Don Piso Returns to Construction & Starts a Housing Development

9/09/2014 – Expansion

Property management company Don Piso has been prepping for recovery in the real estate sector for over a year. Firstly, the firm hired 42 sales people last year and is planning to sign 100 work contracts more before 2014 ends. Then, Don Piso moved to a bigger office building situated on the Diagonal avenue in Barcelona. Finally, the company has started a new housing development and thereby undertook the activity abandoned due to the crisis.

Its first housing development in years will be located in a high-end area of Barcelona, precisely on a plot where previously stood the premises of publishing house Tusquets. This firm was acquired by the Planeta group and the property fell into hands of Hemisferio, real estate company of the Lara family.

Don Piso paid €2 million for the plot that now will undergo demolishment works followed by construction of an 18-dwelling complex. Trading had begun in July and already 14 homes found their new owners.

Don Pisos CEO, Luis Perez explains that there is an unsatisfied demand for new housing in many spots in large cities like Barcelona, because of construction shortage experienced in the last years. One of the still-available homes from the development offers a one hundred square meter area and costs €540.000, suggesting a price of €5.400 per square meter.

Real estate development is not the leading enterprise field of Don Piso that specializes in property sales and rentals. In bonanza times, the firm used to dispose of 170 own offices and 290 franchises scattered around the country which number now diminished to 11 sales points and 51 franchises.

From January to August, real estate agencies of Don Piso sold 320 dwellings, by 60% more than a year earlier. Yet we cannot speak of a change in the cycle but the pricing expectations of vendors and buyers are levelling out.

In 2009, Don Piso, which formerly belonged to Habitat, was acquired by Mr Perez and three other executives for €810.000 euros.

Last year, Don Piso achieved a turnover of €62 million and presently it markets 31.500 houses in all corners of Spain.

 

Original article: Expansión (by Marisa Anglés)

Translation: AURA REE

Bankia Begins The Sale Of Its Property Fund Assets

14/08/2014 – Expansión

‘PROJECT LAKE’/ The bank offers foreign investment funds a part of the assets from its real estate entity, Bankia Inmobiliario, in which it has recently acquired a 100% holding.

Bankia wants to dispose in the coming months of a large part of the assets of its property investment fund. The bank presided by José Ignacio Goirigolzarri started to distribute last month a sales pamphlet among investors with close to 300 million euros in assets leased to the property sector, many of which come from the bank’s real estate entity, Bankia Inmobiliario.

This sales process, known as Project Lake, has generated a large interest among the big foreign funds, and especially among the so-called Socimis (listed real estate investment companies).

Together with the assets of Bankia Inmobiliario, the nationalised bank has also included in Project Lake some properties which have been adding to the list of foreclosed properties after the transfer of assets to Sareb.

Bankia has begun this transaction after having acquired 100% of its property fund last March. This product of collective investment is inherited from Gesmadrid’s old company, Madrid Patrimonio Inmobiliario, which as a result of the liquidity crisis suffered by these funds from 2008 onwards, began to buy shareholdings from those investors who wanted to recover their money. In this way it avoided becoming a case similar to that of Banif Inmobiliario, which had to suspend repayments for two years, causing a great fuss among its shareholders.

With this strategy, Caja Madrid and later Bankia began to take over virtually all the shareholdings of the fund, until they held 98% of the share capital at the start of 2014. In this situation, they transferred the rest of the shareholders to the investment fund Bankia Monetario Euro Deuda III.

Thanks to this move, Bankia no longer has its hands tied and can carry out whatever strategy it considers appropriate with the fund.

Bankia Inmobiliario currently holds assets valued at 375 million euros, according to data from the end of the first half. The majority of the properties are situated in Madrid and, to a less extent, in Barcelona. Two thirds of the portfolio is to be used for rental homes, and the rest for offices and commercial properties.

Better perspectives

The managers of the fund indicated at the end of 2013 that the property market is showing “a notable increase in activity,” “as a result of more investment by foreign funds.” Furthermore, they add, “in locations where the stock of homes has been reduced or rental prices have fallen the most, small price increases are starting to be seen.”

In this context, the investment fund managed to raise occupation rates of the homes it owns to 78,5%. The occupation ratio in offices is slightly lower, around 60%.

Leased property assets are in great demand among Socimis, which are obliged to invest 80% of their portfolio in them.

Together with this sale, Bankia has in the pipeline another of the largest property sales of the moment: Project Amazon (Proyecto Amazonas), which includes 300 loans guaranteed by properties and hotels. Furthermore, the bank is closing the sale of 430 million in loans to developers which it did not transfer to Sareb, as part of Project Sky.

Original article: Expansión (by Jorge Zuloaga)
Translation: Aura REE

The sale of Bankia Habitat reaches its final stage.

Bankia continues getting rid of assets in order to comply with Brussels´ demands. The next operation could be the closure of the sale of Bankia Habitat, the real estate subsidiary. The institution presided over by José Ignacio Goirigolzarri started this process at the beginning of the year and has awoken the interest of more than twenty international funds. Financial sources explain that there remain only three candidates, among them Cerberus and Centerbridge.

The acquirer of Bankia Habitat will assume the company, their headquarters in Madrid and Valencia, the technological platform for the management of awarded assets and 500 employees. The properties and the credit for developers in the portfolio of Bankia Habitat (for 2900 and 2600 million Euros) will stay in the bank, which will sign a management agreement with the new owner. This should also take charge of the assets that Bankia transferred to Sareb.

 

Source: Expansión

Bankia finalizes the sale of its real estate subsidiary Bankia Habitat.

Nationalized banks continue getting rid of any business related to the construction sector. Bankia prepares the sale of its real estate subsidiary, Bankia Habitat. The operation, named Project Platform and launched at the beginning of this year, awoke the interest of more than twenty international funds and asset management companies. Now the process is in its final stage and Bankia will receive binding offers next week, according to sources well informed of the process. The proposals presented until now were not binding.

The acquirer of Bankia Habitat will assume the company, their headquarters in Madrid and Valencia, the technological platform for the management of awarded assets and 500 employees from the real estate subsidiary and the central services of Bankia. The properties and the credit to developers Bankia has in its portfolio (for 2900 million Euros and 2600 million Euros, respectively) will stay in the bank, that will sign a management agreement with the new owner. It is planned that the latter will also take charge of the assets transferred to the bad bank.

Among the international investors most interested in real estate assets who are looking for opportunities in Spain there is Morgan Stanley, Cerberus, Fortress, Apollo, Oaktree or TPG.

Bankia has covered all its affiliated shares at their market value. It still remains to see if the sale of the real estate subsidiary will be done with gains or losses. The bank presided over by José Ignacio Goirigolzarri considers that this disinvesment is key for two additional reasons: because it lowers the staff costs with the exit of 500 employees and because it allows the reduction of the number of layoffs that it needs to do according to the restructuring plan agreed with the European Commission.

Brussels demanded the cut of 6000 employees, but Bankia agreed with unions a minor adjustment: 4500 employees. The rest would come from exits of staff thanks to sales of affiliated companies, such as the case of Bankia Habitat. (…)

More than 20 funds bid for Bankia Habitat in order to manage assets from Sareb.

More than 20 international funds and asset management companies have shown an interest in the operation and are planning to present a non binding offer next week, according to sources aware of the negotiation which have been enquired by Expansion.

Bankia would like the sale to be closed by the beginning of May. The operation includes the platform and team, made of more than 500 professionals, whose departure would decrease the global number of layoffs to be done by the company presided over by José Ignacio Goirigolzarri in the next few months, estimated at 4500 employees.

The winner in this auction will continue providing the services of Bankia Habitat to the financial group, which holds real estate assets and developers credit for 5500 million Euros. It also seems it will be the one in charge of managing the assets transferred by the institution – Bankia as well as BFA – to Sareb at the end of 2012, valued at 22300 million Euros. Nevertheless, sources close to the operation point out that this last fact depends on the offer and on the negotiations with Sareb.

Recurring income

This volume of assets represents nearly half of the 51000 million Euros of the bad bank and they would generate a recurring income through the commissions paid by Sareb, close to 0,2% only for managing the assets.

The Operation Platform is seen within the sector as a launch pad for foreign investors, to enable them to take positions for the acquisition of other assets and provide services to third parties. The bad bank is among these potential investors, as it has delegated the management to the nationalized institutions only during the first years. A management bid will take place later. This is why the sale of Bankia´s platform has awaken so much interest.

The operation will include the management and at first, not the transfer of real estate assets which continue to be in Bankia. The institution has currently 2900 million Euros in awarded properties and 2600 million Euros in developers credits, 3,3% of the total credit of the group. Before the transfer of assets to Sareb this percentage reached 17%. A part of these 5500 million Euros originate in the awarding of assets in 2013 and mostly of those assets which were not transferred to the bad bank as they did not exceed the limits: 100.000 Euros for properties and 250.000 Euros for credits.

Interested funds

Among those interested in the offer there are the main international investment funds, which have been looking for business opportunities in Spain for the last year. There are, in fact, many potential buyers from countries that have already carried out deep restructuring processes, as a consequence of the crisis. One of the entrance barriers to the promotion of this business in Spain is finding the right people to do this job, but Bankia Habitat has a very powerful team with a great performance in a very complex situation within the real estate sector.

Until now, these funds have focused on the acquisition of consumer credit portfolios, where normally institutions and investors reach economic agreements easier. This is why the Operation Platform is so original. Among those investors most interested in real estate assets there are Morgan Stanley, Cerberus, Fortress, Apollo, Oaktree or TPG.

Several management platforms are also analyzing the operation. Santander overtook its competitors by assigning the recovery management to a third party through the sale to the Norwegian group Lindorff two years ago. And Banesto did exactly the same with Centerbridge. But they will not be the only ones. This business is no longer considered core and many institutions will end up outsourcing this service.

Source: Expansión