Haya Reactivates its IPO After Protecting its Mega-Contract with Sareb

8 November 2018 – Cinco Días

One of the IPOs scheduled for this year is going to be executed next year, most likely in the window that will launch in May. The bane that was weighing down on Haya Real Estate, the end of its mega-contract with Sareb, has almost been lifted. The contract was signed in January 2015 and expires in December 2019, but financial sources are now certain that it is going to be renewed. Nevertheless, Sareb is likely to pay lower commissions to the real estate asset manager (servicer, in the jargon). The appraisal value of the firm ahead of its stock market debut amounts to around €1.2 billion.

Last May, Sareb put assets worth around €23.5 billion up for sale, comprising property developer loans and real estate assets. They accounted for 60.6% of the €38.8 billion that Haya had at the end of June.

That caused investors to panic about their bonds, whose yield soared to 8.5% (refer to the graph) and put in doubt Haya’s stock market debut this year, as Cinco Días published on 4 June. Now, the yield on that debt amounts to less than 7%. Haya has engaged Rothschild as its chief IPO advisor and Citi and JP Morgan as the coordinators.

But last summer, the so-called bad bank decided to suspend that operation and opt, in all cases, for smaller sales. Thus, the firm controlled by Cerberus was going to manage those assets until the end of the year. The sources consulted indicate that, after the divestment was ruled out, the negotiations between Sareb and Haya progressed at a good pace and the likelihood of the contract being extended now exceeds 90%. Barring a last-minute change of heart, the two entities will announce the extension of the agreement before 30 June 2019. Nevertheless, a spokesperson for Sareb clarified that a decision has not yet been taken. A spokesperson for Haya declined to comment on the information.

The final discussion points relate to the commission that Sareb is going to have to pay Haya. By contrast, the servicer is not going to pay any upfront payments, like it did in at the start of the current contract, for €235 million.

The other question that must be resolved in parallel to the stock market debut is that of a possible merger. Sabadell has put its asset manager, Solvia, up for sale for around €400 million, and Cerberus (Haya’s main shareholder) is the main interested party. In fact, Cerberus has already acquired 80% of Sabadell’s real estate assets with a book value of €9.1 billion. Santander and Apollo are also in the process of selling Altamira, and Haya is exploring possible business opportunities outside of Spain.

In addition to Sareb’s assets, Haya Real Estate is also likely to manage the majority of the assets that BBVA has sold to Cerberus for around €4 billion (with a book value of around €13 billion). It has also already been agreed that Haya Real Estate will manage the future flows of toxic property from BBBA. Haya will also add the so-called Ágora portfolio to its assets, comprising €650 million purchased by Cerberus from CaixaBank.

Until the amount of assets managed is increased, it already has a Bankia portfolio amounting to €5.5 billion under management, thanks to a contract signed in May, as well as portfolios from Cajamar (€5.9 billion), Liberbank (€2.9 billion) and other firms (€1 billion). Between January and June, Haya recorded revenues of €130.2 million, of which €64.9 million was converted into EBITDA. On Thursday 15 November, the firm will publish its accounts to the end of September.

Original story: Cinco Días 

Translation: Carmel Drake

The CNMV Approves Housers As A RE Platform

9 May 2017 – Cinco Días

Housers markets itself as “the leading real estate investment platform”, which allows users to invest in property in the best areas of large cities for as little as €50. It pays rental income to its users and allows them to benefit from the appreciation in real estate prices when the property they invest in ends up being sold.

It is the largest platform in the sector, with more than 42,000 users, of which around 40% have already invested. Since it began life in April 2015, its users have invested more than €22 million. And, following extensive negotiations with the CNMV, the platform has now received approval from the supervisor chaired by Sebastián Albella. (…).

Sources familiar with the situation say that, since the beginning, Housers has been in contact with the supervisor, chaired in theory by Elvira Rodríguez, and then its conversations intensified with Sebastián Albella. In this way, the problem with Housers was that it joined together fund-raising activity with the promotion of that activity, and that was not permitted by law.

Sources close to the entity explain that the platform has spun off both activities. (…).

As such, Housers Global Properties will now be called Housers Global Properties PFP SL. In an email sent out to its users, the firm explained that since it began operations in April 2015, it has managed to finance 92 properties: 73 in Madrid, 9 in Barcelona, 7 in Valencia, 1 in Marbella and 2 in Palma de Mallorca.

Housers generates a return, known as a dividend, which varies by project, but the historical average amounts to around 3.6%. On the firm’s website, it advertises a return of 6.6% from investing in Zurbano. In addition to the rental income, investors benefit from rises in property prices, amounting to more than 12%, on average.

Sources close to the platform highlight that its mantra is to obtain certainty around its investments, which is why it has to buy homes in central areas, as a way of saving. Its core cities are Madrid, Barcelona, Valencia and Palma de Mallorca. Housers mainly invests in housing and retail premises for rent, as well as in properties for renovation and subsequent sale. (…).

How does the platform earn money? Housers charges a 10% commission on the dividends it pays out, as well as on the proceeds from its property sales. (…).

Original story: Cinco Días

Translation: Carmel Drake

Hispania Negotiates New Strategic Focus With Soros

29 December 2016 – El Confidencial

It hasn’t always been a Socimi. When it debuted on the stock market on 14 March 2014, Hispania Activos Inmobiliarios was an investment company owned by a Socimi, a structure that had chosen very carefully, given that the formula allowed it, amongst other things, to acquire assets by purchasing debt, like it did, for example, with Hotel Guadalmina, its first major operation in the most tourist segment of the real estate business.

But there was another more fundamental reason for adopting that structure: the limited life period that it was born with. Unlike the other three large Socimis – Merlin, Lar España and Axiare –which fired the starting gun from the get go in this booming sector, Hispania was created in accordance with a detailed timetable that included three investment years and another three divestment years, as the company explained in detail in its IPO prospectus.

Nevertheless, the company left the door open to expand this horizon, provided it received the green light from its shareholders at the General Shareholders’ Meeting, a date towards which the team at Azora, Hispania’s management firm, is now working. Azora is finalising a new proposal with the aim of receiving the approval of its investors in March, when the vehicle will celebrate three years of life.

According to several sources, the now Socimi (it adopted this company structure just before the summer) is negotiating with its main shareholders, led by George Soros, not only to extend the company’s life term, but also to adopt a new value proposition, based on specialising increasingly in hotels, to the detriment of offices and homes, and in modifying the management policy. Hispania itself has declined to make any comments in this regard.

The Hungarian magnate’s confidence in Hispania was underlined during the company’s latest capital increase, which he subscribed to in accordance with his proportional share, and in the messages that he has sent to the Azora team, in that he is willing to continue to back the company, but that he wants to make a series of changes that will directly affect the interests of the management company.

According to the same sources, Soros is interested in internalising Hispania’s management team in some way, rather than having it operating externally as it does currently, and in modifying the fee policy, which the management contract splits into a fixed part, the base fees, and a variable part, the incentive fees. The first is a commission linked to the investment percentage of the initial net funds raised through the IPO; and the second is a commission relating to the level of returns obtained from the investments.

Strategic change

Since its creation and until the third quarter of 2016, the last period for which official figures are available, Hispania has invested €857.1 million in hotels, €395.3 million in offices and €177.9 million in the residential sector, bringing its total investment volume to €1,430.3 million, almost three times more than the amount it raised through its debut on the stock market (€500 million).

It was then that Soros appeared as the company’s major shareholder and anchor investor, and that is a role that he continues to play today, controlling as he does 16.67% of the shares. (…).

In recent months, the company has undergone a major reorganisation of its structure, with the conversion of all of its subsidiaries into Socimis and the absorption of them. All of these steps are oriented towards the same purpose, to convince the shareholders of the appropriateness of continuing to back this vehicle. Albeit, with a new road map. The proof will be in the pudding in March.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Engel & Völkers’ Sales In Spain Soared By 45% In H1

28 July 2016 – Expansión

The German real estate company Engel & Völkers, which specialises in the sale of luxury assets, increased its (global) turnover by 41% during the first half of the year. In Spain, its revenues soared by 45.1%, to reach €690.9 million. This growth was driven by operations in both the sales and rental markets.

The company, which plans to open nine new outlets in Spain, attributed this “good progress” to strong demand for premium properties in holiday areas such as Mallorca, a fundamental market where its business grew by 79% during H1, as well as in large cities, where it has a presence through the Metropolitan Market (MMC).

At the global level, the group increased its revenues from commission by 26.2%, to €229.4 million.

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

Engel & Völkers’s Sales In Spain Rose By 46.3% In 2015

28 January 2016 – Expansión

The German real estate agency Engel & Völkers, which specialises in the residential sector, grew by 46.3% in Spain in 2015, selling properties worth €1,023 million during the year, compared with homes worth €699 million in 2014.

Last year, the company closed 1,785 house sales, up by 66.7% compared with 2014, with an average price of €616,106 per home, which represents a decrease of 5.6% with respect to the previous year.

In terms of the rental market, the number of homes managed by the firm in Spain increased by 116.3% to 1,566 operations. In this segment, the average price decreased by 5.5%, in line with the market trend, to €2,178/month.

In the rest of the world, Engel & Völkers increased its revenues from commissions by 36.4% to €409.8 million, which represents an increase of more than €100 million, compared with the €300.3 million recorded the year before, and a new record in the company’s 35-year history, according to Europa Press.

In its central European market alone, in particular in Germany, Austria and Switzerland, the company increased its turnover by 15.2% in 2015 compared with 2014, whilst in North America, its revenues rose by 133%.

Original story: Expansión

Translation: Carmel Drake

BMN Sells Part Of Its Recovery Business To Lindorff

6 October 2015 – Expansión

BMN is completing the sale and outsourcing of its recovery business in an agreement with Lindorff. The entity, led by Carlos Egea, has awarded the management of its late-stage non-performing debt portfolio (balances that have been overdue for more than 120 days) to the Norwegian financial group, according to financial sources consulted by Expansión.

According to the same sources, Lindorff has paid around €20 million for the contract to manage this debt for ten years.

It is the second such contract that BMN has awarded to Lindorff. The Norwegian group has been managing BMN’s early-stage non-performing debt portfolio (balances that have been overdue for up to 120 days) since the beginning of 2014; it paid €36 million for this contract.

The nationalised group also did the same thing with its own firm Inmare, dedicated to the management of foreclosed assets and real estate debt; it sold the company to Aktua (owned by Centerbridge) for almost €50 million.

In total, BMN has obtained just over €100 million from these kinds of operations in recent years. These types of sale allow the entity to generate capital gains, which it uses to strengthen its capital base. Although the funds, in this case Lindorff, pay the capital upfront, they recover it subsequently through commissions based on objectives.

Specialisation

One of the other reasons behind such deals, which would have carried less weight in this transaction, is the outsourcing of a service in which banks are not experts and whose results improve when it is delegated to specialist firms such as Lindorff.

The operation has been advised by Montalbán Atlas Capital, a firm that has coordinated similar transactions in the past, such as the one closed by Popular, which sold its recovery business EOS for €135 million; and Sabadell, which sold its business to Lindorff, for €162 million.

In addition to the sale by BMN, Ibercaja has launched the transfer of its real estate management division, together with all of its foreclosed assets, in an operation known as Project Kite.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake