Tag: Ciudad Financiera

Addmeet: Investment in RE in Madrid Exceeded that in Barcelona by 2.5x in 2019

7 January 2020 – El Confidencial

According to the real estate portal, Addmeet, real estate investment in Spain amounted to €35.0 billion in 2019, of which 70% was concentrated in Madrid and Barcelona (€18.0 billion and €6.8 billion, respectively). The data compiled reflects all real estate operations amounting to more than €3 million in all sectors of the professional real estate market.

In the Community of Madrid, investment broke all records (€18 billion), exceeding the figures recorded in 2018 (€15 billion) and in 2008 (€10 billion). There, the office sector was the main driver, accounting for 61% of the total figure (€11 billion). The star transaction was the sale of Santander’s Ciudad Financiera, which the financial entity repurchased from Marme Inversiones for €3.2 billion 11 years after selling it to that same firm.

Other office-related deals included the sale of the La Finca business park to the Socimi owned by the Cereceda family for €423 million; and the purchase by Allianz Real Estate of Castellana 200 (comprising 20,000 m2 in office space and 6,500 m2 in retail area) for €250 million.

The next main drivers were the residential sector, which accounted for 11% of investment (€2 billion), boosted by the build to rent segment, and the retail sector, which accounted for 11.5% of the total investment.

Meanwhile, record figures were also recorded in the province of Barcelona (€6.8 billion) despite the “procés”. In fact,  the investment volume almost doubled that recorded in 2008 and far exceeded the total recorded two years ago (€5.6 billion).

Like in Madrid, the office sector in Barcelona accounted for most of the real estate investment (46% or €3.1 billion). The retail sector represented 11.5% (€0.8 billion), whilst the hotel segment attracted almost €1 billion (14%) and the residential segment just €0.5 billion.

Major deals in the Catalan capital in 2019 included the sale by Telefónica of Diagonal 00 to the Philippine magnate Andrew L. Tan for €150 million, amongst others.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

Santander Matches the Reuben Brothers’ Bid to Acquire the Ciudad Financiera

13 February 2019 – Voz Pópuli

Santander has matched the bid presented by the Reuben brothers for the Ciudad Financiera, in a new attempt to neutralise the offensive by the British investors to acquire its headquarters in Boadilla del Monte (Madrid).

On Tuesday, the bank chaired by Ana Botín presented a preferential acquisition right against the bankruptcy of Marme – the previous owner of the Ciudad Financiera –in the commercial court of Madrid, having set aside €20 million to be able to carry out the acquisition, according to sources familiar with the process. The operation is valued at around €3 billion.

Spain’s largest bank considers that it has the option of resorting to a preferential acquisition right, established in the lease contract for the Ciudad Financiera, signed on 30 December 2008 between Marme and Santander Global Facilities.

Bankruptcy process

Nevertheless, during the bankruptcy process that has resulted in the sale of the Ciudad Financiera, the administration appointed by the judge warned that the aforementioned right could not be exercised in order to “not obstruct the liquidation of the assets any further”.

Judge María Teresa Vázquez Pizarro, from Commercial Court number 9 in Madrid, said that the purpose pursued with the transfer of the Ciudad Financiera determines “that the lessee’s right of preferential acquisition cannot be accepted, given that the interest in the continuity of the business activity prevails over any rights recognised to third parties”.

The deadline for Santander to exercise its preferential acquisition right expires in the middle of this month (…).

Last November, the bankruptcy administration announced that the Reuben brothers had submitted the highest bid for the Ciudad Financiera, exceeding even the offer presented by Santander, a decision ratified this year by the court.

Santander warned that the offer from the British investors – one of the top 100 wealthiest families in the world – should not be accepted, highlighting the corporate network that they had set up for the operation, which includes several companies registered in tax havens.

Moreover, the Spanish bank has agreed the purchase with the main creditor banks of Marme – Caixabank, ING, Natwest Markets (previously The Royal Bank of Scotland), Bayerische Landesbank, and HSH Nordbank- of their debt. Through that, it has managed to obtain the support of those entities for its intentions and they have sent letters to the mercantile court defending the purchase of the Ciudad Financiera by Santander.

The breach of the preferential acquisition right by Marme carries a fine of €500 million, and the retraction of the sale to a third party, according to the terms of the contract signed by Marme and Santander, say the sources consulted.

The same sources indicate that this fine could be supplemented by another penalty amounting to €750 million if the suitability test is not fulfilled; in total, a fine amounting to €1.25 billion that Santander hopes will serve to ensure that the Reuben brothers reconsider their strategy

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

The Reuben Brothers Complete the Purchase of Santander’s HQ for €283M

14 January 2019 – El Periódico

Commercial Court number 9 in Madrid has decided that the best offer for the acquisition of Santander’s Ciudad Financiera, is the one presented by the brothers Simon and David Reuben through their investment arm in Spain, Sorlinda Investment, which bid a fixed amount of €283.73 million.

The administration responsible for the liquidation procedure of the company Marme Inversiones 2007, which is the owner of the Cantabrian bank’s headquarters, asked the Commercial Court to declare the offer presented by Sorlinda Investment as the winner after concluding that its bid was the best. In 2014, Marme Inversiones filed for creditors’ bankruptcy in light of its inability to repay the €1.575 billion loan that it had used to purchase the property from Banco Santander itself.

A few months ago, Banco Santander filed a series of allegations when it was announced that Sorlinda had won the bid. It questioned the entity in terms of the forecasts made in the liquidation plan, and because it considered that the offer submitted by the Reuben brothers did not fulfil the established requirements. The allegations were made by the banking group as creditor and offeror.

Nevertheless, the Commercial Court of Madrid explained that the execution of the liquidation plan, which regulates the procedures to be followed for the realisation of the assets, corresponds to the insolvency administration.

“The report presented explains the procedure followed for the selection of the bids submitted and the actions carried out by the insolvency administration, specifying that there are no justifications whatsoever to question it”, said the ruling, which states that the purpose of the plan is to obtain the greatest value from the asset for the benefit of all of the creditors.

In this way, despite the allegations presented by Ana Botín’s bank, the insolvency administration considers that, from an economic point of view, the offer presented by Sorlinda is the best for covering the loans of all of the creditors in the group.

The Reuben brothers, owners of other large assets

Reuben Brothers is a private investment group specialising in real estate development and debt financing. The company, created by two British brothers of Indian origin, is considered as one of the most exclusive in the world with several privileged properties in its portfolio, such as The Curtain and Members Club in Shoreditch, one of the most well-known luxury hotels in London, and Lingfield Park Marriott Hotel & Country Club.

It is also the owner of the London Oxford airport in Kidlington, the Wellington Pub Company chain of clubs and the Italian marina Portosole Sanremo, amongst others.

Ana Botín’s entity agreed the sale of its head offices in Boadilla del Monte to Marme Inversiones 2007 on 12 September 2008 for €1.904 billion.

Nevertheless, Marme Inversiones 2007 filed for creditors’ bankruptcy in 2014, before the Court then initiated the coordinated liquidation plan in October 2015 (…).

Original story: El Periódico

Translation: Carmel Drake

The Reuben Brothers Buy 5 Plots of Land in Mallorca

4 January 2019 – Eje Prime

The Reuben brothers are continuing to invest in Spain. The British billionaire businessmen Simon and David Reuben have purchased five plots of land in Manacor (Mallorca). The price of the operation is not known nor is the identity of the former owner.

The plots are located close to the house and tennis academy of Rafael Nadal and include 1.5 kilometres of beach, a natural lake and several caves, according to Voz Pópuli. The Reuben brothers will be able to build on their new plots, although parts of them are protected.

With this new operation, the Reuben Brothers are increasing their commitment to the Spanish real estate sector. Just a month ago, the group submitted the highest bid to acquire Santander’s Ciudad Financiera in Madrid.

The investment manager also has assets in sectors such as luxury real estate, including the Portosole Sanremo marina in Italy and the British racetrack company Arena Racing Company. The Reuben brothers’ fortune amounts to more than USD 14.2 billion (€12.4 billion), according to Forbes, which places them in 75th position in the ranking of the richest people in the world.

Original story: Eje Prime 

Translation: Carmel Drake

The Reuben Brothers Win the Bid for Santander’s Ciudad Financiera

12 November 2018 – El Confidencial

Banco Santander’s Ciudad Financiera has a new owner. The Reuben brothers have won the bid to acquire the headquarters of the Spanish bank, whose former owner, Marme Inversiones, filed for creditors’ bankruptcy. The Asian investors, who are residents in London and lovers of Ibiza, submitted the highest bid for the land in Boadilla del Monte (Madrid), fighting off competition from the bank itself chaired by Ana Botín and from the Arab fund AGC Equity Partners.

That is the result of the bid after the envelopes containing the final offers from the three candidates were opened by the bankruptcy administrator. Although the final price is not known, the offers amounted to around €3 billion, according to sources close to the operation, one of the largest operations ever in the real estate market in Spain involving a single asset.

From now on, to validate the purchase by the Reuben brothers, the judge from the mercantile court who is conducting the sale will have to certify that the offer from the London-based millionaires is correct, fulfils all of the requirements and complies with all of the analysis regarding transparency and money laundering. Nevertheless, and even if the judge gives his blessing, Banco Santander may exercise its right of first refusal, which gives it the last word for recovering the headquarters, which it sold in 2008 to a group of investors, who were also British, and with whom it agreed to remain as the tenant for forty years.

For that, the €500 million that Santander has paid Marme by way of rental over the last ten years has to be deducted from the final price, as does the €300 million of intra-group debt that is no longer taken into consideration following the entry into bankruptcy of the company.

Movements in the courts

Because what the Reuben brothers are now buying is the asset of a company that, after borrowing funds to pay even the tax on the original acquisition in 2008, can no longer keep up repayments on the loan it requested to acquire Ciudad Financiera and so filed for bankruptcy. After a long bankruptcy administration process, numerous claims by the creditors in the courts and offers from several international sovereign funds, the Spanish entity wanted to acquire the land of its headquarters in Boadilla del Monte (Madrid), where almost 7,000 people work.

The creditors of Marme Inversiones 2007 include ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank, which granted a loan amounting to €1.575 billion to Propinvest ten years ago in the form of a leaseback arrangement with Santander’s largest real estate asset. Other entities also participated in that loan, including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which started to sell their stakes in the loan to vulture funds in 2011, with significant discounts on the nominal values, when the owner started to acknowledge that it was unable to make the debt repayments.

One of those who purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. The first two submitted an offer to acquire Ciudad Financiera on 17 September, but their proposal was lower than those offers by Santander (…).

The Reuben brothers, which have purchased almost 168 hectares of land in Ibiza over the last two years, have submitted their bid for the Ciudad Financiera through Ibiza Properties LTD. That company was constituted on 1 August, with a nominal value of just GBP 100, money that it will now have to increase to cover the payment to the bankruptcy administrator.

Original story: El Confidencial (by Agustín Marcos)

Translation: Carmel Drake

The Reuben Brothers Edge Ahead in the Bid for Santander’s Ciudad Financiera

22 October 2018 – Eje Prime

The Reuben brothers are in pole position in the race for Santander’s Ciudad Financiera. Their company, Reuben Brothers, has submitted the best offer for the headquarters that the Botín family’s bank owns in Boadilla del Monte (Madrid).

The other two companies bidding in the operation, which is reportedly worth around €3 billion, are AGC and Banco Santander itself. Those three players are the only ones that submitted bids for the Ciudad Financiera on Friday, the deadline for the submission of final offers.

The sale of Santander’s headquarters is part of the insolvency proceedings in which the former owner of the asset, Marme Inversiones, is immersed. The brothers Simon and David Reuben, with the support of JP Morgan, have sent the highest bid to the court, followed by AGC and Santander, according to Vozpópuli.

The envelopes are going to be opened between Wednesday and Thursday of this week, nevertheless, the sale could still be postponed for a little longer by the courts. Not in vain, the Santander Group claims that it has the right of first refusal in the operation, which means that it could improve on the offer that emerges victorious from the bid this week. Neither the Reuben Brothers nor AGC consider that the bank holds this option; they argue that this matter was already resolved during the bankruptcy proceedings.

Original story: Eje Prime

Translation: Carmel Drake

Santander Offers €3bn for its own Ciudad Financiera

19 September 2018 – Eje Prime

Banco Santander could end up buying back its Ciudad Financiera. The Spanish bank has submitted an offer for around €3 billion for the complex in the framework of the auction organised by Commercial Court number 9 in Madrid to liquidate the assets of Marme Inversiones, the owner of the asset, according to Expansión.

Besides Santander, two other entities have submitted bids. They are the Kuwaiti fund headquartered in the British capital, AGC Capital Markets, and the British-Irani investor Robert Tchenguiz.

According to the most recent information, Blackstone was going to participate in the bid. Specifically, the US fund was going to offer more than €3 billion for the Spanish bank’s central offices.

In the end, both Blackstone and Centerbridge have ruled out participating in the auction, the resolution of which will be revealed within the next few days: the bankruptcy administrator could award the asset, or open another phase for the receipt of better offers.

Banco Santander’s Ciudad Financiera has been owned by Marme Inversiones (controlled by the investors Glenn Maud and Derek Quinlan) since 2008. The company filed for bankruptcy after it was unable to keep up the repayments on the loans it took out to sign the operation.

Original story: Eje Prime

Translation: Carmel Drake

Centerbridge & Blackstone Join Forces to Bid for Santander’s Ciudad Financiera

13 September 2018 – Expansión

A consortium led by the US funds Blackstone and Centerbridge is emerging as the main favourite to buy Banco Santander’s headquarters in Boadilla del Monte (Madrid), in one of the largest real estate operations of the year in Spain, which is set to exceed €3 billion.

The court that is overseeing the creditors’ bankruptcy of Marme Inversiones, the company that has owned the so-called Ciudad Financiera Santander since 2008, has asked the parties interested in purchasing this asset to submit their binding offers by Monday 17 September at the latest. The objective of the bankruptcy administrator is to use the funds raised to repay Marme’s debt in full.

According to market sources, the funds GSO (a subsidiary of Blackstone specialising in restructured debt) and Centerbridge are preparing a joint offer that could amount to €3.1 billion. These investors are negotiating to finance their proposal with a loan that could be led by Deutsche Bank.

Second attempt

Both GSO and Centerbridge are now creditors of Marme, given that they purchased some of the debt from the banks that loaned money to the company back in the day. Their bid could be pitted against others from creditor funds such as Avenue Capital, according to sources close to the process.

During the creditors’ bankruptcy, which began in 2014, GSO and Centerbridge already tried to take control of the company, with a proposal to buy Marme’s share capital and retain the current debt. It was a similar strategy to the one pursued for several years by Aabar (an Abu Dhabi fund) together with the British-Iranian investor Robert Tchenguiz, after buying some of the debt granted to Marme by the bank RBS.

But the administrator has decided to conduct a formal auction so that the interested parties can bid together for the Ciudad Financiera and whereby allow all of the liabilities to be repaid. The creditors believe that offers above €3 billion will be necessary to recover all of the principal and interest.

Just as Blackstone and Centerbridge seem willing to formalise an offer in compliance with the conditions established by the judge, it is not clear whether Aabar is going to participate in the auction. In recent months, the fund has been caught up in a legal dispute with Tchenguiz regarding their joint investment in the company that currently owns the Boadilla campus.

The Kuwaiti fund AGC Equity Partners is also analysing the possibility of submitting an offer for the Ciudad Financiera. Almost two years ago, that firm submitted an offer for €2.7 billion to acquire the headquarters of the Spanish bank, but it did not get the go-ahead because the creditors’ bankruptcy was in an incipient phase and because Santander threatened to exercise its right of first refusal to buy back its offices.

Long-term rental

The investors Glenn Maud and Derek Quinlan, who already owned the Citi skyscraper in London, purchased the headquarters of the Spanish bank in 2008 for €1.9 billion, for which they used a loan from a group of banks led by RBS. Shortly after the acquisition, problems started with meeting the conditions of the loan, which ultimately led to the creditors’ bankruptcy of Marme Inversores, one of the instrumental companies created by Maud and Quinlan to carry out the transaction (…).

The main appeal of the Ciudad Financiera is the fact that the bank chaired by Ana Botín has committed to remain as the tenant for 40 years, until 2048. On that date, the Spanish entity may negotiate an extension to the lease contract or repurchase the property.

Three options

Once the offers have been presented next Monday before the Mercantile Court number 9 of Madrid, which is leading the bankruptcy, three possible alternatives may ensue.

If there are several attractive bids, the judge may open a process to competitively improve the prices proposed. If there is only one offer, of an appropriate value to pay the creditors, then it may be accepted immediately (…).

The last possibility is that the offers do not reach the estimated valuation. In that case, the judge may change the strategy and allow the piecemeal sale or liquidation of the different liabilities of Marme Inversiones (…).

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Blackstone Offers €3bn+ for Santander’s Ciudad Financiera HQ

10 September 2018 – El Confidencial

Santander’s Ciudad Financiera, the operating headquarters of the bank chaired by Ana Botín in Boadilla del Monte (Madrid), is being put up for auction five years after its owner, the company Marme Inversiones 2007, owned by several investment funds, filed for bankruptcy. After an arduous legal process whereby the bankruptcy administrator and the court managing the liquidation has released the asset, the central offices of Spain’s largest financial institution have been put on the market in search of a buyer.

According to financial sources close to the process, one of the most interested parties is Blackstone, the US hedge fund that has become Santander’s largest real estate partner after it purchased half of its portfolio of toxic assets last year. The US fund is negotiating the finishing touches for the presentation of its offer for the building where the bank employs almost 7,000 employees, including the office of the President, Ana Botín. According to the same sources, Blackstone is debating whether to participate in the auction by itself or to team up with the other creditors that supported the purchase of the Ciudad Financiera in 2008.

Of those, the presence of ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank stand out, which 10 years ago granted a €1.575 billion loan to Propinvest to acquire Santander’s largest real estate asset on a “leaseback” basis. Other entities also participated in that loan including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which in 2011 started to sell its stake in the loan to vulture funds at significant discounts on the nominal value, when the owner started to realise that it could not afford to pay the debt.

One of the players that purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. According to other sources, those investors are seriously considering submitting a joint offer on 17 September, the date on which the interested parties have to appear before the judge. That date is the one that has been set for the binding offers for all of the assets to be processed. If none are received, which is unlikely, then the Ciudad Financiera will have to be split up and sold off piecemeal.

According to these sources, Blackstone is now the main candidate, after two Arab groups placed tentative offers on the table that never proved successful due to legal wrangling and the lawsuits filed by some of the creditors, such as the Iranian Robert Tchenguiz. The investor, who owns several properties in London and is known for his idle lifestyle, was another person to take advantage of Propinvest’s bankruptcy to acquire debt at low prices and whereby become a significant creditor. Nevertheless, his problems with the Law – he ended up being arrested – have ruled him out of the process to take ownership of all of the Ciudad Financiera.

Arab interest

The player that came very close to acquiring Santander’s headquarters was AGC Equity Partners, a Kuwaiti fund with €3 billion under management, which received approval from Mercantile Court number 9, which was leading the bankruptcy of Marme. But its bid, which amounted to €2.5 billion, now needs to be updated, given that, according to various sources, the debt alone of the special purpose vehicle reached €2.8 billion, including senior and mezzanine. Therefore, the offers must exceed at least €3 billion, which means that this auction is going to turn into one of the largest real estate operations of the year.

The attempt by AEG, which was suspended when Ana Botín exercised the right of first refusal over Ciudad Financiera, came at the same time as the bid from Aabar, a company from Abu Dhabi, owned by IPIC, the owner of Cepsa, now renamed Mubadala. According to those sources, that fund is no longer interested in the auction and Santander has no intention of exercising its preferential right, as acknowledged by official sources at the Spanish entity.

The main attraction of Ciudad Financiera is that Santander, which financed the first operation with a loan amounting to €304.6 million to pay the VAT on the purchase, has committed to remain as the tenant of the property for the next 40 years, which means that the rental income is guaranteed.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

A Swap from ING & CaixaBank: the Last Stumbling Block in the Sale of Santander’s HQ to AGC

27 July 2018 – Voz Pópuli

The sale of the company that owns Santander’s Ciudad Financiera is closer than ever to becoming a reality. The approval of the liquidation plan by a Madrilenian court set September as the deadline for offers. Nevertheless, there are still disputes to be resolved.

The main stumbling block now is a lawsuit in London against a swap (financial derivative) granted by five entities: Royal Bank of Scotland (RBS), CaixaBank, ING, HSH Nordbank and AG Bayerische Landesbank. The lawsuit, filed years ago, is based on a claim that RBS manipulated the interbank – LIBOR and Euribor – market. The lawsuit amounts to €800 million, given that the swap has cost around €90 million per year since 2008, according to financial sources consulted by this newspaper.

The discussion in Spain focuses on the fact that some of the creditors of Santander’s headquarters fear that the new owner of the company (Marme Inversiones 2007) will decide to shelve that lawsuit. It would require an agreement between the new Marme and the five banks party to the swap in exchange for renegotiating the derivative, which expires in 2023.

AGC’s offer

Those €800 million, if the process in London proves successful, could mean that all of the creditors recover their money. In particular, the original shareholder, the Brit Glen Maud, and the company Edgeworth Capital, owned by the Iranian investor Robert Tchenguiz, who took positions during the bankruptcy.

Other sources consulted indicate that there is a commitment from the main interested party in the Ciudad Financiera, the Arab fund AGC Equity Partners, to keep the Marme litigation case open.

Currently, the only offer on the table is the one presented by AGC in 2016 for between €2.5 billion and €2.8 billion, depending on the variables that are included. A year earlier, Aabar Investments, the owner of Cepsa, and Edgeworth, also submitted bids. But they were not accepted.

As we wait to see what will happen over the next two months, AGC leads the rest of the candidates to acquire Santander’s headquarters.

One of the possible counter-offers could come from Edgeworth, which negotiated a €2 billion loan with JPMorgan to participate in the liquidation plan. It also proposed that the company exit from bankruptcy without the need to be liquidated.

This operation would generate a sale with significant gains for the funds that entered the process by buying Marme’s debt from financial institutions. They include Blackstone, Canyon and Monarch.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake