Montebalito’s Turnover Fell by 52% in 2018 & its Losses Amounted to -€2M

28 February 2019 – Eje Prime

Montebalito suffered in 2018. The group recorded losses amounting to €2 million last year, compared with the profit of €948,000 that it obtained in 2017. In parallel, the company’s turnover dropped by 52% to €7 million, according to reports filed by the company with Spain’s National Securities and Market Commission (CNMV).

The decrease in turnover occurred because there were no sales of singular assets in 2018 like there were in 2017, according to Montebalito. “If we strip out the effect of those sales, the group’s turnover rose by 32% YoY, driven primarily by an increase in the sales of developments located in Brazil and Chile”, he said.

Montebalito’s gross asset value (GAV) amounted to €135.7 million at the end of 2018, compared with €144.2 million last year. Similarly, the company has said that the total investment that it has to make for all of its projects in progress amounts to €32 million.

The firm’s investment volume in 2018 was €5.8 million, which represents a 51% increase compared to the previous year. That figure was justified by the acquisition of three plots: one in Madrid, one in Collado Villalba and one in Sevilla, in Isla de la Cartuja, for the construction of a hotel with 92 rooms.

Original story: Eje Prime 

Translation: Carmel Drake

Vía Célere Completes its Merger with Aelca to Create a Giant Firm with Land for 25,000 Homes

16 January 2019 – El Confidencial

Vía Célere has completed the integration of the real estate assets (land and property developments) of Aelca, to become one of the largest property developers in Spain with a gross asset volume (GAV) of €2.2 billion and a land bank for the construction of 25,000 homes. From today, the company has the capacity to deliver an estimated 2,000 homes in 2019 and 5,000 homes in 2021.

To put that into context, Metrovacesa owns land for the construction of 38,000 homes, has a GAV of €2.6 billion, and so it is still the largest property developer in Spain. Meanwhile, Aedas has land for 14,521 homes and a GAV of €1.6 billion, whilst Neinor, with a GAV of €1.7 billion, has land for another 13,500 units.

Following the operation, Värde is now the owner of 75% of the shares in Vía Célere, whilst the other minority shareholders (Marathon, Attestor, BAML, Barclays, DB and JPM) own the remaining 25% stake. The company is also strengthening the diversification of its asset portfolio with 38% in Madrid, 20% in Málaga, 11% in Barcelona, 9% in Sevilla, 5% in Valencia and 17% in other provinces across the rest of Spain.

The purchase of Aelca by Vía Célere was made with one clear objective in mind: to grow the company so as to be able to list it on the stock market, given that the transaction has allowed the company chaired by Juan Antonio Gómez-Pintado (pictured above) to incorporate assets worth €1.3 billion (…).

Future stock market debut?

Since then, the rumours regarding the possible stock market debut of Vía Célere have been constant (…). In fact, it was initially scheduled for the spring of 2018, but it was always known that the property developer needed to be larger to be able to compete in the market with Neinor, Metrovacesa and Aedas (…).

Original story: El Confidencial 

Translation: Carmel Drake

Blackstone Negotiates Sale of the Ilunion Portfolio with Zurich for c. €100M

13 November 2018 – Cinco Días

The real estate giant Blackstone is pushing ahead with several divestments from its recently acquired Socimi Hispania. The US fund is negotiating with the insurance company Zurich regarding the sale of a portfolio of office buildings, which are occupied by Ilunion as a tenant, according to confirmation from sources in the real estate sector. The price of the operation will exceed €100 million.

Blackstone acquired Hispania through a takeover launched in the spring, which valued the Socimi at almost €2 billion. The US fund completed the operation because it was primarily interested in the company’s hotel assets, given that it owned 13,100 rooms across 46 hotels, the largest owner in the country in that segment. The US giant wants to create a hotel platform in Spain and, in fact, has already ceded the management of those establishments to its company HI Partners, the manager of other hotels purchased from Sabadell.

In total, Hispania’s portfolio has a gross asset value (GAV) of €2.811 billion. The most residual part, Hispania’s housing, is already being managed by another company owned by the fund, Fidere. And for the office component, the strategy is to divest the assets.

When Blackstone acquired Hispania, it broke off an agreement that the Socimi had with the British fund Tristan Capital Partners to divest the entire office portfolio for more than €500 million. That was the second time that the sale had been thwarted, previously Swiss Life was the buyer, in that case at the end of the summer in 2017, when the uncertainty surrounding the Catalan sovereignty process meant that the conditions of the insurance company were more demanding.

By contrast, the strategy now is to put this portfolio up for sale in a piecemeal fashion. The most advanced process relates to four properties in Madrid, which are all occupied by Ilunion, the holding company of the ONCE, as the tenant.

The largest property is the Torre 30 Building, appraised at €50 million at the end of 2017. Located next to the M-30 by the junction with the A-2, it was constructed in 1968, renovated in 2006 and has a surface area of 11,417 m2.

The sale also includes the Mizar Building, a property next to Torre 30, where in addition to Ilunion, Eysa and Paramount also have their headquarters, according to Hispania’s public documents, and which is worth €27.4 million. They are joined by the Pechuán building in Plaza Sagrado Corazón de Jesús next to Príncipe de Vergara, worth €19 million. Finally, the portfolio contains a property on Calle Comandante Azcárraga in the Pio XII area, worth €10.1 million.

Those four buildings had a combined appraisal value of €106.5 million as at 31 December 2017. Their current value is unknown but it is expected to be higher given that in May, Hispania revalued its assets upwards by 5.7% on average.

The rest of the office portfolio is not officially up for sale, but given that they are not strategic assets for Blackstone, the expectation is that it will receive offers for them, as a group or in different sub-portfolios.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Testa’s Sales Soar But Profits Fall Due to Extraordinary Expenses

7 September 2018 – Expansión

Testa – the residential rental Socimi – has closed the first quarter of the year with a net profit of €8.94 million, down by 81% YoY, due to extraordinary expenses, such as the €107 million it paid to Merlin for the cancellation of management contracts. Excluding those extraordinary items, and others such as variations in asset values, the funds generated from operations (FFO) – equivalent to the firm’s operating cash flow or the recurring profit – increased by 60% to €19.58 million.

In terms of gross revenues from rental income, the company generated €36.98 million, which represented an increase of 69% with respect to the same period as last year. That increase was due to an improvement in the occupancy rate, growth in the number of homes in the portfolio and an improvement in annualised rents (GRI). On a like-for-like basis, revenues grew by 9%. Net rental income, after deducting direct operating costs, amounted to €28.47 million, up by 75%.

Testa Residencial, which had initially scheduled its stock market debut for June, decided to delay its listing plans for the main stock exchange and debut on the Alternative Investment Market (MAB) instead. The company, in which Santander (36.9%), BBVA (25.2%), Acciona (20%) and Merlin Properties (17%) all hold stakes, owns 10,615 homes with a gross asset value (GAV) of €2.637 billion. Moreover, it recently agreed the purchase of a group of 549 rental homes in the province of Madrid for €66.8 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Metrovacesa Reaches Low with €39 Million in Losses and Begins Recovery

23 March 2018

In 2018, the real estate company plans to launch between 3,500 and 4,000 units, while delivering 520.

Metrovacesa, a real estate developer controlled by Santander and BBVA, announced today that it recorded losses of 39 million euros in 2017 with revenues of 28 million euros and a gross margin of 25%, in line with its reporting during its re-listing on the stock exchange.

The company, which returned to the stock exchange on February 6, obtained a negative gross operating result (Ebitda) of 7 million euros in its launch phase.

However, Metrovacesa has highlighted the group’s “solid” financial position, with zero net debt and a long-term loan to value target of less than 25%, which will allow the implementation of its business plan.

The company has highlighted that it is “firmly” moving forward with its plans to meet target deliveries of between 4,500 and 5,000 homes by 2021.

In 2017, the sales of residential units experienced “solid” growth, especially in the second semester.

The company pre-sold 512 homes in the year as a whole, closing the period with an accumulated pre-sale book of 135 million euros (equivalent to 541 units). The number of deliveries made during 2017 reached 110.

As of December 31, 2017, the company had 48 active developments (2,141 residential units), of which 21 (955 residential units) are already under construction.

Regarding its service industry business, Metrovacesa obtained 2.6 million euros last year from the sale of land and has preliminary agreements for another 30 million euros.

The firm has also highlighted the sale of a turnkey project involving an office in Madrid located in Josefa Valcárcel for 30 million euros to Axiare Patrimonio.

By 2018, Metrovacesa expects the launch of between 3,500 and 4,000 units and the delivery of 520. Regarding the progress of sales, the developer’s projects have a high level of visibility for deliveries this year, with 70% already sold.

In addition, all units that have been targeted for delivery are in the construction phase.

In 2019, the company plans to deliver 700 units, 33% of which have already been sold and 72% are in the construction phase.

Metrovacesa practices active management of the land undergoing development, which has meant that, in the last quarter of 2017, the company managed to increase its ready-to-build land portfolio by 76%, in terms of gross asset value (GAV).

With regard to the service industry business, Metrovacesa aims to launch more than 36,000 square meters in the current year.

Original Story: La Información

Photo: Wikimedia Commons

Translation: Richard Turner

Aedas Recorded Losses of €40M in 2017 Mainly Due to IPO Costs

28 February 2018 – Expansión

Aedas, the property developer controlled by Castlelake, which debuted on the stock market in October, closed last year with net losses of €40 million, due primarily to non-recurring expenses relating to its IPO process, which resulted in a negative impact of €31.55 million.

That result also includes a cost of €26.2 million associated with the director incentive plan, which was paid for in full by Castlelake, and which is reflected in personnel expenses.

The property developer highlights that, excluding extraordinary operations and expenses, its losses for the year as a whole amounted to €8.55 million. Of that amount, €8.27 million corresponded to the first half of the year, “an amount that was already reported and discounted by investors from the price of the stock market debut”, says the company. By contrast, the firm closed the second half of the year with losses of €280,000 and an EBITDA of €3.3 million.

Aedas, which was created in July 2016 and which started to market its first homes in March 2017, reported revenues of €38.6 million in 2017. The gross value of its assets (GAV) amounted to €1.475 billion, which represents an increase of 7.2% with respect to its IPO valuation.

The property developer indicated that from 2018 onwards, it will start to register its first “significant” revenues through the delivery of its first large batch of homes and said that the 915 commercial sales that it has closed represent gross revenues of €310 million.

Original story: Expansión (by R. Arroyo and J. Díaz)

Translation: Carmel Drake

Merlin’s Profit Rose By 47% In Q1 To €66.6M

16 May 2017 – Expansión

The real estate company, which merged with Metrovacesa last year, recorded total revenues of €119.9 million in Q1, up by 52.9% compared to last year, the majority of which came from rental income.

Merlin Properties, in which Santander and BBVA hold stakes, generated a net profit of €66.6 million between January and March, up by 47.1% compared to the same period last year.

The revenues of the real estate group, the largest in Spain and one of the largest in Europe, following its integration of Metrovacesa, registered total revenues of €119.9 million, which represented an increase of 52.9%.

Most of that figure corresponded to rental income, with gross rental revenues of €115.3 million, up by 50.1%. In turn, of the total rental revenues, €53.4 million corresponded to offices, €22.6 million to shopping centres, €26.1 million to high street retail premises, and €8.9 million to logistics assets. Merlin’s EBITDA improved by 47.5% to €99.4 million, and it recorded a margin of 82.9%.

At the end of the first quarter, Merlin’s gross asset value (GAV) amounted to €10,026 million. The group invested €206 million between January and March, mostly on the acquisition of new assets (€188.7 million). Its net financial debt amounted to €4,570 million.

Original story: Expansión

Translation: Carmel Drake

Neinver & Tiaa Acquire Six New Outlet Centres

24 November 2016 – Expansión

The Spanish real estate firm Neinver and the financial services firm Tiaa have signed an agreement to acquire six outlet centres in Europe, three of which are located in Spain.

Through their joint company, the firms have acquired a block of six outlets which Neinver has been managing and whose value amounts to €700 million. The funds belonged to the fund Irus European Retail Property Fund, in which Neinver holds a 25% stake.

The overseas outlets are located in Poland (Poznan) and Italy, specifically Castel Guelfo, close to Bolonia, and Vicolungo, located in the vicinity of Milan and Turin.

In Spain, the company has acquired Neinver’s three large outlets, located in San Sebastián de los Reyes, Las Rozas and Getafe. In addition, the alliance between Neinver and Tiaa has also finalised the purchase of the Nassica shopping centre, which they have purchased from KKR for €140 million.

Once this latest operation has been signed, which is expected to happen during the first quarter of 2017, the joint venture will have a gross asset value (GAV) of more than €1,200 million, making it one of the most important investors in commercial assets in the country.

At the beginning of 2015, Neinver and TH Real Estate (a subsidiary of Tiaa) signed a strategic alliance, in which they each hold a 50% stake, to create a leading platform for outlet centres in Europe. This joint company already owns three centres in Poland and one in France, as well as the Viladecans The Style Outlet, which opened recently in Barcelona.

Original story: Expansión (by R.Ruiz)

Translation: Carmel Drake

Acciona Holds Negotiations With Merlin To Add 850 Homes To Testa

28 October 2016 – El Confidencial

The most important real estate operation in Spain so far this year may take another significant step forward within the next few months. To this end, Acciona is holding talks with Merlin to analyse the possibility of joining forces with the real estate giant by selling the portfolio of rental homes that the group owned by the Entrecanales family holds in its portfolio, including hundreds of properties in the elite Madrilenian neighbourhood of Parque del Conde Orgaz.

Although the conversations are still in the negotiation phase, the two parties have been holding meetings since the Socimi, led by Ismael Clemente, reached an agreement with Metrovacesa to merge their entities into two large investment vehicles: Merlin itself, which has now taken control of the offices, hotels and shopping centres; and its subsidiary Testa, which will focus on rental homes.

Acciona has placed its focus on this second Socimi, given that the new Testa is set to become the largest residential property owner in Spain (…) .

Against the advantage of the two real estate giants, Acciona is able to bring quality to the table, given that it has one of the most sought-after rental home portfolios in Spain. The infrastructure group owns around 850 homes, with occupancy rates of more than 97%, many of which are “high standing” properties located in Conde Orgaz.

In the same upmarket neighbourhood of Madrid, Acciona also used to own 50% of the Arturo Soria Shopping Centre, but it has already agreed to sell that stake to Merlin, a first movement of understanding that comes a year after the Socimi acquired the other 50% from Joaquín Molpeceres.

At that point, Acciona was analysing the option of listing its real estate division on the stock market, but it decided to suspend that operation last spring after José Manuel Entrecanales, Chairman of the group, acknowledged that “our objective is still to deleverage our business by selling our assets or debuting on the stock market. We will wait for a reasonable time or we will pursue a more feasible alternative”. And he may have found that in the form of Testa.

As we have already seen with the merger of Merlin and Metrovacesa, the inclusion of Acciona into the project would turn it into one of Testa’s main shareholders, alongside Merlin and the financial entities Santander, BBVA and Popular, which were the main shareholders of Metrovacesa.

Both the bank chaired by Ana Patricia Botín, as well as the bank led by Francisco González have decided to go one step further and sell more than 5,000 homes to the new residential subsidiary, a move that will allow Testa to increase its portfolio from its current base of 4,900 to 9,000. If Acciona also ends up joining the project, the Socimi will own around 10,000 homes.

The power of Acciona’s real estate subsidiary

Last year, Acciona Inmobiliaria segregated some of its assets into Acciona Real Estate, the subsidiary in which it grouped together all of its assets relating to the development and management of rental properties, whose gross value (GAV) stood at €218.48 million, as well as its stakes in the companies Urbanizadora El Coto, famous for having developed the majority of Conde Orgaz, Torrelugano and Valgrand 6.

The company also owns 16 plots of land and plans to develop 1,146 homes on 14 of them, according to its latest annual accounts, corresponding to 2015. On the others, it is planning to build an office building in Barcelona and extend Hotel Estrella de Mar, which it owns in Marbella and which is operated by the chain Vincci. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Merlin & Metrovacesa Will Approve Their Merger On 15 Sept

12 August 2016 – Expansión

Metrovacesa and Merlin have both convened General Shareholders’ Meetings on 15 September 2016, in order to approve their merger. Before the operation, the companies will distribute a combined dividend amounting to €116 million in total. Specifically, Merlin will distribute a maximum of €66 million to its shareholders, whilst Metrovacesa will pay out €50 million.

The main shareholder of Metrovacesa is Banco Santander, with a 70% stake, followed by BBVA, with 20% and Banco Popular, with almost 10%.

The agreement between Merlin and Metrovacesa includes a penalty of €75 million, plus the reimbursement of costs incurred, in the event that their respective General Shareholders’ Meetings do not approve the operation.

In addition to approval from the shareholders, the merger requires the green light from the Competition authorities. The companies notified the CNMC about the deal at the end of July and, according to the agreed timetable, the transaction will be completed in the fourth quarter.

The merger will give rise to a new real estate giant in the tertiary sector – offices, shopping centres, logistics warehouses and hotels – with a gross asset value (GAV) of €9,300 million and annual gross rental income of €450 million.

In addition, the operation will involve the grouping together of rental homes from Metrovacesa and Testa – owned by Merlin. The combination of the residential businesses of both groups will include more than 4,700 homes, with a GAV of €979 million. Testa Residencial will take on bank debt amounting to €250 million.

It is expected that Merlin will render advisory, planning and strategic management services to Testa Residential for a period of 30 years from the operation close, for a cost of €7.7 million p.a., which may be increased by 1.5% p.a. and which may be paid for through the capitalisation of shares.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake