Neinor Withdraws from the Purchase Process of ‘Solvia Desarrollos Inmobiliarios’

28 February 2019 – El Español

Neinor Homes is not going to be one of the candidates that submits an offer to acquire Solvia Desarrollos Inmobiliarios (SDI), the subsidiary of Banco Sabadell. The real estate company has been studying the operation for a while but has concluded, following its initial analysis, that the numbers do not fit with its investment philosophy.

That is according to explanations provided by Neinor’s CEO, Juan Velayos, who acknowledged that he has the sales prospectus on his desk but that at the moment, “it is not a priority” for him. We are talking about a company that has a portfolio of 300 buildable plots and which the bank led by Jaime Guardiola put up for sale in January.

Velayos himself acknowledges that he “loves the portfolio”, but he’s not so convinced by the numbers being seen in the market”. (…). “I’m afraid that it is not going to be for us from the perspective of a disciplined investor”, he said. The first valuations of SDI’s land are in the region of €1.3 billion, given that the portfolio also includes 130 real estate developments in different areas with 5,000 homes under construction.

Indeed, the price of land is one of Neinor’s obsessions. Over the last year, it has purchased 2,400 plots in which it has invested €95 million. Neinor’s CEO believes that his firm has adopted a prudent policy in this regard (…).

As a result, it looks like Neinor will not be one of the candidates to bid for Sabadell’s subsidiary in the end. The bank is awaiting possible expressions of interest for its land company. The intention is to receive binding offers before the end of this quarter and to settle the sale during the month of April.

Interested parties

In terms of the parties that are interested in SDI, they include some of the main international funds such as Cerberus, Värde, Oaktree and Blackstone (…).

The sale of SDI comes after Banco Sabadell sold Solvia, its real estate servicer for €300 million, for which it obtained capital gains of €185 million (…).

Original story: El Español (by Arturo Criado)

Translation: Carmel Drake

Who is the Largest Residential Property Developer in Madrid

29 November 2018 – El Confidencial

With 12 developments underway comprising 758 homes with some type of protection, the Municipal Housing and Land Company (‘La Empresa Municipal de la Vivienda y Suelo’ or EMVS) is the most active property developer in the city of Madrid. Of the more than 350 residential projects under construction in the capital at the moment, the public initiative (by the Town Hall of Madrid), together with the promotion of cooperative homes or units with some kind of protection, has significant weight in Madrid, given that more than 16% of new build projects underway and 22% of the units under construction are public initiative developments (EMVS) or cooperative promotions.

That is according to data from the consultancy firm CBRE, which has compiled a study to analyse real estate activity in the Spanish capital, using satellites, taking into account both new build projects that require cranes for their completion as well as comprehensive renovation projects that do not need cranes or scaffolding. On the basis of the data obtained, the property developers who are currently carrying out those projects in the 21 districts of Madrid have been identified, be they new build projects, renovations, private homes or social housing units, excluding any homes being marketed on which construction work has not started yet.

The study establishes a ranking with the top 25 residential property developers in the capital on the basis of the number of projects underway and the number of units under construction. That ranking is led by the EMVS both by number of developments as well as by number of homes. Its developments are concentrated in the Pau de Vallecas (8 projects comprising 475 units), Latina (one development comprising 87 homes), Arganzuela (one development comprising 85 units), Villa de Vallecas (one development comprising 72 homes) and Carabanchel (one development comprising 25 homes).

Despite the strong development activity of the EMVS, the reality is that it is the private property developers who lead the activity overall, given that they account for three quarters (78%) of the new home units under construction in the city of Madrid. In fact, there are 12 private property developers with three or more projects under construction, which account for more than a third (34%) of the homes under construction.

Pryconsa and Inmoglacier, the most powerful

The second position in the ranking by number of developments is held by Pryconsa. The company chaired by Marco Colomer currently has seven projects underway, comprising 500 homes (…).

By number of units under construction, the second place in the ranking is held by Inmoglacier, with 748 homes under construction, distributed across just five developments, all of which are concentrated in Parque Ingenieros in Villaverde (…), all with some kind of protection and constructed on land acquired from Sepes more than three years ago. The company chaired by Ignacio Moreno (…) is one of the most active property developers in the capital and is focused towards a segment of the population capable of acquiring a home at affordable prices.

“At first glance, the sector appears to be vey fragmented. The 351 residential projects underway in Madrid are split between 241 companies or cooperatives. However, many property developers assign a separate legal entity to each promotion (…) and so it is not always easy to identify the large groups (and commercial brands) behind each project”, explains Samuel Población, National Residential Director at CBRE speaking to El Confidencial (…).

By area, the main national property developers are committed to constructing large projects in new areas, such as Arroyo del Fresno (Amenabar and Grupo Pinilla), Valdebebas, Parque de Ingenieros and El Cañaveral, where the projects with the largest number of units are concentrated. Companies such as Grupo Ibosa (…) and Vía Celere, along with the newcomer Brosh, complete the ranking (…).

International firms stick to the rich neighbourhoods

In terms of the property developers with a more international profile, by contrast, they are continuing with a strategy focused on the renovation of homes inside the city, in the most sought-after neighbourhoods. Venezuelan property developers have been particularly active, including Gran Roque (…), which has a dozen residential projects underway comprising more than 100 homes in some of the most sought-after areas of Madrid (…).

Also, Grosvenor (from the UK) and Darya Homes or Dazia Capital (France) are concentrating their activity exclusively in the districts of Centro, Chamberí and Salamanca. Those three developers – include Gran Roque – are currently managing 10 residential remodelling projects, which are characterised by the limited number of units (14 on average) and a clear vocation towards the high- and very high-end segments of the market.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Värde Merges Vía Célere & Aelca to Create one of Spain’s Largest RE Firms

1 October 2018 – El Español

The US fund Värde has created and will control one of the largest residential property developers in the country after merging the two companies in the sector in which it holds a stake, Vía Célere and Aelca, according to a statement issued by the entity.

The resulting company, which will retain the name Vía Célere, will have the capacity to deliver 2,000 homes in 2019 and 5,000 homes in 2021.

Värde will control 75% of the share capital of the new Vía Célere. Nevertheless, the firm will continue to be led by Juan Antonio Gómez-Pintado (pictured above), who also chairs the real estate trade association.

This is the US fund’s second merger operation in the Spanish real estate sector, after it integrated Dos Puntos, the real estate firm that it constituted with assets left over from the San José group, and Vía Célere in April 2017.

With its latest operation, Värde says that it is “reaffirming its commitment to the Spanish market”, which it considers is still highly “fragmented” and “needs greater consolidation by the operators to provide a rate of deliveries that reflects the budgets prepared”.

Värde, together with Lone Star, Castlelake, Blackstone and Cerberus, is one of the overseas funds that arrived in Spain during the peak of the crisis to buy up real estate assets, above all those that the banks had been left with after foreclosing debts.

Possible resizing of the workforce

According to Värde’s data, the property developer that it has created owns assets worth €2.2 billion, located all over the country, although the firm did not provide details about the new entity’s landbank in square metres or the number of homes under construction.

According to information provided by the new Vía Célere, 38% of its assets are located in Madrid, 20% in Málaga, 11% in Barcelona, 9% in Sevilla, 5% in Valencia and the remaining 17% in other provinces.

25% of the share capital of the new Vía Célere, which is controlled by Värde (75%), is distributed between other shareholders, all of them are foreign investors, such as Barclays.

At the operational level, the new real estate giant says that, in theory, it will hold onto the 300 employees that make up the workforce, although it does not rule out “resizing its structure” over the coming months, depending on its needs.

Original story: El Español

Translation: Carmel Drake

German Fund Manager Aquila Capital Launches its own Property Developer in Spain

1 August 2018 – El Economista

The German fund manager, Aquila Capital, is demonstrating its commitment to Spanish property by launching a new property developer called AQ Acentor.

Until now, the firm has worked in Spain by delegating its development activities and in partnership with other real estate companies such as Inmoglacier, with which it has undertaken several projects. “The strategic partnership with the property developer has been positive and has resulted in the construction of three successful real estate developments, which have contributed to Aquila Capital’s expansion plans in the Spanish market under its own brand, AQ Acentor”, explains Sven Schoel, CEO of the German manager in Spain.

Aquila has been operating in Spain since 2014, focusing its business on the real estate sector, with projects worth more than €800 million. With the creation of this new brand, the firm has incorporated a management team to boost growth through in-house development.

AQ Acentor has been created with more than 3,000 new homes under construction, of which around 500 will be handed over during the course of this year. Currently, the firm is working on residential projects in metropolitan areas, primarily in Madrid, Barcelona, Málaga and Valencia.

“The company has a multidisciplinary team comprising more than 40 professionals located in offices in Madrid, Barcelona and Málaga”, explain sources at the firm.

“The creation of AQ Acentor responds to our firm commitment to the Spanish market and is backed by a pipeline amounting to €1 billion over the next five years”, specifies Schoel.

The manager is also present in the logistics market in Spain, one of the other real estate segments that is experiencing a boom, besides the residential segment. In that case, it has launched an investment plan amounting to between €350 million and €400 million for the Iberian Peninsula and Italy.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

ST: Madrid & Barcelona Sell 93% of their New Housing Stock in Just 2 Years

18 May 2018 – El País

In the cities of Madrid and Barcelona, the two main real estate markets in Spain, there are just 4,114 homes in new developments available for sale (9,920 in both provinces), the bulk of which have been put on the market within the last two years. Moreover, there are no longer many finished homes on offer, like during the years of the crisis, but rather mostly developments under construction or units that have not even been started yet, which are being offered off-plan and whose prices have risen by so much since 2016 that the supply of homes for less than €150,000 is currently insignificant.

Given the shortage of construction projects, the supply of new homes may be exhausted within eight months in the case of the Madrid region (nine in the capital) and within just under 14 months in the Catalan province (12 months in the municipal area), something that is going to accelerate the price rises seen in recent months, according to ST (Sociedad de Tasación), which has compiled a census on the developments that are currently up for sale.

Over the last two years, both real estate markets have done an about turn and not only due to the increase in prices. In the Community of Madrid, 93.7% of the stock of new homes has been exhausted since 2016, according to Sociedad de Tasación. The appraisal company registers a current supply of 6,319 homes, which represents an increase of 15.8% with respect to 2016. This calculation includes 346 homes that were already up for sale in 2016 and which have not been sold, plus 5,973 new units.

The rate of absorption in Madrid capital has been more marked, where more than 97% of the homes put up for sale over the last two years have been sold, in such a way that now there are 3,067 homes on the market (3,007 of which are new units), 42.1% with respect to 2016. 98% of this supply comprises properties that have been put on the market over the last two years.

In this new real estate cycle, the supply of finished properties has lost weight over the total, with such homes now accounting for just 7.5% of the total stock in the Community of Madrid, compared with 58.1% in 2014. 60.5% of the supply registered now corresponds to homes that have not been started yet and 32% to homes under construction. Specifically, the current supply of finished homes has decreased by 75.8% with respect to the census in 2016 and the volume of properties under construction has grown by 54%, whilst the supply of homes not yet started has risen by 75.1% (…).

In the province of Barcelona, 89.6% of the stock has been absorbed in just two years. In addition to the 289 homes that are still on the market from 2016, 3,312 new units have been identified, bringing the total current supply to 3,601 homes, 28.9% more than in 2016. And in the Catalan capital, 93.4% of the supply that has come onto the market over the last two years has been sold and today the current supply amounts to 1,047 homes. 93.2% comprise homes that have been put up for sale within the last two years.

Here too there has also been an increase in the weight of homes under construction (50.9%), at the expense of the supply of finished homes, which account for 12.4% of the total stock in the metropolitan area, compared with the 29.9% that they represented in 2016. Specifically, the current supply of finished homes has decreased by 53.6% with respect to the 2016 census, and the supply of homes under construction has grown by 65.7%, whilst the volume of homes not yet started has increased by 54.8% (…).

Larger and more expensive homes

Another feature of the new real estate cycle is that the homes for sale are larger and also more expensive than they were two years ago. In the Madrid region, homes with surface areas of between 100 m2 and 150 m2 are gaining weight, and now represent 62.2% of the total, compared with 45.8% in 2016. By contrast, homes measuring less than 100 m2 are losing weight, down from 36.1% in 2016 to 22.1%.

In terms of prices, there are increasingly fewer homes that cost less than €150,000, which have gone from accounting for 25.6% of the supply to just 15.2% in the Madrid region and from 13.6% to 9.7% in the Spanish capital. By contrast, the proportion of homes costing between €150,000 and €300,000 has increased, according to ST.

In the Barcelona metropolitan area, homes costing less than €150,000 have gone from accounting for 15.9% of the total supply to just 4.8%. And in the city itself, the appraisal company has not been able to identify any units on the market for less than €150,000. What’s more, homes costing more than €500,000 have grown from representing 24% of the total in 2016 to 39% in 2018.

Original story: El País (by Sandra López Letón)

Translation: Carmel Drake

Town Hall of Madrid Is Building 2,300 of the 4,000 Homes Promised by 2019

14 February 2018 – Madridiario

On Wednesday, the mayor of Madrid, Manuela Carmena, and the delegate for Equality, Social Rights and Employment, Marta Higueras, visited several developments currently under construction by the Municipal Housing and Land Company (‘Empresa Municipal de la Vivienda y el Suelo’ or EMVS) in the districts of Villaverde and Puente de Vallecas (Madrid).

The Town Hall of Madrid, through the ‘Empresa Municipal de la Vivienda y el Suelo’, has 2,356 homes under construction, at different stages, of the 4,000 that it has committed to building in total during this legislature. All of them are destined for rent and represent a change of tack towards “social needs” with respect to the previous PP Government, because “they are not being built to make money”.

That is according to the delegate for Equality, Social Rights and Employment, Marta Higueras, speaking on Wednesday. She detailed that, under the previous regulations, people who can now be awarded homes and who receive income for the entire family unit of between €600 and €700, were previously not allowed to register as applicants for homes (…) as they did not meet the minimum economic requirements.

“Only those that exceeded the IPREM by three times were allowed to register, but we have turned around that social approach because we are not looking to make money (from the process)”, said Higueras, who added that some rents start at as little as €65/month.

Meanwhile, the mayor of Madrid, Manuela Carmena, recalled that the responsibility for housing, both in terms of its construction and provision, lies with the Community of Madrid (regional Government) but, in fact, it is the Town Hall “that is proving to be the first port of call for citizens and that is having to find a solution”. To emphasise this point, Higueras contrasted the more than 2,300 homes that the Town Hall has underway, in different phases of construction, with the 140 homes planned for the capital by the regional executive.

Of those 2,536 homes in different phases of construction, 970 of them have already been started or will be started soon. They are joined by 458 under public tender, which will soon be awarded to the construction company and 212 in the phase of project supervision and licence management. Another 200 are inter-generational homes in the Ecobarrio de Vallecas, which are under tender and 516 are in the internal tender publication process for the drafting of plans.

Original story: Madridiario

Translation: Carmel Drake

Quabit Approves €110M Capital Increase To Finance Land Purchases

17 November 2017 – Expansión

On Wednesday, Quabit, the shareholders of the property developer chaired by Félix Abánades, approved several capital increases amounting to more than €110 million, which will be used to finance the purchase of land in Málaga, Costa del Sol, the Balearic Islands and the Corredor del Henares.

The purchase of these plots will be financed primarily by a line of credit amounting to €40 million, agreed with Avenue Capital Group, and by the delivery of new shares in Quabit issued at a price of €2 per share, which will represent a 27% increase in the company’s share capital. To this end, it will increase its share capital through non-monetary contributions amounting to €41.8 million, through the issue of approximately 20.9 million new shares.

Similarly, the shareholders of Quabit approved another monetary capital increase amounting to €70 million to prevent/avoid the dilutive impact of the non-monetary expansions. This increase will be completed through the issue and placement into circulation of 35 million new ordinary shares also with a maximum value of €2, recognising the preferential subscription right for all shareholders.

“The full subscription of all of the capital increases will result in the inflow of approximately €105 million and the strengthening of Quabit’s own funds, which will undoubtedly help to boost growth and to generate value for shareholders over the medium term”, explained the President, Félix Abánades.

The director added that the property developer currently has 18 developments under construction with 1,655 homes up for sale, and is working on the commercial launch of another five developments: “We will finish the year with around 2,100 homes on the market”.

According to Abánades, with all of these land operations and the portfolio of assets already owned by the company, Quabit will own almost 1 million m2 of land for the development of more than 6,700 homes. 70% of those properties will be handed over between 2017 and 2021.

The most recent acquisitions include a portfolio comprising developable land in Corredor del Henares, owned by Grupo Rayet – the main shareholder of Quabit – with a joint investment of €30 million and a buildable surface area of 131,000 m2 for the construction of 970 homes. These plots are located next to land in Alovera (Guadalajara), where Grupo Rayet is planning to build Alovera Beach, a leisure park that will soon be home to the largest artificial urban beach in Europe.

Original story: Expansión

Translation: Carmel Drake

Liberbank Finalises Property Sale To Ensure Success Of Capital Increase

4 October 2017 – Cinco Días

Liberbank does not want to follow in the footsteps of Popular and is taking firm strides to avoid that fate. Its focus now is on shaking off the property that it still holds following the crisis, in order to project the image in the market that it has cleaned up its books and to ensure the success of its upcoming capital increase. In this way, the entity is finalising the sale of a large part of its portfolio of foreclosed assets this week, in parallel to the capital increase, which its General Shareholders’ Meeting is expected to approve on 9 October.

The entity led by Manuel Menéndez is working against the clock to ensure its independence. The CNMV has given it until 30 November to extend, for the third time, a veto on short positions that it imposed in June, a few days after Popular’s future was resolved. Sources close to the operation expect the first stage (the sale of a portfolio worth €800 million) to be closed this week. Or within 15 days, at the latest, since in that case, it would be performed in parallel to the start of the capital increase.

Liberbank received the first binding offers at the beginning of last week. And from those, it has selected three funds: KKR, Bain and Cerberus. The latter is the firm that acquired the bank’s real estate subsidiary, Mihabitans, in the summer, through Haya Real Estate. It spent €85 million on that purchase. The market described the operation as a “success” and uses it as an example for the upcoming sale of the toxic property.

Haya is exclusively managing the current foreclosed real estate assets on Liberbank’s balance sheet, as well as any future foreclosed real estate assets that end up being incorporated onto the bank’s overall balance sheet or onto those of any of its real estate subsidiaries. According to the accounts for the first half of the year, Liberbank held €3,115 million in foreclosed assets on its balance sheet, with a provision coverage ratio of 40%. Of those, €1,741 million are finished homes, €1,162 million are plots of land, €480 million are homes under construction and €402 million are offices and warehouses.

This new sale of foreclosed assets, dubbed ‘Operación Invictus’, will be closed for a price of around €400 million. Although the book value of the real estate assets in the portfolio is €800 million, the sale will be closed at a discount of at least 50%. Santander closed the sale of 51% of Popular’s property to Blackstone at a discount of 66%.

With the aim of wiping out the losses that this sale will generate and of getting rid of a large part of its real estate portfolio, once and for all, the Board of Directors of Liberbank proposed a capital increase on 6 September, which they are now trying to safeguard. The bank hopes to raise €500 million through the operation. The objective is for the bank’s default ratio to amount to 3.5% by 2019 and for the coverage ratio on its non-performing assets (doubtful loans and foreclosed assets) to rise to around 50%. At the end of June, Liberbank recorded figures of 11.3% and 40% for these ratios, respectively.

With a balance sheet of €40,000 million, Liberbank is the smallest entity of those supervised by the ECB, together with Banco Crédito Social Cooperativo, the parent company of Cajamar. One of Liberbank’s other missions is to increase its return on equity (ROE) to 8% by 2020, compared with the figure of 2.7% recorded during the first half of this year. It is the second time that the bank has increased its share capital since it started trading on the stock market in 2013. The previous capital increase, in May 2014, saw it raise almost €500 million.

Then, the bank responsible for coordinating the operation was Deutsche Bank; now it is being managed by Citi. Last time, the injection of fresh funds allowed the entity to early repay €124 million that the FROB (Fund for Orderly Bank Restructuring or ‘Fondo de Reestructuración Ordenada Bancaria’) had injected it with; to strength its top-tier capital ratio to more than 10%, as if the Basel III requirements were completely applicable; and to bring forward the payment of dividends to its shareholders.

Original story: Cinco Días (by Álvaro Bayón and Pablo M. Simón)

Translation: Carmel Drake

ACR Emerges From The Crisis Thanks To RE Recovery

20 May 2016 – Expansión

After the slump of 2013 and 2014, the Spanish construction company ACR, which specialises in the construction and development of residential housing, has experienced significant growth thanks to the recovery of the real estate market in Spain. “The residential construction segment has clearly improved”, said Michel Elizalde (pictured above), the CEO of the company, which saw its turnover soar by 45% in 2016, to reach €130 million.

The fruits of 2015 (€100 million in new contracts) have contributed to increase the size of the portfolio to €125 million, of which only 10% comes from abroad. Spain, unlike the trend in other construction companies, has offset the irregular nature of the business overseas. ACR is withdrawing from France and is analysing Colombia very carefully, where it is starting to feel the lack of projects due to the difficult economic situation, driven by the unfavourable exchange rate versus the euro, the decrease in the price of oil and in fall in prices of raw materials. “Our international expansion is costing us more than we expected it would when we launched the initiative in 2011”, acknowledges Elizalde. ACR will continue to analyse opportunities in Colombia, but it will abandon the French market, due to the barriers to entry against foreign groups and the different culture there in terms of contracting suppliers.

ACR performs most of its work for third parties, and the remainder relates to developments in different cities, primarily, in Madrid and Barcelona. Currently, the group has around 1,900 homes under construction. According to ACR, the factor that has most contributed to the mobilisation of the Spanish residential market has been the entry of new investors, primarily investment funds, which require the support of groups with experience in construction to develop their projects. “In addition, there was pent-up demand, which is now flourishing, although we are still a long way off the production speeds of 100,000 homes per year”.

ACR, with a controlled debt of €26 million, expects its turnover to reach €140 million this year, on the basis of its performance during the first four months of the year. “We are evolving from a real estate construction firm into a project management partner”, said the CEO of ACR.

Elizalde gave the example of his firm’s agreement with the fund Allegra to develop two housing complexes in Madrid.

Original story: Expansión (by C.Morán)

Translation: Carmel Drake