Grupo Lar to Create New Investment Vehicle With €1 Billion in AUMs

24 October 2019 – The developer Grupo Lar is studying whether to incorporate a new socimi for its rental housing business. The new investment vehicle would have more than €1 billion in assets, including more than 5,000 homes. Yesterday, Grupo Lar announced that it would start work on a project to build 66 rental homes in Valladolid, in an initial investment of nine million euros.

The development is part of the firm’s initial strategic plan to build 500 rental homes. Grupo Lar also has two other projects under development in Parla and Móstoles.

The company is studying the best investment structure for the new vehicle, potentially creating a new socimi.

Original Story: Cinco Días – Alfonso Simón Ruiz

Adaptation/Translation: Richard D. K. Turner

Vukile Looking to Launch Takeover of Lar España

10 September 2019

The South African firm, Vukile Property, is looking to take a stake in Socimi Lar España, a major investor in shopping centres, with 16 assets valued at 1.462 billion euros.

Vukile, which operates in Spain through Castellana Properties, has already arranged financing for the deal. UBS will represent the firm, while Lar España has hired Lazard.

Lar España was the first socimi to list on the continuous market and currently has a capitalisation of €615 million, a 36% discount to net asset value. Lar España’s largest shareholders, Pimco and Grupo Lar, are expected to insist on a 30% premium to the share price. The socimi ended the first semester with sales of €39 million and a net profit of 29 million euros.

Lar España has been focusing its investments on shopping centres, selling the office buildings it had in its portfolio, as well as logistic assets. In the last 18 months, the firm has raised €425 million, including the €120-million sale of a logistics portfolio to Blackstone and the €190-million sale of four office buildings in Madrid and Barcelona.

Lar España currently has fourteen assets in its portfolio, with a gross rental area of ​​580,000 m2 and a market value of €1.462 billion (June 30, 2019).

Original Story: Expansión – Rebeca Arroyo / Nicolás Sarriés.

Adaptation/Translation: Richard D. K. Turner

Realia to Invest €16M in the Construction of 85 Flats in Tres Cantos (Madrid)

9 May 2019 – Idealista

The property developer Realia has announced that it is launching a new line of business dedicated to the rental of residential homes. In this way, it is following in the footsteps of its rivals in the sector, such as Grupo Lar, amongst others.

The group led by the Mexican magnate Carlos Slim has purchased a plot in Tres Cantos (Madrid), where it is going to invest €16 million in the construction of 85 homes.

As at the end of March 2019, the company had a stock of 546 units (homes, premises and offices) that were either finished or in progress and pending delivery. In the residential sector, it had three developments underway (in Palma de Mallorca, Sabadell and Alcalá de Henares) plus a construction licence to start work on 45 units in Valdebebas (Madrid).

Realia’s land portfolio spans more than 5.7 million m2 and the company registered a net profit of €5.02 million during Q1 2019, up by 18.1% YoY.

Original story: Idealista 

Translation/Summary: Carmel Drake

Grupo Lar & Centerbridge Join Forces to Build Logistics Assets

10 March 2019 – Expansión

The Spanish real estate firm Grupo Lar has joined forces with the US private equity company Centerbridge to promote a portfolio of latest generation logistics warehouses.

The assets in the portfolio will primarily be located in Madrid and Barcelona, but opportunities will also be sought in Valencia, Málaga, Sevilla and the Pais Vasco.

The joint venture between the two firms will compete with another partnership launched in 2017 to invest in the logistics sector between the fund manager CBRE Global Investors and Montepino.

Original story: Expansión

Translation: Carmel Drake

Lar España’s Profits Fell by 4.6% in 2018 to €129.3M

1 March 2019 – Expansión

Lar España recorded a net profit of €129.3 million in 2018, which represented a decrease of 4.6% with respect to the previous year, whilst its revenues grew by 0.3% to €77.8 million.

According to explanations provided by the company, this result includes a charge of €17.9 million in the first quarter, to comply with the Grupo Lar management contract, as it achieved divestments of €100 million.

Without that negative effect, which is only going to be recorded in 2018 (…), the resulted would have amounted to €155.7 million, 7% more than in the previous year. Meanwhile, the EBITDA amounted to €55 million, up by 0.3%.

The firm completed divestments amounting to €272.5 million in 2018 and invested €75.6 million in the renovation of its asset portfolio.

In terms of dividends, the sale of the luxury homes at Lagasca 99 (Madrid) will allow the company to increase its remuneration to shareholders from €0.49 in 2017 to €0.80 in 2018, a rise of 63.2%.

At the end of 2018, the firm’s financial debt amounted to €621.7 million. Last year, its assets appreciated in value by 12.1% (…).

Original story: Expansión

Translation: Carmel Drake

Neinor & Vía Célere Lead the Ranking of Forecast House Deliveries for 2019

28 January 2019 – Cinco Días

Year after year, the new major players in the house construction sector are seeing the numbers in their growth plans increase. During 2019, the largest property developers created since 2015, and some of those reborn from the ashes during this latest upwards cycle, are expected to approach their cruising speed, above all, the listed companies Neinor, Aedas and Metrovacesa, which have been called to lead the residential construction sector together with Vía Célere. Even so, the sector is still very fragmented with lots of small companies.

Neinor Homes and Vía Célere have become the two entities with the largest number of home deliveries this year. In both cases, 2,000 clients will receive the keys to their homes, according to figures provided to Cinco Días by around twenty property developers. In these forecasts, the companies have detailed three concepts for their plans for 2019: homes that they will launch onto the market, homes that they will start work on and forecast deliveries.

Neinor Homes, created in 2015, and led by Juan Velayos (…) expects to start work on 3,000 homes this year, coming close to the cruising speed that it defined during its IPO, and it will start to market another 2,000 units.

Meanwhile, Vía Célere, controlled by the US fund Värde Partners, is in the middle of integrating the assets of Aelca, the other property developer owned by Värde, which has now emptied its portfolio (…). It is the only one of the large players that is not yet listed on the stock market; its plans in that regard were postponed last year.

The listed firm Aedas, also created in 2017 with land from another US fund, in that case, Castlelake, is also perceiving an upwards turn in its numbers. This year, it will hand over 1,055 homes, start marketing 2,500 homes and start building 3,000 homes, just two years after first appearing on the stage, with David Martínez as its CEO.

Meanwhile, Metrovacesa, the other large listed company, controlled by Santander (and in which BBVA holds a minority stake), clearly leads the business plans, with up to 4,500 homes to be newly marketed and whose construction will be launched. This one-hundred-year-old real estate company, which was cleaned up by the banks following the crisis, launched its new project in 2017 with Jorge Pérez de Leza, from Grupo Lar, as the CEO.

In terms of those entities backed by funds, the rescued firm Habitat also stands out, reactivated last year by Bain Capital, and which is planning to market 3,000 homes this year. Similarly, Cerberus took control of Inmoglacier in 2017 (…). That firm declined to provide its forecasts to this newspaper, but it is also set to play a significant role, given that it has become one of the real estate arms of the US fund, one of the most active in the purchase of assets from the banks and which also owns Haya Real Estate as its servicer.

The group of twenty-odd companies consulted will hand over almost 16,000 homes this year, will start work on 34,000 units and will begin marketing another 30,000 properties. These figures reflect the enormous fragmentation in the sector, which in the last 12 months has started 103,000 homes in total, according to figures from the Ministry of Development as at October 2018.

Small specialist property developers still carry a lot of weight, unlike in other countries where large players exist. Moreover, even though the rate of residential construction has taken off since 2014, it is still well below the peak of 2006 when 865,000 building permits were granted.

In terms of the new players also boosted by the international funds, they include other developers with a high rate of house sales: AQ Acentor (owned by the German fund Aquila), which is going to put 1,700 homes up for sale; Kronos Homes (backed by several European and US investors), which will market another 1,600 homes; and ASG Homes (backed by the British firm ActivumSG), which plans to add another 1,000 homes.

In terms of the survivors of the crisis, Amenabar stands out, the Gipuzkoan company, which expects to start work on 3,608 homes next year and to hand over 1,245 units. Another of the stalwarts is the Madrilenian firm Pryconsa, owned by the Colomer family, which has already reached a high number in terms of house starts: 1,285. In more modest terms, other important firms include the Basque entity Inbisa and the new entity Áurea Homes, the residential subsidiary of the Navarran construction group ACR (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Grupo Lar Purchases 36,000 m2 of Logistics Land in Valencia

17 December 2018 – Eje Prime

Grupo Lar is starting to expand in the Spanish logistics sector. The company has completed the purchase of 36,000 m2 of logistics land in the municipality of Quart de Poblet, in Valencia with the aim of constructing two warehouses and an additional block of offices.

The two logistics centres will have surface areas of 5,000 m2 and 17,000 m2, respectively. Meanwhile, the office building will span approximately 1,300 m2. The building work is expected to start during the second quarter of 2019 and finish during the first quarter of 2020.

The land is located close to the Riba-roja logistics hub, 15km from Valencia and 10km from the Manises airport. Moreover, its proximity to the city’s main arteries gives it a privileged position when it comes to moving goods.

Currently, Grupo Lar is working on an expansion plan for its logistics platform with Madrid, Barcelona, Valencia, Málaga, Sevilla and País Vasco all in the spotlight. The company plans to invest €250 million between now and 2021 in the acquisition of 500,000 m2 of industrial land.

Original story: Eje Prime 

Translation: Carmel Drake

Blackstone, Lar, Crown…the Appeal of the Port Feeds Valencia’s Logistics Boom

18 November 2018 – El Confidencial

The growth of cargo traffic at the Port of Valencia and its role as a maritime port of entry for the ‘hinterland’ that runs from the central area of the Mediterranean to Madrid and its metropolitan area, are feeding a boom in logistics operations in the area around the capital of the Community of Valencia. Large funds and multinationals such as Blackstone and the US manufacturer of metal containers for the agro-food sector, Crown Holdings, have pounced on the chance to occupy spaces in well-communicated areas, either to develop projects for third parties or to set up shop themselves ahead of forecast growth in operations towards clients located in the area.

The latest operation has been finalised very recently with the acquisition by Grupo Lar of a plot measuring 40,000 m2 for the construction of a warehouse measuring 25,000 m2 in Quart de Poblet, next to the access point to Valencia along the A-3 motorway, which connects the city with Madrid.

That ring road and the industrial estates located either side have been experiencing important movements for several quarters. Business sites such as those in Loriguilla and Riba-Roja are on the verge of saturation and are still welcoming new projects, such as the logistics platform that MRW inaugurated in July on the El Oliveral site. That same month, Blackstone acquired Lar España’s logistics portfolio for €120 million, which included land for development in Cheste (also on the A-3 axis) and a warehouse in the Juan Carlos I Park in Almussafes, where the Ford factory and an important proportion of its auxiliary industries are located. The speculative bet of the US investment bank is seeking to take advantage of the shortage of land dedicated to storage and transport management operations that is starting to be seen in Valencia.

Last year saw record leasing figures, with more than 220,000 m2 of space leased, up by 69% with respect to the previous year, according to a report compiled about the logistics market in the city by CBRE, one of the most active consultancy firms in this real estate segment in Valencia and its metropolitan area. The increase in leasing in Valencia is running in parallel to the market in Madrid, which rose by 100%, and despite a notable decrease in Barcelona, which saw a sharp drop in the volume of surface area leased (…).

CBRE has identified three major areas for logistics operations. The first is the town centre and the first storage arc focused on serving the city and its surroundings. The second arc is very closely related with companies linked to the port activity. That is where the Riba-roja, Loriguilla and Cheste industrial estates are located, on the motorway that connects Valencia with Madrid. Then, there are the new logistics developments that are being built in the north in Parc Sagunt (…).

The potential demand is high, estimated at 1.7 million m2 across the three rings, according to estimates from CBRE. But the lack of available plots in prime areas is endangering the “major opportunities in the business”. The returns on those well-located plots are the highest (6.75%) of any of the main European centres, above those in Madrid and Barcelona (5.85%). “There is a general need for new at risk developments”, said the consultancy firm rather than for “turnkey” projects, which the local property developers have been focusing on until now.

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

Ibosa Offers €33.5M to Acquire Most Sought-After Plot in Madrid

20 November 2018 – El Confidencial

The cooperative managed by Grupo Ibosa, Residencial Shaula Sociedad Cooperativa, has fought off competition from 16 other contenders in the auction for the most sought-after plot of land in Madrid. On the table: €33,510,000, an amount that almost doubles the minimum price of €17 million that the Treasury had set for it.

The cooperative has fought off competition in a tight bid from Desarrollos Los Astros, constituted at the beginning of November, and backed by Grupo Nozar, which placed €32 million on the table, and Arcano, which bid €31.2 million. Nevertheless, those two high offers were unable to compete with Grupo Ibosa, which has a lot of experience in this type of auction.

Expectations were high at Calle Guzmán el Bueno 139, the headquarters of the Special Delegation of the Economy and Finance in Madrid, where the auction was held. At 10am, in a room full with more than 100 people, 17 envelopes were opened containing 17 bids for the most sought-after plot of the year in Madrid. The land was owned by the National Currency and Stamp Factory (Fábrica Nacional de Moneda y Timbre), which entrusted its sale to the Heritage Service. The cooperative members will have to make the first disbursement within the next few days, equivalent to 25% of the amount offered, in other words, almost €8.4 million, and then pay the remaining 75% over the coming months, after deducting the deposit paid in order to be able to bid, which amounts to €850,000.

Vía Célere also submitted an offer (€23.7 million), exactly two years after submitting the only offer for another plot of land owned by the Treasury, in the same place, on Avenida Santo Ángel de la Guarda. The company chaired by Juan Antonio Gómez-Pintado is a familiar face in this type of action. In fact, just a few days after that auction, it was awarded the Adif and Repsol plots in Méndez Álvaro. On that occasion, its bid was also the only one.

In terms of the other names called out in the room, they included traditional property developers such as Ebrosa (€20.53 million), which submitted the most conservative bid; Grupo Premier, which put €25.16 million on the table through the company Cajandral; and Grupo Lar, which bid €30.13 million through Desarrollos Residenciales Madrid Norte. Pryconsa, another of the real estate firms that typically participates in these types of procedures, offered €23.1 million through Cogein, and Renta Corporación, with €22.15 million.

The surprise bidders included Inmo Frieria, a company backed by Manuel Jove, the former President of Fadesa, with a bid amounting to €24.7 million. And the listed company Aedas Homes, which offered €25 million through the company SPV Reoco 1, in its first major auction in Madrid. The long list of interested parties was completed by Global Nostromo (€28.5 million), Golego ITG (€22.12 million), Taz Real Estate (owned by Alza Real Estate, €24 million), Misodi Rent (owned by the Huguet family, with €23.2 million), Torre Rioja Madrid (€25.1 million) and Denoti Investment, a company owned by Irvine Alan Stewart Laidlaw, a British businessman and one of the richest people in the United Kingdom, whose bid amounted to €31 million.

A cooperative wins again

Like happened exactly four years ago, in November 2014, with the auctions of the plots on Raimundo Fernández Villaverde (owned by the Ministry of Defence) and the former metro depots in Cuatro Caminos (owned by Metro de Madrid), it is a cooperative – which saves on the property developer margin – that has managed to put the most competitive offer on the table, to fight off seasoned property developers such as Premier, Pryconsa, Ebrosa and Aedas Homes in a bid that the experts are describing as the auction of the year in Madrid. Not because of its size or its features, but because of its location, just 500m from the Retiro Park, this was one of the most sought-after plots in the capital, and its new owner may build up to 100 homes on its 4,500 m2 – 9,000 m2 of buildable space (…).

The cooperative managed by Grupo Ibosa currently comprises 60 cooperative members and its plans involve the construction of 94 homes. The 4 bedroom homes with two parking spaces and a storeroom will cost between €806,000 and €1,175,000, whilst the 3-bedroom homes will cost between €670,000 and €688,000 (…). The 2-bedroom homes will cost between €490,000 and €498,000, and the 1-bedroom homes will cost between €309,000 and €354,000. The complex will also have a swimming pool, a padel court, a gastroteque, a mini-crossfit studio, a sports pitch, a gym, changing rooms, a spa, a sauna and a jacuzzi.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Grupo Lar to Invest €250M in New Logistics Developments

28 October 2018 – Expansión

The property developer Grupo Lar is going to bet on the logistics segment in Spain over the coming years, with a planned investment of around €250 million to purchase land and build warehouses.

The Managing Director of Grupo Lar, Miguel Amo, explained that the first project included in that investor package is being carried out in Quart de Poblet (Valencia), where the firm is on the verge of purchasing a plot spanning 40,000 m2. The pre-agreement to the purchase was negotiated in July and the audit has recently been completed prior to the construction of a warehouse measuring 25,000 m2 on the site.

Following that project in Valencia, the new team for the logistics segment at Grupo Lar is preparing and negotiating other investments in Barcelona, Madrid, Málaga, Sevilla and País Vasco, with the “same structure”: minority shareholders and in-house management.

The investments in logistics land have been decided by the property developer Grupo Lar – which is owned in its entirety by the Pereda family – after it was announced that the new strategy of the Socimi, Lar España Real Estate, will focus purely on the shopping centre segment (“retail”).

Grupo Lar owns 10% of Lar España and is that firm’s second largest shareholder. It will also operate the Socimi’s management contract until 2021.

Lar España’s focus on retail has caused the Socimi to divest from other segments, such as residential, offices and logistics.

According to Amo, the difference is that the Socimi’s logistics investments involved finished warehouses, whereas those planned by the group include the acquisition of land and development. In the residential segment, Grupo Lar has a portfolio of land for 15,000 homes, of which around 4,000 are active in the seven markets in which it operates: Mexico, Spain, Peru, Colombia, Brazil, Poland and Romania.

The firm expects to close 2018 with around 2,000 homes delivered, for almost €450 million.

In Spain, the group has around 2,000 homes in its portfolio, of which 350 are active, with plans to handover around 250 during 2018.

Original story: Expansión

Translation: Carmel Drake