Colonial Leaning Towards Blackstone in Sale of Logistics Portfolio

26 June 2019

The US fund Blackstone is reportedly leading the field of potential buyers for Colonial’s portfolio of logistics assets. The portfolio, whose sale would be one of the year’s largest, is said to be worth approximately €400 million. Colonial, a Spanish socimi, expects to finalise the transaction by late August.

Colonial is apparently leaning towards a sale to Blackstone due to its experience in the logistics sector, the financial guarantees the Americans are providing and its capacity to absorb such a large portfolio. Prologis, an American REIT, and Deutsche Bank are also vying for the assets.

Original Story: Merca2.es – Carlos Lospitao

 

Prologis, Blackstone & Deutsche Bank Bid For Colonial’s Logistics Portfolio

20 June 2019 – Cinco Días

Inmobiliaria Colonial has chosen the three finalists who have submitted the highest bids for its logistics portfolio and they are: Prologis, the largest owner of warehouses in Europe; Blackstone, the US fund; and Deutsche Bank, through its manager DWS, according to market sources.

Colonial inherited a sizeable logistics portfolio from Axiare following its takeover of that firm last year, but since the Socimi focuses on offices in prime areas of Madrid, Barcelona and Paris, it put the logistics portfolio up for sale a few weeks ago.

The company has received around a dozen offers, from which it has selected three that exceed €400 million. It is planning to close the operation before the summer.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation/Summary: Carmel Drake

Colonial Finalises the Sale of its Logistics Centers Worth €480M

14 June 2019 – La Vanguardia

Colonial is finalising the sale of a portfolio of 15 logistics centres worth €480 million that it inherited from Axiare. The assets span a surface area of 574,462 m2 and are located on the outskirts of Madrid, Barcelona and Sevilla.

The Socimi led by Pere Viñolas hopes to complete their sale within a maximum of two months as it seeks to take advantage of the strong demand for these types of assets thanks to the boom in online commerce.

Colonial’s core portfolio comprises office buildings located in the centres of Madrid, Barcelona and Paris, with a market value of around €11.4 billion. The firm is also working on fourteen new projects located in its three key markets, which have an associated investment of €1.3 billion.

At its recent General Shareholders’ Meeting, Colonial approved the appointment of two new independent directors and ratified the distribution of a dividend amounting to €0.20 gross per share, up by 11% YoY.

Original story: La Vanguardia 

Translation/Summary: Carmel Drake

Spain’s Largest Landlords are Merlin, Colonial, GMP & Mapfre

19 April 2019 – Expansión

Merlin, Colonial, GMP and Mapfre: three Socimis and one insurance company together own 16% of the total office space in Madrid. Blackstone, Realia, Mutua Madrileña, Tristan, Pontegadea and Starwood complete the Top 10 ranking.

According to a report from Deloitte, the ten largest landlords own more than 3.1 million m2 of leasable space in Madrid, out of a total spanning more than 13 million m2 (24%). In Barcelona, there is 6.1 million m2 of leasable space.

Leading the ranking is Merlin, which owns 7% of the total stock in Madrid and more than 3% in Barcelona. Its 140-strong office portfolio is worth €5.5 billion and accounts for 45% of its total assets. The Socimi’s tenants include BBVA, Endesa, Inditex and PwC, and its star assets include Torre PwC in Madrid and Torre Glòries in Barcelona.

Behind Merlin is Colonial, which owns 3.8% of the office stock in Madrid and 4.6% in Barcelona (where it is the market leader). Its key assets include the building located on Paseo de la Castellana, 52, two properties on Calle Miguel Ángel (numbers 11 and 23), all in Madrid, and Torre Marenostrum in Barcelona.

Completing the podium is GMP, which owns 2.8% of the gross leasable area in Madrid, including Torre BBVA and Torre Ederra, both in Azca. Meanwhile, the insurance companies Mapfre and Mutua Madrileña own 2.7% and 1.4% of the total stock in the Spanish capital, respectively.

In addition, the funds have strengthened their positions in recent months. The US fund Starwood purchased a portfolio of offices in Madrid and Barcelona from Autonomy for €125 million. It also acquired the San Fernando Business Park, in conjunction with Drago, from Oaktree for €120 million.

The British fund Tristan has also been active, with the acquisition of an office complex on Avenida de Manoteras in 2017 and the purchase of six offices spanning 78,000 m2 from Colonial in 2018 (…).

Original story: Expansión (by R. Arroyo)

Translation/Summary: Carmel Drake

Utopicus to Open 6 New Coworking Centres by 2020

14 March 2019 – Expansión

Utopicus is planning to add six new centres to its portfolio in Madrid and Barcelona over the next year taking the total number of centres to 13, which will together span a surface area of 36,000 m2.

On Monday, the coworking company controlled by Colonial will open its large, long-awaited office on Gran Vía 4, where it will occupy the entire building (spanning 5,000 m2 in total).

The average cost of the firm’s workspaces ranges between €300 and €400 per month. The company expects to welcome 6,000 coworkers in 2020.

New office openings

In addition to Gran Vía, over the coming months, Utopicus plans to open centres in Parc Glories and Gal la Placidia, in Barcelona and on Paseo de la Castellana 163, Jose Abascal 56 and Paseo de la Habana, in Madrid.

According to Rafa De Ramón, CEO of Utopicus, coworking is a phenomenon on the rise. Currently, coworking spaces span 150,400 m2 in Barcelona and Madrid, which accounts for between 0.5% and 1% of the total office market. That figure is expected to grow by between 5% and 10% over the next few years.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

ING Grants a €75M Green Loan to Colonial

5 March 2019 – Idealista

ING has granted a sustainable improvement loan to the Socimi Colonial amounting to €75.7 million. The terms of the loan are linked to the company’s performance in this field in that the interest rate varies depending on the rating that Colonial obtains from the Sustainability Agency GRESB for ESG (environmental, social and corporate governance) compliance.

It is the first loan of its kind to be granted to a Spanish company in the real estate sector and Colonial’s first sustainable transaction in the market. The real estate firm will use the funds to finance the LEED Gold certified building that it owns on Calle Almagro in Madrid, which is leased to the law firm Cuatrecasas.

Colonial has set itself the objective of having a portfolio of efficient buildings that consume fewer resources and reduce CO2 emissions and the amount of water used, amongst other factors.

Original story: Idealista 

Translation: Carmel Drake

Colonial’s Profits Fell by 23% in 2018 to €525M

26 February 2019 – El Confidencial

Colonial closed 2018 with revenues from rental income of €347 million, up by 23% compared to a year earlier. Nevertheless, the Socimi’s profit decreased by 23% to €525 million, given that in 2017, the firm recorded a gain from the sale of a building in Paris – In & Out – for €445 million and was converted into a Socimi. The buildings contributed by the merger with Axiare generated €56 million, equivalent to 16.1% of the total.

These are Colonial’s first results following the completion of its merger with Axiare, the Socimi over which it launched a €1.45 billion takeover in November 2017, and in a year in which it also increased its stake in the French firm Société Foncière Lyonnaise (SFL).

In a relevant fact sent to the CNMV, the Socimi also announced that it ended the year with assets worth €11.3 billion – distributed across the centres of Paris, Barcelona and Madrid – up by 22%, following the integration of Axiare onto its balance sheet. Excluding the effect of that integration, the increase would have amounted to 8% (…).

“Following an excellent year, we are confident of achieving a very satisfactory performance in the market and of generating rental income of €500 million over the next three or four years”, explained the CEO of Colonial, Pere Viñolas, who added that the company’s recurring profit, after excluding extraordinary items and asset revaluations, amounted to €101 million and represented an increase of 22%.

In operational terms, last year, Colonial signed 103 rental contracts, spanning a total surface area of 175,000 m2, which will generate rental income of €43 million p.a. (…).

In financial terms, at the end of 2018, Colonial recorded net debt of €4.7 billion at the end of 2018, up by 52% with respect to 2017 (€3.1 billion) before the purchase of Axiare. That liability accounts for 39% of the firm’s asset value (…).

Original story: El Confidencial (by E.S.)

Translation: Carmel Drake

Investors & Tenants Alike Demand Sustainable Buildings

21 February 2019 – Expansión

Sustainability has become an essential requirement in the search for offices. Beyond the social demand for spaces that are more respectful of the environment, sustainable buildings actually allow their owners to obtain higher rents, increase the valuation of their assets and make them more liquid.

“With the emergence of technology, changes in working habits and organisational efficiency, sustainability and well-being have become essential aspects for tenants and important factors for investment decisions”, explains Tomás Higuero, CEO of Aire Limpio, a group specialising in offering products and services for internal environmental quality, which works for hospitals and offices, above all.

Higuero says that the internal air quality of buildings is a fundamental factor that contributes to the health and well-being of workers. In this sense, the main REITS (a corporate structure similar to the Socimis in Spain) in US offices prioritise that their assets are certified or are in the process of being certified, and that they are healthy and efficient buildings from an energy perspective. This trend is also present in Spain and is being adopted by many of the large Socimis and real estate groups, such as Colonial, Merlin and GMP (…).

Original story: Expansión (by R.A.)

Translation: Carmel Drake

Blackstone will be the Landlord of 25,000 Rental Homes by the End of 2019

31 January 2019 – Voz Pópuli

Blackstone, one of the largest investment companies in the world, expects to end the year with 25,000 rental homes under management in Spain.

Eduard Mendiluce (pictured above, left), the man from Blackstone who leads the US giant’s real estate emporium in Spain, has explained that the firm believes in the Spanish market, as it has done since 2014, and will end 2019 managing 10,000 more rental homes that it currently owns (15,000).

“We continue to believe in the fundamentals of the residential sector in Spain”, said Mendiluce at a conference about the real estate sector organised by Iese in Madrid. “Spain was one of the countries that suffered the most during the real estate crisis of 2008; prices are still 30% below their maximums”, he said.

The CEO of Aliseda and Anticipa explained that the US fund’s strategy in Spain in terms of real estate involves renting or buying and selling second-hand homes worth between €120,000 and €150,000. “When you have more than 200 homes under management in a given municipality, the business becomes profitable”, he explained.

Blackstone has invested almost €26 billion in the Spanish market over the last five years. In March 2014, it purchased 40,000 problem mortgages from Catalunya Caixa for €3.6 billion.

Since then, it has purchased: Banco Popular’s toxic property, together with Santander, for more than €5 billion; the Socimi Hispania for €2 billion; and 50.01% of the rental home Socimi Testa for €947 million. Last year, it bought Cirsa, a leading company in the gaming industry in Europe in a deal worth €2 billion.

In terms of the criticisms directed at the rental policies of Blackstone and other funds from certain sectors, Mendiluce has highlighted that in Spain, the funds own just 3% of the total rental housing stock, and that the rest is in the hands of individuals.

“I think that it is difficult to manipulate prices when you only account for a small percentage (of the market)”, he said. “I firmly believe that if there has been very concentrated price inflation in a handful of towns, then that has been due to a lack of supply”, and he pointed out that Spain has the lowest percentage of social housing in Europe.

Fashionable market

Juan José Brugera, President of the real estate company Colonial, was very optimistic about the real estate sector in Spain.

“We are in an expansive phase of the cycle, we are facing lower growth, but growth is growth, and it’s strong in Spain”, he said at the conference organised by Iese. “In the rental cycle, we are still in the growth phase, we have potential for rental growth that we believe ensures a strong performance over the next two or three years” he said.

“The Spanish market is fashionable at the moment, we predict expansive behaviour”, he said. “I have a positive vision, the stock market is behaving a bit strangely, but I think that is due to certain turbulences, both external and internal, that are generating uncertainty”.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

El Corte Inglés Puts a RE Portfolio Worth Between €1.5bn & €2bn Up For Sale

21 December 2018 – Expansión

El Corte Inglés is preparing to shatter the real estate market. The distribution giant has engaged PwC to sell a mega-portfolio containing 130 properties with a valuation of between €1.5 billion and €2 billion, which would represent the largest divestment undertaken by the company to date.

The operation includes a large variety of assets, all of which are non-strategic, and includes shopping centres (not large department stores), logistics warehouses, supermarkets, offices and land. Once the period for receiving offers has closed and depending on the offers themselves, El Corte Inglés will reserve the right to reduce the size of the portfolio. According to market sources, the firm’s intention is not to find a single buyer but rather to slice up the assets into packages.

Real estate portfolio

The company chaired by Jesús Nuño de la Rosa is whereby accelerating the divestment plan launched to reduce debt with a view to obtaining an investment grade rating from the ratings agencies over the medium term.

El Corte Inglés is one of the main owners of real estate assets in Spain, with a portfolio worth more than €17 billion, larger even than those owned by the large Spanish Socimis, Merlin and Colonial, whose asset portfolios were worth €12.2 billion and €11.2 billion, respectively, as at June, and those of the large real estate companies such as Amancio Ortega’s Pontegadea, whose assets were worth €8.8 billion at the end of 2017.

With this large exposure to property, El Corte Inglés is taking advantage of the investor appetite in the market for real estate assets to clean up its balance sheet. Last year, real estate investment reached a new record with transactions worth €18.7 billion, including corporate operations, which represented an increase of 46%. Excluding purchases by companies, the investment figure also reached a historical maximum of €10.8 billion, according to data from CBRE.

In the framework of this plan, this summer, the company sold its centres in Parquesur and La Vaguada, both in Madrid to Unibail Rodamco, the largest operator of shopping centres in Europe. Those assets have a surface area of 20,000 m2 each and were sold for €160 million.

Original story: Expansión (by R. Arroyo & V. Osorio)

Translation: Carmel Drake