Acciona Acquires Banesto’s Former Headquarters from Banco Santander

8 February 2019

With the deal, Santander continues its policy of the divestment and reallocation of its portfolio of real estate assets, while trying to recover the ownership of the ‘Financial City.’

Santander has sold Acciona the complex of buildings that the bank owned on calle Mesena in Madrid, and which once housed the former headquarters of Banesto and until a year ago was the headquarters of Santander Spain, according to sources close to the transaction.

It complex comprises a set of seven buildings with a total area of ​​about 104,000 square meters, located in a residential area north of the city.

With this operation, Santander continues its policy of the divestment and reallocation of its portfolio of real estate assets, while trying to recover ownership of its ‘Financial City’, located in Boadilla del Monte, and where it has its headquarters. The bank recently appealed the courts’ decision to award the complex to the brothers Simon and David Reuben.

For its part, the deal marks Acciona’s first major acquisition after it reactivated its commitment to the real estate sector two years ago.

Original Story: El Confidencial

Translation: Richard Turner

Grupo Arenal Acquires Banesto’s Former HQ in Bilbao for €6M

26 April 2018 – El Correo

Onwards and upwards. Bizkaia is continuing to form the backdrop to some of the country’s most high profile real estate transactions. Following the placement on the market of BBVA’s old skyscraper for €100 million and the Ballonti commercial mega-centre in Portugalete for €150 million, big-name investment funds have put Bilbao in their line of fire once again for large operations that mix financial, commercial and real estate interests.

The most recent major intervention has been undertaken by three players. The international consultancy firm Catella has brokered the sale of Banesto’s former headquarters, located at number 3 Calle Navarra. The perfume company Grupo Arenal has acquired the historical building, which has been closed for several years following the cessation of the bank’s activity. The Galician firm has made the disbursement for the property, which spans 2,500 m2 and is spread over three floors.

According to experts in the sector, the operation has been closed for a sum of around €6 million, a figure on which sources at Catella declined to comment yesterday. The consultancy firm, one of the most important in Europe and founded by the owner of Ikea, who ended up selling it to a fund, has served as a bridge between Grupo Arenal, which had been studying the Bilbao market for years, and the former owners of the iconic building. The building previously belonged to a family office of the Invivas Group, owned by the Bilbao-based businessman Sabino Arrieta Heras.

To a certain extent, this operation breaks the mould of the recent sales and purchases carried out in Bilbao. To date, most of the acquisitions have involved local investment funds, which follow very closely the few buildings that become free in the city. The amount disbursed by Grupo Arenal is slightly lower than the figure agreed two weeks ago by the Governing Board of the Town Hall of Bilbao to acquire the largest Zara store in Euskadi and use it for the future expansion of the Basque Museum.

The PNV and PSE approved the payment of €5 million – divided into equal parts by the Town Hall and the Diputación de Bizkaia – for a store measuring just over 1,900 m2 on Calle La Cruz, owned by a company chaired by the wife of the Inditex founder.

A 70m-long façade

The arrival of Grupo Arenal has fulfilled the expectations of all the parties involved. Santander has freed itself of a property for which it was paying a sizeable rent, even though it was empty, and the perfume brand is ensured a shop window that measures more than 70m in a retail area that is very much on the rise (…).

The megastore, whose neighbours will include Starbucks, will soon open its second store in the Vizcaya capital, as it seeks to take advantage of the future “commercial pull” of Primark, which is going to occupy five floors of BBVA’s tower and the arrival of TAV. It is also hoping to benefit from its proximity “to major fashion operators, such as El Corte Inglés, Inditex and Mango” (…).

The perfume brand is going to use Bilbao as a “strategic” axis in its expansion plans, which involve increasing its revenue to €150 million and growing the number of points of sale from 40 to 60 by 2020.

Original story: El Correo (by Luis Gómez)

Translation: Carmel Drake

Cerberus Wins Bid To Manage & Sell Bankia’s Expanded Real Estate Portfolio

5 March 2018 – La Información

Cerberus has fought off competition from Lindorff to become one of the new Bankia’s partners, responsible for managing and selling its portfolio of foreclosed assets, which now exceeds €5 billion. The group chaired by José Ignacio Goirigolzarri has opted to continue with its existing partner in the end, to the detriment of the partner that has been working with BMN since 2014, for reasons that may go beyond the mere economic bid offered by both, indicate reliable sources.

Bankia’s alliance with Cerberus dates back to 2013, when it acquired its real estate firm Habitat on which it built Haya Real Estate, the servicer, which is now finalising its debut on the stock market after having also been awarded contracts to manage the portfolios of BBVA, Liberbank, Cajamar and Sareb (…).

At that time, almost all of Spain’s financial institutions opted to divest their “servicers” in light of the need to accelerate the sale of their toxic assets and the large appetite of specialist funds to grow in size and contracts. BMN’s story is similar. In 2014, it sold its real estate asset company Inmare to Aktua for €40 million. Aktua was Banesto’s former real estate servicer company, which Lindorff acquired from Centerbridge Partners in a close battle with Apollo and Activum SG Capital Management in 2016.

The Norwegian fund, which is itself currently immersed in an integration process with Intrum Justitia, thus took over the management of the real estate assets of the banking group led by Caja Murcia, as well as of those transferred by BMN to Sareb. The entity now also works for Ibercaja and with certain portfolios from entities such as Santander.

Haya Real Estate and Lindorff’s contracts with their respective clients are similar because they both impose a decade-long period of exclusivity, forcing Bankia to review its position following the absorption of BMN, just like with other types of joint ventures. The bank is going to proceed first to break the contracts and indemnify each partner for a sum estimated to amount to €100 million, according to Expansión, and then it plans to close a new agreement with the winning party. Both partners may have submitted similar bids although it is understood that Aktua offered an exclusively commercial service whilst the agreement with Haya Real Estate included the absorption of the workforce.

The transfer of employees

The new Bankia Group’s property portfolio has a gross value of €5.1 billion, as at the end of 2017, compared with €3.5 billion registered a year earlier excluding BMN’s exposure. The entity has a cushion of provisions that covers 35.9% of its portfolio value in such a way that it could afford to dispose of the portfolio at 64.1% of its initial value without incurring losses. The bulk – 62% – are homes associated with foreclosed mortgages and another 16% are properties received for debt in construction or property development – 48% of that proportion corresponds to land -.

BFA’s subsidiary reduced its problematic assets by 9.9% YoY last year – excluding the incorporation of BMN’s exposure onto its balance sheet – thanks, above all, to sales amounting to €427 million (€5.55 million corresponded to gains) and a 15.3% reduction in doubtful risks.

With the integration of BMN, the bank is being forced to review and rethink all of the contracts where exclusive suppliers operate in both networks. It has already resolved one relating to life insurance, which will see it discontinue BMN’s relationship with Aviva – it will pay that firm €225 million by way of compensation – in favour of Mapfre, which was also victorious in 2016 when the bank came across another duplicate alliance, for the first time (with the same British insurance company, which was also a historical ally of Bancaja). It still needs to settle a similar agreement with Caser, and put the finishing touches to its deals with Lindorff and Cerberus.

Original story: La Información (by Eva Contreras)

Translation: Carmel Drake

Basque Family Office Invivas Sells Prime Retail Store in Bilbao

12 December 2017 – Eje Prime

A new operation has been signed in the heart of Bilbao. The Basque family office Invivas, which is backed by the family of Sabino Arrieta Heras, has sold a shop in the heart of the Basque city to Grupo Arenal. The purchaser is a family office specialising in investment in real estate assets and the owner of the Arenal perfume chain, according to explanations provided by the company to Eje Prime. The operation has been brokered by the real estate consultancy firm Catella.

Grupo Arenal, which did not want to disclose the amount of the operation, could have paid around €6 million for the asset. The property is located at number 3 Calle Navarra and its façade is more than 70m long. The store is located between the retail thoroughfares of Gran Vía, Rodríguez Arias and Ercilla.

It is a strategic location, which, as well as being home to the country’s major fashion retailers, such as El Corte Inglés, Inditex and Mango, is expecting to welcome a new Primark store soon; moreover, a high-speed train station is being built in the vicinity.

The space was the former main branch of Banesto in Bilbao and has a total surface area of 2,500 m2, spread over three floors. The first floor measures 777 m2, the ground floor spans 841 m2 and the basement has a surface area of 881 m2.

With this sale, Grupo Invivas, led by the former number two of the Basque Government’s Home Office (…) is divesting in the heart of Bilbao. This family office has been starring in real estate operations for several years, especially in the País Vasco, but also in the international market.

Its most recent purchases include a retail store in Miami, through Invivas Miami Real Estate, for €5.2 million (…). Four years ago, in the summer of 2013, it launched its operations in Germany with the purchase of a 1,000 m2 building in Frankfurt, used as offices and retail space, for €7 million (…).

The retail sector is thriving in the País Vasco  

One of the most active segments in Bilbao in recent months has been retail, as a result of the improvement in consumption. The activity in terms of new arrivals in the city has been led by domestic fashion brands, which have accounted for 44% of the new movements, followed by accessories firms (23%) and specialist brands (19%), according to a study compiled by the real estate consultancy firm CBRE (…).

The situation is similar in San Sebastián, where major groups such as Fnac and Zara have now arrived in the Mercado de San Martín; moreover, Pull&Bear, Mango and Violeta have set up shop in the former Kutxabank building (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Cerberus Gets its Cheque Book out again to Buy NPLs from CaixaBank

4 December 2017 – Voz Pópuli

Cerberus is stepping on the accelerator in Spain. The US fund has starred in another major operation just days after acquiring a real estate portfolio from BBVA. One of Cerberus’s subsidiaries, Gescobro, has won an auction for €0.8 billion in non-performing loans and real estate from CaixaBank.

The fund has purchased part of that portfolio, known as Project Egeo, whilst the Norwegian group Lindorff has bought the rest, according to financial sources consulted by this newspaper.

Part (€0.5 billion – €0.6 billion) of this €0.8 billion portfolio comprises unsecured loans (credit cards, personal loans and others without any guarantee) and just over €0.2 billion relates to loans to SMEs secured by real estate.

This is Cerberus’s fourth operation in the Spanish financial and real estate sector in 2017 following the acquisition of Project Jaipur from BBVA (€0.6 billion in non-performing property developer loans; the purchase of the real estate arm of Liberbank, Mihabitans, for €85 million; and the acquisition of €13 billion in property from BBVA for €4 billion.

Strategic fit

The sale of Project Egeo, which is still pending the completion of the necessary paperwork, forms part of the routine divestment plans of the Catalan group. In this way, it is managing and controlling its default rate and complying with the regulatory requirements of the European Central Bank (ECB).

Currently, the group’s default rate stands at 6.4%, after falling by seven tenths in the last year. In total, its doubtful loans amount to €15.3 billion, of which €13.9 billion are in Spain. It has another €7.2 billion in foreclosed assets.

The firm that has won the auction, Gescobro, has been led by Iheb Nafaa until now, but he was recently poached by Servihabitat, the real estate company owned by TPG (51%) and CaixaBank (49%).

Meanwhile, Lindorff has been one of the main competitors in the bank debt market since 2012. More than a year ago, it expanded its real estate business with the purchase of Aktua, the former real estate arm of Banesto; and it strengthened its business through a merger with Intrum Justicia.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Popular Values The Complex That Was Going To House Its New HQ At €400M

17 October 2017 – Expansión

Popular has increased the book value of the real estate complex that was going to house its future headquarters to almost €400 million. The complex, which is still under construction, is being built on two plots that Popular purchased from Vocento in 2008. The plots span a surface area of more than 100,000m2, alongside the A2 motorway in Madrid. The market valuation of the headquarters could amount to €200 million, according to calculations by real estate experts.

The property is one of the unique assets inherited by Santander following its purchase of Popular. For the time being, the group will retain control of the headquarters, given that it has not been included in the batch of assets that Santander is going to transfer to the company that it is going to constitute together with Blackstone. That new company, in which the US firm is going to hold a 51% stake and Santander a 49% stake, will manage the damaged portfolio inherited from Popular. The company will be born with assets on its balance sheet with a gross value of €30,000 million.

Two buildings

The corporate complex of the former Banco Popular comprises two independent buildings, located on both sides of the A2. One of them, on Calle Abelias, is already finished. The second, on Calle Juan Ignacio Luca de Tena, is still under construction. The initial forecast was that the building work would be completed this autumn.

The book value of the property on Calle Abelias amounts to €132 million, according to the most recently published figures, which relate to December 2016. Of that total value, €44 million relates to the cost of the land and €93 million to the investment in the construction of the building. The sum of those two figures equals €137 million, from which €5 million has already been deducted for cumulative depreciation, to arrive at the aforementioned figure of €132 million.

In terms of the building on Calle Luca de Tena, the cost of the land amounts to €112 million. Meanwhile, the value of the construction in progress amounts to €149 million at year-end, up by €74 million compared to 2015. The sum of the two figures gives a global value of €261 million.

The property that has already been finished, on Calle Abelias, was inaugurated in January 2013 and houses Popular’s technological headquarters. The IT migration is one of the most sensitive elements of the merger currently underway between Santander and Popular (…).

Four headquarters

Following the purchase of Popular, Santander now has four large corporate centres in Madrid. On the one hand, it has the Ciudad Financiera, its central headquarters, located in the Madrilenian town of Boadilla del Monte. That building was inaugurated in 2004, has a surface area of 250 hectares and comprises nine office buildings (….). Santander also owns Banesto’s former corporate complex, located on Calle Mesena in Madrid, which is home to the Santander España division. Meanwhile, the group owns the historical headquarters of the now extinct entity Banif, specifically, the small palace located on Castellana 24, which has housed the central services of Openbank, the group’s digital bank since this summer.

Original story: Expansión (by M. Martínez)

Translation: Carmel Drake

Reyal Urbis Files For Spain’s Second Largest Bankruptcy

21 June 2017 – Cinco Días

The long-awaited death of Reyal Urbis is approaching. The real estate company has failed to convince a majority of its creditors to accept the proposed agreement presented by the entity chaired by Rafael Santamaría, which included significant discounts of between 80% and 90% of a total debt balance amounting to €4,600 million. It is the second largest liquidation ever in history, following that of the property developer Martinsa-Fadesa, which folded with a debt of around €7,000 million.

The proposed agreement presented by the company has not received sufficient backing given that in the case of the ordinary debt, it only obtained favourable votes from 32.7% of the creditors; another 37.79% voted against the proposal and the remaining 29% abstained, according to legal sources. In the case of the syndicated loan, the votes did not reach the 75% threshold either.

The bankruptcy administrator, namely, the audit firm BDO, is obliged to communicate the result of the vote that takes place in Commercial Court number 6 in Madrid, where the judge will issue the proposed liquidation ruling, with an equity black hole of €3,436 million.

The liquidation of Reyal Urbis was finalised after its major creditors, including Sareb and the opportunistic funds that had acquired some of the liabilities in recent weeks, rejected the proposed agreement, as disclosed by Cinco Días at the end of May.

The company has liabilities worth more than €3,200 million corresponding to a syndicated loan, in which Sareb holds a crucial stake, with more than €1,000 million proceeding from loans from the former savings banks. In addition, Reyal Urbis owed almost €900 million in ordinary debt and more than €400 million to the Tax Authorities. In fact, the real estate company is the largest debtor on the list of overdue debtors published by the Tax Authorities.

The property developer is dying just a decade after its merger which saw it become one of the large real estate companies in the country, together with Martinsa-Fadesa, Colonial and Astroc. Its President, Rafael Santamaría, a technical architect by training, has spent his whole life working for the family business. He was appointed CEO in 1985 and took over from his father as President in 1997. In 2006, he starred in one of the largest deals in the sector, after acquiring Urbis from Banesto for €3,300 million.

But that joy was short-lived. The burst of the real estate bubble dragged him down, just like it did Martinsa, Habitat and Nozar. The company filed for voluntary creditors’ bankruptcy in February 2013 after Sareb, BBVA and Santander refused to refinance its debt.

Santamaría’s last ditch attempt to save the company came with an aggressive liquidation proposal. That plan included discounts of 90% on the ordinary loans. In the case of the syndicated loan, the offer included the “dación en pago” of assets, which would have meant accepting discounts of around 80%. In turn, the Tax Authorities negotiated a unilateral payment plan for the €400 million owed.

That aggressive plan did not seduce the creditors, who have seen the possibility of recovering their capital go up in smoke, choosing instead the option of liquidating the company’s remaining assets, which are currently worth almost €1,200 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Sareb Rejects Reyal’s Proposed Payment Plan

1 June 2017 – Expansión

Reyal Urbis has taken another step closer to the precipice. Sareb, its main creditor, has voted against the agreement presented by the property developer to circumvent its liquidation. Yesterday, the deadline set by the judge for Reyal’s creditors to sign up to the proposed agreement came to an end and, according to market sources, the public company has rejected the plan submitted by Reyal Urbis, which filed for bankruptcy four years ago.

Sareb, the real estate company’s main creditor, with debt amounting to €1,000 million, had already expressed its doubts regarding Reyal’s payment plan. In the end, it has opposed the plan because it considers that the proposed discounts (on the debt), of between 88% and 93%, are too high and that the proposal to free up assets that are securing certain loans only serve to benefit Rafael Santamaría, the company’s President and majority shareholder.

Reyal’s other major creditors include Santander and funds such as Värde Partners, which are now working to find out the current value of the company’s assets, with a view to its possible liquidation. The US fund has been acquiring some of Reyal’s debt from overseas entities over the last few months and is now negotiating the purchase of more land, as Expansión revealed on 22 May. Värde’s aim is to take ownership of some of the real estate company’s plots of land and whereby strengthen its commitment to Spanish property, which has led it to buy Vía Célere and Aelca in recent times.

Another key player in the creditor pool is the Tax Authority, to which Reyal Urbis owes more than €400 million. The real estate company has offered to pay this debt using the funds it obtains from the sale of its assets, but it is proposing a very long term horizon.

At the end of 2016, Reyal Urbis’ liabilities amounted to €4,660 million and the group had negative own funds of €3,449 million. The assets, most of which are plots of land to be developed, were worth €1,170 million and its annual revenues amounted to less than €9 million. Reyal Urbis was created in 2007 following the merger of Reyal, led by Santamaría, and Urbis, the real estate arm of Banesto.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Realia Finalises €700M Syndicated Loan To Repay Debt

23 February 2017 – Expansión

Realia is finalising a syndicated loan amounting to around €700 million. And with just the finishing touches left to complete, all indications are that the company controlled by Carlos Slim will reach an agreement with its new creditors within the next few weeks, just in time to cancel the debt held by its subsidiary Patrimonio before it matures, on 27 April.

In addition to CaixaBank, which will lead the new loan syndicate, Santander and Bankia have approved the operation and are negotiating with other banks to include them in the agreement as well.

“Realia Patrimonio is currently negotiating its refinancing with several entities”, explained the company in a document submitted to the CNMV, in which it warned that if, by the aforementioned maturity date, the entity has not reached an agreement with its creditors or it has not been possible to secure new financing sources, then “it will have a liquidity problem”.

In April 2007, Realia Patrimonio undertook a debt restructuring through the subscription of a syndicated loan with Caja Madrid and Banesto, which subsequently transferred part of its exposure to another 14 entities for an initial maximum amount of €1,087 million, which it has been repaying ever since. Currently, its debt balance amounts to around €680 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Santander & Bankia Join CaixaBank In €700M Loan To Realia

6 February 2017 – Expansión

The process to negotiate the refinancing of Realia is still underway. In the latest development, Santander and Bankia have announced that they will join CaixaBank in a new syndicated loan, amounting to around €700 million, which will allow the Spanish real estate company, which is controlled by the Mexican businessman Carlos Slim, to pay off its existing debt.

In this way, in addition to Caixabank, which will lead the new loan for the subsidiary Realia Patrimonio, Santander and Bankia have approved this operation. They are now looking for three more banks to join the agreement, since the idea is that six financial institutions will comprise the new syndicate, according to sources familiar with the process.

To this end, the coordinator has made contact with around thirty banks, including most major banks in Spain, as well as some foreign entities that have headquarters in Spain, such as ING, Crédit Agricole, Société Générale, Deutsche Bank, Aareal Bank and Natixis. Financial sources indicate that the players most interested in joining the process are Abanca, Sabadell, Bankinter and Popular.

The sales document containing the results of the due diligence was published on Thursday and it is hoped that the loan contract will be signed in April, which is when the real estate company’s existing debt, amounting to €680 million, is due to expire. CaixaBank engaged Deloitte in December, on behalf of the other financial institutions, to perform a feasibility analysis of the group’s properties, as well as a comprehensive due diligence; meanwhile, the law firm Uría will be responsible for drafting the new syndicated loan financing contract.

The negotiations to agree the terms of a new syndicated loan form part of the firm’s objective to fulfil its financial viability plan and reduce its level of indebtedness.

In April 2007, Realia Patrimonio carried out a restructuring of its financial debt by subscribing to a syndicated loan with two entities – Caja Madrid and Banesto. They subsequently assigned some of their exposure to 14 others entities, whereby taking the total number of FIs in the lender group to 16, for an initial maximum amount of €1,087 million, and Realia has been paying off the balance ever since. Moreover, these entities have since transferred some of the debt to other companies.

Within the framework of this strategy, at the end of 2015, Realia signed a refinancing agreement with the debt-holding entities of its residential activity – another one of the company’s business lines – whose capital pending repayment amounted to more than €800 million.

Following the restructuring of the residential business debt and after incorporating the debt outstanding on the participation loan that Inversora Carso purchased from Sareb, Realia’s gross financial debt position stood at €941 million at the end of Q3 2016, down by 46% compared to the same period in 2015.

Original story: Expansión (by R.Arroyo)

Translation: Carmel Drake