BBVA Breaks off Talks for Sale of Operation Chamartín with Merlin Properties

1 October 2019 – BBVA has informed Spain’s National Securities Market Commission (CNMV) that it has broken off talks regarding the potential sale of its development rights to the Operation Chamartín project. The bank did not cite a reason for the breakdown in the talks. Merlin Properties had recently  made a preliminary offer of almost 700 bank branches it leases to BBVA in exchange for the rights.

Recently, other candidates, such as the Canadian investment group Brookfield and the sovereign wealth fund Qatar Investment Authority, have also demonstrated an interest in the project. Construction in the Operation Chamartín area is expected to last for 25 years and require total investments of over €7 billion.

Original Story: La Vanguardia – Conchi Lafraya

Photo: Dani Duch

Adaptation/Translation: Richard D. K. Turner

Telefónica Finalises the Sale of 25 Data Centres for €600M

15 April 2019 – Expansión

The telecommunications giant Telefónica is expected to complete the sale of a portfolio of 25 data centres located in the USA, Europe and Latin America after Easter, as it continues its efforts to reduce its debt.

One of the best-positioned candidates in the bid to acquire the assets is Asterion Industrial Partners, a fund founded by Jesús Olmos, former Director of KKR, in November, which has already fought off competition from the infrastructure fund Brookfield, amongst others.

Two other investment vehicles have also reportedly expressed significant interest in acquiring the portfolio, namely, EQT and I-Squared Capital, as have two companies in the sector, the US firms Digital Realty and Equinix.

Of the portfolio of assets, eight centres are located in Spain, three in Brazil, three in Colombia, three in Ecuador, two in Peru, two in Chile, two in Argentina, one in Miami and one in Mexico.

With this new divestment, which is expected to generate proceeds of around €600 million, Telefónica will succeed in reducing its debt below €40 billion.

Original story: Expansión (by D.B., M.Á.P., I.C. and R.C.)

Translation/Summary: Carmel Drake

Juan Pepa: “The Recovery of the RE Sector Has Solid Foundations”

29 June 2018 – Eje Prime

Spain is doing well. At least that is according to the heads of the domestic and international funds that participated in the Square forum, a business meeting that is being held at the moment in Ibiza and which has brought together the leaders of the Spanish real estate sector to discuss new concepts and disruptive models.

Under the slogan “money never stops”, Javier Faus, founder and CEO of Meridia Capital, said at Square that “money will continue to be invested in the Spanish real estate sector for at least the next ten years”.

For the Catalan businessman, real estate is “growing” and he pointed out in a debate about investments at the meeting, moderated by Stephen Newman, the CEO of Savills Aguirre Newman, that “Spain has always been unique: despite the economic crises or threat of Cataluñan independence, and now the change of Government, large funds have always come here to invest”.

Of the same opinion is Juan Pepa, another of the guests at the roundtable organised by Square. Perhaps, the main driver behind the IPO of the property developer Neinor Homes, in his capacity as the former senior director of the fund Lone Star in Spain, Pepa highlighted that “the recovery of the real estate sector has solid foundations”. “You just have to look at the way in which the banks are now lending money in the residential sector: they are being very cautious”, said the now co-Managing Partner of Stoneshield.

In this regard, Faus added that in the market where his corporation dominates the most, the office segment, “we are not going to see rents return to their 2007 levels for another five years”. Therefore, according to the director, there is still scope for growth in a sector that in Barcelona and Madrid is looking very strong, taking advantage of the pull of the economic recovery and the arrival of international companies to the country.

Logistics and alternative assets, the great desires

“Now, everyone wants to invest in logistics”. That is how one international heavyweight committed to Spain summed up the target of the funds. Evan Carruthers, Managing Director of Castlelake, recognises that for his opportunistic fund, those types of assets are not attractive, given that “there is too much money looking for logistics assets”, he said.

His investment firm, which, amongst others, controls the listed property developer Aedas Homes, remains faithful to the residential market, in contrast to the other experts around the table.

For Juan Pepa and his fund, student halls, one of the most sought-after alternative assets at the moment, are very attractive “and so too are logistics assets, but we don’t touch them because we are small”.

In the appeal of halls of residence, the Argentinian business agrees with Brookfield, “the largest real estate company in the world”, according to the Spanish leader Ismael Clemente, CEO at Merlin and one of the promoters behind Square’s debut this year. The Director of Investments in Europe at the US giant, Brad Hyler, added that the problem on the continent is political instability but he did not assess in any detail the Spanish market, where his firm does not yet have a presence.

Those who are investing a lot of capital in Spain, and it seems that they will continue on this path over the coming years, are Latin American property companies and family offices. Pepa said in his intervention that “we will see much more money from Latin Americans investing in the country”.

In his closing comments on the second of three days, Clemente wanted to point out that in a real estate world in which the fashionable term is “to create experiences”, real estate “is, without doubt, the most human productive sector: we create employment and there is a healthy atmosphere between us”.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Popular’s €10bn Portfolio Sale Was The Largest RE Operation in the World in 2017

26 March 2018 – Cinco Días

Spain was the setting for the largest real estate operation in the world in 2017. The stars were Santander, as the vendor, and Blackstone, as the buyer. The object of desire was the property portfolio that took down Popular. The price: no less than a valuation of €10 billion.

The purchase of Popular’s property portfolio (containing real estate assets and loans with real estate collateral) led last year’s ranking of the largest operations in the sector involving a single asset or portfolio, compiled by Real Capital Analytics (RCA). Of the largest transactions, those undertaken in China stand out in particular, as well as a handful of deals completed in the United Kingdom. The classification excludes operations involving the purchase of companies.

The operation to sell Popular’s portfolio, announced in August, after Santander took control of the entity in June, was structured into a company worth €10 billion, in which Blackstone controls 51% and the rest remained in the hands of the bank chaired by Ana Botín.

Following that purchase, as well as others, such as Catalunya Caixa’s portfolio, Blackstone is now one of the largest owners of real estate assets in Spain. Another major operation of this nature was closed a few months later when Cerberus purchased 80% of BBVA’s real estate portfolio worth €5.5 billion (…).

In total, around the world, last year, deals worth USD 143.2 billion were closed, which represented an increase of 14% compared to the previous year.

China starred in the majority of the largest operations last year. China Vanke acquired an enormous land portfolio for real estate developments in Cantón for €7.1 billion, which constituted the second largest transaction of 2017. The next largest sale in the Asian country was the purchase of part of an office and retail development in Shenzhen by the company Kingboard, which is headquartered in Hong Kong (…).

In Europe and the USA, the focus was on alternative investments, such as student halls of residence, hospitals and logistics warehouses.

In fact, the third largest transaction in the world last year involved an alternative investment. Specifically, the sale of a stake in a portfolio of hospitals and 200 nursing homes in the USA and UK, which was purchased by the Chinese insurance company Taikang Insurance Group.

In Europe, in addition to Popular’s portfolio, the next largest deal saw the sale of the Bluewater shopping centre in the United Kingdom, worth €2.1 billion, in which Royal London Mutual Assurance acquired a stake.

In terms of office buildings, the sale of the Leadenhall Building in London, popularly known as the “cheese grater”, also stood out; it was acquired by the investment group CC Land, from Hong Kong, for more than €1.3 billion.

Typically, the large buyers include the largest investment managers, such as Blackstone, Brookfield, Deka, THI, Axa, Invesco and Morgan Stanley, whose clients tend to include sovereign funds from Norway and Abu Dhabi, as well as universities (for example, the Harvard investment fund) and workers’ unions or pension funds (German doctors, public sector workers from Korea and Ontario…).

In terms of 2018, for example in Europe, Borja Sierra, Executive Vice-President of Savills Aguirre Newman, believes that the clearest trend will be investment in the residential rental sector as a form of institutionalised real estate investment. “With the scenario of rising interest rates and measures from Trump that favour the renewal of infrastructure in the USA, I think that we will see a migration towards infrastructure funds, a move that will somewhat reduce investment pressure on the real estate sector. Nevertheless, the year has started with volumes that exceed those recorded in 2017, and so we expect a good year”.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

CNMC Approves Sabadell’s Sale of Hotel Socimi to Blackstone

4 December 2017 – Eje Prime

The sale of Sabadell’s hotel Socimi has been given the go-ahead. Spain’s National Markets and Competition Commission (the CNMC) has given the green light to the first phase of the sale of Banco Sabadell’s hotel subsidiary, HI Partners, to the US fund Blackstone for €630.7 million.

The operation was agreed in October through the company Halley Hodco, which is controlled by the US investment fund. The sale of the Socimi will generate a net profit of €55 million for Sabadell and will improve its capital ratio by 22 basis points this year.

A few months ago, the Catalan bank engaged Credit Suisse, Citi and JP Morgan to work on the possible IPO of the hotel chain, but in the end, the financial institution decided to completely divest the company.

In addition to Blackstone, the fund Brookfield also bid for the purchase of the company, which was created only two years ago. HI Partners has a portfolio of 29 assets and is worth €1 billion. Its hotels include the Abora Catarina in Maspalomas (Gran Canaria); the Ritz-Carlton Abama and the Jardín Tropical, both in the province of Tenerife.

Original story: Eje Prime

Translation: Carmel Drake

Blackstone & Brookfield Submit Bids To Buy HI Partners

5 October 2017 – Eje Prime

Sabadell may be selling off its hotels. The Catalan bank has received two offers from two international investment funds to divest its hotel chain, HI Partners. The interested parties are Blackstone and Brookfield, who have submitted bids to purchase all of the assets owned by Sabadell’s subsidiary.

HI Partners has been preparing its debut on the stock market, for which it has engaged Credit Suisse, Morgan Stanley and Citi. With a value of €1,000 million and another €850 million of debt under management, Sabadell was committed to listing the company on the stock market this year. But according to El Confidencial, that decision could now be up in the air.

The bank chaired by Josep Oliu has been running the hotel chain for the last two years, under the leadership of Alejandro Hernández-Puértolas and Santiago Fisas. Its portfolio comprises around thirty hotels, including The Ritz-Carlton Abama and the Jardín Tropical, in Tenerife, and the recently inaugurated Hotel Axel, in Madrid.

A year ago, the subsidiary of Sabadell purchased three hotels in the Canary Islands from Grupo Lopesan, in a three-way operation with the construction company Sacyr and the island-based holding company.

Original story: Eje Prime

Translation: Carmel Drake

Colonial to Enlarge Capital & Save SFL

24/03/2014 – Cinco Dias

The managing board of Colonial has decided to suplement the startup capital of €1 billion with €266 million more. The new enlargement was approved by the board on 21 January. Initially, the plan foresaw selling 20% of Société Foncière Lyonnaise (SFL) in which Colonial holds a 53% stake. Obtaining a new syndicated loan would allow payment of €1.759 million loan that expires at the end of the year.

(…) The Villar Mir Group that owns 20,27% of Colonial´s capital contributed by €300 million last year. This year the company will invest at least €50 million more. Villar Mir defeated Brookfield at the war on control over the real estate firm.

The U.S. private equity firm acquired 46% of syndicated loan valued at €1.759 million and revealed an intention of restructuring property sales and swapping the debt for assets. (…).

The nearest extraordinary shareholders´ meeting will take place on 8 April. (…) “Successful execution of the capital enlargement and obtaining a long-term syndicated loan will permit paying-off the current syndicated loan of €1.8 billion, keeping the majority stake at SFL and stabilizing the Loan to Value below 50%” – points out Colonial.

One of the most apposite steps taken by the real estate company was the creation of Asentia, its private “bad bank”. (…)



Original article: Cinco Días (Alberto Ortín Ramón)

Translation: AURA REE