Naturgy to Relocate 4,000 Employees in order to Rent Out Offices

30 May 2019 – Expansión

Francisco Reynés, the President of Naturgy, is adjusting costs through a mega real estate plan that will see the company optimise its office space at all of its headquarters across Spain, in order to free up plenty of square metres to be re-let or sold.

In total, around 4,000 employees will be moving offices in an operation that could affect up to 50 different offices. The first moves will be made in Madrid and Barcelona, where around 2,500 workers will be affected, with the firm’s departure from its large headquarters on Avenida de San Luis, 77 in the Spanish capital and on Plaza del Gas, 1 in the Catalan city.

The aim is to leverage new opportunities offered by design (open-plan offices), technology (working from home) and internal reorganisations to cut real estate costs. Austerity and pragmatism will prevail over other factors such as aesthetics and corporate image.

Original story: Expansión (Miguel Ángel Patiño)

Translation/Summary: Carmel Drake

Haya Real Estate Looks to Expand into Italy & Greece to Grow its Business

27 May 2019 – Expansión

Haya Real Estate, the servicer controlled by the US investment fund Cerberus, is looking to grow its business. Following its merger with Divarian (formerly Anida), it is now the second largest servicer in Spain, after Altamira, with 1,200 employees and €47 billion in assets under management.

In order to diversify its portfolio, the servicer led by Carlos Abad (pictured above) is evaluating its expansion into Italy and Greece, two emerging markets in which multiple NPL investment and management opportunities are expected to arise in the short term. That would help alleviate concerns over Haya’s future, which currently depends heavily on the outcome of the servicer’s negotiations with Sareb, whose contract is due to expire in December.

The future of Haya Real Estate has been up in the air since its stock market debut was postponed last year. Cerberus has held its stake in the servicer for six years now and is keen to exit soon given that its typical investment rotation period amounts to five years. Following the postponed IPO, the US giant is now holding preliminary conversations with several other investment funds interested in acquiring its stake, but the price will depend on the servicer’s future with Sareb.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

Málaga Leads the Construction Sector in Andalucía with an Occupancy Rate of 88%

10 May 2019 – Expansión

Málaga is leading the ranking of house sales in Andalucía with 32,438 transactions and a market share of 32%, almost doubling that of its nearest rival, Sevilla (17.4%).

According to the participants of the round table organised by the Association of Property Developers and Construction Companies in Málaga (pictured above), the province is currently the driving force behind the construction sector and is home to some of the highest employment rates in the country (88.5%). That means that the sector now employs 62,700 people of the 70,200 surveyed in the Active Population Survey (EPA) when just five years ago, that figure amounted to just 57%.

In terms of the challenges facing the sector, the most important ones are rising rental prices and the generation of buildable land. In this context, the General Secretary for Housing at the Junta de Andalucía, Alicia Martínez, took advantage of the round table event to announce a new housing plan called ‘Plan Vive Andalucía’, which includes a greater commitment to affordable housing, the reactivation of obsolete urban areas and the promotion of R&D in the sector, amongst other initiatives.

Original story: Expansión (by Juan A. Gómez)

Translation: Carmel Drake

CPPIB Awards Altamira the Mandate to Manage BBVA’s Former €1.5bn Portfolio

1 March 2019 – Voz Pópuli

The Canadian pension fund (CPPIB) has delegated the management of the Ánfora portfolio, purchased from BBVA, to the servicer Altamira, according to financial sources consulted by this newspaper. Altamira has declined to comment on the reports.

It is a striking decision given that the fund decided to sell its stake in the servicer to DoBank in January, along with Apollo.

Between them, the two funds used to own 85% of Altamira. Santander owns the remaining 15%, although that stake could also end up being sold to DoBank. This operation shows that the Canadian fund continues to trust in Altamira, despite its exit from the company.

Agreement with BBVA

BBVA signed an agreement to sell the aforementioned loan portfolio, which mainly comprises mortgage loans (primarily doubtful and non-performing loans) with a live balance of approximately €1.49 billion to CPPIB in December. That operation formed part of the bank’s strategy to reduce its exposure to real estate risk to a minimum.

In the last two years, BBVA has closed a series of operations that form part of that real estate strategy, including the transfer of its real estate business in Spain to Cerberus, which was announced in November 2017 and closed last October.

The acquisition of 100% of the share capital of the servicer has been valued at €412 million in business value terms, according to Oliver Wyman, strategic advisor to the operation.

Altamira offers NPL services, including the sale, development and administration of real estate assets, advisory services and portfolio administration activities. In 2017, it had a market share of 15% in Spain, with assets amounting to more than €140 billion and a workforce of 2,200 employees.

Original story: Voz Pópuli (by David Cabrera)

Translation: Carmel Drake

Solvia: Sabadell Puts its Real Estate Subsidiary Up For Sale

17 October 2018 – El País

Sabadell is going to listen to offers from several real estate vulture funds that are interested in acquiring its subsidiary Solvia, the manager of its properties. The entity, which declined to comment, has now entrusted the sales process to an investment bank. In the summer, Jaime Guardiola, CEO of Sabadell, justified holding onto Solvia due to “the great contribution it makes to the bank”, but now he is taking a step towards selling it. Sources in the sector indicate that Sabadell wants to strengthen itself and take advantage of the good climate still being enjoyed in the real estate market.

The banks are getting rid of properties before the booming market deflates. They are selling not only portfolios, but also the companies that specialise in the management of those real estate assets, known in the sector as servicers. Until now, it was typical for the banks to include their servicers in the package of asset sales: that is what CaixaBank did with Servihabitat and BBVA with Anida.

But, Sabadell wanted to get more mileage out of its subsidiary and so decided not to sell Solvia when it divested around €12.2 billion of its properties to Axactor, Cerberus, Deutsche Bank and Carval. Nevertheless, Sabadell has now taken the definitive step and is open to offers from the interested vulture funds. According to sources in the market, the interested parties include Cerberus and Oaktree.

148,000 assets under management

Based on data as at May 2018, Solvia is one of the leaders in the real estate services market in Spain, with a portfolio of 148,000 units in assets under management, whose value exceeds €31 billion, according to the entity. In a report from Goldman Sachs, Sabadell indicates that Solvia’s annual profit amounts to €40 million.

The company has extensive experience in the marketing of new build developments, given that it has placed more than 10,000 homes in new developments on the market since 2015. At the moment, Solvia has 55 developments up for sale. In terms of rental, as of October, the firm was managing 32,000 assets, of which 74% belong to Sabadell. Solvia also works with other clients, including Sareb.

The report from Goldman Sachs noted that Sabadell could sell Solvia as a way of raising its capital ratios, with little detriment to its income statement.

Market sources agree with these arguments to explain the step taken by Sabadell. On the one hand, as the European Central Bank has indicated, entities must accelerate the sale of all businesses relating to the real estate sector. The banks are aware that times of lower economic growth will come and understand the importance of taking advantage of the appetite that the large international funds still have for Spanish property.

On the other hand, the sale of Solvia will also result in cost savings, a reduction in the workforce and, above all, lower capital consumption. In the last quarter, between March and June, Sabadell’s capital ratio decreased by one point, from 12% to 11% for its CET 1 fully loaded capital ratio (the highest quality indicator). The limit on the basis of which the ECB applies severe measures is 10.5%.

This decrease was due to the problems that Sabadell has been facing with its British subsidiary TSB, which was left without a service for weeks. Between March and June, the bank lost €138 million in provisions against real estate portfolios and the problems at TSB.

Original story: El País (by Íñigo de Barrón)

Translation: Carmel Drake

Värde Merges Vía Célere & Aelca to Create one of Spain’s Largest RE Firms

1 October 2018 – El Español

The US fund Värde has created and will control one of the largest residential property developers in the country after merging the two companies in the sector in which it holds a stake, Vía Célere and Aelca, according to a statement issued by the entity.

The resulting company, which will retain the name Vía Célere, will have the capacity to deliver 2,000 homes in 2019 and 5,000 homes in 2021.

Värde will control 75% of the share capital of the new Vía Célere. Nevertheless, the firm will continue to be led by Juan Antonio Gómez-Pintado (pictured above), who also chairs the real estate trade association.

This is the US fund’s second merger operation in the Spanish real estate sector, after it integrated Dos Puntos, the real estate firm that it constituted with assets left over from the San José group, and Vía Célere in April 2017.

With its latest operation, Värde says that it is “reaffirming its commitment to the Spanish market”, which it considers is still highly “fragmented” and “needs greater consolidation by the operators to provide a rate of deliveries that reflects the budgets prepared”.

Värde, together with Lone Star, Castlelake, Blackstone and Cerberus, is one of the overseas funds that arrived in Spain during the peak of the crisis to buy up real estate assets, above all those that the banks had been left with after foreclosing debts.

Possible resizing of the workforce

According to Värde’s data, the property developer that it has created owns assets worth €2.2 billion, located all over the country, although the firm did not provide details about the new entity’s landbank in square metres or the number of homes under construction.

According to information provided by the new Vía Célere, 38% of its assets are located in Madrid, 20% in Málaga, 11% in Barcelona, 9% in Sevilla, 5% in Valencia and the remaining 17% in other provinces.

25% of the share capital of the new Vía Célere, which is controlled by Värde (75%), is distributed between other shareholders, all of them are foreign investors, such as Barclays.

At the operational level, the new real estate giant says that, in theory, it will hold onto the 300 employees that make up the workforce, although it does not rule out “resizing its structure” over the coming months, depending on its needs.

Original story: El Español

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

Equilis Invests €120M in a Commercial Complex in Esplugues

27 June 2018 – El Mundo

The Belgian real estate firm Equilis is finalising a new shopping centre in Esplugues de Llobregat, which is expected to be inaugurated in November; 90% of the stores in the complex have already been commercialised. The centre, which has received investment of €120 million and which has employed 1,000 people for its construction, will receive up to 8 million visitors per year and will create 500 more jobs once it begins operation, according to forecasts prepared by the company.

The macro-project from the company controlled by the Mestdagh family is a first step in its expansion in Spain, where it expects to begin six projects with a value of €750 million over the next few years, two of which will be in Cataluña, which will receive investment of €200 million – including Esplugues – and four in the rest of the country.

Finestrelles Shopping Center, as the commercial complex in Esplugues is known, is located in the Ca n’Oliveres sector, in the neighbourhood of Can Vidalet, on the plot that exists between Calles Laureà Miró and Sant Mateu. It will have two tunnels that will connect the space with Ronda de Dalt and la Avenida Diagonal.

The surface area of the complex will span 40,000 m2, distributed over five floors, two of which will be dedicated to parking and the rest for commercial use. The centre will contain 110 stores as well as a hall of residence for students with almost 375 beds and a hypermarket. “For the time being, there won’t be any cinemas, but we are not ruling that out”, said Víctor Gómez (pictured above), CEO of the company in Spain.

Original story: El Mundo 

Translation: Carmel Drake

INE: 25% More Companies Operating in the RE Sector in 1 Year

25 June 2018 – Eje Prime

The new bonanza phase in the real estate sector is triggering the constitution of new companies and, in just one year, Spain registered 33,503 more companies dedicated to real estate activities. According to the latest structural survey of companies in the service sector of Spain’s National Institute of Statistics (INE), the sector contained a total of 169,031 companies in 2016, which represents an increase of 24.7% in just one year.

The property rental segment was a net generator of new companies. Specifically, companies dedicated to the rental of real estate assets increased by 24.3%, to more than 119,400 companies. By contrast, the number of companies dedicated to property sales fell by 10% to just 926 companies.

Similarly, companies undertaking real estate activity on behalf of third parties amounted to a total of 48,665 in 2016, which represents an increase of 26.7% in the census of companies dedicated to this activity in just one year.

The significant increase in the number of companies was not accompanied in 2016 by an analogous increase in the turnover of companies in the real estate sector, although the trend was positive. For the whole of the sector, revenues amounted to €25.7 billion, up by 5.4% compared to the previous year.

Curiously, despite the boom in the constitution of companies, the revenues of rental property companies stagnated: all of the active companies in the sector recorded turnover of €17.5 billion in 2016, down by 0.8%.

By contrast, whilst some of the active companies disappeared, the aggregate turnover of the companies dedicated to the sale and purchase of properties soared by 42.5% to €1.7 billion.

Generation of employment, on the rise 

INE’s data also reflects the evolution of the personnel employed by service companies. In this case, the real estate sector as a whole saw its total workforce rise by 15.3% in 2016, to 238,428 workers.

Of that figure, companies dedicated to the sale and purchase of properties accounted for just 2,264 workers, compared to the 142,378 employees who were working for property rental companies.

In terms of real estate activities for third parties, the number of employees amounted to 93,786 people, up by 18.4% compared to a rise in turnover of 16.4% to €6.6 billion.

Original story: Eje Prime (by C. De Angelis)

Translation: Carmel drake

Jevaso Buys 41,000 m2 Plot in Zaragoza from Porcelanosa for €10M

30 May 2018 – Eje Prime

Real estate operation in the logistical heart of Spain. The logistics operator Jevaso, which works for groups such as Inditex, has acquired a plot of land measuring 41,000 m2 in the Logistics Platform of Zaragoza (Plaza), which had belonged to Porcelanosa until now. The company has disbursed ten million euros for the land and will invest another €3 million on the renovation and expansion of the warehouse, which will span 13,000 m2.

Following the construction work, which will be completed in August, Jevaso’s facilities in Zaragoza will span 25,000 m2. Porcelanosa acquired the plot in 2005 and invested €22 million in the project.

Jevaso is going to use these facilities primarily for returns, ironing and drop-shipping, and initially, its main client is going to be Inditex. Over the medium term, the company plans to add another 12,000 m2 of space. Jevaso has three other warehouses, one that it owns and two that it leases. The aim of the group is to centralise its operations on the new site and hold onto just one of the existing assets, which is connected with Inditex.

At the end of last year, the company acquired another plot measuring 25,600 m2 in Meco (Madrid) with a warehouse spanning 9,000 m2 for €5 million. The group has budgeted an investment of €1 million for that renovation and is considering expanding it to 48,900 m2 over the medium-long term. Jevaso’s new site in Madrid is just 300 m away from the former, located close to Inditex’s operations.

In the cases of both Zaragoza and Madrid, the plots still have scope for more construction, whilst in A Coruña, the group has had to grow with new independent warehouses that have a surface area of 103,000 m2.

In total, Jevaso has six plants in A Coruña, Zaragoza, Madrid, Parets del Vallès (Barcelona) and Braga spanning 200,000 m2. The group employs more than 1,500 workers, moves 120 million garments per year and irons up to 350,000 pieces of clothing a day. The group generates revenue of around €60 million and expects to grow by between 10% and 15% this year.

Jevaso’s history dates back to 1983. Jesús Vázquez, whose family also worked in the textile industry, started his professional career in Samlor, one of Amancio Ortega’s first companies. In the beginning, Jevaso was a clothes manufacturing company dedicated to serving large Galician businesses, which expanded to offer ironing and labelling services. With the industrial relocation, the company turned its business on its head and integrated the logistics activity.

Original story: Eje Prime (by P. Riaño & I. P. Gestal)

Translation: Carmel Drake