Tag: Bain

Irea: “Mistakes Are Still Being Made But We Are A Long Way From A Bubble”

22 February 2018 – El Economista

The real estate sector is booming and the euphoria that is being experienced, especially in the residential segment, is leading to a genuine war in the purchase of land. That is according to Mikel Echavarren (pictured below), CEO of Irea, who says that the first mistakes are starting to be made.

The Director, who has participated in significant operations in the sector, such as Bain’s purchase of Habitat, and who has acted as a financial advisor to Blackstone in its acquisition of Banco Popular, believes that the next alliances will be harder to forge, but, even so, expects to see greater consolidation in the sector.

Q: How is the fabric of the real estate business evolving?

A: The residential development sector is giving rise to eye-catching activities in the market, such as stock market debuts and corporate acquisitions. On the one hand, we have the upper part of the sector, with large companies and on the other hand, we have the vast majority of real estate companies, which are lifting up their heads, maximising everything they can with the few resources they have. They have more money now than they did in 2013 and they have resolved almost all of their debt problems (…). They are all taking their first steps with something that did not exist before the crisis: money from funds for specific projects. And that is causing companies to revive and, as always happens, the markets that are recovering first are the Costa del Sol, Madrid, Barcelona, Málaga, Sevilla and Bilbao. But there are still some markets that have not recovered at all.

Q: Do you need to be big to survive in this sector?

A: Being big in the residential sector means that you can access the land purchases that the majority of companies don’t have the capacity to afford. It does not mean you have to be listed, but being large allows you to access faster and cheaper financing, and with that, you can rotate your portfolio much more. Meanwhile, smaller property developers have to hand over developments that they started three years ago to be able to afford to invest in land now (…).

Q: So, whoever can afford to buy land is guaranteed success?

Yes. Whoever has funds today to buy land in good locations is going to emerge victorious. That is one of the reasons why being large makes sense. Land is a scarce asset and since no new plots are coming onto the market due to the active or passive inoperativeness of the Administration, and because there is no capacity to finance the development of new land, prices are going to soar. Developable land prices have decreased by a lot (since their pre-crisis peaks), by between 60% and 80%, and I am certain that they will rise by between 200% and 300% (…).

Q: This situation means that the greatest fights are now over the purchase of land…

A: Yes, punches are already being thrown in this fight and we are entering a time in which mistakes are being made because people are buying land that is too expensive. But given that they are making those mistakes with their own funds, we are not facing a bubble scenario (…).

Q: With Neinor Homes, Aedas and Metrovacesa now listed, do you think we are going to see a boom in the number of property developers going public?

A: Going public is a consequence of the fact that there are funds behind the real estate companies that are looking to obtain returns. Nowadays, there are so many players wanting to invest in property developers in Spain, because, in theory, their performance is going to be very highly correlated with the recovery of the Spanish economy, that with few listed firms and so much capital, the value of them is increasing and it does not make sense for a property developer’s share price to exceed the value of its assets. I think that in two years time, we will see half a dozen companies listed on the stock market, but no more. There are not going to be that many because it is hard for a property developer to be strong, and to have good and geographically diversified plots. There have been some clear examples that are not going to be replicated, such as in the case of Vía Célere, which is a really good company that was sold because it did not have anyone to take over, but it is hard for many more operations like that to arise. Funds that already participate in a property developer do so because they are sure that they are going to go public. But we can expect to see acquisitions, purchases that seem like mergers (…).

Q: One of the major social problems in this country is the difficulty that young people face when affording to buy their first home. Moreover, they are now also struggling in the rental market…

A: It is a big problem and it reflects a structural change, not a circumstantial change. There is a huge proportion of the population who cannot and will never be able to buy a home in their lifetime, and then there is a percentage of people who do not want to buy a home, who prefer to travel or buy a good car, or simply have more flexibility (…). What is happening is that there is an unstoppable process to expel people from their homes who traditionally lived in rental properties in the centre of cities. That has happened in all of the major cities in Europe and it is going to happen here too. The centre is reserved for people with more money and for tourist rentals (…).

Q: In your view, which operations and businesses do you think still offer good opportunities for investors in Spain?

A: Large investors still have the possibility of creating residential development platforms with good managers and to debut them on the stock market or sell them to another party. I also see options in the sector for alternative financing. If everyone wants to buy land and the banks don’t want to finance land purchases, then there is a niche to lend (expensively) to whoever wants to buy. I also see opportunities in the market for land purchases; for example buying land to develop it or to carry out the final management procedures and then sell it on (…).

Original story: El Economista (by Alba Brualla)

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

Bain Relaunches Habitat to Compete with the Large Real Estate Firms

30 January 2018 – Expansión

With 2.5 million m2 of land and the US investment fund Bain Capital Credit as its largest shareholder, the historical real estate company is working to regain its position as one of the largest property developers in the country.

Founded in 1953, the property developer Habitat is facing a new stage hand in hand with its new shareholder: the US investment firm Bain Capital Credit.

This firm – the subsidiary of a fund created in Boston by the former Republican White House candidate Mitt Romney amongst others – completed the purchase of Habitat on 22 December after fighting off competition from other investment firms such as Oaktree and Apollo.

The arrival of the new shareholder gave oxygen to one of the historical real estate companies in the sector. Created by the Catalan businessman Josep Maria Figueras and Josep Ildefons, the company purchased the real estate arm of Ferrovial in 2006 for €2 billion. Two years later, it filed for creditor bankruptcy with a debt amounting to more than €2.8 billion.

With a proposal to pay up to 80% of the amount owed, the property developer emerged from insolvency in April 2010. Nevertheless, the economic crisis was still raging in Spain, and that caused the Figueras family, led by the son of the founder, Bruno, to lose control of Habitat to funds such as Goldman Sachs, Bank of America Merrill Lynch and Capstone, amongst others. And it was they who hung the ‘for sale’ sign up over the company last summer (…).

Habitat owns a land portfolio spanning 2.5 million m2, which makes it the second largest owner of this precious asset in the country, behind only Metrovacesa (which owns 6 million m2) and ahead of companies such as Neinor, Aedas and Vía Célere. Its portfolio is split almost equally between developable land and plots that require management, say sources at the company.

To this portfolio, new acquisitions that Habitat is currently evaluating will soon be added, either through purchases from third parties or incorporations of foreclosed assets and loans from Bain’s portfolio. Habitat’s objective is to look for opportunities in the major markets where it is already present, namely: Madrid, Barcelona and Sevilla.

Managing the land portfolio is not the firm’s only task for 2018. This year, the company also plans to deliver the first of more than 1,000 homes that it currently has up for sale. Of those 1,000 homes, more than 700 are currently under construction and of those, more than 80% have already been sold.

Deliveries

Thanks to these deliveries – the first 60 units in Alcobendas (Madrid) will be handed over during the first quarter of the year – the company expects to increase its revenue so that the figure for 2017 will be similar to that recorded in 2016 (€44.5 million).

For this new period, Bain Capital will keep in place the management team that joined the company last year. In this way, the most senior executive will be Eduardo Carreño, the Director General of Habitat, who has been managing the executive functions of the real estate company since the departure of Bruno Figueras in June 2016.

In January, the company moved its headquarters to Madrid, although it will continue to hold onto its offices in Barcelona as a regional delegation.

Amongst the alternatives that Bain is considering for its future divestment of Habitat include its placement on the stock market, as Lone Star did with Neinor Homes, or a merger with another group.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

The Funds Acquired €60bn of Banking ‘Assets’ in 2017

3 January 2018 – El Economista

International funds’ appetite for Spanish real estate is proving insatiable. And that was reflected in the final days of 2017, which saw a frantic year-end in the market for the sale by banks of debt portfolios secured by real estate collateral. On the basis of the operations that were underway during the final months of the year and the transactions that were actually closed, it is estimated that debt with a gross book value around €60 billion was sold in 2017, compared to €22 billion in 2016. Of that total volume, Blackstone was, undoubtedly, the great star, with its acquisition of the largest real estate portfolio ever sold in Spain and one of the largest ever sold in Europe.

The US fund agreed with Santander to purchase 51% of all the toxic assets – doubtful loans and foreclosed properties – from Popular, which had a gross value of €30 billion. A record operation in Spain, which the bank chaired by Ana Botín closed to clean up the balance sheet of the recently acquired entity.

Cerberus was the other major purchaser of 2017, after it acquired Anida and BBVA’s real estate assets with a gross value of €13 billion, through the creation of a joint company in which the fund will hold a majority 80% stake and BBVA will retain a 20% share.

Those two operations are a clear reflection of the dynamic role that funds are playing in the Spanish real estate market, given that in addition to having provided the impetus for the new generation of property developers, they are also serving as the main clean-up tool for financial institutions. “The funds have played a fundamental role, given that they have put a price on the portfolios and have provided capital to execute purchases”, explains Manuel Ángel González Mesones, Partner in Corporate Finance for the Financial sector at KPMG in Spain, who states that in the primary market – the sale of portfolios directly by the banks – property developers, the other great consumers of debt with real estate collateral “have not been particularly active, given that their criteria are very selective”. Nevertheless, “the large property developers have been buying foreclosed assets in a selective way for years from both financial institutions and different market players, such as Sareb and funds that have acquired those assets through the purchase of portfolios”.

In this sense, Emilio Portes, Director of Financial Advisory at the real estate consultancy firm JLL, highlights that, although the role of the funds has been key, the property developers have also played their part, by converting themselves into “instrumental vehicles for the funds in terms of the development of the land acquired in portfolios such as NPLs – doubtful loans – and REOs – foreclosed assets”. Thanks to that intense activity in which, in addition to Blackstone and Cerberus, other players have also featured, including Bain, Goldman Sachs, Oaktree, De Shaw, Deutsche Bank, Lone Star and Apollo, the banks have managed to decrease the volume of toxic assets relating to the real estate sector by almost half in one year, from more than €132 billion to around €75 billion. To that figure, we have to add the €40 billion sold by Sareb, which means that the total clean up figure amounted to €115 billion by the end of 2017.

That figure is still well below the almost €400 billion that was reached at the height of the crisis, but it also well above the less than €10 billion that was registered before the burst of the bubble (…).

More moderate operations in 2018

According to González, “Activity will continue to be significant, but due to the size of the entities that still have assets let to sell, I don’t think that we will see such large operations this year. The focus will certainly be more on transactions with nominal values of between €500 million and €2,000 million, although that could lead to an equally successful year…”.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Unicaja Sells 4,000 Properties to Axactor

14 December 2017 – El Confidencial

Another transaction involving the sale of real estate assets by one of the banks. Grupo Unicaja has sold a portfolio of 4,000 real estate assets, whose gross value amounts to €252 million, to the Norwegian player Axactor.

The foreclosed assets are divided into two companies in which the Andalucian entity will continue to control a 25% stake, whilst the other 75% stake will be taken over by the Nordic fund. The operation will not have a significant impact on Unicaja’s income statement, according to a report sent by the bank to the CNMV.

This agreement follows the path marked by Santander, which in the summer fired the starting gun for a generalised move in the sector towards the rapid deconsolidation of the bulk of its real estate exposure.

The entity chaired by Ana Botín transferred 51% of a €30 billion portfolio to Blackstone; BBVA then sold 80% of a €13 billion portfolio to Cerberus; and Liberbank recently sold 90% of a €600 million portfolio to Bain and Oceanwood.

Axactor and Unicaja have agreed that one of the entity’s subsidiaries, the company Gestión de Inmuebles Adquiridos (GIA), will be responsible for the administration and marketing of the properties.

Over the last year, Unicaja has reduced its non-performing assets by €1.19 billion, equivalent to 21% of the non-performing assets (most doubtful foreclosed assets) that it held on its balance sheet at the end of 2016.

Original story: El Confidencial

Translation: Carmel Drake

Bain Capital Completes Purchase of Habitat for €220M

6 December 2017 – Expansión

Oaktree Capital Group and Apollo Global Management also submitted bids for the property developer.

The US private equity firm Bain Capital has completed the purchase of the Catalan property developer Habitat Inmobiliaria for €220 million, according to reports by a source close to the operation, speaking to Efe-Dow Jones.

The US investment companies Oaktree Capital Group and Apollo Group Management also submitted bids for the property developer, worth between €200 million and €250 million, according to the same source.

Created in 1953, Habitat Inmobiliaria has built more than 60,000 homes during its lifetime, according to figures published by the company itself.

Moreover, it has a portfolio of land measuring 2.5 million m2, worth €189.7 million.

The objective of the company is to hand over more than 2,000 homes between now and 2021. Its property developments are located in Madrid, Cataluña, the Canary Islands, Andalucía and the Community of Valencia.

Original story: Expansión

Translation: Carmel Drake

Habitat Purchase: Bain Looks Set To Pip Apollo & Oaktree At The Post

16 November 2017 – El Confidencial

Provided nothing goes wrong in the next few hours, tomorrow, Bain Capital will be the party chosen to buy Habitat, after the US fund submitted an offer that values the real estate company at around €225 million, according to confirmation from several sources in the know.

Its proposal has been valued as the best by Irea, the firm contracted to lead the sale process. And it is looking likely that, on Friday, the owner funds of Habitat – Capstone, Goldman Sachs, Bank of America, Värde and Marathon, amongst others — will endorse its opinion.

With this step, Bain will create a new real estate giant in Spain and follow in the footsteps already taken by other large investment vehicles such as Lone Star, which created Neinor, Castlelake, owner of Aedas and Värde, owner of Vía Célere.

In fact, Bain was on the verge of acquiring the company founded by Juan Antonio Gómez-Pintado, but a failure to align economic expectations undermined that operation and left the path open for Värde, which had previously acquired San José Desarrollos Inmobiliarios, to purchase the property developer.

Far from throwing in the towel, Bain has continued to insist on its strategy of acquiring a platform on which to build a large real estate company with the assets that it has been acquiring in Spain. It has purchased several non-performing loan and real estate asset portfolios from the banks, amounting to almost €2,600 million in total, although the investment made by the fund, which specialises in opportunistic operations, amounts to just one-third of the nominal value of those portfolios.

Most of the assets and collaterals acquired are residential, although Bain’s portfolio also includes properties dedicated to hotel, industrial and commercial use located all over Spain. The land and developments of Habitat, at the end of 2016, the most recent full financial year, amounted to just over €1,000 million, but its provisions of €848.5 million reduce its net valuation to €238 million.

One example is the recent purchase of €602 million in real estate assets from Liberbank, which it acquired in partnership with Oceanwood, for a discount of 65%. This operation also forms part of Bain’s accelerated plan for growth in Spain, where its objective is to get on the wave of recovery in the Iberian residential market.

Besides Spain, the fund has its sights set on Portugal, where a similar upward movement is expected, similar to that already seen in Spain over the last year and a half. In fact, in the summer, it made its debut in the country with the purchase of a portfolio of non-performing loans and real estate assets from Caixa Geral, an operation that was closed almost in parallel to the purchase of a €489 million portfolio of non-performing loans to property developers from Ibercaja.

Italy is the other market where Bain has now taken some important steps with the acquisition of a portfolio of €385 million in non-performing loans backed by real estate assets, as well as of the bad bank Heta Asset Resolution, with a portfolio of €570 million.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Sale Of Habitat Set To Close This Week Despite Catalan Crisis

15 November 2017 – El Confidencial

Last weekend marked the deadline for the three funds interested in buying the Catalan real estate company Habitat, namely Apollo, Bain and Oaktree, to submit their binding offers. Despite constituting one of the most important real estate sales of our times, there have been doubts in the market about the impact that the sovereign challenge in Cataluña may have on the appetite of these three investment giants. Their parent companies have ended up living through the worst moments of the crisis once again, requesting regular reports about the political situation in Spain.

And in the end, all three interested parties decided to push ahead and put their binding offers on the table for the purchase of the real estate company, which is worth between €200 million and €250 million. Irea, which has been engaged by the shareholders of Habitat to lead the sales process, plans to explain to them the pros and cons of each proposal between now and Friday, the day when the winner of the process is expected to be chosen.

Sources consulted by El Confidencial state that the most attractive offers were those presented by Bain and Apollo and they all but rule out Oaktree‘s chances. According to the schedule, the players behind the two best offers will be given the opportunity to fine-tune their proposals between today and Friday. Although the possibility also exists that Irea may choose the best proposal, without asking for any improvements, to present it directly to the shareholders of Habitat.

One way or another, the idea is that this week, the winner of the quest for Habitat will be chosen, a transaction that the interested parties are looking to complete before the end of the year.

Buildable land platform

The purchase of Habitat will allow the successful buyer to acquire an important platform through which to benefit from the recovery of the Spanish residential property development market. That desire has had a strong impact on the parent companies of the three interested funds, all from the US, allowing them to overlook the political and economic uncertainty unleashed by the independence challenge.

Habitat is the heir of the former Ferrovial Inmobiliaria, a company that the firm controlled then by Bruno Figueras acquired for €2,200 million at the end of 2006; that operation that gave rise to the fifth largest property developer in Spain. But, just two years later, during the first few months of the crisis in the sector, the company filed for the fourth largest creditor bankruptcy of all time, with debt amounting to €2,800 million.

Although it managed to get out of that hole in 2010, five years later Figueras was forced to cede control to the creditor funds, and firms such as Capstone, Goldman Sachs, Bank of America, Värde and Marathon acquired 70% of the share capital when the bulk of the debt was converted into shares. (…).

Bain, Apollo and Oaktree have all been trying to acquire a large domestic property developer for some time now, to allow them to create a large group through which to benefit from the recovery in the market. In fact, the former has just acquired, together with Oceanwood, €602 million in real estate assets from Liberbank, whilst Apollo fought to the end to acquire the €30,000 million portfolio of toxic assets from Banco Popular that was sold in the summer.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Spain’s Banks Sell RE Assets Worth €52,000M+ In 2017

2 November 2017 – Cinco Días

According to all of the experts consulted, there is no doubt that the operation carried out by Santander in August, involving the sale of €30,000 million in property to Blackstone, marked a before and after in the formula for the financial sector to get rid of its real estate deadweight.

That operation significantly boosted the total amount transacted in these types of portfolio sale operations this year. Taking into account those operations that already have been closed, as well as those that are currently underway, the transaction volume in 2017 will comfortably exceed €52,000 million. That figure contrasts with the volume recorded in 2016 (€22,000 million), even though this year (2017) was expected to be more modest in terms of transactions.

The new international accounting standard IFRS 9, which will enter into force in January, and which will toughen provisions for real estate portfolios, as well as the pressure from the Bank of Spain and, above all, the European Central Bank (ECB) for the sector to accelerate the sale of its NPL assets, have served as a trigger for the banks to accelerate the sale of their foreclosed land and properties.

The heads of Spain’s largest banks (Santander, BBVA, CaixaBank, Bankia and Sabadell) have said, during the recent presentations of their results for the first nine months of the year, that their objective is that property will no longer weigh down on their income statements by the end of 2018 and, in some cases, by a year later, at most (…).

By way of example, Bankia has two very different financial operations underway, but international funds are the interested investors in both cases. One involves the upcoming sale of between 7% and 9% of the entity’s share capital, a placement that is expected to be carried out during the month of November and whose buyers will be institutional investors.

The other operation will involve the sale of several real estate portfolios. One of those, for €100 million, goes by the name Jets; and another, amounting to almost €2,000 million, is known as Giant, comprises property from Bankia’s own balance sheet and maybe some from BMN, the entity that it will integrate into its perimeter at the end of the year (…).

CaixaBank, with around €18,000 million in at-risk assets, of which €10,000 million are NPLs, may also star in a similar operation to the deal closed by Santander with Blackstone within the next few months, according to two experts.

For the time being, all of the consultancy firms and investment banks agree that (with the exception of the sales processes already underway) the trend is to carry out much fewer placements of small portfolios and “to undertake a few, large sales instead”.

These same sources also agree that the investment funds (Apollo, Oaktree, Bain, Cerberus, Blackstone, Lone Star, Castlelake, Värde Partners, Lindorff, TPG and Goldman Sachs, amongst the most active) “are in a hurry to buy and the banks are in a hurry to sell”.

One of the large banks that has shown reluctance to sell its real estate assets until now, despite its bulky portfolio of foreclosed assets, has been BBVA. It has carried out some operations (refer to the table above) but it has been, together with Sabadell, the only entity that has not sold its real estate platform.

Nevertheless, the bank chaired by Francisco González has been holding exclusive negotiations with Cerberus for months regarding the sale of part of Anida (in an operation known as Sena). Specifically, it is interested in 20% of Anida Grupo Inmobiliario SL, which is equivalent to around €1,200 million, an operation for which it would pay approximately €300 million.

But several sources say that the bank is rethinking its sales strategy and in 2018, will be willing to put a much larger portfolio up for sale and whereby tackle an operation similar to the one closed by Santander, but this time with Anida as the protagonist.

Sources at investment banks and managers add that the upcoming regulatory changes affecting securitisations in Europe will also help to boost the sale of packages of property portfolios amongst investors (…).

Original story: Cinco Días (by Ángeles Gonzalo Alconada)

Translation: Carmel Drake

Habitat Considers Moving Its HQ To Madrid Due To Cataluña Crisis

7 November 2017 – El Confidencial

The historical property developer Habitat Inmobiliaria is on its way to becoming the next iconic Catalan company to abandon its region of origin in order to avoid the risks associated with the current crisis being caused by the independence challenge. The company’s shareholders, led by Capstone Equities Management, have been discussing the possible transfer of its corporate headquarters from number 458 Avenida Diagonal in Barcelona to Madrid for several weeks now; they want to reduce any risks to the sales plans being developed by its commercial network (in other parts of the country).

The company, founded in 1953, was owned by the Figueras family until November 2015, when it was taken over by Capstone and a group of funds, including Värde, in an operation that included a multi-million debt discount and in which Goldman Sachs and Bank of America also participated. The change in ownership led, in turn, to an about-turn in its management. Rafael del Valle took over the role of President and a significant part of the operations were moved to Madrid, although the registered address of Promociones Habitat, as the company is known formally, was maintained in Barcelona.

Now, the owners have initiated a sales process and the private equity firms Apollo, Oaktree and Bain are all competing in the final round, according to El Confidencial. In this context, the uncertainty generated in Catalaña could give the final push to move, however, the debate is on-going internally, which sources from the real estate company freely admit.

The problem for Habitat is not so much its exposure to the Catalan market itself, but more a question of its image in the commercial network across the rest of Spain. Of the 11 real estate developments that it currently has up for sale, only one is located in Cataluña, specifically, in Cornellà de Llobregat, called Parc de Can Mercader. The rest are located in Madrid (four developments), the Community of Valencia (four), Andalucía (three), Las Palmas de Gran Canaria and Portugal (one each). In other words, the problem facing the company is the opposition that its products may receive given the fact that it is a Catalan company, a phenomenon that is being seen in other sectors.

If this change of registered address comes about, Habitat will be the second large real estate company to abandon Cataluña for political reasons after the Board of Directors of Inmobiliaria Colonial also decided, on 9 October, to move from Avenida Diagonal in Barcelona to Paseo de la Castellana in Madrid.

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake