Tag: citibank

AEW Purchases Office Building In Alcobendas For €39M

9 December 2015 – Expansión

The investor furore for properties in Spain and for office buildings in particular, has resulted in record figures for this business in 2015 and has led to a fierce struggle for the best buildings in the major markets, such as Madrid and Barcelona.

This fight for the real estate gems in the centre of large cities has left many investors unable to close all of the operations they want to in Spain, and for this reason, they have started to look for opportunities beyond the established areas. Such is the case of the fund AEW Europe. The firm, one of the largest real estate investment managers on the continent, is finalising its purchase of an office building, known as the Amura building, in the Arroyo de la Vega area of the Madrilenian suburb of Alcobendas. The area is a long way from the financial centre of Madrid but it is the location of choice for several multinational companies, such as Citibank, Procter & Gamble, Pfizer and Bankinter.

Amura has several features that make it attractive to investors. The building, measuring 18,177 m2 over four levels, has an occupancy rate of 75% with very affordable rents, of around €10/m2/month.

Its main tenant is the Ricoh group, the manufacturer of digital equipment for office use. The Spanish subsidiary of Ricoh opened its headquarters in this building in 2008, leasing an area measuring 1,700 m2, which it increased by a further 800 m2 three years later.

Until now, the property formed part of Union Investment Real Estate’s Spanish portfolio. Union Investment is one of the largest fund managers in Germany, with assets worth €220,000 million under management.

Yields

Union Investment will sell the property to AEW for €39 million, according to real estate sources, which represents a yield of around 5%; that is low for the area, but reflects the furore that exists for these types of properties.

In Europe, AEW owns a portfolio of assets worth more than €16,600 million and it has now set its focus on the Spanish market. “Spain has gone from not existing (for us) to being a key priority market”, said Russell Jewell, the Director of PE funds in Europe for AEW.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Citi Establishes an Investment Club For Foreign Fortunes Willing to Buy Spanish Property

5/12/2014 – Expansion

In spite of the challenges the financial and economic crisis keeps putting in front of Spain, the country is a tidbit from the investment point of view and world’s biggest fortunes took it at the aim.

In order to streamline the increasing interest, above all in the Spanish real estate, Citi and its local partner Mazabi decided to create an investment club for the grand property managers.

Fernando Lopez Muñoz, the General Director and the Head of Citi Private Bank for Spain, Italy, Portugal and Latin-America inside the EMEA (Europe, Middle East and Africa), explained that ‘the club foresees spending a minimum of €200 million in the country, an amount which, if leveraged, could rise to €400 million‘.

The investee ‘will comprise equity of 15-20 families owning a minimum of €100 million worth of property each. They will declare a soft commitment, meaning an input of €10 million for opportunities proposed by Mazabi‘, the executive pointed out.

‘Great majority of groups belonging to the club – which is still being constituted – proceed from Southern America (mainly from Mexico and Chile) and the Middle East, but also U.S. investors are among its members. From Europe, some interest was shown in the United Kingdom and in Spain itself’.

‘The vehicle should disburse the equity within a three years’ term which is extendable to five years. In any case, we believe the core of the investment will be sealed in 2015 and in the first quarter of 2016′, Mr Lopez said.

Bearing in mind the current point in the cycle and the experience from other investment clubs enhanced by Citi Private Bank, the director estimates that the Internal Rate of Return (IRR) may post 15% annually.

A Value-Adding Partnership

Mazabi, specialized in detecting opportunities on the Spanish territory, has intially pointed at assets located mainly in Madrid and Barcelona, and also in Bilbao, Valencia, Seville and other provincial main cities. The properties are of residential, tertiary, industrial and hotel types.

Lopez underlined that ‘Mazabi is not a mere intermediary broker but a partner who adds a huge value to the partnership‘. In fact, Mazabi has been providing real estate advisory services to Citi since 2010.

Citi Private Bank, having USD 310 billion  under management, employs 24 private bankers in Spain. Each of them works with 20 clients and it is predicted that next year, two to four more experts will join the team.

‘One of the main indicators of this business is soaring up in the country: the potential of property management services, cooperating together with private banking and equity markets’, Lopez remarked.

 

Original story: Expansión (by Ana Antón)

Translation: AURA REE

Apollo, Centerbridge & Värde Make It to the Final Bidding For Popular & Citi´s Credit Cards

1/07/2014 – El Confidencial

Complex operation foreseen by Banco Popular for this year makes it to the finish line. Last week, the bank sealed the deal on the acquisition of Citibank´s credit card business together with 45 branches for over €800 million. Now, the entity chaired by Angel Ron will pack the cards together with its own and put them up for an auction in order to obtain a better price.

At the beginning, Centerbridge took the lead as the favourite but was soon joined by two other funds: Apollo and Värde Partners. Cerberus and Blackstone have been outbidded, whereas although Kennedy Wilson stays at the bidding, the odds for its winning are low.

Popular is not going to sell the entire business, though, but keep a share (around 50%) to benefit from the future upsides. Therefore, the offers will be considered for this criteria.

The operation resembles the purchase of Italian Antonveneta, a piece of ABN Amro, bought for €6.6 billion by Popular in 2007. Three weeks later, the entity sold the business to Monte dei Paschi for €9 billion, thereby gaining €2.4 billion. Afterwards, the Italian Tax Office accused the business partners of signing a pre-agreement on sharing the gains.

The total cost borne by the bank posts €340 million, however the amount shall be enlarged by additional €450 million to preserve the bank´s solvency requirements.

Citi´s credit card portfolio embraces around 1.2 million customers and over 1.1 billion cards generating a €1.4 billion debt in total. Popular will adopt the 45 offices with approximately 950 employees, as well as the €2.3 billion worth of assets and the €2 billion deposits management.

 

Original article: El Confidencial (by Eduardo Segovia)

Translation: AURA REE