Tag: David Martínez

Aedas Homes Will Make Its Stock Market Debut Before Year End

25 September 2017 – Expansión

A new real estate company will debut on the stock market before the end of the year. On Friday, the property developer Aedas Homes confirmed its intention to debut on the stock market during the fourth quarter of the year.

The company, which specialises in the construction of homes, has not revealed the price at which the placement of its shares will take place. Nevertheless, market sources forecast that its market capitalisation will be higher than its Gross Asset Value, estimated at €1,345.8 million.

Aedas Homes was created by the US fund Castlelake, after that firm invested several hundreds of millions of euros in buildable residential land in Spain. After creating a portfolio containing 1.3 million m2 of buildable land, worth €1,000 million, Castlelake turned to the team at the Socimi Merlin Properties to design a business plan that would allow it to maximise the returns on its investments. For this project, the fund recruited David Martínez, a director with experience in real estate developments, such as Valdebebas and Castellana Norte, both in Madrid.

Castlelake’s intention is to place between 40% and 60% of the company’s shares on the stock market, through a primary offer and then a secondary offer amongst qualifying investors. The primary offer is expected to raise funds amounting to approximately €100 million.

Investors

“The stock market debut of Aedas Homes will allow us to access funds from a diversified base of investors, which will be used to finance the company’s expansion and development plans”, explains David Martínez, CEO of the property developer. Citigroup and Goldman Sachs are acting as the global coordinating entities of the placement; Banco Santander and UBS as the joint bookrunners; BBVA, CaixaBank and Sabadell are the co-lead managers; and Deloitte is the financial advisor.

Currently, Aedas owns a portfolio of land worth €1,370.5 million, distributed across sight Spanish provinces – including Madrid, Barcelona, Málaga and Valencia–, which will allow it to build more than 13,000 homes. These magnitudes place it amongst the top four property developers in Spain. The company is currently working on 11 projects, involving 576 homes. Its business plan forecasts the investment of between €200 million and €250 million on new acquisitions over the next 2.5 years to deliver 3,000 homes per year from 2022 onwards.

With this move, Castlelake is following in the footsteps of Lone Star, which was the first international fund to list its company, Neinor Homes, on the stock market, after investing in assets in the Spanish market.

The debut of Lone Star’s real estate company took place in March, with a valuation of €1,340 million. Since then, the company has appreciated in value and its market capitalisation now exceeds €1,420 million. Lone Star placed 60% of its company’s share capital in the stock market debut. Last week, it divested another 27%, to raise €394 million. On Monday, the fund Wellington acquired an 8.5% stake.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Who Is Leading The New Generation Of Property Developers?

7 September 2017 – Expansión

The real estate sector wants to leave behind its shady image and to that end, has committed itself to a more professional style of management going forward. In this sense, the new generation of property developers, controlled by investment funds and banks, are combining the experience of professionals with extensive local knowledge and the financial vision of the providers of capital.

One of the property developers with the most ambitious forecasts is Metrovacesa, which, following a non-monetary capital increase in July, now owns assets worth more than €2,600 million and a portfolio of land spanning more than 6 million m2, ready for the construction of more than 40,000 homes. To lead the project, the real estate company, which is controlled by Santander and BBVA, has recruited Jorge Pérez de Leza (pictured above), who worked for 12 years as the CEO at Grupo Lar.

Neinor, which is controlled by Lone Star, was the first company to try its luck on the stock market, when it debuts on the main exchange in March. The firm is led by Juan Velayos, who was responsible for founding the Real Estate team at PwC and who has led the property developer since the end of 2014.

Värde has placed its trust in the founder of its property developers to lead the project into this new phase. In this way, Juan Antonio Gómez-Pintado – a stalwart of the sector – is captaining Vía Célere, whilst the management team of Aelca comprises Javier Gómez and José Juan Martín Montes.

Meanwhile, Castlelake has chosen David Martínez to lead Aedas. He was responsible for the Cuatro Torres and Valdebebas urban planning projects, amongst others.

Others

Besides these real estate companies, there are several others that survived the crisis, such as Quabit, led and controlled by Félix Abánades, and Realia, owned by the Mexican magnate Carlos Slim, who has put one of his most trusted men, Gerardo Kuri Faufmann, at the helm of that company.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Aedas Completes €2.3M Capital Increase

17 July 2017 – Eje Prime

Aedas Homes is continuing to raise funds to finance its growth. The company, the heir of Vallehermoso, has carried out a €2.3 million capital increase, which it plans to use to continue to boost its growth and strengthen its position as a key player in the real estate development business in Spain.

According to the Commercial Registry, the company Aedas Homes has carried out a capital increase amounting to €2.3 million. This is the second injection that the company has received in recent months after it increased its capital by €31.5 million in April. In this way, the company’s subscribed capital now amounts to €33.7 million.

Aedas Homes, created by the fund Castlelake and advised by Merlin Properties, was created with the objective of constructing 12,000 homes on land that it has been acquiring since 2013, spanning around 1.35 million m2. In March, Aedas Homes, which competes directly with Neinor Homes, Aelca and Vía Célere, began marketing its first fourteen developments and the group plans to add another fifteen developments to its portfolio in the near future.

The company began life in 2013, where the country’s housing market bottomed out and almost all of its activity was suspended. The fund Castlelake is one of the players who decided to back this business in Spain and in order to carry out its plans, it started to create a portfolio of land in locations that, according to its criteria, would be the first to recover.

At the end of 2015, when the real estate recovery started to become a reality and after investing more than €1,000 million in Spain, the fund had accumulated a portfolio of land covering more than 1.3 million m2, equivalent to 12,000 homes, of which 75% corresponded to primary residences.

It was at this point that the leaders of the project started to think about the possible evolution of all of their assets. To figure it out, they invited the Socimi Merlin Properties to enter the fold, to advise the group on the best formula for operating its land portfolio.

At the company’s helm is David Martínez (pictured above), who has vast experience in the real estate sector. After holding positions of responsibility at groups such as Ferrovial and Bovis Lend Lease in the 1990s, Martínez led projects such as Valdebebas and served as a senior manager at Distrito Castellana Norte.

New hires

In parallel to its growth, Aedas Homes is continuing to beef up its management team. The company recently hired Enrique Gracia, former director of Merlin, as the new Head of Finance. Gracia joined Aedas Homes in May; he has more than fifteen years of experience in the real estate sector (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Spain Is A Long Way Away From A New RE Bubble

21 April 2017 – Expansión

Spain’s large property developers consider that the (Government’s) policies in terms of housing are obsolete and so, they are requesting changes to the existing legislation to reflect the new habits and demands of Spanish society.

A more professionalised sector, with a greater industrial component, which is more disciplined in terms of debt, selective when buying land and prepared to adapt to the economic cycles. That is how Spain’s real estate developers see the future of the residential market in the country.

“I find it hard to believe that the market is not going to undergo a major transformation. The banks are not going to finance land and the radical fragmentation that we have seen until now is not going to continue”, said Juan Velayos, CEO of Neinor Homes, on Wednesday at the XXIV Meeting of the Financial Sector, organised by Deloitte, Sociedad de Tasación and ABC.

The CEO of Aedas Homes, David Martínez, said that between 130,000 and 150,000 new homes are going to be needed per annum over the next few years, so there is still a long way to go. For that Director, Spain has entered a new bonanza cycle following the crisis, which will probably last longer than the previous one.

The CEO of Sociedad de Tasación (ST), Juan Fernández-Aceytuno rejected the idea that there is currently a real estate bubble in Spain. “There is clearly stability in terms of prices, but it is still too soon to talk about a complete recovery in the market”. (…).

Thus, the President and CEO of Vía Célere, Juan Antonio Gómez-Pintado, said that the challenge for the sector in the future is to achieve greater industrialisation. “The situations that are being imposed on us by house and land prices are turning us into a speculative model. The sector was very badly affected during the crisis and there are only a handful of companies with their production capacity intact at the moment”.

For Gómez-Pintado, the sector is still very fragmented: “The large players will not account for more than 5% of the total market”.

Meanwhile, the CEO of Metrovacesa Suelo y Promoción, Jorge Pérez de Leza, highlighted the importance of recovering the reputation of brands.

In terms of his firm’s strategy for the future, Pérez de Leza explained that Metrovacesa Suelo y Promociones wants to become a “premium” channel for generating value from the land currently held by its shareholder banks (Santander, BBVA and Popular). “There has been a lot of speculation around whether we were going to end up as a dump. That is not the case. The strategy that we have chosen to adopt is for Metrovacesa to choose the land that will allow it to be a competitive property developer. The portfolio of land is very good and will be the envy of many of our competitors”.

Shortage of land

In terms of the lack of buildable land, Velayos acknowledged that, although Neinor currently has sufficient buildable land to carry out its strategic plan, which involves delivering between 3,500 and 4,000 homes per annum, the lack of supply may become a problem in the future. (…).

Moreover, the property developers are demanding a change in legislation in terms of housing in Spain so that it reflects the new needs of society. “I can’t think of any other sector that is worse in terms of regulatory matters than urban planning. It is absurd”, said Velayos. (…).

Meanwhile, the Managing Partner at Azora, Concha Osácar, pointed out that Spanish society is changing. “The rental market has been slow to reach Spain, due to a lack of investment and products, but it is now here to stay. (…). The stock of rental homes needs to be increased substantially”. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Operación Chamartín’s # 2 Jumps Ship To Castlelake

21 September 2016 – El Confidencial

Just three years ago, BBVA and San José hired David Martínez as the CEO of Duch, the property developer of Operación Chamartín, which was subsequently renamed Distrito Castellana Norte. It was a high profile move, given that Martínez was CEO of Valdebebas at the time, the only large real estate development in the capital that had managed to resist the crisis.

With those credentials, Martínez became the number two in command at Operación Chamartín, behind only the Chairman, Antonio Béjar. He was also the key figure that allowed the project to be relaunched, a year later, with the consent of the three administrations involved: the Ministry of Development, the Community of Madrid and the Town Hall of Madrid.

But that consensus broke down with the arrival of Ahora Madrid in Palacio de Cibeles. They reversed the plan and submitted their own proposal, Madrid Puerta Norte, which cut the scope of the original plans in half.

In the middle of this blockade, whose most recent chapter has just been written by the High Court of Justice in Madrid, with the admission of the appeal submitted by DCN against the Town Hall, Martínez has abandoned ship to join one of the major international funds in the Spanish real estate sector: Castlelake.

As El Confidencial revealed, the US firm has reached an agreement with Merlin to launch its own property developer from what was leftover of the former firm Vallehermoso, and the 1 million sqm of land that the fund has been acquiring over the last two years.

New property developer

Martínez said goodbye to DCN on 1 September to join this new company, which is expected to start work in October under the brand, Aedas Home. The firm has offices on Paseo de la Castellana and an 11-man team that used to form part of Vallehermoso, Sacyr’s former property developer subsidiary, which was liquidated two years ago.

Martínez’s recruitment is a statement of intent regarding the plans that Castlelake has for Spain, given that he is one of the most recognised professionals in his sector in Spain – he was at the helm for eight years at Valdebebas and then has spent another three years at Operación Chamartín. In fact, many consider him to be the real brains behind these two developments, on whose future the final configuration of the north of Madrid depends.

With Aedas Home, Castlelake has finished shaping the new map of the largest property developers in Spain, a market whose present and future is marked by the clear commitment that three large international funds, in particular, have made to the Spanish real estate sector: Lone Star, which acquired the developer Neinor from Kutxabank for €930 million two years ago; Värde, which together with Marathon and Attestor has launched Dos Puntos from the ashes of the former San José Desarrollos; and now, Castlelake.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake