The Reuben Brothers Win the Bid for Santander’s Ciudad Financiera

12 November 2018 – El Confidencial

Banco Santander’s Ciudad Financiera has a new owner. The Reuben brothers have won the bid to acquire the headquarters of the Spanish bank, whose former owner, Marme Inversiones, filed for creditors’ bankruptcy. The Asian investors, who are residents in London and lovers of Ibiza, submitted the highest bid for the land in Boadilla del Monte (Madrid), fighting off competition from the bank itself chaired by Ana Botín and from the Arab fund AGC Equity Partners.

That is the result of the bid after the envelopes containing the final offers from the three candidates were opened by the bankruptcy administrator. Although the final price is not known, the offers amounted to around €3 billion, according to sources close to the operation, one of the largest operations ever in the real estate market in Spain involving a single asset.

From now on, to validate the purchase by the Reuben brothers, the judge from the mercantile court who is conducting the sale will have to certify that the offer from the London-based millionaires is correct, fulfils all of the requirements and complies with all of the analysis regarding transparency and money laundering. Nevertheless, and even if the judge gives his blessing, Banco Santander may exercise its right of first refusal, which gives it the last word for recovering the headquarters, which it sold in 2008 to a group of investors, who were also British, and with whom it agreed to remain as the tenant for forty years.

For that, the €500 million that Santander has paid Marme by way of rental over the last ten years has to be deducted from the final price, as does the €300 million of intra-group debt that is no longer taken into consideration following the entry into bankruptcy of the company.

Movements in the courts

Because what the Reuben brothers are now buying is the asset of a company that, after borrowing funds to pay even the tax on the original acquisition in 2008, can no longer keep up repayments on the loan it requested to acquire Ciudad Financiera and so filed for bankruptcy. After a long bankruptcy administration process, numerous claims by the creditors in the courts and offers from several international sovereign funds, the Spanish entity wanted to acquire the land of its headquarters in Boadilla del Monte (Madrid), where almost 7,000 people work.

The creditors of Marme Inversiones 2007 include ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank, which granted a loan amounting to €1.575 billion to Propinvest ten years ago in the form of a leaseback arrangement with Santander’s largest real estate asset. Other entities also participated in that loan, including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which started to sell their stakes in the loan to vulture funds in 2011, with significant discounts on the nominal values, when the owner started to acknowledge that it was unable to make the debt repayments.

One of those who purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. The first two submitted an offer to acquire Ciudad Financiera on 17 September, but their proposal was lower than those offers by Santander (…).

The Reuben brothers, which have purchased almost 168 hectares of land in Ibiza over the last two years, have submitted their bid for the Ciudad Financiera through Ibiza Properties LTD. That company was constituted on 1 August, with a nominal value of just GBP 100, money that it will now have to increase to cover the payment to the bankruptcy administrator.

Original story: El Confidencial (by Agustín Marcos)

Translation: Carmel Drake

BP Acquires 65 Gas Stations in Spain from Avenue Capital and JZ International

2 October 2018

The British oil company has reached an agreement to take over 100% of Kingbook Inversiones Socimi and Petrocorner Retail, the owner and manager of gas stations in 21 provinces of Spain.

The oil company BP has reached an agreement with the venture capital funds Avenue Capital and JZ International for the acquisition of the Kingbook socimi and Petrocorner Retail, a company that owns and operates 65 gas stations spread across 21 provinces in Spain.

The operation has already been finalised, pending the corresponding regulatory approvals, as confirmed by official sources at BP.

Kingbook Inversiones, 60% owned by GL Europe REIT (Avenue), with the remaining 40% held by JZ Real Estate (JZI), both vehicles domiciled in the Cayman Islands, was delisted from the Alternative Stock Market (MAB) on July 20, just one year after its debut.

Kingbook had already warned in June that it was conducting “very advanced” negotiations for the sale of 100% of the company. The firm had been building its portfolio since 2014.

Another source close to the operation said that DISA (Shell in the Peninsula), the Canary Islands oil company chaired by Demetrio Carceller (Damm), also considered acquiring the asset.

The service stations that will become the property of the company formerly known as British Petroleum are distributed between the north, the centre and the southeast of Spain. Specifically, the oil company chaired by Luis Aires in Spain will increase its presence in Asturias, Cantabria, Vizcaya, Guipúzcoa, Navarra, León, Burgos, Zamora, Valladolid, Ávila, Madrid, Valencia, Albacete, Alicante, Murcia, Jaén, Huelva, Málaga, Granada, Almería and the Balearic Islands.

BP is thus consolidating its position as the third largest fuel distributor in Spain, behind Repsol and Cepsa and ahead of Galp and Shell. With this agreement, BP will control around 700 service stations in Spain. In 2017, the company stated, within its expansion strategy, that it owned 648 total stations.

Until now, these gas stations were operated by Petrocorner, which has also acquired BP. According to Petrocorner’s website, the service stations are branded by Repsol, Cepsa, BP, Shell, Galp, Avia, while some are independent.

According to the latest accounts sent to the Mercantile Registry, Kingbook lost more than €1.5 million in 2017, compared to a loss of €1,733,446 in 2016.

Although the price of the transaction was not disclosed, the statement company submitted to MAB said that its assets were valued, according to the consultancy CBRE, at approximately 70 million euros (€40 million book value).

Avenue Capital has participated in several important operations in Spain. The US fund gave financial support to Quabit and is participating in the purchase of debt from Banco Santander’s Ciudad Financeira. In June, the fund acquired tile company Roig Cerámica (Rocersa).

Original Story: El Confidencial – Juan Cruz Peña

Photo: Reuters

Translation: Richard Turner

Centerbridge & Blackstone Join Forces to Bid for Santander’s Ciudad Financiera

13 September 2018 – Expansión

A consortium led by the US funds Blackstone and Centerbridge is emerging as the main favourite to buy Banco Santander’s headquarters in Boadilla del Monte (Madrid), in one of the largest real estate operations of the year in Spain, which is set to exceed €3 billion.

The court that is overseeing the creditors’ bankruptcy of Marme Inversiones, the company that has owned the so-called Ciudad Financiera Santander since 2008, has asked the parties interested in purchasing this asset to submit their binding offers by Monday 17 September at the latest. The objective of the bankruptcy administrator is to use the funds raised to repay Marme’s debt in full.

According to market sources, the funds GSO (a subsidiary of Blackstone specialising in restructured debt) and Centerbridge are preparing a joint offer that could amount to €3.1 billion. These investors are negotiating to finance their proposal with a loan that could be led by Deutsche Bank.

Second attempt

Both GSO and Centerbridge are now creditors of Marme, given that they purchased some of the debt from the banks that loaned money to the company back in the day. Their bid could be pitted against others from creditor funds such as Avenue Capital, according to sources close to the process.

During the creditors’ bankruptcy, which began in 2014, GSO and Centerbridge already tried to take control of the company, with a proposal to buy Marme’s share capital and retain the current debt. It was a similar strategy to the one pursued for several years by Aabar (an Abu Dhabi fund) together with the British-Iranian investor Robert Tchenguiz, after buying some of the debt granted to Marme by the bank RBS.

But the administrator has decided to conduct a formal auction so that the interested parties can bid together for the Ciudad Financiera and whereby allow all of the liabilities to be repaid. The creditors believe that offers above €3 billion will be necessary to recover all of the principal and interest.

Just as Blackstone and Centerbridge seem willing to formalise an offer in compliance with the conditions established by the judge, it is not clear whether Aabar is going to participate in the auction. In recent months, the fund has been caught up in a legal dispute with Tchenguiz regarding their joint investment in the company that currently owns the Boadilla campus.

The Kuwaiti fund AGC Equity Partners is also analysing the possibility of submitting an offer for the Ciudad Financiera. Almost two years ago, that firm submitted an offer for €2.7 billion to acquire the headquarters of the Spanish bank, but it did not get the go-ahead because the creditors’ bankruptcy was in an incipient phase and because Santander threatened to exercise its right of first refusal to buy back its offices.

Long-term rental

The investors Glenn Maud and Derek Quinlan, who already owned the Citi skyscraper in London, purchased the headquarters of the Spanish bank in 2008 for €1.9 billion, for which they used a loan from a group of banks led by RBS. Shortly after the acquisition, problems started with meeting the conditions of the loan, which ultimately led to the creditors’ bankruptcy of Marme Inversores, one of the instrumental companies created by Maud and Quinlan to carry out the transaction (…).

The main appeal of the Ciudad Financiera is the fact that the bank chaired by Ana Botín has committed to remain as the tenant for 40 years, until 2048. On that date, the Spanish entity may negotiate an extension to the lease contract or repurchase the property.

Three options

Once the offers have been presented next Monday before the Mercantile Court number 9 of Madrid, which is leading the bankruptcy, three possible alternatives may ensue.

If there are several attractive bids, the judge may open a process to competitively improve the prices proposed. If there is only one offer, of an appropriate value to pay the creditors, then it may be accepted immediately (…).

The last possibility is that the offers do not reach the estimated valuation. In that case, the judge may change the strategy and allow the piecemeal sale or liquidation of the different liabilities of Marme Inversiones (…).

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Blackstone Offers €3bn+ for Santander’s Ciudad Financiera HQ

10 September 2018 – El Confidencial

Santander’s Ciudad Financiera, the operating headquarters of the bank chaired by Ana Botín in Boadilla del Monte (Madrid), is being put up for auction five years after its owner, the company Marme Inversiones 2007, owned by several investment funds, filed for bankruptcy. After an arduous legal process whereby the bankruptcy administrator and the court managing the liquidation has released the asset, the central offices of Spain’s largest financial institution have been put on the market in search of a buyer.

According to financial sources close to the process, one of the most interested parties is Blackstone, the US hedge fund that has become Santander’s largest real estate partner after it purchased half of its portfolio of toxic assets last year. The US fund is negotiating the finishing touches for the presentation of its offer for the building where the bank employs almost 7,000 employees, including the office of the President, Ana Botín. According to the same sources, Blackstone is debating whether to participate in the auction by itself or to team up with the other creditors that supported the purchase of the Ciudad Financiera in 2008.

Of those, the presence of ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank stand out, which 10 years ago granted a €1.575 billion loan to Propinvest to acquire Santander’s largest real estate asset on a “leaseback” basis. Other entities also participated in that loan including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which in 2011 started to sell its stake in the loan to vulture funds at significant discounts on the nominal value, when the owner started to realise that it could not afford to pay the debt.

One of the players that purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. According to other sources, those investors are seriously considering submitting a joint offer on 17 September, the date on which the interested parties have to appear before the judge. That date is the one that has been set for the binding offers for all of the assets to be processed. If none are received, which is unlikely, then the Ciudad Financiera will have to be split up and sold off piecemeal.

According to these sources, Blackstone is now the main candidate, after two Arab groups placed tentative offers on the table that never proved successful due to legal wrangling and the lawsuits filed by some of the creditors, such as the Iranian Robert Tchenguiz. The investor, who owns several properties in London and is known for his idle lifestyle, was another person to take advantage of Propinvest’s bankruptcy to acquire debt at low prices and whereby become a significant creditor. Nevertheless, his problems with the Law – he ended up being arrested – have ruled him out of the process to take ownership of all of the Ciudad Financiera.

Arab interest

The player that came very close to acquiring Santander’s headquarters was AGC Equity Partners, a Kuwaiti fund with €3 billion under management, which received approval from Mercantile Court number 9, which was leading the bankruptcy of Marme. But its bid, which amounted to €2.5 billion, now needs to be updated, given that, according to various sources, the debt alone of the special purpose vehicle reached €2.8 billion, including senior and mezzanine. Therefore, the offers must exceed at least €3 billion, which means that this auction is going to turn into one of the largest real estate operations of the year.

The attempt by AEG, which was suspended when Ana Botín exercised the right of first refusal over Ciudad Financiera, came at the same time as the bid from Aabar, a company from Abu Dhabi, owned by IPIC, the owner of Cepsa, now renamed Mubadala. According to those sources, that fund is no longer interested in the auction and Santander has no intention of exercising its preferential right, as acknowledged by official sources at the Spanish entity.

The main attraction of Ciudad Financiera is that Santander, which financed the first operation with a loan amounting to €304.6 million to pay the VAT on the purchase, has committed to remain as the tenant of the property for the next 40 years, which means that the rental income is guaranteed.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Quabit Buys Land in Menorca for €24.6M to Build Homes and a Hotel

3 July 2018 – Eje Prime

Quabit is preparing to bring more new homes onto the market. The company chaired by Félix Abánades (pictured below) is taking positions in the residential market in Menorca. The company has acquired a portfolio of buildable residential land on the island for €24.6 million.

The plots are located in Son Parc, on the north coast of Menorca, and form part of the municipality of Es Mercadal, according to explanations provided by the company in a statement. The plots have a buildability of 69,350 m2 for the construction of 277 new homes and 264 hotel beds.

The payment of 70% of the transaction price has been made through the company in which Quabit holds a majority stake and in which the global investment firm Avenue Capital holds almost 10%, with financial support from the funds advised by Avenue. The remaining 30% has been funded by using shares in the company with a value of €2 per share through a non-monetary capital increase.

“Quabit is going to start the pre-launch marketing campaign immediately, before the month of August”, explained the company. The deal in Menorca represents the company’s fourth major land transaction so far this year, after its acquisition of buildable residential plots during the first quarter in Madrid, Guadalajara and Corredor del Henares.

Following these operations, Quabit now has 1.1 million m2 of buildable land on which to build around 8,800 homes. In 2018, Quabit’s commercial portfolio comprises 45 developments with almost 3,300 homes in different phases of construction in Madrid, Málaga and the Costa del Sol, Guadalajara, Corredor del Henares and the Balearic Islands. The company is maintaining its objective of handing over 7,900 homes by 2022.

Original story: Eje Prime

Translation: Carmel Drake

Spain’s Large Property Developers Handed Over Just 3,000 Homes in 2017

2 February 2018 – Expansión

Market / The property developers Amenabar, Aelca and Corp take the lead in the race to notarise new homes.

The property developers have returned to the forefront after years of ostracism. In this way, two companies, Neinor and Aedas, debuted on the stock market in 2017, putting an end to the 10-year drought. Meanwhile, a historical company in the sector, Metrovacesa, is planning its stock market debut for Monday (5 February), and is waiting to close the requests book.

These companies, together with the other large property developers such as Vía Célere, Aelca and Habitat (all three of which are controlled by investment funds) have set themselves the objective of handing over between 3,000 and 4,000 homes per year, something that they will achieve over the next 2-4 years. Nevertheless, for the year just ended (2017), the figures recorded were much more modest.

According to data facilitated by the companies, the 13 largest residential property developers notarised an average of 270 new homes each last year. Together, they handed over just 3,168 units, compared with the more than 77,500 newly-built homes that were sold (according to data as at November from INE).

Amenabar is the leader of the ranking for the number of homes handed over. The property developer owned by the Amenabar family closed 2017 with 752 homes notarised. This year, that company, which is headquartered in Zarautz plans to start work on around 3,094 homes and to sell 4,087 units.

Of those properties for sale, approximately half correspond to land in the portfolio and the rest to new purchases to be made over the coming months, say sources at the company.

With almost 500 units each, Aelca and Corp Promotor complete the top three firms in terms of the number of homes notarised, with 498 and 496, respectively. Founded in 2012 by José Juan Martín and Javier Gómez, and controlled by Värde Partners (75% stake), Aelca is one of the new real estate companies and it has a more advanced pace of work. In this way, it plans to launch almost 4,000 homes across almost 50 new developments during 2018. In 2017, Aelca sold 1,128 homes.

Meanwhile, with 360 flats registered, Gestilar also stands out. The Madrilenian company created by Javier García-Valcárcel closed sale and purchase or pre-reservation contracts for another 419 homes in 2017, up by 57% compared to 2016. The company controlled by its founder does not have any immediate plans to debut on the stock market. Nevertheless, it has closed an alliance with one of Morgan Stanley’s investment funds to boost its plans to buy land and subsequently develop it.

Neinor

With a figure of more than 300 units (between 310 and 315, according to the latest estimates from the company), Neinor Homes has accelerated its house building plans to fulfil its business plan, which aims to put between 3,500 and 4,000 homes per year on the market between now and 2020.

Those hand overs will allow Neinor to increase its revenues, which, during the first half of last year, amounted to €127 million, after the hand over of 150 units.

It was followed by Inbisa, with 223 notarisations, and Vía Célere, with 183. The real estate firm led by Juan Antonio Gómez Pintado handed over two developments in Madrid and part of a third on c/Aragó in Barcelona, its first project in the Catalan capital.

In the absence of year-end data, during the first three quarters of last year, Realia handed over 80 homes amounting to €16.9 million (around €212,000 per unit), compared with 69 and €13.4 million in the previous year.

Less than ten each

Finally, three of the largest domestic property developers are operating at a  much slower rate. Such is the case of Quabit, which notarised just six homes in 2017, although it is expected to reverse that situation this year, after closing new land purchases, including co-investment alliances with the fund Avenue Capital. In this way, it plans to hand over 215 units in 2018, corresponding to four developments in Boadilla, Barcelona and Guadalajara, and also start work on around 2,000 new homes, confirms the company.

In the case of Habitat, the company did not notarise any homes in 2017, a year that was marked by its own sale, formalised by Bain Capital Credit just a few weeks ago. Now, the fund is working to boost the company, which is planning to hand over its first homes in 2018, of the more than 1,000 that it has up for sale.

The same thing is happening with Aedas. Launched in 2016, the company controlled by the fund Castlelake plans to hand over its first 231 homes this year.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Quabit & Avenue Capital Create a Company to Buy Residential Land

4 December 2017 – El Mundo

Quabit Inmobiliaria and the global investment firm Avenue Capital have constituted a company, in which the US fund holds an almost 10% stake and the property developer controls the majority shareholding, to carry out the purchase and development of residential land in Málaga (Mijas), the Balearic Islands and the Corredor del Henares.

In this way, Avenue Capital is ratifying its support for Quabit’s investment and growth plan and is showing its confidence in the development of those assets, worth almost €75 million. The assets have a combined buildable surface area with capacity for approximately 2,000 homes, according to a statement issued by the property developer.

According to the same source, Quabit Inmobiliaria and Avenue have signed all of the documents that set out the terms of the financing line agreement amounting to up to €40 million, announced in September. Of those funds, which will be used to buy the aforementioned plots of land, 15% will take the form of a participation loan and the rest will correspond to senior debt.

The remaining cost of the land will be financed by Quabit Inmobiliaria through newly issued shares as the result of the capital increase that has already been approved by the General Shareholders’ Meeting.

Upwards review of the Business Plan 2017-2022

This new financing line from Avenue forms part of the financing arrangement for new investments set out in the Business Plan that the company has just updated to reflect the intense investment effort that it has undertaken in 2017. Quabit now has a land portfolio spanning almost 1 million m2 and it has put several residential developments on the market.

The company chaired by Félix Abánades has revised upwards its growth and expansion plan in such a way that it has almost doubled (92%) the objective for the number of new homes it expects to build between now and 2022, to 7,888 units, from the 4,100 units estimated initially.

“Since March, we have managed to close land operations amounting to almost €150 million, for less than initially forecast, thanks to the management expertise of the entire team. That gives us great visibility over our business plan and, in turn, allows us to extend our projections until 2022, which is when we will reach our cruising speed, with the hand over of 3,000 homes per year”, explains the President.

This investment effort and the launch of new developments will allow the company to exceed the revenue and profit forecasts it made in January by 20%. The company has designed an ambitious land acquisition plan, which will see it invest €673 million. The forecasts indicate that the firm will record revenues of €1.915 billion, generate operating cash flow of €463 million and distribute €87 million in cash dividends between now and 2022.

Original story: El Mundo

Translation: Carmel Drake

Quabit Agrees €15M Financing Line With Alpin Equities To Buy Land

11 October 2017 – Expansión

The list real estate company Quabit has announced a new line of financing to partially fund its growth plan. On this occasion, the company controlled by the construction group Rayet has signed an agreement with Alpin Equities, which is leading a group of funds that are finaning the loan, amounting to €15 million.

The conditions of the loan, which has a 3-year term, include the possible conversion of all or some of the outstanding loan balance into shares in Quabit if “certain circumstances” arise.

The operation with Alpin Equities is the third alliance of its kind that Quabit has closed in recent months. Until now, the residential property developer had reached two financial agreements with the fund Avenue Capital, for a combined total of €100 million.

The objective of these three lines of credit is to allow the real estate company, which emerged a decade ago from the merger between Astroc, Landscape and Rayet Inmobiliaria, to close new land purchases, some of which are in very advanced phases of negotiation, say sources at the company, such as the construction of 14 new developments, which will result in turnover for the company of almost €180 million.

Following these agreements, Quabit’s residential portfolio will amount to almost 1 million m2 of land for the construction of 4,700 homes, whereby exceeding its own objective for the period between now and 2021 (4,090 homes).

The company has announced that it will convene an extraordinary shareholders meeting soon to approve a non-monetary capital increase, with which to materialise the transfer of several plots of land from Rayet, as well as the operations closed with Avenue.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

International Funds Reactivate RE Sector By Building Thousands Of Homes

2 October 2017 – Expansión

After years of drought, the residential real estate market is starting to show signs of recovery, with a significant increase both in investment in land as well as in the construction of new developments. In this new phase, international investment funds have become a major player, with more than €1,000 million invested in the Spanish residential sector and thousands of homes under construction. “Interest from these types of funds in the residential property development market is the result of the recovery that the segment is experiencing, as a consequence of a clear improvement in the underlying macroeconomic indicators”, says Borja Ortega, Director of Capital Markets at JLL.

For its investments in Spain, large international funds such as Värde, Castlelake, Lone Star and Morgan Stanley have opted for alliances with local operators (…). “This formula (…) is very beneficial for the market as it combines access to capital and international sources of financing with knowledge and experience of the local real estate development sector”, says Ortega.

“In most cases, the international fund provides the bulk of the capital, whilst the local partner participates in each project with a smaller percentage investment, but bringing to the table its expertise in terms of the acquisition of land and the construction of developments”, highlights Samuel Población, National Director of Residential and Land at CBRE España.

Lone Star stands out amongst the major investors. The fund, led in Spain by Juan Pepa, has invested more than €1,000 million in launching Neinor Homes, the first property developer to debut on the stock market in almost a decade. Another key player, Castlelake, is willing to spend a similar figure on the creation of another real estate giant, in this case, Aedas, which will also make its debut on the stock market soon.

Alongside them, Värde, which channels its investments in the residential sector through two companies: Vía Célere and Aelca. These three funds lead the national ranking, with 11,189 homes under construction and almost 5 million m2 of land.

Property developments

The giants Lone Star, Morgan Stanley, Castlelake and Värde are not the only players to be investing in housing in Spain. The German fund ASG is another one of the most active investors. Through its Spanish subsidiary, ASG Iberia, it is currently working on the construction of 2,000 homes, across six sites, including in San Juan (Alicante), Alcalá de Henares (Madrid) and Málaga (…).

Other active players include Stoneweg; Harbert Management Corporation (HMC), which has teamed up with the Spanish management company Momentum; the German institutional fund Patrizia; and Pimco, which joined forces with the Socimi Lar España (…).

Other partnerships are purely financial. Such is the case of the agreement between Avenue Capital and Quabit, where the fund has granted two lines of credit, amounting to €100 million in total, to the property developer to buy land.

Pressure

According to CBRE, investment in residential assets exceeded €600 million between January and September. And, according to the experts, that figure is going to continue growing. “We will continue seeing interest from international funds, given that the outlook for growth in the sector is strong for the next three to four years. The funds already present will continue with their activity and it is probable that others (not yet present) will also join in, given that the investment pressure is high”, says Población.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Quabit Joins Forces With US Fund Avenue Capital

15 December 2016 – Valencia Plaza

Quabit Inmobiliaria and the US investment firm Avenue Capital have signed a binding framework agreement for a financing line amounting to €60 million from funds advised by Avenue Europe International Management, L.P.

The available funds under this credit line will be used to acquire buildable urban plots of land in the Community of Madrid and the surrounding area, as well as in other regions with high potential for demand.

After successfully completing a capital increase last year, the company chaired by Félix Abánades, has been holding intensive negotiations with different investment funds for the last few months. It has now closed this agreement with Avenue Capital, given the professionalism of the investment firm and its certainty for the great potential for growth and profitability in the Spanish real estate sector.

With the signing of this agreement, Quabit Inmobiliaria is continuing to fulfil the objectives set out in its strategic plan to 2020. Specifically, it means that it is fulfilling another one of the most significant milestones in its business plan regarding the raising of financing to undertake new investments and develop new residential projects.

“The strategic agreement with Avenue is a perfect symbiosis for generating value. On the one hand, Quabit has more than 20 years of experience, an expert team in the management of land and real estate developments, sensitivity and market knowledge, an established financial structure and a healthy equity position. All of this, combined with Avenue’s investment capacity, gives us the capability to start growing again and to become one of the key players in the consolidation of the real estate business in Spain once more”.

The most important terms of the agreement are:

– The funds from this credit line will be used to finance 70% of all land acquisitions. The remaining 30% will be financed by Quabit.

– The funds must be drawn down during the first year of the contract, and repaid when the credit line matures (after 4 years).

– Quabit may make early repayments from month 18 onwards and it may reuse the funds to make new investments in land.

– A new company will be constituted for each one of the plots of land that are financed. Each company will be owned 100% indirectly by Quabit.

– Moreover, Quabit will provide Avenue with warrants over its shares, which will allow the investment firm to own up to 6% of the real estate company’s share capital if it subscribes to new share issues in several tranches. During the first two years of the agreement, the average subscription price will be €3.25/share; and during the last two years, it will be €3.75/share. The use of the different warrant tranches will depend on how much of the credit line is drawn down.

Quabit and Avenue have set a deadline of 28 December for signing all of the documents that form part of this agreement, which will also be the start date for the line of credit’s term.

Original story: Valencia Plaza

Translation: Carmel Drake