Liberbank Accelerates Sale Of Its RE Arm For €80M

20 July 2017 – Voz Pópuli

A defensive operation by Liberbank. The Asturian entity is accelerating the sale of its real estate company Mihabitans to strengthen its capital, according to financial sources consulted by Vozpópuli. The group led by Manuel Menéndez (pictured above), which declined to make comments, had been considering this possibility for months but has decided to fire the starting gun now, when the market’s focus has been placed on the entity. The prices being considered for this sale come in at just over €80 million.

The operation has been underway for several months under the watch of Alantra (formerly N+1). The subsidiary up for sale is Mihabitans Cartera, which Liberbank created in June last year. This company is responsible for managing the financial group’s homes and real estate debt. Liberbank has transferred some of its staff to the new entity. Its CEO is Víctor Sánchez, the Director that Menéndez entrusted to sort out the property portfolio at CCM following its purchase.

This sale, known in the market as Project Pipe, includes only the management of the real estate assets, a priori, and not their ownership. The idea is that it will take a similar form to the operation carried out by Santander with Altamira when Apollo purchased an 85% stake of that entity; as well as CaixaBank with Servihabitat, which is now controlled by TPG; and Popular with Aliseda.

According to the same sources, the process is in an advanced phase and several candidates have been selected to submit binding offers. The candidates include Lindorff, owner of Aktua; and Haya Real Estate, owned by Cerberus.

Crucial moment

These types of operations are undertaken to generate capital gains and strengthen capital. Given that they only manage properties, companies such as Mihabitans do not have any assets of their own other than their employees and the contract with the bank(s) that own(s) the properties. Depending on the contract agreed, the price may be higher or lower. In this way, Popular obtained around €700 million for Aliseda and Santander received €664 million for Altamira.

This sale comes at a key moment for Liberbank. Following the termination of CCM’s asset protection scheme (EPA), the group’s default rate soared in the last quarter and its capital decreased to 12%, above the levels required. Nevertheless, it is considering several options, such as the deal involving Mihabitans to strengthen itself and calm the market (…).

Liberbank has been compared to the entity that is now in the hands of Santander (Popular) in terms of its default rate, which in the case of the former amounted to 13% at the end of March. The objective is to bring it down below 7% within a year and a half. The entity had accumulated €2,951 million in doubtful debt and €2,414 million in foreclosed assets as at March, with a coverage (over the latter) of 40%. The sale of homes, which Mihabitans is responsible for, reached historical highs in the first quarter of €56 million (…).

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Singapore GIC To Expand Its Logistics Portfolio In Spain & Portugal

19 May 2017 – Expansion

P3, the company specialising in the ownership, development and management of logistics assets, wants to take advantage of the support being offered by its new owner, the sovereign fund Singapore GIC, to lead the logistics market in Spain and establish itself as one of the country’s leading developers and investors in this segment.

The company, which operates under the commercial name P3 Logistics Parks, currently owns a portfolio of assets covering 400,000 m2 in Spain, after it purchased eleven logistics warehouses in April. P3 is planning to finish the year with 500,000 m2 under management, according to the CEO of the company in Spain, David Marquina.

“We want to become one of the main suppliers of logistics space over the next three years. Specialisation and a long-term outlook are our mantras”, he said.

To this end, P3 has just opened an office in Madrid and has a team there analysing opportunities. The group specialises in closing off-market operations.

The firm wants to strengthen its two business lines in the country: investment in rental assets and the construction of turnkey projects for clients. “We are analysing both the purchase of companies that own logistics assets, as well as the acquisition of portfolios and individual properties to grow in size”.

Similarly, as part of its expansion plan, P3 is considering expanding its operations into Portugal. The company, which was created in 2002 in Prague and which quickly began its expansion into central and Western Europe, owns a portfolio containing 170 logistics warehouses and parks in 11 countries across Europe, spanning a total surface area of 3.5 million m2 and with a land bank covering more than 1.8 million m2 for development.

“Germany, France and other countries where we have had a more limited exposure until now, such as Italy and Spain, are strategic markets for the group”.

In Spain, P3 has a presence in the central logistics corridor, which connects Madrid, Zaragoza and Barcelona, and it wants to strengthen its presence in the Mediterranean corridor.

The director highlights that 98% of its assets are leased through rental contracts that have an average term of 6.2 years.

For Marquina, the economic recovery and political stability have allowed investors to be interested in Spain, which is firmly back on the investment map. “After the crisis, real estate and logistics development was left paralysed. The stock became obsolete and out-dated. Over the last four years, liquidity has increased in the market and there has been a compression in yields, but there is still a long way to go”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Carmena Buys c/Alcalá, 45 In Madrid For €104M

21 December 2016 – Expansión

The Town Hall of Madrid says that it will save €23 million in rental payments between now and 2019 as a result of this purchase.

The Town Hall of Madrid wants to reverse the decapitalisation of municipal properties carried out during the years of the PP government and to that end, repurchased a building located on c/Alcalá, 45, yesterday, for €104 million. The iconic building currently houses the Municipal Councils of Economy and Finance and of Citizen Participation, as well as a Customer Services office for Taxpayers. The Town Hall has rented the property since 2004, when the then mayor, Alberto Ruiz-Gallardón, included it in an operation with the Ministry of Development to acquire the Palacio de Cibeles, which now houses the Town Hall’s headquarters.

Since then, the Town Hall has been paying an annual rent of €6,6785,000 for the property (equivalent to €18,422 per day), a price that, according to the current Town Hall, exceeds market rates.

The purchase of the property, which will be closed within the next few days, puts an end to an “armoured” contract, which if extended until 2019 would have involved a total disbursement of €91,354,120. In other words, the Town Hall would have spent almost as much in rent as it received when it sold the asset in 2004 (€97 million); and at the end of the period, the Town Hall would not have even owned the property.

As a result of this operation, the Town Hall will save itself rental payments for the next three years, amounting €20,031,514 in total. Moreover, according to sources at the Town Hall, the municipal government will receive tax revenues corresponding to the Tax on the Increase in Value of Urban Land, which will represent income of €3,188,215.

As a result of this operation, the Town Hall of Madrid’s budgeted rental expenditure will decrease from €27,354,000 in 2016 to €20,679,042 next year.

The Town Hall justifies its purchase not only in terms of the current rent saving, but also in terms of the future saving given that, once the current contract comes to an end, it would have had to move the 620 workers that currently work in c/Alcalá, 45 to another building.

According to the Directorate General of Heritage, the cost of moving all of the furniture would have amounted to €250,000 and the investment to renovate and adapt a building with similar characteristics would amount to between €7.8 million and €15.6 million. (…).

The Town Hall of Madrid currently has 32 lease contracts in force, which it has to pay on a monthly basis. The Town Hall hopes that with the elimination of rental payments and the transfer of public servants to other facilities, such as the future Legazpi Market, it will only have to pay €5,252,907 in rents by 2019. (…).

Original story: Expansión (by Roberto Bécares)

Translation: Carmel Drake

HI Partners Buy A Hotel From Lopesan For €42M

18 July 2016 – Expansión

HI Partners have completed a new operation in the hotel investment market. The subsidiary of Banco Sabadell has just acquired a four-star, 402-room hotel on Playa del Inglés, on the island of Gran Canaria for €42.4 million. Until now, the property, known as the IFA Catarina, which overlooks the Dunas de Maspalomas, belonged to the IFA Hotel & Touristik Group, which is listed on the Frankfurt stock exchange. That company is controlled by the Spanish hotel group Lopesan (52% stake), with whom HI Partners has signed a “sale and management back” contract, which means that it will continue operating the hotel after the sale.

The aim of HI Partners is to invest €7 million in IFA Catarina to refurbish its rooms and improve the hotel’s facilities, which will include areas dedicated exclusively to adult customers only.

This is the first operation that HI Partners has completed in the Canary Islands. This year, the hotel investment and management company has also purchased Hotel Terramar de Sitges (Barcelona) and its portfolio now contain 25 properties. In March, it joined forces with the US fund Starwood Capital to invest €500 million in the purchase of vacation hotels, although this operation falls outside of that agreement.

Original story: Expansión (by Sergi Sabori)

Translation: Carmel Drake

AEW Purchases Office Building In Alcobendas For €39M

9 December 2015 – Expansión

The investor furore for properties in Spain and for office buildings in particular, has resulted in record figures for this business in 2015 and has led to a fierce struggle for the best buildings in the major markets, such as Madrid and Barcelona.

This fight for the real estate gems in the centre of large cities has left many investors unable to close all of the operations they want to in Spain, and for this reason, they have started to look for opportunities beyond the established areas. Such is the case of the fund AEW Europe. The firm, one of the largest real estate investment managers on the continent, is finalising its purchase of an office building, known as the Amura building, in the Arroyo de la Vega area of the Madrilenian suburb of Alcobendas. The area is a long way from the financial centre of Madrid but it is the location of choice for several multinational companies, such as Citibank, Procter & Gamble, Pfizer and Bankinter.

Amura has several features that make it attractive to investors. The building, measuring 18,177 m2 over four levels, has an occupancy rate of 75% with very affordable rents, of around €10/m2/month.

Its main tenant is the Ricoh group, the manufacturer of digital equipment for office use. The Spanish subsidiary of Ricoh opened its headquarters in this building in 2008, leasing an area measuring 1,700 m2, which it increased by a further 800 m2 three years later.

Until now, the property formed part of Union Investment Real Estate’s Spanish portfolio. Union Investment is one of the largest fund managers in Germany, with assets worth €220,000 million under management.

Yields

Union Investment will sell the property to AEW for €39 million, according to real estate sources, which represents a yield of around 5%; that is low for the area, but reflects the furore that exists for these types of properties.

In Europe, AEW owns a portfolio of assets worth more than €16,600 million and it has now set its focus on the Spanish market. “Spain has gone from not existing (for us) to being a key priority market”, said Russell Jewell, the Director of PE funds in Europe for AEW.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake