The Ruggieri Family Buys Eurosic’s Spanish Socimi

18 October 2017 – El Confidencial

One of the wealthiest families in France has set its sights on Spain’s tourism market. The Ruggieri family, owner of the Batipart Group, reached an agreement in August with the also French firm Eurosic to purchase the Socimi that that firm had created in Spain, and has now renamed the entity Elaia Investment Spain.

After taking over 66% of the vehicle, Batipart has put all of the wheels in motion to enable the company to make its debut on the stock market before the end of the year, just like its previous owner had planned.

In this new business venture, Ruggieri is accompanied by Euler Hermès, owner of 13.81% of the Socimi; Allianz Invest Pierra, owner of another 9.21%; and around twenty individual investors who own the remainder of the share capital.

Elaia owns twelve real estate assets in Spain, primarily hotels and tourist apartments, although it also owns two residential properties in Madrid, on the centric streets Bailén and Atocha.

The Socimi focuses on three-and four-star category hotels and on taking advantage of the boom in tourist apartments. It owns two assets of each type in Mallorca and a hotel and two apartment blocks in Málaga, whilst, in Cataluña, it owns a hotel in Roses (Gerona), one tourist rental building in Barcelona and another in Estartir (Gerona).

In total, the Socimi has invested €145 million so far acquiring its portfolio, although its objective is to reach €280 million. To that end, it is currently holding talks with various investors, whose contributions will range between €10 million and €30 million.

When it debuts on the MAB, Elaia expects to have a market capitalisation of €120 million, a figure that will make it one of the largest Socimis on the market. The company will be managed by Elaia Management Spain, a subsidiary of Batipart, and the plan is to undertake some of its expansion together with Pierre & Vacances, its main partner in Spain.

The Socimi’s roadmap foresees it continuing with its intense asset acquisition policy for the next year or so, before spending the following two years repositioning those assets. The divestment phase is expected to be activated from 2021 onwards and that strategy is expected to be carried out on an asset by asset basis, culminating in 2024, with a forecast rate of return (IRR) of 15%.

Eurosic-Gecina’s heritage

The Batipart Group was founded in 1988 by Charles Ruggieri, who was born in Italy but who settled in France many years ago, where he is one of the top 100 wealthiest people in the country, with a net worth of around €900 million. A historical shareholder of Eurosic, in June, he agreed to sell his 24% in the real estate company to Gecina, in exchange for taking ownership of all of the leisure, health and hotel assets in the portfolio, including Elaia, worth €463 million in total.

That agreement was signed on 29 August, which is when Batipart took control of the Spanish Socimi. Moreover, the group owned by the Ruggieri family also has a presence in the nursing home sector, through the Korian Group, and it owns six hotels in Africa.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

French Fund Primonial Makes First Purchase In Spain

4 September 2017 – Expansión

The Spanish real estate market has a new investor: Primonial Reim, a French real estate fund manager that, with a portfolio of more than €10,700 million under management, has just completed its first purchase in Spain.

Primonial has acquired the Sant Antoni nursing home and clinic in Barcelona. The centre, located in La Marina del Port, has 300 beds, with a total surface area of 16,000 m2. For this asset, Primonial Reim has disbursed €20 million, in an operation that has been advised by Cuatrecasas, JLL and Grant Thornton, which has performed the financial due diligence.

The Sant Antoni centre, owned until now by the firm Hucasve, will be incorporated into the portfolio of its subsidiary SCPI Primovie, whilst the management of the centre (engaged to the Catalan Health Service) will remain unchanged, under the terms of the long-term contract in place.

Alternative assets

The Spanish real estate sector has been on the radar of all overseas investors for several months now, given the expectations of a macroeconomic recovery and the affordable prices of assets compared with those in other similar locations. Due to this high demand, the assets most favoured by investors (such as offices and commercial assets) are scarce, and so properties known as alternative assets are becoming a highly attractive option. These properties include medical centres, nursing homes and halls of residence.

According to Deloitte, investment in alternative assets in Europe accounts for 14% of the total, although that figure is much lower in Spain. As such, the segment in Spain offers significant potential, with returns of 6% on average, well above those of other real estate assets.

The most high profile transactions in this market in recent times include a purchase by another French group, the investment fund Eurosic Lagune – owner of the Socimi Eurosic – which bought 16 nursing homes from the SARquavitae Group for €116 million.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Eurosic Debuts Its Socimi On The MAB With Tourist Assets Worth €137M

21 June 2017 – Expansión

The French real estate company Eurosic is looking to finalise the stock exchange debut of its company in Spain. The firm, which trades in France under the Siic framework (similar to the Spanish Socimi system) has been investing in Spain for a year and a half now, during which time it has accumulated 11 assets, whose combined acquisition price amounts to €137 million.

Specifically, Eurosic undertook its first operations outside of France in 2015, with the purchase of a property in Germany and another three in Spain. In December 2015, the French group acquired a hotel in Fuengirola (Málaga), an estate spanning more than 12,600 m2 in l’Estartit (Gerona) and another building, requiring renovation, on Calle Bailén in Madrid. According to the most recent accounts filed for Eurosic Investment Spain Socimi, the French group spent €35 million on those three properties.

Months later, the vehicle acquired two hotels in Sóller (Mallorca) and another building on Calle Atocha in Madrid.

After closing these operations, the Socimi now has a portfolio specialising in tourist assets (hotels and apartments), worth €137 million. Its objective is to increase its investment to €280 million by the end of 2017 when Eurosic plans to debut its investment vehicle on the MAB.

The Socimi currently has share capital amounting to €96 million, of which Eurosic has contributed €70 million; the firms Euler Hermes and Allianz Invest Pierre (managed by Immovalor Gestión) have invested €25 million of their own funds; and the management team has contributed €1 million.

According to the accounts for the most recent fiscal year, closed March 2016, Eurosic Spain recorded rental income of €452,616. In January, the Socimi undertook a capital increase amounting to €1.57 million, to make way for the entry into the share capital of a fund in which Allianz holds a stake, according to market sources.

In 2014, the French group purchased Colonial and Realia’s stakes in the French real estate company Siic de Paris for €850 million. In February, it invested €116 million in Spain, acquiring 16 nursing homes, as reported by Expansión.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Eurosic Teams Up With Allianz To Launch A Socimi In Spain

13 February 2017 – El Economista

The Socimi market is still going strong and for the first time since the legislation governing these listed companies was reformed, a vehicle is now being created with mostly French capital. In December 2015, the French real estate giant Eurosic created Eurosic Investment Spain Socimi, with the aim of debuting it on the stock market with a share capital of more than €100 million, according to sources in the sector.

Eurosic, which already tried less than a year and a half ago to debut on the Spanish stock market by purchasing Testa, will launch this Socimi in partnership with the Allianz group, which will use this vehicle to take a new step in its strategy to gain weight in the Spanish real estate business.

The insurance company, through two of its companies, Allianz Invest Pierre and Euler Hermes Reinsurance – world leader in credit insurance – has entered the shareholding of Eurosic Investment Spain Socimi. Both companies, which are headquartered in Switzerland and France, respectively, have taken positions in an operation worth €67 million, according to TTR.

Allianz gains in strength

With this move, Allianz increases its exposure to Spanish real estate, a market it broke into last September, through Allianz Real Estate, which opened a branch in Madrid to track operations in the Iberian Peninsula and manage the Group’s properties on the ground.

Allianz Real Estate’s portfolio contains assets under management worth €41,700 million; €29,300 million in direct and indirect investments and loans worth €12,400 million – figures as at end of 2015, when operations amounting to €7,400 million were closed. Its aim is to reach AuM of €60,000 million “within a few years”.

The strategy that Allianz is carrying out, which includes acquiring stakes in debt and listed companies, as well as direct and indirect positions in financing, places it amongst the most active insurance companies in the real estate market. (…).

Companies such as Mapfre, Mutua Madrileña, Santalucía, Reale and Línea Directa have acquired properties recently and are now looking for opportunities, although their incursion as financiers is residual or non-existent, in contrast to the role played by multinationals such as Axa and Allianz.

Eurosic’s portfolio

In Spain, Eurosic set the wheels in motion last year to feed its portfolio of assets. In this way, in October, it closed the purchase of two buildings in Madrid, at number 40 on Calle Atocha and number 27 on Calle Magdalena. In the same month, it acquired Hotel Tropicana, located on La Carihuela seafront in Torremolinos. This year, it has continued its spending spree with the purchase of Hotel Monterrey Roses (a three-star establishment in Roses, Gerona) and a portfolio of assets in Palma de Mallorca, comprising two hotels and some tourist apartments.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Eurosic Buys 16 Nursing Homes From SARquavitae For €116M

13 February 2017 – Expansión

The French Socimi Eurosic has reached an agreement with SARquavitae, one of the leading providers of care for the elderly in Spain, to transfer 16 establishments through a sale & leaseback operation, whereby the nursing home company will continue to operate the properties under a lease contract.

Eurosic has spent €116 million on the 16 nursing homes. The purchase has been made through Eurosic Lagune, the investment vehicle that the Group launched at the end of 2015 and through which it makes its purchases of assets linked to the health and leisure sectors.

The nursing homes that Eurosic has acquired contain 2,300 beds and more than 300 day places. They have rental contracts with an average maturity period of 25 years and an annual rental income of around €7 million.

Spain

This is the first investment that Eurosic Lagune has made in Spain. The firm held assets worth €1,000 million at the end of 2016.

Nevertheless, the Group has been investing in Spain for a year and a half, through the Socimi Eurosic Investment Spain.

In December 2015, Eurosic completed its first operation with the purchase of: a hotel in Fuengirola (Málaga); an estate covering more than 12,600 m2 in l’Estartit (Gerona); and another building, which needs to be renovated, located on Calle Bailén in Madrid. Since then, it has closed several other acquisitions, including two hotels in Sóller (Mallorca) and another building located on Calle Atocha in Madrid.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Blackstone, Merlin, Hispania & Eurosic Bid For Testa

11 May 2015 – Expansión

The US fund, the two Socimis and the French real estate company have all submitted bids for Sacyr’s subsidiary. The construction group is also considering other options, such as performing an IPO of 30% of Testa’s share capital.

Sacyr now has four proposals on the table for the purchase of its real estate subsidiary Testa. The Socimis Merlin Properties and Hispania, the US fund Blackstone and the French real estate company Eurosic have all submitted bids to acquire Sacyr’s subsidiary, which owns assets worth more than €3,100 million.

Sacyr engaged Lazard to organise a competitive process for the interested parties to bid for Testa. The deadline for proposals was Friday and in the end, four offers were received for the construction company chaired by Manuel Manrique.

Bids were invited for 30% of Testa, the stake that Sacyr had initially planned to place on the stock exchange (it currently controls 99.2% of the capital) as well as for the entire shareholding. In the end, Merlin, Hispania, Blackstone and Eurosic have all expressed interest in acquiring 100% of the real estate company, according to sources close to the process.

Proposals

Of the four candidates, only Merlin Properties had already formally expressed its interest in Testa. Now, the Socimi, which completed a capital increase amounting to more than €613 million last Thursay, has increased its bid to include 100% of the company.

The real estate company Hispania Activos Inmobiliarios has joined Merlin, the largest Socimi by market capitalisation. Hispania is owned by George Soros and John Paulson, and channels the majority of its investments through its Socimi Hispania Real. It has now fixed its gaze on Testa after trying to acquire one of the country’s other real estate companies, Realia.

Hispania, which is still waiting for a response from CNMV to the counter offer made by Carlos Slim to its bid for Realia, will now propose a similar transaction for Testa, whereby taking advantage of its access to funds from international investors.

Another one of the candidates is the French real estate company Eurosic. Last year, the company purchased Realia and Colonial’s shares in SiiC de Paris, for a total of €868 million. Now, it is looking to expand its portfolio of assets by backing the Spanish market, where the macroeconomic forecasts and the real estate environment point to an imminent rise in rental prices. Eurosic is participating in the process along with a foreign institutional fund.

Blackstone, the largest investment firm in the world, is behind the fourth proposal. This US fund has been investing in the Spanish real estate sector since 2013, when it acquired 1,860 rental homes from the Municipal Company for Housing and Land (Empresa Municipal de Vivienda y Suelo or EMVS) in Madrid. Moreover, Blackstone is the owner of four office buildings in Madrid and Barcelona, leased to companies such as Citibank and HP, as well as several logistics centres distributed across various locations.

The sale of 100% of Testa is just one of four scenarios that Sacyr is contemplating. As well as the possible sale of 100% of the company, the construction firm chaired by Manuel Manrique is also exploring the possible entry of a strategic partner to work together with Testa to realise the original plan of placing up to 30% of the company’s share capital on the stock exchange through an initial public offering (IPO).

Furthermore, Sacyr is evaluating a transaction that would have a much greater strategic impact and would involve the merger of Testa with another large real estate group. To that end, the company has begun preliminary conversations with Colonial to create the largest company in the sector in Spain and one of the largest in Europe.

On Saturday, Colonial said that “it would evaluate any invitation to participate in the eventual sale of Testa”. However, the group said that it is not “currently” studying any integration with Sacyr’s subsidiary.

In February, the construction company approved an “accordion operation”, where Testa regularised its finances with its parent company, subject to a capital increase of €500 million, which would allow the real estate company to strengthen its balance sheet. It is during this phase that the negotiations with Colonial would be addressed, according to sources close to the process.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Realia Closes the Sale of SIIC de Paris to Eurosic

25/07/2014 – Expansion

Yesterday, the parties finally signed the contract on transfer of the 58.95% stake in SIIC de Paris in hands of Realia to Eurosic for €559 million.

The sale will allow the real estate company controlled by FFC and Bankia to cut in the total, €1.03 billion indebtness due to injection of €489 million in the French branch and a €544 million paid for cash generation.

 

Original article: Expansión

Translation: AURA REE

Realia Sells Stake in SIIC de Paris to Eurosic

20/05/2014 – Reuters

Eurosic, a France-based investment group, acquires a 59% stake which Realia held in SIIC de Paris for €22 a share.

In turn, the Spanish real estate firm is controlled by FCC and Bankia.

Eurosic will probably file for purchase of entire SIIC de Paris, once the deal sealed.

 

Original article: Reuters (by Sarah White)

Summary: AURA REE