UBS Pays Hines €70M For Zielo Shopping Centre

5 June 2015 – Expansión

The transaction confirms the return of institutional investors to the Spanish market.

International funds are continuing with their commitments in Spain. Whilst the key players in the market were opportunistic funds in 2013 and Socimis in 2014, in recent months, institutional funds, both European and Asian, have burst into the market.

The latest player to make an investment in Spain has been UBS. The Swiss fund management has finalised the purchase of the Zielo Shopping centre, in Pozuelo (Madrid), after several weeks of exclusive negotiations. UBS will pay €70 million for the property to Hines European Value Added Fund, a fund managed by the property developer Hines.

The company invested €100 million in the development of the shopping centre, designed at the height of the property boom, including a loan for €50 million. The property was opened in October 2009 and has a surface area of 50,000 m2, of which 15,555 m2 comprise the retail area.

In the transaction, UBS has been advised by the consultancy firm Knight Frank, whilst CBRE, which also manages the centre, has worked with the vendor. “This transaction shows that prime assets are generating significant interest amongst investors with a more core profile”, explains Gonzalo Senra, Head of Commercial Investments at CBRE.

In 2014, more than €2,000 million was invested in commercial property in Spain, a figure that may be exceeded this year, according to Knight Frank, given that €600 million has already been invested.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

MoD Sells A Plot Of Land In Mallorca For €5.5M

27 May 2015 – Expansión

The Ministry of Defence is continuing its real estate divestment plan to generate revenue. To this end, the body chaired by Pedro Morenés has closed the sale of a plot of land measuring 14,429 square metres, with more than 25,000 square metres of buildable area, in Cas Capiscol (Mallorca).

Given that the building is owned by the Administration, the Ministry of Defence organised a public auction, through the real estate portal addmeet. The plot of land that is up for sale houses former (army) barracks, spread over several buildings, which have been in disuse since the 1990s.

The Ministry of Defence put this land on the market for €5.318 million. In the end, it has been sold for a slightly higher price: €5.55 million. The winning bid was submitted by a subsidiary of the Catalan real estate company La Llave de Oro. The buildable plot measuring 25,131 square metres may be used for tertiary purposes, i.e. to build offices, hotels and retail buildings. Nevertheless, the general urban development plan where this land is located is currently in the process of being modified.

The Ministry of Defence also own other plots of land in Mallorca, including in Son Busquets, where it has a plot measuring more than 110,000 square metres.

Original story: Expansión (by R. Ruiz)

Blackstone, Merlin, Hispania & Eurosic Bid For Testa

11 May 2015 – Expansión

The US fund, the two Socimis and the French real estate company have all submitted bids for Sacyr’s subsidiary. The construction group is also considering other options, such as performing an IPO of 30% of Testa’s share capital.

Sacyr now has four proposals on the table for the purchase of its real estate subsidiary Testa. The Socimis Merlin Properties and Hispania, the US fund Blackstone and the French real estate company Eurosic have all submitted bids to acquire Sacyr’s subsidiary, which owns assets worth more than €3,100 million.

Sacyr engaged Lazard to organise a competitive process for the interested parties to bid for Testa. The deadline for proposals was Friday and in the end, four offers were received for the construction company chaired by Manuel Manrique.

Bids were invited for 30% of Testa, the stake that Sacyr had initially planned to place on the stock exchange (it currently controls 99.2% of the capital) as well as for the entire shareholding. In the end, Merlin, Hispania, Blackstone and Eurosic have all expressed interest in acquiring 100% of the real estate company, according to sources close to the process.

Proposals

Of the four candidates, only Merlin Properties had already formally expressed its interest in Testa. Now, the Socimi, which completed a capital increase amounting to more than €613 million last Thursay, has increased its bid to include 100% of the company.

The real estate company Hispania Activos Inmobiliarios has joined Merlin, the largest Socimi by market capitalisation. Hispania is owned by George Soros and John Paulson, and channels the majority of its investments through its Socimi Hispania Real. It has now fixed its gaze on Testa after trying to acquire one of the country’s other real estate companies, Realia.

Hispania, which is still waiting for a response from CNMV to the counter offer made by Carlos Slim to its bid for Realia, will now propose a similar transaction for Testa, whereby taking advantage of its access to funds from international investors.

Another one of the candidates is the French real estate company Eurosic. Last year, the company purchased Realia and Colonial’s shares in SiiC de Paris, for a total of €868 million. Now, it is looking to expand its portfolio of assets by backing the Spanish market, where the macroeconomic forecasts and the real estate environment point to an imminent rise in rental prices. Eurosic is participating in the process along with a foreign institutional fund.

Blackstone, the largest investment firm in the world, is behind the fourth proposal. This US fund has been investing in the Spanish real estate sector since 2013, when it acquired 1,860 rental homes from the Municipal Company for Housing and Land (Empresa Municipal de Vivienda y Suelo or EMVS) in Madrid. Moreover, Blackstone is the owner of four office buildings in Madrid and Barcelona, leased to companies such as Citibank and HP, as well as several logistics centres distributed across various locations.

The sale of 100% of Testa is just one of four scenarios that Sacyr is contemplating. As well as the possible sale of 100% of the company, the construction firm chaired by Manuel Manrique is also exploring the possible entry of a strategic partner to work together with Testa to realise the original plan of placing up to 30% of the company’s share capital on the stock exchange through an initial public offering (IPO).

Furthermore, Sacyr is evaluating a transaction that would have a much greater strategic impact and would involve the merger of Testa with another large real estate group. To that end, the company has begun preliminary conversations with Colonial to create the largest company in the sector in Spain and one of the largest in Europe.

On Saturday, Colonial said that “it would evaluate any invitation to participate in the eventual sale of Testa”. However, the group said that it is not “currently” studying any integration with Sacyr’s subsidiary.

In February, the construction company approved an “accordion operation”, where Testa regularised its finances with its parent company, subject to a capital increase of €500 million, which would allow the real estate company to strengthen its balance sheet. It is during this phase that the negotiations with Colonial would be addressed, according to sources close to the process.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Standard Life Buys Revlon’s HQ In Barcelona For €30M

24 April 2015 – Expansión

The building was sold by the US bank Morgan Stanley

This is the third transaction involving a property in the World Trade Center Almeda Park (Barcelona) in less than a year. The Scottish fund Standard Life has purchased Revlon’s headquarters for almost €30 million. The building was sold by the US bank Morgan Stanley and the deal was advised by Cushman & Wakefield, who did not want to make any comments.

The acquisition closed by Standard Life comes after the Socimi Merlin Properties purchased two other buildings in this office complex last year. In August 2014, Merlin acquired the building leased (in its entirety) to AXA for €47 million. In January, it purchased another office block, which houses various tenants, for €37 million. In both cases, the buildings were sold by the Swiss bank UBS and the deals were advised by Cushman & Wakefield.

The property acquired by Standard Life has a surface area of 10,300 square metres and is mainly occupied by Revlon, but also has other tenants. It was built as a turnkey project for the Colomer Group, which used to be the distributor of Revlon’s line of professional products, and which was acquired by the US group in 2013.

This is not Standard Life’s first investment in Barcelona. In 2011, it acquired a plot of land in the 22@ district for €28 million where it constructed the 250-room Hotel Travelodge de Poblenou. It also used to own two buildings on Gran Vía de Barcelona, although it sold one of those, the one leased to the Catalan Institute of Finance (Instituto Catalán de Finanzas or ICF) to the Generalitat in 2008 for €30 million. This building formed part of a package of assets through which Standard Life entered the Spanish market in the middle of 2007 and which also included buildings located on Paseo de la Castellana, number 55 and Calle Serrano, number 73, both in Madrid.

Original story: Expansión (by Marisa Ángles)

Translation: Carmel Drake

Klépierre Close To Finalising Its Purchase Of Plenilunio

20 February 2015 – Modaes

The French company Klépierre, which specialises in the management of retail properties, is putting the finishing touches to its purchase of the Plenilunio shopping centre. The retail complex located in Madrid is one of the largest in Spain with a gross leasable area (GLA) of 70,000 square metres.

In the final stretch of the sales process, Klépierre has overtaken the fund manager Tiaa Henderson and the German fund Invesco, which have also been bidding for the property in recent weeks.

Currently, Plenilunio is owned by the fund Orion. Klepierre would be willing to pay between €380 million and €390 million for the shopping centre, which comes close to the asking price set by the current owners (€400 million). Negotiations beween Orion and Klépierre are now in full swing and a deal could be reached within the next few days. The sale of Plenilunio would break the record for the purchase of a shopping centre in Spain.

The Madrilenian centre occupies a surface area of 220,000 square metres, of which 70,000 square metres are leasable. Some of the most important fashion brands have stores in the centre, including H&M, Inditex and Primark; the latter operates its largest store in Spain in this centre.

Klépierre has an asset portfolio valued at €14,000 million and has a presence in thirteen European countries, including Italy, the Netherlands, France, Germany, Spain, Portugal and Turkey.

Original story: Modaes

Translation: Carmel Drake