Áurea Homes & FS Capital Buy a Plot of Land in Sevilla for the Construction of 40 Homes

11 December 2018 – Press Release

Áurea Homes, a company specialising in property development services, has acquired a new plot in Mairena del Aljarafe (Sevilla) for the construction of 40 homes. The land has a buildable surface area of 5,080 m2 and represents a total investment of €7.5 million for the development of the Áurea Bulevar development, which Áurea Homes is undertaking together with the fund FS Capital.

The development will be distributed over two 6-storey blocks, containing homes with two-, three- and four-bedroom homes. The staggered layout of the blocks towards the south means that all of the homes in the development will have attractive terraces. The complex will also include parking spaces and storerooms, as well as extensive common areas, including a large swimming pool. Áurea Bulevar will be completed with a large commercial premise measuring 800 m2.

This residential complex has a privileged orientation overlooking the new boulevard area in Mairena del Aljarafe, a town that forms part of the metropolitan area of Sevilla and which is experiencing a great urban planning boost with the arrival of new tenants.

The municipality is widely consolidated, with numerous parks and gardens, spanning a total green area of around 500,000 m2 and with several protected spaces. Moreover, the new neighbourhoods are distinguished by their wide avenues, numerous recreation areas and excellent sporting and cultural facilities.

Mairena del Aljarafe is well connected with the city of Sevilla through the metro and several bus routes, which make it one of the most attractive areas for housing in Sevilla.

Second operation in Andalucía

This is Áurea Homes’ second operation in Andalucía, which is focusing on the Sevilla area for the time being. The company’s total investment in Mairena del Aljarafe amounts to €38.1 million for the construction of 197 homes in several developments, 109 of them will be multi-family and 88 will be single-family.

Original story: Press Release

Translation: Carmel Drake

Overseas Funds Compete to Finance & Buy Land in Spain

15 April 2018 – Voz Pópuli

At the beginning of 2012, at the height of the economic crisis, one of the directors of the Bank of Spain – José María Roldán, now the President of the AEB – faced a tough meeting with investors. One of them told him that land in Spain was worth nothing. “If that’s the case, then I’ll take it all”, replied Roldán.

And if he had done so, today, the executive would be a millionaire and the same funds that raised doubts over the banks’ balance sheets would today be knocking at his door to buy that land and finance developments on it.

The good times in the Spanish economy and the real estate recovery are causing the opportunistic funds to look for ways to take advantage of the situation. They are buying assets, real estate companies – Habitat and Inmoglacier are the most recent examples – and trying to fill the gap left by the banks in the financing arena. That is where they have set their sights on land, the last bastion, where traditional entities are still wary of lending.

“Bank financing is available for projects and occasionally for parts of plots, but it is inflexible and restricted to certain locations and pre-sales levels. Ours (financing) is flexible in terms of volume, periods and conditions”, says Luis Moreno, Senior Partner at Ibero Capital Management, a firm that has just teamed up with Oak Hill Advisors to lend the property developer at least €400 million. In just a few weeks, they already have projects on the table exceeding that amount.

Types of investors

“Bank financing is still almost non-existent and is only granted in very low percentages in situations of high pre-sales”, says Pablo Méndez, National Director of Capital Markets at Savills Aguirre Newman.

The example of Oak Hill is just one of many. Julian Labarra, National Director of Corporate Finance at CBRE, explains the different types of investors that are interested in land. A first group comprises funds that provide bridge loans. Whilst the banks require “that a development already has the necessary permits and a certain level of pre-sales”, some of the funds financing certain projects with “yields of 14-15%”. And they exit after 18-24 month, by which point the development meets the requirements of the traditional banks (…). Active funds in this segment include Incus, Oquendo and Avenue.

Other funds have chosen to team up directly with Spanish property developers: they put up the capital to buy and develop land and the managers contribute their knowledge. There are several examples: Lone Star with Neinor, Castlelake with Aedas, Cerberus with Inmoglacier; Bain Capital with Habitat; and Morgan Stanley with Gestilar.

Another similar, more recent, example is the association between FS Capital – from Finsolutia – and Inmobiliaria Espacio, a company owned by the Villar Mir group, to relaunch the construction business and sell homes by investing €400 million on land purchases (…).

Other funds also interested in land are those committed to financing the whole process, such as Oak Hill, and those that are buying portfolios of land from the banks and from Sareb, but not to resell them, such as Deutsche Bank and Blackstone.

By location, the experts agree that financing has gone from being limited to the large capitals to appearing in increasingly more cities. “(…). Until two years ago, interest was limited to Madrid, Barcelona, Málaga and the Balearic Islands. Now we are seeing operations along the whole coast, as well as in Sevilla, Zaragoza and Pamplona, amongst others (…)”, says Labarra, of CBRE. “This year we will see operations in cities such as Bilbao, Vigo, Salamanca, Zaragoza and Murcia, which have recently come onto the radar of the large investment groups”, adds Méndez, of Savills (…).

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

FS Capital Creates JV with Inmobiliaria Espacio to Build 1,000 Homes

10 April 2018 – Press Release

The new Joint Venture plans to launch in the main cities of the Iberian peninsula to promote its primary residence homes. 

The real estate project has been created with four plots of buildable land, on which construction work will begin in the next few months. 

Inmobiliaria Espacio, a company that has been dedicated to property development for more than 45 years, has today announced the signing of a joint venture agreement with FS Capital, which, through funds that it advises, is planning to build more than 1,000 homes in Spain and Portugal over the next few years.

The Joint Venture is going to be carried out through Espacio Living Homes, the vehicle from which the future residential projects will be constructed. Following the completion of the operation, the funds advised by FS Capital hold 75% of the shares in the aforementioned company, and the remaining 25% stays in the hands of Espacio.

FS Capital, the commercial brand of Principal Advisor EAFI, is an investment advisory company regulated by the CNMV, which specialises in real estate and loan opportunities, amongst others, in Spain and Portugal. FS Capital advises institutional investors with assets worth approximately €300 million and has a team of highly-qualified professionals with extensive investment experience across a wide range of assets, geographies and capital structures.

Inmobiliaria Espacio, with its proven experience in the integral management of real estate assets and provision of advice in processes to plan, manage and build urban developments, as well as to coordinate and manage construction processes; will form, together with FS Capital, the perfect tandem, which will invest up to €400 million in existing land and assets for primary residences, anywhere on the Iberian Peninsula, with no geographical restrictions.

The JV has been created with four buildable plots of land in Madrid, Valladolid and Levante, on which construction work will begin in the next few months.

The process was closed after several candidates were invited to a restricted access process where most of the investors expressed interest in becoming Espacio’s strategic partner for property development. The consultancy firm Aiga Advisory has advised the process since the project began and has made the union of these two companies possible, in collaboration with PwC on the legal side, to cover the entire scope of the operation, which has been closed in record time.

With this new investment, both FS Capital and Inmobiliaria Espacio, consolidate their commitment to the recovery of the sector and to the Iberian peninsula, which they consider is one of the markets with the most potential and the best expectations in terms of development and quality of life for investing in over the next few years.

Original story: Press Release

Translation: Carmel Drake