Tag: gain

Sabadell Completes the Sale of its Platform Solvia to Intrum

24 April 2019 – Cinco Días

Banco Sabadell and Intrum have definitively closed the operation whereby the entity chaired by Josep Oliu has sold 80% of its real estate platform Solvia to the Swedish group, more than four months after it was initially announced, having obtained the corresponding approvals.

The operation values 100% of the company at €300 million and so Sabadell will receive €240 million for the 80% stake, an amount that may increase by another €40 million depending on the evolution of the business.

The bank will record a gain of €138 million as a result of the sale and its capital ratio will improve by 15 basis points.

The entity is also waiting to complete the sale of its property developer Solvia Desarrollos Inmobiliarios (SDIn) during the next quarter. The funds Cerberus and Oaktree have made it through to the final round of that operation, according to sources.

Original story: Cinco Días (by A. G.)

Translation/Summary: Carmel Drake

Starwood Purchases Omega Park in Madrid and an Office Building in Barcelona

24 January 2019 -El Confidencial

The US fund Starwood Capital has taken another important bite out of the Spanish office market with the purchase of the entire portfolio of Autonomy, the Socimi whose main asset was the Madrilenian Omega Business Park, a giant corporate complex comprising four buildings spanning more than 33,000 m2, and which houses the headquarters of multinationals such as BP and Samsung.

The transaction, whose consideration amounted to €125 million, also includes an office complex in the sought-after 22@ district of Barcelona, which allows the US fund to also expand its presence into the Catalan capital and to make strides in its commitment to build an office portfolio in Spain worth €500 million.

To reach this objective, Starwood joined forces last year with Drago Capital, together with which it starred in the purchase of the Madrilenian San Fernando Business Park for €120 million, and which has also accompanied it in its purchase from Autonomy (…).

The Socimi, meanwhile, had put the for sale sign up over its whole portfolio a while ago. It constructed the portfolio with a clear opportunistic appetite during the worst periods of the crisis and it is now able to undo its positions with juicy gains.

In fact, at the end of 2017, Autonomy sold the jewel in its crown in Spain, the building located at number 4 Gran Vía, to the Riberas family, owner of Gonvarri and Gestamp, for €43 million, an amount that generated a gain of 40% for the opportunistic investor.

Following the sale of the office portfolio to Starwood, the Socimi is going to distribute €44.7 million as an issue premium, as well as an interim dividend of €51 million, amounts that in both cases will be paid into the accounts of shareholders on 30 January.

Moreover, once all of these operations have been completed, Autonomy will still have €10 million in cash and no assets under ownership, which means that it will have completed its objective of divesting all of its positions in Spain with juicy gains.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Aelca & Aedas Enter Final Round of Sareb’s Property Developer Venture

1 June 2018 – Eje Prime

The bad bank is gradually outlining what its property development venture in Spain is going to look like. Aelca and Aedas Homes are the final candidates in the bid to take over the land portfolio that the bad bank has put on the market in exchange for entering the share capital of one of the house builders. By contrast, Vía Célere has abandoned the competition, leaving the path clear for the other two operators.

According to sources familiar with the process, Vía Célere has decided not to submit a final proposal to Sareb. The property developer, controlled by Värde Partners (51%), together with other funds, decided against going forward to exploit the bad bank’s €1.2 billion portfolio.

The bet by the entity chaired by Jaime Echegoyen is also happening because its property developer partner is listed on the stock market, such as in the case of Aedas, or has the intention of doing so, such as Aelca. That means that the financial institution will be able to divest its shares easily in the future and make a gain. That point is likely to have been one of the reasons that led Vía Célere to back out of the deal, given that it has put the brakes on its stock market debut following the postponements announced by Testa and Azora.

Original story: Eje Prime

Translation: Carmel Drake

Sabadell Earns €35M From the Sale of its Last 11 Hotels

15 May 2018 – La Vanguardia

Banco Sabadell has definitively completed its divestment from the hotel business by selling off the last of the establishments that did not form part of the package acquired by Blackstone last year. Overall, the bank chaired by Josep Oliu has recorded income of around €35 million from the sale of 11 medium-sized establishments in different parts of Spain. The last one to be sold is the Barceló Estepona, which has been acquired by Hotusa.

In that case, the financial entity has sold the ownership of the property in which the hotel is located. In the majority of cases, the establishments were managed by a specialist company. All of the hotels were left over from the real estate crisis. Sabadell ended up taking ownership of them in recent years in lieu of payments for the debts that their owners had taken out and which they could not repay. In other cases, they were the direct result of mortgage foreclosures for non-payment.

In recent months, the bank led by Jaume Guardiola has been considering several alternatives for its hotel portfolio, including a possible stock market debut. In the end, the entity opted to sell most of the assets owned by the company HI Partners to Blackstone last year. The 11 establishments that were left out of that operation are the ones that have just been sold. In the operation with Blackstone, the bank obtained gains (extraordinary profits) of €55 million from proceeds of €630.7 million. In that deal, it sold establishments such as the ME Sitges Terramar, the Hilton Sa Torre in Mallorca and the Axel Hotel in Madrid to the international fund.

In addition to the Barceló Estepona, the bank has also just divested the following hotels: Barcelona Gate, Margas Golf, Cunit and La Selva. Most of the establishments sold in this final phase were not beachfront properties, nor were they large. Other properties sold recently include the Asta Regia Hotel Jerez de la Frontera acquired by Hotusa, the Aparthotel Augusta in Boí Taüll bought by Kesse Invest, the Balt Hotel Spa in Gijón purchased by Artiem, the Barceló Oviedo acquired by Barceló and the AC Lleida bought by AA Hoteles.

In parallel, the bank is continuing with the process to divest a large proportion of its non-hotel real estate assets that also resulted from the real estate crisis, including those inherited from the now extinct entity CAM. The bank has launched the sale of toxic assets amounting to €10.8 billion through a number of separate operations. It is a significant amount with respect to the €13.5 billion in assets that the bank had registered on its balance sheet at the end of last year.

The CEO Jaume Guardiola also announced last month during the presentation of the entity’s quarterly results that the entity is analysing the future of its real estate subsidiary Solvia. “When there is an opportunity to create value”, it will be sold, explained the director (…).

Original story: La Vanguardia (by Eduardo Magallón)

Translation: Carmel Drake

BBVA Continues to Obtain Juicy Profits from the RE Market

17 April 2018 – Merca2

Bilbao. Gran Vía, 1. One of the most iconic buildings in the Vizcayan capital has been located at that address since 1969. Comprising 21 storeys and measuring 86 m tall, it was the giant of the city until the arrival of Torre Iberdrola. Headquarters, at the time, of Banco de Vizcaya, the entity known nowadays as BBVA has just put the property up for sale. The price? Around €100 million.

This is a new milestone in the process to divest iconic buildings that the entity chaired by Francisco González has been carrying out for several years and which has been generating some juicy profits. This money for the coffers is a godsend for the balance sheet.

Another example, the most recent on the long list, saw the sale of Torre Puig in 2017 to the Catalan perfume group of the same name. That building, which ended up in BBVA’s hands after its acquisition of Catalunya Caixa, was sold for €60 million, at a gain of €30 million.

Also prior to this latest operation on Bilbao’s Gran Vía, which is expected to be closed before the summer, in 2015, BBVA sold the office block known as Torre Ederra in Madrid, located at number 77 Paseo de la Castellana, to Gmp (owned by the Montoro Alemán family and the sovereign fund of Singapore GIC). Spanning 21,000 m2 and spread over 18 floors, BBVA acquired that property in 2003 for €87.5 million from the French group Saint Gobain. The sales price paid by Gmp exceeded €90 million.

BBVA and its €300 million gain

There are several reasons behind BBVA’s decision to divest a series of buildings; some of them have significant value, not only financial but also in terms of their history and architectural beauty.

One of the reasons is to finance the cost of the creation of BBVA City (Ciudad BBVA). The new headquarters, popularly known as La Vela due to its most iconic tower, also comprises another seven horizontal buildings. It cost around €700 million to build and was constructed to reduce by one third the operating cost of having around 6,500 employees spread across a dozen properties, amongst other reasons.

Another building that was sold, for example, was the work of the architect Francisco Javier Saénz de Oiza. Constructed at number 81 Paseo de la Castellana, measuring 100 m tall, and spanning more than 49,000 m2 over 30 storeys, that property was sold in 2007, also to the real estate group Gmp.

That same year, BBVA reduced its portfolio further by placing other buildings in Madrid on the market, such as those located on Calle Goya 14, Calle Alcalá 16 and on Gran Vía de Hortaleza. In total, more than 108,000 m2 of space was sold, which saw these last four buildings generate gains of €300 million for the entity chaired by González (…).

Another operation that was different was BBVA’s sale, at the end of 2017, of its real estate division to the fund Cerberus Capital for around €4 billion. That deal was carried out at a discount of 61%: the gross book value of the 78,000 real estate assets that form part of the deal is €13 billion.

In this case, the operation involved divesting the bank’s exposure to property, in part “imposed” or “recommended” by the Single Supervisory Mechanism (SSM) of the European Central Bank (…).

Which assets are being spared? So far, the former headquarters of Argentaria, located on Paseo de Recoletos in Madrid, which currently houses the headquarters of Fundación BBVA. For the time being, no “for sale” sign has been put up there. But it could only be a matter of time.

Original story: Merca2 (by Valentín Bustos)

Translation: Carmel Drake

Non-Ibex Property Developers Also Shine: Quabit, Insur & Montebalito

5 January 2018 – El Confidencial

The real estate sector is starting to show green shoots and that is being reflected in the Spanish stock exchange. In 2017 alone, 19 companies made their debuts on the Alternative Investment Market, taking the total number to 47. Beyond the five large Socimis (Merlin, Colonial, Hispania, Axiare and Lar), there are alternative real estate companies that have experienced positive growth and that represent good investment options.

Quabit Inmobiliaria could summarise its 2017 in two ideas: financial support from large firms and capital increases. And, at the end of December, the company closed a capital increase amounting to €29 million, most of which (77%) was subscribed by Cobas Asset Management (Francisco Paramés’ management firm) and Kairos Investment. In total, it saw its share price rise by 16% during 2017 and experts believe that its share price will reach €2.40.

“In addition to the push that it has been given by the fact that large funds are including its stock within their portfolios, the listed company owns a significant number of properties as it heads into 2018. Moreover, its debt has decreased, and so it can afford to invest more. In addition, another positive factor is the performance of house prices, above all in Barcelona and Madrid, where it has its greatest presence”, explains an analyst at XTB Manuel Pinto.

Another real estate firm to watch is Montebalito, which saw its share price rise by 43% in 2017. “In general, we expected more from this stock. Nevertheless, it managed to close the year with a gain, thanks to the sale of a property in Berlin for €10 million, a deal that allowed it to clean up its balance sheet”, said Pinto.

Nevertheless, its performance could have been greater if it had not been for the depreciation of the currencies in Brazil, the Dominican Republic and Colombia, countries where the listed firm owns a significant number of assets.

All of this data is being supported by the boom in the real estate sector, which has managed to increase in value by more than 360% since 2012, according to the latest report from ‘Bolsas y Mercados Españoles’ (BME). “All of Spain’s real estate companies are very healthy, mortgages are rising, the sector is cyclical…In general, all indicators are still positive for these companies to continue growing during 2018”, says an analyst at Orey iTrade Roberto Berzal.

Moreover, Inmobiliaria del Sur has also joined the party, given that it managed to increase its share price by 35% (in 2017). “This company is improving its turnover and income, above all in the construction sector. Nevertheless, results from the last quarter mean that we are being cautious with the stock and waiting for its performance over the medium term”.

Original story: El Confidencial (by C. Alba)

Translation: Carmel Drake

Hispania Earns 31% More & Increases Its Revenues By 19%

15 November 2017 – Expansión

Hispania – the Socimi in which George Soros holds a stake – increased its net profit to September by 31% to reach €179 million, whilst its revenues rose by 19% during the period to €119 million.

By business segment, hotel revenues rose by €98 million or 21%. Hispania explained that the good performance recorded during the first nine months of the year was due to a 10.2% improvement in the average daily price per occupied room (ADR) and a 10.6% rise in the revenue per available room (RevPar) of its hotels in the Canary Islands.

Meanwhile, the turnover of its offices reached €16 million, up by 16.6%. During this period, Hispania increased the occupancy rate of its offices from 82% in December 2016 to 86% with a gross space leased of more than 15,000 m2 during the period.

The company, which had been negotiating the sale of its office portfolio, decided to postpone that operation due to the situation in Cataluña. Hispania expects to resume the sales process during the first quarter of next year.

Finally, revenues from the residential area decreased by 12% to €4.1 million. Hispania is continuing with its plan to sell homes in the retail market, which it began at the end of 2016. During the period, the Socimi sold 47 units in total between Isla del Cielo and Sanchinarro (Madrid), to accumulate a gain on the sale of 38% on the investment made.

Revaluing its portfolio

The value of the company’s real estate assets as at 30 September amounted to €2,347 million, which represents an increase of 17% with respect to the start of the year and a rise of 40% compared to the same period last year.

By segment, the value of Hispania’s hotel assets amounts to €1,516 million, its offices are worth €591 million and its residential assets amount to €239 million.

At the end of the period, Hispania had financial debt amounting to €620 million in total, with an average cost of 2.6%, compared to €631.3 million at the same time last year.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Ministry Of Development: House Prices Rose By 1.5% In 2016

24 February 2017 – ABC

The average price of private (unsubsidised) housing amounted to €1,512/m2 in the fourth quarter of 2016, representing a YoY increase of 1.5%. As such, the indicator recorded seven consecutive months of rises, according to data published yesterday by the Ministry of Development.

According to the same source, prices rose by 0.8% in Q4 compared to the third quarter of 2016.

Nevertheless, house prices are still well below their peaks of the first quarter of 2008 (-28% lower). On the other hand, prices have now recorded a cumulative increase of 3.4% since their minimum values, recorded in the third quarter of 2014.

In real terms (excluding inflation), between October and December last year, house prices in Spain rose by 0.5% with respect to the same quarter in 2015 (to record nine consecutive quarters of increases), according to the Ministry of Development, which added that we are now seeing a slowdown in the growth rate in real terms due to an increase in CPI.

In the case of new homes (those aged less than five years old), prices rose by 1.5%, to an average of €1,764.2/m2. The price of houses aged more than five years old also rose, by the same percentage, to an average price of €1,503.6/m2.

Meanwhile, house prices rose in nine of Spain’s autonomous regions led by Madrid (4.8%), Cataluña (4.4%) and the Canary Islands (3.8%). The most significant decreases were recorded in Navarra (2.8%), Murcia (2.6%), Castilla y León (1.5%) and Asturias (1.3%).

In towns with more than 25,000 inhabitants, the highest absolute house prices were recorded in San Sebastián (€3,059.8/m2), Barcelona (€2,822.1/m2), Sant Cugat del Vallès (Barcelona) (€2,779.2/m2), Ibiza (€2,772.4/m2), Getxo (Vizcaya) (€2,681.9/m2), Santa Eulalia del Río (Ibiza) (€2,640.7/m2) and Madrid (€2,628.6/m2).

In smaller towns, the most expensive homes were sold in Ontinyent (Valencia) (€522.7/m2), Elda (Alicante) (€540.6/m2), Alcoy (Alicante) (€552/m2), Jumilla (Murcia) (€552.9/m2), Villena (Alicante) (€560.4/m2) and Novelda (Alicante)(€573.8/m2).

Finally, the average price of social housing amounted to €1,124.30/m2 during the fourth quarter of 2016, representing a rise of 2.6% with respect to the same period in the previous year.

Original story: ABC

Translation: Carmel Drake