KCRE Acquires 5,600 m2 Office Building in Madrid

18 December 2017 – KCRE Press Release

Kefren Capital Real Estate (KCRE) has closed the acquisition of an office building located on Calle Juan de Mariana, 15 (Madrid). The property was Grupo Segur Iberica’s headquarters until the company filed for insolvency during the summer. PwC, the receiver administering the liquidation proceedings, awarded the asset to Kefren Capital, as the winner of a competitive bid process.

The building was completed in 1994 and comprises c. 3,600 m2 above ground, spread over 5 floors, and more than 2,000 m2 below ground, including 39 parking spaces. “The building is very flexible – it would be ideal as the headquarters for: a company wanting a central location at a competitive rent; a co-working office in the south of Madrid, very close to the high-speed train; or as a mixed-use building offering the possibility of servicing last-mile logistics thanks to a loading dock at street level” states Pelayo Primo de Rivera, CEO of KCRE.

It is located in the Méndez Álvaro-Delicias district, a consolidated business area home to large companies such as Repsol, Amazon, Gas Natural, Ericsson, CLH and Mahou, with excellent public transport and road connections. The building is just a 15-minute walk from Atocha train station and Parque del Retiro (to the north), and a 5-minute drive to the M-30 ring road (to the south).

Over the last 10-15 years, Méndez Álvaro has benefited greatly from the general gentrification of Madrid’s southern neighbourhoods and the comprehensive supply of services that new office and residential developments have brought with them.

KCRE has been advised by Araoz y Rueda on legal matters and Mace on the technical side. The c/Juan de Mariana 15 office building is the 4th successful value-added transaction that Kefren Capital Real Estate has completed in 2017.

Kefren Capital Real Estate

KCRE is a real estate asset management company created in 2012 by the investment firm Kefren Capital. KCRE offers investors the full range of services required for real estate transactions: sourcing, analysis, financing structuring, deal negotiation and asset management. What differentiates KCRE from other platforms is its ability to co-invest and its investment philosophy – assets are managed from the perspective of the owner and not simply as a third-party manager.

Original story: KCRE Press Release (by Pelayo Primo de Rivera)

Translation: Carmel Drake

Zambal Acquires 2 Office Buildings in Madrid for €70M

4 December 2017 – Eje Prime

Zambal is continuing to gain ground as one of the star Socimis in the office sector in Spain. The company, managed externally by IBA Capital Partners, an independent private equity firm specialising in real estate investments, has just invested €70 million in the purchase of two office buildings in Madrid, according to sources at the group.

The company formalised its purchases in November. The first is an office building located at number 96 Calle Santiago de Compostela, in Madrid. The building has a gross leasable area of 14,317 m2 and 182 parking spaces. Currently, the building is leased in its entirety to the Community of Madrid.

The Socimi has also added another property to its asset portfolio in Madrid. That building is located at number 44 Calle Lérida and has a gross leasable area of 4,039 m2. It is currently leased to Gas Natural. According to the group, both acquisitions “have been financed in their entirety using own funds and financing from the main shareholder”. On 23 November, Zambal formalised a loan with Altaya for €60 million.

Moreover, between May and July this year, the company launched a €91 million capital increase on the market through the issue and launch into circulation of 91.2 million shares with a nominal value of €1 each and an issue premium of €0.25 per share, as revealed by Eje Prime. The aim of that capital injection was to add new properties to its portfolio.

With these latest purchases, the Socimi has fattened up its asset portfolio, worth more than €730 million. These two office buildings are the first assets that Zambal has acquired in 2017. Prior to that, the most recent asset that the Socimi added to its portfolio was Gas Natural’s headquarters in Madrid, for which it paid €120 million. That property is located at number 77 Avenida de San Luis in Madrid and is leased in its entirety to Gas Natural (…).

Management team 

The Socimi is managed by executives who have extensive experience in the Spanish and European real estate markets. The head of the company is Thierry Julienne, founding partner of IBA Capital Partners and President of the Socimi. Before taking over the reins of Zambal, the executive was Director of Constructa Asset Managment in Spain and Portugal, Director of the Capital Markets Department at Auguste-Thouard, Co-founder and Director at EXA Real Estate Advisors and founder of Abedo Asset Management.

The executive Jesús Valderrama works alongside Julienne leading the company. He started his career in the international department at Eurohypo and later went on to serve as the bank’s Director of Operations in Spain. Julienne and Valderrama are accompanied by Beltrán Martínez, Administrative and Finance Director of IBA Capital, and Maria Gistau, Director of the Asset Management team at Zambal, who has held several positions of responsibility in companies such as Sonae Sierra.

Zambal has one major shareholder, the company Altaya, which is domiciled in Singapore. The company’s portfolio is primarily focused on buildings used for office and commercial purposes. By region, Madrid accounted for 80% of the Socimi’s rental income in 2015, and Barcelona the remaining 20%.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Axiare Buys Office Building In Barcelona For €19.5M

3 May 2017 – Iberian Property

Axiare Patrimonio has acquired an office building in Sant Cugat del Vallès with a surface area of 17,648 m2 for €19.5 million. The transaction has been advised by Estrada & Partners, representing the buyer.

According to news from Spanish Real Estate, the property, which has been specially designed to operate as a corporate head office, is located on Avenida Can Fatjó del Aurons, in Sant Cugat de Vallès, a stone’s throw from the railcar stop at Can Sant Joan, making for easy access to/from Barcelona. Tenants of the calibre of Hewlett-Packard, TVE, Deutsche Bank, Banco Sabadell, Mapfre, Nespresso and Gas Natural all have offices in the area.

The building has a modern auditorium with capacity for 200 people and parking for more than 400 people.

With this transaction, the Socimi is beginning to invest some of the proceeds raised through its most recent capital expansion in one of its pipeline property projects announced at the presentation of its results in February.

Original story: Iberian Property (by Ana Tavares)

Edited by: Carmel Drake

Axiare Acquires 12,000 m2 Office Building In Barcelona For €19.5M

27 March 2017 – Observatorio Inmobiliario

Axiare Patrimonio has closed its first purchase following the capital increase announced in March. The Socimi has invested €19.5 million in the acquisition of an office building that has a GLA of 12,000 m2 and more than 400 parking spaces. The building, which was constructed recently, comprises several floors measuring 2,500 m2 each, as well as an auditorium with capacity for 200 people. According to the Socimi, the building will generate annual rental income of €1.25 million over the next two years.

The asset is located on Avenida Can Fatjó dels Aurons in Sant Cugat, Barcelona. Sant Cugat is a strategic area for offices in Barcelona, with direct connections to the C-16 and AP-7 motorways and a 5-minute walk from the Sant Joan train station. The area is home to many institutional owners including Mapfre, Axa, Catalana Occidente, Banco Sabadell and Merlin and tenants of the calibre of Hewlett-Packard, TVE, Deutsche Bank, Banco Sabadell, Mapfre, Nespresso and Gas Natural. Sant Cugat has been extremely sought after by tenants is recent times and currently has one of the highest occupancy rates in Barcelona.

The CEO of Axiare Patrimonio, Luis López de Herrera Oria states that “we have purchased a magnificent office building for a price that is 27% below its repositioning cost and with a great potential to increase in value”.

Following this operation, during the first three months of 2017, Axiare Patrimonio has invested €157.9 million on the purchase of four tertiary-use properties, with a combined surface area of 46,354 m2 and almost 1,300 parking spaces. This property formed part of the pipeline announced by the Socimi when it presented its annual results for 2016 on 27 February.

For this operation, Axiare Patrimonio has been advised by EY, BNP Paribas Real Estate and Estrada & Partners.

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

 

Who’s Who Behind The MAB’s Largest Socimis?

6 February 2017 – Expansión

The majority of Spain’s Socimis are now listed on the Alternative Investment Market (MAB). They have a combined market capitalisation of €3,500 million and so account for 68.5% of the value of that market, which is aimed at small and medium-sized companies.

In total, 29 real estate companies form part of the MAB, which comprises 67 companies in total. Seventeen of those real estate companies debuted on the MAB last year (…).

The largest Socimis

With a market capitalisation of €819 million, GMP is the largest Socimi on the MAB, larger even than one of the four Socimis that trades on the main stock market, Lar España. GMP, which was founded in 1979 by the Montoro Alemán family, debuted on the MAB last July, after adopting the Socimi structure two years ago. The real estate company, which owns around twenty office buildings in the most high profile financial districts of Madrid, has the sovereign fund of Singapore GIC as one of its shareholders; GIC owns a 32.9% stake in GMP, which it controls through another MAB-listed company, Eurocervantes.

Moreover, GMP is not only the largest Socimi (on the MAB) by market capitalisation, it also holds the largest portfolio of assets, worth €1,800 million as at 30 June 2016.

Another important owner of office buildings is Zambal. This Socimi is the only one of the five largest Socimis on the MAB that is not managed by its owner. The firm Investment Business Beverage Fund, based in Luxembourg and owned by the French magnate Pierre Castel, has appointed Iba Capital to manage its real estate investments in Spain. Iba is led by Castel’s fellow countryman Thierry Julienne.

This Socimi is the landlord of a number of large companies, both home-grown and from overseas. It owns the Madrid headquarters of Vodafone, Enagás, Gas Natural, BMW, Unidad Editorial and Día, amongst other buildings. Its portfolio is worth more than €730 million and its market capitalisation amounts to €559 million.

Meanwhile, Uro Property was created by the creditors of the company Samo, which purchased around 1,130 bank branches leased to Banco Santander in 2007. Nowadays, after selling several batches, it owns 755 branches worth €1,585 million (as at 30 June 2016).

Its main shareholder is the firm Ziloti Holding, although Santander and CaixaBank also hold direct stakes in the company amounting to 22.79% and 14.5%, respectively.

Blackstone, the largest investment fund in the world, has also listed a Socimi on the MAB to manage some of its real estate assets in Spain. Specifically, it has placed the thousands of homes that it owns and rents out into Fidere, worth €317.5 million.

The fifth largest Socimi on the MAB by market capitalisation is Isc Fresh Water. This vehicle was created with more than 200 bank branches from Banco Sabadell purchased in April 2010 by the Mexican fund Fibra Uno, controlled by the investor Moisés El-Mann.

Nowadays, the Socimi owns 213 branches, worth around €374 million, and its main shareholders are the El-Mann family, with a 65% stake and Jacobo Bazbaz Sacal, with 14.85%.

Diversity on the MAB

Each one of the Socimis on the MAB has its own characteristics, ranging from Promorent, with its market capitalisation of €4 million to GMP (which is worth more than €800 million). Their performance on the stock market is also very different: five of them have recorded increases since the beginning of 2017; three have registered decreases; and the remaining 21 have not seen any changes in their share price since the start of the year. (…).

Outlook for 2017

The proliferation of Socimis on the stock market will continue this year, according to the experts, who believe that the economic context favours these companies. (…).

Nevertheless, analysts warn that their small size and lack of liquidity imply risks for investors, since it is possible that they will not be able to sell their shares when they want to, due to the very small volume of business. (…).

Original story: Expansión (by Rocío Ruiz and Diana Esperanza)

Translation: Carmel Drake

Gas Natural Sells 4 Office Buildings In Madrid For €206M

28 December 2016 – Expansión

Gas Natural Fenosa has made cash from some of its real estate portfolio. The energy company has sold four corporate buildings in Madrid for more than €206 million, according to a statement filed with the CNMV.

Gas Natural, which will continue to occupy all of these buildings as the tenant on a rental basis, has generated net profits of around €35 million through the operation.

Specifically, the gas company has sold its headquarters in Madrid, located on Avenida de San Luis 77, to the Socimi Zambal Spain for €120 million, as Expansión reported on 24 November. It is a building with a surface area of almost 31,900 m2 and 979 parking spaces.

Similarly, Gas Natural has also closed an agreement with an institutional investor to sell three buildings located in Spain’s capital city, specifically those on Avenida de América, 38; Calle Antonio López, 193; and Calle Acanto 11-13.

The price to be paid by the buyer, whose identity has not been revealed, will amount to €86.5 million in total. The three buildings have a combined surface area of 25,100 m2 and 716 parking spaces.

Just like in the case of its Madrilenian headquarters, Gas Natural will continue to occupy these other buildings as the tenant on a rental basis.

Original story: Expansión (by J.D.)

Translation: Carmel Drake

Gas Natural Sells Its HQ In Madrid To IBA Capital For €120M

24 November 2016 – Expansión

Gas Natural has had a change of heart in its strategy to sell its real estate jewels in Madrid. The firm chaired by Isidro Fainé, which engaged the real estate consultants CBRE and Cushman & Wakefield in the summer to sell its main real estate assets in the capital, has decided to divide up its batch of four properties and sell the most sought after asset, located on Avenida de San Luis, in a separate transaction.

In this sense, the energy company has reached an agreement with IBA Capital, through its Socimi Zambal, to sell its headquarters in the capital located on Avenida de San Luis 77. The transaction will be completed within the next few days for around €120 million, once the bureaucratic procedures have been completed.

The firm has opted for the sale & leaseback formula, involving the sale of the property and its subsequent lease for a period of ten years.

The real estate fund manager, which purchased Vodafone España’s headquarters in Madrid just over a year ago, has knocked out the Spanish real estate and investment manager, Drago Capital, from the process, which until now was the favourite candidate for taking over Gas Natural’s buildings in Madrid. Drago Capital, which has been in exclusive negotiations with the energy firm for several weeks regarding the purchase, was unable to complete the operation as it failed to obtain financing from the banks.

In terms of the rest of the buildings up for sale – one property on Avenida de América 38; the Acanto 11 complex; and the Antonio López complex, on Antonio López 193– , the company has decided to reopen the process and invite those investors who expressed interest in the initial process to participate. Besides Drago Capital, the finalists also included Henderson Park and Has Capital.

In total, the combined surface area of the four complexes amounts to 57,000 m2. In addition, this asset portfolio includes 1,695 parking spaces. Specifically, Gas Natural’s headquarters on Avenida de San Luis 77 has a surface area of almost 32,000 m2, which is dedicated to office space. With this operation, Gas Natural is taking advantage of the real estate sector’s current strong performance to generate value from its properties and earn some cash, without having to move its staff by remaining as the tenant.

The office market in Madrid and Barcelona has heated up a lot in recent months due to the shortage of high quality products in good locations. During the first three quarters of this year, investment in the office market amounted to €2,200 million, according to data from Aguirre Newman.

Gas Natural’s approach is in line with that of some of its rivals, which have also opted to divest their real estate investments. For example, Torre Cepsa, located in the Cuatro Torres complex in Madrid, was sold to Amancio Ortega’s investment vehicle, Pontegadea, two months ago for €490 million. Meanwhile, Endesa’s headquarters in the capital is owned by the Socimi Merlin and Iberdrola’s head office in Bilbao is partly owned by Kutxabank.

Original story: Expansión (by R. Arroyo & M. Á. Patiño)

Translation: Carmel Drake

Drago Finalises Purchase Of Gas Natural’s RE Jewels

7 November 2016 – Expansión

The investment firm Drago Capital, together with the Canadian pension fund manager PSP Investments, has emerged as the clear candidate to acquire the real estate jewels of Gas Natural Fenosa in Madrid. The firm is now holding exclusive negotiations with the energy company to put the finishing touches to a deal that is likely to close within the next few weeks.

According to market sources, the offer from the Spanish real estate vehicle manager, which was presented as part of a consortium with the Canadian fund, has supplanted those submitted by the other suitors also interested in the assets.

The operation values the energy company’s assets in Spain’s capital at just over €300 million, which means that this will be the largest sale and leaseback transaction (sale to a third party and subsequent rental of the property) since 2010.

The firm chaired by Isidro Fainé engaged the real estate consultancy firms CBRE and Cushman & Wakefield in the summer to sell its main real estate assets in Madrid. This process sparked interest amongst private equity funds and investors alike, both at home and overseas.

Other candidates

Specifically, in addition to Drago, the investors Iba Capital, Henderson Park and a family office participated in the bidding until the latest round. Has Capital, which had also expressed its interest in Gas Natural’s properties, withdrew at the last minute as it was unable to raise financing.

The assets up for sale are: the group’s headquarters in Madrid, located on Avenida de San Luis 77; a property on Avenida de América 38; the Acanto complex, at number 11 on the same street; and the Antonio López complex on Calle Antonio López 193.

Altogether, the global surface area of the four complexes amounts to 57,000 m2. In addition, the portfolio of assets includes 1,695 parking spaces. (…) .

Gas Natural’s move comes at a time when its competitors are also divesting their real estate assets.

Specifically, Torre Cepsa – one of the Cuatro Torres in Madrid – was acquired just two months ago by Pontegadea. That purchase – the largest ever undertaken by Amancio Ortega’s investment vehicle – was completed in September and saw the founder and largest shareholder of Inditex spend €490 million.

Meanwhile, Endesa’s headquarters in the capital is owned by Merlin; and Iberdrola’s headquarters in Bilbao is partially owned by Kutxabank.

Repsol still owns its headquarters in Madrid, in Méndez Álvaro, however, there has been speculation that the oil company may sell the asset. (…).

According to the consultancy JLL, real estate investment in the office segment is expected to exceed €2,400 million in 2016. That figure falls below the record €3,170 million achieved last year due to the limited supply of high quality products. During the first nine months of 2016, investment in offices amounted to €1,572 million, with Madrid accounting for the vast majority of that figure (€1,150 million).

Original story: Expansión (by R. Arroyo & M. A. Patiño)

Translation: Carmel Drake

Duro Felguera Puts Its Non-Core Properties Up For Sale

4 November 2016 – Expansión

Liquidity crisis / The engineering group has two large corporate headquarters in Madrid and Gijón, which it is looking to sell to cover its financial commitments whilst it resolves several legal disputes overseas.

Duro Felguera explained yesterday during the presentation of its results for the 9 months to September 2016 that it has ordered the sale of its “non-productive assets” to avoid the deterioration of its cash balance whilst it resolves legal disputes overseas for unpaid invoices amounting to more than €300 million. According to the sources consulted, the assets under analysis include the company’s two major headquarters in Madrid and Gijón, the proceeds from which could amount to several tens of millions of euros.

For the time being, the company has issued a sales mandate but has not specified which formula it will use for the divestment. In recent years, many of Spain’s large corporations have sold their headquarters through sale and leaseback contracts, whereby the company sells the property but remains as the tenant for a certain number of years. Ferrovial, Acciona, Prisa, Telefónica, Santander, Gas Natural and Endesa, amongst others, have all used this formula in recent years.

Duro Felguera’s office building in Madrid has been on the company’s balance sheet for two years, after it acquired it for €20 million in 2014. The previous owner was the real estate company GMP. The headquarters is located on Vía de los Poblados, in the north of Madrid, alongside the M-40 ring road and the Campo de las Naciones business park.

Duro Felguera’s headquarters in Madrid has a useful surface area of 13,791 m2. It is an eight-storey building – five of the floors are used for offices, two are used for parking and one contains an undercover space for storage and other facilities.

In Gijón, the company chaired by Ángel Antonio del Valle owns of one of the best complexes in the city’s Scientific and Technological Park. That building has a surface area of more than 9,000 m2.

Legal disputes

Duro Felguera will have to use the proceeds from its divestments to cover several urgent obligations. In December, for example, the company is due to repay a loan amounting to €35 million.

In parallel, the group is looking to encompass its financial commitments into the process of recovering its unpaid invoices overseas. Yesterday, the company stated that “it is holding negotiations with various credit institutions (Bankia, Santander, Popular, BBVA, Sabadell and CaixaBank) to adjust the maturity dates of its debt to bring them in line with the expected resolution dates of these conflicts.

In Australia, the group is fighting against one of its client, the Korean firm Samsung C&T, for overruns on the mining project Roy Hill. The court of arbitrage in Singapore calculates that DF may recover almost €140 million (the last invoice amounted to €40 million, plus €90 million in avals). The Australian courts are claiming €46 million, of which €9 million has been already recovered. In Argentina, Duro is claiming another €150 million for overruns at the power plant in Vuelta Obligado. Finally, in Venezuela, the Government led by Nicolás Maduro still owes the Spanish group €101 million.

Original story: Expansión (by C. Morán)

Translation: Carmel Drake

Henderson, IBA, Has & Drago Bid For Gas Natural’s RE Assets

19 October 2016 – Expansión

The bidding for Gas Natural’s real estate gems in Madrid is entering its final phase. The British fund manager Henderson Global Investors, IBA Capital, through its Socimi Zambal, the US investment fund Has Capital and the Spanish management company Drago Capital have all submitted binding offers for the four corporate office complexes that the energy firm has put up for sale in the Spanish capital.

The assets include: the group’s operating headquarters in Madrid, located on Avenida de San Luis 77 (pictured above); a property on Avenida de América 38; the Acanto complex, at number 11 on the same street; and the Antonio López complex on Calle Antonio López 193.

The investors have submitted offers valuing the assets, which have a combined surface area of 57,000 sqm in office space and 1,695 parking spaces, at around €300 million, according to sources in the sector.

The gas firm, which engaged the real estate consultancy firms CBRE and Cushman & Wakefield to sell its main real estate assets in Madrid this summer, plans to chose the candidate during the second half of November and close the deal before the end of the year.

The firm, chaired by Isidro Fainé, is negotiating with these four investors regarding the option of selling the four office complexes in a single operation or awarding the assets in batches. In this sense, both IBA Capital and Has Capital have already submitted offers for all of the assets as well as for different batches, an option that the other candidates may also consider.

The operation, whereby Gas Natural will sell the properties but continue as the tenant, will allow the firm to raise funds without needing to move its employees or look for new offices.

The operation represents the largest sale & leaseback deal in the segment in recent years. (…). The volume of sale & leaseback operations reached its peak between 2007 and 2010, but has slowed down since then. Nevertheless, the formula has been used recently by companies such as Telefónica and Eroski. (…).

The future of sale & leaseback operations

However, new accounting legislation, which no longer allows property sales that are subsequently rented out to be accounted for as off balance sheet financing structures, may put a stop to this option of real estate asset optimisation.

Specifically, IFRS 16 requires companies to recognise rental commitments as debt, except those that have a term of less than a year or relate to low value assets. This standard, which will replace the standard currently in force, IAS 17, eliminates the dual accounting model for lessees, which differentiates between financing lease contracts, which are recorded on balance sheet, and operating lease contracts, which do not require future lease commitments to be recognised (on balance sheet).

Although the new law does not enter into force until 2019, companies are obliged to analyse their lease contracts in advance and make new estimates, which must be updated on a regular basis.

Original story: Expansión (by R. Arroyo and M. A. Patiño)

Translation: Carmel Drake