Tag: German bad bank

Oaktree Expresses Interest in Buying Sabadell’s Real Estate Arm

6 July 2018 – Cinco Días

The Spanish house building business is continuing to spark interest amongst international private equity firms. This was demonstrated yet again by the recent agreement signed between the fund Oaktree Capital and Solvia – the real estate arm of Banco Sabadell–, which created a joint venture to purchase land from Iberdrola, in a deal that may be extended in the future into an even greater alliance.

In fact, the US fund has just informed Sabadell of its interest in acquiring a majority stake in its property development business, in a company called Solvia Desarrollos Inmobiliarios, according to two sources in the financial sector. In this way, it would take another step forward in its strategy to position itself in the house building business.

For the time being, after closing the agreement in June to create the real estate joint venture, contact has now been made between the parties with a view to a possible purchase. Oaktree is expected to specify the details of its bid over the next few days and whereby the sales process would begin. Sources at the bank deny knowledge of any negotiations or offers at the moment. Meanwhile, Oaktree declined to make any comment.

Solvia is currently the parent company of Sabadell’s real estate business, which is divided into three arms. On the one hand, Solvia operates as a servicer to the bank; it also has a real estate agency division; and, finally, it has a property development arm, in the form of Solvia Desarrollos Inmobiliarios, which is the part that Oaktree is interested in, to develop land for own and third-party projects and to build homes.

Last month, Solvia and Oaktree announced that they have created a joint venture in which the fund owns 80% of the capital and Sabadell, through its subsidiary Bitarte, controls the rest. This company, which will be dedicated to identifying, acquiring, developing and marketing plots of residential land in Spain, received approval from the European Competition Authorities in June. The joint company’s first operation is the purchase of land belonging to Iberdrola, for almost €100 million, on which to build homes in several places across Spain.

But financial sources explain that Oaktree wants to deepen its commitment to house building and, for this reason, wants to purchase Solvia’s property development business from Sabadell. It is not known whether the bank is open to bids from the fund or not.

Oaktree’s intention through this corporate move is, primarily, to acquire a team with experience in the house building sector in Spain, according to the same sources. The US firm, meanwhile, has huge financial capacity and also owns several important real estate assets in Spain, acquired from financial institutions such as Bankia, the German bad bank and Sareb. In Spain, it has a subsidiary Sabal, led by Eduardo Bóveda, to manage those bank portfolios.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Starwood Wins the Bid to Acquire the San Fernando Business Park for €120M

22 May 2018 – Eje Prime

Starwood Capital has sealed the purchase of a new asset in Madrid. The private equity fund has reached an agreement with Oaktree to acquire the San Fernando Business Park for €120 million. The operation, according to market sources, is pending the finishing touches, but technically has now been completed.

In this way, Starwood has broken into the Spanish office market by outbidding other international investors, such as the PE house Carlyle, which had expressed interest in the asset, according to Expansión.

San Fernando Business Park ended up in the hands of Oaktree three years ago. It was then that the US fund purchased a portfolio of unpaid debt worth €750 million from the German bad bank FMS Wertmanagement (FMS WM).

That portfolio included, in addition to this office complex, luxury hotels such as the Arts Hotel in Barcelona and another hotel in Cascais (Portugal); five shopping centres, including the Madrilenian Plaza Éboli and Heron City Las Rozas; several storeroom buildings; and some residential and industrial assets.

Original story: Eje Prime 

Translation: Carmel Drake

The ‘German Bad Bank’ Acquires Gran Vía, 68

18 May 2015 – El Confidencial

The building located at number 68 Gran Via, which used to belong to Carlyle, has a new owner: the ‘German bad bank’, FMS Wertmanagement, the equivalent of Sareb in Spain.

The building located at number 68 on the coveted avenue in Madrid has a new owner. FMS Wertmanagement, more commonly known as the ‘German bad bank’ – the equivalent of Sareb in Spain – has acquired the property, which was the first acquisition made by the private equity firm Carlyle in Spain at the end of 2005.

This asset used to belong to the real estate fund Carlyle Europe Real Estate Partners II (CEREP), which filed for bankruptcy in March 2012. It is estimated that the fund paid €45 million and so had to obtain a loan from the German entity Hypo Real Estate to finance the transaction – Hypo was taken over by the German Government in 2009 – and the debt has ended up in the hands of FMS. According to sources close to the transaction, this asset, which is currently worth around €21-23 million, has had lots of suitors.

In fact, in addition to FMS, the holding company that owns the investments of the businessman Manuel Jove (Inveravante) and the US fund, Autonomy, which has an opportunistic profile and arrived in Spain in 2013, both submitted bids.

In the context of the bankruptcy, the sale has been conducted by the bankruptcy administrator; and all indications suggest that FMS could have acquired the building for the amount of the debt, around €40 million. The sources consulted by this newspaper say that the German bad bank intends to seek a buyer for the property, at a time when the Spanish real estate market has taken off (again), and in an area (Madrid’s Gran Via) that has sparked so much interest and activity over the last year and a half.

Carlyle’s real estate ‘troubles’ in Spain

We have to go back almost ten years to see Carlyle’s first foray into the real estate sector in our country. At the end of 2005, the firm bought this property, which dates back to the beginning of the 20th century, from the Urconsa group – it was formerly owned by La Unión and Fénix Español – with a view to renovating it and turning it into luxury apartments. With a surface area of 7,600 m2, comprising three retail floors and eleven additional floors for residential use, it is totally empty at the moment.

Carlyle had intended to build 75 luxury apartments, preserving the original façade of the iconic building in the centre of Madrid. Its commitment to the real estate sector in Spain was clear and it expected to have the renovation completed within two years. However, its plans took a turn for the worse.

The Town Hall of Madrid did not grant the construction licence until April 2008, according to Cinco Días, and by 31 October 2010, only one of the commercial premises was leased out.

“We are delighted to have made our first investment in Spain. The residential market in Madrid is buoyant and we think that there will be strong demand for these new apartments in a building as impressive as this. We hope that this will be the first of many investments in Spain”, said Rachel Lupiani, Director of Carlyle Real Estate, after the deal was announced. She was responsible for closing the transaction, which was advised by the consultancy firm CB Richard Ellis and the law firm Clifford Chance.

In Spain, Carlyle also acquired land on Calle Alcalá in Madrid and the Telefónica headquarters in Barcelona – for which it paid €219 million in 2007.

The German bad bank is now looking for a buyer

The German bad bank, which operates in a similar way to Sareb, was created in 2010 with assets from the nationalised bank Hypo Real Estate. These included almost €900 million of non-performing assets and loans, including the debt relating to Gran Via, 68.

Just like in the case of Sareb in Spain, FMS is now looking for buyers for many of its non-performing assets and loans. In fact, at the beginning of this month, it sold the Gaudí debt package, which it had also inherited form the nationalised Hypo Real Estate, to the Californian fund Oaktree. That portfolio included debt relating to the Hotel Arts de Barcelona, a five-star property managed by Ritz-Cartlon, as well as another luxury hotel located in the Portuguese town of Cascais, five shopping centres, four office buildings, 17 storeooms and other residential and industrial assets.

Original story: El Confidencial (by E. Sanz and R. Ugalde)

Translation: Carmel Drake