Spain’s Large Property Developers Own Land to Build 1,500 Homes in Valencia

16 May 2018 – Levante EMV

The four Spanish property developers backed by investment funds that make up the Big Four have acquired large batches of land in Valencia and now own plots on which to build 1,500 homes over the next few months.

The property developers in question are Neinor, Aelca, Aedas and Vía Célere, and they share financial muscle in common, which has allowed them to outperform the competition. The key is that the four firms are listed or are aspiring to make their debuts on the stock market and so they need to quickly grow their portfolio of homes to attract investors. The latest major operation has just been closed by Aelca, which is going to invest €7.5 million in the construction of 62 homes on the PAI de Moreras.

Sources in the sector warn that there is hardly any buildable land left in Valencia and they lament the fact that this is going to result in a “reheating” of prices. The same sources state that land in Patraix, which cost around €200/m2 two years ago is now being sold for €450/m2 due to the voraciousness of the large property developers. “Aelca purchased land in Patraix for €425/m2 and is now costs €450/m2. The large property developers have driven up prices because they need to take positions ahead of their stock market debuts”, say the experts.

In other areas, such as Malilla, Neinor paid €600/m2 for a plot with capacity for 400 homes, and the US fund Harbet Management Corporation (HMC) and its local partner Momentum Real Estate Investment Management (REIM) purchased 30,000 m2 of land in Nou Campanar and Alfahuir for €800/m2. The problem is the impact that this is going to have on the final prices of those homes, given that, according to the experts, they will have to soar above €2,000/m2 to be profitable. “We are going to see homes costing upwards of €220,000. Who can pay those prices in Valencia? What happens to permanent employees who are 40-years old and who can only be granted mortgages of up to €160,000?” ask the same sources.

Aelca – 368 homes

Aelca is a property developer founded in Madrid in 2012. Four years later, a fund from Minneapolis (USA), Värde purchased 75% of that firm. The company arrived in València with two developments comprising 192 homes in Patraix (own) and Nou Campanar (owned by Sareb). Now it is building 44 homes in Malilla (on Calle Isla Formentera), 70 homes in Nou Moles (on Calle Brasil) and 62 homes in the PAI de Moreres. Aelca is also preparing its stock market debut.

Vía Célere – 22 homes

Vía Célere is another property developer linked to the fund Värde that is also preparing to debut on the stock market. Its first development in València is a 22 home building with a swimming pool at number 55 Avenida de la Petxina. The cheapest home there costs €310,900 (€348,703 including costs).

Aedas – 399 homes

Aedas is a listed property developer, controlled by the US fund Castlelake. The firm currently has three developments underway in València where it is going to build 399 homes. The company is going to construct an urbanisation containing 220 homes on a plot on Avenida Maestro Rodrigo (…). In addition, it is building 59 homes in Quatre Carreres. Also, the company has just acquired another plot on Avenida Antonio Ferrandis to build 120 homes (…).

Neinor – 713 homes

Neinor arrived in València in March 2017 and has become the largest landowner in the city with a portfolio for the construction of 713 homes. The property developer, whose main shareholder is the Israeli fund Adar Capital, is currently marketing a 49-home development in Malilla and another 216-home development in Nou Benicalap. It is also working on a 416-home development in Malilla (…) and a 100-home development on Avenida Antonio Ferrandis in Quatre Carreres.

Original story: Levante EMV (by Ramón Ferrando)

Translation: Carmel Drake

Atitlán Sells 6 Hotels to Bankinter’s New Socimi Atom Hoteles

19 March 2018 – Valencia Plaza

Atitlán is continuing to shake up the real estate market with its operations, in this case focusing on the hotel sector. The investment firm owned by Roberto Centeno and Aritza Rodero has sold six hotels to a new Socimi in the sector that is being promoted by Bankinter. According to sources familiar with the operation, speaking to Valencia Plaza, the asset sale has included the Hotel Rey Don Jaime de Valencia, amongst others.

The transaction represents Atitlán’s departure from a market in which it has operated by stealth since 2013 when it began to acquire hotel assets in Spain. Its modus operandi involved buying up hotels in need of refurbishment in good locations. The company then invested in the renovations before putting the properties back on the market, in some cases affecting a change of operator to optimise the management.

The brand acquired the aforementioned portfolio, containing six hotels in total, located in the cities of Madrid, Sevilla, Palma de Mallorca, Santiago de Compostela and Valencia, in the case of the latter through the purchase of the Hotel Rey Don Jaime from Grupo Beatriz, whose management was entrusted to the operator Hotusa.

That acquisition was completed in 2015 when the hotel was in the midst of a redundancy program. According to reports at the time by the Valencian edition of El Mundo, the investment made by the new owner – Atitlán – was €5 million. The 14-storey building is one of the largest hotels in terms of capacity in Valencia.

When asked about the subject, sources at Atitlán confirmed to this newspaper that a portfolio of six hotels – comprising 900 rooms in total – was sold in February – including the Hotel Rey Don Jaime. The firm declined to confirm the location of the other properties or the total amount of the transaction.

The operation comes shortly after another high profile sale by the company owned by Roberto Centeno – the son-in-law of Juan Roig – and Aritza Rodero. Last month, the firm sold three plots that had been owned for years by a subsidiary of Nuevas Actividades Urbanas (NAU) for €33.6 million, after taking control of NAU just over a year ago for €8.7 million.

The buyer, in that case, was the US fund Harbert Management Corporation, which made its debut in Valencia through this operation hand in hand with the property developer Momentum Real Estate Investment Managers.

Atom Hoteles Socimi

Sources familiar with Atitlán’s hotel operation add that the company that has acquired the assets is Atom Hoteles Socimi SA, a firm promoted by Bankinter, which owns 19 hotel establishments in total spread all over Spain.

The bank has also been silent about the project, although the Mercantile Registry reveals that the new company, which was constituted in January, is chaired by Eduardo Ozaita Vega, the Director General of Bankinter.

At the end of last year, market sources revealed Bankinter’s intention to launch a Socimi focused on the hotel sector this year for its private banking clients, in which it will maintain a stake of around 10%.

The entity led by María Dolores Dancausa plans to launch this investment vehicle on the Alternative Investment Market (MAB) with a share capital of around €200 million, for those clients whose wealth exceeds €1 million. The minimum investment to participate in the Socimi will be €200,000 per client, up to a maximum of 15% of total assets.

In this way, Bankinter is replicating the model of Olimpo Real Estate (Ores), a Socimi that it launched to invest in small and medium-sized retail assets in which the entity retains a 10% stake and which was designed to respond to clients who were demanding higher returns in the context of low interest rates.

Original story: Valencia Plaza (by Dani Valero)

Translation: Carmel Drake

US Fund Harbert Buys 3 Plots in Valencia from NAU for €33M

1 March 2018 – Valencia Plaza

There’s a new player in the Valencia real estate sector. The US fund Harbert Management Corporation is disembarking in Cap i Casal together with the property developer Momentum Real Estate Investment Managers with the purchase of three residential plots from a subsidiary of the real estate company ‘Nuevas Actividades Urbanas’ (NAU), a firm that has been controlled by the investor group Atitlan for the last year.

According to sources in the real estate sector, the operation involves two plots located in the Campanar neighbourhood – close to Maestro Rodrigo – plus a third plot in the area near to Avenida Alfahuir. In all cases, the plots are located in established residential areas of the city where the demand for housing is significant.

The fund has invested €33 million in total to acquire this set of assets, which are estimated to have a (roof space) impact of 42,900 m2. The operation put an end to a long sales process led by Atitlan itself in which more than a dozen parties had expressed their interest.

This is the first major operation that NAU has undertaken following the entry of Atitlan as a shareholder. Atitlan is owned by Roberto Centeno (pictured above) – the son-in-law of Juan Roig – and Aritza Rodero. The company has a stake equivalent to 40% in NAU, which allows it to lead the real estate firm.

It does so through Demeter Áurea, which has controlled 84.51% of NAU’s shares since 2017 after it acquired the 48.62% that Bankia held and received the 35.89% that Gesfesa transferred to it. NAU’s best assets include its stakes in the Aqua Multiespacio and Arena Multiespacios shopping centres in Valencia.

When asked about this, sources at Atitlan confirmed to this newspaper that “one of NAU’s subsidiaries that has filed for liquidation has sold three residential plots”. Nevertheless, the company distances itself from the operation. “Atitlan does not hold a majority stake in NAU and NAU does not hold a majority in the subsidiary that has sold the plots”, they confirmed.

A new property developer in the city

In any case, the operation represents the entry into Valencia of a new operator, the property developer Momentum Real Estate, which is called to lead the development of plots that until now were owned by NAU’s subsidiary. According to details provided by the firm on its website, it specialises in the construction of primary residences.

“It only works with ‘finalist’ assets, those that do not have any urban planning procedures pending”, said the company, which has a large portfolio of developments in Spain – mostly in Madrid – but which lacked projects in the Community of Valencia until now.

With regards to the fund, Harbert does already have experience in the Community of Valencia. It was the owner of the El Manar de Massalfassar shopping centre, which it sold in 2017 for around €40 million.

Original story: Valencia Plaza (by Dani Valero)

Translation: Carmel Drake

International Funds Reactivate RE Sector By Building Thousands Of Homes

2 October 2017 – Expansión

After years of drought, the residential real estate market is starting to show signs of recovery, with a significant increase both in investment in land as well as in the construction of new developments. In this new phase, international investment funds have become a major player, with more than €1,000 million invested in the Spanish residential sector and thousands of homes under construction. “Interest from these types of funds in the residential property development market is the result of the recovery that the segment is experiencing, as a consequence of a clear improvement in the underlying macroeconomic indicators”, says Borja Ortega, Director of Capital Markets at JLL.

For its investments in Spain, large international funds such as Värde, Castlelake, Lone Star and Morgan Stanley have opted for alliances with local operators (…). “This formula (…) is very beneficial for the market as it combines access to capital and international sources of financing with knowledge and experience of the local real estate development sector”, says Ortega.

“In most cases, the international fund provides the bulk of the capital, whilst the local partner participates in each project with a smaller percentage investment, but bringing to the table its expertise in terms of the acquisition of land and the construction of developments”, highlights Samuel Población, National Director of Residential and Land at CBRE España.

Lone Star stands out amongst the major investors. The fund, led in Spain by Juan Pepa, has invested more than €1,000 million in launching Neinor Homes, the first property developer to debut on the stock market in almost a decade. Another key player, Castlelake, is willing to spend a similar figure on the creation of another real estate giant, in this case, Aedas, which will also make its debut on the stock market soon.

Alongside them, Värde, which channels its investments in the residential sector through two companies: Vía Célere and Aelca. These three funds lead the national ranking, with 11,189 homes under construction and almost 5 million m2 of land.

Property developments

The giants Lone Star, Morgan Stanley, Castlelake and Värde are not the only players to be investing in housing in Spain. The German fund ASG is another one of the most active investors. Through its Spanish subsidiary, ASG Iberia, it is currently working on the construction of 2,000 homes, across six sites, including in San Juan (Alicante), Alcalá de Henares (Madrid) and Málaga (…).

Other active players include Stoneweg; Harbert Management Corporation (HMC), which has teamed up with the Spanish management company Momentum; the German institutional fund Patrizia; and Pimco, which joined forces with the Socimi Lar España (…).

Other partnerships are purely financial. Such is the case of the agreement between Avenue Capital and Quabit, where the fund has granted two lines of credit, amounting to €100 million in total, to the property developer to buy land.

Pressure

According to CBRE, investment in residential assets exceeded €600 million between January and September. And, according to the experts, that figure is going to continue growing. “We will continue seeing interest from international funds, given that the outlook for growth in the sector is strong for the next three to four years. The funds already present will continue with their activity and it is probable that others (not yet present) will also join in, given that the investment pressure is high”, says Población.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Aberdeen & Catella Acquire El Manar Shopping Centre For €40M

12 July 2017 – Cinco Días

The firm Harbert Management Corporation has sold the El Manar shopping centre in Valencia for €40 million, according to sources familiar with the operation. The buyers are the companies Catella and Aberdeen, which have created a joint venture to undertake the transaction.

El Manar has a gross leasable area of 24,000 m2 and is located in the city of Massalfassar, in the metropolitan area of Valencia. According to the directory compiled by the Spanish Association of Shopping Centres, the property is managed by CBRE, was inaugurated in 2007 and comprises around twenty stores, with the Carrefour hypermarket proving to be the main draw. El Manar is also home to stores operated by Media Markt, C&A, Kiwoko, Sprinter and the toy shop Poly and it has 1,344 parking spaces. Each year, the centre receives 2.4 million visitors.

El Manar was promoted by the Pradera Group, and Harbert purchased it in 2014, in an operation whose consideration was not disclosed at the time. Three years later, the fund from Alabama has sold the asset in a deal that has been advised by CBRE and Eversheds Sutherland. Meanwhile, the buyers have been advised by the law firm Dentons.

Catella is a Swedish investment manager, which also acts as an advisor in real estate transactions. In Spain, the firm is led by Javier Hortelano.

Meanwhile, the British fund Aberdeen has €360,000 million under management around the world. In Spain, the firm is led by Ana Guzmán Quintana.

Original story: Cinco Días (by A. Simón)

Translation: Carmel Drake

HMC Creates A New Socimi: Heref Habaneras

3 February 2016 – Expansión

The US investment company Harbert Management Corporation (HMC) is the latest firm to adopt the Socimi formula to undertake its investments in Spain. HMC has just obtained approval from Spain’s Alternative Investment Market for its Socimi, Heref Habaneras, to list on the exchange. This real estate investment company is the owner of the Habaneras shopping centre in Torrevieja (Alicante), which it acquired at the end of 2014.

According to the information submitted to MAB, one of the reasons it has opted for this instrument is “to be in a beneficial competitive position to make potential acquisitions of new assets”. The structure also facilitates the incorporation of new investors, as well as financing for this growth.

The Socimi Heref Habaneras will debut on the MAB on Friday at a price of €4.37 per share, which represents a company valuation of €22.1 million.

Original story: Expansión

Translation: Carmel Drake