Project Castillo: Blackstone Puts 11,000 of Catalunya Banc’s Subprime Mortgages Up for Sale

13 June 2019 – El Confidencial

Blackstone has engaged Bank of America to liquidate almost all of the remaining Catalunya Banc subprime mortgages that it purchased from the State between 2014 and 2015 as part of Project Hércules.

After almost five years of actively managing the portfolio, the US fund now has just 31,000 of the more than 100,000 subprime mortgages that it purchased, which are worth €1 billion compared with €5.7 billion in 2015.

Project Castillo is going to contain almost 11,000 of those mortgages, all of which are up to date in terms of payments, but which have been refinanced at some point over the last 5 years.

This sale forms part of a series being undertaken by Blackstone as it completes its first cycle of investments in Spain. In this context, the US fund’s rental home Socimi Fidere put most of its assets up for sale recently.

Original story: El Confidencial (by Jorge Zuloaga)

Translation/Summary: 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

HSBC Acquires 6.9% of Axiare for €100M in Midst of Colonial Takeover

12 January 2018 – Eje Prime

Axiare has yet another shareholder. The British bank HSBC has purchased 6.9% of the Madrilenian Socimi’s shares and has whereby joined the long list of international investors that have acquired stakes in the company since Colonial launched its takeover bid in November.

Specifically, the financial institution has acquired 5.51 million shares in Axiare, according to reports submitted by the company to Spain’s National Securities and Markets Commission (CNMV). According to market values, HSBC must have paid around €100 million for its stake.

Besides the British group, in recent months several other foreign funds have acquired stakes in the share capital of the company led by Luis López de Herrera-Oria including Syquant Capital, Sand Grove and Bank of America, amongst others.

It is worth highlighting that the bank took its decision to invest in the Socimi after the CNMV approved Colonial’s purchase of the company. Following that green light for the operation, the takeover is currently subject to an approval period, which ends on 29 January.

Colonial, led by Pere Viñolas, has offered €18.36 for each share in Axiare, which makes the takeover worth around €1 billion and which would result in the creation of a giant in the real estate sector. The new entity would threaten the throne of Merlin Properties as the real estate king in Spain.

Original story: Eje Prime

Translation: Carmel Drake

Axiare: BofA & 4 Large Hedge Funds Acquire Stakes in Midst of Colonial Takeover Bid

21 November 2017 – Bolsa Mania

Bank of America, one of the giants of the US financial sector, has acquired a stake in Axiare, at the same time as Colonial has launched a takeover bid for the Socimi with the aim of creating an office rental giant. The US entity has declared to the CNMV that it holds a 6.7% stake in Axiare, whilst another group of funds has purchased just over 8% of the entity, at a time when the largest real estate operation in Spain this year is on the verge of being completed.

On Monday, the investment fund Wellington Management announced an increase in its stake from 3% to 3.8%. That means that 15% of Axiare’s share capital is now in the hands of funds. MVN Asset Management (Maven Securities), Gruss Global and Amber Global appeared last week with stakes of 3.5%, 1.1% and 1.21%, respectively. Those qualifying investors join Citi, which already held a 4.9% stake in the Socimi and which emerged as the only high-profile shareholder behind Colonial, after the other shareholders sold their stakes in this real estate company.

Specifically, the British firm MVN Asset Management (Maven Securities) declared a stake of 3.09% in Axiare on 13 November, and on Tuesday (21 November), increased that percentage to 3.5%. Gruss Global controls another 1.1%. Meanwhile, Amber Global, an entity headquartered in the Cayman Islands, has reported that it holds a stake of 1.21%, in that case, all through derivatives, according to the CNMV’s registers. Maven and Amber Global acquired their stakes in Axiare on the same day that Colonial launched its takeover bid for the Socimi Axiare. Colonial is already the largest shareholder with a 28.7% stake.

With its offer, the real estate company led by Pere Viñolas is looking to acquire the remaining 71% of Axiare that it does not yet control. On the same day as it submitted its offer, Colonial increased its stake in the Socimi from 15% to 28%. To that end, it offered €18.50 per share in the Socimi chaired by Luis López de Herrera-Oria. That price represents a premium of 13% over the share price of Axiare on the eve of the takeover and 20.8% over the average list price for the last three months. On Tuesday, the Socimi’s shares were trading at around €18.30.

Axiare claims that the takeover is “hostile”

Axiare says that the takeover that Colonial launched over the company on Monday is hostile in nature, given that it did not know anything about the intentions of the real estate company. The firm, whose largest shareholder is Colonial, announced that it will consult its legal and financial advisors regarding the details of the operation.

“Until the morning of 13 November, neither the management team nor the Board of Directors of Axiare was aware of the intentions of Colonial to purchase an additional block of shares, nor of its intention to formulate a takeover bid”, say sources at the firm chaired by Luis López de Herrera-Oria.

This is not the first time that discrepancies have arisen between the two companies. In fact, it is the second time that Axiare has expressed its resistance to Colonial’s acquisition of its shares. The first time was when the company purchased 15% of the Socimi. Proof, they argue, is that Colonial is not represented on the most senior governing body of Axiare, because it is considered to be a “competitor”.

Original story: Bolsa Mania (by Alberto Sanz)

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

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

Project Inés: Deutsche Finalises Purchase Of Sareb’s €400M Portfolio

17 October 2017 – Voz Pópuli

Sareb is at a critical point in one of its most important transactions of the year. The bad bank is negotiating with Deutsche Bank regarding the sale of the largest portfolio it has brought onto the market in the last 12 months. The portfolio in question is Project Inés and it was initially worth €500 million, but its final perimeter will amount to €400 million, according to financial sources consulted by Voz Pópuli. Oaktree and Bank of America also participated in the bid until the final round, but their offers were lower than Deutsche Bank’s bid. Sources at Sareb declined to comment.

Those three international investors were the final candidates after dozens of other funds interested in the operation fell by the wayside. One of the last candidates to be ruled out was KKR.

The portfolio comprises unpaid loans secured by residential assets in Madrid, Cataluña, Andalucía and Zaragoza. The inclusion of assets in Cataluña, despite everything that is currently happening in that autonomous region, caused many of the funds to hesitate and deduct value from their bids, according to the financial sources consulted by this newspaper.

These types of operations are key for Sareb to accelerate the rate of asset sales, given that it has been given the mandate of divesting €50,000 million of problem assets within 15 years; that period started at the end of 2012. The latest figures show that the cumulative divestment to the end of 2016 amounted to almost €10,000 million, leaving a balance of €40,134 million on the books.

Other operations

Project Inés is not the only operation that Sareb has underway. It has also put a portfolio worth €400 million on the market through an online platform for funds. On the portal, investors can bid for loans on an individual basis (Project Dubai), like they did with Haya Real Estate last year.

Moreover, it has just put another portfolio, known as Project Tambo, on the market through CBRE. That portfolio contains non-performing loans to property developers, worth €300 million.

Sareb normally accumulates lots of operations of this kind at the end of the year. In 2016, it sold seven portfolios after the summer, for a total combined value of almost €1,300 million. The largest portfolio was Project Eloise, which was awarded to Goldman Sachs.

Deutsche Bank and Bank of America are two regulars in these types of operations. In fact, the German bank already acquired two small portfolios from Sareb at the end of last year, known as Project Sevilla and Project Marina, for a combined total of €160 million.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Apollo, Bain & Oaktree Compete To Acquire Habitat

25 September 2017 – El Confidencial

A new large real estate operation is on the horizon. The process to sell Habitat Inmobiliaria has entered the home stretch, after the Catalan company selected a shortlist of three candidates to submit their bids.

The three finalists are the international funds Apollo, Bain and Oaktree, whose binding offers are expected to be received by the beginning of October, according to several sources familiar with the operation. The bids are expected to amount to between €200 million – €250 million and the intention is to announce the winner before the end of the year.

Habitat is the heir of the former Ferrovial Inmobiliaria, the subsidiary that the Del Pino family’s group sold to the Catalan property developer, controlled at the time by Bruno Figueras, for €2,200 million at the end of 2006. That deal was signed just before the outbreak of the crisis and it converted the Catalan company into the fifth largest property developer in the country. Nevertheless, that glory was short-lived.

Just two years after that Pharaonic purchase, Habitat filed for the fourth largest creditor bankruptcy in history, by declaring itself in ‘suspension of payments’ with debt amounting to €2,800 million, exceeded only by Abengoa, Martinsa-Fadesa and Reyal-Urbis.

From there, it began a titanic fight to survive, which included a preliminary agreement in the spring of 2010, which saw it emerge from bankruptcy and then, a modification to that agreement, five years later, which gave control of the company to its creditor funds.

In 2015, firms such as Capstone, Goldman Sachs, Bank of America, Värde and Marathon acquired 70% of the company’s capital, by converting the bulk of its debt into shares, and they ordered a return to house construction, to take advantage of the recovery in the sector.

Moreover, those firms continued as the group’s main financiers, with a participation loan of €70 million and another senior loan of €80 million, they took over the management, and they gradually sidelined Bruno Figueras; he currently holds the role of Vice-President.

At the time, the company analysed the option of organising a sales process, but that never ended up happening. The same idea was revived during the first half of this year when Habitat engaged Irea to organise a sale, merger or the entry of a new shareholder into the company.

After almost 11 years (since the purchase of Ferrovial Inmobiliaria), the Catalan property developer is barely a shadow of its former self, but it still holds a juicy portfolio of buildable land – currently, the most sought-after asset by international funds – concentrated in Madrid, Cataluña, Andalucía and Valencia, plus the company also has a presence in Aragón, Portugal and Hungary.

The three finalists in the bid for Habitat have competed in the past for some of the most important real estate operations of recent times, such as the purchase of Vía Célere by Värde, which Bain analysed, and the acquisition of the €30,000 million in real estate assets from Santander-Popular by Blackstone, which Apollo bid for.

Whoever ends up taking control of Habitat will have the perfect platform to create its own group and to start to compete with other investment giants who have already trodden this path, such as Lone Star, the owner of Neinor Homes; Castlelake, owner of Aedas; and Värde, the primary shareholder of Vía Célere and Aelca.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Vía Célere Boosts Its Land Portfolio Ahead Of Stock Market Debut

18 July 2017 – Expansión

The property developer Vía Célere is advancing with its growth plans ahead of its stock market debut. The Madrilenian real estate company was acquired in February by six funds led by Värde Partners, which owns 51% of its share capital. Following the operation, for which they disbursed €90 million, the company has been working on increasing its size and will debut on the stock market at the beginning of 2018, with a market capitalisation of more than €1,000 million.

The first step in this process was the integration of DosPuntos, the real estate company that Värde and its partners (the funds Attestor and Marathon, as the second and third largest shareholders, respectively, as well as Barclays and Bank of America) had created from the former subsidiary of San José (Parquesol). The operation saw the incorporation of 800,000 m2 of land into Vía Célere’s portfolio (meaning that the firm will be able to build around 7,000 extra homes).

Having closed that merger in record time (less than a month) Vía Célere, led by its former owner and CEO, Juan Antonio Gómez Pintado, has since launched several land purchase operations with the aim of increasing its real estate portfolio.

New portfolio

In total, Vía Célere has invested almost €100 million in nine plots of land through three operations. The land, located in several different provinces, will allow the property developer to increase its buildability by 212,016 m2 and construct 1,907 new homes (…).

Following the contribution of funds from the new shareholders, Vía Célere set itself the goal of investing between €200 million and €250 million per year between now and 2023 in order to maintain a construction rate of around 3,000 homes per year. This year, it plans to start building around 1,800 units: “Our intention is to continue identifying new opportunities and to expand our portfolio of land and projects over the next few months”.

Before these purchases, the property developer’s real estate portfolio contained land covering 1 million m2, making it one of the largest land owners in the country, exceeded only by Metrovacesa, which, following the contribution of €1,108 million from its shareholder banks, now owns land spanning 6 million m2; Neinor Homes, which, following investment of €147 million this year now owns 1.2 million m2 of land on which to build homes; Aedas, the property developer backed by Castlelake, which owns 1.35 million m2 of land.

In total, Vía Célere’s assets are worth €704 million and it currently has 10,054 homes in progress or under construction. Before the integration with DosPuntos, the property developer recorded revenues of €75.4 million in its most recent full year.

Stock market

The property developer led by Värde Partners plans to debut on the stock market next year. In this way, Vía Célere will follow in the footsteps of Neinor Homes, the first real estate developer to debut on the stock market in almost a decade, with a value of €1,340 million. The market capitalisation of that firm currently amounts to around €1,498 million.

Aedas, the company backed by the fund Castlelake, is another of the property developers that has set its sights on the stock market; it plans to make its debut before the end of the year.

Meanwhile, the new Metrovacesa, led by Santander and BBVA, has already met with several investment banks to manage its return to the stock market, which it exited in 2013 after 72 years of trading (….).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake