Habitat Completes the Purchase of 4 Plots of Land for €14M

21 December 2018 – Eje Prime

Habitat is also going Christmas shopping. The property developer, in which Bain Capital holds a stake, is going to complete the acquisition of four plots of land next week, with a combined investment of €14 million, according to a statement from José Carlos Saz (pictured below), the CEO of the company, speaking to Eje Prime.

With these transactions, the company is planning to end the year with €127 million of investment in the acquisition of buildable land for the construction of 2,800 homes. “We have exceeded the forecasts that we announced in October”, said the Executive, who also added that the company has focused its efforts beyond “the areas where everyone else is building, such as the Costa del Sol, Madrid and Levante”, especially during the final stage of the year.

Proof of that includes two of its latest land purchases: one in Sevilla, announced yesterday and involving the acquisition of two plots, and the other in Oviedo, which has resulted in the company’s debut in Asturias. “We have no predilection for any city or region in particular, rather we expand to wherever there is demand and we can generate returns on our investment”, said the director.

Rigour and realism are the two factors that are governing this new phase for the property developer, which starred in Spain’s second largest bankruptcy proceeding in 2008. “The arrival of Bain Capital has represented a critical boost for the re-launch of the company”, confessed Saz. In fact, the company aims to invest €500 million in the purchase of land across the country between now and 2021.

Despite the property developer’s ambitious plans, its CEO clarified that its objectives do not include “becoming one of the largest firms” or being the company that sells the most homes. In this sense, the executive confirmed that “under no circumstances”, does his firm want to return to having a workforce of 900 workers, like it did with the first Habitat. For Saz, the ideal team would comprise around 130 people, 77 of which have already been recruited during 2018.

Similarly, expansion into Portugal does not form one of the company’s objectives either. In fact, Habitat has opted for a policy of divesting the assets located overseas that it inherited from its first phase.

Challenges (…)

For  José Carlos Saz, the major challenges facing the property developer sector at the moment are the lack of buildable land, the increase in construction costs and the need to finish professionalising and standardising the industry (…).

By the end of 2018, Habitat’s land portfolio will comprise a surface area of 1.1 million m2, with capacity for the construction of 10,000 homes. Currently, the company has 33 developments under construction, corresponding to 3,000 homes in total. Of those, 800 units are in the construction phase and the rest are in the planning phase. This year, the company has started to market 1,700 homes and has handed over 270 residential assets distributed across three developments.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

JLL Creates a €85M Fund to Invest in Proptech Companies

6 June 2018 – Eje Prime

JLL is betting on the future and is going to invest €85 million in proptech. The international real estate consultancy firm has launched JLL Spark Global Venture Fund, a venture capital fund through which it intends to acquire stakes in the shareholdings of companies that focus their businesses on offering digital solutions to the real estate sector.

The operation responds to the boom in digitalisation in the sector in all of its segments and aspects. From the use of BIM to facilitate the daily management of logistics spaces to virtual reality, which lets you visit your house before you buy it, and including big data, which provides all the information retail operators could wish for to allow them to know the needs and preferences of potential clients.

The fund will be global, and so the more than 220 proptech firms that are already registered in Spain will have the opportunity to receive a boost from JLL. The vehicle will also focus on seed capital investments and the first round of financing for companies.

“In 2017, investments in technological real estate companies grew by 25%, to USD 3.4 billion, and although the development of proptech firms is on the rise, many challenges still lie ahead and that is precisely there where JLL wants to add value”, said Mihir Shah, co-CEO of JLL Spark Global Venture Fund.

Original story: Eje Prime

Translation: Carmel Drake

Colonial & Axiare Formally Approve Their €11bn Merger

24 May 2018 – Eje Prime

Colonial and Axiare are on the verge of merging. Yesterday (Thursday), the General Shareholders’ Meeting of the Catalan Socimi approved the firm’s merger with Axiare, in an operation that is expected to close during the second half of the year and which will give rise to the largest office building rental company in Spain, a real estate giant with asset worth €11 billion.

The integration is a consequence of the takeover bid that Colonial launched over Axiare at the end of last year to acquire the share capital that it did not own in the Socimi, of which it was already the largest shareholder. The real estate company led by Pere Viñolas purchased 86.8% of the Socimi’s share capital in the end. To obtain the remaining 13.2%, it offered a share exchange deal at a ratio of 1.8554 own shares for each Axiare share.

Colonial also subjected the capital increase necessary to undertake this exchange to its General Shareholders’ Meeting, held on Thursday. With this merger, the real estate company chaired by Juan José Brugera seeks “to consolidate” its position in the prime office sector and “to respond to the current challenges in the real estate sector by strengthening its competitive position and achieving greater size and more efficiency in the business in Spain”.

Nevertheless, it does not rule out that the integration may also generate “duplications and incoherencies” in the resulting workforce, in which case, it plans to undertake adjustments over the coming months.

Axiare will, in turn, give its “approval” to the integration at its General Shareholders’ Meeting today, 25 May, where it will also ratify the Transition Board of Directors, comprising independent members, which Colonial appointed following the takeover.

Original story: Eje Prime

Translation: Carmel Drake

Aguirre Newman: Tertiary RE Inv’t to Exceed €10bn in 2017

30 November 2017 – Expansión

After the odyssey experienced during the years of the crisis, with the drastic fall in the volume of investment, the tertiary real estate sector in Spain is now going through a stage of consolidation. As such, for the third year in a row, the volume of transactions involving non-residential assets is going to exceed the €10 billion threshold again in 2017.

According to the conclusions of a seminar organised by Aguirre Newman and KWM, which included presentations from some of the main players in the sector, this positive trend will continue for the next few years, despite certain risks in the environment, such as the political uncertainty, the inevitable rise in interest rates in Europe, the ageing population and the salaries that continue to stagnate.

At the meeting, which was attended by the main executives and directors of listed companies such as Merlin, Neinor, Aedas and Colonial, amongst others, as well as by property developers and investors such as Grupo Inmobiliario Roca, Morgan Stanley Investment Management, Grupo Ibosa, ASG Iberia and Stoneweg. Together, they discussed the evolution of the sector and the challenges for 2018, amongst other topics.

“The tertiary investment market is going through a growth consolidation phase after the deep recession that we suffered between 2008 and 2013. According to our estimates, the volume of investment in tertiary assets will exceed €10 billion for the third year in a row in 2017”, explained Susana Rodríguez, Director General of the Consultancy division at Aguirre Newman.

According to data from the consultancy firm corresponding to the first three quarters of this year, hotel assets have been one of the stars of the real estate sector, with investment of €1.9 billion during the 9 months to September, up by 29% YoY. The high street segment also experienced significant growth, of 37%, with an investment volume of €605 million. Whilst, investment in the logistics segment amounted to €665 million, up by 26% YoY. By contrast, investment in offices during the first three quarters decreased by 23% to €1.9 billion and investment in shopping centres decreased by 3% to €3 billion.

Slow down

In terms of the threat of a rise in interest rates in Europe, the experts agree that there will be at least one or two years of stability and that when the time comes for the rate hike, it will be managed in a moderate way: “They do not consider that it will affect the valuation of assets, given that we are in a phase of growing rents”.

Another one of the challenges facing the sector is caused by the political uncertainty generated in Cataluña following 1 October. The speakers agreed that, for another year, the country risk is going to be one of the issues that concerns investors.

Rodríguez said that the figures in the Catalan market are “very positive” at the end of the third quarter. Specifically, the leasing of offices in Barcelona rose by 8% to 265,470 m2 and the average prime rent rose by 9% to €18.25/m2/month.

“It is undeniable that, since October, we have felt a slowdown in the volume of real estate operations. Both business people and investors alike are postponing decision-making whilst they wait to see how the political tensions and uncertainties that are affecting the market today are resolved”, she added.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake