Realia Refinances the €120M Debt Owed by its Property Development Arm

22 June 2018 – Eje Prime

Realia has today refinanced the debt owed by its property development arm, amounting to €120 million. The liability was due to mature on 30 June 2018, according to a statement filed by the real estate company, in which FCC and Carlos Slim hold stakes, with Spain’s National Securities and Exchange Commission (CNMV).

The new financing is due to mature on 31 December 2020. Realia has also indicated that “(the new financing) has been subscribed under competitive market conditions”. At the end of 2017, the company had gross bank debt amounting to €763 million, down by 10% compared to a year earlier.

Realia ended the year 2017 with a net profit of €30.5 million, 73.7% less than in 2016. The decrease was caused by the extraordinary results registered in 2016 due to discounts associated with another debt refinancing.

Original story: Eje Prime 

Translation: Carmel Drake

Realia Buys Land & Reactivates Its Property Development Business

12 March 2018 – Expansión

Realia, the real estate firm controlled by Carlos Slim (pictured below), has acquired a plot of land in Alcalá de Henares (Madrid), with a buildable surface area of 44,755 m2, from the Ministry of Defence for €27.5 million. This is the first land acquisition that the company has undertaken since the Mexican magnate took control of the entity, and sees it join the wave of investments that companies in this segment are making in land in light of the reactivation of the sector, reports Europa Press.

In the case of Realia, the land purchase forms part of the reactivation of its construction and house sale activities, which it had suspended, firstly due to the crisis and, subsequently due to the process to restructure and clean-up the company. In this way, it is going to allocate this land to undertaking one of its first three housing developments. The other two, which are going to be built on the portfolio of land that the company already owns are located in Sabadell (Barcelona) and Palma de Mallorca.

Strategy

Realia’s strategy to resume its property development activity involves analysing new build construction projects in “areas where demand is consistent and the supply is very low or new”, such as specific areas of Madrid and Barcelona and “certain other places with the same market characteristics”, according to a statement made by the firm in its annual report for 2017.

That is one of the company’s main objectives for 2018, together with the improvement in margins through the streamlining and optimisation of expenses, and the recovery of prices.

Original story: Expansión

Translation: Carmel Drake

Spain’s Large Property Developers Own Land to Build 100,000 Homes

5 February 2018 – Expansión

Metrovacesa, Aedas, Neinor, Vía Célere, Aelca, Quabit, Realia and Insur own land spanning more than 15 million m2, which they want to use to take advantage of the new real estate cycle.

The upturn in the residential sector is consolidating and the large property developers want to take advantage of the new cycle to obtain returns from the portfolio of land they have accumulated in recent years. The new generation of property developers Metrovacesa, Aedas, Neinor, Vía Célere and Aelca, and some of the listed survivors of the crisis, such as Quabit, Realia and Insur, now own land spanning more than 15 million m2 with the capacity to build more than 100,000 homes over the next few years.

Metrovacesa, controlled by Santander and BBVA is the property developer with the largest portfolio of land on its books. Following a capital increase amounting to €1.108 billion last June, undertaken through the transfer of assets from its main shareholders, the firm owns 6 million m2 of land, with the capacity to build 37,500 homes. As at 30 September, the firm owned a portfolio of residential land with a gross value of €1.9 billion, of which €1.3 billion corresponded to developable land.

Currently, the company has 51 projects under development to build 2,263 homes and it plans to reach cruising speed in 2021, with the delivery of between 4,500 and 5,000 units per year.

Stock market debuts

Metrovacesa, which plans to debut on the Madrilenian stock market tomorrow (Monday) with a market capitalisation of €2.5 billion, says in its IPO brochure that it does not need to acquire additional land to fulfil its annual house building objectives for the next eight years.

The next firm by volume of land is Aedas. That company, in which the US fund Castlelake holds a stake, owns land spanning 1.5 million m2 with capacity for 13,270 homes. The property developer, which started to trade on the main stock market in October, invested €124 million in land purchases in 2017 alone for the construction of 3,159 homes.

The strategy of the firm led by David Martínez involves reaching its cruising speed in 2022, when it expects to record revenues of more than €1.0 billion and handover more than 3,000 homes per year.

The other listed property developer, Neinor, which was the first to make its debut on the stock market in March 2017, owns land spanning 1.3 million m2, worth €1.3 billion and with the capacity for more than 12,000 homes, according to the most recent public information as at 30 September.

Specifically, during the first nine months of last year, that property developer acquired 24 developable plots for the construction of more than 3,000 homes for €275 million.

The firm led by Juan Velayos will launch 2,500 homes during 2018, will begin construction on another 5,000 units and will hand over more than 1,000 homes this year. In 2020, Neinor expects to reach its cruising speed and hand over between 3,500 and 4,000 homes per year.

Some of the most active property developers in the purchase of land and launch of new developments also include Vía Célere and Aelca, both of which have plans to debut on the stock market soon. Vía Célere owns land spanning 1.43 million m2, with capacity for 12,200 homes. The company chaired by Juan Antonio Gómez-Pintado invested €227 million in land last year.

The other property developer controlled by Värde, Aelca, owns a portfolio of developable land spanning 1.28 million m2 for 12,566 homes. The firm expects to launch 49 new developments in 2018 and will have 86 residential projects underway at different stages of completion.

Meanwhile, the listed property developers that survived the crisis, Quabit and Insur, own land with the capacity for 6,720 and 4,691 homes, respectively. Quabit plans to invest €670 million in the purchase of land until 2022, when it will reach cruising speed with the hand over of 3,000 homes per year, whilst Insur will invest €80 million in purchases until 2020 in order to hand over 600 homes per year.

In terms of the residential business of Realia, the firm controlled by Carlos Slim owns a land portfolio spanning 1.85 million m2, of which 25% is developable (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Change of Heart: Slim Suspends Sale of Torre Realia in Barcelona

15 January 2018 – Eje Prime

Carlos Slim has changed his mind about Torre Realia in Barcelona. The real estate company owned by the Mexican magnate has decided to suspend the sales process of its most iconic asset in the Catalan capital, according to explanations provided by sources close to the process. Realia has received offers for more than the asking price (€140 million), however, the company has decided not to sell, citing changes in the company’s strategy.

Last June, Realia entrusted JLL and BNP Paribas with the mandate to sell this asset, equivalent to Torre Kio in Madrid. The tower is located in one of the fastest growing areas of the Catalan capital in terms of the office sector, in Plaza Europa, which is set to become the city’s new business district.

Although sources at the group claim that the decision is linked to a change in strategy, given that the offers that Realia had on the table were “higher than the price set by the real estate group”, it seems that the political situation and the climate of instability may have also been triggers for Slim’s group to decide to postpone the sale to a later date.

Realia’s trophy asset in Barcelona has 24 floors and a surface area of 31,960 m2, as well as 399 parking spaces. The property, which comprises two buildings, was designed by the architect Toyo Ito, in collaboration with Fermín Vázquez, from the B720 Arquitectos studio. Torre Realia is 110 m tall and its ground floor houses a shopping arcade that joins the two towers.

In terms of its real estate activity, at the end of the first half of 2017, Realia primarily owned offices and shopping centres for rent, which spanned a combined surface area of 405,842 m2 and had an occupancy rate of 93.5%. Moreover, at that time, it also owned an asset measuring 18,324 m2, in the form of the Los Cubos building in Madrid, which it ended up selling to the French group Therus for €52 million.

Realia’s stock of offices for rent spans a surface area of 226,729 m2, with an occupancy rate of 94.7%. Moreover, the company owns 41 residential plots for family homes, destined for self-promotion, which it has put up for sale. Realia’s current land portfolio spans a buildable surface area of 1,851,392 m2, of which 49% is located in Madrid and the central region of Spain, according to data from the group.

Plaza Europa, on the rise

The sale of Torre Realia comes at a time when the area in which it is located is enjoying a real boom. As the headquarters of KPMG in Barcelona, Realia’s asset has seen its value rise in recent months thanks to the large number of operations that have been closed in this enclave and to the growing number of large corporations that are moving their head offices to this new financial district, in L’Hospitalet de Llobregat.

One of the main players in the area is the Puig family, which has joined forces with the Catalan Socimi Colonial to build a 14,000 m2 tower at Plaza Europa 46, right opposite Grupo Puig’s corporate headquarters, which it just purchased from BBVA for around €60 million.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Gorbea Puts FCC’s HQ on the Market for €150M

30 November 2017 – El Confidencial

The headquarters of FCC, located in the Madrilenian neighbourhood of Las Tablas is on the verging of changing hands. Its owner, Gorbea Arrendamientos, has decided to cash in its holding and, to this end, has engaged CBRE to launch an express sale process. The intention is to choose a winner before the end of the year. Sources at the consultancy firm declined to comment.

This operation is set to be the most important of the year in the office segment, since the vendor aims to close the sale for around €150 million, according to market sources. That amount has not been reached so far by any of the other office transactions closed in 2017.

Gorbea Arrendamientos is owned by the Hernández-Beitia family, which acquired the land where the headquarters of the company controlled by Carlos Slim is now located for €80 million from FCC seven years ago.

Then, the infrastructure group signed a 20-year lease contract, of which almost 13 years still remain. Specifically, this rental commitment is the main feature of the operation, given that it guarantees the future buyer a stable income in one of the fastest growing areas of Madrid.

When Gorbea acquired FCC’s headquarters, a return of 7% was estimated on the basis of the rental contract. However, the new buyer will see that yield decrease to around 3%-4%. That range that makes this purchase a classic operation for conservative investors, such as insurance companies and pension funds.

Cinematographic fortune

The Gorbeas, as the family behind this real estate group is popularly known, amassed their real estate portfolio as owners of important cinemas in Madrid, including Roxy B on c/Fuencarral, Lido on c/Bravo Murillo and Renoir on c/Narváez. From there, they leapt into the office segment, where they are known for naming many of the buildings they own after their parent company, Gorbea.

Despite the box office crisis that caused so many cinemas to close, this family group still owns several subsidiaries linked to the world of cinema, such as Cines Floridablanca, Cines Retiro and Cines Princesa, in the centre of Madrid, as well as several multiplex companies in Majadahonda, Zaragoza and Guadalajara.

Construction of FCC’s headquarters, which cost €48 million to build, was completed five years ago and, since then, the building has housed more than 1,000 employees from the infrastructure group.

The building has a surface area of 21,000 m2, spread over 3 inter-connected buildings, which occupy an entire block and form an H-shape. They have two basement floors and a ground floor, with capacity for 400 parking spaces, as well as six office floors and a rooftop.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Aelca, Ibosa, Amenabar, Pryconsa, Libra & Princeton Compete For Calderón Plots

18 November 2017 – El Economista

Atlético de Madrid has already received its first offers from investors interested in acquiring the plots of land adjacent to the Vicente Calderón stadium. The sale represents the largest land operation currently underway in the centre of Madrid and the football club is taking advantage of that fact to try to find a buyer willing to pay double the current prices in the area.

According to several sources in the sector, the companies that have bid to acquire these plots of land include the property developer Aelca, in which Värde holds a stake. It is the only one of the four large real estate companies still in the process, given that Neinor, Aedas and Vía Célere have all ruled out participating in the operation, due to its high price.

The same sources state that Grupo Ibosa is another one of the firms that is pushing ahead with the purchase process; and it is doing so with the backing of a fund. Similarly, the property developers Amenabar and Pryconsa have also submitted bids, as has the cooperative manager Libra Gestión.

The British family office Princeton is another name that appears on the list of investors interested in the Calderdón. That firm arrived in Spain at the beginning of 2015 and since then has closed several residential operations as well as a handful of others of a tertiary nature.

CBRE, which is advising the operation, will receive the binding offers at the end of November, with the aim of trying to close the sale before the end of the year. Atlético de Madrid wants to repay Carlos Slim on time for the more than €160 million that he loaned the Club, through the company Inbursa, to finance the works on the new stadium, Wanda Metropolitano.

The land up for sale is divided into three plots (RC-4, RC-7 and RC-8) and together cover more than 63,000 m2. The largest space corresponds to private residential use and the rest to tertiary use. The amount that Atlético de Madrid expects to receive for this operation, according to real estate sources in the know, comes to €200 million, which places the price per square metre in a very high range, of around €3,300/m2. In this way, the c. 480 homes that will be constructed on the site, will have to be sold for around €6,000/m2 if the operation is to be profitable for the buyer. It is precisely these figures that have deterred the large listed real estate companies, as well as those that have financial backing from funds, given that they must fulfil the returns they have promised to their shareholders and investors in every operation.

First obstacles

Although the project known as Mahou-Calderón, which encompasses the sale of these plots, has already received provisional approval from the Town Hall of Madrid, it is still awaiting definitive approval from the Community of Madrid’s Urban Planning Committee, which has four months to analyse the one-off amendment to the PGOU, and the Community of Madrid’s Governing Council, according to José Manuel Calvo, a Councillor for the Town Hall of Madrid, in an interview for the El Economista’s Inmobiliaria magazine.

Nevertheless, on Wednesday, it was revealed that the Ministry for the Environment and Land Planning had identified a “calculation error” in the buildability coefficients, and has urged the municipal technicians to correct the errors in order “to prevent the operation from being susceptible to being challenged in the courts in the future”, said sources from the Ministry to EP.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Atlético De Madrid Wants To Sell Operación Calderón Land For €3,300/m2

10 November 2017 – Cinco Días

Atlético de Madrid is looking to shake up the real estate sector with a record-breaking operation. The club is heating up the housing market with an operation to sell the plots on the site of its former Vicente Calderón stadium, through which it wants to achieve much higher prices than are currently being paid for land in the surrounding area.

The club, chaired by Enrique Cerezo and controlled by Miguel Ángel Gil, has engaged the consultancy firm CBRE to sell the plots of land, and the first round of offers have already been received. Atlético has already been sounding out potential buyers regarding a land asking price of €3,300/m2, according to four companies in the real estate sector, which would represent a record in this part of the Spanish capital.

That high land value would mean that the houses built on the site would have to be sold for approximately €6,000/m2, according to the calculations performed by several sources. That figure is equivalent to other more expensive areas in the capital and represents almost twice the current sales price of new build homes in the district of Arganzuela, where the stadium is located. According to the appraisal company Tinsa, new homes in this neighbourhood are currently being sold for prices ranging between €3,000/m2 and €4,000/m2, based on data as at 2017.

Specifically, Atlético is selling three plots of land, which have a total surface area of 63,076 m2, of which 57,094 m2 corresponds to residential use and the remaining 5,892 m2 to commercial use. Around 500 homes are expected to be built on the site. If the club manages to find a buyer willing to pay €3,300/m2, it will receive proceeds of €210 million. If the price ends up being €3,000/m2, the purchaser will have to spend around €190 million.

This urban planning operation is linked to the club’s change of stadium after it moved this season from its former pitch next to the Manzanares River to the new Wanda Metropolitan (…). Moreover, the football team needs to sell these plots to repay Inbursa – owned by the magnate Carlos Slim – for a €160 million loan that it was granted to build its new stadium.

The so-called Operación Mahou-Calderón, which also includes the adjacent plots on the site of the former brewery headquarters- but which are not included in the sale now being undertaken by Atlético – was approved by the municipal plenary in September. The buildability of that environment has decreased from 175,000 m2 to 147,000 m2 with respect to Ana Botella’s plan dated 2014.

Sources in the sector explain that CBRE has already received at least five offers during the first phase of the process, which is expected to close at the beginning of 2018. For the time being, it is not known whether any of these bids exceeds the figure of €3,000/m2 that Atleti is looking for (…).

Sources at the real estate consultancy firm Knight Frank calculate that the price of land in this neighbourhood amounts to a maximum of between €2,400/m2 and €2,800/m2. They explain that recent similar purchases in the district of Arganzuela, in the Méndez Álvaro area, for example, were closed for a price of between €2,000/m2 and €2,220/m2.

However, some experts in the residential market do believe that the €3,000/m2 threshold may be broken due to the high purchase pressure currently in play, primarily due to interest from international funds. They also consider that these plots are very attractive, located as they are in the Madrid Río area, and so they expect the degree of interest in them to be high.

Meanwhile, on the other side of the river, in the Usera area, Neinor Homes is marketing quite an exclusive development called Riverside at prices that exceed €4,000/m2, according to the portal Fotocasa, and the penthouses are going for €6,000/m2.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

International Funds Take Control Of Spain’s Real Estate Companies

6 November 2017 – Expansión

Together they own stakes worth €4.3bn / International funds and managers have become the largest shareholders of the listed companies in the sector. Seven of the top ten have foreign majority shareholders.

Seven of the ten large listed real estate companies are held in foreign hands. That is the new reality of the Spanish real estate market, which is enjoying a new period of growth ten years after the last boom.

Whilst during the previous upwards peak in the sector, the owners of the property companies were domestic businessmen, now it is the turn of the international funds to hold majority stakes in these companies in the sector. That is the case of the new leaders in the property developer sector: Aedas and Neinor Homes. These two companies made their stock market debuts this year, in October and March, respectively. In both cases, the property developers making their IPOs were owned by two large international funds: Lone Star in the case of Neinor; and Castlelake in the case of Aedas (…).

In the case of Aedas, which debuted on the stock market on 20 October with a valuation of €1.518 billion, two international firms became reference shareholders: T. Rowe Price, with a stake of almost 3.8%, and Fidelity Management and Research (FMR), with a 3.6% stake. It is not their first investment in a Spanish real estate company in either case. T. Rowe was one of the funds that participated in the IPO of the Socimi Axiare, in July 2015, acquiring a 9.7% stake; meanwhile, FMR is the third largest shareholder in another Socimi, Hispania, and in the property developer Neinor Homes. In the case of the latter, another international investor is the second largest shareholder, Wellington Management, which already owns 8.5% of the capital, worth around €120 million.

In the case of the traditional real estate companies, the status of the international funds varies. Realia (…) is currently controlled by Inversora de Carso, a firm owned by the Mexican businessman Carlos Slim. In addition to the Mexican magnate’s stake (70.77%), Polygon Global own 10.5% and JP Morgan own 6.026% (…).

By contrast, two of the classic real estate companies on the stock market still have Spanish businessmen as their main shareholders: Quabit, whose largest shareholder is its President, Félix Abánades, with a 21% stake (…); and Renta Corporación, in which Dinomen, a company controlled by its President Luis Hernández, holds a 29.97% stake. In the latter real estate company, Baldomero Falcones also holds a stake, of more than 5%, making him the fourth largest shareholder.

Quabit’s second-largest shareholder is a Spanish company: Sareb. The public company holds a 7.66% stake in that firm (….). By contrast, the second largest shareholder in Renta is Morgan Stanley, with an 8.1% stake.

In total, foreign investors hold shares worth more than €4.343 billion in the five main Socimis and four largest property developers.

Spanish shareholders

(…), the number of domestic investors who control these types of companies is much lower, but they have a very prominent weight.

Such is the case of the banks Santander and BBVA, the largest shareholders in the largest real estate company on the Spanish stock market: the Socimi Merlin Properties. (…). Currently, Santander holds a 22.26% stake in that company, worth €1.162 billion, more than half of all Spanish investment in the ten largest listed real estate companies (around €1.8 billion). BBVA’s stake is worth around €336 million.

Alongside the two large Spanish banks, two real estate groups stand out as prominent investors in the listed companies in the sector. Such is the case of Colonial, which holds a stake worth €200 million in Axaire (…). Meanwhile, Colonial is controlled by three overseas investors, after Villar Mir reduced its stake.

Moreover, the real estate group Lar, controlled by the Pereda family, is the third largest shareholder of the Socimi Lar España, with a stake of more than 5.6% (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Realia Sells ‘Los Cubos’ Office Building To Therus For €52M

23 October 2017 – Expansión

The real estate company Realia, owned by Inmobiliaria Carso and FCC, which are both controlled by the Mexican businessman Carlos Slim, has sold the office building known as Los Cubos, located in Madrid, for €52 million.

The buyer is the French real estate company Therus, which is co-investing with the British investment group Henderson Park, according to several sources.

The property, which owes its name to its unique architecture, has a leasable area of 18,324 m2 and 334 parking spaces.

The real estate company put this building, located in the vicinity of the M-30 ring road, up for sale at the end of last year, as reported by Expansión at the time. The building has been vacant since the end of 2015. Before its sale, the company considered renovating it on several occasions to improve its appeal in the market.

In the end, Realia has sold the building for €52 million, compared to the initial asking price of €57 million. The sale of Los Cubos is the latest in a long line of high profile real estate investment operations closed in Spain in recent months. The investment volume in the real estate sector during the 9 months to September amounted to €10,300 million.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Realia & Pryconsa Buy Two Plots Of Land From Ministry Of Defence

5 October 2017 – Expansión

The incessant drip feeding of operations in Madrid involving the purchase of land on which to build homes is continuing. In this case, the stars have been the real estate companies Realia, controlled by Carlos Slim, and Pryconsa, owned by the Colomer family. The plots were put up for sale by the Ministry of Defence in July for a combined sum of €40 million.

The first is a plot for residential use, located on the outskirts of Alcalá de Henares. Measuring 14,395 m2 and with a buildable surface area of 44,755 m2, the asking price amounted to €27 million, according to the real estate portal Addmeet. In the end, Realia paid €27.524 million for the plot.

The second plot sparked even more interest. Located in Vicálvaro and measuring 13,723m2, it has a buildable surface area of 19,000 m2. The Ministry of Defence put that plot up for sale for €12.6 million. In the end, the plot was awarded to Pryconsa for more than €15.12 million, almost 20% more than the original asking price.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake