Tag: Atlas

C&W Becomes Favourite To “Acquire” Aguirre Newman

16 May 2017 – El Confidencial

The most awaited marriage in recent times in the real estate sector looks like it is about to come to fruition. Aguirre Newman has chosen a favourite in its sales process, which it has delegated to Atlas, as El Confidencial revealed: the offer submitted by Cushman & Wakefield (C&W).

The firm led in Spain by Oriol Barrachina has presented the best offer, ahead of those submitted by Savills and Colliers, and its dream of becoming the new giant in the country, and of competing with CBRE and JLL for the leadership of the market, is starting to look like a real possibility, given that the merger of the two consultancy firms would create a giant with almost 670 employees.

Moreover, if the conversations between the two firms end up becoming reality, C&W will also take a step forward in its plans to grow in size in order to debut on the stock market, an option that it has been analysing since the beginning of the year. A year and a half ago, the consultancy firm completed a global merger with DTZ, and it is now aspiring to undertake another integration, in this case, in the domestic arena.

Sources at Aguirre Newman point out that “it is an open process, there are several options and interests in the running and nothing has been agreed. The company is continuing to analyse alternatives”. Amongst others, how to convert an operation that is theoretically an acquisition into a merger.

It has been precisely this question that has brought Stephen Newman closer to the posture being adopted by Santiago Aguirre, given that differences existed between the two partners regarding the benefit of initiating a sales process. Internally, the operation is viewed more like a merger and, in any case, it will require the agreement of the two partners to go ahead, given that together they control 75% of the share capital.

In fact, one of the elements that differentiates Cushman’s offer, according to market sources, is that, in addition to a juicy financial proposal, the firm has been much more flexible in terms of ensuring the continuity of the “Aguirres” and their decision-making power within the newly merged company.

With more than 400 professionals, revenues of €80 million and a gross operating profit (EBITDA) of €12 million, Aguirre Newman has been valued at between €80 million and €100 million. But its success story – it is the only Spanish firm that competes against the large multi-national firms – is going through a critical time for generational and business reasons, which was ultimately what triggered the sales process.

The fact that it is exclusively a domestic firm means that it is being left out of many projects, since large companies prefer to work with consultancy firms that can offer them international support, a growing trend in the face of the globalisation of the economy and that impediment is limiting the current structure of the Spanish firm.

An example of how the market is changing is the very sales process involving Aguirre Newman, given that the offers from both C&W and Savills, i.e. the two most important, are being led from London, according to sources familiar with the deal.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Sareb Has Returned €1,000M Assets To Banks

24 June 2016 – Expansión

In recent years, Sareb has found itself with an unexpected line of business as it works to slim down its balance sheet: it has been returning certain assets to the entities that transferred them to it initally. The company chaired by Jaime Echegoyen (pictured above) has returned more than €1,000 million in real estate assets and loans linked to the property sector to groups that transferred it the assets in the first place.

Those €1,000 million represent 2% of Sareb’s balance sheet upon creation – €50,781 million – and 13.5% of the total reduction in its asset value since 2012.

The assets have been returned due to information or appraisal deficiencies made by the transferring entities, at the time of transfer, between 2012 and 2013. Thus, some assets were transferred to Sareb with values that exceeded their real values and other should not have been transferred to the company at all, as they did not meet the requirements.

Financial sources consulted indicated that some personal loans were transferred to Sareb, which had nothing to do with the purpose of the company.

According to Sareb’s annual reports, corrections are made to asset purchase deeds “for the purposes of identifying the improper categorisation of assets, changes in the perimeter and errors or variations in the estimated valuation on the transfer date”.

Bond returns

With these properties and loans, the entities have returned €1,000 million in bonds that they received in exchange for their assets. (…).

Sareb was created at the end of 2012 from the assets of all of the entities that received public aid during the European bank rescue. Firstly, the banks controlled by the Frob – Bankia, Catalunya Banc, Banco de Valencia, NCG Banco and Banco Gallego – transferred their properties and developer loans, and then those entities that had received aid but not been nationalised –Liberbank, Caja 3 and Banco Ceiss, together with BMN– transferred their assets.

Of all of these entities, Catalunya Banc has received the most assets (in return) from Sareb over the last three and a half years. The entity absorbed by BBVA has now been returned €365 million in total, mainly between 2013 and 2014. CB is followed in the ranking by NCG Banco – now Abanca – with €182 million; Bankia with €168 million; and Banco de Valencia – purchased by CaixaBank – with €161 million.

By year, the most active period in terms of property and loan “adjustments” was 2014, when Sareb returned almost €550 million worth of assets to the entities. But the real estate company is still finding problems with the homes and loans that it was transferred, and this year it has already sent back assets worth almost €60 million to Liberbank, Bankia, Caja 3 and Banco Ceiss. (…).

A new tool

Recently, Sareb launched a new internal tool to help it handle all of the assets that it has on its balance sheet and expedite their transfer. It is called Atlas and it performs more than 300,000 valuations each year, automatically, cross checking market data with socio-economic indicators, such as rental income and population size in each place. (…).

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake