Bankinter’s Socimi Negotiates the Purchase of Hotel Meliá Valencia

18 February 2019 – Expansión

Atom wants to strengthen its portfolio with the acquisition of one of the main hotels in Valencia for €50 million.

Bankinter’s hotel Socimi, Atom, wants to strengthen its portfolio and add the Meliá Valencia (formerly the Hilton Valencia) to its list of assets. The property is one of the main hotels in the city, located on Avenida de las Cortes Valencianas, close to the Palacio de Congresos.

Atom, which made its debut on the Alternative Investment Market (MAB) in November, is holding negotiations with the fund Colony to purchase the 4-star hotel for around €50 million, according to explanations provided by market sources speaking to Expansión. Those same sources state that, although the negotiations are in an advanced stage, no agreement has yet been reached between the parties.

History

The hotel, located in a tower standing more than 110m tall, was officially inaugurated in February 2008 and has had several owners since then. The establishment, which has around 300 rooms and 21 meeting rooms, with the capacity to host up to 875 people, is managed by Meliá.

Colony purchased this asset along with some other Spanish hotels just a year ago from the investor group Continental Property Investment, controlled by the Lebanese businessman Boutros El-Khouri (…).

With this operation, Atom would increase its portfolio, which currently comprises 21 hotels and 5,232 rooms, with a gross value of €485 million. 82% of the hotels in its portfolio are 4-star properties and 60% are holiday establishments (…).

Original story: Expansión (by R. Arroyo, R. Sampedro & A.C. Álvarez)

Translation: Carmel Drake

Amazon Revolutionises The Logistics Sector

9 February 2017 – Expansión

The boom in e-commerce and the arrival of the large distribution giants, like Amazon, have caused a genuine tsunami in the real estate market and in the way we understand logistics. Logistics assets – which were, until recently, the ugly duckling of the sector – have really blossomed and now represent one of the investment segments with most potential, given their risk-return relationship, according to the experts.

Operators are increasingly looking for more large logistics warehouses on the outskirts of cities, which they combine with distribution centres situated on ring-roads to make deliveries on time and on budget.

“The effect is a reflection of new consumer habits and online purchases, as well as of consumer expectations, which require products to arrive on time and to be easily returnable (inverse logistics)”, explains Antonio Montero, Director of the Industrial-Logistics business at Aguirre Newman.

Alberto Larrazábal, National Director of Industrial and Logistics at CBRE, said that there has been an increase in the e-commerce market. “Operators are increasingly demanding more logistics and distribution space. In Madrid and Barcelona, 400,000 m2 and 700,000 m2 of space was leased, respectively, in 2016 and e-commerce accounted for 25% of those amounts.

Javier García-Mateos, Partner in Financial Advisory at Deloitte said that “retailers are starting to use their own establishments in cities as logistics and distribution points for e-commerce”.

García-Mateos also said that there is greater demand for the development of cross-docking warehouses (which reduce the time needed for logistics operations and which can be adapted to the needs of e-commerce) in the vicinity of the main urban nuclei. (…).

“Logistics spaces are moving increasingly closer to cities, there are even warehouses inside city centres. These are points where companies can serve their customers in the fastest and most effective way”, said Luis Guardia, Director of the Logistics and Industrial Area at JLL.

Guardia also explained that the major department stores are also committed to opening “regional hubs” to get closer to the major urban nuclei.

Development activity

In terms of investment, Larrazábal considers that the logistics and industrial sectors are becoming more fashionable by the day. “Large funds and private investors will end up acquiring these assets”, he said.

Over the last three years, investment volumes have grown considerably, to reach more than €800 million last year.

One example of this investor appetite is Merlin’s purchase of Saba Parques Logísticos – the company that groups together Saba’s stakes in five parks – for €115 million.

“The logistics market is interesting as it allows the Socimis to diversify and add new assets to their portfolio that generate returns not afforded by the other assets at the moment”, said García-Mateos. Other operators that are committed to this market include Logicor (Blackstone), Zaphir, Prologis, Rockspring, GreenOak and the joint venture between Colony and Neinver.

In the same way, experts indicate that development activity has resumed. “Developers and investors know that there is latent demand in high quality logistics assets and this is encouraging them to buy land and build assets”, said Montero

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Aguirre Newman Sells Portfolio Of Retail Premises For €40M

19 October 2016 – El Confidencial

Less than six months after putting its portfolio of retail premises up for sale, Aguirre Newman has reached an agreement to sell the jewel in the crown: the 14 assets that it owns in Madrid.

According to several sources familiar with the deal, the real estate consultancy has reached an agreement with a Madrilenian family office to close the sale for almost €40 million. With this move, the buyer will acquire a portfolio of assets located, above all, on the Spanish capital’s main high streets.

This lot forms part of the Zaphir real estate fund, which engaged Arcano to organise a formal sales process of 32 retail premises located in several provincial capitals, for a total amount of €80 million.

Nevertheless, during the negotiations and thanks to the attractive offer received for the Madrilenian assets on their own, Aguirre Newman has decided to sell these assets in one lot and to divest the other assets in smaller separate operations.

The portfolio of retail premises in Madrid has an average historical occupancy rate of almost 90% and enjoys a diversified profile of tenants, ranging from giants such as Zara Home, Vips, Trussardi, Cortefiel and Punt Roma to popular corner shops (typically run by Chinese families).

Madrid accounts for 56% of the rental income from this portfolio thanks to the fact that it contains high quality premises such as the store located at number 82 on the sought-after Calle Serrano, which is houses to a Trussardi shop.

Zaphir’s divestments

The sale of these retail premises forms part of Zaphir’s divestment process. The fund also reached an agreement with Neinver and Colony at the beginning of this year to sell them some logistics assets for €87 million.

The recovery in consumption has reawakened investors’ appetite for high street premises, as we saw in 2015, when they invested more than €1,200 million in retail premises, significantly exceeding the historical investment volume in the segment.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Aguirre Newman Puts Large High Street Portfolio Up For Sale

21 April 2016 – El Confidencial

Aguirre Newman has decided to put the “For Sale” sign up on one of the largest assets that it owns through its fund, Zaphir. The asset in question is a portfolio of retail outlets spread across Spain, all of which are located on major high streets. Moreover, unlike the operations carried out by the banks and El Corte Inglés, this portfolio has lots of different tenants.

The firm, which has engaged Arcano to lead the process, considers that this multiplicity of clients is an advantage, along with the €32 million of prior year tax losses recorded by the holding company that owns these premises, which mean that the operation carries tax advantages of around €8 million.

Zaphir has already started to show the 32 assets that comprise this operation to a restricted number of interested parties, mainly core investment funds, Socimis and large family offices, on the basis that the estimated sales price amounts to €80 million, according to sources familiar with the process.

Although the portfolio is spread across Spain, almost half of the premises (15) are located in Madrid and they account for 56% of the rental income, together with some first-rate properties, such as number 82 on Calle Serrano, which houses the Trussardi store.

Despite the interest that some of these premises may awaken individually, the operation has been structured as a “share deal”, in other words, the company will be sold in its entirety, which will allow the new owner to avoid paying taxes on the gains generated by these assets, and any others than it already owns, until the prior year tax losses have been offset.

The average yield of the portfolio is estimated to amount to 4-4.5%, whilst its historical occupancy rate stands at 90%, with clients ranging from retail giants such as Zara Home, Vips, Trussardi, Cortefiel and Punt Roma, to pound shops and newsagents.

The sales process

Aguirre Newman’s decision to sell this portfolio forms part of its divestment plans for the Zaphir fund, which just two months ago completed the transfer of its logistics assets to Neinver and Colony for €87 million.

But, this divestment also comes at a particularly sweet time for the sector, given that interest in investing in profitable real estate assets is at its peak, due to the environment of zero and negative interest rates and the recovery of the Spanish economy.

In fact, last year, according to several studies, almost €1,200 million was spent on transactions in the retail sector, and some establishments in prime areas were sold with yields of around 3%.

This year it is expected that operations involving this kind of asset will multiply, both on the high streets of major capitals, as well as in secondary cities. These operations are beginning to address the recovery in consumption and the growing interest for a presence in our country, from both major fashion firms (Inditex, Primark, H&M and Uniqlo) as well as from players in the restaurant world (the hamburger chain Five Guys has arrived in Spain, opening its first property in Madrid).

The calendar communicated to potential buyers allows for the presentation of non-binding offers within the next two weeks, with the aim of closing the operation before the summer. Aguirre Newman and Arcano both declined to comment on the operation.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

German Bad Bank Finalises Sale Of Spanish Assets To Oaktree

8 May 2015 – Cinco Días

Over the next few weeks the German bad bank is expected to sell the assets that it owns in Spain. FMS Wertmanagement expects to sell the so-called Gaudí portfolio, which contains properties in Spain and Portugal, in a single transaction to Oaktree.

“Now is the time to sell the whole portfolio”, said José Holgado yesterday, Commercial Director of FMW Wetmanagement, at the Spanish real estate market’s second investment forum, which was held yesterday as part of SIMA (Salón Inmobiliario Internacional de Madrid or Madrid International Real Estate Fair). Holgado estimated that the value of the portfolio amounts to almost €900 million, although that is the nominal value, which will be reduced during the final negotiations.

The German entity, created in 2010 with assets from the nationalised Hypo Real Estate bank, operates in the same way as Sareb, the Spanish bad bank. Although the nominal value (of the portfolio) is almost €900 million, it is understood that these non-performing loans and assets have lost value since the start of the housing crisis, therefore they will be sold at below market prices, in the same way as (the assets sold by) the Spanish Sareb. Moreover, since (the portfolio is being) sold on a wholesale basis, the cost will also decrease.

Although several funds have valued FMS Wertmanagement’s portfolio, in the end it will be the Californian fund Oaktree, owner of Panrico, which takes over the Gaudí portfolio, subject to the negotiation of the final details. One of the most significant assets in the portfolio is the luxury Hotel Arts de Barcelona, a five star property managed by Ritz-Carlton. This complex was acquired by several buyers in 2006, including one company that was linked to the Singapore fund GIC. The German bank Hypo Real Estate was one of the entities that granted loans (to it). Once HRE was nationalised, part of the unpaid, syndicated debt was transferred to FMW Wertmanagement.

Other funds

According to the specialist publication CoStar, in addition to Oaktree, the portfolio also sparked interest from other funds including Cerberus Capital Management, Orion Capital Managers and Colony Capital. That publication estimates that the final price of the transaction will amount to approximately €500 million.

The sale of the Gaudí portfolio, which is being managed by Cushman & Wakefield, comprises 16 loans in Spain and two in Portugal. According to sources close to the transaction, Oaktree would immediately acquire another five star hotel in Cascais (Portugal), five shopping centres, four office blocks, 17 industrial storerooms, as well as several other residential and industrial assets.

The shopping centres include the MegaPark in Barakaldo (Vizcaya), Heron City de Las Rozas and Plaza Éboli, both in Madrid.

According to Holgado, FMW Wertmanagement commenced operation holding debt from assets worth €175,000 million, of which €100,000 million have now been sold. The director of the German bad bank said that now is the right time to sell given the significant liquidity in the market.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Who Are The New Property Owners?

20 April 2015 – Expansión

Plans / International funds and Socimis are the main players in the sector

Apollo, Blackstone, Cerberus, HIG, Hispania, Intu, Lone Star, Merlin and Oaktree have gone from being virtually unknown names to being the key players in the Spanish property market (in a matter of months).

Over the last year and a half, large international funds have been investing hundreds of millions of euros in the purchase of property in Spain, both directly as well as through listed real estate investment companies (Socimis).

Värde, Apollo and Lone Star all burst into the market by purchasing real estate platforms from financial institutions. The latter has said that it wants to become the largest land developer in Spain and to that end, it is considering purchasing not only portfolios of land but also small and medium-sized (land) developers. Lone Star has already purchased the real estate arm Neinor from Kutxabank for €930 million, as well as Eurohypo’s loans in Spain for a further €3,500 million.

HIG and Castlelake are looking to buy land in Spain too.

Another investor that is backing Spain with more strength than ever is Blackstone. The largest fund manager in the world has purchased 1,860 homes for rent, as well as a group of office buildings, located in Madrid and Barcelona. One of the players that is most interested in the office market is the Spanish fund Meridia Capital, led by the former Sareb (director) Juan Barba; it has purchased a portfolio of office buildings from General Electric. It is competing against IBA Capital – the French manager has created a Socimi, which has not yet been listed, with headquarters and commercial buildings.

Along with these offices, the other assets that are sparking the most interest amongst investors are shopping centres. Green Oak has already invested €160 million together with Baupost on the acquisition of 6 properties from Vastned. The British group Intu wants to become the leading player in this segment in Spain and to that end, it paid €451 million for Puerto Venecia. Oaktree spent €100 million on Gran Vía de Vigo.

Other important players in this new era for the real estate sector are Socimis. Axia RE, Hispania, Lar España and Merlin have invested almost €3,000 million in assets, which include hotels, offices, logistics centres and warehouses. This last type of asset is attracting considerable interest. The fund Colony has just formed a partnership with the Spanish company Neinver to purchase 16 logistics warehouses.

Finally, in the hotel segment, Cerberus and Orion have purchased Sotogrande, the real estate subsidiary of NH for €225 million.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Neinver Joins Forces With Colony To Buy 16 Logistics Centres

29 January 2015 – Expansión

The Spanish real estate company Neinver, which specialises in the development and management of outlet centres in Europe, has signed an agreement with Colony Capital to buy 16 logistics platforms mainly located in Spain plus two in Portugal.

The purchase will form part of a joint venture created by both companies to invest a budget of €200 million in the Spanish and Portuguese real estate sectors. According to market sources, Neinver and Colony will have invested around €50 million on their first purchase.

The transaction was performed as a sale & leaseback arrangement, whereby the existing owner transfers ownership and remains as the tenant. These platforms are mainly located in Madrid, Zaragoza, Sevilla, Valencia and Lisbon.

Original story: Expansión

Translation: Carmel Drake