Tag: finance

Hispania To Invest €650M Ahead Of Company Sale In 2020

3 May 2017 – Expansión

Hispania is getting ready to embark on a new phase. The Socimi in which George Soros owns a stake wants to update its hotel portfolio, by purchasing new assets and reposition its existing properties, with the aim of preparing the company for sale, which must happen before March 2020 – the date on which the company will celebrate its sixth anniversary of trading on the stock market.

The company plans to invest €400 million in new hotel acquisitions, which it will undertake, for the most part, before September, including an establishment in Mallorca with 250 rooms that is expected to be completed soon and which will turn it into the largest hotel owner in Spain and the third largest group in Europe behind Pandox and Foncière des Murs.

The group has 38 hotels and 11,000 rooms. The gross asset value (GAV) of its hotel portfolio amounts to €1,257 million, according to the most recent valuation performed by CBRE.

Similarly, the company will spend €250 million on the repositioning and renovation of its portfolio. This investment effort will be undertaken primarily in 2018. The group will finance this investment using its own capital and through debt.

In this way, the managers seek to have Hispania ready by the first quarter of 2019 to prepare it for its sale. The Socimi is considering selling off the whole company – excluding its offices and homes – through a transfer of control, rather than by selling off the assets individually or in batches.

The entry of Soros into the group’s most senior management body, following the incorporation of Benjamin D. Barnett, analyst at Soros Fund Management UK Management LLP, into the Board, will facilitate contact with international investors interested in the company, according to sources in the market.

In addition to its hotel portfolio, the Socimi managed by Azora also owns 27 office buildings, worth €520 million and measuring more than 185,000 m2, as well as a portfolio of homes comprising 750 units worth €230 million.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hispania Completes Its Socimi-Conversion Process

21 June 2016 – El Mundo

Hispania, in which George Soros holds a stake, has completed its conversion into a Socimi by merging with one of its subsidiaries, which was already operating under that company structure.

The firm has concluded this internal reorganisation just days after it completed a €230 million capital increase, which it undertook to raise funds to finance new investments.

Hispania has completed its conversion into a Socimi, a decision approved at its last General Shareholders’ Meeting, by signing a public deed that officially merges the two companies in the Commercial Registry, according to a statement to Spain’s National Securities and Exchange Commission (CNMV).

Until now, the company was a listed real estate company; and one of its subsidiaries operated under the Socimi structure and carried out the majority of its operations. Thus, with this operation, Hispania has reorganised its company structure by integrating several subsidiary companies and converting its parent company into a Socimi. The merger will take effect from 2017 for accounting purposes.

Investments

After completing these two operations, the Socimi plans to invest around €400 million over the next “nine or ten months” in new assets to grow its real estate portfolio. It acquired several hotel assets a few days ago.

Nevertheless, Hispania is ruling out buying any new homes for rent, given the narrow profit margin that it considers those assets offer in comparison with others. As such, the company will place its focus on the office and hotel markets.

Residential properties already account for around 12% of Hispania’s existing real estate portfolio, which was valued at €1,463 million at the end of last year.

Original story: El Mundo

Translation: Carmel Drake

Pisos.com: Buyers Offer 23% Below The Asking Price

27 January 2016 – Cinco Días

Data is regularly being published about the rise in the number of house sales, how the fall in property prices is being mitigated, the gradual return of credit to the market and the impact of the overall economic recovery as the driver behind the real estate market overcoming the crisis. Nevertheless, the online portal Pisos.com has gone a step further by cross-checking information about the prices that purchasers are willing to pay and the asking prices being set by vendors; and they are checking the differences between them (…).

In its study, which is based on figures from 2015, the real estate portal notes that the differences between asking prices and offer prices have decreased in line with the improvement in the labour market (as soon as job destruction came to a halt, house sales began their timid recovery) and the relaxation of conditions to access finance.

This alignment of positions has been made possible thanks to the fact that house prices now seem to have bottomed out, at least in the majority of regions, “and buyers’ budgets have increased, thanked to increased savings and the return of credit to the market”, explain sources at Pisos.com.

In this way, during 2015, the average house price in Spain amounted to €138,150, whilst the most sought-after home (by buyers) cost €112,500 on average and had a surface area of 90 m2. The portal understands that the difference between these amounts, i.e. €25,650, represents the difference that currently separates demand and supply, which is equivalent to 23% of the most sought-after price.

Pisos.com has been performing this cross-check of supply and demand since 2009 and in its study, it shows how the relationship has evolved during the crisis and the start of the recovery. In 2009, the difference amounted to 55%, which is explained to a large extent by the sharp decline in the number of house sales; the transactions that did materialise were accounted for with a sizeable discrepancy.

Since then, the positions have moved towards each other to narrow at 20% in 2013. Nevertheless, in 2014, they increased again, to 25% and then last year, that gap moderated slightly to the aforementioned 23%. The evolution varies by region, which is to be expected in the housing market. (…).

Starting prices

Prices in six autonomous regions increased, namely: Andalucía, Aragón, the Balearic Islands, Galicia, Navarra and País Vasco. The highest average asking price is still found in País Vasco, at €232,500. At the other end of the spectrum, citizens in Murcia, Valencia, Castilla-La Mancha and the Canary Islands searched for homes with a average price of €67,500. Navarra is the only autonomous region where the price that buyers are willing to pay exceeded the asking price. The autonomous regions in which asking and offer prices were the closest were: Cantabria (9%), País Vasco (9%) and Cataluña (12%). By contrast, the largest differences were found in Murcia (where the difference still amounts to 39%), Asturias (37%) and La Rioja (36%).

In terms of other variables in the market, such as the number of transactions and the evolution of prices, the General Council of Notaries published its study yesterday, which showed that (house) sales grew by 14.7% YoY in Q3 2015, following their significant growth in the previous quarter (16.8% YoY). Moreover, the notaries highlighted that all of the autonomous regions, with the exception of Navarra, contributed to this result. (…). Meanwhile, prices grew by 2.7% YoY during the same period, just below the rate of growth seen in the previous quarter (3.6%). (…).

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Colonial Repays €1,040M Loan Early & In Full

8 June 2015 – Expansión

Colonial, the real estate company in which Villar Mir owns a stake, has repaid the syndicated loan that it held amounting to €1,040 million, ahead of time and in full. It used the funds raised from its €1,250 million bond issue, closed at the end of May, to finance the repayment.

Original story: Expansión

Translation: Carmel Drake

Merlin Properties Completes Its €614M Capital Increase

8 May 2015 – Expansión

Merlin Properties has completed a capital increase amounting to €613.75 million following the subscription of 64.6 million shares in the listed real estate investment company.

The company will use the funds raised to finance new investment projects.

During the preferential subscription period, which ended on 2 May 2015, 64.5 million shares in Merlin were subscribed, representing 99.8% of the number offered, according to the company’s submission to Spain’s National Securities Market Commission (CNMV).

Moreover, during the period for assigning additional shares, 787 million additional shares in Merlin were requested, despite the fact that only 124,901 shares were available for placement.

In total, the shares subscribed during the preferential subscription period and the additional shares requested show that demand exceeded supply (the number of shares offered during the capital increase) by 13.2x.

The new shares, which will start trading on 12 May, represent 50% of the share capital of the company before the share increase and 33.3% of the share capital following the increase.

Merlin’s CEO, Ismael Clemente, highlighted the outstanding response to the capital increase and the great interest (sparked) amongst institutional investors in Spain.

On 15 April, the Board of Directors of Merlin Properties agreed to increase its share capital by €613.8 million.

At the time, it stressed that the shares issued would have a nominal issue value of one euro plus a premium of €8.50 per shares, which would result in the payment in cash of €9.50 for each new share.

Original story: Expansión

Translation: Carmel Drake