Centerbridge To Sell Property Services Firm Aktua

30 October 2015 – Reuters

U.S. private equity group Centerbridge Partners has appointed investment banks to sell Spanish property services firm Aktua, five sources familiar with the matter said.

Centerbridge is seeking to take advantage of an improvement in the Spanish property market where valuations of real estate assets are recovering after taking a hit during Spain’s economic downturn.

The New York-based fund has hired Bank of America and Barclays to launch a sales process for the company which offers a wide range of real estate services including property maintenance, rental collection and loan management, the sources said. Bank of America and Barclays declined to comment while Centerbridge had no immediate comment.

Aktua is expected to have core earnings of between €40 million and €50 million this year and could be valued at around €300 million ($329 million), or 7 to 7.5 times its earnings before interest, tax, depreciation and amortization (EBITDA), two of the sources said.

The company, which employs more than 400 people in Spain, has already drawn interest from a series of international buyout funds including London-based Permira, another source said.

Permira, which is in the process of selling two of its Spanish portfolio companies, Cortefiel and Telepizza, declined to comment.

The sale of Aktua has yet to start but bidders are already lining up to examine the asset and its growth potential, the sources said.

Real Estate Rebound

Aktua has roughly €5 billion of assets under management of which €2.4 billion are real estate assets and the rest loans.

Based in Madrid, it makes an attractive consolidation platform for private equity firms which could adopt a so-called buy and build strategy and combine it with other Spanish property management firms, the sources said.

This would generate a flurry of deals giving U.S. investors, which swooped on low-priced Spanish real estate assets during the financial crisis, an opportunity to capitalise on Spain’s economic rebound.

Real estate prices dropped by more than 35 percent in Spain between 2007 and 2014, according to the National Statistics Institute.

Centerbridge broke into the Spanish market in 2012. It paid €100 million to buy Aktua from Spanish bank Banco Español de Credito (Banesto).

Other U.S. investment firms could go down the same route and divest property firms they’ve held for the past three years, one of the sources said.

In 2013, New York-based buyout firm Apollo bought 85% of Santander’s property management unit Altamira for €664 million.

Another Spanish bank, La Caixa, sold 51% of its real estate services arm, Servihabitat Gestión Inmobiliaria, for €185 million in 2013.

Original story: Reuters (by )

Edited by: Carmel Drake

Recovery Has Investors Stocking Up On Spanish Malls

11 February 2015 – WSJ

The Spanish shopping experience is getting a multibillion-dollar makeover as the nation’s economy improves and foreign investment flows in.

After a year of tepid recovery from recession, consumer spending is picking up. Retail sales rose 1.9% in November from the same month in 2013, the fourth consecutive monthly increase, after six years of decline. Although nearly a quarter of the workforce remains unemployed, the economy is expected to expand by 1.7% this year, compared with 1.1% in the euro area as a whole, according to the Organization for Economic Cooperation and Development.

That, in turn, is helping to fuel investment in the retail property sector. In all, investment in retail real estate totalled €3.34 billion ($3.78 billion) in 2014, nearly triple the amount of the previous year and topping the record of €3.1 billion in 2006, according to property consultant JLL, formerly known as Jones Lang LaSalle. At least 67% of investments came from outside Spain. There was more investment in retail than in any other class of commercial real estate over the past year, according to JLL.

International investors are expected to pump more money into retail properties this year, including new construction, according to Adolfo Ramirez Escudero, president of property consultant CBRE Group Inc. in Spain.

Much of the money will go toward large-scale projects that mix shopping and entertainment, known as retail resorts, as well as outdoor outlet malls that resemble small cities where shoppers can find discounted designer brands.

Developers see opportunities for strong returns because prices of land and buildings are still depressed six years after the financial crisis. With the prices of many commodities at relatively lower levels and Spain’s unemployment so high, builders can also construct projects at a reduced cost. Meanwhile, the number of tourists to Spain is at a record, bringing with them money to spend.

The entrance of big global investors is a sign that the Spanish market is stabilizing, said Pedro de Churruca, general director of JLL in Spain.

“People are clearly coming back to shopping centers as a consequence of higher disposable income,” said Ismael Clemente of Merlin Properties Socimi SA, Spain’s largest real-estate investment trust, which in July purchased Marineda City shopping center in La Coruña from a local developer for €260 million. The three-year-old retail complex is the second-largest in the country.

The shopping center opened “in probably the worst possible moment in Spain,” said Mr. Clemente, referring to Spain’s economic doldrums. “We saw that there was a clear upward movement expected in rent, so we thought it was an interesting bet.”

The U.K.’s Intu Properties PLC purchased Spain’s largest shopping center, Puerto Venecia in Zaragoza, for €451 million in December. The British real-estate investment trust also announced a partnership with Spanish developer Eurofund to build four more retail resorts in Spanish cities as part of a plan to invest £1.2 billion ($1.8 billion) over 10 years.

Construction on the first of these projects, Intu Costa del Sol in the Malaga suburb of Torremolinos, —is scheduled to begin in the second half of 2015 and be completed by 2018. The 1.9-million-square-foot development will include amenities Intu is known for: a minitheme park, a surf lake, artificial ski slopes and a gourmet market, as well as shops and restaurants of high-end chains.

Intu owns 18 U.K. shopping centers, but Spain is the company’s first international market, which it entered in 2013 with the purchase of Parque Principado shopping center in Oviedo.

“We’re keen to keep growing, and if we focus on the prime, best shopping centers in the market, there are few opportunities in the U.K.,” said Martin Breeden, regional director of Intu. “Spain is a market that seemed open to international investment and where, frankly, there are not a lot of good shopping resorts in existence.”

Intu has purchase options on land for similar developments in Valencia, Vigo and Palma de Mallorca.

The Intu Costa del Sol site is about 3 miles from Malaga’s most-visited shopping center, Plaza Mayor, which opened in 2002. Sonae Sierra of Portugal, which owns and manages Plaza Mayor, has joined with U.K.-based McArthurGlen Group and U.S.-based Simon Property Group Inc. to expand the 572,400-square-foot shopping area to include a designer outlet mall. The €115 million development will add 324,000 square feet of leasable area and be the first large-scale outlet mall in Andalusia. Construction is scheduled to begin in the second half of this year, and the first phase is set to open in 2017.

Joan Jove, McArthurGlen’s regional development director, said Plaza Mayor is a “very strong, established retail scheme” and the planned adjacent outlet mall will be one-of-a-kind in the region. Mr. Jove said the project is mainly targeted at the 10 million tourists who visit Costa del Sol each year.

Intu’s Mr. Breeden said he wasn’t concerned about competition. “We’re very confident that there will be fantastic demand for our project.”

Sonae Sierra said it also plans to spend €55 million to update four of its other shopping centers around Spain within the next five years.

Elsewhere, TIAA-CREF, a U.S. money manager, has formed a joint venture with Neinver, a Spanish outlet-mall developer, to create TH Real Estate, which will own properties in Spain and other countries. Among their projects is the €80 million Viladecans The Style Outlets in Barcelona, which is scheduled to open in 2016.

“There is still plenty of money chasing product, and plenty of people with big debt who want to sell product,” said CBRE’s Mr. Ramirez. “I expect big volume this year.” He said large transactions could start to level off by next year as prices increase.

Original story: WSJ (by Shaheen Samavati)

Edited by: Carmel Drake

INE: House Sales Increased By 15.7% In December

10 February 2015 – Expansión

Sales of second hand homes drove overall house sales to increase by 2.2% in 2014, with respect to the previous year, to reach 319,389 transactions, resulting in a return to positive growth after three years of decline.

House sales rose by 2.2% in 2014 after three years of decline, thanks to a boost from second hand properties, according to the provisional data published today by the National Institute of Statistics (Instituto Nacional de Estadística or INE) regarding the Statistics on the Transfer of Property Rights (Estadística de Transmisiones de Derechoes de la Propiedad or ETDP).

The second hand market was the driver behind this annual growth, the first positive trend since 2010, when house sales grew by just over 6%. That year represented a respite for the real estate market, which had been hit hard by the economic downturn.

The increase in the sale of second hand homes was notable last year with a rise of 18.4%, to reach 199,943 transactions. By contrast, the number of new homes sold decreased by 16.9%, to amount to 119,446.

25,998 houses were sold in total in December, an increase of 15.7% on the same month last year – the fourth consecutive monthly increase – and 3.2% more than in November.

After three years of decline, house sales have returned to positive territory in the context of a strong price correction. In fact, since their peak in 2007, house prices in Spain have decreased by more than 40%.

During the crisis, the worst years for house sales were 2008 and 2009, when the number of transactions plummeted by 28.8% and 25.1%, respectively. Double-digit decreases were also recorded in 2011 and 2012 (-18.1% and -11.5%, respectively), however, the decline eased in 2013 to 1.9% as the tax relief for house purchases ended.

89.7% of homes sold last year were unsubsidised (free housing) and 10.3% were subsidised (protected). In total, sales of unsubsidised homes increased by 3.2% in 2014, whilst sales of subsidised homes decreased by 6.2%, a smaller decline than in previous periods.

Andalucía leads the ranking

By autonomous region, Andalucía recorded the highest number of house sales last year (64,349 transactions were closed there), followed by Cataluña (47,113), Valencia (46,678) and Madrid (44,231).

The autonomous regions that recorded the fewest number of transactions were La Rioja (2,263), Cantabria (3,917) and Navarra (4,403).

In relative terms, the number of house sales rose in eleven autonomous communities in 2014 and decreased in six. The regions that experienced the highest increases in terms of the number of transactions were the Balearic Islands (+18.5%) and Navarra (+13.9%), whilst the ones with the largest decreases were La Rioja (-25.1%) and Castilla-La Mancha (-12.6%).

Original story: Expansión (by )

Translation: Carmel Drake