Bankia Sold its Stake in NAU for Less Than €6M After Reducing its Value by €11.7M

25 June 2018 – Valencia Plaza

The sale of 48.62% of the Valencian real estate company Nuevas Actividades Urbanas (NAU) by Bankia Habitat was closed for a price of less than €6 million. That is according to the latest accounts deposited by Bankia Habitat – corresponding to 2016 – in which the company indicates that it sold a set of shares whose net book value amounted to €6.973 million.

In addition to the shares in NAU, the sold package included the 46% that Bankia held in the company Costa Bellver SA, which was acquired by the Calabuig family for €1 million, as well as other stakes in the firms Espai Comercial Vila-real SL and Viladecavalls Park Centro Industrial Logístico y Comercial SA. As a result, the price at which Bankia sold its stake in NAU must have amounted to less than €6 million.

It is also a lower value than the amount assigned to the company just a year ago. According to the accounts of Bankia Habitat, in 2015, the company recognised an impairment provision amounting to €11.7 million.

When asked about this, sources at Bankia explained to Valencia Plaza that “the stake in NAU was adjusted in 2015 to reflect the estimated market value of that stake, to get it ready, from an accounting point of view, for its possible sale”. “There was no more to it”, they underlined.

In terms of the exact sales price of NAU, Bankia explained that it is not authorised to divulge the figure “for reasons of confidentiality agreed between the parties when the transaction was signed”.

A firm that started life with a share capital of €503 million.

Atitlan and Gesfesa have controlled NAU since March 2017, when they acquired 79.66% of the company through the firm Demeter Aurea SL. The rest of the shares are held by Sabadell Real Estate Development SL (15.22%) and Multiactividades Reunidas SL (5.12%).

The company, created in 2009 with a share capital of €503 million, holds stakes in important buildings including the Aqua and Arena Multiespacio shopping centres, but it is weighed down by a heavy debt, amounting €200 million, according to its new owners.

At the end of 2017, following divestment operations such as the sale of three plots by the subsidiary MAI for €33 million and the stake in the Cirsa Valencia casino, that amount had been reduced to around €95 million, of which €35 million corresponded to the consolidation of subsidiaries.

Original story: Valencia Plaza (by Dani Valero)

Translation: Carmel Drake

Haya Reorganises Its Company Structure & Creates Haya Servicing

19 February 2018 – Eje Prime

Haya is reorganising its company structure. The real estate company, owned by the private equity fund Cerberus, has created a limited company, Haya Real Estate Servicing. This constitution forms part of the bond issue operation that the company carried out at the end of last year.

According to the Official Gazette of the Mercantile Registry, the corporate purpose of the new entity involves activities relating to the purchase, administration and sale of all kinds of real estate assets and securities.

Its share capital amounts to €60,000 and its headquarters are located on Calle Vía de los Poblados, the same registered address as the limited company Haya Real Estate, the group’s parent company. The sole administrator is Carlos Abad, the CEO of the real estate group and its legal representatives are Bárbara Zubíria Furest, the company’s Finance Director, and Ana Suárez Garnelo, Senior Legal Counsel and Secretary to the Board of Directors.

The move forms part of the bond issue that the group undertook in November last year. Then, the company debuted on the debt market by placing €475 million in guaranteed senior bonds.

For the debt issue, the group constituted a new limited company, Haya Finance, created solely to carry out that operation. Nevertheless, in the document sent to the Luxembourg stock exchange, where Haya asked for the bonds to be traded, the group revealed its intention to create a new limited company, arguing that this formula presented fewer restrictions.

“As at the date of issue, Haya is organised as a limited liability company”, said the group in the document. “In accordance with Spanish legislation, the capacity of a limited liability company to guarantee debt in the capital markets has not been tested in the Spanish courts” it continued. In this sense, Haya underlined that a limited liability company may only issue bonds worth up to twice its own resources, at most, unless the issue is guaranteed by a mortgage or joint guarantee from a credit institution, amongst others.

Nevertheless, the company also expressed that “the applicable Spanish statute does not expressly include any restrictions over the maximum amount that can be guaranteed by a limited liability company, and there is debate between the experts as to whether the aforementioned limited limitations should also apply to the guarantee interests provided by a limited liability company to guarantee debt on the capital market”.

Finally, Haya concluded that “in accordance with the trust agreement”, the principle guarantor “shall undertake to convert itself into a limited company that is not subject to the aforementioned restrictions”.

Last week, Cerberus engaged Rothschild to handle the IPO of Haya, currently worth €1.2 billion. The real estate company led by Carlos Abad currently manages a portfolio of assets worth almost €40 billion.

Founded in 2013, after Cerberus acquired the assets of Bankia Habitat, Haya has expanded its reach with the management of additional portfolios on behalf of other financial institutions such as Sareb, BBVA, Liberbank and Cajamar. During the 9 months to September, the servicer obtained revenues of €165.8 million and generated EBITDA of €89.8 million.

Original story: Eje Prime

Translation: Carmel Drake

Haya Real Estate Prepares for its Stock Market Debut

23 January 2018 – Cinco Días

Haya Real Estate is another player in the real estate sector that is heading towards the stock market. The firm manages property developer loans and foreclosed real estate assets on behalf of Bankia, Sareb, Cajamar, Liberbank, BBVA and other financial institutions, worth €39.884 billion.

The company is owned by the private equity fund Cerberus, which created it back in October 2013 after acquiring a firm dedicated to real estate management from Bankia, called Bankia Habitat, in light of the need for the Spanish financial sector to get rid of its property-related toxic assets in a professional way.

Sources at the investment bank indicate that Haya’s debut on the Spanish stock market has been sketched out and will follow the format of the debuts of the property developers Neinor and Aedas, in 2017, and the upcoming debuts of Metrovacesa and Vía Célere. No decision has yet been taken regarding the valuation or percentage of the stake that Cerberus will sell. The news of Haya’s possible stock market debut was published by Bloomberg on Monday night. A spokesperson for Haya declined to comment on the news.

Haya, led by Carlos Abad Rico (formerly of Canal + and Sogecable) offers services throughout the entire chain of the real estate sector, but it is not a property developer: it manages, administers, securitises and sells assets but does not own them. The company mainly focuses on two businesses. Firstly, the advice and subscription of loans and guarantees, the management and recovery of debt and the conversion of the obligations on property developer loans into foreclosed real estate assets. And, secondly, the recovery and management of property through its sale or rental. The firm employs 680 professionals and has a sales network comprising 2,400 brokers. The value of the firm’s property developer debt portfolio amounts to €28.719 billion and of its real estate assets is €11.165 billion.

Haya recorded EBITDA of €89.9 million during the first nine months of 2017, up by 54% compared to the same period a year earlier, with sales of assets worth around €2.5 billion and an effective turnover (essentially commissions) of €165.8 million. The average management fee during the first nine months of last year was 4.25%.

Competitors

Haya has been growing with aplomb since 2013, but it has several major rivals. Blackstone, which purchased 51% of Popular’s real estate assets from Santander last summer for more than €5 billion, created Anticipa Real Estate, under the structure of the former Cataluña Caixa Inmobiliaria. That platform acquired 40,000 mortgages from the extinct Catalan entity for €4.123 billion in 2015. Since then, it has acquired those types of mortgage debt portfolios, with an investment that amounts to around €7 billion.

Meanwhile, Servihabitat belongs to the fund Texas Pacific Group, (TPG), which has held a 51% stake in the servicer since September 2013, when CaixaBank sold it that percentage, holding onto the remaining 49%. It manages assets worth around €50 billion. Altamira is owned by Santander (15%) and the fund Apollo (85%), which acquired its stake in November 2013. Its assets in Spain are also worth around €50 billion. Solvia, owned by Sabadell, manages assets linked to real estate worth more than €31 billion.

Original story: Cinco Días (by Pablo Martín Simón, Laura Salces Acebes & Alfonso Simón Ruiz)

Translation: Carmel Drake

How Cerberus Became Spain’s Largest RE Company

3 December 2017 – Voz Pópuli

If you are thinking about buying a home over the next few months, statistically, it is likely that Cerberus will be the vendor. The US fund is one of the players that arrived in Spain at the height of the financial crisis (between 2010 and 2012), with the objective of acquiring banks and real estate companies, just like it had done in other countries. The former did not happen, despite several attempts to take over some of the former savings banks. But the conquest of the property sector went a lot better: so much so that the fund now controls more than €50 billion in assets and has just starred in the second largest operation in the Spanish real estate sector in recent years.

Those close to Cerberus define it as a fund that is meticulous, aggressive in its negotiating style and persistent. It has proven that last quality with the patience it has shown searching for major operations in Spain over many years. Last week, it finally was in a position to purchase BBVA’s property. It is the fund’s largest acquisition to date in Spain and it is going to cost €4 billion, most of which will be financed by Morgan Stanley.

Five key people inside the fund have been instrumental to the success of this operation, namely: Frank W. Bruno, one of the main directors of the fund at the global level; Lee S. Millstein, another key director of Cerberus, who has been overseeing the business in Spain for years; Manuel González-Cid, Senior Advisor to the fund and former Finance Director at BBVA, and his team; David Teitlebaum, head of the fund in Europe; and Daniel Dejanovic, head of the real estate business in Europe.

The Aznar junior factor

Several other people have also participated, although to a lesser extent: Carlos Abad, CEO at Haya Real Estate, the real estate servicer of Cerberus in Spain; Juan Hoyos, former President at McKinsey in Spain and President of Haya; John Snow, President of Cerberus, who met with the President of BBVA, Francisco González, to propose the deal in the first place; and José Maria Aznar Botella, son of the former Spanish President. The story of this fund in Spain has been inextricably linked to the incorporation of Aznar junior in recent years, at least from the point of view of the media. The bankers who have worked with him describe him as a “strong professional” who has been key to the fund’s success in Spain.

Both Hoyos and Aznar were most certainly instrumental during Cerberus’s first operation in Spain, in 2013, when it purchased Bankia Habitat, in the so-called Project Platform. It was a purchase that revolutionised the sector and paved the way for other similar deals, such as the sale of Altamira, Servihabitat and Anticipa.

Unlike what has happened with BBVA, Cerberus’s operation with Bankia did not involve an asset purchase, but rather the management of that entity’s assets. Like in other similar operations, the fund takes control of the workforce and the administration and sale of debt and foreclosed assets, in exchange for management commissions. Bankia Habitat became Haya Real Estate and subsequently expanded its perimeter after teaming up with Sareb, Cajamar and, this year, Liberbank. Those deals involved the disbursement of around €0.5 billion by Cerberus. Added to the €4 billion paid to BBVA and the fund’s other portfolio purchases, the total figure exceeds €5 billion.

The result of this strategy is that Haya Real Estate has reached a management volume of more than €40 billion, has almost 700 employees and recorded a profit of €31 million (in 2016).

Cerberus’s networks in Spain do not end there: it owns a doubtful debt management firm, Gescobro; a securitisation firm, Haya Tutulización; a stake in another manager of bank debt, Hipoges, whose sale it is currently negotiating with KKR; and dozens of companies where it keeps its real estate assets. As if they were not enough, it will soon be able to add the property developer Inmoglacier to this list.

And that is only one of the strings to Cerberus’s bow in Spain, it also engages in large business ventures such as Renovalia, which is currently up for sale. Operations such as the one involving BBVA reflect the fact that funds like this are still very interested in Spain, despite the uncertainties being generated by Cataluña. And beyond the foreign money that they bring, they should be seen as the new influential players, capable of moving markets such as the real estate sector. And they are here to stay. For the time being at least.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Project Lane: Bankia Negotiates Sale Of €400M Secured Portfolio

13 June 2016 – Expansión

Project Big Bang paralysed the Spanish financial sector in 2015. At the time, Bankia tried to sell all of its foreclosed assets in a single transaction, including: 38,500 homes, 2,600 plots of land and 5,000 commercial premises, worth €4,800 million. A large number of funds were interested in the sale, but only Cerberus and Oaktree expressed their intention to submit binding offers. The prices and conditions did not match with Bankia’s expections and so it decided to suspend the operation at the end of the year. (…).

With all of those roadblocks, Bankia decided that it would maximise the value of its foreclosed assets by keeping them on the balance sheet and selling them off through the retail channel and in smaller portfolios, such as the case of Project Lane, see below. Even so, sources in the sector expect to see fresh attempts to sell large portfolios of foreclosed assets over the next few months and years, something that more than one entity has planned for 2016. To this end, the markets must improve further and provisions should be adjusted even more to the prices being offered by the funds. The Bank of Spain’s new accounting circular, which comes into force in October, is expected to help in this sense and to accelerate the divestment of the banks’ problem assets.

Project Lane

Now, Bankia is negotiating the sale of a portfolio of homes with three international funds, in an operation known as Project Lane. The entity is being advised by KPMG and is looking to transfer around 2,500 homes worth c. €400 million, according to financial sources.

The operation is in a very advanced phase, with binding offers due to be submitted next week. Bankia and its advisor have selected three funds, which according to the same sources, do not include Cerberus.

Initially, the US fund was the favourite buyer for the operation, on the basis that it knows the assets better than anyone else through Haya Real Estate, the former Bankia Habitat, which manages homes and real estate loans from Bankia. In fact, Cerberus was the fund that was closest to acquiring Big Bang, with an offer of around €2,100 million.

The portfolio of assets on sale as part of Project Lane primarily comprises homes, but also includes industrial and commercial assets, to a lesser extent. It is the largest sale of foreclosed assets that any of the banks have put on the market so far in 2016. Only Cajamar has explored this option in recent months, with Project Omeya – around €72 million -, as it waits to see what will happen during the second half of the year. The 2,500 homes on sale represent around 6% of the total haul that Bankia has on its balance sheet. The entity sold 9,200 properties through its branch network and Haya Real Estate last year. The aim is to try and repeat those figures in 2016.

Since the new management team, led by José Ignacio Goirigolzarri (pictured above), took over at Bankia, the nationalised group has been one of the most active in the sale of portfolios. Last year, it sold more than 80 batches of problem assets, which allowed it to decrease its doubtful debt balance from €20,000 million in 2013 to €12,500 million by March 2016. It has managed to do this thanks to higher provisions.

Original story: Expansión (by J. Zuloaga and S. Arancibia)

Translation: Carmel Drake

Cerberus Sees Five More Years Of Portfolio Sales In Europe

9 May 2016 – Expansión

The largest opportunistic fund thinks that the market will remain active in Europe for another five years. That was the view, expressed last week, by the Head of the US fund Cerberus, the investor that has acquired the most toxic debt from banks and governments in Europe.

“I expect the opportunity to buy doubtful loans to last for at least another five years. In baseball terms, we are still in the early innings”, said John Snow (pictured above), the co-founder and CEO of Cerberus.

Last year, according to Bloomberg, the fund invested €28,000 million in debt in Europe, including Northern Rock mortgages, which were sold by the British Government.

Cerberus is also one of the most active international investors in Spain.

In recent years, it has acquired two platforms, which themselves buy problem assets from banks: Haya Real Estate, the former Bankia Habitat, for the management of real estate assets; and Gescobro, for the management of unsecured debt.

In Spain in recent years, besides these two platforms, Cerberus has also acquired AyT, the securitisation fund manager owned by Ahorro Corporación and Cecabank; Cimenta2, the real estate arm of Cajamar; and the firm Patron Properties.

Advisors

The fund relies on several high profile advisors for its strategy in Spain, including Juan Hoyos Martínez de Irujo, the former President of McKinsey España; Francisco Luzón, the former CEO of Santander; Manuel González Cid, the former Financial Director of BBVA; Francisco Lamas, a former Director at McKinsey; and José María Aznar Botella, the son of the former President of the Government.

Cerberus came close to signing one of the largest deals in Spain last year. The US fund offered Bankia just over €2,000 million for a 75% stake in its foreclosed assets, as part of Project Big Bang, which was eventually suspended by the entity chaired by José Ignacio Goirigolzarri.

Original story: Expansión (by J. Z.)

Translation: Carmel Drake

Bankia Considers Cerberus’ Offer For 75% Of ‘Big Bang’

13 October 2015 -Expansión

Bankia’s Project Big Bang is moving towards the finishing line and a clear frontrunner has emerged: Cerberus. In recent weeks, the US fund has submitted a bid for 75% of the assets forming part of the macro-project through which the nationalised entity wants to get rid of all of its foreclosed assets. Cerberus must have put around €2,100 million on the table, according to financial sources.

The same sources say that only one counter-offer has been submitted, by the fund Oaktree, one of the most active players in Spain in recent months. However, its offer must have been lower and for a smaller package of assets.

Other large funds such as TPG, Apollo, Lone Star and Blackstone all exited the process before the binding offer phase, due to the complexity and costs associated with the transaction. They were also deterred by the fact that Cerberus has first-hand knowledge of the assets, since it manages them through its real estate platform Haya Real Estate, formerly Bankia Habitat, which it acquired in 2013. For this reason, Cerberus has been able to offer a price that is closest to the reality of the assets, without having to incur significant expenses in terms of appraisal and consultancy fees.

Bankia’s department for Corporate Investments has been analysing the offers since they were submitted two weeks ago. This stage of the process is very complex, since each one of the proposals is limited to different groupings of the 46,000 assets up for sale, which include homes, commercial premises and plots of land. Moreover, the offers have been received just as Manuel Lagares, the Head of the Corporate Investment team, is leaving the firm, to move to Credit Suisse.

The key behind the success of this operation will  be whether the prices are more or less aligned with those of the provisions. The portfolio, initially valued at €4,800 million has provisions amounting to €1,900 million, and therefore Bankia is not going to be willing to sell for less than €2,900 million.

The complexity of the process forced Bankia to announce over the summer that it would consider dividing up the portfolio. As such, it is possible that the entity led by José Ignacio Goirigolzarri will award the portfolio to both Cerberus and Oaktree. It may also opt to open a new round of offers with a more segmented portfolio, as a means of maximising its value.

Negotiations

In fact, according to sources close to the operation, the key obstacle is that the funds are leaving the lowest quality assets outside of their offers, and Bankia is not willing to be left with only the least attractive homes, commercial premises and land in the real estate market.

The investment bank Credit Suisse and the consultancy firm KPMG are advising the nationalised entity on this transaction.

The Big Bang portfolio comprises 38,500 homes, with a nominal value of €3,300 million; almost 5,000 commercial premises, worth €1,100 million; and 2,600 plots of land, with a gross price of €400 million.

For Cerberus, winning Project Big Bang would enable it to obtain economies of scale in its commitment to the recovery of the Spanish real estate sector. The US fund has acquired the real estate managers of Bankia and Cajamar – Cimenta2 – in recent years, as well as AyT, the securitisation fund manager, previously owned by Ahorro Corporación and Cecabank. But it still has not bought any large asset portfolios like its competitors Lone Star and Blackstone.

Meanwhile, Oaktree has revealed itself to be one of the most active funds in Spain in recent months, due to its purchase of a portfolio of mortgages from Bankia.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

Bankia Puts Property Worth €4,800M Up For Sale

6 May 2015 – Expansión

Project Big Bang / The financial entity has put a batch of homes, land and commercial buildings up for sale, with the objective of disposing of all of the foreclosed assets left on its balance sheet.

Bankia has decided to accelerate the process to divest its real estate assets with a ‘macro-transaction’ involving a large block sale. The financial institution has launched so-called Project Big Bang, which includes a portfolio of residential and commercial assets (including offices and shops), as well as land, worth €4,800 million.

The transaction is still in its very early stages, involving initial meetings with investors, but it will represent the largest asset sale process seen to date (excluding transfers of debt with real estate collateral).

The properties up for sale include assets that Bankia did not transfer to Sareb following its nationalisation, as well as foreclosed assets resulting from subsequent defaulted payments. Most of the portfolio corresponds to residential assets. Thus, of the €4,800 million assets that Bankia has included in the batch, €3,300 million related to residential properties at 31 March 2015. In total, the bank will transfer 38,545 residential units (flats, chalets, parking spaces and storage rooms), with a total constructed surface area of 3.6 million square metres.

Along with the €3,300 million of residential assets, Bankia is selling 4,938 commercial units worth €1,100 million.

Land at zero cost

The portfolio also includes 2,589 plots of land with a total surface area of 4.6 million square metres. This land has a value of zero, according to Bankia, having been fully provisioned.

The sale is being coordinated by Credit Suisse and KPMG. The transaction may be closed as a single deal or through the sale of several blocks. The sale value may also decrease from €4,800 million to a smaller amount, say sources close to the process.

Many of the large funds, including Blackstone, Lone Star and Apollo, have already expressed their interest in the portfolio. These investors will have to compete with Cerberus, which has a preferential right to examine Bankia’s real estate portfolio. This “preferential” arrangement forms part of the negotiations that the US fund has held with the Spanish entity in recent years. In 2014, Bankia transferred its Bankia Habitat business unit to Cerberus for a consideration of between €40 million and €90 million, together with the 400 professionals who work for the platform.

Last September, Cerberus joined forces with the Norwegian fund Lindorff to acquire some of the doubtful and substandard loans, plus those that had doubtful or substandard outlooks, worth €900 million, which the entity chaired by José Ignacio Goirigolzarri (pictured above) was selling, as part of the Somo transaction. In February, Bankia launched a campaign to accelerate the sale of its remaining properties.

The clean up

Project Big Bang represents the largest divestment initiated by Bankia to date in the foreclosed asset and doubtful debt segment. The entity chaired by José Ignacio Goirigolzarri has been one of the most active in this market, having transferred almost 80 portfolios containing problematic loans since 2013, with a nominal value of €10,000 million.

Initially, Bankia undertook these types of transactions due to necessity, since the restructuring plan agreed with Brussels compelled it to divest non-strategic assets amounting to €50,000 million.

Although it has now almost completed this plan, the entity has decided to ‘step on the divestment accelerator’ in 2015 in order to reduce its default rate and focus its resources on new productive assets that improve its financial results. As well as the foreclosed assets, Bankia is also currently negotiating the sale of problematic mortgages, property developer loans and hotel debt.

If it closes all of these transactions, the nationalised group would become the first entity to withdraw from the segments considered by the market as a burden to the sector.

Original story: Expansión (by R. Ruiz and J. Zuloaga)

Translation: Carmel Drake

International Funds And Socimis Hire First-Rate Executives

4 May 2015 – Expansión

Director appointments in Spain / Large international investors and Socimis have been recruiting senior Spanish executives to design their strategies in the country and identify real estate opportunities.

Large overseas investors are hiring first-rate advisors to lead the businesses that they have acquired in Spain. Over the last six months, funds such as Cerberus, Apollo and Lone Star have hired former directors of Ibex companies to support them (execute) their strategies in Spain.

Some of the Spanish Socimis have also hired first-rate executives, including Uro Property and the listed real estate company Hispania, owned by Azora.

Through these appointments, investors are taking the third step in a process to strengthen their strategies to conquer the Spanish real estate sector. To begin with, they put certain Spanish-speaking executives in charge of entering the market. Such was the case of Andrés Rubio (Apollo), Juan Pepa (Lone Star) and Michael Abel (TPG).

The next step was the acquisition of real estate platforms, such as Altamira, purchased by Apollo; Bankia Habitat – now Haya Real Estate – acquired by Cerberus; and Neinor, which was awarded by Kutxabank to Lone Star.

Following these purchases, the funds have sought advice from top executives. “Some of the funds’ foreign directors have made successful acquisitions, but they now need highly skilled, top-level, local professionals to implement their business plans”, says Patricio Palomar, Director of Alternative Investment at CBRE.

“The hardest thing in the real estate sector is finding and accessing opportunities, but these experienced professionals have the skills to achieve that”, adds Carlos Ruiz-Garma, Director of Business Development at Aguirre Newman.

New hires

The most active fund in terms of new recruits has been Cerberus, which has hired two senior bankers for its Spanish subsidiaries in the last few months. Franciso Luzón, former board member and Vice President at Santander, is now a board member at Haya Real Estate, the real estate company that inherited Bankia Habitat’s business; and Manuel González Cid, the former Finance Director at BBVA, has joined the board of directors at Gescobro, the firm that specialises in debt collection.

Another big name signing was that of Oscar Fanjul, as a board member of Altamira, the real estate company owned by Apollo. Fanjul is Vice President at Omega Capital and used to be the Chairman of Repsol.

The fund Lone Star has also drawn on the market for former directors of listed companies to strengthen its strategy. This investor, which purchased Kutxabank’s property developer for €930 million at the end of last year, has hired Juan Velayos to lead the project; he used to be a Partner at PwC and who was the CEO of Renta Corporación until 2011. Lone Star will reveal its strategy for Neinor over the next few weeks.

In the face of all of these new signings, one of the largest funds to show its commitment to Spain, TPG – which is the majority shareholder in Servihabitat – substituted the former banker Rodrigo Rato last April.

Socimis

The Socimis, (many of) which are in turn owned by international investors, are also committed to hiring experienced directors. In this sense, the real estate manager Azora, which controls Hispania, hired Juan María Nin as a board member at the end of last year; until June 2014, he was the CEO of CaixaBank.

The Socimi Uro Property has also followed in the same footsteps; Uro owns some of Santander’s (branch) network and it has appointed Carlos Martínez Campos as its Chairman; he was formerly the Chairman of Barclays España until its sale to CaixaBank. The banker also used to chair Prosegur.

In addition to the signings of former directors of Ibex companies, the opportunistic funds have also hired at least a dozen other executives in recent months. For example, Gonzalo Gómez Navarro, from the Empark Group, has joined Altamira; and the former directors of Sareb, Walter de Luna and Juan Barba, joined Acciona Inmobiliaria and Meridia Capital, respectively.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

German Fund Patrizia To Invest €1,000M In Spain

8 April 2015 – Expansión

Real estate / The fund Patrizia Immobilien has arrived in Spain and wants to purchase a real estate company.

The Spanish recovery has become a magnet for large international investors. The latest player to be seduced by the market is the German real estate fund Patrizia Immobilien, one of the largest property managers on the European stage. The fund is listed on the stock exchange, is worth more than €1,100 million and manages (assets amounting to) almost €15,000 million at the global level, on behalf of large institutional investors.

To guide its entry (into the Spanish market), Patrizia has hired KPMG’s Head of M&A Real Estate, Borja Goday (pictured above). The executive was previously CEO at Sotogrande, partner in Spain of the fund O’Connor Capital Partners and an analyst at JPMorgan.

The German fund intends to expand its workforce by hiring up to seven professionals over the next few weeks, in order to establish an initial team to make the first acquisitions in Spain. But this could be just the tip of the iceberg, since Patrizia Immobilien may invest more than €1,000 million in Spain over the next few years, provided it finds the right opportunities. The company prefers not to share exact figures, but recognises that a large portion of the €2,500 million it plans to invest (globally) in 2015 may flow into the Spanish market.

“We are not a fund that just buys assets; we differentiate ourselves from other investors because we are expert managers. Furthermore, we are not planning to be in Spain for 4 or 5 years only, but rather for several decades”, says Goday. Whilst at KPMG, the executive was a member of the financial-real estate team that leads the sector rankings, and which participated in transactions such as the sale of Bankia Habitat to Cerberus, the sale of Sotogrande and the first major transfer (of assets) from Sareb.

In search of a stake in a real estate company

Patrizia’s (initial) aim is to close a transaction in the short term, and the fund is particularly interested in taking a controlling stake in a real estate company. Given the volume of investments that it manages, the fund could have even presented itself as a candidate in the bidding for Realia.

With a transaction of that kind, Patrizia would immediately assume the management capacity necessary to become a national player, in line with its objectives, and also take on a portfolio of assets with which it would begin to compete with its competitors. Before a purchase of that kind materialises, the investor will manage the assets that it purchases in Spain in collaboration with its team in Germany, where it has 800 employees.

As well as a possible takeover, the German fund is also evaluating the purchase of asset portfolios, primarily focused on residential and office buildings. The investor also has sub-funds that specialise in the purchase of individual assets, which may target buildings on Paseo de la Castellana in Madrid or on Paseo de Gracia in Barcelona.

The entry of Patrizia represents that arrival of a new type of investor in Spain. Following the arrival of opportunistic funds, such as Lone Star, Fortress, Cerberus and Apollo, (in recent years), which have purchased real estate companies with the aim of listing them on the stock exchange over the next few years, now, more conservative funds are arriving, which seem to be interested in settling here for the long term.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake