Tag: branches

M&G Real Estate Buys 16 Santander Branches For €56.2M

25 May 2017 – El Economista

The fund manager M&G Real Estate has signed another deal in Spain, this time to become Banco Santander’s new landlord. Specifically, the firm has just signed an agreement with the Socimi Uro Property to acquire 16 of the financial institution’s branches for which it has paid €56.2 million.

The operation, which was closed at a premium with respect to the most recent valuation of the transferred portfolio, also includes the granting of a call option over another branch, which may be executed in the short term.

According to the Socimi, which owns approximately one-third of Banco Santander’s branches, the portfolio that M&G has purchased generates annual rental income of €3.04 million and comprises seven branches from the so-called Blue portfolio and nine from the Green portfolio.

The classification of the branches into these portfolios reflects the maturity dates of the corresponding rental contracts. Thus, in the first case (Blue portfolio), the lease contracts are due to terminate in 2045, 2046 and 2047, and may be extended for another seven years. In the case of the assets included in the Green portfolio, the lease contracts are due to mature between 2036 and 2038.

These terms of 30 and 20 years, respectively, match the British manager’s investment strategy, given that it seeks safe, long-term operations. In this way, the firm’s first operation in Spain was closed in 2015, when it acquired Telefónica’s former headquarters in Madrid, located in the heart of the city on Calle Ríos Rosas. It paid €175 million for that property, which is now the headquarters of WPP.

Following the sale, Uro will continue to own a portfolio of bank branches whose approximate value amounts to €1,893 million. When the Socimi debuted on the stock market, in March 2015, it managed 1,136 Santander branches, nevertheless, in April 2015, it sold a portfolio of 381 branches to Axa Real Estate for €308 million, leaving 755 branches, which cover a surface area of more than 340,000 m2.

Original story: El Economista (by Alba Brualla and Javier Mesones)

Translation: Carmel Drake

Popular Will Open 40 Branches To Sell Its Homes

17 January 2017 – Invertia

Banco Popular has launched a new network of 40 branches, four regional teams and a workforce of 400 people to manage its newly carved out real estate business.

According to a statement made by the entity, 12 of these branches will be located in Cataluña and Levante, 10 in Madrid and the Centro region, 10 in the North and the Pastor region and 8 in Andalucía.

The objective of this network, which will report directly into the General Director of Real Estate Business and Asset Transformation is to manage the bank’s real estate business and to manage collections in a holistic way “with the perspective of optimising capital, in line with the bank’s overall objective to reduce non-productive assets”.

The creation of this network forms part of the restructuring process that the bank is currently carrying out and which has involved the separation of its core and real estate businesses.

Original story: Invertia

Translation: Carmel Drake

Santander Launches The Sale Of Its Landlord URO Property

11 November 2016 – El Confidencial

Banco Santander and the other shareholders of URO Property, the Socimi that owns 755 of the Cantabrian-based entity’s branches, have formally launched the sale of the company, with a view to finding a white knight to acquire most of the Socimi’s shares.

According to three sources close to the operation, Citi was given the mandate to open an organised process on 19 September, with a view to closing the operation before the end of the first half of 2017.

The US entity had already been engaged in May to analyse the possible alternatives for a change in the shareholder structure and now that interest from sovereign and pension funds, insurance companies, fixed income investors and several real estate companies, has been confirmed, the formal process has been launched.

Citi, Santander and URO all declined to comment on the announcement.

The Socimi is attractive because it represents a low risk investment, with guaranteed returns and the certainty of dividend distributions. Those characteristics make it an object of desire for large sovereign funds and very conservative vehicles, the main candidates that Santander and its partner shareholders are targetting for this divestment process.

In addition, URO’s shareholders are open to exploring formulas such as the one that Santander has just successfully carried out with Metrovacesa, including merging the Socimi with another large landlord of commercial premises, according to the sources.

In addition to the activity undertaken by the bank chaired by Ana Botín, several other entities have also sold off large batches of branches in recent years, including BBVA, which sold 800 branches to Tree Inversiones Inmobiliarios, now part of Merlin, and Sabadell, which sold a portfolio of 228 branches and 133 parking spaces to Moor Park, which, in turn, subsequently sold the portfolio to the Mexican businessman Moisés El-Mann.

URO is currently very limited in terms of its business operations, due to the clauses included in the bond issue, amounting to €1,300 million, which it undertook in the spring of 2015, a month after it sold 381 of Santander’s branches to Axa.

Those two operations were a complete success from a financial point of view because they granted the Socimi the stability that it had been seeking for so long, but they also reduced its room for maneouvre, as the entity was forced to use the rental income from 666 of Santander’s branches to guarantee the issue, and also pledge another 80 branches (…).

Santander and CaixaBank will continue to hold stakes in URO

According to URO, the net book value of its current portfolio of branches amounts to €1,585 million, based on its most recent official accounts corresponding to the month of June, whilst its market capitalisation on the Alternative Investment Market (MAB) amounts to €197.5 million.

The decision to activate a formal sales process represents the company’s response to the desire expressed by several of its shareholders to exit from its share capital, now that the “lock-up period” has come to an end.

URO’s creditor entities, led by Santander and CaixaBank (which hold stakes of 22.78% and 14.5%, respectively), decided to execute their debts and take over control of the company in 2014. Both plan to continue as shareholders in the Socimi following the sale, although they are hoping to take advantage of this move to adopt smaller positions.

Other shareholders include BNP Paribas, one of the entities that wants to sell, which controls 9.18%; whilst the former shareholders of URO, Sun Capital (renamed Atisha Holding) and Pearl Group (now Phoenix Life) hold 18.92% and 14.90%, respectively. Other entities, such as Barclays and several hedge funds, which hold stakes of less than 5%, also want to exit. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Sabadell Converts Solvia Into A RE Franchise

14 October 2016 – Cinco Días

Banco Sabadell is very clear about its future, it wants to take advantage of the boom in the real estate sector to harness the stock of foreclosed assets that it still holds on its balance sheet, which it largely inherited from CAM.

To date, the bank chaired by Josep Oliu has decided to hold onto Solvia, the platform that owns all of its foreclosed assets. Initially, it planned to list it on the stock market, but it quickly ruled out that option. It also studied several offers to sell a majority stake in its real estate platform to large investment funds, like other players in the sector did, including Santander with Altamira and Popular with Aliseda, amongst others. But, it also decided against that idea after it saw demand for real estate grow in recent years.

Since 2013, when the market for the sale of properties became active once again, the heads of Solvia have seen that the transactions that have grown by the most, albeit timidly, are those between individuals. And as such, Sabadell has decided to offer its services to third parties, on both the buy side and sell side. In this way, Solvia “is beginning a new phase in which it is placing its strategic focus on offering its services not only to those interested to buy a home, as it has done to date, but now also to individuals wishing to sell their homes”, explained the bank.

To this end, it is going to restructure its commercial network, by turning Solvia into a franchiser. It will thereby create a network of franchisees with physical branches across Spain. Each franchisee will have the right to sell assets owned by Solvia’s current clients (Sabadell, Sareb and various funds) and by individuals whose homes are located in their respective area. Solvia will also have its own network which, for the time being, will comprise two offices, one in Sevilla and one in Alicante. The idea is that by the end of the year, Solvia will have 12 of its own offices and 24 franchised branches. It will also be able to sell properties through the bank’s branch network. In this way, Sabadell will compete directly with estate agents such as Tecnocasa and Redpiso, for example.

Sources at the real estate agents consulted are certain that other banks will follow Sabadell’s lead. Solvia’s franchisee offer is open to both the network of approved real estate agents (Apis), as well as to other professionals in the sector, such as entrepreneurs and investors. The idea is that Sabadell will reserve a certain number of locations for young people (recent graduates with excellent academic records) who want to start a business and learn on the job.

Since 2012, Solvia has been one of the firms that has sold the most properties in Spain. Its sales have exceeded €2,500 million year after year on a recurring basis, say sources at the bank. An important proportion of these transactions involve the sale of homes and as such, the project to become a real estate agent has been born. (…).

Original story: Cinco Días (Ángeles Gonzalo Alconada)

Translation: Carmel Drake

Fiatc Buys Former HQ Of Naturgas From BBVA

28 June 2016 – Expansión

The insurance group Fiatc has expanded its real estate portfolio with an operation in Bilbao. The Catalan company has purchased the Nervión building, located next to the Guggenheim Museum, in the Plaza Pío Baroja, from BBVA Seguros. The property, which used to house the headquarters of Gas de Euskadi and Naturgas, has a surface area of 6,296 sqm and 66 parking spaces.

In April, BBVA relocated around 350 employees to the building. The banking group will continue to occupy the property under a lease contract.

The operation, whose price has not been revealed, has been brokered by the consultancy firm JLL. With this acquisition, Fiatc increases the market value of its real estate portfolio to €250 million. Most of the buildings in its portfolio comprise its own offices and branches, such as its headquarters on La Diagonal in Barcelona.

Original story: Expansión (by J.O.)

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

Uro Property’s Profits Amounted To €67M In 2015

19 April 2016 – Expansión

Uro Property, the Socimi that owns a quarter of Santander’s branch network on Spain, recorded profits of €67 million in 2015, down by 82% compared with 2014, after it sold some of the branches to Axa.

This operation, which saw Uro go from owning 1,136 branches of the bank chaired by Ana Botín, to 755 branches, generated net profits of €27 million for the Socimi. The transfer price for the 381 branches was €308 million. In addition, the company has another 40 branches up for sale after they were returned by Santander; BNP Real Estate has been appointed to coordinate the sale.

The second major milestone for Uro Property in 2015 was the refinancing of its debt and the cancelation of a swap (insurance against interest rates), which generated losses of €65 million in 2014. As a result, the Socimi reduced the financing costs on its €1,300 million debt balance from 6% to 3.35%.

Despite these achievements, Uro Property’s profit in 2015 was 82% lower than in 2014 as it incurred higher extraordinary revenues in the prior year. In this way, the valuation of its property portfolio generated profits of €183 million two years ago. In addition, the Socimi also recorded extraordinary revenues of €198 million due to the conversion of a mezzanine tranche (young or high risk debt) with a discount on its original value.

Uro Property saw an improvement in the valuation of its properties in 2015, up by 5%, from €1,804 million to €1,916 million, excluding the impact of the branches sold to Axa.

The Socimi will distribute €54 million of the €65 million profit as a dividend, equivalent to 80% of its profits, as required by the legislation that governs these companies. Of this amount, €18 million was already paid to shareholders in December and another €36 million will be distributed in July.

Investigation

Meanwhile, Uro Property is being investigated by the Tax Authorities, which have started disciplinary proceedings. According to the company’s accounts, this investigation is due to “a transcription error”, for which the Treasury has proposed a fine of €7.29 million. Uro has appealed that decision and has not recognised any provisions in its accounts for the time being.

Uro is the company that used to be Samos, which acquired 1,152 Santander branches in 2007 under a sale & lease back arrangement. Its high level of debt meant that the creditor bank acquired some of its share capital in 2014.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Uro Engages BNP To Sell 40 Santander Branches

16 November 2015 – Expansión

Mandate / The Socimi owns 775 branches that it acquired from the bank chaired by Ana Botín under a ‘sale and leaseback’ agreement.

Uro Property, the Socimi that owns one third of Santander’s branch network, is looking for new tenants. The company has engaged BNP Paribas Real Estate to sell or re-let 40 branches released by the entity chaired by Ana Botín.

The bank’s exit from these branches is a reflection of its strategy to gradually reduce its installed capacity – a strategy that the whole sector is undertaking – and forms part of the contract between the entity and Uro Property. Under this agreement, Santander may exit between 4 and 5 branches per year. That figure has been increased for 2015 following the refinancing carried out by the Socimi during the summer.

Uro is the successor company of Samos, which purchased 1,152 offices from Santander in 2007 under a sale & lease back arrangement for €2,040 million. The entity’s high debt level caused the creditor bank to capitalise come of its bonds in 2014, with Santander, Atisha (the former Sun Group), CaixaBank, Phoenix Life (formerly Pearl) and BNP taking over control.

Stock market

At the time, the entity made a commitment to list on the stock exchange, which it did last March, debuting on the Alternative Investment Market (‘Mercado Alternativo Bursátil’ or MAB). It began life by listing at €100/per share and after distributing a dividend of €59/per share, closed trading on Friday at €57/share. Excluding the payment to its shareholders, the company’s share price has increased by 13% since its debut.

Uro sold 381 of the 1,152 branches it acquired initially to Axa Real Estate for around €300 million. They had a gross leasable surface area of 90,000 m2.

Following that operation, Uro now owns around 775 branches, for which it receives annual rental income of just over €100 million.

Now that 40 branches have been released by Santander, Uro Property faces the challenge of looking for new business solutions for the first time. Its priority is to sell the branches one by one, maximising the price. Although by quantity, these branches represent 5% of the total portfolio, they are worth just €20 million, which represents just 1% of the €1,800 million appraisal value of the Socimi’s properties.

These 40 branches have a combined surface area of 9,500 m2 and 50% of them (by surface area) are located in Madrid and Barcelona, whilst the remaining 50% are distributed across the rest of Spain. The properties will be sold empty and may be converted into shops, service outlets or used for other commercial purposes.

Shareholder structure

In addition to the management of these properties, the other major challenge that Uro Property will face in the coming months is the possible renewal of its shareholder structure. The Socimi’s investors have pledged to continue as shareholders for one year after the company’s debut on the stock exchange; that period will expire in March. Subsequently, one or more of the original investors may exit the company, such as Atisha and Phoenix Life, or other entities. In addition to Santander, CaixaBank and BNP Paribas, other shareholders include Burlington, Société Générale and Stichting Z+S.

Another key milestone for the company in recent months was the refinancing of its debt, which it achieved through an income securitisation amounting to €1,345 million, with a term of between 22 and 24 years. Uro Property agreed a fixed interest rate of 3.348% with investors, whereby reducing its financing cost from 6%, including interest rate derivatives.

The company is led by Simon Blaxland as the CEO and is chaired by Carlos Martínez Campos, the former number one at Barclays in Spain.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Bankia Sold 4,135 Properties In H1 2015 For €262M

17 July 2015 – Expansión

Bankia sold 4,135 properties during the first six months of 2015, i.e. more than double the number it sold during the same period in 2014 (1,919). Half of the sales were made directly through branches and the other half were closed through intermediaries. These properties form part of Bankia’s stock and have nothing to do with the assets that the bank transferred to Sareb after receiving public aid.

The sales generated revenues of €262 million, up 82% on the year before. 92% of the sales relate to residential properties. The remaining 8% include the sale of retail premises, whose sales volumes increased 6-fold compared with the previous year.

At the end of the first quarter, Bankia had foreclosed properties on its balance sheet amounting to €4,213 million – this amount had barely changed since the end of 2014.

Original story: Expansión (by M. Romani)

Translation: Carmel Drake

Popular To Put 15,000 More Properties Up For Sale

16 July 2015 – Expansión

Popular is strengthening its strategy to achieve one of the main objectives it has set itself for the coming years, namely to accelerate the divestment of its non-productive assets. This mainly relates to its real estate portfolio, which includes €15,000 million of problem loans to developers, SMEs and individual borrowers, and a further €14,600 million of foreclosed assets.

One of the initiatives that the bank has set for 2015 is to increase the number of finished properties available for immediate sale through its web channel, by 15,000. It is looking to boost its web channel and thinks that it has great potential. This increase of 15,000 assets represents an increase of almost 50% to the portfolio that the bank currently has available for sale (taking the total to around 30,000 properties).

Channels

Currently, Popular sells 73% of its assets through its network of branches, another 21% through commercial agents and only 6% online. In the rest of the sector, digital channels account for 50% of such sales.

The entity, in turn, is accelerating the sale of large portfolios to wholesale investors. In the last two quarters, Popular has closed four such transactions amounting to €333 million, with a 9% discount on the net book value. These operations have included various assets, from residential land to commercial properties and garages.

As a result, the bank has doubled its volume of property sales in the last year. During the first quarter, Popular closed divestments amounting to €534 million, compared with €249 million recorded between January and March 2014, an increase of 115%. In this way and in just one quarter, Popular sold assets with a value very similar to the total amount sold in the whole of 2013, when sales amounted to around €700 million.

Popular’s strategy to dispose of its problem assets has been boosted in the last year and a half, following the partnership agreed in 2013 with the funds Värde Partners and Kennedy Wilson. That transaction, structured through the joint venture known as Aliseda, is not only generating capital to strengthen the bank’s balance sheet, but is also seeking to take advantage of the funds’ extensive experience in this business to accelerate the sale of assets, reduce the length of the recovery process and maximise divestment prices. Kennedy Wilson and Värde Partners, which control 51% of Aliseda, have almost €25,000 million in assets under management. (…)

Original story: Expansión (by M. Martínez)

Translation: Carmel Drake