Blackstone has Created a RE Giant in Spain Worth €20bn

4 September 2018 – Expansión

In just five years, the US fund has become the largest owner of hotels and one of the biggest landlords in the country. Moreover, it manages several major mortgage portfolios.

Blackstone made its first foray into the Spanish real estate market in July 2013, with the purchase from the Municipal Housing and Land Company of Madrid (EMVS) of 18 residential developments, containing 1,860 homes in total, in the Madrilenian neighbourhoods of Carabanchel, Centro, Villa de Vallecas and Villaverde for almost €126 million.

Since then, the US fund, one of the largest investment firms in the world, has turned the Spanish real estate sector into one of its favourite destinations for investment, encouraged by the boom that the market in Spain has experienced over the last five years.

Blackstone’s dominance in the Spanish market is now unquestionable. Since 2012, the US fund has acquired property in the country worth almost €20 billion and it is now the owner of several listed vehicles, as well as of some of the main asset managers in the country.

With that figure, which accounts for 20% of the €100 billion that Blackstone Real Estate has invested around the world, the firm is the country’s largest private manager of real estate assets, including properties and portfolios of mortgages.

In Spain, the fund was one of the first to back the residential segment when the real estate market was still struggling and it has been one of the most active players in the purchase of asset portfolios containing NPLs and REOs from financial institutions.

The fund’s purchase of homes in Madrid from EMVS in 2013 was soon followed by the acquisition of another 1,000 social housing properties from Sareb and FCC. Those homes are owned by Fidere, the fund’s first Socimi, which made its debut on the Alternative Investment Market (MAB) in 2015.

In the same year, Blackstone completed its first major operation with the purchase from Catalunya Caixa of a portfolio comprising 40,000 loans in total, worth €6.4 billion. Blackstone paid €3.5 billion for that portfolio, known as Hercules.

A year later, the US fund purchased the Catalan entity’s real estate manager (without any assets), which was later renamed Anticipa.

Nowadays, that company manages the more than 12,000 rental homes which Blackstone has been purchasing from the banks in different portfolios and which it controls through the Socimi Albirana, which made its stock market debut in 2016, and Torbel Investments.

Popular’s property

Two years after purchasing the Hercules portfolio, Blackstone hit the headlines again with the purchase from Santander of 51% of Banco Popular’s real estate business, with a book value of around €10.3 billion. With that acquisition, Blackstone increased its commitment to Spain and become the most active overseas investment fund in the country. To group together those assets, months later, Blackstone and Santander created Project Quasar Investment, a company that also includes the marketing platform Aliseda (…).

In addition, (…) the US fund has launched itself into the hotel segment, to take advantage of the good times being enjoyed in the tourist sector at the moment. Blackstone’s first incursion into that market in Spain was the acquisition of HI Partners from Sabadell last summer for €630 million. Through that platform, Blackstone owns 17 hotels in Spain comprising more than 4,500 rooms.

Takeover of Hispania

A few months after that acquisition, the US investment firm made a bid for Hispania, the Spanish Socimi specialising in hotels managed by Azora, which owns 46 assets and almost 13,150 rooms in Spain (…). Following that operation, which valued the Socimi at €1.99 billion, the US fund controls almost 91% of Hispania.

As well as hotels, Hispania owns 25 office buildings, with a market value of more than €600 million and residential assets worth €230 million, which now also form part of the fund’s assets (…).

Blackstone is also a star player in the logistics sector. The fund currently controls 10% of the Pan-European platform Logicor, which manages approximately 1.2 million m2 of logistics space in Spain (…).

Also, in July, it purchased five logistics warehouses from the Socimi Lar (…) for almost €120 million.

The fund’s most recent purchase was the headquarters of Planeta, located on Avenida Diagonal in Barcelona, which it acquired from the Lara family for €210 million (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

The FROB Engages Intermoney Valora to Revalue Former CX Assets

5 February 2018 – Expansión

The Spanish Fund for Orderly Banking Restructuring (FROB) has engaged the financial consultancy firm Intermoney Valora to carry out a “valuation service for certain assets in the framework of the process to wind up Catalunya Banc (CX)”.

Sources familiar with the process indicate that this project stems from the process to privatise the former Catalan savings bank, which was nationalised by the FROB in 2012. In accordance with the design of the divestment at the time, the banking business was transferred in its entirety to BBVA, whilst the real estate business (known as the Hercules portfolio) was acquired by the fund Blackstone.

Those same sources indicate that at the time, a small percentage of the assets that should have been transferred to Blackstone, remained under the umbrella of BBVA for technical reasons and could not be transferred. “That has generated what is known as compensable damage, which was anticipated for in the sales contract and, therefore, had been provisioned”, they add.

The role of Intermoney Valora will be to estimate the economic value today of that small percentage of assets pending transfer to Blackstone, so that the indemnities can be calculated.

According to details specified on the Frob’s public contracting page, Intermoney (which competed with five other firms) will receive €130,000 for this assignment and will have two months (extendable for up to one more) to carry out the work.

Last week, the President of BBVA, Francisco González, admitted that he would not have bought CX today. “We are delighted to have purchased savings banks but that was five years ago. Would we buy CX today? Probably not”, he said.

Original story: Expansión (by N. Sarriés)

Translation: Carmel Drake