Tag: improvements

Lar España Excites the Market with its Logistics Portfolio

23 April 2018 – Expansión

The Socimi, which owns five complexes in Guadalajara and Valencia, has received a dozen offers for its assets, all of them for a price of more than €75 million.

Some of the players that have bid for Lar España’s logistics portfolio include the US fund Blackstone, P3 Logistic Parks – a platform controlled by the Singapore sovereign fund -, Palm Capital, CBRE Global Investors, Ares Management and Nuveen, according to market sources speaking to Expansión.

In the logistics sector, the Socimi in which the fund manager Pimco holds a stake, owns four complexes in the municipality of Alovera (Guadalajara), in the heart of the Corredor del Henares.

Together, that site comprises ten logistics warehouses with a total constructed surface area of 142,630 m2 occupied by tenants such as Saint Gobain Isover Ibérica, Tech Data, Carrefour and Factor 5. In addition, the Socimi owns a logistics complex in Almussafes (Valencia) containing a logistics warehouse with a constructed surface area of 19,211 m2. That warehouse is occupied by Valautomoción, the supplier of car parts and accessories to Ford, which was acquired by Ferrostaal in 2015.

According to the latest figures published by the Socimi, its portfolio of logistics assets has a valuation of almost €90 million. Moreover, Lar owns around 200,000 m2 of space for a new logistics development in Cheste (Valencia), which it is not planning to sell until it has finished construction there, to make the investment profitable, according to information reported by the company at the time.

According to Lar’s accounts, the land, which it purchased less than a year ago from Bertolín, has doubled in value since the investment was made. The Socimi paid €2.2 million for the 112,813 m2 plot in Cheste in May 2017 and, at the end of last year, it had a market value of €5.2 million.

Other divestments

Lar España has launched an asset rotation plan to raise cash and undertake new investments in shopping centres After selling two office buildings to Colonial, both in Madrid, for €112 million, the company now has three office buildings in Madrid and Barcelona worth around €85 million.

Moreover, it expects to raise €110 million from the sale of its stake in the luxury residential development Lagasca 99 (Madrid), which it owns jointly with Pimco.

In parallel, the company is going to maintain its investment plan. It expects to allocate €220 million to new acquisitions in retail centres and parks and will invest €247 million in developments, especially commercial ones, and another €49 million on improving its assets.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Lennar’s Socimi Al Breck Sells 14 More Assets for €11M

19 April 2018 – Eje Prime

Whilst last year was marked by investments on the part of the Socimis, this year is being marked by divestments. Lennar Corporation is divesting in Spain again and has closed fourteen operations to sell properties through one of its Spanish Socimis, Al Breck, for €11 million, according to a statement from the company.

The company has carried out the transactions through the company Rialto Capital Management, an investment vehicle headquartered in Luxembourg, which Lennar uses to carry out its real estate operations in Europe and the only one that has a stable structure in Spain.

The company divested the properties between 16 February and 12 April, generating a gain for the company of €5 million. This divestment follows another carried out in January when it sold four assets for €3.5 million.

Lennar Corporation made its debut on the Alternative Investment Market (MAB) with Al Breck at the end of November 2016 (although it commenced activity in Spain in December 2014), with a stock of around 639 rental homes located in the centre of Madrid. The Socimi created its asset portfolio through the purchase of a portfolio from Segurfondo Investion in December 2014.

Specifically, the Socimi’s assets are located in the centre of the Spanish capital (in the Centro, Salamanca, Chamberí and Chueca districts), as well as in La Moraleja and in towns close to Alcobendas and Torrejón de Ardoz. The portfolio also contains retail premises and offices. According to the IPO prospectus, the market value of the asset portfolio at the time of its stock market debut was €110.52 million.

The Socimi made its stock market debut with a business plan that involved generating value from its portfolio, in other words, selling all of its homes within a 5-year period, ending in December 2020. The company has now initiated this divestment process with the sale of these first assets.

Al Breck’s strategy

Specifically, the company’s plan involves investing in improvements in homes “to increase their yields and increase their occupancy rates to stable levels, and then implementing an aggressive rental strategy that includes, where necessary, reducing the rents and making concessions to tenants to improve the cash flow conditions”.

Subsequently, according to the group’s IPO prospectus, “after improving the occupancy rate, the objective is to keep it stable and start to progressively increase the rents in accordance with the improvements made to the properties and market prices”.

Finally, the Socimi plans “to optimise the value of its portfolio by selling assets individually or in batches, when the demand and price so dictate, and once the minimum ownership term of three years has passed in each case”, according to the firm in its brochure.

In addition, the company launched a second Socimi, Ceres Real Estate Socimi, at the end of last year. Although for the time being, that entity’s activity has been very limited (it does not hold any assets in its portfolio), the sole administrator of the company is Rialto Capital.

This new Socimi is, in turn, the heir of Clearfield Invest, a firm constituted just over two months ago and whose administrators form part of the TMF Group’s team in Spain, a company specialising in the provision of services for all kinds of companies.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

The Value of Lar España’s Asset Portfolio Rises by 29% to €1.5bn

25 January 2018 – Eje Prime

Lar España said goodbye to 2017 with more valuable assets in its portfolio. The Socimi has reported that its property portfolio experienced a 29% increase in value last year, up to €1.538 billion. According to the Socimi, that figure is higher than the sum of the prices at which it purchased its properties (€1.196 billion).

The company specified that the valuation of its real estate portfolio has been prepared by Cushman&Wakefield and JLL Valoraciones, according to Europa Press. This increase in the value of its portfolio is due to the various efforts undertaken in respect of its assets and the investments made during the course of the last twelve months.

As Lar España itself explained, between 2016 and 2017, it invested €74 million in improvements to assets in its portfolio, split between shopping centres (€20 million), office buildings (€11 million) and developments (€43 million).

Moreover, according to the Socimi, from the point of view of management, several actions have been undertaken. Specifically, the company highlights the purchase of properties for numerous rental rotation operations. In total, those types of operations account for 22% of the surface area occupied by the Socimi’s assets to date.

Original story: Eje Prime

Translation: Carmel Drake

Lennar’s Socimi Al Breck Sells its first 4 Assets for €3.5M

5 January 2018 – Eje Prime

One of the largest real estate companies in the United States of America is doing business in Spain. Lennar Corporation has sold four properties through one of its Spanish Socimis, Al Breck, for €3.49 million, according to a statement issued by the company. The firm has carried out the transaction through the company Rialto Capital Management, an investment vehicle, headquartered in Luxembourg that Lennar uses to carry out real estate operations in Europe and the only one that has a stable structure in Spain.

The company disposed of the properties in December, whereby generating a profit of €1.79 million. The firm, which has a loan linked to the assets, will have to assume a financial cost of approximately €1.2 million in this regard.

Lennar Corporation debuted on the Alternative Investment Market (MAB) with Al Breck at the end of November 2016 (although it began its activity in Spain in December 2014), with a stock of almost 639 rental homes located in the centre of Madrid. The Socimi formed its asset portfolio by purchasing a batch of properties from Segurfondo Inversión in December 2014.

Specifically, the Socimi’s assets are located throughout the centre of the Spanish capital (in the following districts: Centro, Salamanca, Chamberí and Chueca), as well as in La Moreleja and areas close to Alcobendas and Torrejón de Ardoz. It also owns retail premises and offices. According to its IPO brochure, the market value of its asset portfolio amounted to €110.52 million (in November 2016).

The Socimi made its stock market debut with a business plan that seeks to generate value from its portfolio, in other words, by selling all of its homes within a five-year period, which ends in December 2020. The company has now started this divestment process with the sale of these four assets.

Al Breck’s strategy

Specifically, the company’s business plan involves investing in improvements to its homes, “to increase returns and improve their occupancy rates to stable levels, implementing an aggressive rental strategy that includes, where necessary, decreasing rents and making concessions to tenants to improve cash flow conditions”.

Subsequently, according to the group’s IPO brochure, “having improved the occupancy rates, the aim is to keep them stable and initiate a progressive increase in rental prices, to reflect the improvements made to the properties and market rates”.

Finally, the Socimi plans “to optimise the value of the portfolio, selling assets either individually or in batches, when demand and prices so favour it and having completed the minimum ownership period of three years”, according to details provided in the brochure.

At the end of last year, the company also launched a second Socimi, Ceres Real Estate Socimi. Although for the time being, the activity of that entity is very limited (it does not have any assets in its portfolio), the sole administrator of the company is Rialto Capital (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Merlin to Invest €16M Remodelling Porto Pi Shopping Centre (Palma)

15 December 2017 – Última Hora

Merlin Properties, the listed real estate investment company (Socimi) and largest shareholder of the Porto Pi shopping centre, is going to invest €16 million to remodel and improve the asset’s commercial offer.

The Socimi, in which Santander and BBVA hold a stake, has set itself the objective of improving the centre to bring it into line with current tastes in the market.

Sources at Merlin Properties indicate that in the new era of shopping centres, the aim is to attract the greatest number of visitors “for convenience and experiences”.

The Socimi plans to extend the centre’s areas of activity beyond pure shopping, towards experiences. Moreover, it is keen to integrate the centre with e-commerce, through the constitution of a marketplace and by placing Amazon and Correos e-commerce purchase collection points, as well as pop-up stores and temporary outlets.

Merlin Properties estimates that these improvements, together with the management and natural growth of the assets, will allow it to increase its current annual revenues by 22% and to exceed a country-wide turnover figure of €500 million based on all of its planned projects, without having to buy new properties.

Amongst the most important investments are the €21 million that it plans to spend on the complete renovation of the Larios centre in Málaga and the €16 million that it plans to spend on Porto Pi in Palma.

The shopping centre in Palma receives 8.7 million visitors per year. The different phases of the construction work that are going to be carried out will be completed during the first quarter of 2020 (…).

The final objective is to consolidate Porto Pi’s dominant position at the commercial level in Palma with the maximum variety and diversification of products.

Original story: Última Hora (by J. L. Ruiz Collado)

Translation: Carmel Drake

New Urban Planning PGOU Approved for Málaga

25 November 2017 – Diario Sur

Following the annulment of the PGOU approved in 2010, the route map towards the normalisation of urban planning in Marbella has taken a step forward with the initial approval of some new urban planning rules. The latest document seeks to “update” the plan approved in 1986, which is still valid now and which will serve as the basis for drafting the new PGOU that the city needs. The process, which was approved by the plenary with votes in favour from the government’s team (PP and OSP) and the PSOE, and votes against from IU and Costa del Sol Sí Puede, must now be completed with text from the provincial delegation of the Junta’s Environment Board, prior to the issuance of a mandatory report. Subsequently, it will be presented to the plenary again for definitive approval (…).

In practice, and as the councillor for Land Planning, María Francisca Caracuel, explained, modifications have been made to the framework, amongst others, “which affect many homes” and which mean that “extensions, improvements and renovations will now be allowed” on buildings that were left out of the guidelines after the 2010 plan was annulled.

Another change will affect plots of land, for which it is not currently possible to grant construction licences because no approved urban planning projects exist, in accordance with the plan approved in 1986 “even though, in reality, they are already partially developed”. In these cases, the common rules open the door for the plots to be developed, by submitting an urbanisation work project “which is less complex and which can be processed in less time”.

The new rules will authorise hospitality use on the first floors of homes in the Casco Antiguo (Old Town) and will allow hotel establishments to expand their facilities onto adjoining plots even if the use of those sites is not strictly for hotel purposes (…).

Established urban plots

In the field of urban planning, the plenary also ratified (with votes in favour from the government team, against from IU and CSSP, and abstentions from the PSOE) the proposal made by the Councillor for Land Planning to incorporate established urban plots into the urban development plans, after they have been declared as such by binding legal rulings, administrative declarations, own acts, plenary agreements or by the Local Government. The councillor insisted that, given that it does not require any structural changes, there is no need for the document to be subjected to a new public consultation period, as had been requested by the other municipal groups.

In other matters, the municipal corporation also gave the green light, unanimously, to the proposal from the deputy mayor of San Pedro Alcántara, Rafael Piña (…) to begin the paperwork for the construction of a new secondary school in the south of San Pedro (…).

Finally, the plenary also approved, amongst other items, a proposal from IU to create a network of roads to connect the urbanisations between Bello Horizonte and Elviria, to form a 10km network that will offer a safe alternative to the A-7 motorway, which is “always packed and dangerous”.

Original story: Diario Sur (by Mónica Pérez)

Translation: Carmel Drake

Socimi Bay Hotels & Resort’s Profits Rose By 87% In H1 To €102M

31 October 2017 – Alimarket

Bay Hotels & Resorts, the hotel Socimi created by Hispania and Grupo Barceló, has presented its results for the first half of 2017, which reveal that the Socimi increased its profits by 87% during the period to €102 million, with respect to June 2016. In turn, its revenues from the rental of hotels and shopping centres rose by 26.5% to €38 million. On the investment side, Bay spent €18.8 million to improve and reposition its portfolio during the first six months of 2017. The bulk of that investment was spent on the renovation of the Balearic hotel ‘Barceló Paradise Portinatx’ – acquired by Hispania for €11 million this year – and the Canary Island hotels ‘Barceló Teguise’ and ‘Occidental Jandía Mar’, amounting to €7.6 million, €3.6 million and €775,000, respectively.

Bay’s recent operations include the purchase of all of the shares in Armadores de Puerto Rico for €6.2 million on 28 June 2017. That entity owns land in Lanzarote, on which Bay plans to construct a luxury hotel with 225 rooms. Its plots are located adjacent to the ‘Occidental Lanzarote Playa’ (372 rooms) and ‘Occidental Lanzarote Mar’ (436 rooms) complexes, which Bay Hotels also owns. The objective of the Socimi is to create a luxury mega-complex in this tourist area, with 1,033 rooms in total. That same month, the Socimi also completed its purchase of the Balearic hotel ‘Fergus Tobago’ in Palmanova (Mallorca) for €20.5 million, and the Benidorm hotel ‘Selomar’ for €16 million. Looking ahead to future investments, the group held real estate investment commitments amounting to €19.4 million as at 30 June 2017.

Meanwhile, on 1 June 2017, Bay signed a liquidity contract with the entity GVC Gaesco Beka, S.V., with the aim of favouring the liquidity of its transactions and the uniformity of its share price. Overall, the Socimi held 406,450 own shares as at 30 June 2017, with a total value amounting to €2.15 million. At the end of the first half of the year, Hispania recorded a gross asset value of €931 million, which resulted in the recognition of a €73 million gain for asset appreciation in the income statement (…).

Following the various corporate operations, Hispania and Grupo Barcelona own 76% and 24% of the Socimi, respectively. The representative shares in Bay Hotels & Leisure Socimi have been trading on the Alternative Investment Market since 24 July 2017.

Original story: Alimarket

Translation: Carmel Drake

Internos Leases 3,000m2 Of Office Space In Its La Marina Property (Madrid)

30 October 2017 – Cushman & Wakefield

INTERNOS Global Investors (INTERNOS) has leased more than 3,000 m2 of office space to a leading digital and media solutions company in the La Marina Business Park in San Sebastián de los Reyes, Madrid.

The building, which is owned by INTERNOS Spezialfondsgesellschaft Mbh branch in Spain (part of the ICE Balanced fund) is located in a business park that comprises 11 office buildings and which is characterised by the high quality of its facilities. The asset is home to other high-profile tenants such as Telepizza, Kaelis and P&G.

La Marina Business Park has several services in the area and excellent communications, both in terms of public and private transport. The area is also home to the headquarters of Atresmedia.

Cushman & Wakefield, the global leader in real estate services has advised the operation, which takes the occupancy rate of the building to 85%.

Santiago Neira, Senior Asset Manager at INTERNOS, said: “This is a great achievement for INTERNOS. We have managed to sign two important rental agreements for our property in San Sebastián de los Reyes, covering a GLA of almost 9,000 m2. This provides further evidence of the good quality of our assets and our vocation as proactive managers.

Jaime Ibáñez from the Business Space department at Cushman & Wakefield added: “This is an excellent and modern building that has certainly appreciated in value following the recent improvements carried out by Internos”.

Original story: Cushman & Wakefield

Translation: Carmel Drake

RIU Seeks To Grow Its ‘Hotel Plaza’ Business Line

17 May 2017 – Expansión

RIU is on a roll. As it waits for the starting gun to fire on its Edificio España project in Madrid, the Mallorcan hotel chain is analysing other destinations in order to strengthen its Plaza business line, which is strategic for the group, whereby adding new locations to the Plaza brand.

The CEO of RIU and Head of Canary Islands, Morocco, Portugal and Cape Verde, Félix Casado, explained in an interview with Expansión that the group is considering destinations such as Barcelona, Paris and Rome to continue the business it started in 2010, when it opened its first RIU Plaza hotel in Panama. Since then, it has added another five Plaza branded establishments in Berlin, Dublin, Miami, Guadalajara and New York. But, for the time being, it does not have any in Spain. At the beginning of the year, the company announced its plans to team up with Baraka to manage and invest in the mega-hotel that the Murcian group is planning to open in Edificio España.

“We are very excited about the idea of handling this project in Madrid, in particular, in a building as iconic as Edificio España. The negotiations are not proving easy and now we have to wait for the purchase operation to be closed, which has been delayed for three months, before we can start construction”, said the Director. Casado said that his firm’s investment commitment with the Baraka Group “continues”, in line with expectations, with the aim of creating a joint venture to which the hotel chain will contribute 25% of the investment.

In terms of the possibility of undertaking a project on its own, in the event that Baraka does not manage to close the purchase within the scheduled timeframe – i.e. by June – Casado simply said that that option “is not envisaged”. And he added: “The other line would be a separate study that would have to be analysed from the point of view of the required investment and the return”.

Entry into China

Besides the urban business, the hotel group’s growth plan involves expanding into vacation destinations, both in America as well as in Asia.

The company, which operates in 19 countries with almost one hundred hotels, is considering entering China, starting out in cities such as Beijing and Shanghai. “We would be willing to invest in all of these destinations. RIU is going to attend the ITB Tourism Fair in China to consolidate its relations there and create new business opportunities”, said Casado.

In addition, RIU has not ruled out returning to Cuba, which it left in 2015, with the management of new hotels. “We are looking at various possibilities to return to Cuba. We have experience in that destination and if an opportunity arises that fits with out philosophy then we will explore it”.

Renovations

In addition, the hotel group is committed to repositioning its products through major renovation projects. Within the framework of this strategy, the Spanish group will spend €400 million this year on construction and renovations, of which almost €150 million will be spent on improving its hotel portfolio in Spain.

“We are diversifying the product and we are updating it, so as not to get left behind, with the aim of ensuring that our clients are happy, which is one of the priorities of RIU”, he said. Recently, RIU opened the doors to its Club Hotel RIU Costa del Sol in Torremolinos, after combining and renovating the RIU Belplaya and RIU Costa Lago hotels.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Solvia: 71% Of Spaniards Think Now Is A “Good Time” To Buy A Home

19 April 2017 – El Mundo

71% of Spaniards think that now is a “good time” to buy a home, according to a study conducted by Solvia, a subsidiary of Banco Sabadell, and the research institute Kantar TNS, which have prepared a real estate confidence index to quantify the perception and expectations of Spaniards regarding buying a home.

According to the results of the index, which ranges between values of zero (for the most unfavourable perceptions) to 200 (for the most favourable), the situation in terms of real estate confidence amongst Spaniards is “positive”, since the index value currently stands at 112. The index, which has been prepared on the basis of interviews with 1,000 people, reveals that 71% of those surveyed believe that, in general, now is a “good time” to buy a home. The report’s authors highlight the following main arguments as justification for respondents’ answers: “the decrease in prices that the housing market has seen; the notion that buying is a good investment; and the fact that the market is currently offering some genuine opportunities”.

By contrast, the study adds that the interviewees’ perception changes when they are asked about their personal circumstances. In this sense, 61% of Spaniards consider that from their own individual perspective, now is a “bad time” to buy a home.

In this regard, employment conditions and the limited capacity to save, with the consequent difficulties involved in accessing financing, explain the negative perception held by Spaniards when it comes to acquiring a home now. Nevertheless, the people interviewed hope that, within two years, they will be in a better position financially to buy a home, thanks to improvements in their employment conditions.

In terms of the evolution of house prices over the last year, 35% of Spaniards think that prices have risen, compared with 43% who believe that house prices have remained stable and 22% who consider that they have decreased.

Finally, buying a home is the option that the majority of those interviewed (55% of the total) would recommend to family and friends thinking about their primary residence.

Original story: El Mundo

Translation: Carmel Drake