Tag: capital markets

Colliers International Acquires Spanish RE Consultancy Irea

27 February 2018 – El Confidencial

There’s a new marriage in the market for real estate consultancy firms. Colliers International Group has acquired the independent Spanish firm Irea. This move comes just a few months after Savills purchased Aguirre Newman, a firm that Colliers also expressed its interest in.

Following this integration, the new company will have a team comprising more than 100 professionals, with offices in Madrid and Barcelona, a turnover of €25 million, and will provide services in the following fields: advisory, capital markets, consulting, valuation, workplace solutions and project management. The objective of the new group is to be one of the top three firms in the sector within five years.

The operation has been structured through the purchase of the majority of Irea’s share capital by Colliers International, a listed company with a global turnover volume of €27 billion, a move that has been followed by a merger, whereby Irea has acquired the Spanish subsidiary of Colliers.

Mikel Echavarren, Founding Partner at Irea, is going to be the CEO of Colliers in Spain. Meanwhile, the rest of the management team is going to comprise: Ignacio M. Iturriaga, Joan García and Álvaro Alonso as the Heads of Corporate Finance; Neil Livingstone and Antonio Pan de Soraluce as the Heads of Capital Markets; and Miguel Vázquez and Laura Hernando, as the Heads of the specialist hotel services division.

In addition, in accordance with the model that characterises Colliers, which teams up with local partners, Echavarren, Livingstone and Pan de Soraluce will hold onto 20% of the share capital of the Spanish subsidiary.

“The Spanish real estate and hotel markets have experienced significant growth in recent years, and having the opportunity to expand our business with Irea’s excellent team of professionals is going to allow us to offer high added value services for our clients”, said Chris McLernon, CEO at Colliers International for the EMEA region.

“Our integration into Colliers represents a natural evolution for Irea, given that both companies share the same business culture and a strong commitment to excellence”, said Echavarren. “We consider that integrating ourselves into a global brand that has an unparalleled international platform is the key for strengthening our growth strategy and continuing to offer the best service possible to our clients, wherever they are in the world”, he added.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Bankia To Start Financing Property Developers Again as EC Restrictions End

2 January 2018 – Inmodiario

From 1 January 2018, Bankia will be able to launch new lines of activity after the restrictions, established by the Restructuring Plan that the entity signed with the European Commission five years ago, were lifted. These activities will represent the levers for commercial development in the new growth phase that the entity is now embarking on.

José Ignacio Goirigolzarri, President of Bankia, has confirmed that “we are starting a new phase of growth after leaving behind a successful restructuring phase that we have now completed”. And he added that “the lifting of the restrictions imposed by the Restructuring Plan opens up new business opportunities for us and places us alongside our competitors once again”.

Over the last five years, and as a result of the commitments taken on to enable it to sign the Restructuring Plan (which allowed it to receive aid), Bankia was not allowed to operate in certain activities, such as financing real estate developments or companies with access to capital markets.

With the new objectives in mind, the entity has incorporated a Property Development Division into its new organisation, which was approved recently. It has appointed Alberto Manrique to lead that business and he will report directly to the Business Banking Division, led by Gonzalo Alcubilla.

Manrique joined the group in 1988. Since then, the industrial engineer, who holds a degree in ‘ETS de Ingenieros’ from ICAI, has taken on several positions of responsibility. Most recently, he has carried out different tasks within the Business Banking sphere, such as the corporate management of the business branch network in the centre of Spain, the management of the Structured Finance and Syndicated Loan product teams and taking responsibility for the online business channels.

The new management team will be responsible for developing financing for property developers at a point when the cycle is recovering, “with growth expected for at least three or four years, during which time we expect that around 150,000 new homes per year will be built”, says Manrique.

One of the other new lines of activity that Bankia will develop from 1 January 2018 onwards will be to grant long-term financing to large corporations with access to capital markets, inside and outside of Spain, as well as to finance projects and acquisitions, activities that have been limited in recent years.

In addition to these new lines of activity for the coming year, the growth phase that Bankia is now starting will be marked by its ability to take advantage of the enormous growth opportunities that result from the increase in the client base that the entity has experienced in recent years and as a result of the process to integrate BMN, which consolidates the resulting entity’s position as the fourth-largest bank by assets in Spain.

Original story: Inmodiario 

Translation: Carmel Drake

Ibercaja Sells 505 Property Developer Loans For €489M

10 July 2017 – El Periódico

On Friday, Ibercaja announced a sales operation that will allow it to significantly clean up its toxic assets. Specifically, the bank has completed the sale of 505 property developer loans and credits – most of which relate to “doubtful” assets” – amounting to €489 million. The size of this portfolio represents a decrease of 36% in terms of the total number of doubtful property developer loans that the entity held as a March 2017.

In this operation, known as Fleta, 43% of the portfolio comprises loans granted to finance land purchases, which represents “the highest percentage of such loans in an operation of this kind recorded in Spain to date”, said sources at the Aragon entity on Friday.

Moreover, the deal allows Ibercaja to bring its default rate below 8%, a figure that forms part of the strategy to optimise its balance sheet and provide a commercial boost, established in the entity’s strategic plan for 2015-2017.

Since the end of 2014, the year when the aforementioned plan was launched, the volume of doubtful loans has decreased by €1,103 million, in other words, to 57% of the initial volume.

The portfolio has been sold to the company Fleta Issuer Holdings Designated Activity Company, after a process in which “first-rate” domestic and international investors have participated “which reflects the interest received for the offer in the market”, said the bank.

On the other hand, Ibercaja has increased the financing of new real estate projects. In 2016, it tripled the number of homes it financed with respect to 2014. During those three years, it financed 150 new projects, most of which are located in Madrid, Barcelona and Zaragoza.

That milestone, add sources at Ibercaja, followed others that have been fulfilled in accordance with the strategic plan, which “is reinforcing the financial strength of the entity, driving the transformation of the business model and activating the geographical growth plans for the retail business”.

Financial operations

In March of this year, the entity considered the early repayment of all of the contingent convertible bonds (CoCos) issued by Caja 3 and subscribed by the FROB in 2013, amounting to €223 million.

Moreover, last October, the entity placed an issue of 7-year mortgage bonds amounting to €500 million on the capital markets. In July 2015, Ibercaja was the first unlisted entity to issue subordinated debt, amounting to €500 million with a 10-year term, since the start of the restructuring of the Spanish financial system.

A few months later, in October 2015, the bank closed an operation similar to Project Fleta, when it sold a portfolio of 428 property developer loans, mostly doubtful, for €698 million, in an operation known as Goya.

Original story: El Periódico

Translation: Carmel Drake

Interview With Rupert Lea, Partner & Retail Director At C&W

3 February 2017 – Eje Prime

Rupert Lea, Partner and Retail Director at Cushman & Wakefield, analyses the evolution of the retail sector over the last year. “There has been an increase in high street operations, but the deals involving shopping centres have really taken the lead and are positioning themselves as a trend for the next two years”, he said, in an interview with Eje Prime.

Question: Now that 2016 is over, what assessment would you make of last year in terms of retail operations?

Answer: In terms of the volume of transactions, it was somewhat better than 2015. But now, the great trend that we are seeing are shopping centres. We have seen more operations involving shopping centres and retail parks: between 2009 and 2013, there was minimal rotation; investment volumes decreased until 2012. (…). Now, investment is growing at a rate of 50%, driven primarily by the capital markets.

Q: What will 2017 be like?

A: The retail market is a wave: it rises and it falls. Demand will continue to be constant and will have the same strength for the next two years. What sets the tone is the availability of supply, something which fluctuates a lot more in the case of shopping centres and centres that are not prime. (…).

Q: In 2017, several important operations that were closed years ago will bear fruit, for example, Uniqlo, H&M…Is the pace of operations still active?

A: Yes. We negotiate with operators from all sectors who are interested in Spain, including those who want to continue to grow brands that already operate in the country. There is still scope for more flagships to be opened in Spain in very profitable locations for operators, but they have to be experienced stores. That is another trend that is growing strongly. (…).

Q: Can we say that the sector has recovered its pre-crisis rhythm?

A: Any references to pre-crisis are complicated, because periods cannot be compared. What we can say is that some values have now reached higher figures (than pre-crisis), and some other values have not. Monetary policy and investor spirit have changed.

Q: What is the thing that interests operators the most in Spain?

A: Appropriate area of influence, robust consumption, suitable locations and suitable store sizes. The latter is the most difficult to achieve, because there are stores on prime streets that do not fulfil the requirements. Spain has a culture that involves a lot of socialising on the street and that generates a lot of opportunities for retail businesses. The success of tourism is also important for operators to take into account; millions of people visit the country each year and that is like the icing on the cake for retailers. (…).

Q: Do you think that the boom in e-commerce will put an end to the development of retail?

A: E-commerce is a complement. We see e-commerce as an ally: it was born as a challenge for high street traders, but we are seeing successful cross-market formulae. We have online operators who are looking for locations so that users on the street can observe their presence. We also have inverse cross-market formulae: customers want to return in store goods that they purchase online. This is the era of omnichannels, and e-commerce is clearly a complement. (…).

Original story: Eje Prime

Translation: Carmel Drake

Moody’s Assigns Merlin An Investment Grade Rating

19 October 2016 – Expansión

The ratings agency Moody’s has granted Merlin a Baa2 rating, in other words, investment grade. The agency Standard & Poor’s (S&P) also assigned the Socimi’s debt an investment grade rating in February. Merlin is just a few days away from closing its merger with Metrovacesa, which will result in the creation of the largest real estate asset company in Spain.

This rating represents a boost for Merlin’s plans to return to the capital markets soon with a new bond issue. It placed bonds amounting to €850 million in April.

With this rating from Moody’s, the Socimi has become the highest rated Spanish real estate company. The agency highlighted the position of leadership that the Socimi will have in the Spanish market following its merger with Metrovacesa, as well as the diversity of its assets.

Original story: Expansión

Translation: Carmel Drake

Merlin Debuts On Capital Markets With €850M Bond Issue

18 April 2016 – Invertia

The Socimi has debuted on the capital markets with this operation, through which the firm seeks to refinance some of the debt it inherited from Testa.

Specifically, Merlin explains that this debt issue fits within its strategy to reduce the debt it holds after it completed the refinancing of the debt relating to Testa, the real estate company that it acquired from Sacyr, at the end of 2015 .

At that time, the Socimi signed a loan for €1,700 million with ten overseas banks, which was structured into two tranches of €850 million each, one of which is due to expire in December 2017 and which will be repaid through the bond issue.

Merlin is debuting on the debt market after it entered the Ibex 35 at the beginning of this year and managed to achieve an investment grade rating from Standard & Poors, which awarded it a BBB rating.

As such, the debt issue is taking place whilst the Socimi Merlin completes its purchase of the remaining 22% stake of Testa’s share capital, which is still owned by Sacyr, in an operation that must be closed before the end of June, as established in the agreement that the two companies signed last year. The ultimate goal of the company is to merge the two companies to create the largest listed real estate firm.

Original story: Invertia

Translation: Carmel Drake

C&W: Spain Will Be A Key Country For RE Lenders In 2016

22 February 2016 – Mis Oficinas

Spain will continue to represent a very attractive market for entities wanting to lend money to the real estate sector in 2016, according to “The European Lending Trends” report published by Cushman & Wakefield, the global leader in real estate services. This conclusion has been drawn on the basis of surveys completed by 60 European lenders, who contributed €80,000 million in loans to the real estate sector in 2015.

11% of the entities that responded to the questionnaire expressed a clear interest in granting loans to (companies in) Spain over the coming months. That figure is higher than the 9% obtained in the previous report compiled by Cushman & Wakefield. This upward swing in Spain is the largest increase recorded in Europe.

Meanwhile, the survey shows that average financing conditions have also improved in Spain. In Madrid, average leverage levels are close to 59% (previously they stood at 54%), whereby surpassing those recorded in comparable cities – Milan stood at 57% and Lisbon at 50%. Similarly, average margins have reduced, but Madrid still generates returns of 185 bps, well above those recorded in the established markets of central and northern Europe. In the previous report, average margins in Madrid amounted to 210 bps.

According to Pablo Kindelán, Associate in the Capital Markets team at Cushman & Wakefield, “this report confirms a trend that is mirroring real estate investment in Spain, with significant interest from investors, record levels of activity and decreasing yields. The improvement in financing conditions highlighted in this report can only serve to facilitate investment activity”.

According to the report, average loan-to-value, LTV, ratios in Europe range between 55% and 66%, with the highest ratios recorded in Frankfurt and Paris (64%), followed by London (63%). The debt funds are willing to lend at higher LTVs than those typically granted by commercial banks and institutions, and only a few lenders want to expand through speculative developments.

In terms of margins, there are significant variations in the averages by country. In this sense, Stockholm records margins of 130 bps, Frankfurt and Paris generate margins of 140 bps, whilst Lisbon registers margins of 250 bps. Milan is the only other city (in Europe) where margins exceed 200 bps. (…).

Original story: Mis Oficinas

Translation: Carmel Drake

CaixaBank Places €1,500M 7-Year Mortgage Bond Issue

2 February 2016 – Cinco Días

The bank chaired by Isidro Fainé…has placed a 7-year mortgage bond issue amounting to €1,500 million. The entity has been helped by Barclays, Goldman Sachs, Société Générale and UBS.

CaixaBank has placed the debt issue at a price of 78 basis points above the 7-year midswap rate (the risk free interest rate corresponding to that term), slightly below the reference rate of 80 basis points sought at the beginning of the placement. The coupon has therefore been left untouched at 1%.

Demand for the issue has amounted to more than €2,500 million, with more than 125 investors expressing interest in it, of which a significant number were foreigners. This has allowed the entity to reduce the price of the issue. CaixaBank’s last debt issue, which was placed on 4 November 2015, amounted to €1,000 million. It had a five-year term and a coupon of 0.625%. The entity is strengthening its surplus liquidity, which amounted to more than €54,000 million at the end of last year.

Spanish banks are rushing to raise funds on the capital markets. In January, BBVA placed a 5-year senior debt issue amounting to €1,000 million; meanwhile, Bankia placed mortgage debt amounting to €1,000 million; Santander issued 10-year bonds for the same value; and Deutsche Bank issued bonds amounting to €500 million with a 7-year term.

Santander achieved a price of 65 basis points over the midswap rate – the reference index for this kind of debt issue – on its placement. It will pay a coupon of 1.5%. Mediobanca, Natixis and Nomura accompanied the Santander group in the management of the operation.

Javier González, Head of Debt Issues by Financial Entities at BNP Paribas, which participated in the placements of BBVA, Bankia and the Treasury, confirmed that the money invested in these operations has been coming from end investors, such as investment and pension funds.

Banco Santander and Bankia have chosen to issue mortgage bonds because the volatile environment makes this type of asset very popular with conservative investors.

Original story: Cinco Días (by Pablo Martín Simón)

Translation: Carmel Drake