Meliá Finalises Sale & Leaseback of Palacio de Congresos Hotel in Valencia

20 July 2018 – Las Provincias

The tallest skyscraper in Valencia is on the verge of changing hands. The sale of Meliá’s Palacio de Congresos Hotel, located on Avenida de las Cortes Valencianas, number 52, is being finalised for €50 million, according to sources speaking to Las Provincias. The operation is expected to be signed in September and several investors have expressed their interest in acquiring the former Hilton Hotel.

The owner of the iconic property, the fund Colony Capital, took just two months to put it on the market after acquiring it in February when it purchased the fund Continental Property Investments (CPI), the former owner of the hotel. According to the same sources, the candidates to acquire the building now include Socimis, institutional investors and family offices, such as the Valencian Zriser group, the firm owned by Pablo Serratosa. Another interested player is AXA Real Estate, the company that acquired the Hilton Hotel Diagonal Mar in Barcelona last year.

Despite the change of owner, the management of the hotel will continue to be entrusted to Meliá, which signed an extendable 10-year operating contract in 2011. It is a strategic asset for the hotel group, given its location next to the Palacio de Congresos, which makes it the best-positioned accommodation on the market for business people and guests of events organised in the Valencian enclave.

A yield of 5%

According to sources familiar with the operation, the asking price for the hotel was €45 million, which was the “minimum to make an offer”. Nevertheless, the market was pricing it at around 10% more, approximately €50 million and some even think that it will be sold more than that. “Socimis and institutional investors look for yields of 5% per year”, they reveal.

In addition, the sale price per room will range between €165,000 and €175,000. In terms of the price per overnight stay, hotels of this kind with an occupancy rate of 80% typically range between €90 and €95 per room. The expectation is that the former Hilton will cost around €100 per night in five years time.

The former Hilton is a 5-star hotel that opened its doors to the public in May 2007. It stands 117 m tall and has 29 storeys, with 269 rooms, 33 suites and two presidential suites. Moreover, it has a convention room and 18 meeting rooms. The building was constructed between 2002 and 2006 at a cost of €110 million, double the price at which the owners want to sell it for now. It was in 2010 when the owner company, the firm Hotel Palacio de Congresos SL, sold the property to CPI to avoid its definitive closure after that company filed for voluntary creditor bankruptcy.

Original story: Las Provincias (by Elísabeth Rodríguez)

Translation: Carmel Drake

ActivumSG Launches New €500M Fund with Projects in Marbella & Salamanca

22 January 2018 – Eje Prime

The international group ActivumSG is continuing to back its business in the Spanish market. The company, which operates under the brand ASG in Spain, is launching a new €500 million fund to make real estate investments across Europe, according to explanations provided by the company to Eje Prime. Some of the first projects that have already been financed thanks to this fund, the fifth to be promoted by ActivumSG, include three projects in Berlin and three in Spain, located in Marbella, Salamanca and Estepona.

This new fund promoted by ActivumSG is one of the group’s most important in terms of investment, with funds raised mostly from investors that have already participated in the group. Of the €500 million, the fund has already committed more than €200 million in Spain and Germany.

In the Spanish market, ActivumSG has already launched Project España, located in Salamanca. Initially baptised as Project Victoria, the fund has now started construction on this luxury residential development in the centre of the city. “The project involves the demolition of an office building located at number 5 Plaza España to convert it into a high-end residential property, comprising 27 apartments”, say sources at the German company.

The second project that ActivumSG is going to promote with this new fund is Parque Central, in the centre of Estepona. The German fund is already finalising the details to start work on the construction of this residential development, which will span 12,600 m2 and which is already being marketed.

Finally, the fund is working on Project Sierra Blanca, in Marbella. That project, which is in its preliminary phase, will be located in the neighbourhood of Sierra Blanca, in Marbella, and will involve the development of 40 luxury homes, with gardens and parking.

The latter two projects are located in the province of Málaga, one of the main tourist destinations in the south of Spain. ActivumSG has been advised in the acquisition by the group’s Spanish subsidiary, ActivumSG Iberia, which is currently being led by Brian Betel, former Director of Cerberus Iberia Advisor and Citibank.

ActivumSG’s team in Spain is completed by Víctor Pérez Arias, former Director of CBRE; Juan Alonso Bartolomé, a director who has worked for companies such as GE Capital Real Estate and ING Real Estate; Alejandro Adan Manes, who joined the firm from Axa Real Estate; Carlos Molero Sánchez, formerly of PwC and KPMG, and Ignacio Gaytan, who previously held the position of maximum responsibility at Grupo Lar, amongst others.

ActivumSG in Spain

Currently, ActivumSG’s portfolio in Spain comprises a dozen assets, with the exception of two that have been divested in recent months, located in Manuel de Falla and Santa Leonor, both in Madrid (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Axa Buys Remaining 45% Of Hotel Diagonal Mar For €70M

17 November 2017 – Eje Prime

Axa Real Estate is not one to rest on its laurels and so has acquired 100% of Hotel Diagonal Mar in Barcelona. The real estate arm of the French insurance company has committed to paying Iberdrola Inmobiliaria €70 million for the remaining 45% of the establishment to become the sole owner of the property, after it paid €80 million in June of this year for the other 55%.

With just over a month to go before the end of the year, this agreement represents the most important in the hotel sector in Barcelona, and one of the most significant in Spain. According to El Economista, this second payment will have been pre-determined by the two parties in the summer, when Axa’s first investment in the asset materialised.

Hotel Diagonal Mar is a property intended for holiday and convention (business) tourism, in the area of the same name, alongside the shopping centre of the same name, which Deutsche Bank purchased last year for €495 million. The four-star establishment is just 400m from the beach, has 413 rooms and 20 suites, as well as a large banquet room with capacity for one thousand guests and fifteen meeting rooms. The hotel was constructed by Iberdrola, after that firm reached an agreement with the chain Hilton, which has operated the establishment since then.

With this purchase, Axa is strengthening its interest in the hotel real estate business in Spain. In Madrid, it acquired Cine Rex on Gran Vía through the same real estate arm with which it has purchased the hotel in Barcelona. In that operation, the insurance company disbursed around €40 million to the firm Equity Inmuebles SL, controlled by the Mazin, Calero and Briones families.

Meanwhile, Iberdrola has completely disposed of one of its real estate jewels, but still operates a real estate portfolio with a gross leasable area of more than 200,000 m2 and an asset value of more than €600 million.

Original story: Eje Prime

Translation: Carmel Drake

M&G Real Estate Buys 16 Santander Branches For €56.2M

25 May 2017 – El Economista

The fund manager M&G Real Estate has signed another deal in Spain, this time to become Banco Santander’s new landlord. Specifically, the firm has just signed an agreement with the Socimi Uro Property to acquire 16 of the financial institution’s branches for which it has paid €56.2 million.

The operation, which was closed at a premium with respect to the most recent valuation of the transferred portfolio, also includes the granting of a call option over another branch, which may be executed in the short term.

According to the Socimi, which owns approximately one-third of Banco Santander’s branches, the portfolio that M&G has purchased generates annual rental income of €3.04 million and comprises seven branches from the so-called Blue portfolio and nine from the Green portfolio.

The classification of the branches into these portfolios reflects the maturity dates of the corresponding rental contracts. Thus, in the first case (Blue portfolio), the lease contracts are due to terminate in 2045, 2046 and 2047, and may be extended for another seven years. In the case of the assets included in the Green portfolio, the lease contracts are due to mature between 2036 and 2038.

These terms of 30 and 20 years, respectively, match the British manager’s investment strategy, given that it seeks safe, long-term operations. In this way, the firm’s first operation in Spain was closed in 2015, when it acquired Telefónica’s former headquarters in Madrid, located in the heart of the city on Calle Ríos Rosas. It paid €175 million for that property, which is now the headquarters of WPP.

Following the sale, Uro will continue to own a portfolio of bank branches whose approximate value amounts to €1,893 million. When the Socimi debuted on the stock market, in March 2015, it managed 1,136 Santander branches, nevertheless, in April 2015, it sold a portfolio of 381 branches to Axa Real Estate for €308 million, leaving 755 branches, which cover a surface area of more than 340,000 m2.

Original story: El Economista (by Alba Brualla and Javier Mesones)

Translation: Carmel Drake

Axa & Sonae Finalise Purchase Of Área Sur

10 May 2017 – Expansión

Axa Real Estate, the real estate arm of the French insurance company, and Sonae Sierra, are emerging as the likely new owners of the Área Sur shopping centre. The companies are negotiating with Union Investment Real Estate GMBH – the current owner of the asset – to acquire this shopping centre, which is located in Jerez de la Frontera (Cádiz).

Market sources have indicated to Expansión that the transaction may be closed soon for a price of around €110 million.

Following the operation, Sonae Sierra – which specialises in the investment, development and management of shopping centres – will manage the shopping centre.

Área Sur was inaugurated in November 2007 and has a gross leasable area of 47,607 m2. Moreover, the shopping centre has around 2,300 parking spaces.

Investment record

The operation, which has been advised by the consultancy firm Cushman & Wakefield, is another example of the interest in the market for shopping centres. Following a record-breaking year in 2016, investments during the first quarter of this year have exceeded €1,000 million, boosted by deals such as Intu’s acquisition of Xanadú for €530 million.

The shopping centre receives 6.6 million visitors per year, which represents an average annual growth rate of 5% since it opened. The shopping centre’s gross revenues amounted to €7.8 million in 2016.

Área Sur is located near to Luz Shopping, which was inaugurated in October 2010 and which has a total surface area of 174,000 m2. That shopping area is home to stores such as Ikea, Decathlon and Worten.

The Área Sur property, which has been managed by Auxideico since 2011, has three storeys. The first floor, which has a surface area of more than 23,400 m2, is home to numerous fashion brands and its tenants include Zara, Primark, H&M, Massimo Dutti, Cortefiel, Sfera, Bershka, Pull & Bear, Springfield, Stradivarius and Okeysi.

The top floor, which spans almost 10,000 m2, houses leisure and restaurant brands, as well as an 11-screen Yelmo cinema. Meanwhile, the ground floor, measuring 14,200 m2, is leased to Mercadona, Primark and El Corte Inglés.

In its area of influence, Área Sur competes with the Las Dunas shopping centre, in Sanlucar de Barrameda, with a gross leasable area of 75,000 m2; El Paseo, located in Puerto de Santa María, with a gross leasable area of 33,000 m2; and Bahía Sur, in San Fernando, with a gross leasable area of 59,000 m2.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Room Mate Will Operate Hotel Rex In Madrid

6 February 2017 – Expansión

Room Mate, the hotel chain owned by Enrique Sarasola, has been chosen to manage the iconic Hotel Rex, located on Gran Vía in Madrid.

The hotel, which will have 130 rooms and which will be operated by Room Mate on a lease basis, will open its doors in 2018 or 2019 and will create 45 new jobs.

The building was acquired by Axa Real Estate in 2015. The owner now wants to undertake a comprehensive renovation of the property. To this end, the architect Tomas Alía, who has already worked for the hotel chain on other projects, such as Room Mate Oscar in Madrid and Room Mate Aitana in The Netherlands, will be the designer on this project.

In addition to Hotel Rex, Room Mate has five other hotels in Madrid.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Freo Buys An Office Building In Madrid For €15M

14 October 2016 – Expansión

The German fund Freo, which opened offices in Madrid and Barcelona at the end of last year with the aim of investing in the Spanish market, has completed its first purchase. The private equity manager has acquired an office building on Avenida de Manoteras in Madrid for €15 million. The property, known as Edificio Orion, used to be owned by the German fund manager Triuva, formerly known as IVG Institutional Funds.

The asset, constructed in 2001, is located at number 26 on the Madrilenian street and has a surface area of 7,300 sqm. According to sources in the real estate sector, the offices are fully occupied and currently house twelve tenants in total, including Whisbi Technologies, Sacyr, TPI Edita, Tento and several companies from the ACS Group. The operation will generate a return of 6% for the buyer.

Team

Freo is a private equity fund manager that also has its own investment vehicle. It was founded in Frankfurt (Germany) twenty years ago and has offices in all of Europe’s major cities.

Last year, Freo hired Daniel Mayans, former Director at GE Capital Real Estate in Spain, as the CEO of its Spanish subsidiary. It also appointed Óscar de Navas, who also came from the US multinational, as the Vice-President of Investment at Freo for the Spanish market. The firm’s purpose is to look for buildings such as Orion to add value to them, in terms of investment by renovating the offices, as well as in terms of returns by making improvements to the rental contracts.

Investment focus

That is the goal of the most international funds, which, given the shortage of assets in the most central areas of Madrid and Barcelona and the strong pressure to buy, are acquiring assets in more peripheral areas of Spain’s largest cities. Other funds that have recently made purchases on the Manoteras thoroughfare include: IBA Capital Partners, Axa Real Estate, Lone Star and Blackstone, as well as the Socimis Trajano Iberia and Merlin Properties.

The seller of the property in this case, the company formerly known as IVG Institutional Funds, which has been called Triuva since 2015, is the largest institutional real estate fund manager in Germany, with 45 funds in total. The subsidiary in Spain and Portugal manages assets worth €300 million, which have a combined surface area of 78,000 sqm.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Axa Puts UGC Manoteras Shopping Centre Up For Sale

14 January 2016 – Expansión

The real estate arm of the insurance company Axa has decided to put one of its most long-held assets from its Spanish portfolio on the market. The asset in question is the UGC Manoteras shopping centre, located in the north east of Madrid.

The establishment has a constructed surface area measuring 27,000 m2, of which 13,226 m2 is dedicated to retail space, according to the Spanish Association of Shopping Centres. The entire space is dedicated to leisure, with several cinema screens, operated by the company UGC Ciné Cité, and a number of restaurants.

Axa acquired this property in 2007 for €53 million, a price that may now be exceeded, given the high degree of interest that investors have in shopping centres at the moment.

The real estate subsidiary of Axa has been one of the institutional funds that has returned to the Spanish market after several years away investing in other markets. In this way, in 2014, it purchased the Urbil shopping centre in Guipúzcoa from the fund manager CBRE Global Investors for €60 million.

Last year, it also acquired the former Cine Avenida, located at number 37 on Madrid’s Gran Vía, which has now been converted into H&M’s flagship store in Madrid. For that transaction, the insurance company’s real estate subsidiary broke a market record by paying €79.7 million for the building, which has a surface area of around 4,000 m2. In other words, it paid €20,000 per m2 for the property.

At the end of April, Axa Real Estate also acquired 381 bank branches on behalf of a group of investors from the Socimi Uro Property. It paid €308 million for those properties, which are leased to Banco Santander. In addition, in August, it purchased two office buildings in Madrid (where it has its own headquarters in Spain) and Barcelona. The investment, made on behalf of one of its clients, was closed for more than €110 million.

Original story: Expansión

Translation: Carmel Drake

Axa Buys The Cine Rex Building On Gran Vía For €42M

11 December 2015 – El Confidencial

Another high profile operation on Gran Vía. Axa Real Estate, the real estate arm of the French insurance company, has just added another property to its portfolio on the most sought-after thoroughfare in Madrid. This week, the company has reached an agreement to acquire the building that houses Hotel Rex and the historical cinemas of the same name, for €42 million.

The entity won a sales process that was launched at the start of the year by the firm Equity Inmuebles SL, controlled by the Mazon, Calero (owner of the Vincci hotels) and Briones families, which opened the bidding at around €28 million, but which, thanks to the huge appetite that exists to purchase assets on this street, has ended up selling the property for 50% more, according to comments made by several sources in the know.

This is the second operation of this kind that the French firm has closed on this thoroughfare, which last year acquired the former Avenida cinema, at number 37 Gran Vía for almost €80 million. It paid that high figure thanks to the “sweetener” afforded by having the Swedish fashion chain H&M as a tenant; it opened its most iconic store in the capital there in 2009.

For this new operation, Axa’s plans to remodel the building, which measures around 9,000 m2 and to operate it by combining its two current uses as a hotel and retail space. Moreover, the entity is willing to respect the protected nature of the cinemas, which have been closed for several years and which occupy a surface area of almost 700 m2.

Currently, the building houses a 3-star hotel with 147 rooms, managed by the owners of the property. Axa’s idea is to open a high-class establishment, which will add to the resurgence that Gran Vía is experiencing thanks to the boost that Operación Canalejas is generating in the whole area.

Hotel fever

The real estate development, which is being led by OHL Desarrollos, includes the opening of the first Four Seasons hotel in the capital. The hotel chain is proving to be a real magnet, attracting brands of high standing to the Gran Vía area. In fact, experts expect that Grupo Wanda will end up choosing a chain of such standing to manage the hotel that it will open in the Edificio España, although for the time being, the only clue is that it will be a 5-star establishment.

The majority of the new hotels being planned on this thoroughfare are 4-star and 5-star properties, such as: the one due to be opened in the building on Calle Montera, 25-27, owned by the Díaz Estrada family; Gran Vía, 10, which houses the Ministry of Education and which has been acquired by Generali for conversion into a hotel operated by Vinnci; and the Barceló, which has been opened in Torre de Madrid in Plaza de España.

Through this operation involving the Edificio Rex, Axa Real estate joins several other high profile players in the hotel business in the centre of the capital and diversifies its interests, which until now have been very concentrated in the office sector, above all after it acquired 381 Santander branches from the Socimi Uro and after it purchased the headquarters of the Generalitat de Catalunya.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Uro Engages BNP To Sell 40 Santander Branches

16 November 2015 – Expansión

Mandate / The Socimi owns 775 branches that it acquired from the bank chaired by Ana Botín under a ‘sale and leaseback’ agreement.

Uro Property, the Socimi that owns one third of Santander’s branch network, is looking for new tenants. The company has engaged BNP Paribas Real Estate to sell or re-let 40 branches released by the entity chaired by Ana Botín.

The bank’s exit from these branches is a reflection of its strategy to gradually reduce its installed capacity – a strategy that the whole sector is undertaking – and forms part of the contract between the entity and Uro Property. Under this agreement, Santander may exit between 4 and 5 branches per year. That figure has been increased for 2015 following the refinancing carried out by the Socimi during the summer.

Uro is the successor company of Samos, which purchased 1,152 offices from Santander in 2007 under a sale & lease back arrangement for €2,040 million. The entity’s high debt level caused the creditor bank to capitalise come of its bonds in 2014, with Santander, Atisha (the former Sun Group), CaixaBank, Phoenix Life (formerly Pearl) and BNP taking over control.

Stock market

At the time, the entity made a commitment to list on the stock exchange, which it did last March, debuting on the Alternative Investment Market (‘Mercado Alternativo Bursátil’ or MAB). It began life by listing at €100/per share and after distributing a dividend of €59/per share, closed trading on Friday at €57/share. Excluding the payment to its shareholders, the company’s share price has increased by 13% since its debut.

Uro sold 381 of the 1,152 branches it acquired initially to Axa Real Estate for around €300 million. They had a gross leasable surface area of 90,000 m2.

Following that operation, Uro now owns around 775 branches, for which it receives annual rental income of just over €100 million.

Now that 40 branches have been released by Santander, Uro Property faces the challenge of looking for new business solutions for the first time. Its priority is to sell the branches one by one, maximising the price. Although by quantity, these branches represent 5% of the total portfolio, they are worth just €20 million, which represents just 1% of the €1,800 million appraisal value of the Socimi’s properties.

These 40 branches have a combined surface area of 9,500 m2 and 50% of them (by surface area) are located in Madrid and Barcelona, whilst the remaining 50% are distributed across the rest of Spain. The properties will be sold empty and may be converted into shops, service outlets or used for other commercial purposes.

Shareholder structure

In addition to the management of these properties, the other major challenge that Uro Property will face in the coming months is the possible renewal of its shareholder structure. The Socimi’s investors have pledged to continue as shareholders for one year after the company’s debut on the stock exchange; that period will expire in March. Subsequently, one or more of the original investors may exit the company, such as Atisha and Phoenix Life, or other entities. In addition to Santander, CaixaBank and BNP Paribas, other shareholders include Burlington, Société Générale and Stichting Z+S.

Another key milestone for the company in recent months was the refinancing of its debt, which it achieved through an income securitisation amounting to €1,345 million, with a term of between 22 and 24 years. Uro Property agreed a fixed interest rate of 3.348% with investors, whereby reducing its financing cost from 6%, including interest rate derivatives.

The company is led by Simon Blaxland as the CEO and is chaired by Carlos Martínez Campos, the former number one at Barclays in Spain.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake