Hispania’s Shareholders Approve Block Sale of its Office Portfolio for €600M+

4 April 2018 – Eje Prime

Hispania is putting the sale of its office portfolio back on the table. Today,  at its General Shareholders’ Meeting, the Socimi will submit to approval the block sale of its rental office portfolio, a set of 25 buildings worth €603 million. It is a divestment that the Socimi, in which George Soros holds a stake, launched a year ago, suspended in October 2017, and which it has now resumed.

Hispania’s assembly is also going to approve the distribution to shareholders of an extraordinary dividend of €1.97 gross per share linked to the completion of that divestment. The payment will be charged against the issue premium and will involve distributing €215 million in total. This dividend will be added to the ordinary remuneration to shareholders, which will amount to €0.87 per share this year, the first payment of which, amounting to €0.41295 gross per share, was already made in March.

Besides Soros, who holds a 16.6% stake in the firm, the other main shareholders are other overseas institutional investors, such as Fidelity, with a 7% stake, Conepa, with another 6% stake, and Bank of Montreal and BlackRock, with 3% each. The Socimi chaired by Rafael Miranda is framing the sale of its office portfolio within its strategy to focus on the hotel business.

Other items on the agenda at Hispania’s General Shareholders’ Meeting include the re-election of the directors to their roles as the Chairman of the firm and another five members, including Concepción Osácar, José Pedro Pérez-Llorca and Joaquín Ayuso. Hispania will also approve its accounts for 2017, which reported a net profit of €222.82 million, down by 27.7% compared to the previous year.

Original story: Eje Prime

Translation: Carmel Drake

Top 5 Socimis’ Earnings Soared by 70% in 2017

1 March 2018 – Expansión

Spain’s large listed Socimis – Merlin, Colonial, Hispania, Lar España and Axiare – are continuing their rise. They closed last year with a combined profit of almost €2.4 billion, which represents an increase of almost 70% with respect to the previous year, after increasing their revenues from rental income by 20%, to €1.1 billion.

These companies, which, with the exception of Colonial, made their debuts on the stock market between March and July 2014, now own assets worth almost €26.4 billion, which represents an increase of 17% with respect to the previous year. The five Socimis also have a combined market valuation of €13.4 billion.

The stars of the year were, once again, the Socimis on the Ibex. Specifically, Merlin doubled its earnings in a record year, to exceed €1.1 billion, whilst Colonial earned €683 million, up by 149%.

The firm led by Ismael Clemente generated a recurring profit – proceeding from the core business – of €289 million, up by 31%, and increased its revenues by 34%, to €470 million. Merlin’s asset portfolio had a gross value of €11.3 billion.

Meanwhile, Colonial, which is going to merge with Axiare during the second half of this year following its successful takeover, recorded a 22% increase in recurring profits, to reach €83 million, boosted by rising rents, a better financial result and a lower corporation tax charge due to its conversion into a Socimi in May last year.

Unlike its rivals, Hispania saw a reduction in its profit of 27% to €228 million, after recognising provisions amounting to €95 million for the payment of incentives to its management firm Azora. Moreover, the company in which George Soros owns a stake registered a negative impact in its accounts amounting to €46 million due to the payment of incentives and the cancellation of guarantees following the purchase from Barceló of 24% of Bay for €172.4 million.

Hispania, which increased its revenues by 9.5% last year, had a portfolio of assets with a gross value of €2.5 billion at the end of the year, compared with €2.0 billion at the end of the previous year.

Meanwhile, the Socimi specialising in retail, Lar España, earned 48% more, at €136 million, thanks primarily to the performance of its shopping centres. The company recorded revenues from rental income of €77.6 million in 2017, up by 29%, and has announced divestments of non-strategic assets amounting to €470 million, including offices, residential properties and logistics assets, in processes that are already underway.

Meanwhile, Axiare’s net profit soared by 47% last year, to €218 million. The Socimi, controlled by Colonial since January, closed 2017 with turnover of €69.7 million, up by 36.6%, and assets worth €1.8 billion.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hispania Puts its €603M Office Portfolio Back on the Market

27 February 2018 – Eje Prime

Hispania has resumed its plan and placed the “for sale” sign up again over its office buildings, worth €603 million. The Socimi, managed by Azora and in which George Soros holds a stake, owns 25 office buildings and one plot of land. The divestment operation was initiated in February 2017 but was suspended in October due to the socio-political situation in Cataluña at that time. Previously, in June, Hispania sold one office building in Madrid for €37.5 million.

The properties for sale span a gross leasable area (GLA) of 153,621 m2 and have an occupancy rate of 87%. The assets are mostly located in Madrid, and the rest are in Barcelona. Companies such as LaLiga, Aegon, Uría and Ilunion have their offices in Hispania’s buildings.

The company will subject the sales process of this portfolio for approval by the General Shareholders’ meeting, which has been convened for 4 April, according to a statement issued by the company to Spain’s National Securities and Exchange Commission (CNMV).

With this operation, which, when it closes, will result in the distribution of almost €2 in extraordinary dividends per share to each shareholder, the Socimi is going to strengthen its strategy of focusing its investments in the hotel segment, where it is the king of the Spanish real estate sector with 46 assets.

Similarly, Hispania is also starting to sell its portfolio of rental homes to individuals, a market that is currently in high demand in Spain.

Original story: Eje Prime

Translation: Carmel Drake

Hispania Receives a €100M Loan from EIB

12 January 2018 – Expansión

Hispania has signed a loan with the European Investment Bank (EIB) for €100 million to update its hotel portfolio and bring its assets in line with better technical standards, including energy efficiency measures.

Specifically, the investment will be used to improve tourist accommodation that the Socimi controlled by George Soros owns in tourist regions such as the Canary Islands and Andalucía.

The EIB is the European Union’s long-term financial institution, which grants long-term loans to investment projects aimed at promoting the implementation of EU objectives.

The loan to Hispania contributes to improving the competitiveness of the Spanish hotel sector, according to the EIB, through the incorporation of technical standards at its facilities. In this way, the investment supports the growth of less developed regions, where most of the hotels are located, explains the institution.

Hispania whereby joins Axiare, which received €16 million from the EIB last month to improve energy efficiency and the general features of its buildings with the aim of making them more sustainable.

Largest owner

Hispania is currently the largest owner of hotels in Spain with more than 13,100 rooms across the country.

At the end of last year, the company agreed to purchase the remaining 24% stake in BAY from Barceló for a total of €172.4 million. Moreover, it acquired Hotel Barceló Guadalmina from the Mallorcan hotel chain for €19 million. With these acquisitions and the investment plan to improve and reposition its portfolio, Hispania committed all of its financial capacity at the end of last year.

In February, the Socimi, in which George Soros holds a stake, announced its intention to maintain its initial objective of selling all of its assets before March 2020, the date that will mark six years since its debut on the stock market.

Original story: Expansión (by R. A.)

Translation: Carmel Drake

Hispania Completes Purchase of Barceló’s Remaining Stake in Bay for €172.4M

27 December 2017 – El Economista

Hispania has acquired the 19.5% stake that the Barceló Group still held in the Socimi Bay Hotels & Leisure (BAY) for a total amount of €172.4 million, according to a report filed by the company on Wednesday with Spain’s National Securities and Exchange Commission (CNMV).

As such, the Socimi in which George Soros holds a stake now owns 100% of BAY, given that in October 2015, it acquired 80.5% of the company from Barceló.

As a result of the transaction, the parties have agreed to extinguish the contract between the shareholders relating to BAY and to novate certain terms of the investment contract signed when Hispania first entered BAY’s share capital.

The amount of the transaction also includes: the settlement of an incentive detailed in the contract between the shareholders for an approximate amount of €155 million; the expected dividend to be paid by BAY for 2017 amounting to €10.7 million; as well as certain compensation and/or liquidation payments resulting from the termination of the shareholder contract and the novation of the investment contract.

The total price of the operation shall be made in two payments: a first payment amounting to €80 million, which was paid at the same time as the shares were transferred to Hispania; and a second payment, amounting to €92.4 million, which will be paid on 28 February 2018.

The Socimi has specified that the sale and purchase contract anticipates certain upwards movements in the price, agreed in the case of the subsequent resale by Hispania of the acquired stake and only provided certain circumstances arise.

At the same time, the Barceló Group has notified BAY that it is exercising the sale option that it holds over the Hotel Barceló Marbella for €19 million. That transaction is expected to be executed before 28 February 2018.

Original story: El Economista

Translation: Carmel Drake

Hispania Fights Off Competition from Blackstone to Acquire Alua Hotel Portfolio

21 December 2017 – Eje Prime

Hispania is expanding its portfolio after defeating Blackstone. The Spanish Socimi and US fund were bidding for Alua Hotels’ island portfolio, comprising seven resorts in the Canary and Balearic Islands. The properties in question will now pass into the hands of the company managed by the Azora group, in exchange for the payment of €165 million.

With this acquisition, the company, in which George Soros holds a stake, has almost completed its hotel investment plans, in which the purchase of large hotel complexes on the Spanish islands plays a significant weight, according to a report submitted by Hispania to Spain’s National Securities and Exchange Commission (CNMV).

The assets acquired by the Socimi comprise AluaSoul Palma, AluaSoul Mallorca Resort, AluaSoul Alcudia Bay, AluaSoul Ibizia and AluaSun Torrenova, in the Balearic Islands; and Ambar Beach and Parque San Antonio, in the Canary Islands. The 1,700 rooms in the portfolio will continue to be operated by Alua Hotels.

After formalising this operation, Hispania now owns almost 13,000 rooms across 45 hotels. Currently, the valuation of the company is estimated to amount to more than €2 billion, mostly thanks to its hotel assets, although it also owns office buildings and homes.

Original story: Eje Prime

Translation: Carmel Drake

The Catalan Independence Movement Scuppers the Largest Real Estate Deal of the Year in Spain

1 November 2017

It was expected that Swiss Life would pay roughly €500 million for Hispania’s office assets.  The sector has succumbed to fears of contagion due to the political instability

It was the first major real estate deal thwarted by the independence process. And the operation was for nothing less than 500 million euros, which would presumably have made it the largest transaction of the year. Socimi Hispania has been forced to suspend the sale of its portfolio of offices, which began last March and which, before the summer, had been practically finalised with the insurer Swiss Life. The operation’s death knell was the current market uncertainty generated by the independence movement in Catalonia.

“Given the currently uncertain circumstances in Catalonia, the company has decided to postpone the divestment of assets from the portfolio of branches until the first quarter of 2018,” the firm acknowledged on Tuesday in a statement to the CNMV. The possibility of a cancellation of the sale had already been floated in recent weeks.

The company owned by investor George Soros (16.7% of the capital) intended to sell a portfolio of 24 office blocks. The real estate company valued – in its accounts as of June 30 – these assets at a total of €585 million.

Five of these buildings, with a value calculated at €118 million, are in Barcelona, Europa Press reported. The socimi has chosen to suspend the sale for a few months. The company intends to resume the sales process next year if the situation has improved.

Several sources who are knowledgeable of the process indicate that the deal had been practically closed at the end of the summer, barring some minor details, but that Swiss Life hardened the conditions of the deal due to a lack of clarity regarding the Catalan political situation.

This is a severe blow to the real estate sector, according to several market sources, since Swiss Life has a conservative buyer profile, a type of investor that generally appears when the economy is stabilised, replacing other types of investors, such as opportunistic funds, which have led the recovery of the sector in recent years.

In fact, experts point out that the failed deal can signal a lack of confidence to other institutional, insurance and international pension funds seeking conditions of stability. Deutsche Bank, Axa and Generali are others of this type of buyers who made investments in Spain in recent months. Among the largest deals of the year was the sale of Madrid Xanadú, acquired by the British operator Intu for around €520 million.

Hispania’s offer to sell its portfolio of offices fits within its strategy for the real estate sector, which now has the ultimate goal of becoming focused solely on the hotel industry. The socimis investment plan has 2020 as its horizon, at which point it plans to seek new shareholders interested in the hotel business. The company is managed externally by the Azora Group, led by Concha Osácar and Fernando Gumuzio.

Original Story: El País – A. Simón

Translation: Richard Turner

Hispania’s Manager, Azora, Prepares Hotel Vehicle For Portugal

23 October 2017 – El Confidencial

The largest hotel Socimi in Spain may soon have a replica in Portugal. Azora, the manager of Hispania, is working on the creation of a new vehicle to enter the Portuguese market, on the basis that, over the next few years, it expects to see a repeat there of the recovery that the Spanish real estate market is experiencing at the moment.

The Director-General of Hispania, Cristina García-Peri, revealed Azora’s plans at the Barcelona Meeting Point conference, which was held in the Catalan capital last week. “We are looking at the Portuguese holiday market”, said the director, who also highlighted the opportunities that the country’s two major cities, Lisbon and Porto, have to offer.

Sources consulted by El Confidencial confirm that Azora’s strategy is aimed at constituting a new vehicle, given that Hispania’s mandate focuses solely on the Spanish market. As such, the firm is currently making contact with several funds to define the terms of the project.

The example of what Azora has done with Hispania is the best endorsement that the manager can show investors to attract them towards this new proposal, given that the firm founded by Concha Osácar and Fernando Gumuzio considers that the Portuguese market is very similar to the Spanish market and therefore, they already have a wealth of knowledge in terms of both the product and the environment.

Following in Hispania’s footsteps

Created three and a half years ago, Hispania has become the largest owner of hotels in the country in that short space of time, with 36 establishments and more than 10,350 beds. Most of its properties are located in the Canary and Balearic Islands.

Moreover, in the summer, the Socimi acquired a plot of land in Teguise (Lanzarote), where it is going to build a new five-star establishment with 225 rooms, which it will integrate with the existing Occidental Playa and Barceló Lanzarote hotels, to create a mega-resort with 1,033 rooms, the largest in Hispania’s whole portfolio.

Despite the success achieved with its tourist business, in the spring, Azora made a proposal to the Socimi’s shareholders, led by George Soros, to activate the divestment period for the vehicle and whereby renounce the option of converting it into a permanent entity.

This decision has meant that the company has activated a formal process to sell its entire office portfolio. To this end, it has been holding exclusive negotiations with the insurance company Swiss Life for several months now and it has also started to divest its 754 residential properties, one by one.

In terms of Hispania’s hotels, which account for the bulk of its portfolio, it has until December 2020. Until then, the Socimi will focus on continuing to acquire assets, as well as improving and actively managing the ones it already owns to allow it to increase its rate of return on these investments from 10% to 12%.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Sareb Appoints Azora To Manage Its First Socimi, Témpore Properties

21 September 2017 – El Confidencial

Sareb has chosen one of the largest experts in the management of rental housing in Spain to commandeer its first Socimi. The expert in question is Azora, an independent firm with almost 15 years experience and more than €3,000 million of assets under management. Azora’s key milestones include the creation and management of Hispania, one of the largest Socimis in Spain.

After organising a competitive process between several candidates, the entity chaired by Jaime Echegoyen (pictured above), has chosen the management firm founded by Concha Osácar and Fernando Gumuzio to take the reins at Témpore Properties, the name that Sareb has given to its first Socimi. The appointment is still pending the final approvals.

Sareb’s new vehicle will own around 1,500 rental properties, worth almost €200 million. The entity wants to place the assets, which have been valuedby CBRE, on the market before the end of the year.

Having engaged Renta 4 as the registered advisor and Clifford Chance as legal counsel, the next major challenge for Sareb will be to convince the greatest possible number of investors about the virtues of the Socimi, given that, although its market debut will be made on the MAB – the Alternative Investment Market – Echegoyen’s aim is to sell the highest percentage of share capital possible.

In this way, Azora will play an important role, given that over the course of its history, it has managed more than €1,700 million from institutional investors through its five funds, as well as having a cover letter from Hispania, whose illustrious shareholders include none other than George Soros.

Nevertheless, in recent times, the management firm has been focusing on the divestment of the bulk of these vehicles, given that they are now reaching maturity.

In fact, this week, the firm closed the sale of Resa, the largest student hall of residence company in Continental Europe, which formed part of Lazora, a vehicle with which the manager started when it focused exclusively on rental homes.

Moreover, since the spring, the firm has been actively working on the liquidation of the fund Azora Europa 1 as well as of the Socimi Hispania, which is on the verge on selling its entire office portfolio to the insurance firm Swiss Life.

Azora is also behind the sale of 3,000 homes in the Community of Madrid to Goldman Sachs, which now comprise the company Encasa Cibeles, and of the purchase of four Consell Comarcal de Barcelonés developments from several Catalan town halls, assets that it has just debuted on the MAB through its Socimi Colón Viviendas.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Hispania Sells Its Portfolio of Offices to Swiss Life

9 August 2017

 

The Ázcarraga 3 building in the Chamartín district (Madrid)

The Spanish REIT, which counts George Soros as an investor, is close to finalizing the sale of about twenty office buildings to focus on its hotel business.

Everything is ready for the sale of Hispania’s portfolio of offices, one of the most anticipated deals in the real estate market. Absent any last-minute hiccups, the Spanish REIT, which counts George Soros as an investor, will sign an agreement with Swiss Life for the sale of some twenty office buildings for about 510 million euros, according to EXPANSIÓN’s sources.

Hispania’s office portfolio is distributed between Madrid, where 16 buildings are located, as well as two offices in two buildings and one asset under development, Barcelona and Málaga, with five and one building each.

The real estate consultants CBRE, JLL and the law firm Freshfields have advised Hispania, while Swiss Life has been advised by Aguirre Newman and Garrigues.  The deal is expected to be finalized in the coming weeks, or even days.

According to the latest information provided by Hispania, the Spanish REIT’s portfolio of offices had a value of 584 million euros at the end of the first semester of 2017. This assessment included the Aurelio Menéndez building, sold in June to a family office for 37.5 million euros. Hispania plans on keeping its commitment to execute pending works on the asset, which it expects to complete in November, at which time the sale of the building will be finalized.

Not including Aurelio Menéndez, Hispania has offices with almost 182,000 square meters of gross leasable area, of which almost 21,300 meters are in Madrid’s financial district. It also has another 116,852 square meters in office buildings in the prime secondary zone. Hispania has 39,506 square meters in Barcelona and 4,288 square meters in Malaga.

According to the latest information published by Hispania, the occupancy level in these buildings is 84%, with an average monthly income of 13.8 euros per square meter.

Hispania acknowledged this morning in a relevant fact to the market that is negotiating the sale of office assets and added that it maintains contacts with, among others, Swiss Life, although it added that it has not yet reached any agreement on the matter.

Divestment

With this operation, the company managed by the Azora Group goes one step further in its strategy to divest itself of residential and office assets to focus on the hotel business, in which it will continue to invest before putting those assets up for sale as well.

In this regard, in February Hispania announced its intention to continue with its initial objective of selling all its assets, individually, in portfolios or through a sale or change of control in the company, before March 2020, six years after the company was floated. Under this strategy, shareholders decided to extend the investment period until 31 December.

In addition to George Soros, who controls 16.7% of the REIT through Soros Fund Management, Fidelity Management and Research (7%), Tamerlane (6%), BW Gestão de Investimentos (3,6%), BlackRock (3.3%) and AXA Investments (3%) are also investors.

Original Story: Expansion – R. Arroyo / S. Saiz

Translation: Richard Turner