Tag: candidates

Deutsche, Apollo & Cerberus Compete For BBVA’s Largest RE Development

21 June 2017 – Voz Pópuli

BBVA has three multi-million euro deals on the table to acquire some of its problem assets. In the last few days, the entity chaired by Francisco González has received binding offers from three funds to acquire the portfolio known as Project Jaipur, comprising €600 million in unpaid loans linked to real estate developments.

The three candidates to buy this portfolio, the largest that has been placed on the market to date by the entity, are Apollo, Cerberus and Deutsche Bank, according to financial sources consulted by Vozpópuli.

According to the same sources, these funds have put around €200 million on the table, and the best positioned of the three is the German fund, pending the outcome of the negotiations. BBVA and Deutsche both declined to comment. The other two candidates, Apollo and Cerberus, have their own real estate platforms in Spain, Altamira and Haya, and so they almost always analyse these types of operations.

The Spanish bank now has a few days to decide the winner of the bid, although the result will be announced imminently given the interest in closing it before the end of the first half of the year, and thus being able to reflect it in the results that will be presented in a month’s time.

Selling off property

According to the latest figures, at the end of March of this year, BBVA held almost €6,500 million in property developer loans, of which only €1,700 million were up to date. Another €4,750 million were doubtful, with a provisioning level of 56%. Almost all of these loans were secured by land and finished buildings.

In addition, BBVA has another €13,500 million in foreclosed assets, with a coverage ratio of 63%. On Monday, the CEO of the entity, Carlos Torres, insisted that cleaning up this property is one of the group’s major priorities, in order to whereby improve the profitability of Spain. At the presentation of its last results, it announced a period of three years to achieve its goal of cleaning up its balance sheet.

Torres shielded himself behind the property balance to explain why the entity he leads did not present a bid for Banco Popular, after studying its possible purchase together with Banco Santander just two weeks ago. In the end, Popular was acquired by the entity presided over by Ana Botín, for the price of €1, plus a capital increase of €7,000 million.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Deutsche Bank Buys Diagonal Mar For €495M

2 August 2016 – Expansión

Yesterday, Deutsche Bank completed the purchase of the Diagonal Mar shopping centre from Northwood for around €495 million, making it the largest shopping centre transaction in the history of the Spanish market.

In this way, although the final price has been adjusted downwards with respect to the non-binding offer presented by the entity (which valued the asset at €505 million), it still exceeds the €451 million that Intu Properties paid for Puerto Venecia (Zaragoza) and the €375 million that Klépierre spent on the acquisition of Plenilunio (Madrid).

The operation also generates significant capital gains for Northwood, which acquired the property from the Irish bad bank Nama for €150 million in 2015. CBRE has advised this operation on the sell-side, whilst Deloitte advised the buy-side.

Background

The shopping centre, located in district 22@ in Barcelona, has passed through many hands since the real estate company Hines was awarded the mixed use project at the end of the 1990s. The project included a residential area, offices, hotels and a large shopping centre, with a constructed surface area of 100,500 sqm and a gross leasable area (GLA) of 87,000 sqm, as well as 5,000 parking spaces.

In 2002, the German investment fund Deka paid around €240 million for the property, which, was subsequently sold, in 2006, to the Irish investment group Quinlan for €300 million, in its first operation in Spain. Nevertheless, following the burst of the Irish bubble, the asset was taken over by the banks.

Three years after that operation and in a very different economic environment, the property has generated a lot of interest. Specifically, 18 candidates submitted non-binding offers for the property, including Axa, Invesco, Hines, Unibail, the Singapore sovereign fund GIC, Blackstone and the Socimi Merlin, which was the only Spanish company that submitted an offer, for less than €450 million. Only four candidates participated in the final phase: CBRE Global Investment, ECE, Henderson TH and Deutsche Bank.

In order to reposition the asset, Deutsche Bank plans to invest €30 million over four years in a project that includes restructuring the top floor of the shopping centre to create more space for high-end fashion brands (€15 million), refurbishing the other floors with a budget of around €8 million and renovating the centre’s exterior façade for almost €7 million.

With this renovation, the purchaser expects to strengthen Diagonal Mar’s competitive position and increase its gross operating profit (EBITDA) over five years from €20 million in 2015 to more than €26 million.

Impact

The shopping centre, opened in November 2001, was designed by Jean-Louis Solal and the architect Robert A.M. Stern. Diagonal Mar is located in a prime spot, approximately five kilometres north east of the city centre. With more than 200 outlets dedicated to fashion, restaurants, leisure, a bowling alley and other services, the centre has 4,800 parking spaces and an outdoor space: La Terrassa del Mar. Diagonal Mar received 16.7 million visitors last year, up by 2.3% and generated net sales – excluding Alcampo (which falls outside of the transaction perimeter) – of €210 million, up by 8.5%. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Amancio Ortega Offers €490M For Torre Cepsa

28 June 2016 – El Confidencial

Amancio Ortega has entered the bidding, through Pontegadea, to acquire Cepsa’s skyscraper, by placing an offer on the table worth €490 million, according to sources familiar with the operation.

The owner of Inditex is thereby setting himself up to undertake his largest operation in the country to date, in a deal that would rank well above the figure of €400 million that he paid for the iconic Torre Picasso, the building he acquired from Esther Koplowitz almost five years ago.

Then, like now, the businessman approached the operation without the need to request financing from the banks – he has a wealth that differentiates him from the other candidates and enables him to bid slightly below the other interested parties.

In addition to Pontegadea, two other funds have expressed their interest in putting €530 million on the table, according to sources. Clearly, those bids are higher than Ortega’s, but they are linked to certain financial and payment structures that are a long way from offering the guarantees that Pontegadea provides to all vendors.

The hunt

Thanks to his dividend from Inditex, the businessman receives an annual cheque amounting to €1,100 million, which he uses, almost entirely, to acquire properties. This policy has converted Pontegadea into one of the largest real estate owners in Spain, comparable only with the newly created Merlin-Metrovacesa and Colonial.

Nevertheless, the dimensions of this remuneration mean that it is becoming increasingly difficult for the second richest man in the world to find opportunities in Spain. His interests focus on operations with at least eight zeros in the price, and as a result he has multiplied the number of operations undertaken overseas in recent years. (…)

Despite his financial prowess and the increasing challenge of finding desirable properties, Pontegadea remains faithful to its conservative policy and avoids processes that involve increasing the price in the final stretch.

In fact, its offer for Cepsa falls a long way below the €550 million asking price that the Sheik Khadem al Qubaisi hopes to obtain. The Sheik owns the purchase option over the Madrilenian skyscraper and has until September to exercise it if he wants to stop Bankia from taking over the asset once again. (…).

Nevertheless, Pontegadea is remaining firm in its valuation of the building, a figure that, if they end up closing the operation, will be significantly lower than the €558 million paid by the Philippine Group Emperador to acquire Torre Espacio. Nevertheless, according to several experts in the sector, there are important differences between the two operations, not least the higher risk of having OHL as a tenant rather than Cepsa.

The 248 metre tall skyscraper, designed by Norman Foster, has a leasable surface area of 56,000 sqm, spread over 34 floors. The sale has sparked interest from large institutional investors, such as Invesco, AEW, Deka, Hines, Patrizia, Etoile Properties and Axa.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Hotel Las Palomas Sold To Palia Hotels For €13.1M

18 April 2016 – Diario Sur

On Thursday, the iconic Las Palomas Hotel in Torremolinos was awarded in an auction to Palia Hotels, a Mallorcan chain that already runs another property on the Costa del Sol, the former Roc de Benalmádena Costa (now called Hotel Palia La Roca). The Balearic group has committed to pay €13,100,000 for the property and its main facilities with the aim of renovating them and reopening the hotel. The auction was conducted in person in the presence of a notary and was “very exciting”, according to the lawyer Ana Alonso, the bankruptcy administrator of the company that used to operate Las Palomas. “Four candidates were involved and the two highest offers were selected to participate in the final phase, and the bids then gradually increased”, she explained. It was such a close bid that the losing company, also Mallorcan based, offered €13,050,000.

Palia will now have to wait for a month for the acquisition deeds to be signed. If any problems arise with the buyer during that period, then the company that offered the second highest bid would have the opportunity to purchase the property. For Alonso, the result is definitely “good news”, given that the money obtained from the auction will be used to pay off the debts with the Tax Authorities, Social Security, the Town Hall of Torremolinos (which will receive €3.5 million for the IBI that the hotel owed and the profit from the sale) and the employees.

Yesterday, (the trade union) Comisiones Obreras expressed its satisfaction because “the almost 100 staff will receive their salaries and compensation payments” after four years of waiting. The total liabilities of the bankrupt company amount to around €15 million. Alonso said that every effort will be made to ensure that the ordinary creditors will also be repaid. However, the senior creditors will have to accept a discount of some kind for that to happen. “We were locked inside the hotel around the clock between June 2012 and June 2015. Our only aim was to keep our jobs and prevent the terrible management of the Puche family from dragging the workers and the hotel into ruin”, said José Quintana, member of the company’s Board.

The buyer will have to invest between €3 million and €6 million on the renovation work before it reopens the hotel, according to Ana Alonso. The four-star Las Palomas Hotel filed for bankruptcy in 2011 and for liquidation in April 2013.

Original story: Diario Sur (by Nuria Triguero)

Translation: Carmel Drake

‘Ciudad de la Luz’ Will Be Sold For At Least €47M

22 February 2016 – Expansión

The second attempt is underway to auction off the Ciudad de la Luz cinematographic studios in Alicante, which are owned by the Generalitat Valenciana. The sale is being forced by Brussels, which has ruled that the €265 million invested by the Valencian Administration represented unlawful State aid.

The new round of auctioning will take place after just one offer was received during the first round and that was disqualified for failing to comply with the conditions.

The new documents value the complex in Alicante at €94.4 million, but financial bids may be submitted with a maximum discount of up to 50%. In order words, the minimum bid that can be made for the entire Ciudad de la Luz complex stands at €47.2 million.

Brussels has finally approved the new documents prepared by the Valencian Government after months of negotiations, but it has imposed several conditions on the sale. Thus, the European Commission states that the complex may be sold in its entirety or on a piecemeal basis, in six lots, contrary to the aspirations of the Generalitat, which has also failed to defend the use of the studios for cinematographic purposes. The documents state that the studios may be sold for use by any type of industry and to the highest bidder.

Nevertheless, the Consell has succeeded in ensuring that the starting figure for the bidding is much higher than the previous one, given that the last auction, which was suspended in August last year, allowed offers to be made for as little as €20 million. Moreover, the potential purchasers must submit a business plan, which may or may not be linked to the film industry. Also, the proposed activity must not generate noise or environmental damage, and the site may not be used for speculative purposes. The Administration has excluded three buildings from sale: the training centre, the offices and the catering facilities.

Brussels will decide

Investors now have a period of two months, ending on 18 April, to submit their proposals. At that point, the purchase offers will be assessed and the winner will be chosen, so that the deal can be closed in June. Brussels reserves the right to have the last word and will have to approve any deal.

The current CEO of the public company Ciudad de la Luz, Miguel Mazón, said yesterday that the Government had contributed around €500 million in public money to the complex and its activity since Eduardo Zaplana introduced the flagship project in the year 2000.

Original story: Expansión (by Mª. J. Cruz)

Translation: Carmel Drake