Tag: buildings

Finaccess Increases its Stake in Colonial to 18.23%

2 December 2017 – Expansión

The Mexican group Finaccess has reaffirmed its commitment to Colonial by investing another €154 million in the real estate company, which sees its total stake increase to €630 million based on the current market value. Following this acquisition, the group chaired by Carlos Fernández has increased its stake in the real estate company from 13.76% to 18.23% and has whereby retained its position as the company’s largest shareholder.

The operation forms part of the accelerated capital increase that Colonial carried out last week to raise financing for its takeover of Axiare.

Finaccess first acquired a stake in Colonial in the summer of 2016 through an operation that saw it exchange buildings for shares in the company. Since then, the Mexican firm has increased its stake in the real estate company on several occasions.

In addition to the Mexican company, the other two main shareholders of Colonial have also announced their commitment to support the group’s capital increase, up to a total of €250 million, which is why, following the purchase of Finaccess, there will be only €100 million left to raise. After Finaccess, the next largest stakes are held by the Qatar sovereign fund, which currently holds a 10.6% stake, and the Santo Domingo group, with a 7.3% stake. The Puig family, with a 5%, has declined to comment.

On Tuesday, Colonial closed a free capital increase that, together with the placement of its treasury shares, allowed it to raise €416.23 million. The operation followed the issue of €800 million in bonds placed last week. The two operations will contribute a total of €1.216 billion, compared with the €1.033 billion required. Colonial saw its share price close at €8 on Friday, after rising by 0.79% during trading.

Original story: Expansión (by M. Anglés)

Translation: Carmel Drake

Centurion Real Estate Will Debut On The MAB In July

27 June 2017 – Expansión

Shareholders of the blood products manufacturer Grifols are finalising the debut on the stock market of Centurion Real Estate, a Socimi that is owned in its entirety by Scranton Enterprises. Scranton is a holding company headquartered in The Netherlands, which owns 8.67% of the Catalan company Grifols. The real estate company will start to trade on the Alternative Investment Market (MAB) in July, according to financial sources.

Centurion was founded in 2014 in Barcelona – where its headquarters are located – with the aim of “identifying acquisition opportunities in the real estate market for their subsequent management and operation under lease contracts”, according to Scranton.

Scranton

Grifols sources admitted yesterday that members of the family that controls the pharmaceutical group are some of the around twenty shareholders of the Dutch holding company and they said that board members, former board members, directors and former directors of the Spanish company participate in the business – which has its registered office in Amsterdam – although they did not reveal the composition of the shareholders.

Centurion is chaired by Juan Javier Roura, who used to be responsible for Treasury and Risk Control at Grifols until 2015, where he previously served as Finance Director. Other members of the board of directors include Jordi Fabregas, Núria Martín and Tomás Dagá, founding partners of the law firm Osborne Clarke in Spain; Dagá is also a director of Grifols and of some of the group’s subsidiaries.

The Socimi closed last year with own funds of €61.33 million, up by more than ten times compared to 2105. Its turnover amounted to €5.28 million, almost 5% higher than last year. Its profit reached €2.27 million and the company distributed €1.82 million in dividends.

In light of its imminent debut on the MAB, the company has prepared an audited report of its activity during the first four months of 2017, a period in which its turnover amounted to €1.71 million and its profit reached €421,591.

Grifols’ buildings

According to the same document, Centurion Real Estate is the owner of four buildings, currently occupied by Grifols in the city of Barcelona (Calle Jesús y María) and in the Barcelonan suburb of Sant Cugat del Vallès (Avenida de la Generalitat), where the group has its headquarters. In March, the Socimi formalised the acquisition of retail premises in Plaza Francesc Macià, 10, in Barcelona, on the ground floor of Winterthur’s former headquarters for €50 million.

To undertake its business, Centurion signed a €40 million mortgage loan with BBVA in October 2016 and a €10 million loan with Santander in February 2017.

Original story: Expansión (by J. Orihuel and M. Anglés)

Translation: Carmel Drake

Sabadell Still Struggling To Digest CAM’s RE

30 January 2017 – El Mundo

Real estate is continuing to weigh down heavily on Banco Sabadell’s balance sheet, above all due to the complications involved in digesting the enormous portfolio of properties that it inherited from CAM, most of which are located in the Community of Valencia. The entity is selling more properties than ever, its revenues have soared, the number of assets being sold exceeds the number of properties being foreclosed and the prices at which it is selling its real estate are continuing to rise, however, the overall impact of the initiative is still generating losses, albeit for the time being. Specifically, Sabadell’s real estate asset business unit lost €908.4 million in 2016, according to the Group’s annual results, which were presented in Barcelona on Friday.

Those losses already reflect the effect of the Asset Protection Scheme (EPA), which the entity relies on to cover 80% of the losses generated by CAM’s real estate portfolio.

The Catalan bank still holds €9,035 million in real estate assets on its balance sheet, which represents just 2% less than at the end of 2015. Most of those properties (land, buildings, homes etc) belong to the stock of loans that it inherited from CAM and are located in that former entity’s areas of operation, in other words, the Community of Valencia and Murcia. Of those €9,035 million real estate assets, €7,166 million stem from foreclosed assets and embargos of construction companies and property developers, which were unable to repay their loans, and of those €3,851 million corresponds to land. In other words, 42% of the entity’s stock is land, the least liquid asset.

Sabadell owns finished homes worth €1,377 million. Moreover, its properties from unpaid mortgages amount to €1,918 million.

Overall, the bank has managed to offset the mass entry of properties onto its balance sheet with an intensification of sales. For example, it closed 2016 with the entry of properties (homes, land, premises, etc) worth €384 million, whilst the sale and divestment of these assets amounted to €457 million. In other words, it is now selling more than it is taking on.

Solvia is working hard too

In addition, Solvia, the bank’s real estate subsidiary, which has its operations centre in Alicante, sold assets worth €1,557 million last year, up by 40% compared to the previous year, with 14,553 operations, i.e. 27% more. The entity said that “the reduction in the sales discount and the overall increase in prices are signs of the recovery”. Last year, Solvia relied on sales of large asset portfolios to institutional investors to improve its ratios. Not in vain, 22% of its sales are made to that kind of buyer. (…).

Original story: El Mundo (by F.D.G.)

Translation: Carmel Drake

Madrid Accounts For 70% Of All New Housing Permits

10 October 2016 – Inmodiario

The Community of Madrid has been boasting to property developers that it represents the real driver of the growth currently being seen in the real estate sector in Spain.

In this way, at the opening of the National Real Estate Conference, the Director of Transport, Housing and Infrastructure, Pedro Rollán, commented on the statistics and highlighted that licences for new residential construction projects in the region increased by 66% during the first five months of 2016, well above the national average increase of 27%.

During his presentation at the conference, organised by the Association of Property Developers and Construction Companies in Spain (APCE), under the title “From recovery to innovation”, Rollán commented that real estate is a strategic sector, whose contribution to GDP is essential for economic growth.

And, to this end, he stated that the sector’s reactivation is necessary to consolidate and strengthen the (overall) recovery. He emphasised the importance of the need to continue working and adapting the (RE) sector to new times, and of innovating to achieve the most accessible, comfortable and least contaminated spaces.

In this sense, the regional Government is managing aid, which will serve to encourage the renovation of homes and the regeneration and refurbishment of urban spaces, thanks to the agreement signed with the Ministry of Development under the framework of the State Housing Plan.

Thus, this year, €14.4 million will be allocated to subsidies for building renovations and €29.8 million will be spent on aid for urban regeneration and renovation.

In the same way, the regional Government is working to create a Single Integrated Assessment Report Register for buildings in the Community of Madrid, which will contain all of the assessment reports relating to more than 40,000 buildings per year.

This register will enable the data obtained to be used to identify weaknesses and deficiencies in the building stock and will help to improve their quality and sustainability, as well as to obtain extensive information to allow policies to be directed appropriately in terms of architecture and housing. All types of buildings may be registered, regardless of their purpose (use) along with the mandatory registration of all buildings that are more than 30 years old.

Moreover, assessments of the degree of conservation of buildings (ITE) are going to be unified into a single document to ensure the safety of all of the buildings in the region; their basic conditions in terms of universal access, to encourage reasonable modifications in this regard; and energy efficiency certifications (CEE) to help achieve the commitment made in terms of energy savings and building sustainability.

Original story: Inmodiario

Translation: Carmel Drake

Insurance Companies Have Unrealised Gains Of €2,400M From RE

26 August 2016 – Expansión

Mapfre, Mutua Madrileña and Catalana Occidente own the majority of the real estate in the insurance sector, whose total portfolio amounts to €4,475 million.

Insurance companies in Spain are accumulating a cushion of unrealised gains in their real estate investments amounting to €2,433 million, according to data from the Director General of Insurance and Pensions.

This amount is the difference between the value that the companies assigns these assets on their balance sheets and the market price of these assets, according to the mandatory appraisals that have to be performed periodically by independent appraisers.

These latest gains in the insurance sector are still well below the threshold of €4,226 million achieved in 2009, at the beginning of the burst of the real estate bubble.

Unrealised gains are recognised in the accounts of entities if the properties are sold at a profit. They are also included in the calculation to measure the solvency margin of the entities, which measures the firms’ strength to deal with unforeseen events using their uncommitted assets.

Insurance companies have traditionally invested in properties, given that they are a particularly appropriate asset for the long term over which they conduct their activity. They also generate regular income in the form of rental payments.

In addition, insurance companies have had to diversify their portfolios following the decrease in interest rates in recent months, which makes the investment strategy of these entities more complicated; they have traditionally focused on public debt, primarily in Spain.

Purchases

Insurance companies are risk averse in their investments and in the face of this new panorama, they have made several purchases that have increased their real estate portfolios, particularly important for the Spanish capital firms Mapfre, Mutua Madrileña and Catalana Occidente, which own the majority of the sector’s total portfolio of €4,475 million, according to data from the Director General of Insurance and Pensions. In recent months, these three entities have been involved in several real estate purchases amounting to more than €250 million. (…).

The Mapfre Group, which has a presence in fifty countries, reported latent gains of €975 million in its accounts for 2015 on the basis of the book value of its total real estate portfolio (€2,267 million) and the market price (€3,242 million). Most (56% or €1,835 million) correspond to real estate investments, whilst the rest (44% or €1,406 million) are properties used by Mapfre. (…).

Meanwhile, Mutua has accumulated a piggy bank of unrealised real estate gains amounting to €462 million, with total assets worth €1,443 million at market prices and €981 million on the balance sheet. Its assets are concentrated in Madrid, where historically it has owned a handful of individual buildings on Paseo de la Castellana. (…).

Grupo Catalana Occidente’s investment in real estate amounts to €1,024 million, which includes unrealised gains amounting to €465 million. The insurance company, which has a presence in more than fifty countries, acquired a building measuring almost 4,000 sqm in the 22@ district in Barcelona in July.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake

The Banks Still Hold €77,250M Of Toxic Assets

13 June 2016 – El Mundo

The banks are still paying for the excessive risks that they assumed when they financed real estate operations virtually indiscriminately. Eight years after the burst of the real estate bubble, the default rate and volume of doubtful loans held by the top 12 banks have decreased, without exception.

Nevertheless, despite the balance sheet clean ups, the entities are still having to take on waves of land, buildings, homes and offices. By the end of 2015, the banks had absorbed €4,562 million more new foreclosed assets, which took the total volume of this toxic caption to €77,250 million. As such, they are having to take preventative measures and the recovery of their ordinary business is being hindered, according to a report prepared by Bankia’s research team.

The rescue of a sector in trouble may be hit by what is one of their major problems today. Since 2015, the recovery in prices and sales of the market that represents the main drag on the banks’ balance sheets is a relief for the sector because it allows the volume of sales of foreclosed assets to increase and at prices that are closer to the net values of the assets (which are discounted by the book value of the provisions recognised). This situation means that the banks will try to place significant portfolios of assets on the market over the next few months. The list of entities that are sounding out the wholesale market in search of buyers for their assets so far this year includes BBVA, Sabadell, Bankia, Popular…even Sareb, the so-called bad bank. (…).

Of the major Spanish entities to have survived the wave of mergers since 2010, BBVA is the one that held the highest volume of foreclosed assets at the end of 2015, with €16,138 million. Like in the case of Santander, that figure relates to property that the bank has had to take on in Spain and in the case of the group chaired by Francisco González, it is explained by the absorption of Catalunya Banc at the end of last year.

The entity created from the merger of the savings banks Catalunya, Tarragon and Manresa had already sold its portfolio of most problem mortgages to the investment fund Blackstone in April for €4,123 million (the portfolio had a nominal value of €6,000 million). Even so, BBVA is still, by far, the group that had to take on the highest volume of foreclosed assets in 2015: €2,385 million primarily land, which was 45% more than the second entity in the list, CaixaBank, which absorbed €1,634 million.

However, taking into account the recovery of the real estate market and the interest from investors, BBVA thinks that its exposure to toxic assets could be eliminated within a period of three years, as the group’s CEO, Carlos Torres, said in February. In this way, the asset digestion process could be entering its final phase, after a 2015 during which the entity sold around 21,080 foreclosed assets, 9% fewer than the year before, but with a significant increase in returns, which translated into capital gains of almost €120 million, compared with €17 million a year earlier.

At the other end of the spectrum are the entities that completed sales of assets to investment funds in 2015, which bought them at significant discounts. In this way, Kutxabank is the entity that liquidated its assets the quickest. Last year, it took a giant leap by reducing its volume of foreclosed assets by €1,503 million. In one of its major milestones, the bank created from the former Basque savings banks reached an agreement with Lone Star to transfer half of its real estate portfolio, held in the subsidiary Neinor, for €930 million and to grant a management contract for the other half.

Bankia, meanwhile, was the next entity that most reduced its foreclosed assets by the most, although its figures were much smaller than Kutxabanks, with sales of €352 million. (…).

Original story: El Mundo (by César Urrutia)

Translation: Carmel Drake

RTVE Seeks RE Agent To Help It Sell 32 Buildings For €85M

7 June 2016 – Voz Pópuli

Spain’s national broadcaster, Radiotelevisión Española (RTVE), wants to sell 32 plots of land and properties, distributed across Spain, for which it hopes to obtain proceeds of €85.6 million. The corporation has launched a competition, with a budget of €3.1 million, which aims to find an estate agent in the market of these buildings, which in several cases are empty or offer services that could be carried out in another one of its work centres. The so-called “idle assets”.

The jewel in the crown of this package of public goods is the plot of land measuring 245,000 sqm that RTVE owns in the Madrilenian suburb of Las Rozas, which is valued at €49.3 million and which is currently used as the broadcasting centre for Radio 1 and Radio 5 MW. The corporation plans to move these facilities (including the antennae, which are approximately 200 metres tall) to a cheaper, less densely populated area, which would allow it to generate profits from this real estate operation.

The real estate portfolio that will go up for sale also includes the headquarters of Radio Nacional de España, located in Calle de Roc Boronat in Barcelona, and inaugurated in 2007, when Luis Fernández was President (of RTVE) and the PSOE was in Government in Moncloa. The idea is to transfer this media centre to TVE’s studios in Sant Cugat del Vallès – which will cost €3.5 million – and sell off the headquarters.

The Directors of the corporation want the estate agent who ends up being awarded the contract to take care of the necessary legal procedures to change the urban classification of this estate to obtain higher revenues from the operation, according to details specified in the competition tender document.

Buildings all over Spain

The list of properties that RTVE wants to get rid off also includes a 26,000 sqm plot of land in the Madrilenian suburb of Majadahonda (€5.3 million), a building on Calle de Colón in Valencia (€4.57 million), another on Calle de la Albareda in Zaragoza (€3.4 million) and another on Avenida Ranillas, also in the Aragonese capital, which has been valued at €4.57 million.

The following assets in the portfolio also have prices that exceed the one million euro threshold: the RNE headquarters in Valladolid (€1.02 million), the corporation’s facilities at the Edificio Venus in Murcia (€1.47 million) and the office in Santa Cruz de Tenerife (€1.46 million). The portfolio due to be sold also includes buildings and plots of land in Alicante, Mérida (Badajoz), Cádiz, Gerona, Granada, Jaén, Las Palmas de Gran Canaria, Lérida, Monforte de Lemos (Lugo), Palma de Mallorca, Pamplona, Pontevedra (Vigo), Santander, Tarragona, Teruel and Talavera de la Reina (Toledo). (…).

Original story: Voz Pópuli (by Rubén Arranz)

Translation: Carmel Drake

Martinsa’s Liquidation Progresses & May Close In 2017

6 June 2016 – Expansión

The liquidation of Martinsa Fadesa may be finalised in 2017, once the creditors have been returned the “present value” of the assets they financed, according to sources close to the process.

The current bankruptcy administrators of the company have put Martinsa’s assets, worth €225 million, up for sale and have completed sales amounting to €25 million. The jewels in the real estate company’s crown include a group of buildings and plots of land in Paris, as well as assets located in Poland and Morocco.

Discounts of 30%

The liquidation of the company, which was one of the country’s largest companies during the years of the real estate bubble, includes the sale of assets with discounts on their book values of around 30%. It also includes the auctioning off of assets and the allocation of those unsold assets to creditors so that they may choose whether to carry out the “dación en pago” of the debt or approve the sale of the asset by the bankruptcy administrator in exchange for cash.

According to the sources, although the assets are the same ones that were financed at the time of the takeover bid, the decline in the real estate market in Spain has affected their initial values.

Nevertheless, they consider that the creditors may recover their investments over a time horizon that mirrors the recovery of the Spanish economy and of the real estate sector. In fact, they say that some assets have been sold above their book values.

Original story: Expansión

Translation: Carmel Drake

Property Developers Search For Buildings To Refurbish

3 May 2016 – Cinco Días

For the third year in a row, 2015 closed with an increase in the number of building permits, although the level of housing construction is still a long way below that recorded at the height of the boom. So great is demand in places like Madrid that investors/property developers are now allocating almost one out of every five euros to the acquisition of buildings in the centre of the capital for renovation and whereby bringing more new homes onto the market in prime areas.

The slight slowdown in construction detected by the Bank of Spain during the first quarter of the year does not seem to be affect real estate activity that much, but does affect other sub-sectors. In fact, the main market indicators show how the pull of demand for housing is continuing to strengthen and how that has driven the launch of new developments. Above all in places where most of the stock has now been absorbed and there is none left, or the surplus that remains unsold does not match what buyers are looking for.

A recent study compiled by the consultancy firm Knight Frank also shows how the recovery in housing has reduced auto-promotion, or the construction of homes by cooperatives, in favour of traditional property developers by 8%, and the banks have played an important role in the phenomenon as they have started to finance the most solvent developers with the most robust projects once again.

Nevertheless, although it might seem like the real estate business has returned to the high road once again, the fact is that the recovery has only fully arrived in certain, very specific enclaves and one of them is Madrid, and it has done so in a nuanced way and at different speeds.

“Madrid is the most sought-after area for investors in search of residential products, specifically, it receives 19% of all real estate investment. Andalucía, Valencia and Cataluña are the following most popular autonomous regions, accounting for 16%, 15% and 14% of total investment, respectively” says the report. (…).

And, in the meantime, the appetite to buy homes in the prime areas of the major cities is such that investors and property developers are starting to opt mainly to buy buildings that need refurbishing in the centre of cities, to then bring new homes onto the market that better suit the demands of buyers. In 2015, investment in entire buildings accounted for 19% of the total, whilst land purchases represented 81%.

Type of home

(…). In general, the typical buyer profile nowadays is a family with medium to medium-high purchasing power, looking for a home to reposition or improve the one they currently own “in locations with services, transport, urbanisations with common areas and quality in the design of the materials and finishes”. Thus, the most sought-after product is now a three-bedroom house, with an average price of between €230,000 and €450,000.

Does the market in Madrid offer that product in sufficient quantity so as to not generate perverse tensions in terms of prices? The conclusion of the study by the aforementioned consultancy firm is….that the supply is still insufficient. The municipality of Madrid has around 3,000 new homes registered as available. Only 30% of those are located inside the M-30, where the scarcity of land is most acute and prices are highest. 20% are located in the area between the two main ring roads (the M-30 and the M-40) and the remaining 50% are in the PAUs and new developments, some of which are located beyond the M-40. Demand for housing is distributed in a relatively similar way, which according to Knight Frank avoids major imbalances between supply and demand (…).

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Colonial Will Sell Mature Properties To Fund Investment

2 February 2016 – Expansión

The real estate company Colonial plans to increase its forecast future investment (estimated to amount to €300 million p.a. on average), by selling certain buildings from its portfolio that it considers have now reached maturity.

At the end of 2015, Colonial announced a plan to invest €1,500 million over the next 5 years.

Original story: Expansión

Translation: Carmel Drake