Tag: financing

VBare Earned €4.8M in 2018 & Plans to Raise More Financing in 2019

5 March 2019 – Eje Prime

The Socimi VBare, which specialises in the management of residential assets, generated a profit of €4.8 million in 2018, up by 100% compared to the previous year. That increase was driven by the strong performance of its rental income and an appreciation in the value of its portfolio.

In this context, the company is going to carry out another capital increase within the coming months to finance the acquisition of more properties and further fatten up its portfolio.

The company’s revenue also increased in 2018 to €1.4 million, up by 33% compared to 2017, when the Socimi generated sales from gross rental income of €1.07 million.

At the end of 2018, VBare’s assets were worth €50 million, up by 76% YoY and the occupancy rate of its portfolio amounted to 90% at year end (vs. 83% at the end of 2017).

Looking ahead, the Socimi plans to continue focusing its investments in Madrid. Already this year, it has purchased a building containing 27 homes and two premises on Calle Vallehermoso in the Spanish capital for €5.2 million. Following that operation, the company’s portfolio contains 301 units.

Original story: Eje Prime (by Roger Arnau)

Summary/Translation: Carmel Drake

INE: One Third of House Purchases in León in 2018 were Financed by Cash

2 March 2019 – Diario de León 

According to Spain’s National Institute of Statistics (INE), 3,128 homes were sold in the province of León in 2018, of which one in three were paid for in cash. This is a growing trend in the real estate market, as savers look for investment alternatives in the face of instability in the financial markets and the high returns being offered by property, due to house price rises and rental price increases.

In the province of León, 2,024 mortgages were signed in 2018, up by 4% YoY, whereas 11% more house sales were recorded compared to 2017.

Original story: Diario de León (by María J. Muñiz)

Translation: Carmel Drake

INE: Mortgage Lending Rose by 16.5% YoY to €42.7bn in 2018

27 February 2019 – La Vanguardia

Last year, 345,186 mortgages to purchase homes were signed in Spain, up by 10.3% compared to 2017, but the banks again refrained from fully opening the financing tap: the average loan amount increased by just 5.6% to €123,727, according to data presented on Wednesday by Spain’s National Institute of Statistics (INE).

The growth in the average amount is only slightly higher than the increase in house prices (which rose by 3.9% on average last year, according to data from the Ministry of Development, albeit by much more in the large cities and their metropolitan areas, where the bulk of demand is concentrated). “The banks are adopting a conservative strategy, that’s for sure”, said Oscar Gorgues, Manager of the Chamber of Urban Property in Barcelona – “because they are still very mindful of the excesses of the boom years. For that reason too, we can say that the real estate market is healthy and there is no risk of a bubble”.

The data from INE shows that after five years of recovery in the real estate sector, the number of mortgages granted is still 71% lower than the 1.24 million mortgages granted by the banks in 2007, the last year before the burst of the real estate bubble.

According to real estate firms, the caution on the part of the banks means that the main factor causing families, and especially young people, to rent, is the fact that it is impossible for them to obtain a mortgage loan. By contrast, according to the real estate firm Forcadell, around one third of homes are now purchased without a mortgage, in operations undertaken by investors (…).

According to data from INE, the value of all of the new mortgages constituted to purchase homes last year amounted to €42.7 billion, up by 16.5% compared to 2017, due to the combined effect of increases in the number of operations and the average loan amount (…).

Original story: La Vanguardia (by Rosa Salvador)

Translation: Carmel Drake

Thomas Cook Signs a €51M Loan with CaixaBank to Finance Hotel Purchases

4 February 2019 – Hosteltur

Thomas Cook today announced that its joint venture with LMEY Investments, called Thomas Cook Hotel Investments (TCHI), has obtained a second round of financing amounting to €51 million thanks to an agreement with CaixaBank. The funds will be used to acquire hotels in Spain and the Mediterranean.

Thanks to that agreement, the joint venture’s funds to purchase hotels have increased by €91 million over the last three months, following the agreement signed with Piraeus Bank, according to reports from HostelTur news (…).

Those funds will be used to invest in opportunities that arise in Spain and the Mediterranean area. In fact, TCHI has also announced the acquisition of one 250-room hotel in the Canary Islands and another 300-room hotel in the Balearic Islands. In total, the seven hotels that the company currently owns represent assets worth €250 million and contain 2,200 rooms.

The fund has the objective of owning between 10 and 15 hotels over the next two years. A channel for more hotel acquisitions has been identified by the company and the team is focused on executing the expansion plan for the coming years.

TCHI was created in March 2018 to support the growth of the Thomas Cook’s own brand hotel portfolio as part of its strategy to take greater control over its hotel inventory and the customer experience (…).

Original story: Hosteltur 

Translation: Carmel Drake

Izilend to Spend €200M Financing Real Estate Projects in Spain

1 February 2019 – Expansión

Izilend has arrived in Spain with the launch of a vehicle, which has funding of up to €200 million to finance real estate projects in the country.

Since September, the alternative financing firm has already undertaken ten operations worth €20 million and it plans to finance operations amounting to €50 million during the course of this year.

Izilend, which has a presence in Portugal with a real estate crowdfunding platform, forms part of the holding company FS Capital Partners, which also includes a servicer, Fintech, Finsolutia and a financial advisory company (EAFI).

Izilend is thereby joining other alternative financing platforms specialising in the real estate sector that have made their debuts in Spain in recent months, such as Íbero Capital Management, from the US investment fund Oak Hill Advisors, and the firm promoted by Azora and Oquendo.

Focus

In the case of Izilend, the firm focuses on the financing of projects amounting to between €1 million and €10 million. To date, it has financed investors, property developers, cooperatives and Socimis for projects in Madrid, Málaga, Sevilla and the Balearic Islands. The financing fund intends to continue expanding the focus and to finance different types of assets ranging from housing, offices, retail and land in the main cities of Spain and Portugal.

Francisco Jonet, one of the people responsible for Izilend’s business in Spain, explains that the company offers a solution to property developers and real estate investors to develop projects that the traditional banks are not interested in either due to the type of product, the situation of the operation or the response times.

“To date, we have financed firms ranging from small property developers to Socimis, and products ranging from land to residential blocks, located in different provinces around the country”, said Jonet.

Gonzalo Gutiérrez de Mesa, the other person in charge of the fund, forecasts that the demand for alternative financing will double over the next five years and will thereby approach the market rates in more mature countries in Europe, where this type of financing accounts for between 30% and 40% of the total market. “We are creating a new niche in which we believe there is great potential”, adds Gutiérrez.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Sareb Sells a Residential Asset in Barcelona for €2M

23 January 2019 – Idealista

Sareb is divesting more assets in Cataluña. The company, in which the State owns a 45% stake, has sold a residential building in Hospitalet de Llobregat, in Barcelona, for €2 million. The buyer is a Catalan family office and the operation has been financed by La Caixa.

The building, located in Collblanc, used to be occupied illegally, but has subsequently been renovated and fitted out to house residential homes. The operation has been brokered by Mercat Inmobiliari.

The building has a surface area of 1,800 m2 comprising housing and parking distributed over four above-ground floors plus a basement, ground floor and mezzanine level. In recent months, Mercat Inmobiliari has also closed the sale of two buildings in Palma de Mallorca to the fund Mediterranean Capital for their conversion into holiday homes. Those two assets also used to be owned by the public-private entity (Sareb).

Sareb is finalising several options to get rid of its assets. One possibility includes the creation of a fund with a property developer, to which it would contribute land worth more than €800 million for the development of new build homes.

Moreover, the company is sounding out the market to sign agreements with specialist companies to convert its plots into buildable sites. Sareb owns land in Spain worth €5 billion, but almost half of the plots lack building permission.

Original story: Idealista (by Custodio Pareja)

Translation: Carmel Drake

The Grifols Family Joins Forces with Corp Promotor to Create the Largest Rental Home Group

8 January 2019 – El Confidencial

After two small ventures in the sector, the Grifols family is entering the real estate sector in a big way. And it is doing so to create the largest rental home developer in Spain. Through the company Scranton, which is controlled by the Grifols family and a group of former directors from the pharmaceutical company, they are joining forces with the Catalan property developer Corp Promotors to constitute a group that is going to build 2,500 rental homes in the Barcelona area over three years, according to sources in the real estate sector familiar with the group’s plans, which are expected to involve an investment of €230 million in total.

This corporate alliance is being carried out by the company Scranton and does not involve the Grifols as a company, which has been left out of the operation. But the success of Grifols has been impacting its shareholders for a long time now. The Dutch firm Scranton, owner of 8.67% of Grifols, is mobilising investments in other sectors using the profits obtained by the company that bears the family name.

Spokespeople from Corp declined to comment on the matter. But other financial sources familiar with the project explain that Scranton and Corp are going to create a joint venture company, in which Scranton will hold 66% and Corp will own 34%. Corp will provide land, including assets such as plots on Rambla Guipúzcoa, Bonaplata and Can Batlló II, next to Gran Vía, all in the Catalan capital. And the Grifols will provide the funds to build on that land. Sources in the real estate sector indicate that half of those 2,500 homes will be constructed in the city of Barcelona and the remainder will be built in nearby cities such as on the Torreblanca plots in Sant Just Desvern and in towns such as L’Hospitalet, Badalona and Terrassa, for example.

Corp Promotors was created by two partners who left a nightclub business in Mataró to enter the real estate sector a decade ago, at the height of the real estate crisis, when almost all of the property developers in Barcelona had abandoned their activity after running out of bank credit. Those two partners are Pedro Molina Porras and Pau Castro Sáez. According to the consolidated accounts of the group deposited at the Mercantile Registry, Corp Promotors recorded revenues of €99.8 million in 2017 and profits of more than €7 million. The book value of the group’s plots are worth €209 million but not all of them will be involved in the operation with the Grifols.

The Grifols and its partners have detected a housing emergency in Barcelona, with an alarming lack of developments and they have entered the market in search of profitability at a time when investors have surplus funds, but there are insufficient assets (…).

New player

Through its alliance with Corp, the Grifols are aspiring to become one of the major players in the Spanish real estate sector. According to the business plan prepared by the partners, once the new company is operating at full capacity, in three years time, it could be worth €1 billion and with rental assets that will convert it into a kind of high yield bond for investors.

That will be possible because Corp is one of the largest owners of land at the moment in the Barcelona area. But with so many projects underway, the group is very indebted. Its accounts reflected debts of €142 million at the end of 2017, twice the figure of a year earlier. Corp’s shareholders have been trying to sell the property developer, in whole or in part, for a year, according to sources in the real estate sector. Now, with the new partner, they can forget those plans and enter another phase of their corporate life (…).

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

Sareb Invites 20 Investors to Participate in the Sale of its Socimi Témpore

20 December 2018 – El Economista

A formal process is being launched after initial interest was received from three buyers, including one that stood out from the US fund TPG.

On Tuesday, Sareb opened a formal process to sell Témpore, its rental home Socimi, according to confirmation provided by sources in the sector speaking to El Economista. The bad bank, which has not engaged an external advisor for this divestment process, has invited 20 investors to participate.

In November, Nicolás Díaz Saldaña, CEO of the residential company, acknowledged that a Data Room had been enabled containing information about the Socimi and that access had been granted to it for five investors interested in the acquisition of Témpore.

In the end, three offers were received, of which the ones from Ares and TPG stood out, the latter being the highest. In light of the expressions of interest, Sareb decided to raise the matter to its Board of Directors, which yesterday launched an orderly sales process in which investors may participate by invitation only.

According to the same sources, Sareb has not imposed any conditions regarding what percentage of its stake is for sale (it held 98.38% at the end of June), and so it will be open to all offers.

The Socimi has just carried out what will be its last non-monetary capital increase subscribed by Sareb amounting to €150 million to acquire 1,769 assets in total, of which 850 are rental homes. The operation, which forms part of the right of first refusal agreement (ROFO), which Sareb and the Socimi signed, allows Témpore to double in size to reach €325 million.

Growth plan

Before announcing the sales process, Témpore had a growth plan underway with the aim of achieving a portfolio worth €500 million and in this way having sufficient volume to make its debut on the main stock market. That was explained at the time by Díaz Saldaña, who noted that in order to continue growing, “we will have to look for financing, be it from the bank or an alternative, such as a bond issue”.

Amongst the different options, the Socimi is analysing the purchase of whole buildings of rental homes and is also studying the acquisition of developments under construction that are currently in the hands of Sareb. In addition, it is considering buying turnkey projects through delegated promotion. “In the case of the latter, the first projects would be with Sareb, given that at the moment, for the other property developers that we have spoken to, it is more profitable for them to sell in the retail market”, said the CEO.

Meanwhile, yesterday, Sareb announced the sale of some land in the Torre Salses area, in Lleida, for the construction of a large shopping centre, spanning more than 60,000 m2. Eurofund Capital Partners has paid €8.3 million for that plot, whose sale was agreed in 2016.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Corestate Teams up with Medici Living to Invest €200M in Co-Living Homes

17 December 2018 – Eje Prime

Corestate Capital is launching itself in the residential co-living market in conjunction with Medici Living. The Luxembourg-based fund manager has joined forces with the German provider of spaces to invest €200 million in the development of shared residences across Spain, according to explanations provided by sources close to the operation speaking to Eje Prime.

The plans of the two groups in Spain form part of an expansion target at the European level. In fact, over the next three to five years, Corestate and Medici Living are planning to invest €1 billion in the development and purchase of around thirty co-living properties, containing 6,000 rooms in total, located in Austria, Poland, Switzerland and Spain.

Barcelona, Madrid and Sevilla are the cities that the joint venture has chosen for its debut in the Spanish market. In those regions, they forecast investment of between €20 million and €60 million. For the time being, the intention of the companies involves acquiring seven buildings in Spain, with 1,190 rooms in total.

Corestate is responsible for the investment, project development, financing and management of its assets. Meanwhile, Medici Living takes care of the design and operation of the properties, according to reports by the company, which already has a portfolio of 1,800 rooms and a presence in Germany, the United Kingdom and the Netherlands.

It is the largest operation undertaken to date in the European co-living market. In fact, it is a sector with a great deal of potential on the Old Continent, aimed at people looking for professional environments and collaborative lives, where they can share ideas and experiences. Currently, most of these assets are located in Anglo-Saxon countries and they are expected to become one of the alternatives for affordable living in large cities.

“The arrival of investment to the shared accommodation sector represents a great step forward for the European residential market”, said Gunther Schmidt, CEO at Medici Living, who stresses in a statement that, as a company, they have set themselves the objective of becoming the WeWork of co-living.

Meanwhile, the CEO of Corestate Capital, Michael Bütter, confirmed that “demand for shared residential spaces is increasingly motivated by the desire of young people to work and live in different cities and to do so in a community”. Moreover, according to the executive, “they are low-risk operations that generate great returns”.

In addition, with this agreement, the Luxembourg fund manager is diversifying its commitment in Spain after announcing its investment plan for student halls of residence next year. Corestate is planning to allocate €100 million to the construction of those types of assets and is currently searching for land in Valencia, Sevilla and Bilbao, as revealed by Christopher Hütwohl, the head of the company in the country, speaking to Eje Prime.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

Meridia III Buys a Logistics Platform in Madrid for €15M+

5 December 2018 – Eje Prime

Meridia III has added another asset to its logistics portfolio. Meridia Capital’s Socimi has acquired an industrial platform in Alcalá de Henares (Madrid) for €15.25 million, according to a statement filed by the company with the Alternative Investment Market (MAB).

The warehouse has a surface area of 26,400 m2 and is located on the Corredor de Henares axis, the place that accounts for the largest volume of logistics stock in the whole of Spain.

The Socimi, which debuted on the stock market at the end of 2017, has financed the operation using a €10.3 million loan with a term of seven years, according to a statement filed by the company with the stock market regulator. Moreover, with this acquisition, the logistics portfolio of Meridia III now spans almost 100,000 m2.

In recent months, the company has also been undertaking some significant investments in the Spanish office market, such as its purchase in March of a building in the financial district of Madrid for €26.5 million. That property, which has a surface area of 7,500 m2, is located at number 4 Calle Juan Hurtado de Mendoza, close to Paseo de la Castellana. Moreover, in Barcelona, the Catalan manager leased its new building in the 22@ district to the international consultancy firm Everis.

On the other hand, according to the company’s latest accounts, Meridia III recorded a loss of €522,124 to June, which means that said indicator had decreased by 76% with respect to the first half of 2017. In addition, the company recorded revenues of €8 million during the first six months of the year, whereby doubling its turnover in comparison with the same period a year earlier.

Moreover, the company completed a €14.2 million capital increase at the end of November. The company’s new shares are going to be issued for a nominal value of €13 million plus an issue premium of €1.2 million.

Original story: Eje Prime 

Translation: Carmel Drake