Tag: CPPIB

British Fund Intu Finalises Purchase Of Xanadú For c. €520M

10 March 2017 – Expansión

The British private equity fund Intu is finalising the completion of a record deal in the Spanish real estate market with the purchase of the Xanadú shopping centre (in Arroyomolinos, Madrid) from Ivanhoé Cambridge for around €520 million, according to market sources.

The purchase – which the fund has been negotiating in exclusivity since January – will represent the largest operation involving a shopping centre in the history of the Spanish market, whereby exceeding the €495 million that Deutsche Bank paid for Diagonal Mar (Barcelona) last August, the €451 million that Intu paid for Puerto Venecia (Zaragoza) and the €375 million that Klépierre paid for Plenilunio (Madrid).

CBRE and the law firm Clifford Chance have advised Intu during the operation, whilst Eastdil has advised Ivanhoé, which bought Xanadú from the Mills Corporation in 2006, along with two other shopping centres, one in Canada – Vaughan Mills (Ontario) and one in Scotland – Saint Enoch (Glasgow) – for a combined value of around €770 million.

The operation will be financed by Santander, Crédit Agricole, CaixaBank and BBVA with a loan to value (percentage value of the asset that is covered by the loan) of 40%.

In parallel, Intu is looking for a partner to whom to transfer 50% of the share capital in Madrid Xanadú 2003, the company that owns the shopping centre. Market sources point to the Canadian fund CPPIB as a possible ally. Both firms are already partners in two other Spanish shopping centres owned by Intu: Puerto Venecia (Zaragoza) and Parque Principado (Asturias).

One of the other candidates interested in acquiring the asset was TH Real Estate, but it was pipped at the post a few months ago by Intu, as revealed by Expansión on 31 January.

With this operation, Intu, which has plans to develop new shopping centres in Málaga, Valencia, Mallorca and Vigo, is strengthening its position in Spain and picking up one of the trophy shopping centres in Madrid to boot.

The shopping centre, constructed in 2003, has a total surface area of 153,695 m2 spread over two levels and 220 stores. Its tenants include Inditex, El Corte Inglés, Hipercor, Bricor, Decathlon, Primark and Apple.

Xanadú Madrid receives almost 13 million visitors per year and generates sales of around €230 million.

The shopping centre houses an indoor ski area – the only one in Spain and the largest in Europe – covering around 18,000 m2, as well as 15 cinema screens, a mini-golf course, a mini theme park, themed restaurants and a bowling alley.

In addition, Ivanhoé signed an agreement with Parques Reunidos last summer to construct an aquarium in Madrid Xanadú. Both companies reached an agreement with Viacom International Media Networks, a division of Viacom, to construct a theme park based on Nickelodeon characters in Xanadú.

Original story: Expansión (by R. Arroyo and R. Casado)

Translation: Carmel Drake

Hotelbeds Borrows To Finance Its Own Purchase (By Cinven & CPPIB)

8 June 2016 – Expansión

Hotelbeds has had new owners for just over a month. At the end of April, the private equity firm Cinven and the Canadian fund CPPIB won the bid opened by TUI to sell the Spanish travel services supplier. They put a joint offer on the table, valuing the company at €1,165 million, which exceeded all of the other bids. Now, they are holding negotiations regarding how they will pay that price.

All indications suggest that the target company will end up paying a large portion of the bill itself, in a debt operation that is typical in private equity acquisitions. According to several financial sources, Hotelbeds is in conversations with seven banks to obtain financing, including a syndicated loan amounting to €490 million and a line of credit amounting to another €150 million.

BBVA, Morgan Stanley, HSBC, UniCredit, Deutsche Bank, Bank of Ireland and Mizuho are the entities participating in the syndicate, which is expected to be closed within the next few days and whose fruits will be used to pay for some of the acquisition.

Neither the purchaser nor the vendor has provided details about how much of the €1,165 million value assigned to Hotelbeds will be paid for in debt and how much will be paid for in cash, but some of the parties involved implied that the latter will account for more than half of the total price. Using that reference and the fact that Cinven and CPPIB are not purchasing 100% of the company, rather some of its shares will remain in the hands of the travel services supplier’s management team, then it seems likely that the €490 million syndicated loan will cover a significant part of the total financing.

Hotelbeds will pay at least 500 basis points (5.5%) above Euribor for the syndicated loan, which will have a seven year term, according to financial sources. That spread was the maximum established to begin negotiations, so it may decrease, depending on the banks’ appetite and the conditions offered by the company.

The same thing will happen with the €150 million line of credit. In that case, the term will be six years and the minimum spread will amount to 450 basis points, but the definitive conditions will not be agreed until the negotiations have been finalised. (…).

Hotelbeds’ financial results work in its favour with respect to its negotiations with the banks, according to financial sources. The supplier works with 75,000 hotels in 180 countries and recorded a turnover of €1,200 million in 2015 and an EBITDA of €117 million. In addition to hotel rooms, the company also manages transfers, trips and corporate events.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Brussels Authorises CPPIB’s Investment In Puerto Venecia

10 August 2015 – Expansión

Brussels has authorised the transaction on the basis that it will not have a negative impact on Europe’s economic environment.

The European Commission has authorised the joint acquisition of the largest shopping centre in Spain, Puerto Venecia in Zaragoza, by the Canadian pension fund CPPIB and the current owner, the Luxembourg holding company Intu, on the basis that the transaction will not have a negative impact on Europe’s economic environment.

The company created by CPPIB and Intu already controls the Parque Principado shopping centre in Oviedo, but the European Commission considers that the new operation does not threaten competition in the EU, because it will have a “limited impact” on the structure of the market.

The case, which was referred to Brussels on 10 July, has been examined in accordance with the simplified procedures that apply to less problematic deals.

Original story: Expansión

Translation: Carmel Drake

Pontegadea, Deka & CPPIB Submit Bids For ‘Torre Espacio’

8 July 2015 – Expansión

Amancio Ortega’s investment company Pontegadea, the German investor Deka and the Canadian pension fund CPPIB have all submitted bids to acquire the Madrilenian skyscraper from Villar Mir.

The sales process for Torre Espacio, the skyscraper owned by Villar Mir in the Madrilenian Cuatro Torres complex, is progressing according to plan. Yesterday, one month after the property was first listed on the market, Villar Mir received offers from some of the companies it had selected to participate in the process.

Villar Mir, which owns the building through its real estate company Espacio, worked together with the real estate consultancy Aguirre Newman to select and invite around a dozen investors to participate in the sales process, rather than opting for a mass tender, in order to close the deal as soon as possible. Those selected included the German funds Deka, Reef and Patrizia, the Abu Dhabi fund Asia, the Socimi Merlin Properties, the real estate company Colonial, Amancio Ortega’s investment company Pontegadea, the sovereign fund Singapur GIC (which invests in Spain jointly with the real estate company GMP) and the Canadian pension fund CPPIB.

Of those, Deka, Canada Pension Plan and Pontegadea all submitted proposals yesterday. Indeed, the investment arm of Amancio Ortega has been one of the favourites to take ownership of the property since the process was launched, on the basis that the company has access to immediate liquidity and the building would be a perfect fit with its existing portfolio, which includes other large office and commercial buildings in major European capitals, such as London and Madrid, as well as in the USA.

The aim of the group controlled by Juan Miguel Villar Mir was to sell the property for between €650 million and €700 million, and whereby benefit from the investor boom that is taking place in the Spanish real estate market. The company invested €400 million on the construction of the building, including the amount it paid to Real Madrid for the land (€187 million). Nevertheless, according to sources close to the process, the offers received range between €500 million and €600 million. (…).

Tenants

Torre Espacio opened in 2007 and has office space of c. 60,000 m2, distributed over 57 floors. The tower is 236 metres high and its tenants include large international corporations, such as British American Tobacco and Red Bull. It has an occupancy rate of 85% (84.3% at the end of 2014). Other tenants include the embassies of Australia, Canada, the Netherlands and the UK.

Furthermore, 55.1% of the building is occupied by the Villar Mir Group. OHL occupies around ten floors.

To make the purchase more attractive, the owner of OHL has offered to continue as a tenant and guarantee the new landlord rental income of €34/m2/month. However, the market does not believe that such a rental price can be maintained considering that the maximum rent in the best buildings on the Castellana barely exceeds €30/m2/month. (…).

Following the receipt of the bids, one or two candidates will be chosen to participate in exclusive negotiations, with a view to closing the transaction in October. Nevertheless, the proposed structured of the transaction, as well as the difference in terms of price expectations between the vendor and the buyers, may hamper the completion of the transaction. (…).

Original story: Expansión (by R. Ruiz and D. Badía)

Translation: Carmel Drake

CPPIB Buys 50% Of Puerto Venecia From Intu For €225.4M

3 June 2015 – Expansión

The Canadian fund has paid €225.4 million to the British real estate company Intu Properties for half of Puerto Venecia, the largest shopping centre in Spain.

Intu Properties and the Canadian Pension Plan Investment Board (CPPIB) have strengthened their partnership in Spain, through the creation of a joint venture to manage Puerto Venecia, the largest shopping centre in the country, located in Zaragoza, which has a constructed surface area of 200,000 m2.

According to a statement issued yesterday, CPPIB is going to pay €225.4 million to Intu for 50% of Puerto Venecia, although – “the operation is subject to certain conditions, including regulatory approval”.

The valuation of the shop and restaurant complex, located in Zaragoza, is the same as the one used by Intu in January when it purchased 100% of the property from the fund Orion Capital for €451 million. Then, the British real estate company announced that it was going to look for a partner, and several analysts identified CPPIB as a possible ally. PwC has advised the Canadian pension fund in its purchase.

Intu and CPPIB already share the ownership (50% each) of the Asturian shopping centre Parque Principado, which they acquired in 2013 for €162 million from CBRE and Sonae Sierra. Therefore, the Puerto Venecia operation “extends this alliance to include two of the ten largest shopping centres in Spain” said Intu Properties.

The British bank HSBC has financed the acquisitions of Puerto Venecia and Parque Principado with two mortgage loans amounting to €320 million in total.

Andrea Orlandi, CPPIB’s Director of RE Investments in Europe, sais that “the joint venture with Intu represents an opportunity to increase the fund’s presence in Spain’s commercial real estate market. Puerto Venecia complements our European portfolio”.

According to David Fischel, CEO at Intu, the revenues from this transaction will allow his company to develop other projects in Spain. The real estate firm has acquired a plot of land in Malaga for the construction of a shopping centre measuring 175,000 m2 and it is also evaluating options to develop other projects in Vigo, Valencia and Palma de Mallorca.

Intu intends to involve partners in these new projects as well, and may even create a holding company for its Spanish properties in the future, and list it on the stock exchange.

Intu’s share price fell by 2% during trading in London yesterday. Its market capitalisation amounts to GBP 4,380 million (€6,050 million).

Original story: Expansión (by Roberto Casado and Rocío Ruiz)

Translation: Carmel Drake

Intu Will Invest €425m In Its Shopping Centre In Málaga

2 March 2015 – Expansión

The British company Intu Properties confirmed yesterday that it plans to invest €425 million in the construction of a new shopping centre in Málaga, as part of its plan to create a large network of leisure and retail complexes in Spain.

In March, as a preliminary step, the group is going to ask its shareholders to approve the purchase of land close to Torremolinos for €42.1 million, where it will build the centre, which will have a gross leasable area of 175,000 square metres. The shopping centre is expected to open in 2018.

Since 2013, Intu has acquired two operational shopping centres in Spain: Parque Principado (in which the Canadian fund CPPIB holds a 50% stake) in Asturias, for €162 million and Puerto Venecia, in Zaragoza, for €451 million.

As well as the project in Málaga, the company is also considering developing centres in Valencia, Vigo and Palma de Mallorca. It expects to make its largest investment in the Oceania de Valencia complex, which could amount to €750 million.

In its results for 2014, Intu increased the valuation of its 50% stake in Parque Principiado from €81 million to €106 million. The firm is now looking for a financial partner for Puerto Venecia.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake