Tag: dividend

Lar to Invest €200M Buying Retail Assets After Divesting Other Assets Worth €425M

25 April 2019 – El Economista

Lar is entering a new phase in which it will specialise in retail after divesting all of its offices and logistics assets. The Socimi has received total proceeds of €425 million from its recent sales, of which it intends to dedicate around €200 million to new purchases over the next three years.

According to José Luis del Valle, President of Lar España Real Estate, the Socimi is now going to focus on operations in the commercial segment only, including both asset purchases and new developments, to continue to expand its €1.5 billion portfolio.

Lar is coming to the end of the development of Vilanova Park in Sagunto (Valencia), Lagasca 99 in Madrid and Lagoh in Sevilla and so it has the capacity to take on more promotion projects in the future, according to Miguel Pereda, CEO of the Socimi.

Following its recent asset sales, Lar has approved the distribution of an extraordinary dividend amounting to €25 million, charged against the accounts for 2018, equivalent to €0.80 per share. This represents the largest dividend in the Socimi’s history and is 67% higher than last year’s payout.

On Wednesday, the Socimi completed the sale of the last office building left in its portfolios – the property located at Calle Eloy Gonzalo in Madrid, which is now in the hands of Swiss Life.

In addition to its forecast new operations, Lar is also working on the repositioning of its assets, with plans to invest €40 million in total.

Original story: El Economista (by Alba Brualla)

Translation/Summary: Carmel Drake

Starwood Purchases Omega Park in Madrid and an Office Building in Barcelona

24 January 2019 -El Confidencial

The US fund Starwood Capital has taken another important bite out of the Spanish office market with the purchase of the entire portfolio of Autonomy, the Socimi whose main asset was the Madrilenian Omega Business Park, a giant corporate complex comprising four buildings spanning more than 33,000 m2, and which houses the headquarters of multinationals such as BP and Samsung.

The transaction, whose consideration amounted to €125 million, also includes an office complex in the sought-after 22@ district of Barcelona, which allows the US fund to also expand its presence into the Catalan capital and to make strides in its commitment to build an office portfolio in Spain worth €500 million.

To reach this objective, Starwood joined forces last year with Drago Capital, together with which it starred in the purchase of the Madrilenian San Fernando Business Park for €120 million, and which has also accompanied it in its purchase from Autonomy (…).

The Socimi, meanwhile, had put the for sale sign up over its whole portfolio a while ago. It constructed the portfolio with a clear opportunistic appetite during the worst periods of the crisis and it is now able to undo its positions with juicy gains.

In fact, at the end of 2017, Autonomy sold the jewel in its crown in Spain, the building located at number 4 Gran Vía, to the Riberas family, owner of Gonvarri and Gestamp, for €43 million, an amount that generated a gain of 40% for the opportunistic investor.

Following the sale of the office portfolio to Starwood, the Socimi is going to distribute €44.7 million as an issue premium, as well as an interim dividend of €51 million, amounts that in both cases will be paid into the accounts of shareholders on 30 January.

Moreover, once all of these operations have been completed, Autonomy will still have €10 million in cash and no assets under ownership, which means that it will have completed its objective of divesting all of its positions in Spain with juicy gains.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Blackstone Obtains a c. €2bn Mega-Loan for Testa

19 December 2018 – Expansión

The Socimi Testa held an extraordinary General Shareholders’ Meeting on Tuesday, where it reduced the number of members of its Board of Directors from 11 to 5. The new governing body includes three people proceeding from the new majority shareholder, the investor group Blackstone.

Testa Residencial is going to sign a mega-loan amounting to €1.943 billion, which it had already agreed in principle after the US fund Blackstone takes control of the rental home Socimi with the purchase of 80.6% of its share capital within the next few days.

The loan, equivalent to the amount that the purchase of the firm has cost the fund (around €1.52 billion) along with the debt held by the Socimi, has been agreed with Bank of America Merrill Lynch, Société Générale and Santander itself, Blackstone’s partner in Testa with 18% of its share capital.

This bank financing was agreed during the first meeting of Testa’s new Board of Directors following the restructuring of the management body conducted hours before, at the General Shareholders’ Meeting, when entry was granted to Blackstone.

By virtue of this restructuring, Testa’s Board has been reduced to five members, from the previous number of eleven. The fund has appointed three representatives to the Board, one of which, Diego San José, will also be the President of the Socimi, a role held until now by Ignacio Moreno.

The other two chairs at the table will continue to be occupied by the current CEO, Wolfgang Beck, and the director Miguel Oñate. In this way, the Board seeks to ensure continuity in the management of the real estate firm and to continue benefitting from Oñate’s experience and knowledge.

New strategy

Despite this continuity in management, at the first meeting of Testa’s Board, with Blackstone in the driving seat, a resolution was taken to approve a new strategy for the company, which had been planning to invest €550 million in the purchase of new rental homes to add to its existing portfolio of 10,700 flats.

The new strategy involves “analysing the eventual purchase of new homes depending on the circumstances at play in each case”. Moreover, Blackstone has raised Testa’s current leverage limit, situated at 35% of its asset value, and has reduced the dividend payment to the “legal minimum”.

In terms of the super-loan, it is being guaranteed by the assets of the Socimi itself, worth €2.3 billion in May when it was considering making its debut on the main stock market, and which will be signed with a two-year term, with the possibility of three annual extensions.

Dividend

Before changing the dividend policy, the Board also agreed to distribute a payment to the shareholders leaving the Socimi as well as to the new shareholders.

Specifically, it is going to pay €7.612 per share to the shareholders that leave the company after selling their stakes to Blackstone, in other words, to BBVA, Acciona and Merlin and to Santander for the proportion of shares that it has also sold.

Moreover, Testa will pay €0.035 per share to those players that will be its shareholders once the sale and purchase agreement has been signed within the next few days, in other words, to Blackstone and Santander, as well as to a group of minority shareholders who own 0.5%.

With the acquisition of this Socimi, Blackstone is strengthening its position as the largest owner of rental homes in Spain, with around 24,000 homes through its various firms and Socimis. Moreover, it is consolidating its position as one of the largest real estate owners in the country, with an asset portfolio worth more than €20 billion.

Original story: Expansión

Translation: Carmel Drake

Project Apple: Apollo Bids Hard for Santander’s Last Real Estate Portfolio

30 July 2018 – El Confidencial

Project Apple, the name chosen for the €5 billion real estate portfolio that Banco Santander has put up for sale, is entering the home stretch. The entity chaired by Ana Botín has asked the interested funds to submit their definitive offers this week, according to sources close to the operation.

As this newspaper revealed, the firms that have expressed their interest in the operation include the giants Lone Star, Cerberus, Blackstone and Apollo, although, the latter two are regarded as the favourites, given that they have significant recent history with the Cantabrian bank’s property.

Just one year ago, Blackstone was awarded project Quasar, the €30 billion portfolio of gross toxic assets that Santander sold (following its acquisition of Banco Popular). Meanwhile, Apollo owns 85% of Altamira, the real estate asset manager that the financial entity created and which is currently administering the €5 billion portfolio up for sale.

Having been left out of all of the major real estate processes involving the banks, Apollo has decided to bid hard for Apple, according to the same sources, a move that has been launched in parallel to the possible sale of  (its stake in) Altamira, the manager that would lose some of its appeal if another fund were to manage to acquire this portfolio.

In addition, the firm led in Spain by Andrés Rubio has just reached an agreement with Santander to modify Altamira’s management contract and to refinance the servicer’s debt, in a deal that has allowed the fund to distribute a dividend of €200 million.

For Santander, the sale of Project Apple will mean completing the divestment of all of its real estate exposure, a move that took a giant leap forward last year with the transfer of the Quasar portfolio to Blackstone.

Nevertheless, and precisely because it has already cleaned up the bulk of its balance sheet, the entity does not have any need to sell and, therefore, if the bids come in below its expectations, it may decide not to transfer the portfolio after all, at least not through this process.

After the Cantabrian bank, BBVA reached an agreement with Cerberus to sell it 80% of its toxic property, whose gross value amounts to €13 billion, in an operation that is expected to be completed later this year.

More recently, CaixaBank reached an agreement with Lone Star to sell it 100% of Servihabitat and the majority of a portfolio of properties worth €6.7 billion; and Banco Sabadell made a deal to transfer €12.3 billion in toxic assets to Cerberus (€9.1 billion), Deutsche Bank (€2.3 billion) and Axactor (€900 million).

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Spain’s Competition Authority Approves Minor’s Takeover of NH

21 July 2018 – Expansión

Minor’s takeover of the NH Hotel Group is moving forward. The Spanish National Securities and Markets Commission (CNMV) admitted the offer from the Thai company Minor on Thursday and then, yesterday (Friday), Minor obtained approval from the Spanish and Portuguese competition authorities (CNMC). In this way, the offer is conditioned “exclusively” on its approval by Minor’s General Shareholders Meeting, which has been convened for 9 August. The Thai company currently controls 29.8% of NH’s share capital and, in September, plans to complete the purchase of an additional 8.4% stake from the Chinese firm HNA, which will increase its percentage stake to more than 38%.

The company, which is offering to pay €6.40 per share (€6.30 following the payment of the dividend approved by the General Shareholders’ Meeting) has indicated that its objective involves controlling between 51% and 55% of the Spanish group and for the remaining shares to continue to be listed. If that limit is exceeded, the company will consider making way for the entry of a financial partner in the share capital. Minor has also said that its objective involves increasing NH’s dividend by 50% next year to €0.15 per share.

The Thai group recorded revenues of €1.4 billion in 2017, has a market capitalisation of €3.9 billion and employs 66,000 people. With this operation, Minor will strengthen its hotel presence in America and Europe. Minor has 161 hotels and 20,384 rooms, primarily in Asia and Africa, whilst NH has 382 establishments and 59,350 rooms. Currently, the only markets in which the two chains have a presence are Brazil, Portugal and the United Kingdom.

At the General Shareholders’ Meeting held in June, the Chairman of NH’s Board, Alfredo Fernández Agras, described the offer as insufficient. Moreover, the President of Hesperia and CEO of NH, José Antonio Castro, expressed his criticism of the operation and his dissatisfaction with the Thai group’s entry onto the Board of Directors, where it now has three representatives.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Apollo, CPPIB & ADIA Are Open to Offers for Altamira

12 July 2018 – Voz Pópuli

The ownership of the real estate company Altamira may change hands over the coming months. The company controlled by the fund Apollo has hung up the “For Sale” sign after the refinancing and restructuring of its contract with Santander, signed just a few days ago, according to financial sources consulted by Voz Pópuli.

At least 85% of the real estate firm will go on the market. The servicer currently manages assets worth €54 billion. The US fund Apollo is the entity that controls the majority stake, whilst its ownership is shared equally with two other partners: the largest Canadian fund, CPPIB (Canada Pension Plan Investment Board); and the main Abu Dhabi investment fund, the ADIA (Abu Dhabi Investment Authority) sovereign fund.

Each of them controls 28.3% of Altamira, just like Apollo, although it is the latter who leads the real estate company and chairs its Board.

Divestment

After four and a half years of investment, the main shareholders have decided that now is the right time to sell, given the strong performance of the real estate market and the appetite from large investors to enter the business.

In fact, sources consulted indicate that several international and Spanish investors have already approached Altamira. One of the candidates is Haya Real Estate, a similar platform, owned by Cerberus, which is interested in growing its business ahead of a potential stock market debut.

Another possibility being rumoured in the market is that CPPIB itself may purchase the 56% stake in Altamira currently owned by Apollo and the Abu Dhabi sovereign fund. The Canadian fund entered the market for the acquisition of toxic asset portfolios from the banks last year with a bang, by closing an operation with Sabadell; and this year, it has signed another deal with BBVA.

The possible sale of Altamira comes after the refinancing of the real estate firm agreed with the banks and the renegotiation of the contract with Santander. Thanks to this operation, the shareholders of Altamira are now going to share out a €200 million dividend, according to El Confidencial, which means that the numbers already add up for the funds.

The relationship between Apollo and Santander

Apollo and its two partners already tried to exit Altamira two years ago but failed to reach an agreement with Santander, which made a low offer that was not accepted. Since then, the real estate firm has pushed ahead with its own internationalisation by branching out into Portugal and Cyprus.

Original story: Voz Pópuli (by Jorge Zuloaga)

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

Saba Delays AGM by 1 Month to Finalise New Ownership Structure

3 May 2018 – Expansión

Never before has an ordinary general meeting of Saba’s shareholders raised so much expectation. The parking lot company, in which Criteria Caixa holds a 50.1% stake, has delayed the shareholders’ meeting that it had planned to hold in Barcelona on 9 May, postponing it until 12 June. The reason is that the shareholders still need to agree on the changes in their stakes in the parking lot company.

Its been a while since Torreal, which owns 20% of Saba; KKR, which holds 18.5%; and ProA, which owns 10.5%, expressed their intention of divesting their stakes in the company, a move that is logical for funds, which typically rotate their portfolios every few years.

But Criteria Caixa, which is in a position to buy, in light of the proceeds amounting to €3 billion that it is going to receive over the next few months when it sells its stake in Abertis, has initiated conversations with the other three major shareholders to take control of the company. The remaining 1.2% of the shares, which are owned by small investors, proceed from the time when Saba belonged to Abertis.

In parallel, Criteria is also planning to hold a Board Meeting at the end of this month to define the final position of its investment portfolio. Sources consulted assure that a decision will be taken at that meeting as to whether to take over complete control of the company led by Josep Martínez Vila or to sell its stake. In theory, all indicators are that Criteria Caixa will become Saba’s sole shareholder.

Finishing touches

During the extra month that they will now have, the shareholders are going to close all of the details to approve the changes in their shareholding. Meanwhile, Saba has justified the change of date in “the greater social interest and for reasons beyond its control”. Nevertheless, some parties were in favour of holding the meeting and organising another extraordinary meeting later on, once the shareholder restructuring has been agreed.

The aspects to be discussed include the distribution of a dividend amounting to €19.95 million, charged against the issue premium; the approval of the results; and, as the fifth item on the agenda, the re-election and appointment of the directors.

Criteria is going through a time of enormous liquidity due to the funds that it is going to receive when it sells the 18% stake that it holds in Abertis and because it has not participated in any large operations since it divested its 10% stake in Gas Natural Fenosa, for which it obtained €1.8 billion.

Saba, chaired by Salvador Alemany, is worth around €1.4 billion, on the basis of a multiple of between 12 and 14 times its EBITDA, which amounts to around €100 million. The company manages 195,000 parking spaces and, in 2016 – the most recent year for which data is available – it recorded revenues of €205 million (+17%) and obtained EBITDA of €94 million (+10%) (…).

Original story: Expansión (by Artur Zanón)

Translation: Carmel Drake

Renta Corporación Considers Paying Dividend of 30% to Shareholders in 2018

26 April 2018 – Eje Prime

Renta Corporación is returning to the boom times. According to Luis Hernández de Cabanyes, President of Renta Corporación, the real estate group is evaluating the possibility of distributing a 30% dividend to its shareholders. If that decision is approved in the end, the group’s shareholders would receive almost €5 million, given that the group’s objective for this year is to achieve a net result of €16 million.

That would be the first time in ten years that Renta Corporación has distributed any of its profits. “We have the intention of distributing a dividend, however, it will all depend on the financing needs of the company”, added the President of the group. Although the dividend for 2018 is still under consideration, the company has hinted that it will almost be a commitment to its shareholders starting from next year.

This reward for Renta’s shareholders comes after the company managed to pull itself out of the economic crisis. “We find ourselves facing a favourable market for the next four years and our objective is to return to our pre-crisis levels, when the group’s net profit amounted to between €30 million and €50 million, by 2022”, says Hernández.

“A stable business model, a renewed brand (the group is going to unveil a redesign of its entire corporate image next week), solvency, a portfolio of buildings under construction, a database and external collaborators are the ingredients to achieve the results that we have set ourselves”, concluded the President of the group.

According to the group, its strategic plan for the next three years involves maintaining a portfolio mix similar to the one it has had until this year “with the aim of diversifying its exposure to the risk presented by the different segments of the real estate market”.

“Renta will continue to concentrate its portfolio in the residential sector, one of the markets that is experiencing the highest growth and where positive trends are forecast, both in terms of prices and the volume of operations” – say sources at the group – “The operations forecast in the strategic plan will continue to concentrate on the cities of Madrid and Barcelona, since they are the most dynamic of all the markets”.

In 2018, Renta expects to close numerous operations involving the acquisition of new assets and the sale of properties, whilst in 2019, the number of transactions carried out by the group will rise to 31. In 2020, Renta plans to sign 34 operations. The operating margin is expected to amount to €26.5 million in 2018; €33.9 million in 2019; and €35.6 million in 2020.

Although Renta is focusing on Spain, specifically Madrid and Barcelona, the company does not rule out returning to some of its old haunts such as Paris (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Blackstone Lends Fidere €543M to Pay a €120M Dividend

23 April 2018 – Eje Prime

Blackstone is going to refinance all of the debt owed by Fidere, its rental home Socimi. The US fund has signed a €543 million loan with an international finance company for its Spanish subsidiary. Thanks to this operation, the company is going to be able to distribute a dividend amounting to €120 million, as reported by the group to the Alternative Investment Market (MAB).

In addition to undertaking the refinancing of this debt, Blackstone is planning to use this new loan to tackle Fidere’s investment plans and to manage the distribution of the group’s reserves. In this sense, the objective of the fund, as the majority shareholder, is to raise funds to pay a mega-dividend.

Currently, Fidere has a financial debt with the fund that owns it of €117 million, in addition to the €270 million that it holds in mortgage loans with several Spanish financial institutions such as BBVA, Sabadell, CaixaBank, Popular and Bankia.

The capital injection that Blackstone has made into its real estate subsidiary has a term of two years, with the option of being extending to five years in the event that certain conditions are fulfilled. The payment of interest has been set quarterly at a rate of Euribor plus 2.5%.

This operation follows others that have been completed in the real estate sector in recent times involving international investment funds and real estate companies. Blackstone itself purchased most of the now extinct Popular’s toxic assets, worth €30 billion, from Banco Santander. BBVA also sold a large portfolio to another fund, Cerberus, whilst, recently, Testa managed to sign a €800 million loan without any mortgage guarantee.

Fidere owns 10,000 residential assets for rent, after starting operations four years ago with 1,860 homes, acquired from the Municipal Housing Company of Madrid (EMVS). Most of the Socimi’s homes are located in Madrid, although the company also owns properties in other cities, most notably, Barcelona.

Original story: Eje Prime

Translation: Carmel Drake