Several Funds Acquire/Increase their Stakes in Hispania in the Midst of Blackstone’s Takeover Bid

11 June 2018 – Expansión

Blackstone’s takeover bid for Hispania has placed the Socimi firmly on the radar of investment funds. Since April when Blackstone announced its intention to launch a public share acquisition offer (OPA) for the Spanish Socimi, there have been continuous changes in the shareholding structure.

In terms of the funds who have been active, Fidelity has continued to back the company and has strengthened its stake to 9.64%. Prior to the takeover bid, the company’s stake remained at just over 7%.

Fidelity is the second largest shareholder of Hispania, behind Blackstone, which, after purchasing the stake owned by the Hungarian-born magnate George Soros, leads Hispania’s shareholder ranking, with a 16.56% stake.

Another one of the Socimi’s shareholders that has strengthened its weight since the takeover is Axa Investment Group, which now controls 4.14% compared to 3% before the takeover bid, and Bank of Montreal and BlackRock, which currently hold stakes of around 4.1% each, compared with 3.01% and 3.3%, respectively, that they used to control.

These shareholders constitute the hardcore nucleus of the company’s owners, together with the Mexican firm Canepa, which holds almost 6% through Tamerlane, and the Brazilian family office BW Gestao de Investimentos (BWG) with 3.7%.

New shareholders

In addition to the reference shareholders who have taken positions, Blackstone’s interest in Hispania has led to new interest from other shareholders.

The Norwegian fund, through its manager Norges Bank, has appeared to acquire 1.09% of the Socimi; Man Group, one of the largest hedge funds in the world, has bought 1.27%; and Kite Lake Capital Management has purchased 1.56%.

Blackstone’s takeover bid for 100% of Hispania at a price of €17.54 per share means that it is valuing the Socimi at €1,905 million. Hispania used to have a market capitalisation of €1,903 million and its shares closed trading on Friday at a price of €17.68 per share, slightly above the takeover price.

After Blackstone launched its takeover, Hispania’s Board of Directors engaged Goldman Sachs, UBS and JPMorgan as financial advisors and Freshfields and Uría Menéndez, as legal advisors, to analyse the terms of the offer and look for alternatives.

Expressions of interest

In a conversation with analysts in May, during the presentation of the group’s results, Cristina García-Peri, Director-General of Hispania, classified Blackstone as a “plausible” buyer, but she emphasised that other investors have been “very interested” in the Socimi and its hotel portfolio.

The American investment fund’s offer, whose brochure is pending approval by Spain’s National Securities and Markets Commission (CNMV) is conditional upon obtaining at least 50% plus one of the shares in Hispania. Moreover, the takeover is subject to a clause that prevents the sale of assets for an aggregated transaction value of more than 5% of the NAV (net asset value) (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Rents In Azca’s Towers Exceed Those In The Cuatro Torres

12 September 2017 – El Economista

The Cuatro Torres skyscrapers, to the north of Madrid, are no longer casting a shadow over Azca, which is establishing itself as the iconic business district in the city. With views overlooking the Paseo de la Castellana and just a stone’s throw from the Santiago Bernabéu Stadium and the Nuevos Ministerios transport hub, this business centre has managed to renew itself, to avoid being left behind compared with other areas of Madrid. So much so, that the rents for its recently renovated skyscrapers are 16.6% higher per square metre than the most expensive space in the Cuatro Torres, to the north of the city.

Castellana 81, the historical headquarters of BBVA, leads the ranking in terms of rental prices in Madrid, given that its empty space is being marketed for between €27 and €35 per square metre per month. This tower, designed by the prestigious architect Sáenz de Oiza, has been subjected to a comprehensive renovation by its owner, the Socimi GMP, which spent €30 million renovating one of its most iconic properties in Azca and on Madrid’s skyline.

The asset, which became a multi-tenant property when it first came onto the market, has already managed to conquer new companies following the departure of the banking entity, which moved to its own financial city, in Las Tablas, to the north of Madrid. Thus, in the last few months, rental contracts have been signed with Teka and Hays.

At the forefront of design

Castellana 77, which is also owned by the Montoro family’s real estate company and the Singapore sovereign fund, GIC, has been the subject of another of the major renovation projects that has been carried out in Azca and which has positioned the business district at the forefront of design. Its façade is covered with slats that protect it from direct sunlight and which are lit up at night in a diverse range of colours.

The tenant that decides to lease the office space in this building, which spans 16,200 m2 over 18 floors, will be able to choose the colour of the tower, which has more than 200 parking spaces as well as charging points for electric cars. With these features, this property has the second highest rents in Azca, which range between €28 and €33 per square metre per month.

And it is followed closely by Torre Europa, which housed the headquarters of the professional services firm KPMG for many years. Following the move of that consultancy firm to the Cuatro Torres, the tower has been renovated to turn it into the first intelligent and connected office building in Spain. Infinorsa, the majority owner of this skyscraper, which overlooks the Santiago Bernabéu, has invested €20 million on a facelift of the façade, which had not been changed for 30 years, and above all, on the renovation of the interior, which has given a radical about-turn to the essence of this 121m-tall tower (…).

Rents in this tower now range between €27 and €32 per square metre per month. Its renovation has already captivated one of the large international law firms, Freshfields (…). The US firm AOL has also decided to move its Spanish corporate headquarters to Torre Europa, as well as a pharmaceutical company (…).

Torre Picasso, the tallest skyscraper in Azca, at 156m, has not undergone such a comprehensive renovation as its neighbours, but following the departure of the consultancy firm EY to Torre Titania, 15,000 m2 of space there was left vacant. Some of that space in the tower owned by Pontegadea – the investment arm of Amancio Ortega – will be leased to Deloitte, which will thereby become its largest tenant. After several improvements to the property, the highest floors are now being marketed for €31/m2/month (…).

Rents in the Cuatro Torres barely reach €30/m2/month

Nevertheless, in the new financial district located in the north of Madrid and known as Las Cuatro Torres, only one of the towers manages to charge a rent of €30/m2/month, even though the buildings are much younger, given that they were inaugurated between the years 2008 and 2009.

Office space in Torre Espacio ranges between €29 and €30 per square metre per month. The Philippine group Emperador, which owns this skyscraper (…) renewed the image of the tower at the end of last year and launched a new marketing plan with the aim of finding tenants for the 8,800 m2 that were vacant in the building at that time.

Next in the ranking is Torre Cepsa, for which Amancio Ortega (…) paid €490 million last year. It is occupied almost in its entirety by the oil and gas company whose name it bears; the cost of the 15,000 m2 of space that is available ranges between €23 and €28 per square metre per month.

Meanwhile, Torre de Cristal, the tallest skyscraper in Spain, at 210m, is the most affordable of its neighbours, since its available space is being marketed for between €25 and €27 per square metre per month. Last year, KPMG left the Azca area and moved to this property, where it leases around 23,000 m2 (…).

Next door is Torre PwC, leased to the consultancy firm whose name it bears and the five-star hotel Eurostars. Its owner is the Socimi Merlin Properties (…) and PwC reportedly pays €19/m2/month.

The Cuatro Torres complex is now getting ready to receive a fifth tower, Torre Caleido. That property, which is currently being constructed (…), will be leased to IE Business School and Grupo Quirón-Salud (…), who will reportedly pay between €15 and €18 per square metre per month (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

KKR & Altamar Join Forces With Elix To Buy Residential Properties

21 July 2017 – Expansión

KKR and Altamar Capital Partners have formed an alliance to invest in the Spanish market where it wants to acquire, renovate and rent out residential buildings. The two funds have joined one of the property developers with the longest history in this sector, Elix, to launch a Socimi that will invest more than €200 million in the purchase of properties in Barcelona and Madrid.

According to sources in the know, yesterday (Thursday) the Socimi Elix Vintage Residencial was constituted, an investment vehicle that is expected to debut on the stock market once it has undertaken the bulk of its investments. This company, which is headquartered in Barcelona, has been created with a share capital of €100 million, most of which has been contributed by KKR and a group of international and domestic investors, including Altamar and Deutsche Finance Group. The other shares are held by Jaime Lacasa (pictured above, right) and Jorge Benjumeda (pictured above, left), founders of Elix.

This capital contribution could be more than doubled when debt is added to the mix. The idea is to buy around 40 buildings in three years, subject them to a comprehensive refurbishment and put them on the rental housing market once the renovation work is complete. The corresponding rental income will feed the Socimi, which plans to rotate its portfolio of assets every three years.

Although Elix Vintage Residencial may debut on the MAB initially, its aspiration is to debut on the main stock market.

Elix will be the company responsible for converting the properties, which is why it has been named as the industrial partner. With this vehicle, the company will be able to successfully scale its business model, which until now had been very concentrated within the El Eixample district of Barcelona. The company, founded in 2003, has managed to convert its brand into a reference in the renovation market in the Catalan capital and last year, it launched activity in Madrid.

“For Elix, this operation represents an important milestone in our development due to the cooperation with some renowned internationally prestigious investors”, explained Lacasa and Benjumeda yesterday. According to the businessmen, the Socimi “will support the growth and institutionalisation process” of the company.

Guillaume Cassou, Head of the Real Estate area at KKR in Europe, has been appointed President of the Socimi. “We are delighted with this new investment in Spain, in a sector that we consider has significant potential and in conjunction with partners with the standing of Altamar and Elix”, said Cassou.

Advice

Altamar Capital Partners, the Spanish independent financial services group chaired by Claudio Aguirre, will be represented by Fernando Olaso, Head of Altamar Real Estate.

The constitution of Elix Vintage Residencial has been advised by Freshfields, RCD, BDO Abogados and CBRE. The investment vehicle will be managed by Elix SCM Partners, a company chaired by Mercedes Grau – formerly a director at Banca March and partner at MdF Family Partners – and will be advised by Lacasa, Benjumeda and the lawyer Adolf Rousaud.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

Tristan Capital Buys Manoteras Business Park For €103M

14 June 2017 – El Periódico

Tristan Capital Partners’ real estate fund, which recently launched the CCP 5 ‘Long-Life’ fund, has completed its first transaction with the acquisition of the Manoteras business complex for €103 million.

The business park is located on Avenida de Manoteras, in the A-1 corridor of Madrid, according to details provided by the company in a statement.

The Director of Investments at Tristan Capital Partners, Nikolay Velev, confirmed that “the first investment for the CCP 5 fund is a milestone for Tristan in Spain”. “It allows the core-plus fund to enter the dynamic office market in Madrid, where there is a significant imbalance between supply and demand, after six years of record lows”, he said.

The Manoteras business park comprises four buildings, which offer 38,200 m2 of Grade-A office space and 995 parking spaces.

Tristan’s fund has teamed up with Zaphir Asset Management, a subsidiary of Aguirre Newman, which has co-invested in the transaction.

Fernando Ramírez de Haro, Partner and Executive Director at Zaphir Asset Management, said that they are “very happy to have been appointed by CCP5 as the local operating partner responsible for managing the assets”.

“We are very active in this market and we are confident that the A-1 corridor offers a very good opportunity for sustainable rental growth, given that it is one of the most established CBD office markets in Madrid”, he said.

CCP5’s advisors in the transaction have been Aguirre Newman, JLL and Freshfields Bruckhaus Deringer. CBRE, Knight Frank and Uria Menéndez advised Lone Star.

Original story: El Periódico

Translation: Carmel Drake

KKR & Dunas Capital Purchase The Intertur Hotel Chain

9 May 2017 – Expansión

For €100 million / The hotel chain owns five hotels in Mallorca and Ibiza, containing 1,119 rooms. The new owners are going to modernise and reposition the assets.

The private equity fund KKR and the asset manager Dunas Capital have reached an agreement to purchase the hotel chain Intertur Hotels, which owns five establishments in Mallorca and Ibiza.

The terms of the transaction have not been disclosed, but sources in the market have indicated that the acquisition was closed for a price of just over €100 million. In addition, the investors plan to modernise and reposition the acquired hotel portfolio, which contains 1,119 rooms.

Freshfields, Deloitte, Bird & Bird and Deerns advised the buyers to the operation, whilst the law firm Buades advised the vendor.

Once the agreement enters into force, Alua Hotels & Resorts will be responsible for managing the hotels, which will be marketed under that brand from 2018 onwards. The Aula hotel group, in which the alternative asset manager Alchemy Partners owns a stake, manages 15 hotel assets and almost 3,200 rooms in the Balearic and Canary Islands.

Specifically, Intertur owns two hotels in Mallorca –Hotel Hawaii Mallorca & Suites and Palmanova Bay, both in Palma Nova–, and three assets in Ibiza –Hotel Hawaii Ibiza (in San Antonio) and apartments and a hotel (in Santa Eulalia)–.

Guillaume Cassou, Head of European Real Estate at KKR, said that this portfolio constitutes a “very solid base” for creating value in a market that is benefitting from a very favourable environment and he underlined the interest expressed by KKR, Dunas Capital and Alua in “undertaking more projects together”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Lar España Comes To The Rescue At Juan Bravo 3

2 February 2015 – Cinco Días

The largest luxury residential project in the neighbourhood of Salamanca had previously filed for bankruptcy.

The Spanish Socimi Lar has teamed up with the Luxembourg fund LVS II LUX XIII to re-launch the luxury housing project on Calle Juan Bravo, 3. After its acquisition of the developer’s shares , construction at Juan Bravo Plaza will commence within days.

On Friday, the real estate company reported to the CNMV that it has invested €120 million in the acquisition of this building and another one on Calle Claudio Coello. As a result of the deal, Juan Bravo Plaza will exit from its bankruptcy proceedings, in light of its commitment to pay all of its creditors. The developer Eurosazor will also emerge from its state of insolvency, according to the agency EFR.

Juan Bravo Plaza was led by the developer Eurosazor (owned by Rafael Ortiz) and owned by Fernando Fernández-Tapias and Paloma Mateo. The real estate project in the neighbourhood of Salamanca was destined to be a landmark development in the European luxury housing market, inspired by the British skyscraper One Hyde Park, in London.

Located on a plot of land on Calle Juan Bravo, on the corner with Calle Lagasca, the complex was to due to comprise 60 luxury homes (flats worth more than €2.5 million). The plans were developed during the “boom” years (2006) but were paralysed by the burst of the housing crisis.

The initial project included 19,400 square metres of constructible surface area, spread across two-, three- and four-bedroom flats.

It was being led by the prestigious architect Rafael de la Hoz and the best interior designers. To carry out the Juan Bravo Plaza project, better known as Juan Bravo 3, the real estate company spent €131 million in 2002 to acquire the two buildings that were located on the site: Juan Bravo B and Juan Bravo C.

In 2009, the initiative was resumed following the presentation of a special plan for the change of the use of the property, but it was paralysed again in mid-2012. Eurosazor has been advised through the process by Bazarra Abogados and Cuatrecasas, whilst Lar España has been advised by Freshfields.

Original story: Cinco Días

Translation: Carmel Drake