Starwood Purchases Omega Park in Madrid and an Office Building in Barcelona

24 January 2019 -El Confidencial

The US fund Starwood Capital has taken another important bite out of the Spanish office market with the purchase of the entire portfolio of Autonomy, the Socimi whose main asset was the Madrilenian Omega Business Park, a giant corporate complex comprising four buildings spanning more than 33,000 m2, and which houses the headquarters of multinationals such as BP and Samsung.

The transaction, whose consideration amounted to €125 million, also includes an office complex in the sought-after 22@ district of Barcelona, which allows the US fund to also expand its presence into the Catalan capital and to make strides in its commitment to build an office portfolio in Spain worth €500 million.

To reach this objective, Starwood joined forces last year with Drago Capital, together with which it starred in the purchase of the Madrilenian San Fernando Business Park for €120 million, and which has also accompanied it in its purchase from Autonomy (…).

The Socimi, meanwhile, had put the for sale sign up over its whole portfolio a while ago. It constructed the portfolio with a clear opportunistic appetite during the worst periods of the crisis and it is now able to undo its positions with juicy gains.

In fact, at the end of 2017, Autonomy sold the jewel in its crown in Spain, the building located at number 4 Gran Vía, to the Riberas family, owner of Gonvarri and Gestamp, for €43 million, an amount that generated a gain of 40% for the opportunistic investor.

Following the sale of the office portfolio to Starwood, the Socimi is going to distribute €44.7 million as an issue premium, as well as an interim dividend of €51 million, amounts that in both cases will be paid into the accounts of shareholders on 30 January.

Moreover, once all of these operations have been completed, Autonomy will still have €10 million in cash and no assets under ownership, which means that it will have completed its objective of divesting all of its positions in Spain with juicy gains.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Starwood Capital Finalises the Purchase of an Office Portfolio for €125M

24 January 2019 – Expansión

The fund Starwood Capital is seeking to strengthen its presence in Spain with the purchase of a portfolio of offices in Madrid and Barcelona. Specifically, Starwood is finalising the purchase of an office complex in Madrid, comprising four buildings, and another one in Barcelona from the Socimi Autonomy for €125 million, according to explanations from market sources speaking to Expansión.

In the case of Madrid, the four office blocks are located in the north of the city, inside the Omega business park, in the Arroyo de la Vega area. They span a combined surface area of 33,458 m2 and have 940 parking spaces.

The Omega Business Park, which is home to the headquarters of companies such as Samsung, BP and Allianz, is located next to the airport of Madrid and has become one of the most established areas in the north of the capital.

Besides the offices in Madrid, the operation also includes a new build property in the 22@ district of Barcelona, with a surface area of 12,596 m2.

The building in Barcelona comprises two towers connected by a common entrance hall, with twelve and four floors, respectively. The building also contains commercial premises and 216 parking spaces.

The building on Calle Pallars is occupied by tenants such as Regus, General Electric and Ticketmaster. The operation has been advised by the real estate consultancy CBRE, on the vendor side, and by Drago Capital, which has advised the buyer and which will manage the properties (…).

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Investors in search of bargains.

KKR, Centerbridge, Cerberus, Lone Star, Apollo, Blackstone, Colony Capital or Green Oak. Their names sound more and more often in Spain, as the list of international funds interested in finding a real estate bargain continues growing. The traditional Spanish venture capital is out of the equation, not only due to lack of cash, but also because of the legal limitations to invest in this kind of assets. Only certain firms, such as Atitlan, from the Roig family, or Altamar have the possibilities of participating in the real estate sector.

These great funds have nearly 13.000 million Euros to invest in Spain and a great part of this capital is for the real estate sector that is now considered a priority. Nevertheless, the search for assets is very specific.”The foreign investors focus on a liquid and good quality product, preferably in rent; the search for high profits implies important discounts, which reduces the volume of operations”, Jesús Conde, partner in the real estate department at Baker & McKenzie.

The operations in the sector depend on the market of each asset. In the residential one, “the foreign funds are waiting for Sareb to organize and package the portfolio of the nationalized banks, so as to offer then a very reduced price for a set of assets with a similar level of liquidity and risk, with discounts of up to 90% of the original valuation”, Eduard Saura, managing partner of the financial assessment company Accuracy, explains.  In his opinion, the Anglo Saxon opportunistic funds are the ones keeping an eye on these assets.

This expert considers there is less interest on the segment of shopping malls. However there are still operations. For example, the bid organized by Morgan Stanley for the three malls that its fund Msref has in Spain was attended by many funds that are not present in the country. Only foreign funds have reached the final stage: Bau Post, Drago Capital and the one that is best positioned, Incus Capital.

At the end of the year, another foreign investor made its debut in Spain: the North American Autonomy, which acquired two buildings in the business park Omega, in Alcobendas (Madrid). In Barcelona, other funds, this time European ones, Värde and Anchorage, took part in the Operation Copernico, with the acquisition of five buildings in the centre of the Catalan capital and in Madrid for around 100 million Euros.

If the first ones to arrive to Spain were the Anglo Saxon funds, in the last few months other funds with a Latin American origin, have arrived to the market with a lot of liquidity. “Up to now, the Latin American capital fled the volatility of its countries and bet on the United States to invest. Now they are searching in Spain”, Francisco Machón, in charge of Investments of BNP Paribas Real Estate, assures. One example is the tycoon Carlos Slim, who acquired six months ago properties from CaixaBank for more than 400 million Euros, or the acquisition of a building in Recoletos street, closed last week, by a Latin American family.

“The investors are much more active, although they search for an adjustment in prices in view of the uncertainty of the awaited flow of cash for the next three years”, Javier García-Mateo, in charge of Real Estate at Deloitte, declares.

Source: Expansión