Tag: commercial assets

Project Babieca: Bankia Puts €672M Portfolio Up For Sale

21 October 2015 – Idealista

Bankia has put another debt portfolio up for sale, worth almost €700 million and secured primarily by commercial assets (offices and shops), land and industrial assets. The project has been named ‘Babieca’ like the legendary horse of the hero El Cid Campeador.

Bankia is continuing with the process to reduce the real estate exposure on its balance sheet and to that end, has put another loan portfolio up for sale, a technique that has been used all over the world, during the process to clean up the financial sector. In this case, the so-called ‘Project Babieca’ is in the hands of the consultancy firm PwC, which is looking to place the portfolio, worth €672 million, with international investors, according to financial sources consulted.

The portfolio comprises 3 different sub-portfolios, but Bankia hopes to sell them all to a single buyer:

Portfolio Jimena: contains loans amounting to €115 million, primarily secured by land (specifically, 81% is guaranteed). This debt is shared between 9 borrowers, none of which have filed for insolvency to date.

Portfolio Elvira: contains debt amounting to €172 million, of which 78% is backed by commercial assets (offices and shops) and industrial assets. This debt is distributed between 40 borrowers, of which 18 have fallen into arrears.

Portfolio Sol: contains debt amounting to €384 million, of which 73% is secured by commercial assets. This tranche is spread between 30 borrowers, 22 of which are solvent.

According to the sources consulted, Bankia expects to receive non-binding offers from a handful of investors by the middle of October and to receive binding offers by the middle of November. In this way, it hopes to close the sale of this package in December.

If it manages to complete the sale before the end of the year, Bankia will be able to add the achievement to another sale it has already completed of another debt portfolio worth €1,300 million, which mainly contained doubtful mortgages to individuals. That package known as ‘Project Wind’ was awarded to the funds Oaktree and Chenavari (in July).

Bankia has also closed another operation this year, the sale to Bank of America of a hotel debt portfolio at the beginning of June. That operation, known as ‘Project Castle’ comprised 91 operations linked to 45 assets. 56% of the total portfolio related to doubtful debts.

In addition, Bankia has another package of real estate assets up for sale at the moment, the so-called ‘Project Big Bang’, which includes a portfolio of residential and commercial assets and land, worth €4,800 million. This is a sale that the bank is also looking to accelerate and one that would represent the largest sale of real estate assets since the real estate bubble burst.

Original story: Idealista (by P. Martínez-Almeida)

Translation: Carmel Drake

Axiare Buys Building In Madrid From Telefónica For €33M

14 October 2015 – Expansión

The Socimi Axiare Patrimonio has completed the purchase of a new office building. The Socimi has acquired the property located at number 84 on Calle Don Ramón de la Cruz, in the central business district of Madrid, from Telefónica.

The building, which has a surface area of 9,271 m2, is currently vacant, having housed various divisions of the Spanish telecommunications operator in recent years. As such, Axiare will have to look for a new tenant.

Axiare has paid €32.75 million for the property, which it will add to its growing portfolio of investments, amounting to more than €800 million since it first went public in July 2014.

The company invested the €360 million it raised from investors through its debut on the stock exchange in less than one year. And in June 2015, it closed a capital increase amounting to €395 million to finance the continuation of its purchases. Currently, its portfolio comprises 28 properties, with a combined surface area of more than 550,000 m2, of which the vast majority (73%) are office buildings, although it also owns logistics platforms and commercial assets.

Axiare, which made profits of €31.3 million during H1 2015, closed trading yesterday up 2.01%, taking its share price to €12.20. The company’s market capitalisation amounts to €876.9 million, having increased by 17.48% in one year.

The sale of the building by Telefónica forms part of the property divestment process that the operator is conducting for its non-strategic assets. Recent sales include two completed this summer involving properties in Madrid – one in the same street – Calle Don Ramón de la Cruz and the other in Plaza Santo Domingo, for €42 million.

In September, Telefónica also auctioned off five other buildings located in Madrid, Barcelona, Sevilla and Valencia. The group will continue to occupy all of the properties sold recently, with the exception of the latest one.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Deutsche Will Invest €200M In 2015 Through Its RE Fund

1 June 2015 – Expansión

Following the arrival of the first investors, which had a more opportunistic profile, the Spanish real estate market is now starting to show the first signs of stability, with the arrival of more conservative investors. That is the case of the German institutional funds, which manage the savings of wealthy investors and insurance companies in the European country.

These German funds include Ara (Alternative and Real Assets), which is the real estate division of Deutsche Bank. “There is a clear commitment to the recovery of the Spanish real estate sector. In 2014, investment in the non-residential sector amounted to €8,000 million, but we should remember that at the peak of the boom, that volume amounted to €11,000 million. We believe that there are still a lot of good products that have not yet come onto the market”, explains Carlos Manzano, head of Real Estate España at Deutsche Asset & Wealth Management.

For this year, Ara has set a target of investing around €200 million in property in Spain. “We have the capacity to invest twice as much as we (currently) hold (in the portfolio)”, he says.

Change of course

The former Reef has focused its activity in recent years on managing its portfolio, which has included a few divestments. “Pre-2006, we made a lot of investments but then we stopped investing due to the crisis and focused on managing. Now the market has changed and we believe that there is still a lot of good property that has yet to come onto the market”, he explains.

One of their recent major transactions included the purchase of a batch of 1,350 branches from BBVA in the summer of 2009. Those properties, managed by Magic Real Estate, ended up in the hands of the Socimi Merlin Properties. “We decided to sell BBVA’s branches even though there was a business plan (for them) until 2018. But we wanted to take advantage of the opportunity in the market and in the end we obtained a better return than we initially expected. In December, we also sold an office building in Las Rozas (purchased in 2011). But we do not want to be sellers in the Spanish market, but rather buyers. We have now divested everything that we wanted to”.

Currently, Ara is on the look out for good assets. “There are lots of German funds and private clients that are expressing their interest and their preferences have not changed. They are looking for good assets in central locations. It is a product profile that is hard to find”.

Its targets include offices, commercial assets and logistics warehouses; these products are “very much in vogue”, according to the head of the German fund.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Renta Corporación Seeks Partnerships With New Overseas Funds

8 May 2015 – Cinco Días

The Catalan company Renta Corporación hopes to sign at least one agreement with a foreign real estate fund in 2015 to (allow it to) continue investing in new assets. That is what sources at the company said yesterday following the presentation of its results for the first quarter 2015.

Renta Corporación closed the first quarter with a 10% increase in profits, to reach €1.1 million thanks to the sale of four buildings. The company also revealed that it has already committed to future sales worth €33 million. The listed company has debt amounting to €22 million and Sareb currently holds a 5% stake in its share capital.

The partnerships it hopes to sign this year will resemble the agreement it has already signed with the fund Kennedy Wilson Real Estate to acquire and transform residential buildings.

Currently, as a result of this agreement, the joint venture has already invested in property in the central Almagro neighbourhood of Madrid.

These new investment vehicles will allow it to specialise in the purchase of hotels and commercial assets. Renta Corporación hereby gains financial muscle, since almost all of the investment is financed by the fund, like in the case of Kennedy Wilson.

Moreover, in Spain, that Californian firm shares a 51% stake with Värde in Aliseda, the real estate arm of Popular.

After overcoming bankruptcy last year and returning to the stock exchange, Renta Corporación expects to work with these international funds to continue its growth. Sources at the company say that they understand that their experience in the Spanish market is critical for these firms, which in turn provide liquidity.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Bankia Puts Property Worth €4,800M Up For Sale

6 May 2015 – Expansión

Project Big Bang / The financial entity has put a batch of homes, land and commercial buildings up for sale, with the objective of disposing of all of the foreclosed assets left on its balance sheet.

Bankia has decided to accelerate the process to divest its real estate assets with a ‘macro-transaction’ involving a large block sale. The financial institution has launched so-called Project Big Bang, which includes a portfolio of residential and commercial assets (including offices and shops), as well as land, worth €4,800 million.

The transaction is still in its very early stages, involving initial meetings with investors, but it will represent the largest asset sale process seen to date (excluding transfers of debt with real estate collateral).

The properties up for sale include assets that Bankia did not transfer to Sareb following its nationalisation, as well as foreclosed assets resulting from subsequent defaulted payments. Most of the portfolio corresponds to residential assets. Thus, of the €4,800 million assets that Bankia has included in the batch, €3,300 million related to residential properties at 31 March 2015. In total, the bank will transfer 38,545 residential units (flats, chalets, parking spaces and storage rooms), with a total constructed surface area of 3.6 million square metres.

Along with the €3,300 million of residential assets, Bankia is selling 4,938 commercial units worth €1,100 million.

Land at zero cost

The portfolio also includes 2,589 plots of land with a total surface area of 4.6 million square metres. This land has a value of zero, according to Bankia, having been fully provisioned.

The sale is being coordinated by Credit Suisse and KPMG. The transaction may be closed as a single deal or through the sale of several blocks. The sale value may also decrease from €4,800 million to a smaller amount, say sources close to the process.

Many of the large funds, including Blackstone, Lone Star and Apollo, have already expressed their interest in the portfolio. These investors will have to compete with Cerberus, which has a preferential right to examine Bankia’s real estate portfolio. This “preferential” arrangement forms part of the negotiations that the US fund has held with the Spanish entity in recent years. In 2014, Bankia transferred its Bankia Habitat business unit to Cerberus for a consideration of between €40 million and €90 million, together with the 400 professionals who work for the platform.

Last September, Cerberus joined forces with the Norwegian fund Lindorff to acquire some of the doubtful and substandard loans, plus those that had doubtful or substandard outlooks, worth €900 million, which the entity chaired by José Ignacio Goirigolzarri (pictured above) was selling, as part of the Somo transaction. In February, Bankia launched a campaign to accelerate the sale of its remaining properties.

The clean up

Project Big Bang represents the largest divestment initiated by Bankia to date in the foreclosed asset and doubtful debt segment. The entity chaired by José Ignacio Goirigolzarri has been one of the most active in this market, having transferred almost 80 portfolios containing problematic loans since 2013, with a nominal value of €10,000 million.

Initially, Bankia undertook these types of transactions due to necessity, since the restructuring plan agreed with Brussels compelled it to divest non-strategic assets amounting to €50,000 million.

Although it has now almost completed this plan, the entity has decided to ‘step on the divestment accelerator’ in 2015 in order to reduce its default rate and focus its resources on new productive assets that improve its financial results. As well as the foreclosed assets, Bankia is also currently negotiating the sale of problematic mortgages, property developer loans and hotel debt.

If it closes all of these transactions, the nationalised group would become the first entity to withdraw from the segments considered by the market as a burden to the sector.

Original story: Expansión (by R. Ruiz and J. Zuloaga)

Translation: Carmel Drake