Cerberus Looks to Expand in Spain

3 October 2019 – Cerberus is looking to increase its presence in the Spanish residential real estate market. The fund, which already owns Inmoglaciar, is in talks with investment banks to potentially acquire a larger developer to further enhance its activities in the Iberian peninsula.

Most recently, the US fund bid on Solvia Desarrollos Inmobiliarios’s developer. However, though the fund was a finalist in the bidding process, it lost out to Oaktree, which paid €880-million for the firm, including the company’s structure and landholdings.

Other international funds have been quicker to raise their games in Spain.  Lone Star acquired Neinor and eventually took it public. Castlelake created Aedas with a land bank acquired during the crisis and also took it public. Värde took over Aelca, Parquesol and Vía Célere.

Cerberus is aiming to build 3,000 homes a year, based on its ownership of Immoglaciar and other potential acquisitions. The latest possibility is Inmobiliaria Espacio, which the Villar Mir Group put up for sale two weeks ago.

Original Story: Cinco Días – Alfonso Simón Ruiz / Pablo Martín Simón

Adaptation/Translation: Richard D. K. Turner

Castlelake Acquires Land for 1,000 New Homes in Valencia

27 September 2019 – The US fund Castlelake, the majority shareholder of Aedas Homes, has acquired sufficient land, 100,000 square meters, to develop 1,000 homes in Quart de Poblet (València) from the real estate developer Grupo Ática.

Grupo Ática owned 60% of the total land in the new development, enough to build 1,400 homes out of a total of 2,300.  After the sale Ática will still own land for 400 homes, all of which will be subsidised (VPO). The two firms declined to reveal details of the transaction.

The remaining 40% of the land is owned by: Metrovacesa, with 6%; Dosval, with 3%, and the Quart de Poblet City Hall with 11%. Small property owners account for the remaining 20%.

Castlelake’s investment in the new development is expected to exceed 28 million euros, with €23 million in infrastructure works.

Original Story: Valencia Plaza – Estefanía Pastor

Adaptation/Translation: Richard D. K. Turner

Aedas Reaches an Agreement with Castlelake to Buy Non-Finalist Plots

20 May 2019 – El Confidencial

Aedas Homes has reached an agreement with its main shareholder, the US fund Castlelake, to ensure its supply of long-term land, without having to make any major investments in the short-term.

Specifically, the property developer and the fund will create ad hoc companies for each non-finalist plot in which they decide to invest, whereby Aedas will take a 10% stake and will reserve the right to buy up to 25% of the homes built on each one of the sites.

Aedas’s team will be responsible for managing the vehicles, processing the urban planning formalities and obtaining the finalist land status. The company has already identified six plots in Madrid, Valencia and Sevilla, on which more than 9,200 homes could be built.

It will take between 4 and 5 years to transform those plots into finalist sites and the idea is that Aedas will build at least 2,500 of the homes permitted, with the remainder being sold for development to other property developers.

This strategy will ensure that Aedas has a supply of finalist land over the medium and long-term at affordable prices.

Original story: El Confidencial (by Ruth Ugalde)

Translation/Summary: Carmel Drake

Aedas Homes Recorded Losses of €3.4M in Q1 2019

30 April 2019 – Eje Prime

Aedas Homes recorded losses of €3.4 million during Q1 2019, up by 47.8% compared to the same period last year (-€2.3 million). Nevertheless, the property developer’s results were in line with the business plan and revenues grew by 55% YoY during the same period to reach €14 million.

This year, the property developer controlled by the investment fund Castlelake plans to launch the construction of 2,580 homes and hand over 1,055 units. The firm has already sold 83% of the homes that it expects to hand over in 2019 and 55% of those forecast for delivery in 2020 (1,986).

Original story: Eje Prime 

Translation: Carmel Drake

Property Developers are Building 18,000+ Homes in Andalucía

18 March 2019 – ABC Sevilla

The real estate market in Andalucía is booming, and in a good way. According to the latest figures from the Ministry of Development, 12,363 permits were granted in 2017 for the construction of new homes, compared with the record before the burst of the bubble of 156,483 in 2006. Construction activity is responding to real demand in the market and is featuring some new players that are planning to build thousands of new homes in the region over the next three years.

Two markets

The investors, which include international funds and local property developers alike, differentiate between two markets – the eastern (Málaga) and the western (Sevilla) – the former accounts for 70% of new developments.

Aedas Homes currently leads the regional ranking by number of homes planned and investments forecast in the autonomous region. The property developer controlled by the US fund Castlelake plans to invest almost €1.3 billion in the region in the construction of 5,150 homes, primarily in the provinces of Málaga (2,600 homes) and Sevilla (1,800).

It is followed by Neinor Homes, which owns a portfolio of 29 plots for the construction of 3,628 homes; Metrovacesa, which has 2,300 homes in its Andalucían portfolio at various stages of completion; and Vía Célere, controlled by another US fund Värde, which is building 1,975 homes across 21 developments.

Meanwhile, ASG Homes has buildable land in Andalucía for the construction of 1,700 homes; Habitat Inmobiliaria, owned by the US investment fund Bain Capital, is working on the construction of 15 developments containing 1,621 homes; and the Sevillan property developer Insur is working on 17 residential developments comprising 1,136 homes at various stages of completion.

Finally, Q21 Real Estate, the property developer created from the alliance of the US fund Baupost and the owners of the former Pinar group, is also constructing almost 500 homes in the region, bringing the total number of homes under construction to more than 18,000.

Original story: ABC Sevilla (by Encarna Freire)

Translation: Carmel Drake

Aedas Homes Evaluates the Purchase of ‘Solvia Desarrollos Inmobiliarios’

28 February 2019 – Idealista

Aedas Homes is evaluating the possible purchase of Sabadell’s property developer, Solvia Desarrollos Inmobiliarios (SDIN). The listed real estate firm, controlled by the US fund Castlelake, is interested in acquiring the property developer and its land from Banco Sabadell for more than €1 billion.

Other large funds and property developers have also expressed their interest, including Cerberus, Oaktree and Bain Capital (through its property developer Habitat), but Aedas is deciding whether to bid just for the land or for the company as well. Last week, Neinor announced that it was withdrawing from the process.

Last year, Aedas handed over 231 new homes and purchased land for the construction of another 2,600 units. This year, it plans to purchase land for the construction of at least 1,000 homes and expects to hand over 1,055. By 2022, the property developer intends to reach its cruising speed in terms of the handover of new homes.

Original story: Idealista 

Summary/Translation: Carmel Drake

Neinor & Vía Célere Lead the Ranking of Forecast House Deliveries for 2019

28 January 2019 – Cinco Días

Year after year, the new major players in the house construction sector are seeing the numbers in their growth plans increase. During 2019, the largest property developers created since 2015, and some of those reborn from the ashes during this latest upwards cycle, are expected to approach their cruising speed, above all, the listed companies Neinor, Aedas and Metrovacesa, which have been called to lead the residential construction sector together with Vía Célere. Even so, the sector is still very fragmented with lots of small companies.

Neinor Homes and Vía Célere have become the two entities with the largest number of home deliveries this year. In both cases, 2,000 clients will receive the keys to their homes, according to figures provided to Cinco Días by around twenty property developers. In these forecasts, the companies have detailed three concepts for their plans for 2019: homes that they will launch onto the market, homes that they will start work on and forecast deliveries.

Neinor Homes, created in 2015, and led by Juan Velayos (…) expects to start work on 3,000 homes this year, coming close to the cruising speed that it defined during its IPO, and it will start to market another 2,000 units.

Meanwhile, Vía Célere, controlled by the US fund Värde Partners, is in the middle of integrating the assets of Aelca, the other property developer owned by Värde, which has now emptied its portfolio (…). It is the only one of the large players that is not yet listed on the stock market; its plans in that regard were postponed last year.

The listed firm Aedas, also created in 2017 with land from another US fund, in that case, Castlelake, is also perceiving an upwards turn in its numbers. This year, it will hand over 1,055 homes, start marketing 2,500 homes and start building 3,000 homes, just two years after first appearing on the stage, with David Martínez as its CEO.

Meanwhile, Metrovacesa, the other large listed company, controlled by Santander (and in which BBVA holds a minority stake), clearly leads the business plans, with up to 4,500 homes to be newly marketed and whose construction will be launched. This one-hundred-year-old real estate company, which was cleaned up by the banks following the crisis, launched its new project in 2017 with Jorge Pérez de Leza, from Grupo Lar, as the CEO.

In terms of those entities backed by funds, the rescued firm Habitat also stands out, reactivated last year by Bain Capital, and which is planning to market 3,000 homes this year. Similarly, Cerberus took control of Inmoglacier in 2017 (…). That firm declined to provide its forecasts to this newspaper, but it is also set to play a significant role, given that it has become one of the real estate arms of the US fund, one of the most active in the purchase of assets from the banks and which also owns Haya Real Estate as its servicer.

The group of twenty-odd companies consulted will hand over almost 16,000 homes this year, will start work on 34,000 units and will begin marketing another 30,000 properties. These figures reflect the enormous fragmentation in the sector, which in the last 12 months has started 103,000 homes in total, according to figures from the Ministry of Development as at October 2018.

Small specialist property developers still carry a lot of weight, unlike in other countries where large players exist. Moreover, even though the rate of residential construction has taken off since 2014, it is still well below the peak of 2006 when 865,000 building permits were granted.

In terms of the new players also boosted by the international funds, they include other developers with a high rate of house sales: AQ Acentor (owned by the German fund Aquila), which is going to put 1,700 homes up for sale; Kronos Homes (backed by several European and US investors), which will market another 1,600 homes; and ASG Homes (backed by the British firm ActivumSG), which plans to add another 1,000 homes.

In terms of the survivors of the crisis, Amenabar stands out, the Gipuzkoan company, which expects to start work on 3,608 homes next year and to hand over 1,245 units. Another of the stalwarts is the Madrilenian firm Pryconsa, owned by the Colomer family, which has already reached a high number in terms of house starts: 1,285. In more modest terms, other important firms include the Basque entity Inbisa and the new entity Áurea Homes, the residential subsidiary of the Navarran construction group ACR (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Apollo Engages Goldmans to Sell Altamira for c. €600M

8 October 2018 – Eje Prime

Apollo is getting down to work to divest Altamira and, to this end, has engaged Goldman Sachs to execute the mandate. The US fund renewed its contract with the investment bank and has now distributed the sales document for the servicer to potentially interested parties for an amount that ranges between €500 million and €600 million.

The real estate asset and loan manager, Altamira, is primarily owned by Apollo, which holds 85% of its share capital, whilst the remaining 15% stake is in the hands of Santander. The intention of the fund is to officially launch the sale over the coming weeks and to close the operation during the first quarter of 2019, according to reports from Expansión.

Just over a year ago, Altamira’s portfolio was valued at close to €1 billion, but the amount has varied depending on the assets under management at any given moment. At the end of 2017, the package of assets that the company had under management amounted to €50 billion.

Similarly, the principal value of the servicer is the long-term contract that it has with Santander, as well as the contract for the management of assets owned by Sareb. Potential buyers of Altamira include funds such as Deutsche Bank, Bain Capital, Kennedy Wilson, Baupost and Castlelake.

Original story: Eje Prime

Translation: Carmel Drake

Värde Merges Vía Célere & Aelca to Create one of Spain’s Largest RE Firms

1 October 2018 – El Español

The US fund Värde has created and will control one of the largest residential property developers in the country after merging the two companies in the sector in which it holds a stake, Vía Célere and Aelca, according to a statement issued by the entity.

The resulting company, which will retain the name Vía Célere, will have the capacity to deliver 2,000 homes in 2019 and 5,000 homes in 2021.

Värde will control 75% of the share capital of the new Vía Célere. Nevertheless, the firm will continue to be led by Juan Antonio Gómez-Pintado (pictured above), who also chairs the real estate trade association.

This is the US fund’s second merger operation in the Spanish real estate sector, after it integrated Dos Puntos, the real estate firm that it constituted with assets left over from the San José group, and Vía Célere in April 2017.

With its latest operation, Värde says that it is “reaffirming its commitment to the Spanish market”, which it considers is still highly “fragmented” and “needs greater consolidation by the operators to provide a rate of deliveries that reflects the budgets prepared”.

Värde, together with Lone Star, Castlelake, Blackstone and Cerberus, is one of the overseas funds that arrived in Spain during the peak of the crisis to buy up real estate assets, above all those that the banks had been left with after foreclosing debts.

Possible resizing of the workforce

According to Värde’s data, the property developer that it has created owns assets worth €2.2 billion, located all over the country, although the firm did not provide details about the new entity’s landbank in square metres or the number of homes under construction.

According to information provided by the new Vía Célere, 38% of its assets are located in Madrid, 20% in Málaga, 11% in Barcelona, 9% in Sevilla, 5% in Valencia and the remaining 17% in other provinces.

25% of the share capital of the new Vía Célere, which is controlled by Värde (75%), is distributed between other shareholders, all of them are foreign investors, such as Barclays.

At the operational level, the new real estate giant says that, in theory, it will hold onto the 300 employees that make up the workforce, although it does not rule out “resizing its structure” over the coming months, depending on its needs.

Original story: El Español

Translation: Carmel Drake

David Martínez: “Aedas Has Land on which to Build Homes for the next 4 Years”

8 September 2018 – Expansión

Aedas, the property developer in which the US fund Castlelake holds a stake, is continuing to push ahead and take on new challenges. As the first anniversary of its debut on the stock market approaches and with its business plan on track, the company is considering starting to buy plots of land that still require urban planning approval to anticipate possible price rises and improve margins, as well as to launch projects to sell to specialists companies in the rental sector, such as Socimis.

“We have a land bank spanning more than 1.5 million m2, which will allow us to build more than 14,000 homes. That gives us four years of visibility with respect to our business plan”, explains David Martínez, CEO of the company.

Aedas became the second largest property developer, after Neinor, to make its debut on the stock market after ten years of drought following the burst of the real estate bubble. It was followed shortly after by Metrovacesa, and several other companies are lining up to take the plunge, including Vía Célere and Aelca.

Aedas is sticking to the objectives announced in the listing brochure and unlike its rivals is not contemplating a reduction in its initial forecasts. “Our objective is to hand over more than 200 homes this year, more than 1,000 homes in 2019 and to exceed 2,000 homes in 2020. In total, by the end of 2020, we will have handed over more than 3,200 homes and we already have 114 developments underway, with more than 4,000 homes in different phases of development, which gives us a great deal of visibility over the objectives. We designed a realistic business plan and we will fulfil the forecasts for 2018, 2019 and 2020”, said the director.

Investment in land

The CEO of Aedas explains that during the first half of 2018, Aedas invested almost €100 million and purchased land for 1,905 homes, almost doubling the planned investment figure for the entire year. In addition, the company signed a corporate financing line for €150 million to continue expanding its land bank.

“We have detected interesting opportunities that fit with our investment criteria that are not going to be available in six months time. For that reason, we decided to bring forward our investment plan. Recently, we formalised a loan amounting to €150 million to provide us with sufficient financial resources to continue bringing forward the purchases planned in the business plan between now and 2023”, he explained.

At this point, Martínez opened the door to the possibility of purchasing non-finalist land. “There is a lot of land classified as “urbanisable” that still requires urban planning. Given that we now have land to cover our requirements for the next four years and we are not in any hurry, nor do we need to buy finalist land, we are considering land in areas with demand that has the partial plans approved but that still require some urban planning management”, he revealed.

Martínez highlighted that a significant percentage of the €150 million resulting from the loan formalised a few weeks ago will be used to buy non-finalist land. “With the economic recovery, new property developers are emerging who need to buy finalist land to get to work. For this reason, in some places, the prices of some plots of finalist land now exceed our expectations. We want to take advantage to buy land at more affordable prices even if that requires more management subsequently (…).

Rental

Similarly, the property developer is exploring other business opportunities, such as the sale of homes to Socimis and other vehicles specialising in the rental market. “One of the challenges involves supplying homes to young people. Aedas is exploring formulae that allow the construction of homes for rent, basically developing projects that we can sell to companies that specialise in rental. We have a very extensive and urban land bank”.

The director anticipates a “long” upwards cycle. “We are at the beginning of a cycle and notwithstanding the fact that we may see some adjustments in prices in certain specific towns, in general, it is going to last”, he predicted.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake