BNP Paribas Buys Agbar’s HQ in Barcelona for €60M

8 January 2019 – Expansión

The real estate arm of BNP Paribas has acquired the headquarters of the Agbar group located in Barcelona for more than €60 million. The building forms part of the office complex known as Distrito 38 and until now was owned by the US bank Goldman Sachs, which purchased it as part of a batch of assets in 2015 for €355 million.

It was one of the last operations to be closed in 2018 in Barcelona but it has not been published until now. The building used to be managed by Patrimony, the real estate firm founded by Jordi Tremoleda, and the previous owner was advised by Savills Aguirre Newman during the sale.

The property was designed by the Japanese architect Arata Isozaki and has a surface area of more than 16,200 m2. It was first occupied by Agbar in 2015, when that firm moved from Torre Agbar, the iconic building designed by Jean Nouvel, to this office complex located on Paseo de la Zona Franca in Barcelona, in search of a more functional building. In theory, the water management company said that it was going to be a temporary home whilst a new corporate headquarters was constructed, but for the time being, there is no information that a new transfer is being planned.

Agbar left Jean Nouvel’s tower after having agreed its sale with the fund manager Emin Capital, but that operation was not executed in the end and the Socimi Merlin Properties ended up acquiring the building at the beginning of 2017 for €142 million.

Despite being a recently constructed building, Agbar’s current headquarters has already changed owner several times. The office complex was designed by the real estate company Habitat, when that property developer was still owned by the Figueras family. The office development was then acquired by Caja Madrid and, in 2015, by which point it was in the hands of Bankia, it was sold to Goldman Sachs. Sources close to the US investment giant said yesterday that in just three years the bank has achieved a very profitable operation.

According to provisional data, as we wait for the final operations closed in 2018 to be published, Barcelona recorded a good year in terms of real estate investment, albeit below 2017. The consultancy firm CBRE estimates that the outlay on buildings could have amounted to €1.973 billion, compared with €2.177 billion the previous year. A large part of these operations (46%) correspond to the office sector, which accounted for investment of €906 million, compared with €757 million in 2017. According to the same report, 68% of the purchasers that invested in Barcelona were foreigners. And of the domestic investors, half were Socimis.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

The Would-Base Developer of 13,000 Homes in Sevilla is Declared Insolvent

29 May 2018 – ABC Sevilla

Desarrollo Urbanístico Sevilla Este (Duse), the company that was going to build more than 13,000 homes on a 330-hectare site next to the airport, Parque Alcosa and Sevilla Este, has filed for creditor bankruptcy in Mercantile Court number 1 of Sevilla after accumulating debt amounting to €300 million. The company has filed for liquidation after waiting fifteen years for the Town Hall to execute general infrastructure work, for which it had paid the Town Hall €60 million when Alfredo Sánchez Monteseirín was mayor.

Just when it seemed that we had seen the last of the bankruptcy proceedings involving major companies in Sevilla, the demise of Duse comes as a wake-up call for the local real estate sector. The liquidation of this company means the suspension of the urban development that was set to become one of the great areas of expansion in Sevilla: Santa Bárbara.

Duse is owned by Sando Proyectos Inmobiliarios (53.9%); Realia Business (30.5%), linked to FCC; the investment fund Vertrauen Corporate, to which Unicaja sold its 5.99% stake in 2016; Bankia (2.7%) and Bankinter (1.12%), according to the Mercantile Registry. The company owns two plots spanning more than 330 hectares on the Santa Bárbara estate. Some of this land was expropriated in the 1970s and returned to its former owners over the subsequent decades, including the heirs of Augusta Peyré, which ended up selling their land to Sando in 2002.

Urban planning agreement

Before the new PGOU was agreed in 2006, the owners of those plots signed an urban planning agreement to collaborate with the Town Hall of Sevilla to execute the urban development plan. Thus, in 2003, at the height of the real estate boom, urban planning agreements were signed between Sando and the Leaders of the Urban Planning Department for the development of the two plots spanning more than 330 hectares.

In those agreements, the Town Hall undertook to establish a certain buildability ratio for the plots and the owners agreed to bear the acquisition cost of the general infrastructure work (involving the construction of streets, avenues, roundabouts…). The PGOU established that a maximum of 2 million m2 could be built in Santa Bárbara, which would allow for the construction of 13,853 private and social housing units (…).

In exchange for that buildability, Duse paid the Town Hall €15.4 million for the acquisition of land for the external general infrastructure and €42.6 million for the execution of the construction work. In total, Duse paid the Town Hall €58.1 million, according to sources consulted by ABC (…).

The municipal Government received that money but failed to execute the general infrastructure work following the end of the economic crisis (…).

In 2017, Duse filed a claim against the Town Hall for €75.4 million – the €58.1 million it had handed over plus €17 million to cover interest, damages and harm – for the breach of the urban planning agreements (…).

In order to execute the project, Duse signed a loan with Caja Madrid for more than €200 million, which has now risen to an outstanding balance of €300 million due to the non-payment of the principal and interest. As a result of the reordering of the banking sector and the transfer of toxic assets to the so-called “bad bank”, Caja Madrid’s loan for the development of Santa Bárbara ended up in the hands of Sareb.

Sareb’s unpaid loan

In March, the loan in question matured, and so Duse offered Sareb the option to renew it, now that the economic recovery has reactivated real estate demand, or take over the plots as “dación en pago”. According to sources close to the operation, Sareb rejected both proposals. The economic crisis and the failure by the Town Hall to execute the general infrastructure work have ended up economically suffocating the property developer, which has finally thrown in the towel and filed for credit bankruptcy, starting liquidation proceedings.

What will happen to those plots now? In all likelihood, they will go up for auction. If nobody is awarded them, they will end up in the hands of Sareb, which is now the counterparty of the almost €300 million loan that Duse has outstanding (…).

Original story: ABC Sevilla (by María Jesús Pereira)

Translation: Carmel Drake

Bankia Buys 10,000m2 Office Building In Madrid From Activum

3 March 2017 – El Confidencial

Bankia outgrew its Torre Kio offices in Madrid several years ago. In fact, it was more than a decade ago when the entity (still operating under the guise of Caja Madrid) began to consider moving offices. To that end, it acquired the imposing skyscraper from Repsol that Norman Foster had designed on the site of Real Madrid’s former Ciudad Deportiva.

But that operation ended up being disastrous for the bank, which paid €800 million to acquire the property and ended up selling it for half that sum. Nevertheless, Bankia’s expanding space requirements are a reality once again, and under the mandate of José Ignacio Goirigolzarri, the entity is embarking on a cautious but gradual policy of acquiring assets for corporate use.

In this vein, the entity acquired an office building from Activum in December. The property is located in the Julián Camarillo district of Madrid, a secondary area that is currently enjoying a revival, thanks to the boost being given by property companies such as Torre Rioja.

The building in question is located at number 32 on Calle Santa Leonor, it has a surface area of 10,134 m2, spread over two basement floors, with more than a hundred parking spaces, one ground floor, four upper floors and one top floor. Bankia has acquired this building to house all of the workers from its Multi-channel Department, which until last year occupied a rental property, specifically, the Torre Foster, which Amancio Ortega has just purchased. The entity has confirmed the acquisition of this building, but declined to reveal the amount paid, which according to market sources must have amounted to between €2,000/m2 and €2,500/m2, taking the final figure for the transaction to around €20 million.

This is the second major purchase of an office building that Bankia has signed in recent months, after it closed the acquisition of the property that houses its IT services in Las Rozas, for €130 million, from the Swedish group SEKin December 2015. Five years earlier, SEK had bought the building from Caja Madrid for €108 million, with the commitment from the entity to remain as the tenant (‘sale & leaseback’).

With these two operations, the entity has managed to balance out some of its past mistakes, given that, on the one hand, it has exchanged an expensive rent in one of the most iconic buildings in Madrid for a purchase that it has managed to make at a reasonable price and, on the other hand, it is readjusting the numbers for a sale that it completed during one of the toughest periods of the financial crisis.

Through this sale, Activum has completed its second divestment in Spain, following the sale of an office building on Calle Manuel de Falla to the Socimi Axiare. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Realia Finalises €700M Syndicated Loan To Repay Debt

23 February 2017 – Expansión

Realia is finalising a syndicated loan amounting to around €700 million. And with just the finishing touches left to complete, all indications are that the company controlled by Carlos Slim will reach an agreement with its new creditors within the next few weeks, just in time to cancel the debt held by its subsidiary Patrimonio before it matures, on 27 April.

In addition to CaixaBank, which will lead the new loan syndicate, Santander and Bankia have approved the operation and are negotiating with other banks to include them in the agreement as well.

“Realia Patrimonio is currently negotiating its refinancing with several entities”, explained the company in a document submitted to the CNMV, in which it warned that if, by the aforementioned maturity date, the entity has not reached an agreement with its creditors or it has not been possible to secure new financing sources, then “it will have a liquidity problem”.

In April 2007, Realia Patrimonio undertook a debt restructuring through the subscription of a syndicated loan with Caja Madrid and Banesto, which subsequently transferred part of its exposure to another 14 entities for an initial maximum amount of €1,087 million, which it has been repaying ever since. Currently, its debt balance amounts to around €680 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Santander & Bankia Join CaixaBank In €700M Loan To Realia

6 February 2017 – Expansión

The process to negotiate the refinancing of Realia is still underway. In the latest development, Santander and Bankia have announced that they will join CaixaBank in a new syndicated loan, amounting to around €700 million, which will allow the Spanish real estate company, which is controlled by the Mexican businessman Carlos Slim, to pay off its existing debt.

In this way, in addition to Caixabank, which will lead the new loan for the subsidiary Realia Patrimonio, Santander and Bankia have approved this operation. They are now looking for three more banks to join the agreement, since the idea is that six financial institutions will comprise the new syndicate, according to sources familiar with the process.

To this end, the coordinator has made contact with around thirty banks, including most major banks in Spain, as well as some foreign entities that have headquarters in Spain, such as ING, Crédit Agricole, Société Générale, Deutsche Bank, Aareal Bank and Natixis. Financial sources indicate that the players most interested in joining the process are Abanca, Sabadell, Bankinter and Popular.

The sales document containing the results of the due diligence was published on Thursday and it is hoped that the loan contract will be signed in April, which is when the real estate company’s existing debt, amounting to €680 million, is due to expire. CaixaBank engaged Deloitte in December, on behalf of the other financial institutions, to perform a feasibility analysis of the group’s properties, as well as a comprehensive due diligence; meanwhile, the law firm Uría will be responsible for drafting the new syndicated loan financing contract.

The negotiations to agree the terms of a new syndicated loan form part of the firm’s objective to fulfil its financial viability plan and reduce its level of indebtedness.

In April 2007, Realia Patrimonio carried out a restructuring of its financial debt by subscribing to a syndicated loan with two entities – Caja Madrid and Banesto. They subsequently assigned some of their exposure to 14 others entities, whereby taking the total number of FIs in the lender group to 16, for an initial maximum amount of €1,087 million, and Realia has been paying off the balance ever since. Moreover, these entities have since transferred some of the debt to other companies.

Within the framework of this strategy, at the end of 2015, Realia signed a refinancing agreement with the debt-holding entities of its residential activity – another one of the company’s business lines – whose capital pending repayment amounted to more than €800 million.

Following the restructuring of the residential business debt and after incorporating the debt outstanding on the participation loan that Inversora Carso purchased from Sareb, Realia’s gross financial debt position stood at €941 million at the end of Q3 2016, down by 46% compared to the same period in 2015.

Original story: Expansión (by R.Arroyo)

Translation: Carmel Drake

Bankia & Apollo Go To Court Re Sale Of Finanmadrid

3 October 2016 – Expansión

Both entities are waiting for the discrepancies that arose from the sale of Finanmadrid to be resolved. The sale was completed in 2013 for €1.6 million

Fracciona Financiera Holding, the subsidiary of Apollo, filed the first lawsuit, in which it claimed €8.5 million from Bankia due to discrepancies in the sale and purchase contract based on the determination of the sales price for Finanmadrid.

The contract included clauses that have an impact on the basis of the evolution of various parameters. These conditions have been common in multiple sales operations closed in the financial sector since the outbreak of the crisis. The asset protection schemes (EPA), which cover the buyers of former savings banks, are the most visible example of these types of operations.

Bankia has responded to the lawsuit filed by Apollo, with its own claim for €6.4 million.

Finanmadrid, which used to specialise in offering consumer credit through retailers and car dealerships, has now been integrated into Avant Tarjetas, a subsidiary of Evo Banco, controlled by Apollo. Previously, it was integrated into Fracciona Financiera Holding. In the company’s accounts from last year, the audit report explains that “in the opinion of the company’s legal advisors, an unfavourable outcome from the lawsuit (with Bankia) is remote, nevertheless, the shareholder (Apollo) would financially support any contingency that may arise in the event that no provision has been recognised”.

Before the integration, Finanmadrid reduced its share capital by €2.24 million to absorb losses and so it was left at €2.79 million.

Apollo’s claim against Bankia forms part of a broad range of claims against the entity chaired by José Ignacio Goirigolzarri. In total, the bank faces claims amounting to €390 million, not including the claims relating to its debut on the stock market and the sale of its preference shares.

Claims

The largest claim, amounting to €165 million, is one presented by ING Belgium, BBVA, Santander and Catalunya Banc against Bankia, ACS and Sacyr. (…).

The construction group Rayet also claims €78.2 million from Bankia for what it considers are accounting irregularities and for differences in the valuation of plots of land linked to the debut of Astroc on the stock market in 2006, an operation piloted by the former Caja Madrid.

The bank has 305 legal proceedings open relating to derivatives with claims amounting to €38.8 million.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake

The Hotel Industry Warns That A Moratorium Could Discourage Investment In Madrid

13 February 2016 – Expansion

City occupancy Level audit ordered by the mayoress, Manuela Carmena, threatens to jeopardize the recovery of the sector and drive away investors.


The hotel industry stands up for the potential of Madrid as a tourist destination and warns that if the occupation audit ordered a few days ago by the city council derives in a moratorium, it will drive away foreign investment.

The industry welcomes the initiative of the Mayoress, Manuela Carmena, provided it is addressed to make sense of hotel supply growth, which is experiencing a boom of new projects in the last months after several years in dry dock. 
This is precisely what chains and investors reproached Ada Colau, its counterpart in Barcelona, when she decreed the suspension of ongoing projects last summer.
But if the audit is a prior step towards a moratorium similar to that of Barcelona, the opinion is also unanimous. It will suddenly dissipate the interest of domestic and foreign investors after a record year in which Madrid beats Barcelona as top destination in the urban segment, with EUR 589 million in transactions. 
This interest is still held at the start of 2016 although investment growth usually lowers in the first months of the year “Madrid is still a preferred investment objective, ahead of Malaga, Valencia, Seville, Bilbao and Barcelona, where having a hotel means having a treasure, but behind holidays hotels, where there is a genuine investment fever,” says Miguel Vazquez, partner in charge of hotels at Irea consulting company. “The investment market is not as it ended in 2015 but not for a lack of interest, but lack of product,” agrees Inmaculada Ranera, CEO of Christie & Co. However, there are factors that cast uncertainty. On the one hand, the political context and the formation of the new government. And, secondly, the give and take between the city of Madrid and Dalian Wanda on the rehabilitation of Edificio España.

In the sector they suggest that the decision of the Chinese investor, who has hired JLL to find a buyer for the property, could not be definitive but a simple negotiating tactic, although they admit it has created legal uncertainty. 
At the moment, the risk is limited and most investors are still looking for good deals, although more carefully. The roadmap established by Carmena and her team once the report on their hands could nonetheless reverse this situation. In the sector it is believed that a moratorium would paralyze the recovery of Madrid as a destination. And above all, they argue that it would be an illogical measure. 
”Colau had it on her political program, but Carmena did not have it”, said Miguel Casas, Head of CBRE Hotels. 
Madrid – hotel company heads say, does not have the pressure suffered by Barcelona due to the boom in tourist apartments and what it needs is more international visitors. In Barcelona these represent 80% of the total; in Madrid, they are below 50% -. According to Luis Arsuaga, executive vice president of JLL Hotels, “if revenues per room or tariffs came down, it would make sense to think about it but, on the contrary, the occupation is getting better and better.” 
Regulation

In this line, say hotel companies, more hotel space and foreign brands, a coordinated tourism promotion between City Hall and Community and – above all, the illegal supply to be regulated and not to limit the private sector is what is really needed. According to Irea, there are 22 ongoing projects totaling 6,000 hotel places and an economic impact of EUR 145 millioN which could be affected by a sudden moratorium like that of Barcelona. Among them, for example, projects to convert the former headquarters of Caja Madrid and the building that houses Café Berlin into a hotel; or the expansion of Asturias Hotel. 
Moreover, according to these estimates, each hotel place in Madrid generates 24,155 direct and indirect Euros and 22 jobs are created per 100 spaces. Since 2008, the number of stays increased by 2.5 million, which has resulted in an impact of EUR 380 million. 
Apart from the withdrawal of the investment, a moratorium would “create a bubble like the one Barcelona is living, soaring the value of operating hotels and tourist accommodation,” says Bruno Hallé, Magma HC partner.

Original story: Expansion (by Yovanna Blanco)

Translation: Aura Ree

Caja Madrid’s Former HQ Is Up For Sale

5 November 2015 – Cinco Días

The former headquarters of the Caja Madrid is up for sale. La Fundación Montemadrid has engaged Irea to search for a buyer for the historical building, located a short distance from the Puerta del Sol in Madrid.

La Fundación Montemadrid, formerly known as ‘Fundación Obra Social y Monte de Piedad de Madrid’, plans to sell the whole property, excluding the premises where Monte de Piedad undertakes its activity, which will be made independent from the rest of the building. In total, the property has a surface area of 25,000 m2, which maybe used as a hotel, retail or office space.

Sources in the market consider that it is likely that the building will be converted into a “luxury five-star” hotel, which may also include some retail space.

If the building is converted into a hotel, then it would be highly coveted by international operators, at a time when Spain is under the spotlight thanks to the decision by Four Seasons to operate the hotel in the Canalejas Complex, and the purchase of the Ritz by Mandarin and Olayan. Meanwhile, in the Plaza Mayor, the Portuguese group Pestana is planning to open a five-star hotel in the Casa de la Carnicería.

Domestic and international investors, both hotel chains and investment funds have already expressed their interest in the property, which could represent the gateway into Madrid for franchises such as Hyatt, Kempinski, Hilton, W and Shangri-La. The future hotel would have around 200 rooms, as well as terrace space measuring 3,000 m2, one of which would be on the roof, with panoramic views of the city. The price of the property could exceed €100 million, and the buyer would also have to factor in the cost of the refurbishment.

No architectural protection

One of the features of the property is the lack of architectural protection, with the exception of the baroque doorway that overlooks the Plaza de las Descalzas. This makes the building a unique opportunity in the centre of the capital, according to market sources, vis-à-vis the Canalejas project, which is being developed by Villar Mir, whose construction has been unblocked this week by the courts, and Edificio España, acquired by the Chinese group Wanda, which had requested permission to dismantle the protected façade of that building brick by brick, to then rebuild it. That request was rejected by the Local Historical Heritage Commission of Madrid. Market sources believe that the operation could be closed by the end of this year or the beginning of 2016, and that the property, if it does end up being converted into a hotel, would open its doors in 2018, after the Four Seasons.

Original story: Cinco Días

Translation: Carmel Drake

Amancio Ortega’s RE Jewels In The Heart Of Madrid & BCN

26 March 2015 – Expansión

The largest shareholder of Inditex has an extensive real estate portfolio that includes properties and retail stores on the two most desirable streets in both cities.

They are the most sought-after streets in Spain for any real estate investor. On the one hand, Paseo de Gracia, in Barcelona, the star shopping street in the Catalan capital. On the other hand, the Paseo de la Castellana, in Madrid, an object of desire for any investor and a prime office location. As such, both have piqued the interest of Amancio Ortega, who owns more than ten buildings on the two thoroughfares.

Through Pontegadea, the company that the founder and majority shareholder of Inditex channels his investments through after closing his Sicavs, Ortega has purchased six buildings on the Catalan avenue and another five on the Madrid street.

In the case of the Paseo de Gracia, the most recent acquisition was made last year when Ortega purchased an office building located at number 1 on the street, on the corner with the famous Plaza Cataluña, for €44 million. This space, which has been leased to Banesto until now, will be converted into an Iberostar Hotel. A few months earlier, he acquired the commercial premises in the same building for €80 million, which are leased to Apple (see picture above). That US multinational is not Ortega’s only illustrious tenant; others include Fnac, Baker & Mackenzie, Burberry and Google.

In March 2012, Pontegadea acquired another building also on the Paseo de Gracia. In that case, Ortega’s company paid Sacyr €53.5 million for the building located at number 56. Measuring more than 9,000 square metres, it is leased to the British textile manufacturer Burberry. The Inditex owner is also the landlord of the building at number 93.

Madrid

The purchases made in the last decade have made Amancio Ortega one of the largest property owners on Madrid’s main thoroughfare: the Paseo de la Castellana. The owner of Zara joined the select club of property owners in that area in 2004, when he acquired number 92 (that same year he made a joint purchase with Metrópolis of an office building on the Paseo de Gracia, 16, which was converted into luxury housing). On the Castellana, Ortega also owns number 35, which he acquired in 2005; and number 79, the former headquarters of Axa, which he renovated to create a new office building with a shopping area, now leased to Fnac and Habitat.

But, undoubtedly, the jewel in Ortega’s crown in Madrid was acquired at the end of 2011, when he signed an agreement with FCC to purchase the Torre Picasso. He paid €400 million for the skyscraper that sits in the heart of the city’s financial district, just a few metres from the Paseo de la Castellana – a record figure for a single building, second only to the €815 million that the then Caja Madrid invested in the Torre Foster.

Nevertheless, it was not the first time that Pontegadea had paid so much in a real estate transaction. At the end of 2007, Amancio Ortega paid €458 million to Santander for the acquisition of ten buildings located in several Spanish cities, which included Castellana, 24 and Paseo de Gracia, 5.

These two great Spanish streets are just an example of Ortega’s extensive property holdings, which also include buildings leased to Inditex companies, such as for example Serrano, 23, in Madrid, which is leased to Zara. In the last full financial year (2013), Pontegadea’s assets were valued at €4,519.5 million and they generated a profit of €93.3 million, compared with €70.5 million a year earlier.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake