Tag: Dospuntos

Cranes Return To Spain After Almost A Decade Away

19 December 2016 – La Vanguardia

After nine years away, since the financial crisis first started to crush the real estate bubble in 2007, cranes have returned to form part of the Spanish landscape during 2016, They are a visible sign of the recovery that the real estate sector has been enjoying since 2014.

With just a few weeks to go before the end of the year, real estate investment is on track to set a new record in 2016, of almost €14,000 million, thanks to large-scale operations such as the merger of two giants in the sector, Merlin and Metrovacesa, to create the largest real estate company in Spain, with assets worth more than €9,300 million.

This year, the growth of the economy, improvement in employment, low interest rates, return of financing and the continuous inflow of foreign capital have combined to allow the real estate sector to consolidate its recovery despite the political uncertainty that hung over Spain for most of the year.

After almost a decade of paralysis, the property developers that survived the crisis and others created more recently have set cranes up on the streets, especially in cities with the most economic and tourism activity, where the “stock” is now practically non-existent and demand for new homes a reality.

Quabit is planning to invest €470 million between now and 2020 on the purchase of urban land on which it will build more than 3,000 homes; and Neinor Homes has set itself the objective of launching around 40 new developments this year and selling more than 1,500 homes.

The newly formed company Dospuntos, controlled by the US fund Värde Partners, plans to invest €2,000 million over the next six years and complete 2,000 homes per year from 2019 onwards. Vía Célere has just bought the largest available plot of land in the centre of Madrid from Repsol and Adif, which is ready for the construction of homes.

Inveravante, owned by the business man Manuel Jové, and the real estate subsidiary of BBVA, have joined forces to promote 850 homes; the German investment fund Aquila Capital and Ónice will spend €100 million building luxury homes in La Moreleja; whilst Ibosa will invest another €30 million converting the Hotel Foxá M-30 into homes.

The recovery of the sector is undeniable. According to the notaries, house purchases grew by 10.3% in September, a percentage that rises to 13.2% according to INE, after registering eight consecutive months of increases and growth of 10% in terms of the signing of mortgages for house purchases.

The Ministry of Development calculates that prices rose by 1.6% during the third quarter, to complete 6 consecutive quarters of increases, whilst permits for the construction of new homes soared by 32% in September to reach figures not seen since 2011.

Moreover, house purchases by foreigners grew by 19.7% during the first half of the year, with Britons leading the ranking, despite the threat of “Brexit”. (…).

During 2017, the number of transactions is expected to grow by 6.5% and prices are forecast to rise by 3.5% to reach 2004 levels. Meanwhile, Tinsa estimates that prices will remain stable or will increase by between 1% and 2%, at most, during 2017, in line with forecasts for the end of this year. (…).

Original story: La Vanguardia (by Cora Serrano)

Translation: Carmel Drake

Spain’s RE Sector Enjoys A Flurry Of Operations

24 November 2016 – Expansión

The real estate sector continues to celebrate. Investors are still very much interested in Spain and real estate operations continue to be signed. The office sector is still one of the major stars of the recovery, along with shopping centres, thanks to the boost from domestic and international investors and fund managers alike.

The increase in liquidity, together with the lack of profitable alternatives – such as the bond market – and the volatility of the global stock markets, have generated a great deal of interest in the sector and the experts predict that, with the resolution of the political deadlock now behind us, several pending operations will likely close within the next few months.

Although the experts forecast a decrease in investment in the sector, after a record year in 2015, large-scale operations, such as Amancio Ortega’s purchase of Torre Cepsa, are a sign of the good health that the sector is enjoying.

The Socimis continue to be one of the most important players, as evidenced by: the agreement reached between Merlin and the shareholder banks of Metrovacesa, for the merger of the two companies; the entry of the real estate company Colonial into the share capital of Axiare; and the decision taken by the US fund Pimco to strengthen its position in Lar España, taking it to almost 20%, according to the latest records from the CNMV.

Besides the activity in the tertiary asset market, the residential market is also enjoying a revival. In this sense, yesterday, the property developer Dospuntos, owned by the fund Värde, announced the launch of its first real estate development in Spain, with 62 homes in A Coruña. This move forms part of the company’s plan to invest €2,000 million in the country over the next six years.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

More Than 1,000 New Homes Are Being Built In Sevilla

17 October 2017 – ABC

(…) In the last twelve months in Sevilla, the main initiatives that had been suspended following the decline of companies such as Novaindes, Navicoas and Habitat, have been reactivated. With a few exceptions, the large plots of buildable land in good locations now all have new owners. The clear sign of this trend is that between 2016 and 2019, more than 1,000 new homes will come onto the market in the most sought after areas of Sevilla.

Who is behind these projects? The most spectacular moves have been made by the Murcian property developer Monthisa, which has completed five operations in just ten months to purchase plots of land on which it plans to construct around 350 homes. In February, it signed an agreement with the company Gestión de Inmuebles Adquiridos – which belongs to the Unicaja group – to construct 150 homes in Kansas City 36; a month later it purchased the plot of land in Pagés del Corro 122 from Solvia (the real estate subsidiary of Banco Sabadell) with capacity for 52 apartments; in September, it acquired the Correos warehouses on Calle Fernando Tirado (which will house between 35 and 40 properties) and it signed an agreement with Sareb (also known as the bad bank) to develop the plot of land on Calle de la Florida, where it will build another 84 homes.

The bad bank has been one of the most active players in the real estate sector in Sevilla. Whilst in La Florida, Sareb chose Monthisa, in Carretera de Carmona 43, it appointed Solvia to regenerate the plot of land that used to be home to Tysa Ford. That alliance was signed at the end of 2015 and the construction work (of the more than 200 homes) is due to be completed in March 2019. In parallel, Solvia is also responsible for another one of the star projects in the city centre: 30 homes in the Puerta de Nervión building on Calle José Luis de Casso, opposite the Sánchez Pizjuan stadium.

These projects are different from those seen before 2007. The majority of these developments involve large apartments, with prices of less than €3,000/sqm. According to experts in the sector, the demand for housing now comes from established families in stable economic situations and so the most successful products are those with several bedrooms. According to Ricardo Pumar, Chairman of Inmobiliaria del Sur (Insur), “nowadays, only projects that are well designed, with innovative solutions, high quality finishes and very competitive prices have a chance of success”.

Insur was one of the first companies to detect this change in the cycle. At the end of 2013, it acquired the former Cuartel de Intendencia and there it has launched Pineda Parque, a residential complex that contains three twelve-storey towers and another two eight-storey towers that will house 158 homes (measuring between 140 sqm and 228 sqm, with three, four and five bedrooms). In 2014, it started the construction of Edificio Miraflores, on a plot purchased from Sareb where it is now finishing the construction of 64 homes.

And the final example of this trend is Dospuntos (a group controlled by the American investment fund Värde Partners), which is going to begin the construction of 87 homes soon on a plot of land on the corner of Calle Enramadilla and Avenida de la Buhaira. This plot originally belonged to Pontegran (a company jointly owned by Osuna and San José).

There are still a few projects pending sale, but most of the large plots of land in the city have now been bought up.

Original story: ABC (by Luis Montoto)

Translation: Carmel Drake

Värde – One Of The Largest RE Developers In Spain

24 August 2016 – Expansión

The US fund Värde has been one of the most active investors in the Spanish real estate sector in recent years.

It made its last purchase in June here, when it bought the real estate group Aelca. Specifically, Värde signed an agreement with the Avintia Group to purchase the company for around €50 million.

The US fund is also a major shareholder in Dospuntos – the former real estate division of the Sanjosé group, the result of the integration of Parquesol within the construction group – . The fund acquired 51% of Sanjosé Desarrollos Inmobiliarios in August 2015 after acquiring a 25% stake from Popular for approximately €90 million.

Dospuntos has launched a plan for the promotion and development of homes that includes an investment amounting to €2,000 million over six years and it is, alongside Neinor Homes – the real estate arm of the fund Lone Star – one of the main residential property developers in Spain.

Dospuntos’ plan involves starting the construction of homes this year and completing around 800 homes in 2018 and almost 1,500 in 2019. With this roadmap, the group hopes to reach its cruising speed in 2019, with the completion of 2,000 homes per year.

In addition to Värde, the property developer is also partially owned by the funds Marathon and Attestor, as well as Bank of America Merrill Lynch (BofA), JPMorgan and Barclays.

The US fund also controls Bancopopular-e (Banco Popular’s card business). Värde purchased 51% of the business from the financial institution in October 2015. In addition, Värde acquired, together with Kennedy Wilson, the real estate arm of Popular, Aliseda, for approximately €800 million.

At the global level, the fund, founded in 1993 in Minnesota (USA) manages more than $40,000 million and has 200 employees, of which 65 are professional investors with more than twelve years experience.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Popular Engages Deutsche To Sell RE Assets Worth €4,000M

13 July 2016 – Expansión

Banco Popular has almost oiled the machinery that it will use to remove between €3,500 million and €4,000 million in property from its balance sheet. The entity chaired by Ángel Ron (pictured above) has engaged Deutsche Bank and EY to create a real estate company, which will be opened up to investors, in order to deconsolidate its assets, according to financial sources.

The plans are already well underway, although the complexity involved means that they will probably be delayed until the end of the year.

For the time being, Popular and its two advisors will focus on defining the perimeter of the assets to be transferred to the company and in creating the ideal structure. To this end, the bank will write to Spain’s National Securities Market Commission (CNMV) to obtain the necessary authorisations.

The plan being carried out by the entity is very similar to the one conducted by Santander, and to a lesser extent by BBVA, with Metrovacesa, when it reduced its stake and transferred its assets in order to deconsolidate them from their balance sheets. That forms part of the merger plan with Merlin Properties. Popular also owns a stake in Metrovacesa, and so has followed the process closely.

In theory, all of the assets to be transferred to the new company will be foreclosed: land, homes and work in progress properties. The new company will have its own management team, which will operate independently of the bank chaired by Ron.

Popular owned €16,132 million in foreclosed assets at the end of 2015. Of those, €4,352 million related to finished buildings; €6,685 million was land; €1,436 million comprised homes proceeding from (unpaid) mortgages; €398 million related to buildings under construction; and €3,255 million corresponded to other assets.

Problematic assets

In addition to these foreclosed assets, Popular held doubtful loans to property developers, which took its total exposure to problem assets to €34,000 million, making it the financial group with the largest real estate inheritance in the financial sector at the end of 2015.

That situation movitvated the €2,500 million macro capital increase that the entity completed last month. One of the main objectives was to increase the coverage of the problem assets from its current level of 38% to 50%, in line with the rest of the sector. The low coverage ratio was one of the impediments facing the entity in its efforts to undertake large sales of real estate assets.

The bank’s strategic plan involves reducing the volume of problem assets by €15,000 million between now and 2018, to €19,000 million.

In addition to its large operations, such as the one it is working on with Deutsche Bank and EY, Popular is also promoting the sale of properties through its commercial network and its real estate manager, Aliseda. That company is controlled by Värde Partners and Kennedy Wilson, which together own a 51% stake in the share capital, and Popular, which holds the remaining 49% stake.

Investors

Värde Partners is one of the major investors who will be invited to participate in the company. In addition to Aliseda, the US fund has joined forces with the bank in its credit card business, WiZink, in which it acquired a 51% stake. Värde also recently launched its own property developer, Dospuntos, which has an ambitious investment plan amounting to €2,000 million. Even so, the project will also be opened up to other international and domestic investors.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

International Funds Reactivate Residential Development Market

7 July 2016 – El Economista

After several years away, cranes are appearing on Spain’s landscape once again. Their return has come thanks to several large international funds, which have managed to reactivate the property developer market in record time and just at the right moment. Thanks to their presence, property developer activity in Spain grew by 30% last year, with 50,000 new construction permits; and the experts are certain that the residential business is now unstoppable.

The financial capacity of the new players is overwhelming in some cases. They have liquidity surpluses that the historical property developers would have envied, but, nevertheless, they do not know the ‘ins and outs’ of the local market, and their experience in terms of land is practically non-existent. For this reason, their entry into the Spanish market has been undertaken through the purchase of property developer platforms and through partnerships with local companies (…).

In light of the high profile partnerships that have been signed in the last two years, involving players such as Lone Star, Värde and Kennedy Wilson, the experts predict that the high level of activity will continue this year with the purchase of plots of land. In fact, they confirm that sales of non-developable land are starting to accelerate and that demand for land purchases will increase, especially those in the final stages of development, due to the high level of competition that has been generated between the key players in the sector – property developers, investment funds and cooperatives.

All of these players have realised that the opportunities that the residential development business is now offering “have yields that are considerably higher than those of other investments”, according to Solvia’s Market View report, which states that transactions have grown by 8.6% and prices have risen by around 4.5%. With these positive indicators, the development figures being talked about now include 150,000 new homes and 50,000 secondary residences per year until 2020.

Most of these homes will come onto the market thanks to Neinor Homes, which is looking to become the largest property developer in Spain. This company will be one of the most active over the next few years, given that according to its own forecasts, it expects to build between 2,500 and 3,000 homes per year. The firm, led by Juan Velayos – the former CEO of Renta Corporación – is the largest residential real estate company created in Spain following seven years of recession.

Its potential was proven last year, since between its creation, in May 2015, and the end of the year, it invested own funds amounting to €800 million on the purchase of land, on which it plans to construct 10,000 homes over the next few years, bringing together the largest bank of high-quality developable land in Spain (…).

But Lone Star is not the only fund that has made a long-term commitment to the Spanish residential market. The US fund has had a major competitor for several weeks now, in the form of Värde, which after acquiring 25% of the real estate arm of San José from Banco Popular, has now created a new property developer.

The company is called dospuntos and its Business Plan for 2016-2012 forecasts an investment of almost €2,000 million in the Spanish real estate market over the next six years, to complete the construction of 2,000 homes per year on average from 2019 onwards. For the time being, the group already owns a sizeable bank of land for the construction of more than 7,000 homes across Spain.

Inmobiliaria Habitat is another company with history in the sector, which in 2015, after finding itself in a very delicate financial situation and incapable of paying its debt, ended up in the hands of a group of funds – Bank of America Merril Lynch, SP101 Finance Ireland, Capstone and Goldman Sachs, amongst others. In this case, although the commitment by the funds has been key, it is nonetheless a temporary measure, given that they plan to exit the group within two or three years.

The latest residential report from the consultancy firm CBRE highlights other partnerships between international funds and domestic developers such as: Grupo Lar and Pimco; Renta Corporación and Kennedy Wilson; Momentum Real Estate and HMC; Aquila Capital and Inmoglaciar; Mina Inmobiliaria and Eurostone; Aelca and Värde; and Q21 Real Estate and Baupost. (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Värde Creates A New RE Company: Dospuntos

21 June 2016 – Cinco Días

One of the real estate firms that suffered during the real estate crisis has been reborn under a new name and with new owners. Värde Partners has created a new property developer, Dospuntos, out of the San José Desarrollo Imobiliarios structure, which it acquired from the San José Group last year. The US fund has an ambitious plan to turn the company into one of the major players in the sector as the incipient recovery starts to heat up.

“Värde and the rest of our shareholders believe in the recovery of Spain and in the growth of the real estate sector”, said Javier Eguidazu (pictured above), CEO of Dospuntos, who joined the firm in September from the Valdebebas urban development in Madrid. According to the Director, Värde and its partners paid more than €1,000 million to purchase the real estate company from San José, basically the amount equivalent to the value of its debt, and the debt clock was reset when the agreement was signed.

The company now owns land from the former subsidiary of San José, as well as from Várde, which was a dynamic and discrete purchaser of land during the recession in Spain. “We now have 800,000 sqm of land, on which we will build 7,000 homes”, said Eguidazu. “Värde is a very active operator in the market and is always studying deals. It is our majority shareholder, but that does not mean that it constructs all of its developments through our entity, nevertheless, it is likely that it will”, said the Director.

The major shareholder of this new real estate company is the US fund, with a stake of more than 50%; it manages assets worth more than €10,000 million all over the world. Värde has been particularly active in Spain in recent years, with the acquisition of Popular’s credit card bsiness, as well as half of the real estate firm Aliseda, from the same bank, in an operation that it entered into together with the fund Kennedy Wilson. Moreover, it is currently holding negotiations to acquire a stake in Procisa’s office business.

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

The shareholders plan to invest €2,000 million between 2016 and 2012, at an average rate of €400 million per annum, of which €800 million will be allocated to continuing to acquire land on which to build homes. Over the long term, 30% or 40% of the company’s resources will come from bank financing. “Our aim is to create the best land bank in the country and to be the most profitable property developer in Spain”, said Eguidazu. The firm has already invested €100 million in land and another €55 million launching developments. (…).

The new property developer plans to put its first 1,300 homes up for sale in 2018, given that it is already starting to construct its first properties in Madrid, Málaga, Sevilla and A Coruña. Its other target locations include Pamplona, Valladolid, Zaragoza, Sevilla, Barcelona and Tenerife. From 2019, it plans to reach a cruising speed of 2,000 homes per year on average. By then, the company also expects to be generating revenues of between €500 million and €600 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake