Tag: consultancy firms

Cerberus Starts to Value the 160,000 Assets it has Acquired in Spain Ahead of their Sale

19 February 2019 – Voz Pópuli

Last year, the giant Cerberus strengthened its team with the appointment of the former JLL director Maurice Kelly as its Vice-president of Real Estate in Spain. The professional has become a key person for the fund, given that he is now responsible for meeting with the real estate consultancies regarding the valuation of the 160,000 assets that the investment giant has acquired in recent years in Spain, according to financial sources consulted by Vozpópuli.

Its haul also includes assets acquired in the Apple Portfolio from Santander, a sale that was negotiated in 2018 and which is expected to close between February and March. Moreover, that figure could increase during the coming months due to the great activity that there is in the market at the moment.

The fund wants to generate value from everything that it has purchased from the banks through large portfolios and has now spotted a window to put its acquisitions on the market from April onwards and over the next two or three years. Similarly, the fund is constantly rotating the assets that it acquires and assessing everything that it purchases for its subsequent placement on the market.

New portfolios

The first sale strategy involves the placement of new portfolios, of medium sizes, ranging between €100 million and €200 million, and will be distributed amongst medium-sized funds, above all those from the UK, Ireland and the Netherlands (…).

Another way to sell is through operations involving “unique assets”. In other words, buildings that have added valued and that may be of interest to a private investor or family office. The price of those would be over €50 million.

Finally, the most typical approach will see it sell portfolios of homes, in groups of more or less 500 units, for between €10 million and €20 million apiece.

The valuation of those 160,000 assets is included within the Cerberus European Servicing division and the placement of them is not going to be easy, given that “the fund has purchased a lot” and has “things” that even it does not know about. “It has picked up a lot of parking spaces and assets of that kind that are going to be very difficult for it to place”, warned the sources.

A taste for Spain

Cerberus has invested more than €10 billion in Spain in total and now wants to operate new lines of business such as rental and logistics. It is also planning to multiply its property development activity three-fold by purchasing more land and following its acquisition of Inmoglaciar (…).

Cerberus entered the Spanish market at the height of the financial crisis (between 2010 and 2012) with the aim of taking over banks and real estate firms, like it did in other countries. The former did not work out well following several attempts with former savings banks. But its conquest of property has proved a lot more successful.

Its next acquisition could be the property developer Solvia Desarrollo Inmobiliario (SDIN) from Banco Sabadell, which has put land worth more than €1 billion up for sale. The bid for those assets has already started and financial sources say that the fund has expressed interest in them.

Original story: Voz Pópuli (by David Cabrera)

Translation: Carmel Drake

Solvia Sells 2 Office Blocks in Alicante for €7.5M

30 December 2017 – Diario Información

The recovery in the Alicante real estate market is now also reaching the office segment. Whilst in recent years, the province has seen a significant number of operations in the residential sector and even in the shopping centre segment, now the interest of funds and other institutional investors has also extended to offices. Demand for office space has also started to recover in the face of the increase in activity, especially in the provincial capital.

In this context, Solvia has just closed the block sale of two office buildings in the city centre for approximately €7.5 million, an amount that is not at all typical in this market, which does not typically see the large figures of Madrid and Barcelona. The buyer is a Spanish family office – in other words, one of the investment platforms that many wealthy families use to manage their real estate portfolios – which has already participated in other similar operations. In fact, these types of companies have become one of the most active players in the market in recent times, in light of the minimal returns currently being offered by the banks on financial investments.

In terms of the assets sold, the larger one is located on Calle Calderón de la Barca, 16. That property has seven storeys and comprises 5,300 m2 for office use and another 1,300 m2 for parking and facilities, which is leased in its entirety to Iberdrola. The electricity company’s rental contract runs until at least 2022, which represents a great incentive in these cases.

The property, constructed in the 1960s, ended up in Sabadell’s hands in June 2015, in the same way as many other assets during the years of the crisis. The entity decided to put it on the market in September, to take advantage of the investor appetite. It shared the sales brochure with around thirty funds, Socimis and family offices known to be interested in these types of assets until it was finally able to close the operation a few days ago.

The operation also included another building in the centre of Alicante, in this case, located at number 46 Calle del Teatro, which is also used as offices. It is a new building with four storeys that houses 1,300 m2 of offices, as well as a commercial premise on the ground floor spanning almost 250 m2 and two basement floors with around twenty parking spaces, which are very sought-after in that area, next to Paseo de Soto and Maisonnave.

Few large premises

Demand for offices has increased significantly in Alicante over the last year and, although there are many empty offices, there is a shortage of spaces spanning more than 1,000 m2. Such spaces are of particular interest to consultancy firms, technological companies, ETT and Call Centre firms looking to expand into the area, according to the sector sources consulted. As such, interest in buying these types of properties has also increased from investors who have traditionally focused only on larger cities such as Madrid and Barcelona.

Original story: Diario Información (by David Navarro)

Translation: Carmel Drake

Deloitte Strengthens Its Financial-RE Team

22 April 2015 – Expansión

Deloitte hires nine new professionals / The consultancy firm has recruited a team from Quadratia, a company that specialises in the residential RE sector

Deloitte expects to see a boom in the sale of homes and land to overseas funds; and it wants to become a leader in that market. The consultancy firm has recently strengthened its financial-real estate team by hiring new professionals from the specialist company Quadratia. The new recruits include the Managing Partner of that consultancy firm, Gonzalo Gallego, who joins as a Real Estate partner in the Financial Advisory team.

This move comes as a result of the belief that following the purchase of real estate platforms, shopping centres, individual buildings and loan portfolios, the opportunistic funds are going to focus their attention on the residential market this year and next. “We are seeing an increasing focus by real estate investors on the residential market, where they are interested in buying land, homes and other properties on the coast”, said Enrique Gutierrez, partner in the Transaction and Restructuring Advisory team at Deloitte. Gutierrez is responsible for the department where increasing weight is being given to the real estate sector. The RE team at Deloitte is led by the partner Alberto Valls, who Gallego will report into. In total, Deloitte’s Transactions team comprises more than 300 professionals.

Valls explains that, in the same way as has happened with other types of assets, “history is repeating itself and there is a lot of conviction amongst opportunistic investors that now is the time to enter the residential sector”. These types of funds are specialists in acquiring assets that carry higher risk and therefore, represent opportunities for extracting higher returns. “In a year from now, higher returns will be obtained. Once the situation stabilises, other more conservative, institutional investors will enter (the market)”, he adds.

In this context, investors are focusing their attention on banking assets: “(Many of the banks’) balance sheets are still fully loaded with debt from property developers and other foreclosed assets, and there are 400 funds willing to invest in Spain. No other segment has as much potential as the residential market”, says Gallego.

The banks are adopting two approaches to unblock the real estate plughole: the sale of homes in their networks, which accelerated every month in 2014 thanks to the mortgage war; and the sale of portfolios to funds. Deloitte estimates that there have been 30 transactions involving the transfer of (property) developer loans over the last year and a half.

The consultancy firm explains that the banks take three parameters into account when they put these types of portfolios on the market: time, cost and price. If the result of this equation shows that it will be more expensive to foreclose assets in the future than sell them at a discount now, then they put them on the market.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake