US Fund King Street Capital Acquires 3.92% of Neinor Homes

5 April 2018 – Eje Prime

King Street Capital is knocking at the door of Neinor Homes. The US fund has purchased a 3.92% stake in the Spanish property developer, a percentage that, at current market prices, is worth €45.6 million, according to the records held by Spain’s National Securities and Exchange Commission (CNMV).

The US investment fund is acquiring a stake in the listed real estate company at a time when the company led by Juan Velayos is undergoing significant changes. In a shareholding dominated by overseas institutional investors, Adar Capital stands out with 27.8% of the share capital. The Israeli fund increased its stake in Neinor from 5.2% to almost 30% in a matter of weeks, the threshold that would oblige the company to launch a takeover bid for the entire firm.

In the last week, another foreign fund, in this case from Luxembourg, Alken Fund, has acquired 3.11% of the property developer, whose main secondary shareholders are Bank of Montreal, with a 5.20% stake; Invesco, which also controls 5.2%; Wellington Management Group, which holds 4.9%; and Norges Bank, owner of 4.5%.

Currently, Neinor Homes has 71 housing developments underway in Spain, comprising 5,470 homes, after launching five new developments with 528 homes in the third quarter of last year. The property developer’s plans involve investing more than €1.5 billion over the next five years to hand over up to 15,000 homes.

Original story: Eje Prime

Translation: Carmel Drake

Velayos: Neinor Homes Will Generate Sales Of c. €1,000M In 2019

9 October 2017 – El Periódico

Neinor Homes, the real estate company born out of Kutxabank and in which the fund Lone Star holds a stake, has now reached a production rate of 5,000 homes in Spain, according to the firm’s CEO Juan Velayos. In fact, the company has 72 developments under construction and now owns land on which to build 12,000 homes.

“We have 35 developments in the launch phase – around 3,000 homes – , we have already handed over five developments and we have three more approaching completion”, explained Velayo at a press conference prior to the celebration of Barcelona Meeting Point, which will take place in the Fira de Barcelona from 18th until 22nd October.

Velayos explained that the property developer expects to record turnover of almost €1,000 million in 2019. “We will come in just below that figure in 2019 and then we will exceed it in 2020”, he said. Specifically, the company expects to complete this year with revenues of around €300 million and to record sales and EBITDA (gross profit) of €400 million and €100 million, respectively, in 2018.

Neinor Homes currently has 64 developments underway; in 2018, it expects to have 92; in 2019, more than 100; and in 2020, 120 in total, which translates into the forecast completion and handover of between 3,500 and 4,000 homes per year from 2020 onwards. “That is the pace that we want to maintain over the long-term”, said Velayos.

The property developer, which operates in Madrid, Catalunya, País Vasco, the Balearic Islands and Andalucía, is also looking at opportunities in Galicia and Portugal. At the moment, 50% of its output is divided between Madrid and Barcelona, and the other 50% is spread across the rest of Spain. Of the two large markets, Catalunya accounts for 20% of the total. “We are not planning to increase the weight of that autonomous region in our portfolio, for the time being at least”, he said.

Original story: El Periódico (by Max Jiménez Botías)

Translation: Carmel Drake

Ferrovial, FCC, Acciona & ACS Are Building Houses Again

25 May 2017 – El Confidencial

A decade after they sold or wrote off their real estate arms, the country’s largest construction companies are now returning to the residential property development sector. Ferrovial, ACS, Acciona and FCC have regained their appetite for property and although they have different paces and strategies in mind, they have all definitively decided to revive their real estate divisions.

In the case of the group chaired by Rafael del Pino, which sold Ferrovial Inmobiliaria to Habitat for €2,200 million at the end of 2006, it will lay the first stone of this new strategic phase in Valdebebas. It owns plot 128A there, in what is one of the most important urban planning developments in the north of Madrid, and it plans to build between 200 and 300 homes on the site.

And that is just the tip of the iceberg, given that as the group’s CEO, Íñigo Meirás, acknowledged to this newspaper, the firm “is willing to become a property developer once again”. (…).

This strategy, combined with the gradual recovery in the real estate sector, has allowed residential construction work to account for 5% of the group’s total building portfolio, having closed last year at €442 million, up by 31.7% YoY. The group aspires to increase those numbers, by resuming its property development activity, which has caused it to analyse land operations in different areas to the north of Madrid.

FCC Real Estate also wants to make a similar move. The division, led for the last year and a half by Xavier Fainé Garriga, has decided to start developing half a million m2 of land that it owns in the Madrilenian town of Tres Cantos. The company has owned the plots for years, and its construction division will also participate in their development, along with the real estate subsidiary Realia, which will collaborate on the marketing side. (…).

Meanwhile, Acciona has a more ambitious plan, after it tried, two years ago, to divest its real estate arm, by listing it on the stock market or selling a stake in it to a fund – it has now ended up deciding to return to development. That was recognised by the firm’s Corporate Development Director, Juan Muro Lara, in March, when he announced the launch of 16 housing developments: 13 in Spain and the rest in Mexico and Poland.

In parallel, the group is finalising the transfer of its rental properties to Merlin, in a deal disclosed by El Confidencial in October, which will see the former’s exit from the real estate business. It also wants to push ahead with the sale of its hotels and office buildings through individual operations.

In the case of ACS, the firm is carrying out its strategy in the development segment through Cogesa, the historical subsidiary of the group, which stands out because it is the owner of the group’s two main corporate headquarters, the office buildings located in Las Tablas and on Avenida Pío XII in Madrid, and for owning sizeable land portfolios in areas such as Montecarmelo, Arroyo Fresno, Las Tablas, Carabanchel and Ensanche de Vallecas.

The turning point for this subsidiary, which is led by the brother of Florentino Pérez, Enrique, came two years ago, when it carried out a capital increase amounting to €44 million and then acquired one of the last plots of residential land in Montecarmelo for €2,200/m2. That figure turned the operation into one of the most onerous since the burst of the bubble, but is now seen in a very different light. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Aedas Homes Prepares Its Stock Market Debut For October

28 April 2017 – Expansión

Aedas Homes wants to follow in the footsteps of its rival Neinor and debut on the stock market. The residential property developer controlled by the US fund Castlelake has engaged Goldman Sachs and the law firm Linklaters to prepare its debut on the stock market and whereby benefit from the good times that the residential market is currently enjoying in Spain, as well as from the confidence that international investors are placing in the real estate sector, according to market sources.

The same sources indicate that, although the operation is still in a preliminary, evaluation, phase, the objective of the new property developer, which only commenced activity a few months ago, is to be ready to start trading its shares in October of this year.

In this way, the real estate company would join Neinor, which debuted in March and would overtake Vía Célere, which is controlled by the fund Värde, which has also expressed its desire to debut on the stock market, within two years.

Aedas Homes is exclusively dedicated to the development of housing projects, both primary and secondary residences. The property developer undertakes projects on land that it owns and has a portfolio of land, primarily buildable (building permission has already been granted), for the construction of more than 12,000 homes. Specifically, it has fourteen developments currently underway in Alicante, Barcelona, Madrid, Málaga, Sevilla and Valencia.

Castlelake’s commitment

Castlelake, which backed the housing market in Spain in 2013 by purchasing various plots of land, launched Aedas Homes less than a year ago, advised by the Socimi Merlin Properties. After accumulating a portfolio of land in Spain spanning 1.3 million m2, worth more than €1,000 million, it is now building more than 1,500 homes.

The company, which includes professionals from Testa, is led by David Martínez (pictured above). (…).

Control of the funds

Aedas is one of several new property developers, controlled by investment funds, that wants to lead the residential market in Spain, which is highly fragmented and still reeling from the crisis.

Besides Aedas, one of the new star property developers in the Spanish real estate market is Neinor, which was launched by Lone Star. (…) . Other new players include Vía Célere – which has merged with Dos Puntos – and Aelca (both controlled by Värde).

Another new player (…) is Kronos Homes, in whose share capital, investors from the United Kingdom, France, Finland, the USA and Switzerland hold stakes.

In addition, other players include Metrovacesa Promoción Suelos – the division that was left out of the merger between Metrovacesa and Merlin –and other property developers that survived the crisis such as Realia, controlled by the Mexican businessman Carlos Slim, and Quabit, heir of the former Astroc.

Original story: Expansión (by R. Arroyo and S. Saiz)

Translation: Carmel Drake

Don Piso Invests €36M To Build New Homes In Barcelona

11 July 2016 – La Vanguardia

The real estate group Don Piso has 10 housing developments underway, worth €36 million, in the province of Barcelona, according to its majority shareholder and CEO, Luis Pérez. “Property development has always been a complementary part of our company’s activity; we mainly focus on brokering the sale and purchase of homes”, explained Pérez. The group, which has created an independent company for each construction site, has already completed one development in Badalona, the first one it started following the end of the real estate crisis; and it expects to finish its flagship development, opposite the Clínica Quirón in Barcelona, on the site of the former headquarters of the Tusquets publishing house, in September. In addition, Pérez explained that the group has three developments underway in l’Hospitalet de Llobregat, two in Cornellà and three in Sabadell. “We buy small plots of land on which to construct between 10 and 30 homes, in areas where we already have representatives and therefore where we know the market”, he explained. The developments are all at different phases, some are still under construction, whilst others are waiting for licences to be processed.

Don Pizo, explained Pérez, has accelerated its pace of growth to manage the increase in transactions being brought about by the real estate recovery. Thus, he explained, the group already owns 20 offices of its own and a network of 51 franchised agents. “We are going to open an office in Madrid, with 8 people, which will operate as a sales office and which will also centralise the relationships with our franchisees: this represents our return to this market following the crisis”, he explained. The firm has also returned to the Canary Islands, where it had 60 offices before the crisis. “It is a very important market and we have hired a very powerful local partner there to undertake the significant expansion”.

Don Piso used to have more than 400 offices before the outbreak of the real estate crisis, in 2007 – it owned 156 of those outright and also had more than 260 franchises, but the crisis forced it to cut back, to just 8 own offices and less than 20 franchises, with a workforce of 40 people. Thanks to the recovery of the market, the firm now employs 296 people.

“We are enjoying an ideal market at the moment, with affordable prices and satisfied buyers. We hope that the market will continue like this, with price increases of between 2% and 6% p.a., and that we avoid repeating the mistakes of the past”, he acknowledged. Last year, Don Piso recorded a turnover of €7 million and brokered property sales worth €92 million. The firm, which returned to profit in 2014, expects to close this year with a 30% increase in revenues, to reach €9 million, with brokered property sales of €117 million.

Original story: La Vanguardia (by Rosa Salvador)

Translation: Carmel Drake

Sabadell To Release 800 New Homes Onto The Market

27 July 2015 – Expansión

The improved outlook regarding the performance of the Spanish economy is reflected in the real estate market, where prices are stabilising and even increasing in certain areas of Madrid and Barcelona. And the stocks of newly constructed homes are drying up in some towns, due to a lack of new developments in recent years.

Against this background, cranes are returning to the domestic landscape and banks are taking on a new role in the market for real estate development, as they aim to generate returns from the land and half-finished construction projects that they foreclosed in exchange for debt payments. And Sabadell is playing a very active role. It will release 800 homes onto the market over the coming months.

The bank led by Josep Oliu is currently developing eleven of its own real estate urbanisations, most of which are located in Barcelona, Andalucía and Levante, but also in País Vasco and Asturias. The construction work will be completed during the remainder of 2015 and 2016, and will culminate in the release of more than 400 homes – flats and houses – onto the market, over several stages, with some of the properties already being sold.

Beside these developments, which spread across the country and whose degree of completion ranges between 15% and 100%, three other new developments will be started after the summer in Madrid – in the towns of Colmenar Viejo and Alcalá de Henares – and Levante. Once finished, these urbanisations will contain approximately 400 homes.

During the first half of 2015, 46% of Sabadell’s property sales were made in cash, whilst 37% were financed by the bank and the remaining 17% were funded using loans from other entities. In fact, the Catalan bank is offering buyers both variable rate and fixed rate mortgages – at Euribor plus 1.6% and 2.9%, respectively.

The entity’s real estate and mortgage offer is in line with those of other banks such as Santander and BBVA, which are developing 600 different urbanisations at the moment, as well as with that of Sareb, which will release 1,200 homes onto the market during the remainder of 2015, in some of the 30 developments that it completed last year and the 42 that it currently has on-going.

Signs of recovery

After an intense and long-lasting period adjustment, both in terms of activity and prices following the burst of the real estate bubble, the sector is now showing clear signs of recovery, to the extent that foreign funds have also entered the sector for the development of homes. But, is there a risk of excess supply?

Residential development is likely to grow over the next few years, says Javier López Torres, the partner responsible for the real estate sector at KPMG in Spain. And there is still room for more new builds without any risk of a new real estate bubble, says an expert from Andbank, Rocío Ledesma. And Sabadell wants to maximise the opportunities in the market through its development company Solvia.

Solvia is dedicated not only to the development of urbanisations owned by the bank, it also works for third parties. It is a servicer with assets under management amounting to €28,000 million, and it offers services ranging from the management of loan portfolios, to the development of land, as well as the management and administration of assets. In fact, Sareb awarded its first asset management contract to Solvia.

Original story: Expansión (by Alicia Crespo)

Translation: Carmel Drake