The Major Players In The New RE Sector

11 June 2015 – Expansión

Since Colonial’s exit from the Ibex 35 in March 2008, none of the major players in the Spanish real estate sector have been listed on the stock exchange. However, in parallel to the return of large international investors, some real estate companies are starting to emerge, and are knocking on the door of the selective Madrid index. They are the new giants in a sector, which is gaining strength and becoming fashionable again.

These companies include several newcomers, such as Merlin Properties. The Socimi, which went public on 30 June, has managed to create a portfolio of properties worth €2,322 million and has just purchased Testa, the real estate subsidiary of Sacyr, for almost €1,800 million. The operation will create a group with assets worth €5,500 million and a market capitalisation of €4,000 million. Another example of a new company success is Hispania.

The real estate company, which has a Socimi subsidiary, has a market capitalisation of €1,120 million. After purchasing assets worth €422 million and creating a hotel Socimi with the hotel chain Barceló containing 16 properties, it has launched a takeover bid over another listed company in the sector, Realia.

Lar España and Axiare are the other two large Socimis, with portfolios worth around €500 million each.

Traditional giants

Some of the traditional real estate companies are looking to regain the status they lost when the real estate bubble burst. The survivors include only companies whose main activity is the rental of buildings and not property development. This is the case of Testa (which will soon be integrated into Merlin), Realia, Colonial and Metrovacesa.

In the case of the latter, its main shareholders (Santander, Sabadell, BBVA and Popular) excluded it from the stock exchange in May 2013 in order to clean up the (balance sheet of the) company, which had debt of almost €6,000 million. At the end of 2014, Metrovacesa had reduced its net financial debt to €3,285 million and cut its losses by half.

Realia should undertake a similar exercise when the takeover war between Hispania and Carlos Slim for control over the entity has been resolved. The Mexican businessman is already a shareholder in the real estate company, after he purchased the 24.5% stake that Bankia held and he is also a major shareholder in FCC, which owns another 36.9% stake in Realia. In both purchase proposals, the objective is to get rid of the housing and residential land stock held by Realia to focus on the management of office buildings and shopping centres.

In the case of Colonial, the restructuring is much more on track, after the Villar Mar Group became its major shareholder. The real estate company owns office buildings across Madrid and Barcelona worth more than €1,290 million, and also holds a majority stake in the French real estate company SFL.

Original story: Expansión

Translation: Carmel Drake

Who Are The New Property Owners?

20 April 2015 – Expansión

Plans / International funds and Socimis are the main players in the sector

Apollo, Blackstone, Cerberus, HIG, Hispania, Intu, Lone Star, Merlin and Oaktree have gone from being virtually unknown names to being the key players in the Spanish property market (in a matter of months).

Over the last year and a half, large international funds have been investing hundreds of millions of euros in the purchase of property in Spain, both directly as well as through listed real estate investment companies (Socimis).

Värde, Apollo and Lone Star all burst into the market by purchasing real estate platforms from financial institutions. The latter has said that it wants to become the largest land developer in Spain and to that end, it is considering purchasing not only portfolios of land but also small and medium-sized (land) developers. Lone Star has already purchased the real estate arm Neinor from Kutxabank for €930 million, as well as Eurohypo’s loans in Spain for a further €3,500 million.

HIG and Castlelake are looking to buy land in Spain too.

Another investor that is backing Spain with more strength than ever is Blackstone. The largest fund manager in the world has purchased 1,860 homes for rent, as well as a group of office buildings, located in Madrid and Barcelona. One of the players that is most interested in the office market is the Spanish fund Meridia Capital, led by the former Sareb (director) Juan Barba; it has purchased a portfolio of office buildings from General Electric. It is competing against IBA Capital – the French manager has created a Socimi, which has not yet been listed, with headquarters and commercial buildings.

Along with these offices, the other assets that are sparking the most interest amongst investors are shopping centres. Green Oak has already invested €160 million together with Baupost on the acquisition of 6 properties from Vastned. The British group Intu wants to become the leading player in this segment in Spain and to that end, it paid €451 million for Puerto Venecia. Oaktree spent €100 million on Gran Vía de Vigo.

Other important players in this new era for the real estate sector are Socimis. Axia RE, Hispania, Lar España and Merlin have invested almost €3,000 million in assets, which include hotels, offices, logistics centres and warehouses. This last type of asset is attracting considerable interest. The fund Colony has just formed a partnership with the Spanish company Neinver to purchase 16 logistics warehouses.

Finally, in the hotel segment, Cerberus and Orion have purchased Sotogrande, the real estate subsidiary of NH for €225 million.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake