Tag: consideration

CVC to Purchase the Universidad Alfonso X for c. €1.1bn

26 March 2019 – El Confidencial

Following Permira’s acquisition of Universidad Europea de Madrid in December for €770 million, CVC Capital Partners is following suit. The private equity firm is on the verge of completing negotiations to buy Universidad Alfonso X El Sabio (UAX), also in Madrid.

The consideration for the operation could amount to €1.1 billion, equivalent to 14 x EBITDA, an investment record that reflects the huge interest in the sector from private equity firms.

The main shareholders of UAX are Jesús Núñez, who owns a 72% stake and Manuel Piñera Gil Delgado, who owns 15.67%, together with his ex-wife María Teresa Gallego García, heir of the alcoholic beverage company DYC. Another 7% is owned by their nephew José Jaime Núñez.

Currently, the most significant investments owned by CVC Capital Partners in Spain are its 20% stake in Naturgy, worth €3.8 billion, which it shares with Corporación Financiera Alba; its 25% share of CLH worth €1 billion; Deoleo, the olive oil company that is facing serious financial problems; and Lecta, formerly Torraspapel.

Jesús Núñez created UAX in 1993 after reaching an agreement with the Town Hall of Villanueva de la Cañada, which granted him the right to use 1 million m2 of land for 75 years on which to build the campus. The university now educates 15,000 students per year, generates a turnover of €104 million and makes a net profit of €45 million.

Original story: El Confidencial (by Agustín Marco)

Translation/Summary: Carmel Drake

Bizcayan Investors Acquire the Café Iruña Building in Bilbao for €18M

11 September 2018 – El Correo

It seems that, sooner or later, everything that is put up for sale in the real estate market in Bilbao ends up being sold. No matter how big the operation. The latest example is the building that houses Café Iruña; an iconic property in the heart of the city, which the Heredia-Spínola family has sold for around €18 million. The entire operation, from when the property was put on the market, to the negotiations and finally the sale, have been conducted with the utmost discretion. In the end, according to sources speaking to El Correo, a Bizcayan investment fund has taken ownership of the building, although international funds also expressed interest.

Initially, the asking price was €20 million, but after a few weeks, that figure was reduced to €18 million (…) for several reasons. According to experts consulted, one of the main drawbacks of the building is that it comes “with tenants” (…). And, what’s worse, many of those tenants pay low rents.

Specifically, around twenty companies undertake their activity in this property, ranging from law firms and attorneys to advisors, massage salons, yoga and pilates studios, insurance brokers, psychologists, study centres and a nursing home for the elderly. Some have long-term long contracts, which will force the new owners to hold intense negotiations if they want to evict them and make a radical change to the operation of the building.

In this sense, there is already talk in social media about the upcoming closure of Café Iruña, an icon of Bilbao since 1903, although that information has been categorically denied by its owners, Grupo Iruña Servicios de Hostelería. They explain that the business will continue – its contract runs until 2020 – and that no closures are planned.

Bilbao as a safe haven

In addition to all of that, another of the problems that the experts associate with this building and which may have made its sale more difficult than expected are its internal features, “it does not have an internal patio”, which makes the central spaces “very dark”, above all if the plan is to convert the property into housing.

Even so, despite everything, the building has now been sold and is another example of the appeal of Bilbao’s property sector. In reality, the real estate market has been consolidating its position for a long time as a safe haven for many investors who, with interest rates at minimum levels, are looking for alternatives to invest their money, albeit with moderate returns (…).

This is happening across almost all of Spain. But in Bilbao, there are additional attractive features: rents are high and land is in short supply. A good combination for doing business in the housing market. On the other hand, the environment is stable, a far cry from the upheavals in Cataluña (…). Moreover, with the disappearance of ETA, Euskadi has shed its straitjacket (…).

Original story: El Correo (by Luis Gómez & Luis López)

Translation: Carmel Drake

Colau Sells Mediapro’s Headquarters to a Company Based in Luxembourg

19 June 2018 – El Español

The Town Hall of Barcelona has sold the shares of the joint venture company Mediacomplex SA, created by the Town Hall and the businessman Jaume Roures (pictured below), with the aim of constructing the Imagina building in 22@, to an unknown company headquartered in Luxembourg. This direct award to the overseas company, which will be made official today, has the backing of the municipal legal services and comes after no companies bid in the auction held at the height of the independence process, between 14 September and 14 November 2017.

The history of this project goes way back, given that it began in 2004 when Joan Clos was the mayor of the city. And its dissolution has been extremely arduous. Fourteen years ago, Mediapro constituted, through its company Rilson XXI Inmuebles SL, a joint venture with the municipal company 22@, subsequently absorbed by Barcelona de Infraestructuras Municipales SA (Bimsa). That joint venture is Mediacomplex, in which the Town Hall held a 33.3% stake and Mediapro the remaining 66.7%. The aim of the company was to construct the Imagina building, located at number 177 Avenida Diagonal, in the heart of the 22@ district and where companies belonging to Roures’ group have their headquarters.

The agreement specified that the Town Hall would pay €16.8 million to carry out the project, whilst Roures would pay a fee for the use of the land, owned by the state. But the businessman never made his payments and instead accumulated a debt amounting to €2.9 million.

Given that situation, in the summer of 2017, the government’s team decided to annul the contractual relationship with the businessman. The Board of Directors of Bimsa initiated the process to auction off the shares in the joint venture. In September of that year, 21 companies expressed their interest in acquiring the Imagina building. But two months later, none of them bid in the auction, which was abandoned. The period between 14 September and 7 November – the deadline for the submission of offers – coincided with the most critical period of the independence process.

It was then that the Town Hall commissioned a legal report about the viability of proceeding with the direct award of the shares in Mediacomplex to the company HEVF Master HoldCo S. À. R. L, constituted in October 2017, owned 100% by Hines European Value Fund SCP. The lawyers backed that operation, involving the purchase of 6,638 shares in Mediacomplex at €2,812 each, taking the total consideration to €18.6 million. The company made the offer in April.

But, as it happened, two weeks ago, the Board of Directors of Bimsa met, without the attendees being informed about the sale. That is according to assurances given by the PP councillor for the Town Hall Eduardo Bolaños, who is a member of Bimsa. “It is strange that we were not informed about that operation. We do not understand why that company had not bid in the auction that was abandoned. If it did, we are not aware of it and we are going to ask the Economy and Finance Committee about it all”, he explained.

That Committee, which will meet today Tuesday, will address the sale of Mediacomplex to the Luxembourg-based company.

The Imagina building was used by Mediapro to install the international press centre for the illegal referendum of 1 October. Similarly, the candidacy of Junts per Catalunya, with Carles Puigdemont at the top of the list, launched its electoral campaign at the venue.

Original story: El Español (by María Jesús Cañizares)

Translation: Carmel Drake

Carrefour’s RE Subsidary Acquires 6 Shopping Centres for €182M

4 May 2018 – El Economista

Carmila, the real estate subsidiary of Carrefour, has acquired six shopping centres next to its hypermarkets in Spain from the fund Pradera European Retail, for a total consideration of €182 million and with an average yield of 6.3%, according to a statement issued by the French company on Friday.

Through these new acquisitions, the group plans to renew these spaces with the aim of revitalising them towards a family concept to optimise occupancy rates and strengthen their activity with the deployment of digital marketing tools, such as websites, databases and service kiosks.

The company’s new assets, which have been financed through bond debt amounting to €350 million issued in February, are located in Córdoba, Cádiz, Sevilla, Alicante and in Barcelona, where it has acquired two shopping centres.

At the end of last year, Carmila’s total portfolio comprised 206 shopping centres, located in France, Spain and Italy, worth €5.8 billion in total. The company, which is listed on the Euronext stock exchange in Paris, will hold its General Shareholders’ Meeting on 16 May and will present its half-year results on 27 July.

Original story: El Economista

Translation: Carmel Drake

Savills & Aguirre Newman Complete Their Merger

3 January 2018 – Eje Prime

Without any fuss whatsoever, Savills and Aguirre Newman ended the year by completing their merger. On the last working day of the year, the British company announced to the London Stock Exchange that it had finally signed the agreement to buy the Spanish real estate consultancy. The company, which announced its intention to acquire the Madrid-headquartered business through the same channel on 28 July 2017, will pay €67 million by way of consideration.

According to the document that proves the purchase of Aguirre Newman, the British consultancy firm paid €42 million at the time of the signing and will pay the remaining balance in instalments of €5 million over the next five years, to reach the €25 million agreed between the two parties.

In theory, Savills had planned to complete the purchase before 30 November, however, administrative setbacks delayed the signing. Nevertheless, the company said that all of the paperwork was completed before the end of 2017 (…).

The need of both groups to sign their merger before the end of the year was also an administrative priority, given that they wanted to start the new year afresh to operate under the brand, Savills Aguirre Newman, from the beginning of 2018. Moreover, this change will result in a significant number of changes to its operations in Spain. The first will see it move to a new headquarters in the financial heart of Madrid.

The Spanish subsidiary of Savills has set the wheels in motion to move its offices to one of the capital’s main skyscrapers. After lots of negotiations, the new consultancy firm will move into the Castellana 81 building, better known as the Torre BBVA. The company will lease 8,000 m2 of space after reserving six floors in the building from the Socimi GMP, which owns the asset.

Built in 1981, Torre BBVA is one of the symbols of the Azca financial district in the Spanish capital. GMP renovated the asset after buying it and, coincidently, Aguirre Newman, along with CBRE, were appointed to look for new tenants for the building. The consultancy firm plans to move into its new offices as soon as the integration of the two companies has been formalised.

In terms of the business of the two consultancy firms in Barcelona, sources in the Catalan capital indicate that it is very likely (although not definite) that the Savills staff located in the Catalan capital will move to the offices that Aguirre Newman has on La Diagonal in Barcelona, given their location and capacity.

Another matter still up in the air is the duplication of the entire organisational structure of both companies. Savills’ intention is to maintain the entire workforce, although it is more than certain that many of the directors will leave the company voluntarily, according to sources consulted by Eje Prime.

The Presidents of Aguirre Newman, Santiago Aguirre and Stephen Newman, and the President of Savills España, Rafael Merry del Val, will be appointed to the Board of Directors of the combined company, in the following roles: Santiago Aguirre, Chairman of the Board; Stephen Newman and Rafael Merry del Val, Executive Co-Vice-presidents.

The senior management team of Aguirre Newman and Savills España will retain and include José Navarro, current CEO of Savills España; Javier Echeverría, CEO of Aguirre Newman; Jaime Pascual-Sanchiz, Executive Director General of Aguirre Newman, and Ángel Serrano, Director General of the Business at Aguirre Newman. The office in Barcelona is going to be led by Anna Gener and Arturo Díaz, as the CEO of Savills Aguirre Newman and President of the group in Barcelona, respectively. The real headache for Savills Aguirre Newman will come with the next level of management, although those roles will not be assigned for several weeks yet (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Liberbank’s RE Clean-Up Exercise Echoes Santander’s Deal For Popular

30 October 2017 – Expansión

Liberbank has learned the lesson that Santander taught the market a few months ago when it teamed up with Blackstone to divest almost all of the damaged real estate risk that Popular had held. The bank led by Manuel Menéndez has now also joined the trend of selling most of the capital of a new company, but retaining a stake in it so as to benefit from the future recovery in real estate prices.

The entity, which has just launched a capital increase amounting to €500 million, has also announced that it has created a company using real estate assets that have a book value of €602 million; Bain Capital will own the majority stake (80%), and the remaining 20% will be shared between the bank itself, with a 9.9% stake, and Oceanwood, with a 10.1% stake. Oceanwood is an investment fund that is the largest individual shareholder in Liberbank, with a stake of just over 12%, after the stakes held by banking foundations that gave rise to the entity.

Under pressure

The European supervisory authorities and the main international investment funds are putting pressure on the European banks to divest their toxic assets as soon as possible in order to recover the profitability lost in recent years, having overcome the worst of the financial crisis (…).

When Santander purchased Popular for €1, the first decision that it made public was that of putting all of Popular’s problematic real estate assets up for sale.

To that end, it decided to increase the coverage ratio of those assets to more than 60%, charging it against Popular’s reserves, to allow it to find a buyer more easily. In the end, it decided to accept Blackstone’s offer, which valued the entire real estate portfolio at €10,000 million and which saw the investment fund acquire 51% of the new company and Santander hold onto the remaining 49%. For Santander, the operation was attractive because it allowed it to immediately recover €5,100 million, it removed Popular’s real estate risk from the balance sheet and it left the door open for the entity to recover more money in the future to the extent that Blackstone proceeds to sell the new company’s assets.

Liberbank has done the same, although in a smaller proportion. In its case, the volume of assets is substantially smaller, €602 million compared to €30,000 million in Popular’s portfolio; moreover, its share of the new real estate company is also much smaller; it will be left with a 9.9% stake, whilst Santander owns 49% of its company.

But the result is similar. Liberbank is removing a very significant percentage of the damaged real estate risk from its balance sheet by the same means as Santander did. Raising the coverage ratio of these assets to a sufficient percentage so that an investment fund like Bain Capital Credit, and also Oceanwood, are willing to invest a not inconsiderable amount of money.

Investment

If the valuation of Liberbank’s assets is the same as those of Popular, Bain and Oceanwood will have invested just over €230 million in the operation.

A notable difference with respect to Popular’s operation is that there is a third player in Liberbank’s case. The fund Oceanwood, the bank’s largest shareholder after the banking foundations, which has also committed to participating in the capital increase in an even higher proportion to the amount that corresponds to it based on its current stake, has also decided to form part of the new real estate company, which will be constituted as a Socimi. Those two decisions may be interpreted as a clear commitment that the entity will be worth more in the future than it is at the moment and as a clear vote in favour of the current management team (…)

Original story: Expansión (by Salvador Arancibia)

Translation: Carmel Drake

Savills & Aguirre Newman Will Sign Their Merger In November

5 September 2017 – Eje Prime

A month after closing the most important corporate transaction in the real estate sector so far this year, the details of Savills Aguirre Newman are starting to be revealed. Sources close to both companies have explained that the merger will be definitively sealed in November, which is also when the organisational chart of the newly created company will be redrawn.

Whilst to date, Savills and Aguirre Newman have continued to operate independently, “they will start to manage their businesses in Spain together from 2018 onwards”, according to both companies. “For the time being, there is a willingness on the part of Savills to buy and on the part of Aguirre Newman to sell, however, the formal signing of the sale and purchase has not been carried out yet”, explain sources at both groups. The formal agreements will be signed in November, at the latest.

Moreover, the new company’s plans include looking for new offices for its teams in Madrid and Barcelona. Whilst sources in the Catalan capital indicate that it is very likely (albeit not definitive) that the Savills employees located there will move to Aguirre Newman’s offices on La Diagonal in Barcelona; in Madrid, it is almost certain that a new office will be leased to house the employees of both companies. “All of the options are being considered, including the existing headquarters of Aguirre Newman and Savills in Madrid and Barcelona”, say sources close to the operation.

Another issue that has been left up in the air with Savills’ purchase of Aguirre Newman is the duplication of the entire workforce of both companies. For the time being, according to the same sources, “Savills’ intention is to hold onto all of the employees, although it is already clear that many of the directors will leave the company voluntarily”.

The Presidents of Aguirre Newman, Santiago Aguirre and Stephen Newman, and the President of Savills España, Rafael Merry del Val, will be appointed to the merged company’s Board of Directors, with the following roles: Santiago Aguirre, President of the Board; Stephen Newman and Rafael Merry del Val, Executive Co-Vice-presidents (…).

At the end of July, Savills and Aguirre Newman announced that the purchase would be carried out for approximately €67 million. With this acquisition, the British company will multiply its size in Spain seven-fold, increasing its workforce from 70 professionals to around 500 (…).

International plans

Another issue on the table is the internationalisation of Aguirre Newman following its purchase by Savills. Until now, the international presence of Aguirre Newman has been sustained thanks to an agreement with the network of consultancy firms GVA. However, that partnership may well be cancelled once the purchase of the Spanish real estate consultancy by the British stalwart has materialised (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Axa & Sonae Sierra Team Up To Buy Área Sur Shopping Centre

16 June 2017 – Observatorio Inmobiliario

Axa Investment Managers – Real Assets and Sonae Sierra have announced the completion of their purchase of the Área Sur shopping centre (in Jerez de la Frontera, Cádiz) from its owner until now, Union Investment Real Estate. For the time being, the amount paid for the operation has not been disclosed, but sources consulted by Observatorio estimate that it must have gone for more than €100 million. To carry out the acquisition operation, the buyers have constituted a joint venture, in which Axa IM – Real Assets will be the majority shareholder (with 85% of the capital), whilst Sonae Sierra will hold the remaining 15% and will be the Operating Partner.

Inaugurated in September 2007, Área Sur has a gross leasable area (GLA) of 47,000 m2, spread over three floors, as well as 2,344 parking spaces. The first floor, measuring more than 23,400 m2, is home to fashion brands such as Zara, Primark, Massimo Dutti, Cortefiel, Sfera, Bershka, Pull & Bear, Springfield, Stradivarius and Okeysi, amongst others. The top floor houses a large leisure and restaurant space, spanning 10,000 m2, as well as an 11-screen Yelmo cinema, whilst the ground floor, measuring 14,200 m2, has a Mercadona and an El Corte Inglés store.

The Área Sur shopping centre, which receives almost 7 million visitors per year, has a privileged location in one of the areas of Spain that receives the most tourists. The centre has an area of influence of almost 450,000 inhabitants, and it is one of the largest shopping centres in Andalucía.

Nathalie Charles, Regional Head of Asset Management & Transactions for Southern Europe at Axa IM – Real Estates, said that “this is our first operation in collaboration with Sonae Sierra, one of the most important professionals in the retail real estate sector in Europe and with whom we hope to have the opportunity to work on other projects in Europe in the future”.

Pedro Caupers, Chief Investment Officer at Sonae Sierra, added that “we will pour all of the experience and knowledge that we have accumulated over more than twenty-five years, to improve the returns on the asset and contribute added value to Área Sur, to turn it into one of the iconic centres in the south of Andalucía. Sources at Sonae Sierra confirm that they are continually looking for new and innovative asset management initiatives, with the aim of achieving a higher return on investment for our shareholders. Similarly, we are very happy to be carrying out this project with Axa IM – Real Assets, in accordance with our model to co-invest with other partners, assuming responsibility for the management in order to achieve the objectives set by both parties”.

Cushman & Wakefield advised Union Investment on the sell-side.

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

Savills Finalises Purchase Of Aguirre Newman

14 June 2016 – Cinco Días

The large Spanish real estate consultancy firm par excellence, Aguirre Newman, is going to be acquired by its British rival Savills. The two companies are finalising a purchase agreement, according to sources in the market, which could be closed before the summer. The acquisition price amounts to around €80 million.

The Spanish consultancy firm launched a sale process two months ago, in search of an alliance with an international partner. The company, which was founded in 1988 by Santiago Aguirre (pictured above) and Stephen Newman, the current Presidents, employs around 460 people and recorded revenues of €96 million last year.

If the sale is completed, the co-Presidents Aguirre and Newman will remain at the helm for between four and five years. The rest of the management team will also continue to lead the business, according to sources familiar with the process. The Spanish company operates a real estate broker business in the office, hotel and residential segments; it also performs appraisals, town planning activities and corporate operations.

Besides Savills, the owners of Aguirre Newman have received offers from Cushman & Wakefield and Colliers, in a process that has been advised by the financial group Atlas Capital. But only the British consultancy firm has passed through to the final stage, where the finishing touches still need to be agreed.

Savills, which has declined to comment on the operation, is a real estate broker that recorded turnover of €1,645 million last year, up by 13% YoY. It has a market capitalisation of €1,400 million. Despite being one of the largest consultancy firms in the world, it only has limited operations in Spain, falling behind JLL, CBRE and Aguirre Newman itself. Its business in Spain, where Rafael Merry del Val is President, is strong in operations known as off-market deals.

With this acquisition, Savills will become one of the leading players in the domestic market. The company records revenues of around €11 million in Spain, almost nine times less than the Spanish company. Moreover, it is likely that the British consultancy will retain both brands for a period of time, so as to be more recognisable to its customers.

Experts familiar with the operation indicate that Aguirre Newman brings a strong presence and knowledge of the domestic market, compared to Savills, located in London, which will provide its Spanish subsidiary with strong international links.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Axa & Sonae Finalise Purchase Of Área Sur

10 May 2017 – Expansión

Axa Real Estate, the real estate arm of the French insurance company, and Sonae Sierra, are emerging as the likely new owners of the Área Sur shopping centre. The companies are negotiating with Union Investment Real Estate GMBH – the current owner of the asset – to acquire this shopping centre, which is located in Jerez de la Frontera (Cádiz).

Market sources have indicated to Expansión that the transaction may be closed soon for a price of around €110 million.

Following the operation, Sonae Sierra – which specialises in the investment, development and management of shopping centres – will manage the shopping centre.

Área Sur was inaugurated in November 2007 and has a gross leasable area of 47,607 m2. Moreover, the shopping centre has around 2,300 parking spaces.

Investment record

The operation, which has been advised by the consultancy firm Cushman & Wakefield, is another example of the interest in the market for shopping centres. Following a record-breaking year in 2016, investments during the first quarter of this year have exceeded €1,000 million, boosted by deals such as Intu’s acquisition of Xanadú for €530 million.

The shopping centre receives 6.6 million visitors per year, which represents an average annual growth rate of 5% since it opened. The shopping centre’s gross revenues amounted to €7.8 million in 2016.

Área Sur is located near to Luz Shopping, which was inaugurated in October 2010 and which has a total surface area of 174,000 m2. That shopping area is home to stores such as Ikea, Decathlon and Worten.

The Área Sur property, which has been managed by Auxideico since 2011, has three storeys. The first floor, which has a surface area of more than 23,400 m2, is home to numerous fashion brands and its tenants include Zara, Primark, H&M, Massimo Dutti, Cortefiel, Sfera, Bershka, Pull & Bear, Springfield, Stradivarius and Okeysi.

The top floor, which spans almost 10,000 m2, houses leisure and restaurant brands, as well as an 11-screen Yelmo cinema. Meanwhile, the ground floor, measuring 14,200 m2, is leased to Mercadona, Primark and El Corte Inglés.

In its area of influence, Área Sur competes with the Las Dunas shopping centre, in Sanlucar de Barrameda, with a gross leasable area of 75,000 m2; El Paseo, located in Puerto de Santa María, with a gross leasable area of 33,000 m2; and Bahía Sur, in San Fernando, with a gross leasable area of 59,000 m2.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake