Neinor Withdraws from the Purchase Process of ‘Solvia Desarrollos Inmobiliarios’

28 February 2019 – El Español

Neinor Homes is not going to be one of the candidates that submits an offer to acquire Solvia Desarrollos Inmobiliarios (SDI), the subsidiary of Banco Sabadell. The real estate company has been studying the operation for a while but has concluded, following its initial analysis, that the numbers do not fit with its investment philosophy.

That is according to explanations provided by Neinor’s CEO, Juan Velayos, who acknowledged that he has the sales prospectus on his desk but that at the moment, “it is not a priority” for him. We are talking about a company that has a portfolio of 300 buildable plots and which the bank led by Jaime Guardiola put up for sale in January.

Velayos himself acknowledges that he “loves the portfolio”, but he’s not so convinced by the numbers being seen in the market”. (…). “I’m afraid that it is not going to be for us from the perspective of a disciplined investor”, he said. The first valuations of SDI’s land are in the region of €1.3 billion, given that the portfolio also includes 130 real estate developments in different areas with 5,000 homes under construction.

Indeed, the price of land is one of Neinor’s obsessions. Over the last year, it has purchased 2,400 plots in which it has invested €95 million. Neinor’s CEO believes that his firm has adopted a prudent policy in this regard (…).

As a result, it looks like Neinor will not be one of the candidates to bid for Sabadell’s subsidiary in the end. The bank is awaiting possible expressions of interest for its land company. The intention is to receive binding offers before the end of this quarter and to settle the sale during the month of April.

Interested parties

In terms of the parties that are interested in SDI, they include some of the main international funds such as Cerberus, Värde, Oaktree and Blackstone (…).

The sale of SDI comes after Banco Sabadell sold Solvia, its real estate servicer for €300 million, for which it obtained capital gains of €185 million (…).

Original story: El Español (by Arturo Criado)

Translation: Carmel Drake

Villar Mir Sells its 32.5% Stake in Canalejas to OHL for €50 Million

14 August 2018

Grupo Villar Mir has left the Canalejas project (Madrid), selling the 32.5% that it held in the development to its subsidiary OHL for 50 million euros. In this way, Canalejas will be equally owned by OHL, which already had 17%, and Mohari Limited, a company controlled by the Israeli executive Mark Scheinberg. Villar Mir sold 50% of Canalejas to Mohari in February 2017 for €225 million.

The transaction also includes the acquisition, by OHL Desarrollos, of the credit rights agreed to by Grupo Villar Mir with regards to the project for €9.8 million.

As the company explained to the CNMV, this price could be adjusted upwards to reach a maximum of €60 million (an additional €10 million). depending on “possible capital gains generated in a subsequent sale of these shares.”

Reduce debt

This operation will allow Grupo Villar Mir to continue reducing its debt. The Spanish industrial corporation sold 12% of the Spanish construction company last July for €98 million, reducing its stake in OHL to 38% compared to its previous 50%.

The Canalejas project will feature the Canadian luxury chain Four Seasons’ first hotel in Spain, a commercial complex and exclusive homes. The complex will bring together seven historic buildings, some of them built at the beginning of the 19th century, in a single unit, through an investment of 525 million euros.

Expansion – Rebecca Arroyo

Blackstone Buys Lar’s Logistics Portfolio for €120M

18 July 2018 – Expansión

Blackstone has purchased the Socimi Lar España’s logistics portfolio, comprising five warehouses and a plot of land for development, for €119.7 million. That sum represents an appreciation of 83% with respect to the purchase price of €65.6 million.

Specifically, four of the warehouses acquired are located in Alovera (Guadalajara), one is located on the Juan Carlos I Industrial Park in Almussafes (Valencia), whilst the land to be developed for logistics use is located in Cheste (Valencia).

The five logistics warehouses span a combined surface area of 162,000 m2 and have an occupancy rate of 100% – all of them have stable rental contracts. Meanwhile, the surface area in Cheste spans 182,000 m2.

The warehouses in Alovera were acquired between August 2014 and May 2015 and the property in Almussafes was purchased in May 2015. The advisors to Lar España on the operation have been CBRE, Pérez Llorca and Hill International.

Asset rotation

This operation forms part of the asset rotation process that the company launched last year. Specifically, the Socimi’s first divestment came in September 2017, with the sale of an office building in Arturo Soria, and since then, it has carried out two other sales.

Together, the divestments carried out by Lar España to date amount to €265 million, more than half the €470 million in divestments forecast in the business plan to 2021.

The President of Lar España, José Luis del Valle, said that the company’s plan involves selling those assets that are not strategic to focus on the retail portfolio.

In addition to the asset sales, the company’s business plan involves investing €220 million in shopping centres and retail parks. Within the context of that plan, Lar purchased the Rivas Futura shopping centre for €62 million and the Abadía shopping arcade for €14 million.

In parallel, the Socimi plans to invest €247 million in commercial developments and €49 million to improve its retail assets.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Mapfre Divested Non-Strategic Assets Worth €130M in 2017

7 May 2018 – Eje Prime

The insurance company Mapfre is still interested in the Spanish real estate sector, but it is divesting certain assets that it considers to be non-strategic in the country. The company sold properties worth €130 million in the Spanish market last year, according to information presented in the group’s annual report for 2017. The most high profile sales were carried out in Madrid and included the Luchana building, amongst others.

During the year, divestments amounting to around €130 million were carried out in Spain and Portugal. Highlights include the sale of a plot of land in Valdemarín (Madrid) for €5.5 million and two plots in Palma de Mallorca for €22.5 million, plus a series of other smaller assets for €24.5 million in total.

One of Mapfre’s main divestment operations last year was the sale of the Luchana building to GMP for €72 million. It is an exempt asset, dating back to the beginning of the 1980s, located just six minutes from Paseo de la Castellana by foot.

GMP is currently renovating that property, which spans a gross leasable area of 14,424 m2, spread over eleven above ground floors in total, ten office floors and one commercial-use floor at street level. Its main tenant is Mapfre, which houses the headquarters of its General Regional Management team for Madrid and Verti in this building.

In total, all of the operations signed in the Iberian Peninsula generated gains of more than €65 million for Mapfre, according to the annual report.

Investment in its asset stock in Spain 

But Mapfre has not only been selling assets in Spain, it has also been feeding its portfolio by investing in the renovation of its properties. The insurance group has undertaken improvement work on its portfolio in Madrid, where it has finished work on an asset it owns on Calle Sor Ángela de la Cruz amounting to €8 million, where the General Regional team for Madrid is located; and work on Plaza de la Independencia amounting to €7.39 million. That building has already been leased out for the most part (70% of the leasable surface area).

In addition, Mapfre has started refurbishment work on the facilities of its property on Calle Mateo Inurria, a building that has been leased in its entirety to the Ministry of Finance for a rental cost of €5.04 million per year. Improvement work on its offices on Calle General Perón is still underway with an investment of €5.81 million in 2017. Work is also still underway on the tower in Barcelona amounting to €22 million in 2017, which is expected to be completed during the first half of 2018.

At the end of 2017, the market value of Mapfre’s real estate investments in Spain amounted to €2.945 billion, “with latent capital gains of more than €750 million”, explains the group. Of the total, approximately 58% corresponds to properties for own use, and the remaining 42% relates to properties that are rented out to third parties or are on the market for sale. The occupancy ratio of the rental properties amounts to 83%, considering that at the moment, more than 7,500 m2 of its space is being renovated for repositioning on the market from 2018 onwards.

Commitment to Europe 

In March, the insurance group announced its partnership with GLL to launch a fund to invest up to €300 million in the purchase of prime offices in Europe over a two to three year period.

The new vehicle launched by Mapfre and GLL aims to enter large capitals cities across the continent (Germany, France, Italy, the Netherlands and Belgium) with the aim of achieving returns of between 4% and 6% per year and diversifying its portfolio against other types of financial assets (…).

Original story: Eje Prime

Translation: Carmel Drake

VBARE Appoints Fabrizio Agrimi As New CEO

20 November 2017 -Revista Centros Comerciales

On Monday, VBARE Iberian Properties Socimi (VBARE) announced the appointment of Fabrizio Agrimi (pictured below) as the new CEO of the Socimi. Agrimi is a grand connoisseur of the real estate sector and has extensive experience in investments, mergers and acquisitions, not only in Spain but also in the United Kingdom and Italy. He has worked for a number of high profile international companies and until May 2017 he was Managing Director and Partner at Altan Capital.

Prior to joining Altan Capital in 2007, Fabrizio Agrimi formed part of the Investments Department at Aguirre Newman (2004-2006), where he participated in the acquisition, management and sale of numerous real estate assets. Prior to that, he worked in Milan and London for the law firm Vita Samory, Fabrini e Associati (now part of Orrick) where he was a member of the M&A, Private Equity and Financial Services teams.

Fabrizio Agrimi holds an MBA from the ESADE business school (Barcelona) and a degree in Law from the University of Trento. Whilst at university, Fabrizio completed two international internships at the law firm Sebastià Roca i Associats (now part of Roca Junyent) in Barcelona and at the European Parliament in Luxembourg.

With this addition, VBARE strengthens its team and consolidates its base for growth. VBARE recently presented its results for the first nine months of the year, during which time it generated a profit of €2,177,000, resulting primarily from the appreciation in value of its real estate portfolio. Revenues from rental income amounted to €781,000, which represented an increase of 188% with respect to the same period last year. The total value of VBARE’s property portfolio amounts to €28.2 million, up by 17% compared to the end of 2016.

Original story: Revista Centros Comerciales

Translation: Carmel Drake

Deutsche Bank: BBVA & Unicaja Cut Their Toxic Assets By 15% In 2017

14 November 2017 – Expansión

Deutsche Bank report / Sales to institutional investors of non-performing loans and properties allowed BBVA to reduce its stock by €4,589 million. Meanwhile, Unicaja has decreased its load by €818 million.

The clean up of the banks’ balance sheets is picking up speed thanks to the increasingly common sales of large property portfolios to specialist funds.

Between January and September, the average decrease in the stock of the large banks amounted to 6%; moreover, that figure reached 15% in the case of BBVA España. The next entity in the ranking was Unicaja, with a decrease of 14%.

During the third quarter, Santander España distorted the statistics with the sale of 51% of Popular’s toxic assets (€30,000 million) to Blackstone.

Project Jaipur

BBVA has closed several institutional sales in recent months. One of them, Project Jaipur, was sold to Cerberus, the fund with which it is now negotiating a macro-operation, which would include the sale of its real estate platform Anida. That portfolio comprises loans to property developers backed by real estate guarantees and has a gross nominal value of €600 million.

In February, BBVA sold a batch of 3,500 properties to the fund Blackstone. Another one of the representative operations of the year was the sale of 14 office buildings to Oaktree for €200 million.

Unicaja has sold several plots of land to various real estate developers in recent months. “Unlike in other quarters, during the third quarter of the year, most of the reduction in the banks’ problem assets came from the sale of foreclosed properties, despite the substantial decrease in activity in August”, says the recent report from Deutsche Bank.

Between June and September, CaixaBank was the most active entity, with sales worth €380 million.

The report cites several factors to explain the intensification of this real estate clean up. The first is the increase in the coverage ratio of these toxic assets on the banks’ balance sheets. “The volume of sales is directly linked to the coverage ratio”, it says.

The second is that many of these sales are generating capital gains. According to the data compiled by Deutsche Bank, Unicaja made €40 million in the third quarter and CaixaBank and Sabadell earned €6 million and €7 million, respectively. “These gains will allow them to accelerate future sales”, says the report.

Final quarter

The last quarter of the year tends to be the strongest for these types of operations. Sareb has put a package of doubtful loans up for sale, the vast majority of which are unsecured, for €2,600 million. “We expect to see an additional effort from the banking institutions to reduce the stock at year end. Having said that, the political uncertainty in Cataluna and the upcoming elections may affect prices and/or cause delays in institutional sales”, says Deutsche Bank, which forecasts further stock decreases of 15% in 2018 and 2019. According to its data, CaixaBank, Santander and BBVA are the banks with the highest volume of toxic assets. Since 2015, BBVA has decreased its real estate balance by 27% and Unicaja by 24%.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

Servihabitat: House Prices Will Rise By 4.3% In 2017

7 December 2016 – Expansión

(…) According to Julián Cabanillas, CEO of Servihabitat, the findings from his company’s latest report show that “the trend  (in terms of house prices) will continue to rise in 2017, but at a more moderate rate”.

According to Servihabitat’s forecasts, house prices will rise by 4.6% this year and by 4.3% next year; moreover, all of the other indicators in the sector will continue to make significant improvements. For example, the stock of unsold new homes will decrease in 2017 to 315,000, the lowest figure since 2006, before the real estate bubble burst. In addition, the ratio of the number of years’ salary it takes to pay for a home will amount to six years – three years fewer than in 2007.

During 2016, the construction of new homes will soar by 20% and the gross rental yield (excluding capital gains) will rise to 5.4% (10% if we include capital gains over one year, which the Bank of Spain does in its calculations).

In 2016, property will register its highest price increases since the outbreak of the crisis. The rise of 4.6% predicted by Servihabitat is the highest annual figure since 2007. In 2017, the increase will slow down slightly (by three tenths of one per cent), but residential property prices will increase in every autonomous region. Extremadura will lead the price rises, with an increase of 7.3%. It will be followed by Aragón (+6.9%), Navarra (+6.7%), La Rioja (+6.2%), Murcia (+5.6%), Balearic Islands (+5.4%), Canary Islands (+5.4%), Community of Valencia (+5.4%), Castilla-La Mancha (+5.1%) and Asturias (+4.5%).

Thus, house prices will increase by more than average in ten autonomous regions next year, including Cataluña (+4.3%), and will increase by less than average in six regions, namely: Andalucía (+0.7%), Galicia (+1.2%), País Vasco (+1.5%), Cantabria (+3%), Madrid (+2.4%) and Castilla y León (+4.1%).

Three speeds

Cabanillas points out that the housing market is now operating at three speeds. “The first involves areas where demand is high and supply is at “technical levels””. That is the case in Madrid and Barcelona, where many more homes are being sold than in the rest of the country. (…).

The second speed is happening in “areas where demand is increasing and stock exists”, said the CEO of Servihabitat. In cities such as Málaga, Sevilla and Zaragoza, as well as in the vacation markets of the Balearic and Canary Islands and in the more traditional areas of the Mediterranean Coast. (…).

Nevertheless, residential prices are still recovering at a slower speed in many autonomous regions (the third segment), given that there, prices “are still decreasing (due to the crisis effect) or are stable, because the demand potential is much more contained and/or considerable volumes of stock are still available”.

To this end, it is worth nothing that 72% of the homes sold in Spain in 2016 had a price of less than €150,000. (…).

In this context, there are also considerable disparities in terms of the returns offered from leasing properties in the different regions. For example, buying a home and putting it up for rent would generate a return of 6.9% in Madrid, 5.8% in Cataluña, 4.1% in Galicia and 3.9% in País Vasco. (…).

Clearly, all of the regions offer more attractive average gross returns from rental than those generated by other investments, such as public debt and deposits. Not in vain, the average rental price will rise by more than 10% this year, according to Servihabitat, which highlights the seven most thriving markets in Spain at the moment, namely: Málaga, Balearic Islands, Barcelona, Girona, Alicante, Madrid and Murcia. (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

The Socimis Set Their Sights On Rental Housing

30 August 2016 – Expansión

After buying up offices, shopping centres and hotels, many Socimis are now setting their sights on rental housing.

The Socimis owned by Domo, Alquiler Seguro and Inveriplus, amongst others, are preparing to start trading on the stock market. (…).

At least five new Socimis, focusing on rental housing, are expected to debut on the stock market over the next few months. Some of these Socimis have already started the process to join the MAB by preparing their Information Memorandums for Incorporation onto the Market (DIIM), which will, subsequently, be submitted for review by the MAB’s Coordination and Incorporations Committee and the Board of Directors. These bodies must analyse the document and decide whether or not to approve their debuts on the market.

The potential new joiners to the MAB include the Socimi owned by the management company Domo, which has the distinction of being able to offer its investors the possibility of participating in every project phase – from the acquisition of land, to the monitoring and control of developments, to placing homes up for rent and, subsequently, where appropriate, the sale of the assets. This Socimi is scheduled to join the MAB in September.

New joiners

Domo Activos Socimi, which was constituted on 11 June 2015, aims to raise up to €50 million in initial capital and then carry out capital increases to raise up to €250 million.

Meanwhile, the Socimi owned by Alquiler Seguro – Quid Pro Quo – is planning to debut on the stock market before the end of the year. The company initially wants to raise €50 million, which it will use to purchase properties for their subsequent rental.

The company’s plans involve incorporating 500 homes into its portfolio during the first phase, and its five year objective is to own around 6,000 homes and reach a fund volume of €500 million through subsequent capital increases.

Another Socimi that is finalising its debut on the stock market is owned by Inveriplus, a firm that specialises in the clean up of real-estate assets. This company will be created with €10 million, which will be used to purchase developments. In addition, the company plans to invest €60 million in assets before its debut on the stock market.

Armabex – which specialises in the constitution of Socimis and their subsequent incorporation onto the stock market – is working with two other companies that it expects will be ready to debut on the MAB before the end of the year. One of those Socimis is the subsidiary of a real estate company and the other is a company owned by two architects with projects in the south of Madrid. (…).

Currently, the average gross yield on rental housing amounts to 4.6%, according to the latest available data from the Bank of Spain. If we include future capital gains, from the sale of assets, those yields can soar into the double digits. (…).

For the time being, the ratio of rental properties to owned properties in Spain stands at around 20%, whilst the European average is closer to 35%, with some cities, such as Berlin, reporting percentages of almost 60%. These figures indicate that there is still a lot of potential (in Spain). (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Tauro Buys Building In Madrid For €9.2M

21 July 2016 – Expansión

The real estate investment fund Tauro Real Estate, managed by Josep Maria Xercavins, has purchased a building in Madrid for €9.2 million. The property is located on Calle Ciudad de Barcelona, 89 and was built recently.

The building comprises 31 homes and 50 parking spaces, which will be put up for rent. Tauro Real Estate already owns eleven buildings in Barcelona and three in Madrid, according to data from the Commercial Registry. Its portfolio currently contains 300 homes and the fund is expected to close once it has 500 homes. Tauro’s aim is to acquire properties that generate good returns (from rental income) and capital gains upon sale.

Original story: Expansión

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