Tag: bank branches

BBVA Repurchases 166 Bank Branches for €250M

17 November 2018 – Expansión

An unexpected decision from BBVA. The entity, which has made digital transformation the cornerstone of its strategy in recent years, has just repurchased 166 bank branches from Merlin Properties. According to comments made by the Socimi yesterday, the bank, which had been occupying these branches on a rental basis, is going to disburse €252 million to acquire the batch of offices.

The intention of the bank is to gain flexibility for the daily management of the 2,870 branches that it operates throughout Spain, according to sources at BBVA. Since 2007, the entity chaired by Francisco González has embarked on a policy to divest its main assets, such as its former headquarters in Madrid on Paseo de la Castellana, and other iconic buildings in the capital. Between 2009 and 2010, the entity sold more than 1,000 branches to investment funds.

As one of the conditions of those operations, BBVA committed to remain as the tenant of the branches for between 20 and 30 years, with the possibility of extending those rental terms and ultimately repurchasing the properties.

Economic sense

“Some of the branches that have been repurchased are closed and even so, we have still been paying the rent”, explain sources at the bank. That was one of the reasons that caused BBVA to take a different step in its strategy.

In the sector, experts believe that BBVA’s new course of action with the repurchase of branches may respond to a double objective: to reduce recurring costs due to the payment of rent and to take advantage of the upward cycle in the real estate sector with the subsequent ale of these premises. In fact, the bank has just closed the operation to transfer around €13 billion in foreclosed assets to a new company.

The fund Cerberus controls 80% of that joint venture, of which BBVA will retain the remaining 20% in order to obtain possible gains. With the ownership of the branches, the bank could also save time to expand or reduce the size of those premises, according to sources at BBVA.

The Socimi is still the owner of almost 700 BBVA branches. The entity rules out returning to repurchase a new batch from that portfolio, at least in the short term. The bulk of the branches repurchased from Merlin are located in cities with medium-sized populations.

To accelerate its digital transformation, BBVA is planning to close 179 bank branches in Spain at the end of this year. Based on data as at September, the most recent audited information, the entity has already completed more than 80% of the planned adjustment. BBVA’s commitment to digitalisation translates into more business, given that it sells 34% more to those clients considered as online.

The distribution model has changed drastically since 2009 and has focused on digital transformation. In fact, the network is the smallest it has been for 16 years, the latest available data, with fewer than 3,000 branches (…).

Original story: Expansión (by R. Sampedro)

Translation: Carmel Drake

Uro Properties Sells 14 Santander Branches for €29.5M

6 September 2018 – Eje Prime

Uro Properties is doing business with Lerma Investments. The Socimi, one of the investment vehicles that owns some of Santander’s branches, has sold fourteen of the financial institution’s branches to the company Lerma Investments for €29.5 million, according to a statement filed by the group with the Alternative Investment Market (MAB).

The assets are currently leased to Banco Santander for an average period of 21 years. Following this sale, Uro Properties will have liquidity of €44 million. Moreover, the Socimi will continue to own a portfolio of bank branches with a market value of more than €1.88 billion.

Uro Properties debuted on the MAB in March 2015 at a price of €100 per share and with a market value of almost €260 million. Three years later, its market capitalisation amounts to €206.9 million. The reference shareholders in the company are the firm Ziloti Holdings and Banco Santander itself, which owns 15% of the share capital directly.

Currently, the Socimi’s portfolio comprises 712 properties, which occupy a surface area of more than 330,000 m2. More than half of those assets are located in Madrid, Cataluña and Andalucía.

Original story: Eje Prime 

Translation: Carmel Drake

Ores Socimi Buys 4 Retail Assets In Northern Spain For €63M

4 October 2017 – Eje Prime

Ores is fattening up its portfolio of assets with some new purchases. The company, which had invested just over €60 million in the acquisition of commercial assets in Spain prior to August, has taken its chequebook out again and broken its own record. The Socimi, owned by Bankinter and the Portuguese firm Sonae Sierra, has purchased four commercial assets in the north of Spain for €63 million, according to confirmation from the company itself to Eje Prime.

Ores has acquired four hypermarkets in different parts of the north of Spain. It has purchased one commercial asset in Logroño, on Calle Rio Lomo, which is operated by Carrefour and which has a surface area of 14,912 m2. In Calahorra, Ores has bought a property operated by Eroski, located on the Logroño road, which has a surface area of 10,252 m2.

The Socimi has also carried out purchases in Tolosa and Guernica. In Guipúzcoa, the company has acquired a commercial establishment in Barrio de San Blas, measuring 4,147 m2, whilst in Guernica, it has bought a commercial asset measuring 4,348 m2 in the Txaporta neighbourhood. Both of those properties are operated by Eroski.

“With this acquisition, financed entirely using own funds, the company is continuing to fulfil the investment objectives set out in its business plan and in accordance with the financial parameters that we committed to our shareholders”, say sources at the group.

In recent months, Ores has been expanding its asset portfolio in Spain and Portugal. At the beginning of August, Ores acquired a property, which is leased to and operated by the supermarket chain Pingo Doce, located in Lisbon, Portugal. That asset has a gross leasable area of 2,200 m2 and is located in the Alta neighbourhood (…).

Ores is aimed at clients of Bankinter’s private bank segment. Although its portfolio of assets is limited, for the time being, the Socimi came to the stock market with the aim of investing €400 million in high street retail premises, supermarkets, retail parks (spanning a maximum surface area of 20,000 m2), bank branches and single assets with long-term leases and solvent tenants.

Bankinter and Sonae Sierra launched their new venture into the real estate business in record time. The two groups constituted Ores on 15 December last year, completed the process to create the vehicle and raised sufficient capital to give it a head start and debut on the stock market.

Ores was created with contributions from clients of Bankinter’s private banking segment (in other words, wealthy investors) through a capital increase amounting to €196.6 million. In this way, the private banking clients and some institutional investors control almost 86% of the company’s share capital. Meanwhile, the entity led by María Dolores Dancausa has retained a 10% stake, with Sonae Sierra holding onto just under 4% of the shares.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Who’s Who Behind The MAB’s Largest Socimis?

6 February 2017 – Expansión

The majority of Spain’s Socimis are now listed on the Alternative Investment Market (MAB). They have a combined market capitalisation of €3,500 million and so account for 68.5% of the value of that market, which is aimed at small and medium-sized companies.

In total, 29 real estate companies form part of the MAB, which comprises 67 companies in total. Seventeen of those real estate companies debuted on the MAB last year (…).

The largest Socimis

With a market capitalisation of €819 million, GMP is the largest Socimi on the MAB, larger even than one of the four Socimis that trades on the main stock market, Lar España. GMP, which was founded in 1979 by the Montoro Alemán family, debuted on the MAB last July, after adopting the Socimi structure two years ago. The real estate company, which owns around twenty office buildings in the most high profile financial districts of Madrid, has the sovereign fund of Singapore GIC as one of its shareholders; GIC owns a 32.9% stake in GMP, which it controls through another MAB-listed company, Eurocervantes.

Moreover, GMP is not only the largest Socimi (on the MAB) by market capitalisation, it also holds the largest portfolio of assets, worth €1,800 million as at 30 June 2016.

Another important owner of office buildings is Zambal. This Socimi is the only one of the five largest Socimis on the MAB that is not managed by its owner. The firm Investment Business Beverage Fund, based in Luxembourg and owned by the French magnate Pierre Castel, has appointed Iba Capital to manage its real estate investments in Spain. Iba is led by Castel’s fellow countryman Thierry Julienne.

This Socimi is the landlord of a number of large companies, both home-grown and from overseas. It owns the Madrid headquarters of Vodafone, Enagás, Gas Natural, BMW, Unidad Editorial and Día, amongst other buildings. Its portfolio is worth more than €730 million and its market capitalisation amounts to €559 million.

Meanwhile, Uro Property was created by the creditors of the company Samo, which purchased around 1,130 bank branches leased to Banco Santander in 2007. Nowadays, after selling several batches, it owns 755 branches worth €1,585 million (as at 30 June 2016).

Its main shareholder is the firm Ziloti Holding, although Santander and CaixaBank also hold direct stakes in the company amounting to 22.79% and 14.5%, respectively.

Blackstone, the largest investment fund in the world, has also listed a Socimi on the MAB to manage some of its real estate assets in Spain. Specifically, it has placed the thousands of homes that it owns and rents out into Fidere, worth €317.5 million.

The fifth largest Socimi on the MAB by market capitalisation is Isc Fresh Water. This vehicle was created with more than 200 bank branches from Banco Sabadell purchased in April 2010 by the Mexican fund Fibra Uno, controlled by the investor Moisés El-Mann.

Nowadays, the Socimi owns 213 branches, worth around €374 million, and its main shareholders are the El-Mann family, with a 65% stake and Jacobo Bazbaz Sacal, with 14.85%.

Diversity on the MAB

Each one of the Socimis on the MAB has its own characteristics, ranging from Promorent, with its market capitalisation of €4 million to GMP (which is worth more than €800 million). Their performance on the stock market is also very different: five of them have recorded increases since the beginning of 2017; three have registered decreases; and the remaining 21 have not seen any changes in their share price since the start of the year. (…).

Outlook for 2017

The proliferation of Socimis on the stock market will continue this year, according to the experts, who believe that the economic context favours these companies. (…).

Nevertheless, analysts warn that their small size and lack of liquidity imply risks for investors, since it is possible that they will not be able to sell their shares when they want to, due to the very small volume of business. (…).

Original story: Expansión (by Rocío Ruiz and Diana Esperanza)

Translation: Carmel Drake

Bankinter Launches A €400M Socimi For Its Private Banking Clients

27 December 2016 – Expansión

Bankinter has started to offer its private banking clients a new investment project. It is a Socimi, which the entity plans to launch on the MAB in around two months time. This entity will invest in commercial assets, such as supermarket, hypermarkets, retail premises and parks, as well as bank branches, in sought-after locations. The aim is to invest around €400 million in assets, of which around €200 million will come from contributions made by the entity’s clients and the remaining 50% from financing. The minimum investment per client will be €250,000, up to a maximum of 10% of their financial wealth.

For the launch of this investment vehicle, Bankinter has sought a partner with experience in the Spanish real estate market and in the management of commercial assets. The Portuguese real estate company Sonae Sierra, which owns more than 40 international projects in Europe, Africa and South America, seven of which are located in Spain, will take care of the search for and management of the assets that the Socimi buys. Like Bankinter, it will hold a minority stake in the new company, and two of its representatives will sit on the Board of Directors and on the Investment Committee.

Meanwhile, the bank led by María Dolores Dancausa will have three Board members and two representatives on the Investment Committee.

Anchor investors

The two partners will invest a maximum of €15 million in the case of Bankinter, with a minimum of €7.5 million; and €7.5 million in the case of Sonae, with a minimum of €3.75 million, if they achieve €200 million in equity for the upcoming stock market debut.

The Socimi will focus on buying commercial properties located mainly in Spain (the idea is that Spanish assets will account for 65% of the total portfolio) and the rest in Portugal. The minimum investment volume by operation will be €5 million to €20 million per asset or per portfolio of properties.

All of the assets that the Socimi acquires must be in good locations with long-term contracts that will run for at least five years. Its potential tenants include retail groups such as Mercadona, Carrefour and Día and other large operators such as Leroy Merlin and Decathlon.

Although the investment vehicle does not own any assets yet, it is already analysing ten operations, having made a series of non-binding offers. These deals include the purchase of a portfolio of hypermarkets worth €150 million and the acquisition of a retail park for around €20 million.

The Socimi hopes to achieve a gross asset value yield of between 6% and 6.5% during the first two years, which is higher than the returns offered by other listed real estate companies such as Axiare, Merlin and Realia, which this year expect to offer yields of 4.8%, 3.2% and 4.5%, respectively, according to information provided by Bankinter to its potential investors.

The aim of this Socimi is to offer an average annual dividend of between 4.5% and 5%, which is a much higher return than those offered by other banking products currently on the market. (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

The 4 Largest Socimis Have Raised €3,000M In 1 Year

13 June 2016 – Cinco Días

George Soros has just endorsed his commitment to the Socimi Hispania. Soros Fund Management, managed by the US magnate, subscribed once again to his share of the Socimi’s second capital increase, in which he is the majority shareholder. It is the most visible example of how international investors are still interested in these specialist listed real estate investment vehicles.

Since their creation, the four largest Socimis have raised more than €5,350 million in own funds, primarily from institutional funds and investors. In their respective debuts on the stock market, which all took place in 2014, they raised €2,600 million. Since then, all of them have also raised additional resources through capital increases. In total, they have raised €2,746 million of new financing in this way in the last 12 months.

Hispania completed the most recent operation at the beginning of June amounting to €230.6 million, and Soros participated in order to maintain his 16.7% stake, which required an investment of around €38 million. It was the second operation of its kind, after the Socimi undertook an accelerated placement in 2015 to raise a further €337 million. Its main investors include the international funds Paulson&Co and FMR.

The special tax framework that applies to Socimis, which has revitalised these firms since 2014, establishes that they are exempt from Corporation Tax, although they are obliged to distribute an annual dividend, on which its shareholders are taxed. These structures, which already existed in the USA (known there as REITs), have attracted international funds, who are backing the recovery of the real estate sector in Spain. The assets of the large Socimis, worth €9,235 million at the end of 2015, are rented out and include office buildings, shopping centres, bank branches, other premises, hotels and logistics warehouses.

The largest Socimi Merlin Properties, which is listed on the Ibex 35, has also completed two capital increases to raise €1,650 million. It completed its second round in August 2015, to raise €1,034 million, the largest in this sector. Following its purchase of Testa from Sacyr, the company chaired by Ismael Clemente now owns assets worth more than €6,050 million. Its shareholder structure is very fragmented and includes fund such as Blackrock, Invesco and Principal Financial Group.

Axiare Patrimonio, led by Luis López de Herrera-Oria, also raised €395 million in a capital increase last June. Finally, Lar España – which specialises in shopping centres – issued new shares worth €135 million last summer.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Citi Seeks New Shareholders For Uro Property

20 May 2016 – Expansión

Uro Property, the Socimi that owns a quarter of Santander’s branch network in Spain, may see a change in its shareholders in the coming months. The company that holds 84% of its share capital, Ziloti Holdings, has given Citi a mandate to study possible shareholder changes.

This mandate comes in the face of interest from some of the current shareholders to exit the company, given that they were forced to acquire shares in the first place when their debt was converted into capital in 2014.

The main shareholders of Uro Property – both through Ziloti and otherwise – are Santander, with 22.7%; Atisha Holding, the former Sun Group, with 18.9%; Phoenix Life Assurance, with 14.6%; CaixaBank, with 14.5%; BNP Paribas, with 9.2%; and other private investors and international entities.

Citi will mainly look for investors amongst the large pension funds, insurance companies and investment funds.

The departure of the shareholders was vetoed until March under an institutional agreement reached following the recapitalisation of Uro.

The renewal of the shareholder base is one of the outstanding milestones for the company, which owns 755 Santander branches in Spain. It refinanced its debt last year and cancelled a swap, whereby reducing the financing costs of its €1,300 million debt from 6% to 3.35%. Last year, the Socimi sold 381 branches to Axa for €308 million, recording a capital gain of €27 million.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Axa Puts UGC Manoteras Shopping Centre Up For Sale

14 January 2016 – Expansión

The real estate arm of the insurance company Axa has decided to put one of its most long-held assets from its Spanish portfolio on the market. The asset in question is the UGC Manoteras shopping centre, located in the north east of Madrid.

The establishment has a constructed surface area measuring 27,000 m2, of which 13,226 m2 is dedicated to retail space, according to the Spanish Association of Shopping Centres. The entire space is dedicated to leisure, with several cinema screens, operated by the company UGC Ciné Cité, and a number of restaurants.

Axa acquired this property in 2007 for €53 million, a price that may now be exceeded, given the high degree of interest that investors have in shopping centres at the moment.

The real estate subsidiary of Axa has been one of the institutional funds that has returned to the Spanish market after several years away investing in other markets. In this way, in 2014, it purchased the Urbil shopping centre in Guipúzcoa from the fund manager CBRE Global Investors for €60 million.

Last year, it also acquired the former Cine Avenida, located at number 37 on Madrid’s Gran Vía, which has now been converted into H&M’s flagship store in Madrid. For that transaction, the insurance company’s real estate subsidiary broke a market record by paying €79.7 million for the building, which has a surface area of around 4,000 m2. In other words, it paid €20,000 per m2 for the property.

At the end of April, Axa Real Estate also acquired 381 bank branches on behalf of a group of investors from the Socimi Uro Property. It paid €308 million for those properties, which are leased to Banco Santander. In addition, in August, it purchased two office buildings in Madrid (where it has its own headquarters in Spain) and Barcelona. The investment, made on behalf of one of its clients, was closed for more than €110 million.

Original story: Expansión

Translation: Carmel Drake

Santander To List 2% Of Its Socimi And Whereby Avoid CIT

6 February 2015 – El Confidencial

Desperate times call for desperate measures. That is the proverb that Banco Santander is going to apply to a problem that has arisen after it sold a network of 1,152 bank branches bearing the red flame to a group of investment funds in 2007. The entity, which had to take the branches back when the investment company that had taken ownership of them filed for bankruptcy, is going to float that company on the stock exchange as a Socimi, and whereby avoid paying Corporation Tax. Oleguer Pujol, amongst others, was involved with the original investment company.

The main objective of the transaction that Santander and the other creditors that seized control of Samos Servicios for the non-payment of a €2,000 million loan is to float the newly named Uro Properties on the Alternative Investment Market (Mercado Alternativo Bursátil or MAB). In fact, none of the current shareholders, which includes Santander itself – the largest, with a stake of almost 25% – as well as Caixabank, which entered through the back door and BNP Paribas, all primary lenders, are planning to sell or reduce their stakes in the Socimi.

The transaction will involve listing the company with the placement of a maximum of 2% of its capital, the minimum requirement. With such a small amount of floating capital or free floating capital, Uro Properties is only allowed to list on the MAB, even though its total assets are worth €1,600 million. As such, it will become the largest real estate company on the Spanish stock market. None of the other Socimis that followed the same path in 2013, such as Hispania, Lar, Axia or Merlin Properties, are equal in size.

Since the shareholders are not going to sell their old shares or proceed to offer new ones, like the other Socimis mentioned above have done, the only apparent purpose for listing Uro Properties is to benefit from the tax regimes offered to these kinds of companies. According to Law 11/2009, dated 29 October 2009, these real estate companies pay Corporation Tax at a rate of 0%.

To maximise the tax savings even further, the shareholders of Uro Properties Holding SA have created a parent company in Luxembourg, under the name Ziloti Holding SARL. The shareholders have already asked the MAB for permission to list their shares, as soon as possible, specifically, before the end of February.

From success to failure

The background to Uro Properties dates back to 2007, when Emilio Botín invented a transaction, which other large multinationals later went onto to make fashionable in Spain: the sale of properties to investment funds to obtain sizeable gains in exchange for staying as tenants and paying rent. It is what is called sale and leaseback. The purchasers of Santander’s 1,152 branches were Pearl Insurance, Sun Capital and Drago Real Estate, which were advised by Oleguer Pujol, now accused of crimes against the Treasury, and Luis Iglesias, who was arrested after his home was search, but not charged, according to an official spokesman.

The three funds paid €2,040 million and Santander generated profits of €850 million. But the collapse in the valuation of the real estate assets themselves and the loss of the bank’s credit rating led to an adjustment in the appraisal value of the branches – which were guaranteeing the loan – of more than €400 million. This meant that the purchasers were no longer able to service the loans they had taken out to finance the purchase.

Following the bankruptcy of Samos Servicers, Santander, which had borne most of the financing risk by granting mezzanine debt, had to convert that loan into capital. This meant that it went from being a creditor of the company to a shareholder in the renamed Uro Properties. BNP Paribas, Caixabank, Société General, Royal Bank of Scotland, Barclays and a group of German and Austrian banks, including Bayerische and Raiffessen, did the same thing.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake