Tag: discount

Blackstone Builds Rental Home Giant In Spain

18 May 2017 – Cinco Días

The fund Blackstone is the largest property owner in the world and has been backing real estate Spain for a while now. And, it is going to continue to do so in the short to medium term. For the time being, the fund’s plans involve becoming a giant in the rental housing segment and it is already starting to show its investment strategy through several companies, including three new Socimis.

Blackstone’s first major step was to create the servicer Anticipa Real Estate, under the structure of the former entity Cataluña Caixa Inmobiliaria. This asset management platform purchased 40,000 mortgages from the extinct Catalan entity for €4,123 million in 2015. Since then, it has continued acquiring these kinds of mortgage portfolios, to accumulate a total investment to date of almost €7,000 million.

The latest acquisitions made by Blackstone – which is headquartered in New York – have included a €400 million portfolio of loans backed by property developer collateral and another portfolio from BBVA comprising 3,500 properties, for around €300 million.

This entire portfolio of mortgage debt and properties is managed by Anticipa, a company that is led by its CEO, Eduard Mendiluce, a veteran director in the sector. (…).

The work that the servicer performs for Blackstone involves managing the loans granted by banks to individuals and property developers. In many cases, that task ends with the “dación en pago” or foreclosure of the property or development, due to non-payment. The company says that it treats each client on a case by case basis, and the process often means it has to accept a discount on the debt.

Of the portfolios acquired from banks, “daciones en pago” and foreclosures, Anticipa already owns 12,000 properties, which are leased out (in around 75% of cases) and put up for sale. “The idea is for it to become one of the large owners of rental housing in Spain”, explains a spokesperson.

The opportunistic fund – which purchases problem assets at a discount – is planning to remain in the Spanish market beyond the short term, and has absolutely no interest in selling its businesses within the next 5-7 years, but rather intends to benefit from the upwards trend in property.

To create the residential giant, the US firm has started to create vehicles to which it will transfer properties for rent. The first of these companies is Albirana Properties, a Socimi that started to trade on the Alternative Investment Market in March. That listed investment company, which benefits from certain tax advantages, already manages 5,000 homes.

But it is only the first to be listed. Other Socimis, namely Pegarena and Tourmalet, which have already been constituted and are already owned by several Blackstone funds, will follow. These firms, in turn, operate using Anticipa as their manager. (…).

Packaging up these homes into different companies will facilitate the sale of those companies in the future to various interested parties.

Blackstone decided to back the rental sector rather than the sales market at a time of change in the type of demand, according to experts in the sector. In particular, the generation of millennials, for cultural reasons – are more inclined to live without the tie of a mortgage – and, above all, the difficulties being faced by young people to obtain loans given the job insecurity.

Unlike other Socimis that specialise in rental housing, the management of assets by Albirana is more complex, given that its properties are relatively scattered geographically, as they proceed from individual mortgages. Typically these companies opt to manage entire buildings, but Blackstone’s company has specialised in what is known as granular management.

Currently, the majority of these properties are located in Cataluña. They are followed – at some distance – by homes in Madrid, Comunidad Valenciana and Andalucía.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Blackstone Sells c. €300M Of Catalunya Banc’s Mortgages

8 May 2017 – Expansión

The banks’ non-performing assets are finally starting to generate returns for some of the entities that backed them during the worst moments of the crisis. Four and a half years after Catalunya Banc fell victim to the excesses of the real estate sector and was intervened by the State, and two years after Blackstone finalised its purchase of a portfolio of doubtful mortgages from the Catalan entity, which is now owned by BBVA, the US firm has shown that what were once toxic assets, are toxic no more.

And it has done so through the sale of some of the mortgages that it bought from Catalunya Banc. In fact, Blackstone has created a securitisation fund, with a nominal portfolio of €400 million in loans, and has placed it amongst investors at a price that represents selling almost €300 million of the total without a discount, according to official documentation submitted by the company.

Given that Blackstone purchased mortgages from Catalunya Banc worth almost €6,400 million nominal and that it paid €3,600 million for them, the fact that it has now sold the majority of the securitisation fund at its nominal value implies that investors no longer consider them to be problem loans and that they are willing to buy them without demanding an additional return for any higher risk.

Of course, there are several factors that have contributed to this. “Blackstone has included the best loans from the portfolio in the securitisation fund”, say sources in the market, who insist that the US firm still owns the majority of the loans it purchased two years ago.

In addition, the management of the loans plays a role, given that 82.75% of them have been restructured, according to figures from Fitch, which means that they have been granted grace periods or parallel financing since Blackstone took over the portfolio.

Different tranches

The result of these two factors is that Tranches A and B of the securitisation fund have been sold to investors without any discount on their nominal values. They will pay annual interest of 0.9% and 1.9%, respectively, until 2022 (from April of that year, the yield will rise to 1.6% and 3.3%).

The two tranches amount to €288 million, i.e. they represent 72% of the total fund. Meanwhile, Tranches C and D, which contain the worst mortgages and which have the lowest solvency rating, have been sold for 98% and 93% of their nominal values and will pay interest of 2.5% and 2.6%, respectively, for the first five years. Tranche E, the most risky, has been subscribed in its entirety by Blackstone, at a significant discount. (…).

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Habitat To Start Negotiating With Investment Banks

2 February 2017 – Expansión

The property developer Habitat is getting ready to grow. The company has convened a General Shareholders’ Meeting on 8 March 2017 to authorise the Board to start negotiating its growth plans with investment banks such as Goldman Sachs, Morgan Stanley and Alantra. Sources in the sector indicate that the property developer is currently working to define its corporate strategy. Habitat faces a phase of expansion after, in 2014, it signed the first major modification to a creditors’ agreement in Spain with a discount of 85% on its debt of €1,200 million.

The company was unable to meet the payment plan established by the agreement that allowed it to file for creditor bankruptcy in 2010 and which saw the following entities become shareholders after they capitalised their debt: Bank of America Merrill Lynch, SP101 Finance Ire-land, Capstone, CCP Credit Acquisition Holdings Luxco, CSCP II, Arvo, Goldman Sachs and Melf. Habitat has promoted housing developments in several of Spain’s major cities since the modification to the agreement was signed.

Original story: Expansión (by G. T.)

Translation: Carmel Drake

UniCredit Sells €17,700M In Doubtful Loans To Pimco & Fortress

15 December 2016 – Expansión

The Italian bank has €360,000 million of doubtful loans on its balance sheet.

UniCredit, the largest bank in Italy, has taken its first major step in the long awaited clean up of the transalpine financial sector, with the sale of €17,700 million in doubtful loans to Pimco and the Fortress Investment Group. Experts believe that Italy’s other financial institutions will find it harder than UniCredit to clean up their balance sheets.

Massimo Famularo, analyst at Frontis, considers that “UniCredit is playing in a league of its own and its capacity to absorb losses is enormous compared with that of the smaller Italian banks”, reported the Bloomberg news agency.

The sale of doubtful loans forms part of UniCredit’s new strategic plan, which also includes a €13,000 million capital increase and the cutting of 14,000 jobs. “The inclusion of Pimco and Fortress in the sale agreement for the doubtful loans gives credibility in the market and encourages other players to make the step forward”, says Federico Montero, analyst at Evercore Partners, referring to the other Italian financial institutions with doubtful loans on their balance sheets.

UniCredit will divest these doubtful debt portfolios at a discount of 77%. That is higher than the 73% discount at which another one of the Italian banks in distress, Monte dei Paschi di Siena, is planning to sell its doubtful loans, amounting to €28,000 million, to Atlante, the Italian state fund for the bail out of the financial sector.

On average, Italy’s banks are valuing their doubtful debt portfolios on their balance sheets at a discount of 57%, according to data compiled by Reuters. UniCredit’s share price fell by 6.4% on the stock exchange (yesterday) and has fallen by 48% so far this year.

Monte dei Paschi

Monte dei Paschi, the oldest bank in the world and the third largest in Italy, confirmed yesterday that the ECB has rejected its request to extend its capital increase amounting to €5,000 million until the middle of January. The entity’s Board of Directors met yesterday and will convene again today to announce their definitive plan, according to sources quoted by the Reuters news agency. The market takes it for granted that the entity will need public aid for its recapitalisation.

Original story: Expansión

Translation: Carmel Drake

Sambil Plans To Open 6-8 Shopping Centres In Spain

29 September 2016 – Mis Locales

The Venezuelan Sambil Group plans to open a network of between six and eight shopping centres in Spain and does not rule out expanding its business to other markets in Europe.

Nevertheless, before embarking on its new projects, the company will focus on establishing what is, for now, its only centre in Spain: the Sambil Outlet in Leganés (Madrid), which will open its doors on 24 March 2017, after more than four years of construction work. It will become the largest outlet and leisure space in Spain with a gross leasable area of 43,000 sqm.

The new centre, which will open on a site on the ill-fated M-40 and in which Sambil has invested around €55 million, will create around 1,500 jobs and require additional investment of between €25 million and €30 million to equip the premises for each brand.

According to Cohen (Director General of the Sambil Group), the company has chosen Spain to make its first foray into Europe because it was “ideal” from both a cultural and language perspective, as well as because it has a lot to offer in the corporate field and is attractive again for overseas investors.

“It is a rapidly-growing, mature and legally secure market, which needs entrepreneurship”, said Cohen, who stated that the country “has all of the tools to continue outperforming other markets around the world”.

The Executive highlighted that a company such as his, which is family based and has its headquarters in Venezuela, does not travel “7,000 kilometres” to open one shopping centre, and he added that in Spain his company’s focus is very much placed on the most populous cities -Barcelona, Sevilla, Bilbao, Valencia, etc-.

Although the group is strongly committed to the “outlet” format, it does not rule out opening “traditional” shopping centres in some of the cities, although, in both cases, they would be accompanied by leisure and restaurant facilities.

In this sense, he highlighted that the Sambil Outlet will have the largest wind tunnel in Europe and the most modern cinema screens, which will be run by the Odeon chain, which is working to make cinema-going more “accessible”.

Moreover, it will house the largest Simply (Alcampo) supermarket in the Community of Madrid.

The company thinks that between 5 and 6 million people will pass through the doors of its centre in Leganés during its first year of activity. It has faith in the success of the “outlet” format combined with leisure, which is currently fashionable in countries such as the USA (…).

“Post-crisis, the Spanish consumer is much more rational than emotional” stated the Director of Sambil in Spain, Arnold Moreno, who confirmed that the centre will open with an occupancy rate of at least 80%.

Sambil Outlet will have stores from discount brands such as For&From (the Inditex group’s footwear label), Mango, Fifty Factory (Cortefiel), Décimas and Xti, as well as “low cost” fashion stores.

The Sambil Group has constructed more than 500 residential buildings and offices and owns a portfolio of eight hotels and thirteen shopping centres – ten located in Venezuela, one in the Dominican Republic and one in Curaçao.

Original story: Mis Locales

Translation: Carmel Drake

Sareb Sells NPL Portfolio To Bank Of America & Hayfin

16 September 2016 – Expansión

Sareb has just sold a portfolio of non-performing loans worth €70 million to Bank of America and Hayfin Capital Management (founded by former directors of Goldman Sachs), which is secured by several residential buildings in Madrid. The agents of the operation have been Haya Real Estate and Solvia, who have declined to comment. Sareb does not have its own sales network, but uses the exclusive services of the two real estate managers, together with those of Servihabitat and Altamira Asset Management.

According to sources close to the operation, the discount obtained in the transaction has been 50%.

As a result of the new accounting legislation, operations are now a lot more segmented and therefore smaller.

Solvia, which belongs to Banco Sabadell, has been collaborating as one of Sareb’s agents for almost two years. It won the management of a portfolio containing 42,900 assets, of which 33,000 were properties originally from Bankia and the others were loans acquired from Banco Gallego and Banco Ceiss with various kinds of real estate guarantee.

In March, Sareb completed the sale of another batch of loans, which were secured by industrial logistics assets, hotels and offices, located in Madrid, Barcelona, Cáceres and Tarragona. The nominal amount of the operation amounted to €73.7 million.

The opportunistic funds, the typical stars of these operations, are starting to withdraw from the Spanish market and funds with more potential are now arriving, including Socimis and family offices. The funds that have sold portfolios in the last four years have managed to obtain IRRs of between 10% and 20%, according to business people in the sector.

Sareb was created in 2012 and is owned by the FROB (45%) and by the main banks (55%), with the exception of BBVA. 80% of its assets are loans to property developers and the remainder are real estate assets. Their total nominal value amounts to €107,000 million. By size, the bad bank exceeds its Irish counterpart Nama. Even so its market share barely reaches 4%, because it is a very fragmented market. The large banks compete directly with Sareb in the sale of properties, but bank bad has the advantage of time on its side. It has 12 years to execute its business plan and is under no pressure to list on the stock market.

According to the latest statements by its Chairman, Jaime Echegoyen, Sareb should stop losing money next year. Recently, it has started to develop plots of land from scratch, which will result in 700 homes and €100 million of investment. 21% of Sareb’s revenues are generated by the sale of real estate assets. It is currently selling an average of 27 units per day.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

The Socimi VBA Will Debut On The MAB In November

16 August 2016 – El Confidencial

Another new Socimi, VBA Real Estate, is planning to list on the stock exchange and has decided to accelerate its debut. It is now working against the clock ahead of its listing on the MAB (Alternative Investment Market) in November. But that is just the beginning, given that the company hopes to move onto the main stock market and to start competing with the large Socimis in the field, in other words, with Merlin, Hispania, Lar and Axiare.

In fact, its strategy on the stock market partially replicates those adopted by these large vehicles, given that the reason why VBA is debuting on the MAB is not just to comply with the legal requirements imposed on Socimis to benefit from their special tax regime. In this case, VBA also wants to raise money to finance new purchases and grow in size, a policy that would involve future capital increases, and that means that its upcoming debut on MAB will be structured as an IPO (Initial Public Offering or Oferta Pública de Suscripción or OPS).

To accompany it on its stock market debut, the Socimi has hired Renta 4 and Aguirre Newman, and has also hired professionals from firms such as PwC and McKinsey to comprise its management team, with David Calzada at the helm, as the CEO of VBA.

The Socimi already owns assets for rent in its portfolio, comprising 166 homes, 17 parking spaces and 68 storerooms, spread over four complete buildings; as well as others, scattered across several properties. It has performed these operations with a net direct profitability of 5%, without gearing, and a discount of between 10% and 30% on the market value, which has allowed it to accumulate an increase in its asset value of 34%.

To build this portfolio, VBA has invested €14 million, after having analysed operations worth €420 million and having raised €16.2 million, as well as having closed financing amounting to €3 million. With its upcoming debut on the stock market, the Socimi hopes to secure another €15 million, which will allow it to continue to progress towards its investment objective of €100 million.

According to its roadmap, the company hopes to have a gearing or Loan to Value (LTV) ratio of close to 50%, an ambitious challenge, given that it currently amounts to 16%.

Diversified shareholding

To give credibility and transparency to these numbers, VBA subjects its accounts to a quarterly review and publishes the corresponding financial statements, along with a valuation of its assets, a policy that adopts in order to provide a period point of references to investors interested in investing in its shares. This approach means that it is already complying with the practices of the (main) stock market, even though the obligation does not apply to MAB-listed companies.

Currently, the Socimi’s share capital is owned by 35 different shareholders, from Israel, USA and Spain, and none of them owns more than 15% individually. Part of its decision to accelerate its debut on the stock market (it could have waited until 2017) was based on the fact that several investors are interested in buying its share capital, but they will only do so once the company is listed.

Madrid, Málaga, Valencia, Sevilla and Bilbao are the cities where VBA has set its sights. It tends to close its investments in specific areas and neighbourhoods outside of the centre of those capitals, focusing instead on more popular areas, where rental prices are more affordable.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Soros Will Inject €37M Into Hispania’s €231M Capital Increase

12 May 2016 – El Economista

Hispania has resolved to launch a capital increase amounting to €230.7 million, with the aim of raising funds to allow it to continue investing in the purchase of new real estate assets, according to reports by the Socimi.

The company’s largest shareholder, George Soros, has already expressed his attention of participating in the operation, in line with the 16% stake that he holds in the firm. That means he will inject another €37 million into the business.

By virtue of the increase, Hispania will issue 25.8 million new shares at €7.95 per share, a price that represents a 37.5% discount with respect to the closing price on the stock market on Wednesday (€12.74).

The company expects that the increase will be completed by 9 June, when the new shares should start trading. The operation will begin within the next few days, just as soon as Spain’s National Securities Market Commission (CNMV) gives the green light to the information brochure.

This is the second capital increase that Hispania has launched within the last year, following the accelerated capital increase that it completed in April 2015, through which it raised €337 million.

In this case, the Socimi is resorting to its existing shareholders once again, given that “it has already committed all of its investment capacity” and because it has already identified investment opportunities amounting to €1,500 million and is in “advanced negotiations” to complete the purchase of new real estate assets amounting to around €200 million.

In this way, the company chaired by Rafael Miranda expects to continue increasing its asset portfolio, which comprises hotels, offices and residential properties, worth €1,425 million at the end of 2015, up by 14.8% on the purchase price.

Original story: El Economista

Translation: Carmel Drake

Park Street Advisors Pulls Out Of Husa Rescue Plan

9 May 2016 – Expansión

Park Street Advisors, the London fund specialising in distressed assets, which was going to come to Husa’s rescue, has got cold feet. The group has ruled out the possibility of developing the agreement that it had reached with the Gaspart family to create a joint venture to take control of the parent company, Chain, and inject €1.5 million to ensure its continuity.

Sources close to the company owned by the Gaspart family have confirmed that “this operation will not go ahead”, although “they do not rule out possible future collaborations”.

The agreement with Park Street was announced in January last year, when Husa tried to convince its creditors to approve an agreement that proposed a discount of 95% on its €221 million debt. In exchange, the company committed to return €5 million over the next five years, thanks to the agreement with Park Street, and whereby ensure the continuity of the business that has maintained the group.

Joan Gaspart (pictured above) managed to obtain approval for the agreement from the group’s four main companies last summer; the others filed for liquidation. Over the last few months, they have been filing for bankruptcy, with a view to liquidating some of the other small companies, such as Husa Service Hostelería, which recently suspended its payments in Commercial Court number 3 in Barcelona.

Last summer, the agreement with the Treasury and Social Security, to whom Husa still owes €20 million, remained pending.

Although that matter has still not be resolved, the official of Commercial Court number 3 in Barcelona raised preliminary protective measures under which all of Husa’s companies would remain active.

In its heyday in 2007, the chain owned by the former President of FC Barcelona and the President of Tourism in Barcelona, managed around 200 assets, of which around 140 were hotels and the rest were restaurants. The chain currently operates twelve hotels in Spain and Belgium.

But not all of the business was lost. In recent years, prior to the creditors’ bankruptcy, the Gaspart family transferred some of the hotels that it operated, mainly those that worked the best, to another family company called Atiram, which is run by Joan Gaspart’s daughter, María Gaspart Bueno, as the sole director.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Hotel Las Palomas Sold To Palia Hotels For €13.1M

18 April 2016 – Diario Sur

On Thursday, the iconic Las Palomas Hotel in Torremolinos was awarded in an auction to Palia Hotels, a Mallorcan chain that already runs another property on the Costa del Sol, the former Roc de Benalmádena Costa (now called Hotel Palia La Roca). The Balearic group has committed to pay €13,100,000 for the property and its main facilities with the aim of renovating them and reopening the hotel. The auction was conducted in person in the presence of a notary and was “very exciting”, according to the lawyer Ana Alonso, the bankruptcy administrator of the company that used to operate Las Palomas. “Four candidates were involved and the two highest offers were selected to participate in the final phase, and the bids then gradually increased”, she explained. It was such a close bid that the losing company, also Mallorcan based, offered €13,050,000.

Palia will now have to wait for a month for the acquisition deeds to be signed. If any problems arise with the buyer during that period, then the company that offered the second highest bid would have the opportunity to purchase the property. For Alonso, the result is definitely “good news”, given that the money obtained from the auction will be used to pay off the debts with the Tax Authorities, Social Security, the Town Hall of Torremolinos (which will receive €3.5 million for the IBI that the hotel owed and the profit from the sale) and the employees.

Yesterday, (the trade union) Comisiones Obreras expressed its satisfaction because “the almost 100 staff will receive their salaries and compensation payments” after four years of waiting. The total liabilities of the bankrupt company amount to around €15 million. Alonso said that every effort will be made to ensure that the ordinary creditors will also be repaid. However, the senior creditors will have to accept a discount of some kind for that to happen. “We were locked inside the hotel around the clock between June 2012 and June 2015. Our only aim was to keep our jobs and prevent the terrible management of the Puche family from dragging the workers and the hotel into ruin”, said José Quintana, member of the company’s Board.

The buyer will have to invest between €3 million and €6 million on the renovation work before it reopens the hotel, according to Ana Alonso. The four-star Las Palomas Hotel filed for bankruptcy in 2011 and for liquidation in April 2013.

Original story: Diario Sur (by Nuria Triguero)

Translation: Carmel Drake