Proinsa: The Final Piece of Reyal Urbis’ Empire Files for Bankruptcy

12 February 2018 – El Confidencial

Proinsa, Promotora Inmobiliaria del Este, has filed for creditor bankruptcy. The company is chaired by Rafael Santamaria, who, together with Joaquín Rivero, Enrique Bañuelos, Luis Portillo and Manuel Jove, were the property “lords” of the last real estate boom. Santamaría was also the President of Reyal Urbis, which starred in the second-largest dissolution ever of a real estate company in 2016, after that of Martinsa Fadesa.

Specifically, Reyal Urbis, which filed for its own creditor bankruptcy last summer, controls 70% of the company Proinsa, which is also dedicated to real estate development. Moreover, the two firms share a registered address on the Madrilenian street of Calle Ayala, just 50m from Paseo de la Castellana, where Rafael Santamaría Trigo, who also used to serve as the President of the Property Developers of Madrid (Asprima), used to have his office.

Last week, Mercantile Court number 1 of Madrid declared that Proinsa had filed for bankruptcy with a debt of almost €62 million and assets worth around €57 million, after it had withdrawn from a refinancing agreement in the middle of December 2016. In fact, that company’s short-term debt amounts to €34 million, of which €10 million corresponds to debt with various financial institutions and €21.5 million to Sareb. On the other hand, it has short-term debt amounting to €21.6 million with group companies. Moreover, at the end of 2016, the firm’s losses amounted to €1.1 million, and it held negative equity of almost €5 million.

In addition to Reyal Urbis, the firm’s minority shareholders include several companies from Burgos that form part of the same group: Inmobiliaria Espolón, Promotora Fuente Redonda, Grupo Río Vena Gestión de Obras and Alqlunia 2.

Proinsa held onto just one asset: a plot of land under development in Los Berrocales, one of the developments in the southeast of Madrid that was blocked by the Town Hall of Madrid fifteen days ago. Specifically, it owned 75% of an estate (La Fortuna) with a fair value of €57.1 million at the end of 2016, according to a valuation performed by Knight Frank. A single syndicated mortgage loan was secured over that estate from Sareb, Banco CEISS, Banco Mare Nostrum, Ibercaja and Unicaja, and with EBN Banco de Negocios acting as the agent bank. That loan was constituted in December 2006 and was subsequently novated on three occasions until the end of 2014. Moreover, in terms of unforeseen costs, Proinsa owed €6.5 million to the Compensation Board of Los Berrocales.

Almost half a century dedicated to real estate

The real estate businesses of the Santamaría family date back to 1970. As Nacho Cardero recounts in his novel “The Property Lords”, Reyal Urbis was constituted in March of that year by the current Chairman’s father, Rafael Santamaría Moreno, owner of the Layer Farm in Pinto, dedicated to the wholesale of eggs. “The laying hens were exchanged for cranes and the company turned the company on its head, changing its name to Reyal, which is Layer written backwards”.

The small construction firm would become one of the largest property developers in the country, after it purchased Urbis from Banesto in July 2006 for €3.3 billion, at the height of the real estate boom (…).

Until last week, Proinsa was the final piece at the base of that real estate emporium. And that final piece in the house of cards left many cards along the way, such as the ghost city of Valdeluz, just 67km from Puerta del Sol, in the province of Guadalajara and another symbol, alongside Seseña (Toledo) (…) of the excesses of the real estate party (…).

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

UBS Finalises Purchase of Torre Titán from España-Duero for €50M

29 December 2017 – Voz Pópuli

UBS is on the verge of closing one of the largest real estate operations of this year-end. The Swiss entity is negotiating the purchase of one of the two Titán towers, owned by Banco Ceiss (España-Duero), a subsidiary of Unicaja. The sale is in its final phase and could be closed within the next few days, for more than €50 million, according to financial sources consulted by Vozpópuli.

The final consideration may even reach €55 million, which is exactly the price that España-Duero paid Nozar for the tower in 2008. That acquisition caused a great deal of controversy at the time to the point that some of the former directors of Caja Duero were subjected to investigations, but the case was archived in the end.

The Titán towers are two 13-storey buildings constructed by Nozar in 2008. One of them is owned by Invesco (which acquired it in 2011 for €40 million) and leased to the state-owned firm Adif. The other one is owned by España-Duero and it not only houses the headquarters of Unicaja’s subsidiary but is also home to Nozar and Enagás.

Ceiss continues

This process has been led by Irea, according to El Economista, and two other consultancy firms, Knight Frank and Aguirre Newman, have also been involved, in the search for tenants for the 30,000 m2 of available space. The useful surface area for offices is 10,722 m2.

According to sources close to the operation, España-Duero is expected to commit to continue to occupy the offices. The entity is in the middle of a merger with Unicaja, after the Malagan entity acquired the 12.5% stake that it did not own in the subsidiary from the Frob.

During the IPO in the middle of this year, the heads of Unicaja expressed their intention to merge the two companies (Unicaja and Banco Ceiss). As such, observers in the market speculate that Torre Titán will serve as the new headquarters for the central services team in Madrid.

The sale of Torre Titán will be added to the list of divestments that the Unicaja Banco group has been carrying out in recent weeks. Earlier this month, it sold a portfolio of foreclosed assets to the fund Axactor, as this newspaper revealed.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Solvia Doubles Its Profits & Builds 2,800 Homes

7 April 2017 – Expansión 

Solvia is establishing a name for itself as a profitable division for Banco Sabadell. The real estate arm is no longer just an instrument for evacuating assets awarded to the entity during the crisis, but rather it has become a profit-generating subsidiary and one that generates additional business for the bank’s branch network.

Moreover, the group is establishing itself as one of the main real estate companies in Spain covering the full cycle, given that it not only brokers the sale and purchase of properties, it also operates as one of the largest developers of new build properties, with a current stock under construction of 2,800 homes.

According to company sources, Solvia closed 2016 with a profit before tax (PBT) of €57.8 million, which represents a 2.4-fold increase on its earnings the previous year (€24 million).

The turnover of the company led by Javier García del Río for services rendered in 2016 grew by 31% to €157.5 million. This increase was even higher than the growth in the volume of brokered sales, which amounted to €1,995 million, up by 20.4%.

This rise was driven by an increase in marketing activities and the fact that 2016 was the first year in which the portfolios managed on behalf of Sareb were reflected in Solvia’s results their entirety. The bad bank is Solvia’s main client, alongside Banco Sabadell, although the company also works with several funds and family offices.

Moreover, last year, it diversified its activity by starting to sell homes to individuals through the launch of a chain of real estate offices on the high street. Solvia already has fifteen agencies – four of which are franchised – in Alicante, Sevilla, Torrevieja, Marbella, Murcia, San Pedro de Pinatar, El Campello, Fuengirola, Valencia, L’Hospitalet, Badalona, Oviedo, Getafe, Leganés and Castellón. Its objective is to extend the network right across Spain over the next few years.

Property developments

In total – excluding rental homes – Solvia sold 20,321 properties in 2016, up by 25.8%. It is worth noting that 29% of the sales corresponded to assets other than finished homes, compared to 9% in 2015. Since 2011, Solvia has brokered the sale of 91,000 properties in Spain.

The company now manages 148,000 units, with a value of more than €31,000 million. Of that figure, €4,300 million relates to financial assets under management and €1,200 million relates to land under development. The assets it manages on behalf of Sareb came from Banco Ceiss and Bankia.

The 2,800 new build homes that Solvia is now constructing on land owned by Banco Sabadell and Sareb are located in 79 developments across Spain – in Madrid, Barcelona, Valencia, Córdoba, Sevilla, Gijón and Pamplona.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

The Alcaraz Family Buys Caja España’s Former HQ In Madrid

23 November 2016 – Expansión

Another new luxury housing development is going to be built in Madrid. The family office owned by the Alcaraz family has purchased the building located on Calle Velázquez 23 – which used to house the headquarters of Caja España – from Banco Ceiss, where it plans to construct luxury homes.

The financial entity, which was created as a result of the merger of Caja Duero and Caja España, has taken advantage of the increase in prices driven by the economic recovery in Spain and the lack of high quality products to sell this iconic asset, located in the heart of the Salamanca neighbourhood. The operation has been advised by Aguirre Newman.

The Alcaraz family plans to demolish the property and build a new residential development, but it will respect the façade and arquitectural value of the asset. Velázquez 23 has an above ground surface area of 2,548 m2, as well as 450 m2 of basement space, which may be used for retail purposes and parking.

This building is located on one of the most sought-after axes for the development of high quality residential properties, just a stone’s throw from the Retiro Park and Calle Serrano, which is home to lots of major luxury brands. The price of homes in this area exceeds €10,000/m2 in some cases.

Other developments

This project is the latest in a long line of luxury developments that are already on the market, such as the one on José Abascal 48, comprising 17 homes with a surface area of between 100m2 and 400 m2; as well as others that are underway at Juan Bravo 3 and Canalejas.

The former, now known as Lagasca 99, which is being promoted by the Lar Group, is located in the neighbourhood of Salamanca and is expected to be sold in 2018. Meanwhile, the group of seven properties in Canalejas, a project being undertaken by Inmobiliaria Espacio and OHL, is located between Calles Alcalá, Sevilla, Plaza de Canalejas and Carrera de San Jerónimo. In addition to a hotel and shopping arcade, the Canalejas plan includes 22 luxury residences, which will be operated by the Four Seasons chain, along with the hotel.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Sareb Sells NPL Portfolio To Bank Of America & Hayfin

16 September 2016 – Expansión

Sareb has just sold a portfolio of non-performing loans worth €70 million to Bank of America and Hayfin Capital Management (founded by former directors of Goldman Sachs), which is secured by several residential buildings in Madrid. The agents of the operation have been Haya Real Estate and Solvia, who have declined to comment. Sareb does not have its own sales network, but uses the exclusive services of the two real estate managers, together with those of Servihabitat and Altamira Asset Management.

According to sources close to the operation, the discount obtained in the transaction has been 50%.

As a result of the new accounting legislation, operations are now a lot more segmented and therefore smaller.

Solvia, which belongs to Banco Sabadell, has been collaborating as one of Sareb’s agents for almost two years. It won the management of a portfolio containing 42,900 assets, of which 33,000 were properties originally from Bankia and the others were loans acquired from Banco Gallego and Banco Ceiss with various kinds of real estate guarantee.

In March, Sareb completed the sale of another batch of loans, which were secured by industrial logistics assets, hotels and offices, located in Madrid, Barcelona, Cáceres and Tarragona. The nominal amount of the operation amounted to €73.7 million.

The opportunistic funds, the typical stars of these operations, are starting to withdraw from the Spanish market and funds with more potential are now arriving, including Socimis and family offices. The funds that have sold portfolios in the last four years have managed to obtain IRRs of between 10% and 20%, according to business people in the sector.

Sareb was created in 2012 and is owned by the FROB (45%) and by the main banks (55%), with the exception of BBVA. 80% of its assets are loans to property developers and the remainder are real estate assets. Their total nominal value amounts to €107,000 million. By size, the bad bank exceeds its Irish counterpart Nama. Even so its market share barely reaches 4%, because it is a very fragmented market. The large banks compete directly with Sareb in the sale of properties, but bank bad has the advantage of time on its side. It has 12 years to execute its business plan and is under no pressure to list on the stock market.

According to the latest statements by its Chairman, Jaime Echegoyen, Sareb should stop losing money next year. Recently, it has started to develop plots of land from scratch, which will result in 700 homes and €100 million of investment. 21% of Sareb’s revenues are generated by the sale of real estate assets. It is currently selling an average of 27 units per day.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

Solvia Will Take Over Management Of Ceiss’s Assets From Next Week

26 February 2015 – Expansión

From next week, Solvia, the real estate arm of Banco Sabadell, will gradually incorporate assets from Sareb, the so-called bad bank, into its managament portfolio. Specifically, it will take over the management of assets that were originally held by Banco Ceiss.

In November last year, the Asset Managament Company for Bank Restructurings (Sareb) awarded Solvia, the real estate arm and recovery platform of Banco Sabadell, the management of a portfolio of 42,900 assets that had been originally held by Bankia, Banco Gallego and Banco Ceiss.

In total, 7,000 assets were held by Banco Ceiss; they will be added to those from Banco Gallego that Solvia is already managing. Only the management of the assets originally held by Bankia will remain pending; and that is expected to happen within the next few months”, according to Solvia.

Original story: Expansión

Translation: Carmel Drake