Tag: haya real estate

International Funds And Socimis Hire First-Rate Executives

4 May 2015 – Expansión

Director appointments in Spain / Large international investors and Socimis have been recruiting senior Spanish executives to design their strategies in the country and identify real estate opportunities.

Large overseas investors are hiring first-rate advisors to lead the businesses that they have acquired in Spain. Over the last six months, funds such as Cerberus, Apollo and Lone Star have hired former directors of Ibex companies to support them (execute) their strategies in Spain.

Some of the Spanish Socimis have also hired first-rate executives, including Uro Property and the listed real estate company Hispania, owned by Azora.

Through these appointments, investors are taking the third step in a process to strengthen their strategies to conquer the Spanish real estate sector. To begin with, they put certain Spanish-speaking executives in charge of entering the market. Such was the case of Andrés Rubio (Apollo), Juan Pepa (Lone Star) and Michael Abel (TPG).

The next step was the acquisition of real estate platforms, such as Altamira, purchased by Apollo; Bankia Habitat – now Haya Real Estate – acquired by Cerberus; and Neinor, which was awarded by Kutxabank to Lone Star.

Following these purchases, the funds have sought advice from top executives. “Some of the funds’ foreign directors have made successful acquisitions, but they now need highly skilled, top-level, local professionals to implement their business plans”, says Patricio Palomar, Director of Alternative Investment at CBRE.

“The hardest thing in the real estate sector is finding and accessing opportunities, but these experienced professionals have the skills to achieve that”, adds Carlos Ruiz-Garma, Director of Business Development at Aguirre Newman.

New hires

The most active fund in terms of new recruits has been Cerberus, which has hired two senior bankers for its Spanish subsidiaries in the last few months. Franciso Luzón, former board member and Vice President at Santander, is now a board member at Haya Real Estate, the real estate company that inherited Bankia Habitat’s business; and Manuel González Cid, the former Finance Director at BBVA, has joined the board of directors at Gescobro, the firm that specialises in debt collection.

Another big name signing was that of Oscar Fanjul, as a board member of Altamira, the real estate company owned by Apollo. Fanjul is Vice President at Omega Capital and used to be the Chairman of Repsol.

The fund Lone Star has also drawn on the market for former directors of listed companies to strengthen its strategy. This investor, which purchased Kutxabank’s property developer for €930 million at the end of last year, has hired Juan Velayos to lead the project; he used to be a Partner at PwC and who was the CEO of Renta Corporación until 2011. Lone Star will reveal its strategy for Neinor over the next few weeks.

In the face of all of these new signings, one of the largest funds to show its commitment to Spain, TPG – which is the majority shareholder in Servihabitat – substituted the former banker Rodrigo Rato last April.

Socimis

The Socimis, (many of) which are in turn owned by international investors, are also committed to hiring experienced directors. In this sense, the real estate manager Azora, which controls Hispania, hired Juan María Nin as a board member at the end of last year; until June 2014, he was the CEO of CaixaBank.

The Socimi Uro Property has also followed in the same footsteps; Uro owns some of Santander’s (branch) network and it has appointed Carlos Martínez Campos as its Chairman; he was formerly the Chairman of Barclays España until its sale to CaixaBank. The banker also used to chair Prosegur.

In addition to the signings of former directors of Ibex companies, the opportunistic funds have also hired at least a dozen other executives in recent months. For example, Gonzalo Gómez Navarro, from the Empark Group, has joined Altamira; and the former directors of Sareb, Walter de Luna and Juan Barba, joined Acciona Inmobiliaria and Meridia Capital, respectively.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

The March Family & GreenOak Compete To Buy Ahorro Corp’s HQ

13 April 2015 – Expansión

The financial group has given investors two weeks to submit their final bids. The leading candidates are the March (family), GreenOak, Colonial and Infinorsa.

Ahorro Corporación has prompted a new battle for real estate in the business district of Madrid. And it is proving to be the winner. The financial group is now on the home stretch in the sale of its headquarters, located on Paseo de la Castellana, 89; and the offers received to date have far exceeded the company’s initial expectations. The bids received are approaching €140 million, almost 50% higher than the price offered two years ago (€90 million – €100 million).

Ahorro Corporación and its advisor Aguirre Newman, have now made a shortlist of three candidates to buy the property. According to sources consulted, the investors with the strongest bids are Corporación Financiera Alba, controlled by the March (family), the fund GreenOak, the investor group Infinorsa – which owns Torre Europa – and the real estate company Colonial.

The improved macroeconomic environment (in Spain) and the war waged by these investors to acquire the main properties in Azca, have led to the rise in property prices. The over-supply of funding has also led to greater competition.

The price offered (€140 million) is at the high end of the consideration sought by Ahorro Corporación. Nevertheless, market sources say that the price may decrease slightly – to around €130 million – once the binding offers, which must be submitted in a couple of weeks, have been finalised. Ahorro Corporación has extended the initial deadline due to a request for new information from the interested parties.

100% occupancy rate

The financial group purchased the property from Banco Zaragozano in 2003 for €93.5 million. The building has a surface area of 20,000 square metres, spread over 14 floors and 530 parking spaces. As well as Ahorro Corporación itself, the building’s tenants include Sareb, the French opticians Alain Afflelou and Deloitte. The ground floor of the building is leased to restaurant chains including Lateral, Maki, Wagaboo and New York Burger. The building was constructed in 1977 and refurbished in 2008.

This is not the first battle between real estate investors in recent months. In January, BBVA sold the Torre Ederra, on Paseo de la Castellana, 77 – also in the Azca financial district – for €87 million. On that occasion, the real estate company GMP beat Infinorsa in the final round.

The sale of its headquarters is just another one of a number of divestments undertaken by Ahorro during its redefinition process, which KPMG is advising.

Over the last year, the financial entity has carried out transactions such as the sale of its fund manager, ACGestión to Abanca; the transfer of its infrastructure funds to GEDCapital; and the sale of its securisation manager, Ahorro y Titulización (AyT) to Haya Real Estate, owned by Cerberus.

The group is continuing to focus on its strategic businesses, namely fixed income and equity brokerage and advisory services.

Ahorro is focused on the international diversification of its business in the face of the disappearance or absorption of its former shareholders and clients – the savings banks – by other financial groups.

This group will have to face the remodelling of its shareholder base in the short-medium term, given that some of its shareholders, such as Bankia, will be forced to exit. Other shareholders that holds stakes in the group include: Cecabank, CaixaBank, Kutxabank, Liberbank, BMN, Ibercaja, Unicaja, Abanca, BBVA, Sabadell, Ontinyent and Pollença.

Original story: Expansión

Translation: Carmel Drake

Bankia Puts 40 Large Property Loans Up For Sale

7 April 2015 – Expansión

Project Commander / The bank is holding negotiations with opportunistic funds regarding the transfer of real estate loans worth €500 million.

Bankia is causing a storm amongst large overseas funds in 2015. The entity chaired by José Ignacio Goirigolzarri recently announced two large divestments aimed (precisely) at those investors; they are pioneering due to the types of assets that they include: one contains overdue mortgages and the other contains large loans to real estate companies.

In total, Bankia has put unpaid property-related loans up for sale amounting to €1,800 million. Through this strategy, the bank is seeking to reduce its balance of doubtful loans and to continue awarding real estate assets.

The most advanced transaction (in terms of progress) is the one involving the large loans (to real estate companies). Project Commander, the name of the deal being advised by Deloitte, includes 170 loans granted to 39 companies, worth more than €500 million. Of those companies, 31 are property developers and almost all of them have filed for bankruptcy or liquidation, according to sources at the overseas funds. Some of the loans were granted to companies such as the Catalan group Promociones Habitat, the same sources reported.

Exposure to land

Most of the loans are syndicated and bilateral and provide access to a wide range of assets. These include land – €200 million – most of which is rural; and industrial warehouses – €90 million -. The fund(s) that win(s) the bid will also be in a position to take ownership of office buildings, homes, a fully operational aparthotel and even a winery.

Along with the real estate assets, a small portion of the portfolio is backed by pledged shares and other types of economic rights in creditor bankruptcy.

Almost two thirds of the real estate portfolio is located in Castilla-La Mancha – mainly Toledo -, Andalucía and Cataluña.

According to the agreed timetable, the funds must present their final offers within the next two weeks and the transaction should close before the end of the month. Sources close to the process indicate that Bankia may obtain between €150 million and €200 million for Project Commander.

To secure the deal, many of the large funds have purchased real estate platforms during the last two years: Apollo (Altamira), Cerberus (Haya Real Estate), Blackstone (Anticipa), TPG (Servihabitat), Lone Star (Neinor), Centerbridge (Aktua) and Värde Partners-Kennedy Wilson (Aliseda).

These investors have already participated in some of the large real estate loan purchases. Blackstone purchased the largest portfolio ever transferred in Spain to date, Project Hercules, which comprised problematic mortgage loans from Catalunya Banc amounting to almost €6,500 million; and, more recently, Blackstone acquired a non-performing property developer loan portfolio from CaixaBank. Meanwhile, Lone Star purchased a loan portfolio from Eurohypo for €3,500 million.

Nor does the market rule out the emergence of new players such as Pimco, Chenavari and Deutsche Bank.

Meanwhile, yesterday Fitch increased the rating of Bankia’s mortgage bonds by one notch to A-.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

Bankia And BMN Both Put NPL Portfolios Up For Sale

27 March 2015 – Expansión

Divestments / Bankia and BMN are seeking to replicate the transaction completed by Catalunya Banc in 2014 on a smaller scale. The market expects a “boom” in these sales in 2015.

After two years divesting shareholdings and bad debts, Bankia considers that the time has come for it to transfer some of the non-performing mortgages that it deems to be unrecoverable. The entity led by José Ignacio Goirigolzarri has put a portfolio amounting to €1,300 million up for sale, of which more than €900 million relate to unpaid mortgages. BMN has also put a similar package of loans up for sale, amounting to €160 million, of which €52 million relate to mortgages.

Investors have received these operations with a great deal of anticipation, because since Catalunya Banc transferred a portfolio of problem mortgages amounting to €6,500 million to Blackstone last summer, no other entity had decided to follow suit.

After the step taken by Bankia and BMN, a number of entities are expected to join the band wagon and put some of their real estate loans to individuals up for sale.

Change of course

Until now, the bank had been reluctant to sell mortgages to opportunistic funds for reputational risk reasons. To avoid this, Bankia and BMN have decided to exclude loans relating to subsidised and social housing (from their portfolios). Moreover, sources in the financial sector explain that overseas funds may offer more alternatives for non-performing loans than the banks, since they purchase the loans at a discount and so can offer discounts themselves. These investors, just like the banks, must comply with the Code of Good Practice developed by the (Ministry of) Economy in 2012.

The sale launched by Bankia forms part of Project Wind, advised by KPMG . In total, the portfolio contains overdue loans amounting to €1,300 million, which are split into three sub-portfolios: mortgages; loans to SMEs and real estate developers, secured by properties, worth €180 million; and unsecured loans amounting to €210 million.

The mortgage portfolio comprises 4,300 loans, with an average value of €214,000. Most of the mortgages were granted to purchase property in Cataluña (32%), Madrid (25%) and Valencia (18%). Furthermore, 83% of the 4,300 non-performing loans are involved in judicial proceedings.

These types of transactions allow banks to remove non-performing assets from their balance sheets, release provisions and devote new resources to new more profitable activities.

Foreign funds will monitor this transaction very closely, especially those who have purchased a real estate platform in recent years: Cerberus (Haya Real Estate), Apollo (Altamira), Centerbridge (Aktua), TPG (Servihabitat), Blackstone (Catalunya Caixa Inmobiliaria) and Värde Partners y Kennedy Wilson (Aliseda). Having purchased the real estate management platforms in 2013, these investors are now keen to nurture (feed) them with their own assets, and whereby obtain profitability from their investments.

In addition to this transaction, Bankia has two other deals in the pipeline: the sale of hotel loans – Project Castle – for which it has received non-binding offers of between €200 million and €300 million; and the transfer of syndicated and bilateral loans amounting to €500 million – Project Commander – which Deloitte is advising.

On a smaller scale

In the meantime, BMN has put a similar portfolio up for sale to that offered by Bankia as part of Project Wind. It amounts to €160 million, of which one third are unpaid mortgages. The sale of this portfolio, known as Project Pampa, is being managed by N+1. Almost all of the 300 mortgages included in this portfolio are secured by properties in Cataluña.

BMN hopes to close the sale of its portfolio by the end of May. In the case of Bankia, the transfer process may last until the middle of the year.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

Servihabitat: Sales Of €212M For Spain’s Largest Servicer

18 March 2015 – Expansión

Servihabitat increased its real estate sales by 38.8% in 2014, selling 21,163 assets in total. The real estate company, which is controlled by the fund TPG (51%) and part-owned by Caixabank (49%) also signed 14,873 lease agreements, and so, in total, it successfully marketed 36,036 units.

Thanks to these transactions, the platform led by Julián Cabanillas generated turnover of €212.64 million, which represents an increase of 24.9%. “We are very pleased with the results obtained in a particularly difficult year”, said Cabanillas, the CEO (of Servihabitat) yesterday.

When it was founded, Servihabitat was dedicated solely to the sale of property that had been repossessed by the La Caixa group. Nevertheless, it has now adopted a multi-client strategy and it was one of the real estate companies to be awarded the management of some of Sareb’s assets, which are now being migrated across. Specifically, it took over the management of 33,000 properties and loans from Novacaixagalicia, Liberbank and Banco de Valencia worth €9,200 million. In this way, Servihabitat’s portfolio has grown by 26% and now includes 194,156 units. According to market sources, this volume of properties is worth around €59,000 million, which makes Servihabitat the largest servicer in the sector with a market share (by value) of 22%, ahead of Haya Real Estate, Altamira, Solvia, Anida and Aliseda.

44,207 properties in the entity’s portfolio are currently rented out, which represents an increase of 47%.

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake

RE Managers Ranking: Solvia & Anida Vie With Vulture Funds

25 February 2015 – El Confidencial

Banco Sabadell and its real estate arm Solvia have infiltrated the top ranking of (Spain’s) real estate managers, which mainly includes vulture funds. These funds now have (assets under management amounting to) €278,000 million.

The international funds have consolidated their position as the new players in the real estate sector after Sareb’s latest auction. In fact, together, the so-called vulture funds control a portfolio of assets amounting to more than €278,000 million, including land; properties; and mortgage and developer debt. There are some important exceptions (in the ranking), such as Solvia (Banco Sabadell) and Anida (BBVA), but the top positions are held by institutional investors such as TPG (Servihabitat), Cerberus (Haya Real Estate) and Apollo (Altamira), who monopolise the sector.

Following the bid for Sareb’s assets, the largest manager or servicer is Servihabitat, owned by Caixabank (51%) and the US fund TPG (49%). In total, the company manages €58,698 million, having taken on €19,725 million from Sareb. The entity was already ranked first or second-place, depending on whether the loans in its portfolio were included in the calculations, rather than just the properties.

Since the start of the year, Servihabitat has controlled 21% of the assets of the so-called servicers, including properties and loans. Following the auction, it now also manages assets of Nova Caixa Galicia, Liberbank and Banco de Valencia. This hegemony has been thanks to Sareb’s most recent auction, which was held less than two months ago, which awarded portfolios amounting to €41,200 million. The assets (awarded in that auction) have been managed by the winning companies since 1 January 2015.

The main upset (in the rankings) has been Banco Sabadell and its real estate arm Solvia, which has infiltrated the ranking of the top property managers in Spain. The bank was one of the few that did not sell its real estate portfolio to the vulture funds, like most of its competitors did, and as a result, it has become the fourth largest entity in the (servicing) sector, a surprise gate-crasher to the party, with assets of €39,765 million. Of this amount, €17,187 million came from the most recent auction, in the form of assets that came from Bankia. 43% of the assets that Solvia now manages came from Sareb. It has a 13% share of that market.

Off the podium

In this sense, another important development is that of Apollo. Previously it was the sixth largest player. Now, following the auction and its purchase of Altamira from Banco Santander for €700 million at the end of 2013, it has risen to third place. This bronze medal position reflects the fact that Altamira-Apollo now manages €46,566 million. It has acquired more than half of its property and loan (€26,056 million) from Sareb. The entity has a 17% share of Sareb’s market.

These increases have been achieved at the expense of another operator, Anida, which has dropped down the rankings to fifth place. Anida is the real estate arm of BBVA and has more than €25,000 million assets under management. It is one of only a handful of companies of this type, which, like Solvia, has not allowed foreign funds to participate in its capital. Neither Anida nor Aliseda, which was sold by Banco Popular to Värde Partners and Kennedy Wilson for €815 million, participated in the most recent auction and so they lost size in a business where critical mass is fundamental.

Haya Real Estate, owned by Cerberus, is still the entity that depends most heavily on the Sareb. It controls assets that mainly come from Bankia and so 65% of its portfolio depends on the Sareb contract, much more than Altamira (55%) and Solvia (43%).

By contrast, from all of the large players, Servihabitat is the one that is least dependent on the bad bank, despite having won some of the lots it has auctioned, since it already had a significant asset base. It depends on Sareb for 33% of its portfolio only, which means, on paper, that it should have a higher operating management margin than its closest competitors.

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake