Tag: EY

Unicaja Negotiates Sale of 3,700 Refinanced Mortgages Worth €250M

24 April 2019 – El Confidencial

Unicaja Banco could become one of the first entities in Spain to sell refinanced mortgages whose borrowers are now up to date with their payments.

The Málaga-based entity has engaged EY to coordinate the sale of 3,700 doubtful loans worth €250 million. The mortgages went unpaid during the crisis and were all refinanced, such that the borrowers are now up to date on their payments.

To date, barely any Spanish entities have tried to sell assets of this kind. But pressure from the ECB to improve returns is forcing Unicaja to give it a shot. The mortgages are still classified as doubtful, since the Bank of Spain establishes that a borrower has to pay 12 monthly instalments and reduce some of the capital for a loan to be considered normal.

The sale of the mortgages by Unicaja has been called Project Biznaga and forms part of a larger asset divestment process being undertaken by the entity, worth around €1 billion. The sale is generating a lot of interest amongst international investors and is going ahead in parallel to the bank’s merger negotiations with Liberbank, which are in their final stages.

Unicaja has one of the lowest exposures to problem assets in the Spanish financial sector and the highest levels of coverage. According to the latest official figures, as at December 2018, it had €3.6 billion of foreclosed and doubtful assets and a coverage ratio of 57%.

Original story: El Confidencial (by Jorge Zuloaga)

Translation/Summary: Carmel Drake

Bankinter’s Hotel Socimi Atom will Make its MAB Debut with a Valuation of €265.7M

21 November 2018 – Eje Prime

Atom is lining up to make its debut on the stock market. Bankinter’s hotel Socimi will ring the bell soon on the Alternative Investment Market (MAB) with a portfolio comprising 21 assets located all over Spain. The company will make its debut with a valuation of €265.7 million and a share price of €10.60 after the stock market regulator issued a favourable report for its inclusion on the alternative market, scheduled for before the end of the year.

Atom’s main partner is the Melià Group, which operates six of its establishments. In addition, the Socimi has agreements with AC Hotel by Marriott, Eurostars, Ibersol and B&B, amongst other chains.

Twelve of the company’s hotels are vacation properties, and the remaining nine are urban assets; most are four-star establishments. The properties are worth €483.5 million altogether, according to an independent valuation of the portfolio carried out by EY.

In addition to Bankinter, which owns 5.3% of the shares, other shareholders of the management company include Alcor, which controls 5% of the shares; Mistral Iberia Real Estate, with 5.15%; and Línea Directa Aseguradora, with 2%.

Original story: Eje Prime

Translation: Carmel Drake

Axactor & Grove Compete to Acquire Sareb’s Largest NPL Portfolio

23 July 2018 – Voz Pópuli

The Norwegian investment fund Axactor and the US fund Grove, which is in the process of merging with the British firm Cabot, are competing to be awarded a non-performing loan portfolio with a nominal value of €2.335 billion by Sareb. The portfolio is the largest of its kind to be sold by the company chaired by Jaime Echegoyen (pictured below), according to financial sources consulted by Vozpópuli.

Sareb has recently received binding offers from the two aforementioned funds, as well as from Kruk, a Polish company specialising in debt recovery. Nevertheless, the proposal made by the latter was well below those submitted by the other two. According to the sources consulted, the Norwegian fund, which recently acquired a €900 million portfolio from Sabadell, as this newspaper revealed, looks to be the favourite to win the auction this time around.

The portfolio in question, which forms part of Project Dune, regarding which Sareb is being advised by KPMG, comprises unsecured non-performing loans. In fact, the assets are mortgage tails – loans that have not been repaid following the execution of their corresponding mortgage contracts – from small- and medium-sized property developers.

In this specific operation, the offers that the interested parties have presented reflect significant discounts, which may even amount to 99% of the nominal value of the portfolio, with the aim of trying to recover the maximum possible amount of the debt, which is no longer secured by any collateral.

Gains

In any case, whatever Sareb obtains for this portfolio will represent a gain for the entity, given that all of the loans, which are considered almost irrecoverable, have already been fully provisioned. The completion of the operation will happen in the month of September, at the earliest, according to the sources consulted.

Last week, Sareb shelved the block sale of between €20 billion and €30 billion in real estate assets due to the high cost of the operation. In fact, the Board of Directors of the entity known as the bad bank decided not to undertake that operation for the time being, due to the capital hole that the sale of those assets would have generated for the acquiring fund, which require higher discounts than individual investors.

That deal was called Project Alpha and Goldman Sachs had been working on it for months, to determine how, when and to whom the portfolio could be sold. Sareb was also supported in that deal by the consultancy firm CBRE and the audit firm EY (…).

Original story: Voz Pópuli (by Pepe Bravo)

Translation: Carmel Drake

Sareb Parks €20bn Asset Megasale Due to High Costs

20 July 2018 – Voz Pópuli

Sareb has shelved its megaplan with Goldman Sachs to sell between €20 billion and €30 billion. The bad bank’s Board of Directors has decided that it is not the right time for an operation of that kind, due both to the high costs that it would incur, as well as due to the period of reorganisation that the servicer sector is undergoing, according to financial sources consulted by this newspaper.

The US investment bank, led in Spain by Olaf Díaz-Pintado, has been conducting a detailed study regarding how, when and to whom it could sell this portfolio. For this study – known as Project Alpha – Sareb has also relied on the consultancy firm CBRE and the audit firm EY.

The findings were presented at the Board meeting on Wednesday, and received a cool reaction. No approval was given either for the block sale of the €20-30 billion, or of any part of it.

Impact on capital

One of the key points in the report is the capital hole that the sale of these assets would have generated for a large fund, which typically require greater discounts than individual investors. Goldman proposed improving the price, by giving the buyer an asset management contract, which would allow it to sacrifice future expenses in exchange for not consuming the capital of the bad bank.

Following the detailed study, the Board of Directors chaired by Jaime Echegoyen has decided to park the operation for the time being and to focus on other alternatives. The first is going to be what to do with the management contract that it has with Haya Real Estate, which expires next year and whose assets are the ones that Goldman Sachs has been studying the sale of. The maturity of Haya’s contract is the prologue of the other three servicers to work with Sareb, namely: Altamira, Servihabitat and Solvia.

Faced with these types of contracts, which were classified by asset origin, Sareb wants to segment its sales by province from now on, to join forces with specialist real estate firms in each region.

Before being shelved, Sareb had already been assumed that Project Alpha would be archived due to the change of Government, according to El Confidencial, and the intention of the new Government to undertake an audit of the bad bank.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Sareb Hires Goldman to Sell the Haya Portfolio: €30 Billion In Assets

30 April 2018

A change of scene is occurring in Sareb’s policies. The need to accelerate the sale of assets, together with the interest of large international funds in buying portfolios in Spain, have convinced Sareb to hire Goldman Sachs with an eye on selling its entire portfolio, currently managed by Haya Real Estate. That represents close to €30 billion of the entity’s non-performing loans, according to financial sources.

The choice of this portfolio is directly related to the date since Sareb’s contract with Cerberus’ subsidiary is the one that first that will come up for renewal, in June 2019. However, if the test that Goldman is already carrying out in the market achieves the objectives they are hoping for, Sareb could repeat the measure at a later point with the rest of the ‘servicers’: Solvia, Altamira and Servihabitat. Neither the financial institution chaired by Jaime Echegoyen nor the investment bank was willing to comment.

In its first contacts with potentially interested parties, which Goldman Sachs has already initiated, the US investment bank is offering not just the assets themselves, but also their management. This would place a potential buyer in a privileged position compared to those large funds that use servicers for their investments in Spain, such as Blackstone, Apollo and TPG. Cerberus itself, the owner of Haya, which has just acquired a portfolio of €13 billion in real estate assets from BBVA, is another example. Goldman recently notified Sareb of its confidence in being able to close the operation by next July.

Of these three investment giants, the first is the only one that lacks an asset management contract with Sareb. When the bad bank opened bidding to cede the administration of its assets, the US fund preferred to stay in the wings, as it had an interest in acquiring property as well. This desire was underlined but its recent purchase of ‘Qasar’, a portfolio of €30 billion of toxic assets from Santander-Popular.

Much as the Cantabrian bank has done, Sareb is analysing the possibility of structuring this macro-operation through the sale of a 51% stake, a percentage that would allow it to deconsolidate and reduce its gross share of the new structure to approximately €15 billion. However, the same sources point out that the final parameters of the deal are still to be defined and that Goldman is not the only institution that is working on potential deals to allow Sareb to accelerate its disinvestments.

In fact, Sareb has also employed the services of firms such as EY and CBRE within its Ebro Project, a mega-portfolio whose parameters may reach €10 billion gross in bad debts; PWC was hired for ‘Dune’, portfolio with €2.6 billion in unsecured loans; and Arcano is directing the sale of ‘Nora’, made up of €400 million in unpaid residential loans.

While waiting to see if Goldman is successful with its plans, Sareb has already begun to analyse the possibility that its next move: its next big sale of a portfolio that is currently in the hands of ‘servicers.’ Here the intention is to structure the bad loans by region, to expand the range of potentially interested buyers.

Coaxed by the need to accelerate the pace of its divestments, Sareb is rethinking its strategy of leaving the bulk of its sales to ‘servicers.’

Coaxed by the need to accelerate the rate of its divestments, considering that the bad bank was created with a life expectancy of 15 years, of which it has consumed a third, and conditioned by the consolidation process that these service companies have started, Sareb has begun to rethink if it makes sense to trust the bulk of its divestments to ‘servicers.’ It is now considering following the example of Santander and BBVA, and the bad bank is testing the waters with the mandate it granted to Goldman Sachs.

This transaction has raised questions regarding Haya Real Estate’s IPO, which was scheduled for this May and which has now been delayed until after the summer, at the earliest. Sources close to Cerberus, who have doubts about the American bank’s ability to successfully allocate a portfolio of this size in record time, left the possibility open that the IPO may be delayed until early 2019. Haya was initially valued at €1.2 billion.

Original Story: El Confidencial – Ruth Ugalde / Agustín Marco

Translation: Richard Turner

 

Sareb Seeks Partner(s) to Create Joint Venture With NPLs Worth €10bn

20 March 2018 – Expansión

Sareb has decided to emulate the large financial institutions and find a partner to help it digest its portfolio of foreclosed assets. The entity chaired by Jaime Echegoyen (pictured below) has decided to create a vehicle into which it will place loans with real estate guarantees (known as NPLs) and in which it will retain a minority stake.

Into this joint company, Sareb will place loans with a gross value of €10 billion, although the definitive figure has not been finalised yet, explain sources in the sector. It would be the largest sale ever made by the company that was itself created with assets proceeding from the intervened banks, and loans with all different kinds of real estate guarantees would be included: from land to tertiary assets. Sareb’s objective is to open up this new company to one or more financial partners and it has engaged the firms EY and CBRE to lead the negotiations. The process is still in a preliminary analysis phase, but the aim is to close it during the second half of the year or at the beginning of 2019.

Contacts

In making their preliminary contacts, the consultancy firms have approached the main international funds and managers with investments in the Spanish real estate sector to gauge their possible interest in this portfolio, which will initially be called Project Ebro. Once investors have confirmed their interest in the vehicle, thought will be given to defining how the alliance will be forged, say sources in the sector. Possible interested parties include investment giants such as Cerberus, Bain Capital, Blackstone, Apollo, Kennedy Wilson and Goldman Sachs. With Project Ebro, Sareb would be following in the footsteps of entities like Santander, which has reached an agreement with Blackstone to create the company Quasar, with real estate assets proceeding from its purchase of Popular.

In that case, the US fund owns a 51% stake, whilst Santander retains 49% of the shares.

This is not the only loan portfolio that Sareb currently has up for sale. The company has three other processes underway, although Ebro, given its size, is the star project. In this regard, it has engaged Arcano to sell the Nora portfolio, comprising non-performing loans (NPL) backed by residential collateral worth around €400 million; the Vilasoa portfolio, which includes €300 million in loans secured by land; and project Dune, a portfolio that has been relaunched in 2018 comprising €2.6 billion in unsecured loans. In that case, Sareb has engaged PwC to coordinate the sale.

These processes are happening in parallel to the search for a partner to strengthen its property development business. In that case, Sareb is holding talks with large real estate companies and funds with activity in the residential sector with the aim of working together on the development of buildable land and construction projects in progress.

In total, that portfolio is worth around €800 million and Sareb would contribute those assets to a company in which its partner would hold a majority stake.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Schroders Buys The Metromar Shopping Centre For €52.5M

25 May 2017 – Expansión

Schroder European Real Estate Trust has announced its first investment in Spain, after signing an agreement to acquire the Metromar shopping centre in Sevilla from UBS Asset Management.

The transaction price amounted to €52.5 million, which implies a future annual return of 6.2%, according to Schroders, based on the rental income generated by the property. The shopping centre’s tenants include Mercadona, Zara, Mango, Cortefiel and H&M. In total, Metromar’s rental income amounts to €4 million per year.

In terms of the structure of the deal, Schroder’s fund has directly acquired a 50% stake and has purchased the other 50% through Inmobilien Europa Direkt, a Swiss investor who is advised by the British manager.

UBS put the Metromar centre up for sale last year after acquiring it for €100 million in 2007, just before the outbreak of the real estate crisis.

According to the new owners of the shopping centre, which has a surface area of 23,500 m2, “Sevilla is expected to exceed the national average in terms of economic and consumer growth over the next five years”.

The operation has been partially financed using a loan amounting to €23.4 million.

This is the ninth acquisition by this Schroders real estate fund. Until now, the fund has focused its operations in France and Germany. Since its launch in 2015, the fund has made investments of €212 million.

“Commerce may be a key beneficiary of the economic recovery in Spain, which means that this acquisition represents a welcome addition to the portfolio, offering significant diversification for investors, as well as increasing our dividend yield”, said Tony Smedley, manager at Schroder European Real Estate Trust.

In recent months, overseas firms have been accelerating their purchases of shopping centres in Spain. For example, the British property developer Intu acquired Xanadú in Madrid; and yesterday, the French firm Klépierre announced its purchase of the Nueva Condomina shopping centre in Murcia for €233 million.

Retail Partners, EY and Gleeds have advised the British manager in its acquisition of Metromar. UBS has been advised by Cushman & Wakefield, Novasa and Ashurst

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Axiare Acquires 12,000 m2 Office Building In Barcelona For €19.5M

27 March 2017 – Observatorio Inmobiliario

Axiare Patrimonio has closed its first purchase following the capital increase announced in March. The Socimi has invested €19.5 million in the acquisition of an office building that has a GLA of 12,000 m2 and more than 400 parking spaces. The building, which was constructed recently, comprises several floors measuring 2,500 m2 each, as well as an auditorium with capacity for 200 people. According to the Socimi, the building will generate annual rental income of €1.25 million over the next two years.

The asset is located on Avenida Can Fatjó dels Aurons in Sant Cugat, Barcelona. Sant Cugat is a strategic area for offices in Barcelona, with direct connections to the C-16 and AP-7 motorways and a 5-minute walk from the Sant Joan train station. The area is home to many institutional owners including Mapfre, Axa, Catalana Occidente, Banco Sabadell and Merlin and tenants of the calibre of Hewlett-Packard, TVE, Deutsche Bank, Banco Sabadell, Mapfre, Nespresso and Gas Natural. Sant Cugat has been extremely sought after by tenants is recent times and currently has one of the highest occupancy rates in Barcelona.

The CEO of Axiare Patrimonio, Luis López de Herrera Oria states that “we have purchased a magnificent office building for a price that is 27% below its repositioning cost and with a great potential to increase in value”.

Following this operation, during the first three months of 2017, Axiare Patrimonio has invested €157.9 million on the purchase of four tertiary-use properties, with a combined surface area of 46,354 m2 and almost 1,300 parking spaces. This property formed part of the pipeline announced by the Socimi when it presented its annual results for 2016 on 27 February.

For this operation, Axiare Patrimonio has been advised by EY, BNP Paribas Real Estate and Estrada & Partners.

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

 

Axiare Buys Office Building In Madrid For €41.5M

24 January 2017 – Idealista

Axiare Patrimonio has completed its first purchase of the year: an office building, which is leased out to the Peugeot Citroën Group in Madrid, for €41.5 million. The automobile firm will continue as the tenant of the building until 2026. Axiare’s portfolio of properties is valued at more than €1,300 million.

This office building, which was completed in 2011, is located in Las Tablas, Madrid, close to properties such as the headquarters of BBVA, Telefónica, Philips and Renault. The building has a gross leasable area (GLA) of 9,280 m2 and 306 internal and 64 external parking spaces. It also has access to the A-1 motorway and links to the M-30 and M-40 ring roads.

For the operation, Axiare Patrimonio received legal advice from EY, technical advice from CBRE, and commercial advice from Cushman & Wakefield and CBRE.

Original story: Idealista

Translation: Carmel Drake

EY Gets Ready To Move 2,500 Professionals To Torre Azca

1 December 2016 – Expansión

EY is preparing to move into Torre Azca, previously known as Torre Titania, and is completing the final details of its move, which will be completed next March. The professional services firm will occupy 22,000 m2 of this 100-m tall building, which is owned by El Corte Inglés.

EY will occupy eleven office floors in this property, whose lower floors are occupied by the distribution group’s department store. EY’s employees will have direct access from the street. Specifically, 2,500 professionals will be located on floors 10 to 18, and the 19th floor will be used for external client meeting rooms, with more than 15 meeting rooms and an auditorium. Meanwhile, the 9th floor will house a canteen and a space for events and training. EY will also have a room with panoramic views of Madrid where it will hold presentations and events.

The firm will place is logo at the top of the tower, which will include more than 28 LED modules and will be visible from the Paseo de la Castellana and from Paseo del Prado. EY has been advised by the real estate consultancy CBRE regarding the design of the new offices and the logo, which is currently being installed.

Besides Torre Azca, EY will also lease 2,000 m2 of additional space in Torre de Mahou for its reprographic team. The President of EY España, José Luis Perelli, explained to Expansión that the move to the tower will be completed in several phases. “Two floors have already been occupied by employees from the finance team, who moved in in October. They are busy resolving questions and ensuring that everything is working property, in an effort to minimise problems when most of the staff move in”.

Perelli explains that the move to the new headquarters responds to a change, not only in the building needs, but also in the culture. “We need collaborative spaces that allow us to prioritise the resolution of clients’ needs with multidisciplinary teams”.

The Director of Human Resources at EY in Spain, José Luis Risco, explained that EY’s staff will be able to work on “any floor in the building because the technological means will allow it”. The company is committed to “paperless, open spaces, without any offices”, which promote flexibility and interaction between workers.

Nevertheless, to facilitate the need for so-called Chinese walls, workers will be able to use soundproof rooms on every floor so that they can work with their teams and have confidential conversations.

In line with current intelligent buildings, EY’s new offices will be equipped with the latest technological solutions. For example, there will be a wifi connection throughout the tower, and the building will have 25 video-conference rooms as well as a centralised system for booking meeting rooms, which will allow users to reserve a meeting room from anywhere in the world using an app.

The new offices are located in the heart of the financial district, just a stone’s throw from Torre Picasso – EY’s headquarters until now – and are well connected in terms of public transport. The property also has a car park.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake