2018: The Year that Blackstone was Crowned the King of the Spanish Real Estate Sector

17 December 2018 – Eje Prime

Blackstone wants it all and it wants it now. That is the sensation that the US investment fund, the new king of the Spanish real estate market, is transmitting throughout the real estate sector. Its portfolio is worth more than €20 billion after an accelerated period of purchases during 2018.

One of the objectives of the US fund manager has been, precisely, to expand its network in the Spanish real estate sector by entering markets such as the logistics segment. At the beginning of December, the company closed its latest operation in the country with the purchase of a logistics portfolio from Neinver for €300 million.

Nevertheless, the deal involving the giant Neinver is by no means the most significant operation that Blackstone has undertaken this year. Over the last twelve months, the group has taken control of Hispania, to grow in the hotel sector; it has acquired 80% of Testa, to manage thousands of rental homes, and in the logistics sector, it has accumulated 1 million m2 of space with the 55 assets from Neinver and the purchase of an industrial portfolio from Lar España.

Blackstone has disbursed almost €4 billion in the Spanish real estate sector this year, a figure that far exceeds the €127.5 million that it spent on its first investment in the domestic market in 2013. Moreover, that debut was not free from controversy, given that the group purchased 18 residential developments, containing 1,860 social housing units, which the Town Hall of Madrid sold the fund through the Municipal Housing and Land Company of Madrid (Emvsa).

Five years later, Blackstone is one of the largest owners of residential assets in Spain and the leader of the hotel sector. It leapt to first position in the hotel market ranking this year following its successful takeover of the Socimi Hispania. The company paid €1.99 billion for that vehicle, managed by Azora. With that operation, the fund added 46 assets and almost 13,150 rooms in Spain to a portfolio that it started to grow in 2017 with the purchase of HI Partners, the hotel arm of Banco Sabadell, for €630 million. In total, the manager owns 63 assets and almost 18,000 hotel rooms across Spain.

Hispania also provided Blackstone with residential assets worth €230 million, as well as 25 office buildings whose market value exceeds €600 million. Also in that segment, the company added the iconic Planeta office building in Barcelona to its portfolio during 2018, which it purchased from the Lara family in July for €210 million.

Spain, 20% of its global portfolio

Today, Spain accounts for 20% of Blackstone’s global investment. In total, the US firm owns property worth almost USD 120,000 million (€105,387 million) around the world. This real estate giant has become the largest unlisted real estate company in Spain (…).

The superiority of Blackstone’s portfolio in Spain with respect to those of the large domestic real estate firms is clear. The two largest players, Merlin and Colonial, are ranked within the top 15 Socimis in Europe and, yet, their portfolios are worth just half of that of the fund, at €11.785 billion and €11.19 billion, respectively.

Santander’s best friend

As well as mixing with other real estate players, Blackstone has made friends with some of the Spanish financial institutions. The banks, big losers in the previous real estate cycle, have worked hard over the last two years to place their property with the highest bidder, taking advantage of the new boom in the residential market.

In this way, in 2017, Banco Santander agreed with Blackstone the largest operation involving the sale of toxic assets from the real estate sector in the country. The fund manager purchased 51% of Popular’s property, a portfolio with €30,000 million in assets.

The relationship with the bank owned by the Botín family has been strengthened in 2018 with Project Quasar, the real estate firm created by the financial institution and the fund. The joint venture received a capital injection amounting to €300 million in May. Through this vehicle, the transfer of Popular’s assets is being carried out.

In order to place this property into circulation, as part of the operation in 2017, Blackstone also acquired the bank’s servicer, Aliseda, led by Eduard Mendiluce (…), who also manages the Socimi Albirana.

Albirana Properties is one of four residential Socimis that Blackstone currently has listed on the Alternative Investment Market (MAB). The others are Fidere Patrimonio, Corona Patrimonial and Torbel Investments.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Blackstone’s Socimi Torbel Debuts on the MAB at €11.45/Share

5 July 2018 – Voz Pópuli

Torbel Investments, the new Socimi owned by the US fund Blackstone, is going to make its debut on the Alternative Investment Market (MAB) this Thursday at a price of €11.45 per share, giving the company a market value of €92.2 million.

Torbel, the second Socimi that is going to be managed by Anticipa Real Estate, owns a portfolio of 2,495 assets – 2,165 of the properties are flats and family homes, and the remainder are commercial premises, parking spaces and storerooms -, which have a combined market value of €218 million.

These assets are distributed throughout Spain, with the Community of Valencia accounting for the largest share – it is home to 36.5% of the total between the provinces of Valencia and Alicante -, followed by Cataluña, with 17.8% of the total, and Madrid with 15.9%. The remaining 30% are located in Andalucía and Castilla-La Mancha.

All of these assets, whose overall occupancy rate amounts to around 58% (tenants are being sought for the remaining 42%), proceed from the Empire portfolio that Blackstone purchased from Banco Sabadell between 2016 and 2017; they are managed by the US fund’s subsidiary Anticipa.

Anticipa Real Estate was constituted in 2014 after passing into the hands of Blackstone and has been an evolving entity ever since. It has gone from being a servicer that managed assets for third parties to being a management platform of real estate assets and mortgage loans, all with the aim of becoming the leading residential rental manager in Spain.

Torbel is the fourth residential Socimi that Blackstone has debuted on the stock market in Spain following Fidere Patrimonio, Corona Patrimonial and Albirana Properties.

Original story: Voz Pópuli 

Translation: Carmel Drake

Blackstone to List New Socimi with 4,000 Rental Homes Purchased from Sabadell

29 May 2018 – El Confidencial

One of the first funds to bet on the boom in rental housing in Spain, Blackstone, is on the verge of listing its fourth Socimi to specialise in this market, an area that is really blossoming.

The Socimi in question is Torbel Investments, a vehicle that primarily comprises the so-called Project Empire, a portfolio containing almost 4,000 homes, parking spaces, premises and storerooms that Banco Sabadell sold to the US fund two years ago.

At the time, the operation was worth around €600 million, although in net book value terms, Blackstone has recorded the assets at €113 million, according to Torbel’s most recent official accounts, corresponding to the year ending 2016.

Currently, the fund is on the home stretch of the procedures necessary with the CNMV – Spain’s National Securities and Markets Commission – to list the vehicle, whose natural destination is the MAB – Alternative Investment Market – given that Blackstone’s objective is, simply, to fulfil the demands of the Socimi regime to list the company so that it can benefit from the tax advantages.

That point means that this placement is completely different from the one being finalised by Testa, another giant in the rental housing sector in Spain, which is expected to make its debut on the main stock market in June, with €1.834 billion in assets.

Plethora of Socimis

Since it acquired these homes from Sabadell, Blackstone has managed all of the flats through its own servicer company, Anticipa, the firm that is behind the day to day operations of all of the large residential acquisitions carried out by the fund.

By geographical distribution, both in terms of property value and rental income, the main markets in which the Socimi has a presence are Madrid, Alicante, Murcia and Valencia, in other words, regions where the former entity CAM – Caja de Ahorros del Mediterráneo – had its greatest presence before it was acquired by Sabadell and whose foreclosed assets comprise this portfolio.

Blackstone is competing head to head with Testa to be the largest landlord in Spain, but it is adopting a very different strategy given that whilst the firm in which Santander, BBVA, Acciona and Merlin all hold stakes is opting to concentrate the greatest number of homes possible in a single company, the US fund is playing its hand by backing several smaller vehicles.

For the time being, Blackstone has already listed Fidere, which owns more than 5,700 homes, many of which have some kind of public protection;  it also has Albirana Properties, owner of another 5,000 rental assets; and Corona Patrimonial. But, in addition, the fund has been creating other Socimis such as Tourmalet and Pegarena.

All of these companies are expected to continue expanding their portfolios with assets from Project Quasar, the portfolio that Blackstone acquired from Santander, and which contains a sizeable portfolio of homes from the former Banco Popular.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Blackstone To Merge Popular & Sabadell’s Hotels To Create Tourism Giant

18 October 2017 – El Confidencial

Blackstone has surprised the market once again with the purchase of the hotel company HI Partners from Banco Sabadell for €630.7 million; the operation will turn the fund into one of the major players in the Spanish tourism sector overnight. Nevertheless, this acquisition is actually just the tip of the iceberg of a much larger objective, which is directly linked to the largest real estate operation seen in Europe in recent times: the €30,000 million in toxic assets that Blackstone acquired from Santander-Popular in the summer.

That huge portfolio, comprising foreclosed properties and non-performing loans, contained €800 million linked to hotel assets, some of which Blackstone wants to use to fatten up HI Partners’ portfolio, according to sources in the know. Those same sources define that move as a medium-term strategy, which will allow it to create a hotel giant, capable of competing with other large platforms such as Hispania, before debuting it on the stock market in a few years time.

Although the fund analysed its purchase of Sabadell hotels as a stand-alone operation, Blackstone’s roadmap forecasts the possible generation of synergies with its other large portfolio of hotel assets in Spain, in other words, those proceeding from Banco Popular.

As El Confidencial published, when Blackstone definitively closed the purchase of 51% of the Santander-Popular portfolio, the fund’s objective was to gradually divide it up, taking advantage of the range of vehicles that it already owns in Spain, such as the Socimis Fidere, Albirana and Corona Patrimonial, and undertake direct sales of both assets and debt portfolios.

HI Partners now forms part of that same strategy. The plan is to transfer only those hotels that comply with the group’s business model, which focuses on high category coastal hotels and very selective urban establishments. The Hilton Inn Sevilla, Gran Hotel La Toja in Pontevedra, Tamisa Golf in Mijas and Hotel Ayre in Oviedo are some of the assets that were held under the Popular umbrella.

Nevertheless, given that the bulk of this portfolio is debt whose collateral are these establishments, the transfer of the assets chosen to form part of HI Partners will have to be performed gradually, on an asset by asset basis, depending on the progress of the negotiations regarding the loan status in each case. Blackstone has time on its side since its objective with these acquisitions is to take advantage of the growth curve of the Spanish tourism sector and to do so through an asset repositioning strategy.

Management team

After selling HI Partners, along with its 14 best establishments, Sabadell will now continue with more than a dozen lower category hotels under its umbrella, which it plans to transfer gradually. All of the bank’s debt secured by hotel collateral also remained inside its perimeter for the time being; until now that was being managed by the team led by Alejandro Hernández-Puértolas and Santiago Fisas, and it will probably end up being sold off through Solvia.

The HI Partners management team will continue to be linked to the hotel group even after the completion of the sale to Blackstone, once the operation has received the green light from the Competition authorities. The team will face the challenge of continuing to make the company grow by repositioning the hotels, like they have been doing since 2015, in line with Blackstone’s plans for Popular’s establishments.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Paralysis In Trading Amongst The MAB’s Socimis

17 January 2017 – Idealista

The Alternative Investment Market (MAB) has become the catapult for many small Socimis – the real estate investment vehicles that are obliged to debut on the stock market to maintain the tax benefits that they enjoy.

Currently, this platform is home to 28 such companies, of which 17 debuted during 2016, however, not all of them are attracting the attention of investors. What’s more, one in five is trading today at the same price per share at which they debuted and some of them haven’t registered any movements in their share prices at all, which means that they are not being traded.

Examples include some of the most recent companies to debut. One of them is Inmofam 99, a Socimi that has 10 commercial and residential assets in its portfolio, which is owned by the Hinojosa family, the founder of the Cortefiel textile group. It debuted on the MAB on 21 December 2016 at a price of €17.60 per share and it is still trading at that price almost one month later, according to data from BME, the company that manages the Spanish stock market.

The same is happening with RREF II Al Breck, which debuted on the MAB on 30 November 2016, at a price of €5.40 per share, the same price at which it is currently trading. This Socimi, controlled by a company headquartered in Luxembourg, is the owner of almost 700 assets, mainly homes located in Madrid, although it also owns retail premises, one office and several storerooms, garages and basements.

Another Socimi that finds itself in the same situation is Euro Cervantes, a company that holds two investment stakes in its portfolio: one 30% stake in GMP, the owner of homes, offices and land, and one 49% stake in La Maquinista shopping centre, the largest in Barcelona. This vehicle is owned by the Government of Singapore and has been trading at €31 per share since 22 September 2016.

Corona Patrimonial and Heref Habaneras are also experiencing very similar situations. (…).

These five Socimis together have a combined market value of €353.8 million, a figure that increases to more than €900 million in we include Zambal Spain, which has also been having a tough time. This vehicle, which owns several offices and retail premises, whose tenants are giant businesses operating in Spain, has been trading for almost 14 months (it debuted on the MAB on 1 December 2015…). It is currently trading at €1.24 per share, the same level at which it debuted, although its shares have been traded significantly. During its first month on the market, the company moved 10,000 shares and €13,000, whilst during 2016 as a whole, it moved half a million in both shares and cash. (…).

Trading plummets during first fortnight of 2017

A certain degree of apathy is being observed amongst the Socimis on the MAB in these early stages of the year. Some other vehicles should be added to the list above, including Corpfin Capital Prime Retail, Fidere Patrimonio, GMP Property, Hadley Investments, Inversiones Doalca and Mercal Inmuebles. In fact, of the 28 Socimis trading on this platform, only five have been traded, to a greater or lesser extent, during the first fortnight of January.

The most liquid of all of them is Entrecampos Cuatro, the first Socimi to debut on the stock market (back in November 2013) and whose portfolio mainly contains homes, premises, offices and land. In two weeks, this vehicle has seen 188,000 shares traded for €350,000.

The second most liquid has been Trajano Iberia…with 9,000 shares traded for €91,000. It is followed by the office specialist Autonomy Spain Real Estate (3,000 shares traded for €51,000); Vbare Iberian Properties (2,000 shares traded for €32,000); and Optimum RE (€3,000 traded). The latter two hold homes in their portfolios.

As such, and despite the fact that investors do not normally back Socimis on the MAB (because they are smaller entities with less liquidity…), it is true that we have found some companies that have managed to increase their value by double digits since they debuted on the platform, such as Entrecampos and Optimum, which are amongst the few that have seen movement in their shares during the first two weeks of the year.

Original story: Idealista (by Ana. P. Alarcos)

Translation: Carmel Drake