Tag: Domo

Domo to Give Up Socimi Status After Change in Spanish Rental Law

21 November 2019 – Domo will exit the socimi tax regime and, along with it, its business of developing rental housing due to changes in Spanish regulations. The country approved a law this year where rental agreements would be extended from three to five years, and up to seven years in cases where the owner is a corporate entity.

The firm argued that the change in the law would negatively affect its operations, as its strategy included selling the properties it built within four to six years. Domo added that the new regulations would impact its financing arrangements and decrease its potential profitability.

Nevertheless, Domo expects to maintain its listing on the MAB.

Original Story: La Vanguardia

Adaptation/Translation: Richard D. K. Turner

Goldman Sachs Pays €63M for A Plot of Land in Madrid

6 December 2018 – Eje Prime

Goldman Sachs is targeting the prime housing market in Madrid. The US investment fund has just purchased a plot of land in the centre of the Spanish capital for €63.7 million. The development of luxury apartments planned for the site is going to be built by the Catalan property developer Uniq.

The acquired plot is located at number 147 Paseo de la Habana and has a finalist surface area of 10,000 m2. The vendors are members of a family from Asturias. In the bid for this plot, Goldmans competed with other funds and property developers, such as Grupo Ibosa, Grosvenor, Pryconsa, Domo and Nozar, according to El Confidencial.

With this partnership, Uniq will have the possibility of increasing its presence in Madrid, where it already has a project underway in a former tenement building in Plaza de San Juan de la Cruz. Now, the Catalan property developer is going to build a development less than 1km from Paseo de la Castellana and the Santiago Bernabeú.

The area in which the development will be located has been receiving a lot of investment from wealthy Latin American families, recently. They are driving prices up in the residential market since they are “willing to pay well above the market average”, according to sources in the sector speaking to Eje Prime. They are interested in withdrawing their capital from their countries of origin, many of which are unstable, economically speaking, to invest in Spanish real estate, which offers them greater security.

Original story: Eje Prime 

Translation: Carmel Drake

Grupo Ibosa Acquires 10,000m2 Plot on Paseo de la Habana for c. €70M

24 July 2018 – El Confidencial

It has undoubtedly become the most expensive land operation since the start of the real estate recovery. Paseo de la Habana, 147 has smashed all records, given that almost €70 million has been put on the table for its 10,000 m2, which represents a repercussion price of between €6,500/m2 and €7,000/m2. That figure is significantly higher than the expectations of the plot’s vendors, which had set a sales price range of between €60 million and €65 million.

Since the real estate bubble burst, no one has paid such a high repercussion price for a plot of land. The figure comfortably exceeds the €5,000/m2 that the builder Rafael Ortiz and the popular shipping entrepreneur Fernando Fernández Tapias paid in 2007, at the height of the boom for a plot located on Juan Bravo 3, where the Spanish capital’s largest luxury development is currently being constructed, Lagasca 99.

Since coming onto the market just three months ago, the plots have passed through the offices of more than a dozen property developers and private investors and, although many of them agree on the high price of the operation, the fact is that the plot has had half a dozen suitors in the end.

The companies that placed an offer on the table include Nozar, Grosvenor, Domo and Pryconsa, although the successful bidder in the end was Grupo Ibosa, according to some of the candidates that have been left out of the process, speaking to El Confidencial. Both JLL, the consultancy firm advising the sales process, and Ibosa declined to comment in this regard.

The plot in question is located in the heart of Madrid, opposite the Cuban consulate, just 700 m from Paseo de la Castellana and 1km away from the Santiago Bernabéu stadium, where the supply of buildable land for sale is very scarce. In fact, the vast majority of the projects in the area are being built in renovated properties.

Five detached homes are currently being constructed on the acquired plot, with surface areas of between 300 m2 and 400 m2 each, which will have to be demolished to make way for the buyer’s future project. All indications are that a luxury apartment development will be built on the plot, which will be added to the high-end projects that Ibosa currently has underway in Valdemarín – on some plots it acquired from Blackstone – and in Aravaca, and marketing of which has just been launched.

The lack of new build product in the area and the high demand explain this pressure on prices. The development will be built in the Chamartín district, which is home to some of the most sought-after residential areas in the centre of the city, such as El Viso, where the Venezuelan investors Miguel Ángel and Áxel Capriles arrived in April last year to purchase Villa San José on Pablo Aranda 3, just opposite Florentino Pérez’s real estate bunker.

In terms of benchmark prices, one example is the 11 homes that are being built on the plots of the former headquarters of RTVE. The Ministry of Finance put that plot up for auction at the end of 2015 and it was awarded to Martell Investment for €10.8 million, which represents a repercussion price of €4,800/m2. Construction of those homes has now begun and the prices fluctuate around €7,000/m2.

Boom in prices

In just two years, the prices in the most sought-after neighbourhoods of the Spanish capital have soared by more than 20% (…).

According to a recent report from Engel & Völkers, maximum prices in this Madrilenian neighbourhood amount to €6,000/m2, although, as sources specialising in the sale of luxury homes at the agency explain, “there are no new build properties in the area, and so the final prices depend a lot on the features of each project”.

In terms of the area, like in the most trendy areas of Madrid, prices have risen sharply over the last year. According to Engel & Völkers, prices have risen by 10% since 2017, “although, at the moment, more operations are being closed than last year because there is greater access to credit, but, nevertheless, prices are barely rising”.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Investors Increase their Commitment to Rental Housing

3 May 2018 – Expansión

The boom in the residential market, the changing habits in society, the difficulties involved in accessing housing and the increase in mobility have all led to a rebound in the residential rental market in Spain. According to the latest data from Eurostat, more than 22% of Spanish households live in rented properties, although that figure is still well behind the average for the European Union (34%).

In addition, the State Housing Plan, which seeks to encourage rental amongst the younger generation, and the greater professionalisation of the sector, is going to serve to further boost the rental market in Spain.

The change in trend, as well as the increase in residential rental yields, has compelled investors to analyse this business as an alternative to other real estate assets such as offices, shopping centres and hotels.

To lead this market, certain players have redoubled their commitment to rental housing, such as the case of Testa Residencial – the Socimi in which Santander, BBVA, Acciona and Merlin hold stakes – which owns almost 9,300 residential rental properties, with a gross value of €2.275 billion and annual rental income of €72.2 million.

Stock market debuts

That Socimi is preparing its leap onto the market, which will be carried out through an offer of its existing shares (OPV) and an issue of new shares (OPS) aimed exclusively at qualified investors.

One of the first players to back this business was Blackstone, which purchased 18 residential developments, containing 1,860 homes in total, in the Madrilenian neighbourhoods of Carabanchel, Centro, Villa de Vallecas and Villaverde from the Municipal Housing and Land Company of Madrid (EMVS) in July 2013. In 2015, the fund debuted its Socimi Fidere on the MAB (Alternative Investment Market) with 2,688 social housing properties, including those acquired from the EMVS two years earlier. Currently, Fidere owns around 6,400 homes for rent.

The fund also debuted Albirana on the MAB in March 2017 with a portfolio of 5,000 rental homes proceeding from Catalunya Banc loans. Another star of the real estate sector that has detected an opportunity in the rental sector to offload its assets is the Company for the Management of Assets proceeding from the Restructuring of the Banking System (Sareb) with Témpore Properties. That Socimi debuted on the MAB in April with a portfolio of 1,553 residential units, which have a gross value of €175 million.

Another player is Vivenio Residencial, the investment vehicle created by the Dutch pension fund APG together with Renta Corporación. Vivenio has invested around €200 million in the purchase of properties and now owns more than 1,000 rental homes. The Socimi plans to debut on the stock market in 2019.

According to data from Armabex, in 2017, five new Socimis debuted on the stock market with residential assets in their portfolio. In total, at the end of last year, 16 Socimis held rental homes in their portfolios, including, in addition to Fidere and Albirana, Vitruvio, VBare, Colón Vivienda and Domo.

In addition to the listed Socimis, other players in the sector include the real estate managers. One of the largest by volume of assets under management is Anticipa Real Estate, owned by Blackstone. Anticipa currently manages 12,000 homes proceeding from banks acquired by the fund during the crisis. Anticipa manages Albirana’s homes, amongst others.

Another star in the rental home manager sector in Spain is Azzam Vivienda – a subsidiary of Azora – which has more than 11,000 homes under management distributed across 140 buildings.

Azora, which will make its debut on the Madrid stock market on 11 May, plans to raise up to €500 million from its stock market debut to co-invest with its partners in various assets, including in the residential sector.

New players

The company founded by Concha Osácar and Fernando Gumuzio in 2003, was managing €1.5 billion in residential assets at the end of last year, which represented 33.4% of its total portfolio. It plans to increase its footprint in the sector to have between €1.3 billion and €1.6 billion under management by 2022 in homes, accommodation for the elderly and assets relating to healthcare.

Despite the increasing prominence of the rental sector, the business is still very fragmented and one of the challenges for the sector is to gain scale in order to compete. Juan Manuel Acosta, CEO of Greystar in Spain, said in an interview with Expansión in February that the US real estate investment firm is looking for opportunities to become one of the largest operators in the residential rental market in Spain.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Domo Activos Embarks On New Growth Phase

3 November 2017 – Eje Prime

Domo Activos is embarking on a new phase of growth. The largest property developer Socimi, aimed at medium-sized investors, is going to launch a €15 million capital increase over the next few weeks. It plans to use the funds raised to buy new land in Spain, with the purpose of building new homes, according to José Luís Alba, Director of Domo Gestora’s Socimi.

According to the director, the company has already identified opportunities in Spain and is now waiting to beef up its financial strength so as to be able to actually purchase the new plots. “We will focus these acquisitions in Madrid, Málaga and Valencia in the first instance, but we are also looking for plots in Sevilla, Córdoba, Granada and Zaragoza”, said the executive.

Domo Activos Socimi will increase its share capital through an issue and placement into circulation of up to a maximum of 7.5 million shares, with a nominal value of €2 each “with an incomplete subscription forecast”. To approve this increase, Domo Activos has convened an Extraordinary General Shareholders’ Meeting, which will be held in Madrid on 30 November.

The business model of Domo Activos involves the acquisition of land for the construction of buildings, which are let out for the first three years and then sold “whereby benefitting from the tax benefits afforded to these types of companies”. “In this way, all of the capital gains generated, from the date the land is acquired to the date the properties are sold, are not taxable for corporation tax purposes”, explain sources at the group.

According to the company’s own estimates, the return on this project, once the divestments have been made, could reach 10% per annum. Investors receive the profits resulting from rental income in the form of dividends throughout the period that the buildings are leased and until they are sold.

Currently, the first project being promoted by Domo Activos is the development that it is constructing in Madrid, in El Ensanche de Vallecas. This building will contain eighty homes for rent, according to sources at the group.

New leadership team

Moreover, the company has also been reshaping its management team in recent months. To carry out this new phase of growth, Domo Gestora has appointed José Luís Alba as Director of the Socimi, a role carried out until now by Roberto Boluda, who moved to Prygesa in July as the Managing Director of the property developer owned by the Pryconsa group.

Domo Gestora’s Socimi was created by a team that is closely related to the real estate business. When it was launched, the company appointed Enrique Guerra as its CEO. Guerra is an expert in real estate management and has specialised in housing cooperatives since 2002 (…).

Domo’s management team is completed by executives such as Juan Pedro Plaza, the Socimi’s Director of Investments (…); Feliciano Conde, who took over the presidency of Domo Activos in January 2016 (…); and Alberto Freire, Director of Developments at Domo, amongst others.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Domo’s Socimi Debuted On The MAB On 21 September

22 September 2017 – Eje Prime

The countdown has started for the debut of Domo Activos, the socimi of the cooperative manager of the same name. The company will make its debut on Thursday 21 September on the Alternative Investment Market (MAB), where it will list at €2 per share, a price that represents a market valuation for the company of €7 million, according to the BME.

The company, which is the 41st to make its debut on this market under the Socimi framework, owns just one asset, a plot of land in Madrid, located in El Ensanche de Vallecas, which it purchased in March from Sareb for €6.55 million. The land has a maximum buildability of 9,348 m2 and the firm plans to build 80 homes on the site, plus six ground floor commercial premises and parking.

For the next two years, the firm will focus on developing this project, according to details contained in the information brochure that accompanies its stock market debut. It estimates that the homes will be ready to lease “from September 2019”.

Domo has a business plan that includes taking on new land purchases to develop real estate assets, with the aim of subsequently making cash from them by leasing them out “for at least three years”, and ultimately, selling them.

This strategy includes the development of homes, hotels and tourist apartments, primarily in the Community of Madrid, Cataluña, País Vasco, Málaga, Sevilla, Granada, Córdoba, the Community of Madrid, the Balearic Islands and the Canary Islands.

The Socimi chaired by Feliciano Conde Anguita (pictured above) plans to pay for this business plan through capital increases, in such a way that the firm will undertake operations of that kind, “to the extent that investment opportunities arise”. Current shareholders will have preferential subscription rights in future capital increases.

Original story: Eje Prime (Original article dated 19 September 2017)

Transltion: Carmel Drake

Domo Will Debut On The MAB In October

8 September 2017 – El Confidencial

The cooperative manager Domo now has everything in place for the debut of its Socimi on the stock market. The company led by Feliciano Conde has just submitted the incorporation document (known in the jargon of the industry as the DIM) and has received the corresponding ISIN code from Iberclear, as well as the green card necessary to be able to operate on the stock market.

With those procedures completed, the firm now just has to wait for the authorities of the Alternative Investment Market (MAB) to approve all the documentation for the Socimi to debut on the stock market. And provided there are no surprises, that procedure should happen between the end of this month and the beginning of next month. The property developer wants to ring the bell with an army of first-rate advisors, aware of the revolution that debuting on the stock market will have on its value proposition.

The Socimi has hired the law firm Pérez-Llorca as legal counsel; PwC as the auditor; CBRE as the real estate expert; and Armabex as the registered advisor and global coordinator of the whole incorporation process. Alongside all of them, the corporative manager has been working for almost two years to promote a new sub-segment within the Socimi framework, which has been included via the circular, and which allows it to also include the property development business.

To this end, these vehicles are granted more time to distribute dividends, rather than requiring that at least 80% of the assets in the portfolio are profitable from day 1 and the profits be distributed amongst the shareholders.

The major novelty of Domo Activos’ arrival on the stock market is the possibility of allowing investors in Socimis to also benefit from the property developers’ margins. In fact, the company’s road map forecasts that it will raise up to €250 million through capital increases over a period of two years, money that it will allocate to acquire buildable land on which to construct homes.

Investments amounting to €500 million

Once constructed, the homes will be rented out for a period of three years, to safeguard the tax benefits, and subsequently, they will be sold, with all the profits being shared out amongst the investors. Even before its debut on the MAB, Domo has already undertaken a €7 million capital increase, which it has used to acquire a plot of buildable land in Esanche de Vallecas (Madrid), where it started work last week to build 80 apartments.

These homes will be put up for rent from the summer of 2019, which will allow the Socimi to start distributing dividends that same year. This is the only asset with which the Socimi will make its debut on the stock market, although it will quickly start to execute its growth plans, with a capital increase planned for October, through which it hopes to raise between €20 million and €50 million to acquire plots of land that it has already identified.

Focused in Madrid, but also interested in buildable plots in Málaga and Palma de Mallorca, Domo Activos will be a genuine collective investment vehicle, given that from the start it will have 54 investors and none of them will hold a majority stake. The largest shareholder will be Domo, with a 5% stake. With the €250 million that the entity plans to raise, it should be able to undertake operations amounting to €500 million, given that its objective is to maintain a leverage level of 50% and to offer annual returns of 10%.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Ebrosa Buys Ministry Of Defence’s Last Auctioned Plot In Madrid

9 February 2017 – Expansión

The Ministry of Defence is continuing with its real estate divestment plan. Its last major sale was completed yesterday with the sale of an urban use plot that has a surface area of 3,569 m2 and a buildable surface area of 9,865 m2. The plot is located in the former central park of the engineers in Villaverde, in the neighbourhood of Los Angeles, in the south east of Madrid.

Like in the case of the Administration’s other assets, the sale has been conducted through a public auction, which was publicised through the real estate portfolio addmeet. Specifically, the Ministry of Defence had planned to carry out two simultaneous auctions, for an initial asking price of €4.7 million (in the first round of bidding) and a second asking price of €4.28 million (in the second round). In the end, the second round was not necessary as the initial bids exceeded the initial asking price, and the plot was awarded to the real estate company Ebrosa, which bid €5.04 million.

This Zaragoza-based property developer will use the land, for which planning permission has already been granted, to build a block of flats similar to those projects that it is already developing in other areas of Madrid, such as in Las Tablas and Sanchinarro, in the north east of the city, as well as in Ensanche de Vallecas.

Ebrosa’s new development will be located next to “residential developments that are being sold at a good rate”, according to information included in the addmeet advert. Specifically, one hundred homes that Inmoglacial is promoting together with the investment fund Aquila Capital, in the same central park of the engineers in Vallaverde, after it was awarded nine plots of land from Sepes in July 2015, covering a buildable surface area of 120,000 m2. That project, which is being completed in nine phases, involves a total investment of almost €200 million to construct more than 1,200 homes, whose first phase is due to be completed in the spring of 2017.

According to the most recent annual accounts, corresponding to 2015, Ebrosa generated a profit of €31.38 million, compared with €4 million the year before, from a turnover of €16.68 million.

Divestment plan

The sale of the plot in the neighbourhood of Los Angeles was included in the real estate asset sales plan that the Ministry of Defence launched in 2013, with the aim of divesting some of its land, premises, rural estates and homes.

The most high profile sales in this plan include the sale of the former Precisión Workshop, located on Calle Raimundo Fernández Villaverde, next to Paseo de la Castellana and Nuevos Ministerios. In November 2014, the Ministry of Defence awarded those unused plots to the housing manager Domo for €111 million, which acquired them with the aim of constructing a 320-home development on the site, with an average price of €325,000.

Currently, the Ministry of Defence has two other plots of land up for sale, in Alcalá de Henares and in the Campamento area. The latter, whose sales price has not been revealed, is one of the most attractive sites for construction in the capital, given its location, between the Somosaguas area and the former land of Campamento, whose sale is also being considered by the Ministry.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Värde Will Start Building c.900 New Homes In Q1

11 January 2017 – Cinco Días

The new real estate company Dospuntos, which wants to become one of Spain’s major property developers, will start the year by marketing a significant number of new build properties in a sector that has started to wake up slowly, without any star players. “We are going to start 18 developments containing around 900 homes during the first quarter of the year”, confirmed Javier Eguidazu (pictured above), CEO at Dospuntos, a company controlled by Värde Partners.

These homes will be located in Madrid, Galicia, Andalucía, Castilla y León and Cataluña, primarily in large cities and metropolitan areas. In La Coruña, the real estate company already announced last month that it was beginning its first project there, known as Casa Vega, in the centre of the city. The company will also debut soon in Sevilla, Málaga, Valladolid, Barcelona, Leganés (Madrid) and Oleiros (La Coruña).

“The market has finally woken up. There is pent-up demand because hardly any new homes have been constructed over the last decade. Every property that comes onto the market is sold”, said Eguidazu regarding the recovery in the property development sector.

His company is looking to become one of the largest property developers in the country. After the real estate crisis, almost all of the major players disappeared – went bankrupt – or took time out whilst they waited for better times. Just a handful of companies such as Pryconsa, Vía Célere, local developers, cooperative managers such as Domo and new platforms linked to the banks (Aliseda, Altamira, Solvia…) continued to build at a slow pace. Other listed companies, such as Realia – controlled by the magnate Carlos Slim – and Quabit, are only resuming their business now. Anida, owned by BBVA, also strengthened its business at the hand of Manuel Jove, founder of the now bankrupt company Fadesa.

Dospuntos emerged in June 2016, after Värde purchased the damaged real estate business from the San José Group. It was created to construct around 7,000 homes on land coming from several sources: purchases by the US fund, inherited from San José and even some new acquisitions. “The company has financial muscle. In 2016, we spent €150 million on land”, said Eguidazu.

Along with Neinor Homes, owned by the Texan fund Lone Star, Dospuntos leads this new type of property developer, owned by overseas funds and interested in investing in the real estate recovery in Spain, now that the traditional players have disappeared (…).

The real estate company’s main shareholder is Värde, which holds more than 50% of its share capital. The fund from Minneapolis manages assets amounting to more than €10,000 million all over the world. It has been particularly active in Spain, with the acquisition of Popular’s credit card business, as well as half of that bank’s real estate arm, Aliseda, in an operation for which it teamed up with the fund Kennedy Wilson. Moreover, it has entered the office business of Procisa, the owner of the La Finca business park in Pozuelo de Alcorcón (Madrid).

As a shareholder of Dospuntos, Värde (which means “value” in Swedish) is accompanied by the funds Marathon and Attestor, as well as by banks such as Bank of America and Barclays.

From 2019, the company wants to reach a cruising speed of 2,000 new homes per year on average, according to comments made by Eguidazu at a presentation last June. By then, the company forecasts that it will be generating revenues of between €500 million and €600 million per year.

The shareholders plan to invest €2,000 million between 2016 and 2021, at an average rate of €400 million per year, of which €800 million will be allocated to buying more land on which to build homes. Over the long term, between 30% and 40% of the company’s resources will come from bank financing. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Project Maravillas: Construction Work Resumes

30 December 2016 – Expansión

Yesterday, the Supreme Court of Justice of Madrid (TSJM) lifted the injunction issued the day before that had paralysed the demolition work at the Precision Artillery Workshop, located next to Paseo de la Castellana in Madrid, where the Residencial Maravillas cooperative plans to construct 320 new homes.

After obtaining approval from the Town Hall of Madrid, the project promoted by Domo Gestora was paralysed after the TSJM admitted the request filed by the ‘Ecologistas de Acción’ group to not demolish the Precision Artillery Workshop, located on this site.

The building forms part of the properties that the Ministry of Defence used to own on the plots, and according to the ruling from the TSJM, it does not have any historical value or need to be maintained for heritage purposes.

The work to demolish the building began on 16 December. In November 2014, the Ministry awarded these plots, which had fallen into disuse, to Domo for €111 million, which acquired them with the aim of constructing a development containing 320 homes, with an average price of €325,000. (…).

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake