Tag: Credit Suisse

Marathon Acquires 2 Office Buildings in Madrid from CaixaBank

14 February 2019 – El Confidencial

The US fund Marathon Asset Management, one of the first to back the recovery of the residential property development sector in Spain, has set its sights on the peripheral office market. According to sources speaking to this newspaper, the firm has purchased a complex measuring 17,557 m2 in Madrid from CaixaBank.

The complex comprises two office buildings and 300 parking spaces, as well as several commercial premises and is located at number 43 on Avenida Institución Libre de Enseñanza in the Julián Camarillo area, which is home to the offices of companies such as Atos, Indra and Prisa.

It is the second operation of its kind that Marathon has carried out in the past three months, given that in November, it acquired a mixed-used complex, also in this area from Credit Suisse. That complex comprised an office building and a hotel managed by Barceló.

Specialising in value-added operations, as demonstrated in the past, with its anticipation of the recovery of the residential property development market with its investments in Habitat and San José Desarrollos (now Vía Célere), the fund is convinced about the potential of the secondary office market in Spain, which it has placed at the centre of its investment target.

In fact, Marathon is interested in closing more acquisitions of this kind both in Madrid, where it plans to continue growing in the Julián Camarillo area, and in Barcelona, where it is looking at opportunities in areas such as 22@.

Last sale by CaixaBank

The fund, which has been advised in its purchase from CaixaBank by Cuatrecasas, Arcadis and Doble Dígito Brokerage, is planning to carry out a comprehensive repositioning of the asset, given that its current occupancy rate amounts to just 30%, according to market sources. They also indicate that the acquisition price will have amounted to around €15 million.

This complex was originally promoted by Grupo Veintidós in 2010, a company that ended up transferring ownership of the complex to CaixaBank, which lodged it in its real estate subsidiary Building Center.

Meanwhile, the bank reached an agreement with Lone Star last year to sell 80% of its real estate business, which means that this could be one of the last operations that the real estate subsidiary carries out under the control of the entity.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Blackstone Considers Buying Neinver from the Losantos Family for €500M

23 January 2019 – El Confidencial

Neinver, a property developer and operator of shopping centres, specialising in outlets – focused on offering discounted products – is up for sale and the US fund Blackstone is one of the buyers that is evaluating the operation. The Losantos family is asking around €500 million for the company, which has become one of the major operators in the shopping centre sector in Europe, and which would fit well into Blackstone’s portfolio given the stable rents generated by its properties and land, according to explanations provided by sources in the real estate sector.

Spokespersons from Neinver consulted about the negotiations indicated that “they decline to comment on rumours” regarding the sale operation, one of the largest underway in the sector in Spain this year from a corporate perspective.

Nevertheless, other financial sources have assured that the Losantos family has entrusted the sale of the company to Credit Suisse, which has drawn up a sales book that it has been promoting since the end of the year and which is being considered by several funds.

Blackstone is the favourite because it has already acquired assets from Neinver. In November last year, the property developer placed a package of industrial warehouses and logistics assets with Blackstone for €290 million. Therefore, this fund, the largest overseas investor in the Spanish real estate sector, is an old acquaintance of the Losantos family.

Neinver is chaired by José María Losantos del Campo. It is the largest operator of outlet centres in Spain and Poland, where it operates under two own brands: The Style Outlets and Factory. It has developed some of its assets in association with the fund TH Real Estate. In total, it has promoted and managed 16 outlet centres, and six shopping centres and retail parks (…). It has a presence in seven countries, including France, Italy, Germany, Portugal and the Czech Republic.

Neinver in numbers

Neinver recorded revenues of €93.6 million in 2017, according to the consolidated accounts filed with the Mercantile Registry. That figure represented an increase of 27% compared with the previous year.

Nevertheless, the strong performance in terms of sales was not reflected in its profits. Neinver is selling more but earning less. In 2017, its net consolidated profit amounted to €4.7 million, a third of the €16.1 million that it earned in 2016. The decrease in profitability was due in large part to the projects underway and its indebtedness.

According to the group’s consolidated accounts, the gross debt at the end of last year amounted to €466.3 million, €30 million more than during the previous year, “due to debts stemming from the new companies incorporated into the Neptune joint venture”. Neptune is the joint venture owned by Neinver and TH Real Estate.

Valuations

The €500 million asking price is without the debt. The book value of the company’s assets amounts to €913 million, according to Neinver’s own accounts. The main appeal of the company is the revenue stream stemming from the rental of its assets (…).

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

The Losantos Family Puts Neinver Up for Sale for €500M+

26 December 2018 – Cinco Días

One of the historical names of Spanish real estate, the Losantos family, is putting its real estate firm Neinver up for sale for more than €500 million. Neinver specialises in building and managing retail outlets and is the company that manages shopping centres such as The Style Outlets and the Factory. It has a presence in several countries.

The company, chaired by José María Losantos del Campo, has engaged the bank Credit Suisse to search for interested parties in this multi-national firm that started life in La Rioja, according to four financial and real estate sources familiar with the operation. The financial entity and the company declined to comment about this operation.

The founder of the company, born in 1936, started out in the sale and purchase of tinplate, together with his brother Mario, and later founded Neinver in 1969. Mario would go on to found Riofisa, one of the large real estate empires in Spain (…).

José María Losantos grew Neinver, which is now headquartered in Alcobendas (Madrid), specialising in turnkey projects, for example, in several wineries, and which has opted for shopping centres over the last two decades. His son, Daniel Losantos, serves as the firm’s CEO. The real estate company has, in turn, been controlled by the company Teckel Gestora since 2016, which also owns rural estates in Ciudad Real and which is owned by the patriarch of the family.

Neinver manages 600,000 m2 of commercial spaces, across almost 2,000 stores and in 15 outlet centres under the brand The Style Outlets and Factory, which span a commercial surface area of 300,000 m2.

The company has a joint venture to share ownership of some of these assets with TH Real Estate, the real estate arm of TIAA, the US teachers’ pension fund. Neinver controls a lot of these properties through 23 companies, according to reports from Insight View based on property registry data.

In addition to the centres in Spain, it owns assets together with TH Real Estate and other partners in France, Germany, Italy, Poland, Portugal, the Netherlands and the Czech Republic.

In Spain, it owns The Style Outlets – which are dedicated to the off-season sale of well-known brands – in Las Rozas, San Sebastián de los Reyes and Getafe (all three in Madrid), A Coruña and Viladecans (Barcelona), as well as the Madrilenian shopping centres Alegra and Nassica.

This search for buyers entrusted to Credit Suisse comes at a critical moment for investment in the Spanish real estate market, which is featuring many international funds and Socimis. So far this year, until the middle of December, a record investment figure of €18.719 billion has been registered, according to CBRE, up by 45% compared to 2017, boosted above all by the acquisition of companies. In the case of retail, €4.279 billion has been invested to date this year.

Original story: Cinco Días (by Alfonso Simón Ruis & Pablo Martín Simón)

Translation: Carmel Drake

Santander Cuts the Cost of its Agreement with Altamira in Exchange for Paying Apollo €200M Now

10 July 2018 – El Confidencial

A new twist in the relationship between Santander and Apollo. The Spanish entity and the US fund have restructured the contract that they signed four years ago, when the former sold 85% of Altamira to the latter. As such, they have laid the foundations that will allow for the refinancing of the debt of their shared subsidiary, which specialises in real estate services.

Specifically, the new agreement involves a significant reduction in the commissions that Altamira will charge the bank, in exchange for which Santander will pay Apollo €200 million now. Moreover, a series of agreements made between the two parties means that Apollo will receive another €70 million, according to confirmation from several sources in the know.

Thanks to the cash injection that the reduction in commissions brings, Altamira has improved the conditions of its €270 million syndicated loan that it has signed with Santander, Bankinter, Bankia, Sabadell, Crédit Agricole and Mediobanca. That liability has seen its term improve by two years, to 2023, but without the repayment of the principal, given that Apollo’s aim with all of these changes (the new management contract and the new debt conditions) is to be able to distribute a juicy dividend.

Specifically, according to the sources consulted, the fund wants to take advantage of the new liquidity injection to distribute remuneration of around €200 million. In fact, Altamira’s total financial commitments, which exceed €320 million, will remain the same and will not decrease following all of this restructuring.

It was in January 2014 when Banco Santander closed the sale of 85% of Altamira to Apollo for €664 million, in an operation that included a management contract for the bank’s real estate assets until 2028. That term will be maintained following the new restructuring of the agreement.

Since then, the relationship between the two partners has gone through various phases, which have included an attempt by the bank to buy back 100% of the platform, although that deal never came to fruition for price reasons, and the acceleration made by Santander to rapidly divest all of its property (…).

One strategy, which has involved the transfer of assets to Metrovacesa and Testa, the creation of a joint vehicle with Blackstone, baptised Quasar, to provide an exit for €30 billion in toxic assets and, now, the sales process involving €5 billion in residential and tertiary assets that has been entrusted to Credit Suisse.

This operation forms part of the horizon that the bank defined last year, when it completed Quasar and announced that it was giving itself until the end of 2018 to reduce its exposure to property to an “immaterial” level, in the words of the bank’s own CEO, José Antonio Álvarez.

Nevertheless, this desire to reduce the real estate exposure to zero will have a direct impact on Altamira, given that the portfolio now up for sale accounts for the bulk of Santander’s assets, which are still managed by the servicer.

Historically, Altamira’s two main clients have been Sareb, which awarded it the contract to manage €29 billion in assets and property developer loans, and Santander, a base Apollo has been expanding by signing agreements with other entities, such as BBVA, which has entrusted it with a €200 million loan portfolio, and Bain Capital, which has engaged it to manage the €600 million portfolio that it purchased from Liberbank.

In addition, the servicer has committed to expanding internationally to grow in size, a strategy that has already seen it take over €10 billion of assets under management in Portugal and Cyprus, the first two markets into which Altamira has made the leap.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Meridia’s Socimi Invests €26.5 Million in an Office Building in ​​Madrid’s Financial District

26 March 2018

Meridia’s socimi is growing its participation in the office sector. The fund, led by the Catalan executive Javier Faus, bought 90% of an office building in Madrid’s financial district. The group is in negotiations to acquire the remaining 10% in the coming days. The total price for the property is expected to involve an investment of 26.5 million euros.

The building has 7,000 square meters of area, according to Meridia Real Estate III Socimi, the company through which the fund is finalising the deal. Merida is financing the purchase with equity and a seven-year loan, granted by a Spanish financial institution, of 17 million euros.

Meridia’s socimi listed on Spain’s Alternative Stock Market (MAB) on December 29, the 47th socimi to join the MAB and the last in 2017. The socimi’s shares started trading with a market value of one euro per share, giving the company a capitalisation of 78.5 million euros. The company, which was established last year, is the fund’s third investment vehicle, created by Faus in 2001.

The vehicle has attracted the attention of various investors since its inception. The last to announce its interest in the socimi was the Puig family, which owns the Puig perfume and fashion group. The group acquired 5.25% of the socimi’s capital through its real estate investment firm Inmo.

In addition to the Puigs, its main shareholders include: the institutional investor Dreof, based in New York, which holds 18.39% of the group, a church pension fund, with 15.75%, the European institutional investor Periza Industries (1.13%), the Israeli Harel investment and financial services group (11.98%) and Credit Suisse (7.88%).

The rest of the socimi’s capital is in the hands of two local family offices: Anangu Grup, the principal holding of the Catalan company Eurofred (6.56%) and the Puig family’s Inmo (5.25%). According to a document sent to the Alternative Stock Market, the president of Meridia, Javier Faus, personally owns 5.21% of the socimi.

Original Story: EjePrime – C. Pareja

Translation: Richard Turner

Lar España Buys Rivas Futura Shopping Centre for €62M

6 February 2018 – Expansión

The Socimi in which Pimco holds a stake has purchased the Rivas Futura shopping complex, in the Madrilenian town of the same name, for €62 million.

Lar España has completed its first investment of 2018. The Socimi, whose largest shareholder is the fund manager Pimco, has completed the purchase of the Rivas Futura shopping complex, located in the Madrilenian town of Rivas.

Inaugurated in 2016, this complex was promoted by the real estate firm Avantis, and became a reference in Madrid, with a surface area spanning more than 55,000 m2 and first-class tenants such as Media Markt, Conforama and Toys R Us. Next to the retail park, the same real estate firm constructed a large office complex and a shopping centre called H2Ocio. Recently, that shopping centre also changed hands, with the manager CBRE Global Investors acquiring 70% of the property.

In 2008, Avantis’ liquidity problems meant that it had to find a new owner for the complex. The real estate subsidiary of Axa spent €81 million to buy the centre at that time. Years later, the fund Lone Star was awarded the park as part of Project Octopus, formed by loans from the German bank Eurohypo.

Now, the Socimi managed by the real estate group Lar has become its new owner, after paying €61.6 million to the most recent owner: Credit Suisse.

With this new investment, Lar España has become the largest operator of retail parks in Spain, with more than 150,000 m2 in its portfolio. Its flagship assets include the Megapark complex in Barakaldo, where the Socimi owns both the Megapark shopping centre and the factory outlet (acquired for €170 million), as well as the leisure area; that operation was closed at the end of October.

This purchase also represents the first acquisition of a commercial asset by the Socimi in Madrid, where it already owns a luxury housing development, Lagasca 99, as well as two office buildings. At the end of last year, Lar España put its office portfolio, comprising four assets and worth €170 million, up for sale. Since then, it has sold two of the assets, both located in Madrid and both sold to the same buyer: the real estate firm Colonial.

During the first nine months of 2017, Lar España generated profits of €72.2 million, up by 55% compared to a year earlier, after earning €57.2 million, up by 36%.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

CaixaBank: “The Banks Have Lost €150bn Due to ‘Real Estate'”

26 January 2018 – Eje Prime

The banks have lost no less than €150 billion due to real estate. That is according to Juan Antonio Alcaraz, Director General of CaixaBank, speaking on Thursday. Moreover, the director described a panorama that has “changed radically” in the mortgage market, basically because “people no longer think about buying (a home) and, even less so, about taking out a mortgage”, said Alcaraz.

The current situation of the banks with respect to real estate is that of reconstruction. “Our portfolio has recovered somewhat, but it is much smaller than before”, acknowledges the director, who recalls “the years when 900,000 new homes per year were being built in Spain, whereas now just 80,000 p.a. are being constructed”.

In 2017, CaixaBank undertook property developer loan operations worth between €15 billion and €20 billion. The decline in demand for these types of loans from banks has had an impact on the emergence of “new players, which have caused the figure of the property developer loan to disappear for certain vehicles”.

Moreover, at the meeting between professionals in the sector at Madrid’s IESE, Alcaraz recalled that there is still a shortage on the demand-side for the purchase of new build homes in Spanish society: “Three-quarters of the transactions closed in the residential sector involve second-hand homes”. That fact had an impact in 2017 given that Spain’s banks granted “around 60,000 new mortgages”, much fewer than in the past.

In terms of the emergence of real estate projects, which have been booming in recent years with the arrival of new property developers, the CaixaBank representative says that “there is not a single project that has not been performed for lack of financing”, although he clarifies: “The problem is what type of projects we are talking about and what is being financed”.

“On the stock market, there is space for many more companies in the sector”. Having recently arrived from London, where he works as a Director of Real Estate Investments for the bank Crédit Suisse, Jaime Riera spoke about overseas funds, the largest investors in the Spanish property market. “The whole world understands that it is a cyclical sector and that, leaving aside the recent political events, there is consensus over the strong performance of the real estate business”, said Riera. Nevertheless, the executive has diagnosed “less potential for transactions in the retail sector”.

Another established connoisseur of the British market, Fernando Bautista, European Director of Real Estate Investment at Citi, highlighted at the same meeting that the weight of the real estate sector on the British stock exchange “is much greater than on the Spanish stock market”. For that reason, and after recalling that “without Anglo-Saxon demand, we would not be talking about the Socimis today, or about Neinor and Aedas”, said that “there is room for lots more companies on the Spanish stock market”.

The legal certainty of the new mortgage law

Drafts are already being prepared by the Government for the processing of a new mortgage law, news that is welcomed by the banks. “A new law would give us the legal certainty that we do not have at the moment”, said Alcaraz, who indicates that “the crisis has generated a very high degree of uncertainty over residential assets and mortgages. That is very harmful to us in economic terms”.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Lone Star Exits Neinor after Selling its 12.5% Stake for €174M

11 January 2018 – Expansión

Following this operation, the stake owned by the US fund in the property developer, which was its largest shareholder before its stock market debut, will be reduced to a token 0.4%.

Lone Star is folding up the sails in Neinor Homes, whose share capital it is almost completely exiting less than a year after the property developer’s debut on the stock market, which took place in March last year. The US fund has undertaken an accelerated placement of 9.85 million shares in Neinor, representing 12.5% of that firm’s share capital, amongst institutional investors.

Yesterday, the property developer closed trading at €18.04 per share after a decrease of 1.1%, which means that the package put up for sale was worth €177.8 million.

Nevertheless, today, Neinor has informed the National Securities and Exchange Commission (CNMV) that the price at which the placement was closed was €173.99 million, equivalent to €17.65 per share.

After completing this operation, Lone Star’s presence in Neinor, the company that it controlled 100% prior to the property developer’s debut on the stock market, will be reduced to a token 0.4%, equivalent to 350,918 shares that it is retaining to ensure that it agrees the conditions of an incentive plan for “certain directors and key employees”.

With the sale of this latest package, Lone Star is culminating a divestment process that it began in March last year with Neinor’s stock market debut, when the American fund placed 60% of the property developer’s shares on the market, for which it received revenues of around €800 million.

A few months later, in the middle of September, Lone Star divested another 27% of Neinor, receiving proceeds on that occasion of €394.6 million and obtaining profits of €166 million as a result.

Following the accelerated placement completed yesterday and entrusted to BNP Paribas, Citigroup, Credit Suisse and JP Morgan, the resources raised by the US fund from the sale of Neinor now exceed €1.37 billion in total.

Neinor, whose origins date back to 2015, when Lone Star acquired Kutxabank’s real estate assets, debuted on the stock market with a valuation of €1.34 billion. Currently, its market capitalisation amounts to €1.425 billion, up by 6.3% from that figure.

Neinor’s main shareholders include the investment firms Wellington, with an 8.5% stake; Fidelity, with around 6.8%; and Invesco, with 5%, according to the CNMV’s registers.

Original story: Expansión (by J. Díaz)

Translation: Carmel Drake

Record Financing Deal: Testa Raises €0.8bn From 16 Banks

15 December 2017 – El Confidencial

Testa has managed to close new financing amounting to €0.8 billion and, in a move that has made the deal remarkable, has not had to use any of its buildings as collateral.

As El Confidencial revealed, the entity in which Santander, BBVA, Merlin and Acciona hold stakes, was negotiating to refinance all of its debt so as to be well positioned to make its debut on the stock market and to have a sizeable sum to make new purchases.

In the end, according to financial sources, the Socimi has obtained the backing of 16 financial entities for the largest unsecured loan ever granted to a company in this sector in Spain. The new loan will be structured in three tranches, whose maturity dates will range between two and five years.

The first, amounting to €0.35 billion, is a bullet loan, which will be repaid in its entirety upon maturity, in December 2022; the second, for the same amount, is a 2-year bridge loan, which the company plans to refinance with a bond; and the third, a line of credit amounting to €0.1 billion has a mortgage guarantee over five years.

The entities that have participated in this financing are Banco Sabadell, Santander, Barclays, BNP Paribas, Caixabank, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, ING, JP Morgan, Mediobanca, Natixis and Société Générale.

Following this agreement, Testa’s leverage ratio has increased from 15% to just under 35% and all of its debt is now corporate.

The Socimi is working with a view to making its debut on the main stock market in the spring. It will make that move with a portfolio comprising 9,219 homes dedicated exclusively to rent, spread over 111 buildings and worth almost €2.2 billion.

Nevertheless, thanks to the signing of this new financing, the Socimi now has fresh money to take on new acquisitions before its stock market debut, in line with the purchase that it announced in September of 135 homes from BuildingCenter, the real estate subsidiary of CaixaBank.

65% of Testa’s portfolio is located in Madrid, San Sebastían accounts for 7%, Barcelona 5%, Valencia 4%, Mallorca 3% and other locations the remaining 15%.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

CNMC Approves Sabadell’s Sale of Hotel Socimi to Blackstone

4 December 2017 – Eje Prime

The sale of Sabadell’s hotel Socimi has been given the go-ahead. Spain’s National Markets and Competition Commission (the CNMC) has given the green light to the first phase of the sale of Banco Sabadell’s hotel subsidiary, HI Partners, to the US fund Blackstone for €630.7 million.

The operation was agreed in October through the company Halley Hodco, which is controlled by the US investment fund. The sale of the Socimi will generate a net profit of €55 million for Sabadell and will improve its capital ratio by 22 basis points this year.

A few months ago, the Catalan bank engaged Credit Suisse, Citi and JP Morgan to work on the possible IPO of the hotel chain, but in the end, the financial institution decided to completely divest the company.

In addition to Blackstone, the fund Brookfield also bid for the purchase of the company, which was created only two years ago. HI Partners has a portfolio of 29 assets and is worth €1 billion. Its hotels include the Abora Catarina in Maspalomas (Gran Canaria); the Ritz-Carlton Abama and the Jardín Tropical, both in the province of Tenerife.

Original story: Eje Prime

Translation: Carmel Drake