBA has set its sights. It tends to close its investments in specific areas and neighbourhoods outside of the centre of those capitals, focusing instead on more popular areas, where rental prices are more affordable.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Slim Appoints Trusted Advisor As Realia’s Non-Exec Chairman

7 October 2015 – Cinco Días

The tycoon Carlos Slim is starting to introduce his own people into the real estate company Realia. Yesterday, he appointed two new members to the Board of Directors, including Juan Rodríguez Torres, who will serve as the non-executive Chairman.

Slim controls the property company, which was founded in 2000 with assets from Bankia and FCC, through his company Inmobiliaria Carso.

He took control after purchasing a 24.9% stake in the share capital from Bankia at the beginning of this year. Moreover, he indirectly controls 36.88% of Realia’s capital through his majority shareholding in FCC.

The new Chairman is a man who Slim trusts completely. The two men are the same age (75) and both studied Civil Engineering at the Universidad Nacional Autónoma de México. They have also served together as directors on the boards of several companies owned by Slim, the second richest man in the world, according to Forbes. Rodríguez takes over from Ignacio Bayón, who has held the post since Realia was constituted and who is now retiring.

Several other changes were communicated to the CNMV, including the resignation of Iñigo Aldaz, the CEO – Slim has not yet revealed who will take over his role.

Realia is restructuring its Board of Directors after Slim won the takeover war that was waged with Hispania, in which George Soros holds a stake, to take over the control of the real estate company in June.

The company also appointed the Mexican CEO of FCC, Carlos Jarque, as a member of the Board of Directors of the construction company.

Moreover, Alicia Alcocer Koplowitz and Esther Alcocer Koplowitz will continue as members of the Board, in their capacity as representatives of FCC. Meanwhile, Gerardo Kuri, Slim’s key man at Cementos Portland, also controlled by the tycoon, will enter as a shareholder-director.

Improvement in Realia’s asset value

Meanwhile, the company also reported that it has established a new accounting policy whereby the valuation of its assets would have increased from €912 million as at 31 December 2014, when they were valued at acquisition cost, to a fair value of €1,399 million. “The impact of this measure on the company’s own funds, at the consolidated level, would have been an increase of approximately €367 million”, said a source at the company.

According to Realia, through this decision, the company is bringing itself in line with the standard practices of the main listed real estate companies in Spain. They are also improving the transparency of the communication of the company’s value to the market, since the fair value method, endorsed by an independent expert, more adequately reflects the value of the assets of real estate companies.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake