Santander Studying €12-Billion Sale of NPAs

20 August 2019

Banco Santander is considering a potential sale of a €12-billion portfolio of real estate loans by the end of the summer.

The bank is looking to improve its capital ratios in Spain, which are still weighed upon by assets the bank took over from Banco Popular, in spite of a €30 billion sale of assets to Blackstone in 2017, Project Quasar.  On Tuesday, the bank reported that its NPL ratio stood at 7%, above rival banks such as BBVA Spain (-4.9%) and CaixaBank (-4.6%).

Original Story: El Confidencial – Jorge Zuloaga

Adaptation/Translation: Richard D. K. Turner

Metrovacesa to Invest Up to €1 Billion in Four Major Developments

17 July 2019 – Richard D. K. Turner

Metrovacesa, a real estate developer owned by  Banco Santander and BBVA, expects to build a total of 6,000 homes, along with office buildings, hotels and commercial premises around Madrid, Barcelona, ​​Sevilla and Valencia over the coming six years.  The firm is forecasting a total investment of one billion euros.

The project that is furthest ahead is 67-hectare complex in Palmas Altas, Seville. Metrovacesa is investing 400 million euros to develop 2,189 homes.

Original Story: EjePrime

Santander Transfers 400,000-m2 Land Bank to Landmark Iberia

9 July 2019 – Richard D. K. Turner

Banco Santander has transferred approximately 400,000 square meters of land to its newly incorporated real estate developer, Landmark Iberia. The land could provide space for up to 4,000 new homes.

The portfolio, however, consists of a range of types of land running from ready-to-develop land to rural lands not yet zoned for development. Santander created Landmark at the beginning of this year.

Original Story: El Confidencial – RuthUgalde

doValue Finalises Acquisition of 85% of Altamira for €360MM

28 June 2019

doValue, the Italian NPL specialist, acquired 85% of Altamira Asset Management from firms controlled by Apollo Global Management, Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority. The Italian firm paid 360 million euros.

The operation had been originally announced in December. doValue finalised the acquisition this month after Banco Santander decided not to exercise its tag-along rights, maintaining its 15% stake. DoValue had offered to acquire 100% of the firm.

After the acquisition, DoValue will have €130 billion in assets under management.

Original Story: EjePrime

Blackstone & Santander Rescue Popular’s Marina d’Or Fiasco

11 June 2019 – Expansión

Quasar, the company created by Blackstone (51%) and Banco Santander (49%) to take over the management of Popular’s property portfolio, has injected €101 million into the company Platja Amplaries, which owns the Marina d’Or group’s apartments, parking spaces and land, to avoid its dissolution.

Platja Amplaries had run up losses of €170 million but Quasar’s cash injection has increased the company’s share capital to €108.3 million. The company’s assets were reportedly worth €285 million when it was created in 2011, but their value had fallen to just €85 million by the time Quasar took ownership two years ago.

Original story: Expansión (by A.C.A.)

Translation/Summary: Carmel Drake

Asian Funds Seek Local Allies to Enter Spanish Real Estate Sector

19 January 2019 – Expansión

Asian investors are joining forces with firms such as UBS, AXA and Savills IM to gain weight in the office, logistics and retail segments, where they still have a limited presence.

Spain has become a key destination for international investors interested in real estate assets, and Asian capital is no stranger to this buying fever that has boosted the sector in the country over the last five years. These investors, who are used to large volume operations, are now trying to gain a foothold in Spain through alliances with large European managers, such as UBS, Rockspring, AXA and Savills Investment Management, which will allow them to participate in smaller-sized operations and enter other sectors such as the office, logistics and retail segments.

The incorporation of new investors, capital funds and Chinese, Japanese and Korean family offices, amongst others, at the hand of the large European managers that are already present in Spain and know the local market well, offers them the possibility of arriving in the country by assuming less risk.

One of the most recent examples is that of the Korean fund manager Igis Asset Management, which, through Savills Investment Management, closed the purchase of Nestlé’s headquarters in Esplugues de Llobregat (Barcelona) last October for €87 million. That operation followed others such as the purchase of the Madrilenian Zielo Shopping Pozuelo and that of the office building located at number 2 Calle Santa Bárbara, both through funds managed by UBS, in turn, financed by Asian capital, amongst others.

Indirect investment

(…). These alliances followed the trickle of mega-operations undertaken in Spain in recent years. The most significant include the deal involving the Philippine group Emperador, which purchased the Torre Espacio building in Madrid, one of the skyscrapers that forms part of the Cuatro Torres complex, from Villar Mir, for €558 million.

Another operation that revolutionised the market involved the Chinese holding company Wanda, albeit ephemerally, as it had to abandon the project just three years later. The group purchased Edificio España (Madrid) from Banco Santander in 2014 for €265 million and sold it in the summer of 2017 to RIU, its current owner (…).

Those two Asian investors were joined by the sovereign fund of Singapore GIC, which, through the Socimi P3 Logistics Parks, acquired a foothold in the logistics market in Spain, one of the segments with the most potential.

Investors from Asia are therefore one group of overseas players who are committed to the country, but they are not the only ones. According to a report compiled by Savills Aguirre Newman, international capital was the major star in 2018, accounting for 70% of the €10.8 billion transacted, the largest percentage since the start of the market recovery five years ago (…).

By origin, investors from Europe and the USA account for almost 57% of the domestic and international investment total and 85% of the volume of operations from overseas. Asia is ranked in third place (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Blackstone Launches its 6th Socimi in Spain with 1,600+ Rental Homes

27 December 2018 – El Diario

Blackstone is increasing its position as the largest landlord in Spain. On Thursday, the vulture fund received approval to list its sixth Socimi, Euripo, on the stock market, which will make its debut with an initial value of €110 million. On its balance sheet, another 1,600 homes that will join the more than 20,000 properties that the fund already owns.

Euripo will make its debut on the Alternative Investment Market (MAB), the secondary market in Spain, where it will join other Socimis owned by the US fund, including Fidere, Albirana, Corona and Torbel. Blackstone also recently took control of 80% of Testa, the largest rental home company in Spain, ownership of which it shares with Banco Santander.

In this way, almost one in ten Socimis in Spain have Blackstone as a majority shareholder. As is usual in the operation of this fund, Euripo is owned by a company belonging to Blackstone that is based in Luxembourg.

In this case, Blackstone is listing a portfolio comprising more than 2,000 real estate assets including homes, garages and commercial premises proceeding from the divestment of two financial entities, BBVA and the now extinct Banco Popular. Of the total portfolio, it has direct ownership of 1,900 assets, whilst another 400 are in the hands of a related company, which will likely end up on Euripo’s balance sheet, according to comments included in the IPO document.

There are currently more than 60 Socimis listed in Spain on the MAB, the main stock market and the Ibex 35. Blackstone has been the most active investment fund, especially in the rental home segment, where it controls almost a quarter of the companies currently listed.

The set of assets that Blackstone is debuting on the stock market with this new Socimi is worth around €215 million, of which half are located in Madrid and Barcelona. The remainder are distributed across 35 Spanish provinces, according to the aforementioned IPO document.

Currently, less than 30% of the properties of this company are occupied. For this reason, the company expects to increase its revenues by improving the occupancy ratios and by increasing the rents charged for each occupied home by between 4% and 5%. Moreover, it says that 7% of its assets are illegally occupied.

Original story: El Diario (by Diego Larrouy)

Translation: Carmel Drake

Apollo Negotiates the Sale of Altamira to Dobank (Fortress) for €500M

21 December 2018 – El Confidencial

The sale of Altamira, the historical real estate arm of Banco Santander, is facing its most decisive moment. The Italian group Dobank has positioned itself as the primary candidate in recent days to purchase the platform owned by Apollo and Santander, amongst others, by submitting an offer for between €500 million and €550 million, according to financial sources consulted by El Confidencial.

The offer is somewhat lower than Apollo and its other two partners in Altamira’s share capital, the Canadian pension fund CPPIB and the Abu Dhabi fund ADIA, had expected. Between the three of them, they control an 85% stake, whilst the remaining 15% is in the hands of Santander.

The shareholders engaged Goldman Sachs to coordinate the sale with the aim of obtaining proceeds of €600 million. Nevertheless, the lack of competition has decreased the price in recent weeks. The deal was also influenced by the withdrawal of Intrum, which decided not to buy Altamira after winning the bid to acquire Solvia, according to the same sources.

That price difference means that Apollo and Goldmans are taking their time over the completion of the operation. Apollo, CPPIB and ADIA paid €664 million for the 85% stake in the real estate firm back in the day. Despite that, they do not have to reach that figure to recover their investments, given that they have received various dividends in recent years that compensate their profitability figures.

Dobank is the Italian platform owned by Fortress, the US fund that used to operate in Spain in the recovery of financial assets, through Paratus, Geslico and Lico Corporación.

The platform has been interested in entering the Spanish market for a while and regards Altamira as the ideal partner, given that it is the property manager that has been the most committed to internationalisation. It already operates in Portugal, Cyprus and Greece and the next major market into which it wants to expand is Italy.

Santander has not yet decided what it will do with its 15% stake in Altamira, whether to sell it together with the stakes of the other shareholders or to hold onto it to retain some control over the future of the platform, which still manages some of its assets.

Original story: El Confidencial (by Jorge Zuloaga)

Translation: Carmel Drake

Apollo’s Sale of Altamira Enters the Home Stretch with DoBank & Intrum as Favourites

17 December 2018 – La Información

The market for servicers is still in a spin and, following the sale of the majority of Solvia last week, now it is Altamira’s turn. According to assurances provided to La Información by sources close to the process, the US fund Apollo is facing the home stretch of the operation, which is expected to close within the next few days. Of the offers received by the US entity, those submitted by the Italian entity DoBank and the Swedish firm Intrum, have managed to make it through to the final found.

In fact, according to the same sources, it is DoBank, the former UniCredit Management Bank, that has the upper hand, in a transaction that is being led by Goldman Sachs. Currently, the entity is the largest owner of doubtful loans in Italy, and so its experience with this type of company is more than clear. Moreover, the most recent major operation that it carried out was in Greece, with the acquisition of a portfolio of non-performing loans in the Hellenic country worth €2 billion.

In total, the Italian firm currently manages more than €77 billion in loans and has agreements with most entities in its home country. For that, it employs a workforce of almost 1,200 and works with 1,600 external collaborators.

Apollo engaged Goldman Sachs last summer to carry out the sale of its servicer but after months of offers – including from Haya and Cerberus – it has decided to select the aforementioned two entities for the final round. The US fund has decided to take advantage of the good times in the market to divest and obtain profits after four years at the helm of Altamira (…).

Apollo acquired the servicer in January 2014 after paying €664 million in exchange for the 85% stake that it currently owns. Its primary function is based on the recovery management of loans from banks and the management and sale of properties proceeding from that activity. In 2017, the last year for which data is available in the Mercantile Registry, Altamira had more than 500 employees and generated an annual turnover of more than €300 million.

This servicer has become one of the major managers of financial and real estate assets in the country, with more than €53.8 billion in assets and more than 82,000 properties. Its main clients include its shareholder Banco Santander, and Sareb (…).

Intrum has already purchased 80% of Solvia

In the event that the tables turn and it is Intrum that ends up acquiring Altamira, it would be the second operation by the Swedish firm in one week. On Friday, Sabadell announced the sale of 80% of Solvia Servicios Inmobiliarios to Intrum for €300 million, whereby converting the fund into one of the new property giants (…).

The sale of Altamira by Apollo would serve to further close the door to Spain for the Americans. Since the sale of Evo Banco in September – the fund’s other major project in the country – to Bankinter, speculation has been rife regarding Apollo’s withdrawal from the Spanish market (…).

Original story: La Información (by Lucía Gómez)

Translation: Carmel Drake

Praedium to Build the First 100% Co-Working Office in Barcelona’s 22@ District

12 December 2018 – Eje Prime

The 22@ district is going to have its first 100% co-working property. The Praedium Group, led by Alfonso Cirera, is going to invest €40 million in the construction of an office building in the technological hub in Barcelona, which is going to be occupied in its entirety by companies that back shared office spaces, according to a statement issued by the company.

The ten-storey property will have a surface area of 30,000 m2, and will be constructed on the corner of Calle Selva de Mar and Calle Marroc. Specifically, on the site that used to house the old warehouses of the company Transporte Mateu&Mateu, which was acquired by Praedium in 2008 for €24.3 million.

The building work is expected to begin at the end of next year with the aim of inaugurating the property in the middle of 2021. The building will have capacity to house 2,000 workspaces and another 1,000 in corporate offices and services in the commercial premises.

In the common areas, Praedium has designed a terrace spanning 1,150 m2 with views of the beach, as well as a basketball court. The property will also have a gym, a swimming pool and a parking lot, which will be located in the basement, with a surface area of 2,500 m2.

Almost 30,000 m2 of space leased to September 

The co-working model is proving unstoppable in Spain and the 22@ district is its current epicentre. According to data from Cushman & Wakefield, 29,100 m2 of shared office space was leased in Barcelona during the first nine months of this year.

Between the Catalan capital and Madrid, the co-working segment grew by 71% during the nine months to September, with 55,000 m2 of space leased.

That growth is due to the commitment of the large corporations to co-working. As the report explains, “at the beginning of the 2000s, small spaces predominated, occupied by self-employed people and freelancers; nowadays, these spaces still exist, but the potential of the co-working phenomenon has caused companies such as Banco Santander (Openbank), Accenture and Everis, amongst others, to also use flexible spaces for some of their activity.

Original story: Eje Prime

Translation: Carmel Drake