Altamira Hires Borja Ortega from JLL to Lead its International Expansion

11 April 2018 – El Confidencial

Altamira is stepping on the accelerator to become the leading servicer in the south of Europe and, to this end, has hired a heavyweight from JLL as the Head of International Expansion and member of its Executive Committee. Borja Ortega (pictured below), Director of Capital Markets at the real estate consultancy is going to join the company controlled by Apollo in May.

The first major challenge that he will have to handle is Altamira’s entry into Italy, a market that the company led by Julián Navarro has been analysing for a while to consolidate its position in the Mediterranean region, having already made its debut in Portugal and Cyprus.

The servicer entered Portugal a year ago by purchasing Oitante, a company created to manage Banif’s assets, a move that allowed it to take over the management of more than €1.5 billion in assets.

In Cyprus, last summer, the servicer created a joint venture with Cooperative Central Bank (CCB), the second largest bank in the country with €7.6 billion in financial and real estate assets, in which Altamira holds a 51% stake and which has been operational since the beginning of this year.

Heavyweight from JLL

Until now, as Head of Capital Markets, Borja Ortega has led the firm’s direct investment activities (the traditional business), its financial advisory practice (portfolios, debt, mergers and acquisitions) and its private wealth business.

Some of the most important operations that he has managed in recent times include the process to sell the Adequa office complex to Merlin and the sale of Edificio España, operations that helped his division to record growth of around 50% in the last two years.

Moreover, Ortega launched the private wealth division, which is one of the first to channel the arrival of wealthy Latin American investors in the Spanish real estate market, and he collaborated in the sale of €30 billion in toxic assets from Santander-Popular to Blackstone, an operation in which the fund was advised by JLL.

Following the arrival of the Socimis, which have now begun to consolidate in the market with the takeovers of Axiare by Colonial and of Hispania by Blackstone, and the boom in residential property development, with the stock market debuts of Neinor, Aedas and Metrovacesa, the next major movement in the sector is expected in the field of the servicers.

As we await possible mergers, for the time being, Haya Real Estate is the first firm in the sector to set its sights on the stock market, by engaging Rothschild, JP Morgan and Citi to coordinate its debut later this year. Meanwhile, Altamira has opted to create a large international platform before taking the next step, whilst Solvia has created its own property developer.

Anticipa, the servicer of Blackstone, has swallowed up Aliseda as part of the aforementioned operation involving the purchase of toxic assets from Santander, whilst Servihabitat has appointed a new CEO and it is expected that the complex balance of powers between CaixaBank and TPG will tip in one direction or the other within the next few months, as part of the recently launched process of consolidation in the sector.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

INBISA Doubled its Logistics & Industrial Construction Volume in 2017 to 250,000 m2

21 March 2018 – Press Release

INBISA Construcción continues to be a national leader in the execution of industrial-logistics projects, exceeding 250,000 m2 of constructed space in 2017, more than double the figure it recorded in 2016.

The team specialising in the Industrial-Logistics operations area is strengthening its organisational structure in order to continue leading high-quality projects and its commitment to clients.

In 2017, INBISA Construcción doubled the volume of constructed square metres built in the logistics and industrial area, taking the total for the year to more than 250,000 m2. That figure added to the company’s historical cumulative total means that it has built more than 1.5 million m2 of space in this sector.

The significant growth of the INBISA group’s construction company, which has historically played an important role in the industrial-logistics area, is happening in the context of clear consolidation in the sector at the national level, especially in Madrid and Barcelona.

INBISA Construcción plans to continue increasing its business volume in this area during 2018, supported by the positive outlook for the market.

Logistics platforms and complexes are products that are continuing to spark interest amongst investors, mostly international players. Large funds are buying logistics land, including even some spaces that exceed 100,000 m2, some with operators and others not, something that was more unusual in previous years (…).

The company’s most recent high-profile logistics projects include those undertaken for BCM in Getafe, for GreenOak and Rockspring in Corredor del Henares, for the Port Authority in Bilbao, for Axiare in Sevilla and for Goodman in Barcelona.

Original story: Press Release

Translation: Carmel Drake

Axiare Sells Planetocio to AEW for €20M

9 March 2018 – Eje Prime

Axiare has sold off Planetocio. The Socimi, which has been controlled by Colonial since February, has divested the Madrilenian shopping centre to a fund controlled by the manager AEW, which has paid €20 million for the asset.

Located in Collado Villalba, Planetocio is one of the few retail assets that Axiare, which specialises in the office sector, still holds in its portfolio. The operation is going to be closed this week and will see the buyer strengthen its presence in the Spanish real estate, after it acquired the Mercado de Fuencarral for €50 million last August.

Planetocio was constructed in 2001 and has been owned by Axiare since 2014, when it paid €99.5 million to the Dutch fund Wereldhave for a portfolio that, in addition to the shopping centre, contained several office buildings and industrial warehouses, according to Expansión.

In total, the Madrilenian shopping centre has a gross leasable area of 19,222 m2 and 797 parking spaces. Following this sale, the number of retail assets that Axiare holds in its portfolio will be reduced to La Mercedes Open Park (Madrid), Les Gavarres (Tarragona) and ViaPark (Almería).

Axiare’s divestment of this retail asset comes a few weeks after Pere Viñolas, CEO of Colonial, confirmed that the “logical” thing would be for the properties that his firm has inherited following its takeover of the Socimi to be sold gradually, although the group has the “peace of mind necessary to do so when it is most convenient”.

Original story: Eje Prime

Translation: Carmel Drake

Socimis & Property Developers: Two Sides of the Same Coin

4 March 2018 – Expansión

Property developers and Socimis are two sides of the same coin on the stock market. The two large segments of the listed real estate sector in Spain are moving at different speeds on the stock market after the 2017 results season. Whilst the Socimis, which specialise in the rental of non-residential buildings, are maintaining their cruising speeds, the purely residential property developers are being punished by investors, especially in the case of Neinor.

The company led by Juan Velayos has recorded a share price decrease of 18% this year, reaching its lowest levels since it started trading on the stock market at the end of March last year.

The property developer has just presented its results for 2017, which reveal that it registered a loss of €4.6 million despite generating revenues of €225 million. Moreover, just €77 million of the revenue figure proceeded from the property development business, with the delivery of 313 homes, a rate that is well below the 4,000 units that the firm promises to reach within two years (2020). For 2018, its objective is to hand over 1,000 homes. Investors have penalised the announcement that the company is not going to be able to maintain the volume of house deliveries forecast in its initial roadmap either this year or next.

Punishment

The market’s reaction against Neinor has been virulent. “The time it takes to obtain licences is getting longer and the curve of expected deliveries for 2019 is being delayed until 2020”, explains Velayos, who acknowledges that “we measured poorly”. The company has revealed that it is going to change its strategy of buying only “finalist” land (plots that already have the necessary licences for development) and is going to invest €200 million buying land under management, which is more abundant in terms of supply but which will involve much longer construction times.

Like Neinor, Aedas is also trading below its debut price on the stock market. Its share price has lost just over 9% of its value so far this year and did not vary following the results. During its first year of activity, the real estate company created with land purchased by the fund Castlelake over the last few years recorded revenues of €38.6 million, with a net margin of €12.2 million and a loss of €40.1 million. The losses are due primarily to non-recurring expenses relating to the company’s stock market debut, which had a negative impact of €31.55 million, and a one-off cost of €26.1 million linked to the incentive plan for senior management (…)

Following the cumulative punishment this year, the discount on the net value of their assets amounts to around 5% in the case of Neinor and reaches the double digits in the case of Aedas. But, are they attractive prices? (…). For the time being, analysts are maintaining their ‘buy’ recommendations for the pair (…).

Moreover, the experts consider that both Neinor and Aedas have a bullish potential of around 35% from their current levels (…).

In the case of the classic real estate companies, the results have been varied. Quabit (…) saw its turnover decrease significantly, by more than 80%. The company has handed over just six homes this year, after years focusing on its financial restructuring and the sale of its stock. Now, it has launched an ambitious business plan, which will allow it to resume its property development activity and its share price is up by 6% on the stock market so far this year.

Meanwhile, the Socimis are experiencing a different reality. The four large real estate investment companies (…) debuted on the stock market in 2014 with a combined valuation of €2.6 billion and no assets on their balance sheets. Now, their combined market capitalisation stands at more than €9.3 billion and their portfolios are worth more than €18.6 billion. Including Colonial, the combined profit of these companies has grown by almost €1 billion YoY.

The valuations of the Socimis are much more adjusted. The large players have closed the first two months of the year with share price gains of between 4% and 5%, with the exception of Axiare, which has been limited by the takeover price set by Colonial (…).

Original story: Expansión (by Rocío Ruiz and Enrique Utrera)

Translation: Carmel Drake

Top 5 Socimis’ Earnings Soared by 70% in 2017

1 March 2018 – Expansión

Spain’s large listed Socimis – Merlin, Colonial, Hispania, Lar España and Axiare – are continuing their rise. They closed last year with a combined profit of almost €2.4 billion, which represents an increase of almost 70% with respect to the previous year, after increasing their revenues from rental income by 20%, to €1.1 billion.

These companies, which, with the exception of Colonial, made their debuts on the stock market between March and July 2014, now own assets worth almost €26.4 billion, which represents an increase of 17% with respect to the previous year. The five Socimis also have a combined market valuation of €13.4 billion.

The stars of the year were, once again, the Socimis on the Ibex. Specifically, Merlin doubled its earnings in a record year, to exceed €1.1 billion, whilst Colonial earned €683 million, up by 149%.

The firm led by Ismael Clemente generated a recurring profit – proceeding from the core business – of €289 million, up by 31%, and increased its revenues by 34%, to €470 million. Merlin’s asset portfolio had a gross value of €11.3 billion.

Meanwhile, Colonial, which is going to merge with Axiare during the second half of this year following its successful takeover, recorded a 22% increase in recurring profits, to reach €83 million, boosted by rising rents, a better financial result and a lower corporation tax charge due to its conversion into a Socimi in May last year.

Unlike its rivals, Hispania saw a reduction in its profit of 27% to €228 million, after recognising provisions amounting to €95 million for the payment of incentives to its management firm Azora. Moreover, the company in which George Soros owns a stake registered a negative impact in its accounts amounting to €46 million due to the payment of incentives and the cancellation of guarantees following the purchase from Barceló of 24% of Bay for €172.4 million.

Hispania, which increased its revenues by 9.5% last year, had a portfolio of assets with a gross value of €2.5 billion at the end of the year, compared with €2.0 billion at the end of the previous year.

Meanwhile, the Socimi specialising in retail, Lar España, earned 48% more, at €136 million, thanks primarily to the performance of its shopping centres. The company recorded revenues from rental income of €77.6 million in 2017, up by 29%, and has announced divestments of non-strategic assets amounting to €470 million, including offices, residential properties and logistics assets, in processes that are already underway.

Meanwhile, Axiare’s net profit soared by 47% last year, to €218 million. The Socimi, controlled by Colonial since January, closed 2017 with turnover of €69.7 million, up by 36.6%, and assets worth €1.8 billion.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Colonial Concludes that Axiare Holds Non-Strategic Assets Worth €300M

26 February 2018 – El Confidencial

Axiare has assets susceptible to divestment worth €300 million”. That is according to the President of Inmobiliaria Colonial, Juan José Brugera (pictured below, left), and his CEO, Pere Viñolas (pictured below, right), at the presentation of the company’s results.

“We are least interested in the Socimi’s logistics and retail assets, but that does not mean that we are going to sell off all of those assets or that said divestment is going to be undertaken this year. We have not yet been able to determine whether the assets will be sold in the end or when, due to the fact that we are not yet involved in the ordinary management of the company”, they said.

What assets are we talking about? As at September 2017, Axiare held logistics assets with a net value (GAV) of €192.6 million, spanning more than 466,235 m2. The vast majority are located in Madrid and the rest in Barcelona and other markets. To give us an idea, Axiare’s portfolio at the end of the third quarter of last year comprised 74% offices (50% in prime areas), 18% logistics platforms and 8% commercial assets (…)

Colonial, which registered a record net profit of €683 million in 2017, more than doubling (+149%) the figure obtained in the previous year, boosted by growth in the rental income of its office buildings and the appreciation in value of its assets, also estimates making net future investments of between €300 million and €400 million, in line with those undertaken to date.

In other words, between investments and investments, the net result is going to hover around the €300 million mark. These investments are going to focus on those markets where the firms already have a presence and so they will strongly back Madrid, Barcelona and Paris. Moreover, they are expected to be financed, to a large extent, through the traditional mature asset rotation policy. “We are going to continue investing, and also selling”, said both directors.

The merger will be ready in H2 2018

In this way, the real estate company is going to continue with the organic growth strategy that it has been pursuing since 2015, whilst working on the integration process with Axiare, which it estimates will take between four and five months to complete. As such, Colonial expects to close its merger with the Socimi during the second half of the year, which will materialise through a share exchange to take around 13.1% of the firm that it does not control yet.

“Of the possible alternatives, a merger is the most likely”, although both Bruguera and Viñolas have said that all of the options are currently being evaluated and that there will not be any decision in this regard until the second half of the year. Similarly, they said that they are “in conversations with Axiare to join its Board of Directors”, where they do not have a presence yet even though they increased their stake to 86.86% through the takeover, so as to take part in the Socimi’s management whilst the merger goes ahead (…).

New real estate giant

For the time being, the integration between Colonial and Axiare, which constitutes the first merger between the new generation of Socimis, will give rise to a company with real estate assets worth €11.079 billion, thus surpassing Merlin Properties. Of those assets, €9.282 billion will correspond to office buildings that Colonial owns in the centre of Madrid, Barcelona and Paris, spanning a surface area of 1.36 million m2, and the remaining €1.797 billion will correspond to assets contributed by Axiare, most of which are also offices, according to the year-end valuations completed by both companies.

In addition, the two companies generated a joint net profit of €700 million and turnover from rental income of €355 million in 2017. Nevertheless, Colonial calculates that the combined group’s revenues will increase to €500 million once the projects it currently has under development come onto the market.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Colonial Completes Successful Takeover of Axiare

2 February 2018 – Eje Prime

Colonial has completed its colonisation of Axiare. After two months of to-ing and fro-ing, the company led by Pere Viñolas has managed to acquire 58.07% of the share capital of its rival Socimi and to secure approval from 81.5% of the shareholders to which it addressed its public takeover bid (OPA), which it launched in November. The company now controls 86.86% of Axiare.

In a statement submitted at midday on Friday to the National Securities and Exchange Commission (CNMV), which had previously accepted the positive result of the takeover, Colonial reported that its offer for 45,912,569 shares has been accepted. That figure represents a success for the Socimi, which had a minimum limit of 16,769,180 shares.

The company had offered to pay Axiare’s shareholders €18.36 per share, whereby valuing the management company, until now a competitor of its, at €1.451 billion. The takeover bid was launched for 71.21% of the shares that Colonial did not yet control (it was already the largest shareholder with a 28.79% stake), and so, in the end, the company will have to disburse €1.030 billion following the results made public on Friday.

With the signing of this operation, Colonial has created a real estate giant worth €10 billion and comes even closer to Merlin Properties, its main competitor and the king of the Spanish real estate sector.

Original story: Eje Prime

Translation: Carmel Drake

Vía Célere, Aedas, Neinor & Aelca are Open to Corporate Operations

22 January 2018 – Expansión

Spain’s large property developers are warning that the shortage of land and the slow pace at which licences are being processed will lead to a rise in house prices.

Following the start of the concentration of the large Socimis, with the takeover of Axiare by Colonial as the main exponent, the real estate sector is looking to other companies in the sector to star in the new corporate operations, namely, property developers led by investment funds.

With a land portfolio spanning almost 5 million m2 and more than 10,000 homes under construction, Neinor Homes, Aedas, Vía Célere and Aelca are the leading property developers to have emerged from this current real estate cycle. With the first two listed on the stock market and the second two with plans to that end, their directors say that the commitment from large investment funds and the creation of new property developers is positive, despite the competition. “Competition motivates and helps us. It improves processes, which leads to a better purchase experience for the end customer”, explains Javier Gómez (pictured above, top right (on the left)), CEO and founding partner at Aelca, speaking at the New Housing Industry conference, organised by Expansión and its supplement magazine ‘Su Vivienda’ (Your Home), both part of the El Mundo group.

Operations

Although companies and funds, such as Harbert, Patrizia and ASG, have their own growth plans in the residential market, the shortage of available land for all of them implies that they will have to form alliances between them. “We are in a privileged position. We hold land on our balance sheet for the development of our business plan over the next five years. Having said that, we are obliged to analyse operations that add value for our shareholders, including corporate operations”, said Sergio Gálvez, Director of Business Development at Aedas.

In this context of corporate operations, Vía Célere, which is preparing to debut on the stock market in 2018, and Aelca, have something in common, which, nevertheless, also pushes them apart: their largest shareholder is the US fund manager Värde Partners. “There has been a lot of talk about whether Aelca and Vía Célere could work together, but the structure of and funds and the assets they own are different and that could lead to conflict. We would need to resolve that first”, said Juan Antonio Gómez-Pintado (pictured above, top left), founder and CEO of Vía Célere.

“We think that Spain is a market that is going to be consolidated, where there is space for between five and ten large players and where size is a significant advantage”, reveals Juan Velayos (pictured above, bottom left), who, nevertheless, recognises that it is difficult in his case, since his firm does not have a single controlling shareholder, following the gradual departure of its founder, Lone Star, from the company’s share capital over the last few months.

Original story: Expansión (by Rocío Ruiz and Jesús de las Casas)

Translation: Carmel Drake

HSBC Acquires 6.9% of Axiare for €100M in Midst of Colonial Takeover

12 January 2018 – Eje Prime

Axiare has yet another shareholder. The British bank HSBC has purchased 6.9% of the Madrilenian Socimi’s shares and has whereby joined the long list of international investors that have acquired stakes in the company since Colonial launched its takeover bid in November.

Specifically, the financial institution has acquired 5.51 million shares in Axiare, according to reports submitted by the company to Spain’s National Securities and Markets Commission (CNMV). According to market values, HSBC must have paid around €100 million for its stake.

Besides the British group, in recent months several other foreign funds have acquired stakes in the share capital of the company led by Luis López de Herrera-Oria including Syquant Capital, Sand Grove and Bank of America, amongst others.

It is worth highlighting that the bank took its decision to invest in the Socimi after the CNMV approved Colonial’s purchase of the company. Following that green light for the operation, the takeover is currently subject to an approval period, which ends on 29 January.

Colonial, led by Pere Viñolas, has offered €18.36 for each share in Axiare, which makes the takeover worth around €1 billion and which would result in the creation of a giant in the real estate sector. The new entity would threaten the throne of Merlin Properties as the real estate king in Spain.

Original story: Eje Prime

Translation: Carmel Drake

Hispania Receives a €100M Loan from EIB

12 January 2018 – Expansión

Hispania has signed a loan with the European Investment Bank (EIB) for €100 million to update its hotel portfolio and bring its assets in line with better technical standards, including energy efficiency measures.

Specifically, the investment will be used to improve tourist accommodation that the Socimi controlled by George Soros owns in tourist regions such as the Canary Islands and Andalucía.

The EIB is the European Union’s long-term financial institution, which grants long-term loans to investment projects aimed at promoting the implementation of EU objectives.

The loan to Hispania contributes to improving the competitiveness of the Spanish hotel sector, according to the EIB, through the incorporation of technical standards at its facilities. In this way, the investment supports the growth of less developed regions, where most of the hotels are located, explains the institution.

Hispania whereby joins Axiare, which received €16 million from the EIB last month to improve energy efficiency and the general features of its buildings with the aim of making them more sustainable.

Largest owner

Hispania is currently the largest owner of hotels in Spain with more than 13,100 rooms across the country.

At the end of last year, the company agreed to purchase the remaining 24% stake in BAY from Barceló for a total of €172.4 million. Moreover, it acquired Hotel Barceló Guadalmina from the Mallorcan hotel chain for €19 million. With these acquisitions and the investment plan to improve and reposition its portfolio, Hispania committed all of its financial capacity at the end of last year.

In February, the Socimi, in which George Soros holds a stake, announced its intention to maintain its initial objective of selling all of its assets before March 2020, the date that will mark six years since its debut on the stock market.

Original story: Expansión (by R. A.)

Translation: Carmel Drake