M&G European Property Fund Expands Portfolio in Spain

29 May 2018 – Real Assets

M&G European Property Fund has expanded its portfolio with the acquisition of industrial and retail assets in Spain.

The €3bn core European property fund, managed by M&G Investments’ real estate arm, said it bought two industrial and two retail assets for €80m.

The two retail acquisitions are H&M Reyes Catolicos in Granada and Gran Via 68 in Madrid.  Both sites, which total 3,668sqm, are leased.

The industrial sites Teka Logistics Platform and a further asset in the Getafe logistics corridor are both in Madrid. The sites have a combined size of 55,092 sqm.

Fund manager David Jackson, said: “Our latest research suggests the Spanish economy will continue to perform well, with its recovery having accelerated in 2017.

“This extends to the commercial real estate market, where we predict average rental growth in both industrial and retail will range between 3% and 4% per year for the next three years in Madrid.”

Jackson said these new acquisitions fit perfectly with our strategy to increase our exposure to Continental Europe by investing in core assets in strong growth markets.

“We see a strong correlation between the level of rental growth and tourist spend in major tourist destinations across Europe; Madrid and Granada are very good examples of this trend.”

Federico Bros, a director of asset management for Spain and Portugal, said: “We have seen strong demand for high street retail in prime locations across Spain. Both of the retail sites we have purchased are in established locations and offer great rental growth prospects.

“The industrial sector in Spain also offers strong rental growth prospects as online activity accelerates and these acquisitions help us diversify our portfolio in key sectors.”

M&G European Property Fund was launched in 2006, with a mandate to invest in a globally diversified portfolio of assets in mature European markets outside the UK.

Original story: IPE Real Assets

Translation: Carmel Drake

M&G Real Estate Purchases 3 Commercial Premises in Madrid & Granada

29 May 2018 – Eje Prime

M&G Real Estate is continuing its shopping spree in Spain. The real estate division of the British fund M&G Investment has acquired two commercial premises in Madrid and a third in Granada. Moreover, the firm has also added two industrial assets in the Spanish capital to its portfolio.

The commercial premises in Madrid are located at number 68 Gran Vía, whilst the asset acquired in Granada is located on Calle Reyes Católicos, where the Swedish fashion retailer H&M recent opened a store. In the Spanish capital, the tenants of the retail spaces are the restaurant chain Tony Roma’s and the financial entity Banco Sabadell, which will open its flagship branch in the premises soon.

Meanwhile, in the logistics sector, the real estate investment firm has purchased a logistics platform in Corredor del Henares, which is leased to Teka, and an industrial complex in Getafe. In total, those two assets span a surface area of more than 55,000 m2.

Original story: Eje Prime 

Translation: Carmel Drake

M&G Invests €80M to Strengthen its RE Portfolio

29 May 2018 – Expansión

The real estate division of the London-based firm M&G Investment has decided to bet significantly on the Iberian market, where its exposure now exceeds €500 million. “We are partners of institutional investors looking for core properties in the best locations across Europe. We opened our office in Spain in 2016, but we completed our first operations there a year earlier”, explains Federico Bros, Director of Asset Management for Spain and Portugal.

Its first operation involved the purchase of the former headquarters of Telefónica located on Calle Ríos Rosas (Madrid) and leased to the advertising giant WPP. “It is an example of what we look for, well-located assets with long-term contracts, 17 years in this case. Between the renovation and purchase we will invest €175 million in that property”, says Bros.

After that acquisition came others, such as an office building in Barcelona’s 22@ district and, recently, five operations with a very diverse profile. On the one hand, M&G purchased three commercial assets: two in Madrid and one in Granada. “The premise in Granada, measuring 2,500 m2, is located on Reyes Católicos, the best shopping street in the city”, explains Bros. In the case of Madrid, M&G acquired two retail premises on Gran Vía 68. “We closed this operation in May but we have been negotiating it for months, given that the building was being renovated. A few months ago, a large Tony Roma’s restaurant opened there and Sabadell is going to open its flagship branch in the other premise in a matter of days”, he said.

Similarly, the firm acquired two industrial assets in Madrid, specifically a logistics platform, leased to Teka, in the Corredor del Henares, and another complex in Getafe. Those two sites span more than 55,000 m2. In total, the firm has invested €80 million on its latest operations, channelled through two funds: MEP and EuroSPIF.

More opportunities

Following these investments, the manager is still looking for opportunities in the Spanish market.

“We are involved in several processes, both official and off-market, in Madrid, Barcelona and prime locations in other cities. Spain is a priority country for us”, says Bros.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Lar’s Assets in Valencia Now Worth 34% More than Purchase Price

26 February 2018 – Expansión

The Socimi Lar España values its assets in the Community of Valencia at €210.5 million, up by 34% compared to their combined purchase price. The value of the Vidanova project in Sagunto has appreciated by 77% in two years.

At the presentation of its annual accounts, the Socimi Lar España said that the land that it purchased less than a year ago from Bertolín, next to the Cheste circuit (in Valencia), is already worth more than twice the amount that it paid for it.

According to the Socimi, the logistics plot, measuring 112,813 m2, named Newlogis, which it acquired in May, had a market value of €5.2 million at the end of 2017. In other words, it had appreciated in value by 136% in just eight months.

With those percentages, it is hard not to remember the last real estate bubble of just a decade ago when expressions such as “pelotazo” were so typical in the property sector.

According to the detailed information about the project, the cost of the land has increased significantly because it also includes the urbanisation costs. In this way, the total cost of the land has increased to €16.5 million by including the amount of the urbanisation works that correspond to it and which are in fact being undertaken by a company belonging to the Bertolín family. The Socimi expects that the first warehouses may be ready by the end of 2019.

Lar España has also accumulated significant latent gains on the rest of its investments in Valencia, according to the market value attributed to them by reports from JLL and Cushman & Wakefield. The Socimi owns five assets in the region, specifically, three shopping centres and two industrial properties. At the end of 2017, Lar España valued them at a market price of €210.5 million, compared to the €156.3 million that it paid for them between 2014 and 2016.

The largest asset is the Portal de La Marina de Ondara shopping centre (Alicante), which generated €7.6 million in rental income last year, making it the Socimi’s third best-performing asset by revenues. According to the valuation, it is now worth around €120 million; the Socimi paid almost €90 million for it between 2014 and 2016.

Meanwhile, the Vistahermosa de Alicante shopping centre is now worth €50 million, when it was acquired in 2016 for €42.5 million.

Another asset that has multiplied in value in the Vidanova commercial development in Sagunto, which is worth €24.8 million, up by 77% compared to the purchase price of €14 million.

Finally, the Socimi’s logistics platform in Almussafes has seen its value increase from €8.4 million to €10.3 million in two years.

Original story: Expansión (by A. C. A.)

Translation: Carmel Drake

Segro Acquires 2 Logistics Plots in Madrid & Barcelona

16 January 2018 – Press release

Segro, the British investment fund specialising in the logistics sector, is increasing its presence in Spain with two new acquisitions in Getafe (Madrid) and Sant Esteve de Sesrovires (Barcelona). Both assets were acquired in December 2017.

On the one hand, Segro has announced the acquisition of a plot of land measuring 8 hectares in Getafe for the construction of a logistics warehouse measuring 46,000m2. That land is strategically located in the Puerta Mayor-Los Gavilanes Business and Logistics Park, a relatively new location 14km to the south of Madrid, alongside the A4 Madrid-Andalucía highway and with direct access to the M-50.

That logistically strategic area is home to several large multinational companies, such as Decathlon, CostCo and Amazon, but suffers from a relative shortage of buildings measuring more than 40,000 m2 in the market in Madrid, despite the high demand for large units this year. Work to build the logistics warehouse will begin during the first half of the year in response to this market need.

On the other hand, Segro has acquired a new asset in Sant Esteve Sesrovires. That plot comprises 8 hectares and is located 35km away from Barcelona’s city centre. Sant Esteve Sesrovires is located between the A2 and A7 highways, which run from Barcelona to Madrid and represents a strategic communication hub. Barcelona is an area with a shortage of modern, high-quality warehouses, and for this reason, Segro will proceed to construct a 51,000 m2 property (…).

Whilst the construction and financing of the project will be completed over 2 phases during 2018/2019, work on the first phase spanning 29,000 m2 will start at the beginning of Q1 2018. This project coincides with the construction of a 20,000 m2 warehouse that the firm is working on in Martorelles, which will be completed in the summer and available for rent thereafter (…).

With these two new acquisitions, Segro, in its commitment to expand its presence in Spain, is positioning itself as one of the important investors in the Spanish logistics market with a portfolio spanning 255,000 m2. Segro is continuing to focus on high-quality buildings and prioritise strategic locations to create a privileged portfolio of warehouses for distribution and urban logistics, creating high added-value spaces for large companies and SMEs alike.

About Segro

Segro is a British Listed Real Estate Investment Company (Socimi) and European market leader in the management, promotion and construction of logistics and industrial assets. Segro owns and manages a portfolio of properties spanning 6.3 million m2, with a market value of GBP 8 billion, providing services to various clients in the logistics and industrial sector. Its parks are located in the main distribution and transport hubs of the countries in which it has a presence. It owns some of the best logistics parks and transport centres in Europe.

Segro enjoyed a record year in 2016 and according to its provisional results for 2017, the company recorded a 3.9% increase in its net rental income. Moreover, it signed rental contracts worth GBP 27.5 million (around €30.8 million), up by 28% compared to the same period in 2016 (…).

Original story: Press release

Translation: Carmel Drake

Mango’s Owner Sells H&M Store in Burgos for €12.6M

11 January 2018 – Eje Prime

The property will continue to be occupied by H&M after the operation. The Swedish retailer leases the 3,000 m2 building, which Mango purchased at the end of the economic crisis for €8 million.

Mutualidad General de Abogacía is adding new assets to its property portfolio. The company has acquired the building that houses the flagship store of the Swedish giant H&M in Burgos for €12.6 million, according to sources close to the operation. Until now, the property had formed part of the portfolio of Punto Na, the real estate company owned by the businessman Isak Andic, founder of the Catalan fashion chain Mango.

The property has a retail surface area of 3,000 m2, spread over four floors. The operation, which has been brokered by the real estate consultants Torit Allocation and Otto Capital, will allow Mutualidad General de Abogacía to fatten up its collection of retail assets, which account for 30% of the group’s total portfolio. Following the acquisition, the fashion chain H&M will continue to operate in the store, whereby guaranteeing the Mutua de los Abogados a profitable long-term tenant.

The building is located on the corner of number 1 Plaza de Santo Domingo and number 2 Calle Moneda, and has a façade measuring 66 m. The store is located next to several Inditex and Mango shops, as well as a large El Corte Inglés department store.

Punta Na acquired the building at the end of the economic crisis for €8 million. Until then, the building had been occupied by the historical Caja de Ahorros Municipal de Burgos (…).

In recent years, the owner of Mango has been growing his portfolio of assets by buying up retail premises. Although the businessman’s real estate company is Punto Na, Andic also operates in the retail sector with Punto Fa, which is the company through which he operates Mango.

Thus, like Amancio Ortega has done with Pontegadea, the founder of the Catalan fashion chain, owned assets worth €1.329 billion in 2016 and his objective was to continue to increase his portfolio by acquiring retail premises to lease them to large fashion retailers, which tend to sign long-term lease contracts (…).

The lawyers’ mutual society, a not-for-profit organisation that offers investment solutions for legal professionals, owns a large portfolio of properties all over Spain. The entity has 44 assets under management, spanning a total surface area of 271,816 m2, of which 89% are occupied by tenants (rental arrangements).

By type of assets, 53% of the portfolio comprises offices, 20% hotels, and the remaining 27% is split between retail premises, nursing homes, industrial assets and parking lots.

In terms of the geographical distribution, most of the portfolio’s real estate assets are located in the Community of Madrid, specifically, 29 assets. The other properties are located in Barcelona, where it owns 4 assets; plus it has around ten more buildings in Alicante, Almería, Bilbao, Granada, Málaga, Salamanca, Santander, Sevilla, Lérida, Valladolid and Vigo.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Cajamar Sells 2 Problem Loan Portfolios

23 December 2017 – La Voz de Almería

Grupo Cooperativo Cajamar is continuing with the gradual reduction of its non-performing asset balance thanks to its strong performance in terms of the commercial management of its foreclosed assets and a reduction in its default rate.

In recent weeks, the entity has completed the sale of two portfolios, one containing foreclosed assets and the other containing non-performing loans, bringing the volume of problem assets sold so far this year to €791 million.

In this way, with the ordinary management of recoveries, boosted by the sale of these portfolios, Grupo Cooperativo Cajamar expects to close 2017 with a non-performing loan balance of less than €3.4 billion and a default rate of less than 11%.

Asset sales

Based on data as at 15 December, the rural Almería savings bank has sold more than 4,100 real estate assets for more than €600 million in terms of their gross book value, which represents an increase in sales of 55%.

Meanwhile, its non-performing loan balance, which amounted to €4.211 billion at the end of last year, had decreased to €3.964 billion as at September.

Interest in the market

The operations that have accumulated the largest volumes have been the sale of the Escullos portfolio, containing 1,456 loans worth around €176 million, sold to CarVal Investors and the combined organisation of Lindorff and Intrum Justitia; and the Tango portfolio, comprising around 400 assets, worth more than €57 million, which was sold to the US fund Waterfall.

Both operations were carried out through competitive processes and sparked a great deal of interest in the market. They received financial advice from Alantra.

The first portfolio of non-performing loans to companies and SMEs, most of which were secured, was mainly concentrated in the Community of Valencia (48.9%) and Andalucía (25.8%), although it also contained assets in Murcia, the Canary Islands, Cataluña, Castilla (La Mancha) and Madrid. The second comprised residential properties, although it also contained commercial and industrial assets, most of which were located in Andalucía, Murcia and Valencia.

Cajamar will close a positive year in terms of divestment, with a YoY variation in terms of the number of assets sold of more than 62%. The final numbers will also reflect the results of the current promotional campaign “Now or never”, with a selection of 4,500 properties with discounts of up to 40% (…)

Original story: La Voz de Almería

Translation: Carmel Drake

Project Tour: Bankia Puts €166M Property Portfolio Up For Sale

3 February 2017 – Idealista

The banking sector is starting 2017 with a bang as it accelerates the sale of properties. Bankia has put a new real estate portfolio on the market – it does not contain debt, but rather comprises 1,800 properties, including finished homes, plots of land, retail premises, industrial assets and hotels. Known as Project Tour, the package is valued at €166 million.

Bankia is one of the most active banks at divesting real estate assets once again, as it seeks to focus on its pure banking business. It is a technique that has worked well for the banks in recent years and not just in Spain, but in other countries around the world as well.

In this case, so-called Project Tour is in the hands of the firm Alantra (formerly N+1) which intends to place this property portfolio (known by its initials in English as an REO) with international investors. Its value amounts to €165.9 million, according to financial sources consulted by Idealista.

The portfolio comprises 1,292 finished homes (it does not include any subsidised housing), 324 plots of land, 159 retail premises, 20 industrial assets and 9 hotels. None of the assets in the portfolio are rented or co-owned.

The properties are primarily located in the Community of Valencia, mainly in Valencia; Cataluña, mainly in Barcelona; the Canary Islands, mainly in Las Palmas; Madrid and Castilla y León (Segovia is home to most of these assets).

According to sources consulted by Idealista, Bankia expects to receive non-binding offers from a small number of investors by the beginning of February and binding offers by the middle or end of March. In this way, it plans to close the sale of the package during the month of March.

The entity chaired by José Ignacio Goirigolzarri (pictured above) is known as one of the most dynamic in the market: in 2016, it put several portfolios up for sale, including Project Ocean, a real estate loan portfolio worth almost €400 million, which was sold to Deutsche Bank; Project Tizona, a mortgage debt portfolio worth €1,000 million; and Project Lane, containing properties worth €288 million.

Original story: Idealista (by P. Martínez-Almedia)

Translation: Carmel Drake

Aguirre Newman: Logistics Inv’t Totalled €413M In H1

4 August 2016 – Mis Naves

Investment in the logistics sector amounted to €413 million during the first half of 2016, a similar figure to the one recorded during the same period last year, according to the conclusions of the Logistics Market Report for H1 2016, a study conducted by the real estate consultancy Aguirre Newman. The report explains that fewer operations have taken place during this time period, but those that have been completed have been larger (in value), including the portfolio sales undertaken by Gran Europa and Zaphir Logistics.

Almost all of the profitable investments have been made in the prime markets, Madrid and Barcelona, which together accounted for 80% of the total volume bought and sold. In addition, as a result of the product shortage, investor interest is starting to move to focus on secondary markets, such as Valencia, Zaragoza, Sevilla and Pamplona.

Demand for logistics space in Madrid during the second quarter of the year decreased by 76.3% with respect to the previous quarter (Q1 2016), with just 34,233 sqm of space leased. The most significant operations, of which there were seven in total, took place in Cabanillas del Campo and Coslada, which accounted for 45% of the total space leased.

The highest rental incomes recorded in Q2 amounted to €5/sqm/month and the rents in the prime areas remained stable at between €4.5/sqm/month and €5/sqm/month, as a result of the scarcity of operations completed.

According to the report, despite the low demand for logistics space, demand for industrial assets has been dynamic with 30 operations closed during the period, corresponding to 80,829 sqm of space, half in the rental segment. In terms of sales transactions, 63.6% related to spaces measuring less than 1,000 sqm. This data indicates an improvement in terms of demand in the industrial market, with a high number of low volume operations.

Just like in previous quarters, there was a high level of activity in the market for land dedicated to industrial/logistics use, a clear indicator of the return to property developer activity and the recovery of the sector. Six operations involving land were closed both for end clients and for development through new projects. They included the purchase of more than 160,000 sqm of land in Illescas (Toledo).

In Barcelona, during Q2 2016, demand for logistics space was very positive, reaching 160,469 sqm, a very similar figure to the one recorded during the same period in 2015 and almost 80% higher than during the first quarter of 2016.

During this period, 11 operations were closed, of which four involved spaces exceeding 10,000 sqm, accounting for more than 85% of the total space leased, which focused primarily on the regions of Baix Llobregat and Tarragonès.

In terms of the most significant operations by surface area leased in Q2 2016, Aguirre Newman’s report highlights the operation closed by Amazon in Prat de Llobregat covering 60,000 sqm on the ground floor. On the other hand, in the region of Tarragonès, an operation involving 42,250 sqm of land was closed to provide services to Amazon in the performance of its activity. These two operations accounted for 64% of the total space transacted. (…).

Original story: Mis Naves

Translation: Carmel Drake

Project Lane: Bankia Negotiates Sale Of €400M Secured Portfolio

13 June 2016 – Expansión

Project Big Bang paralysed the Spanish financial sector in 2015. At the time, Bankia tried to sell all of its foreclosed assets in a single transaction, including: 38,500 homes, 2,600 plots of land and 5,000 commercial premises, worth €4,800 million. A large number of funds were interested in the sale, but only Cerberus and Oaktree expressed their intention to submit binding offers. The prices and conditions did not match with Bankia’s expections and so it decided to suspend the operation at the end of the year. (…).

With all of those roadblocks, Bankia decided that it would maximise the value of its foreclosed assets by keeping them on the balance sheet and selling them off through the retail channel and in smaller portfolios, such as the case of Project Lane, see below. Even so, sources in the sector expect to see fresh attempts to sell large portfolios of foreclosed assets over the next few months and years, something that more than one entity has planned for 2016. To this end, the markets must improve further and provisions should be adjusted even more to the prices being offered by the funds. The Bank of Spain’s new accounting circular, which comes into force in October, is expected to help in this sense and to accelerate the divestment of the banks’ problem assets.

Project Lane

Now, Bankia is negotiating the sale of a portfolio of homes with three international funds, in an operation known as Project Lane. The entity is being advised by KPMG and is looking to transfer around 2,500 homes worth c. €400 million, according to financial sources.

The operation is in a very advanced phase, with binding offers due to be submitted next week. Bankia and its advisor have selected three funds, which according to the same sources, do not include Cerberus.

Initially, the US fund was the favourite buyer for the operation, on the basis that it knows the assets better than anyone else through Haya Real Estate, the former Bankia Habitat, which manages homes and real estate loans from Bankia. In fact, Cerberus was the fund that was closest to acquiring Big Bang, with an offer of around €2,100 million.

The portfolio of assets on sale as part of Project Lane primarily comprises homes, but also includes industrial and commercial assets, to a lesser extent. It is the largest sale of foreclosed assets that any of the banks have put on the market so far in 2016. Only Cajamar has explored this option in recent months, with Project Omeya – around €72 million -, as it waits to see what will happen during the second half of the year. The 2,500 homes on sale represent around 6% of the total haul that Bankia has on its balance sheet. The entity sold 9,200 properties through its branch network and Haya Real Estate last year. The aim is to try and repeat those figures in 2016.

Since the new management team, led by José Ignacio Goirigolzarri (pictured above), took over at Bankia, the nationalised group has been one of the most active in the sale of portfolios. Last year, it sold more than 80 batches of problem assets, which allowed it to decrease its doubtful debt balance from €20,000 million in 2013 to €12,500 million by March 2016. It has managed to do this thanks to higher provisions.

Original story: Expansión (by J. Zuloaga and S. Arancibia)

Translation: Carmel Drake