Avintia & Gesurbe Boost Locare: €55M & 3 New Projects in Madrid

13 December 2018 – Eje Prime

Locare is searching for its place in the Spanish rental market. The real estate investment manager, in which Grupo Avintia and Gesurbe hold stakes, has launched the development of its first 405 homes in different locations across the Community of Madrid. The combined investment for the projects will exceed €55 million, according to comments made by Andrés Horcajada, founder and CEO of Locare, speaking to Eje Prime.

Specifically, the company is building 171 homes in Torrelodones (which will be finished during the second quarter of 2019), 110 in Villalba and 124 in Móstoles. The last two developments will enter into operation during 2020, following an average construction period of between 12 and 18 months. Together, the plots span a constructed surface area of 37,000 m2.

“We want to end 2019 with 1,100 homes under development, not only in the Community of Madrid, but also in other parts of the country”, explained the executive. Pamplona, Ibiza and Zaragoza are the cities that Locare currently has it its sights for its next projects, with the aim of investing €65 million.

The company, created in 2016, undertakes all of the phases of the real estate cycle, from raising capital to operating assets. Locare also takes care of searching for plots for social housing units, a requirement shared by all of the plots that the manager acquires.

“We do not buy properties that are already constructed, given that for us build to rent is fundamental”, explained Horcajada. The director added that this business model allows “investors to take advantage of the first phases of the real estate cycle and for the resulting product to be designed specifically for the rental market”.

Tectum is Locare’s ally 

Locare has teamed up with the capital manager Tectum Real Estate to attract investors to finance its projects. “Tectum allows us to group together Spanish family offices primarily and it is the company through which we relate directly with them and we deal with their demands”, explained the CEO of the company.

Besides Tectum, the company led by Horcajada also collaborates with the construction firm Avintia as an industrial partner, although the director explains that they do not have an exclusive contract with them when it comes to carrying out construction projects.

On the other hand, Locare has launched new technology into the world with another strategic collaborator, the proptech Mitula. “Through this platform, we are undertaking data analysis, both of the demand as well as of the supply of each one of the locations in which we are launching”, explained the executive.

In terms of the company’s long-term plans, Horcajada confirmed that the debut on the stock market “is not a plan that features amongst the desires of investors”. Similarly, the director explains that Locare will focus especially on the Spanish residential rental market, for which it predicts a promising future. “Housing is going to be increasingly configured for use (rental) and not for ownership, like in other European companies”, concludes the executive.

Locare is a real estate investment manager dedicated to residential rental. Although both Grupo Avintia and Gesurbe have been linked to this market niche for more than eight years, Locare was created as an independent platform in 2016.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

Oaktree Joins Forces with Sabadell to Promote Iberdrola Land

17 May 2018 – El Economista

Oaktree and Sabadell, through its subsidiary Bitarte, have requested permission from the European Commission to constitute a joint venture through which they will dedicate resources to residential development in Spain. Most of this new joint venture’s portfolio, at least initially, will comprise land that the US fund is going to buy from Iberdrola Inmobiliaria, which has declined to comment in this regard.

According to experts in the sector speaking to this newspaper, Oaktree is going to close the operation to acquire at least five plots of land worth approximately €100 million during the course of this month. As soon as the US fund’s alliance with Sabadell has been approved, the land will be integrated into the new company, whose purpose is going to be to continue growing through new land acquisitions.

Sabadell has chosen its subsidiary Bitarte, an instrumental company dedicated to the world of real estate, to carry out this association with Oaktree, although its stake in this new company is going to be managed by Solvia Desarrollos Inmobiliarios, the arm of the bank that is responsible for property development. The entity constituted that firm, which owns land worth around €1.2 billion when it completed the carve out of Solvia Servicios Inmobiliarios.

According to explanations from the same sources, Sabadell’s role in its alliance with Oaktree will be that of industrial partner with experience in the property development market, and so the fund will have a financial role, contributing the majority of the capital.

Assets

At first, the possibility was raised of an alliance between all three parties, which would see Iberdrola not only contribute assets, but also hold onto a stake in the company, and for that deal, the figures that were bandied around at the time amounted to around €130 million.

In the end, the alliance will be signed between the fund and Sabadell, and so the electricity company will contribute somewhat fewer plots. Of the chosen sites, in the absence of the definition of the final plots to be transferred, one in Móstoles (Madrid) stands out, where Iberdrola has already started work on a residential development project: Villas del Sur 2. This development comprises 22 terraced homes with three and four bedrooms and a private garden.

The other plots selected are located in Salamanca, the Costa del Sol, Pamplona and Pozuelo de Alarcón. This is a small part of Iberdrola’s land portfolio, which owns assets with a buildable surface area of 3.5 million m2. Specifically, the real estate company is working on the construction of more than 330 homes located in different places around Madrid, Murcia, Santander and Valencia.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

EC Approves Sale of 80% of BBVA’s RE Arm to Cerberus’s Subsidiary

9 April 2018 – El Mundo

On Monday, the European Commission authorised BBVA’s sale of 80% of its real estate business to a subsidiary of Cerberus Capital Management (Cerberus) after concluding that the deal would not represent any problems in terms of competition in the market given the “limited” overlap in terms of the activities of the two entities.

The bank chaired by Francisco González (pictured above) announced an agreement at the end of November by virtue of which it would transfer 80% of its real estate business to the US fund Cerberus for a price of approximately €4 billion.

Specifically, BBVA and Cerberus agreed to create a joint venture for the real estate business in Spain.

The real estate business referred to in this agreement comprises around 78,000 real estate assets with a gross book value of approximately €13 billion, as well as the assets and employees necessary for the management of the business. The whole business has been valued at approximately €5 billion.

The services of the EU’s Competition Authority examined the operation through the simplified procedure, which is reserved for less problematic cases.

In the words of the bank when the operation was announced, the agreement with Cerberus is an “opportunity” to take advantage of the experience of an industrial partner who is an expert in the management and sale of real estate assets and to benefit from the strong outlook of the Spanish economy.

Original story: El Mundo 

Translation: Carmel Drake

KKR, Altamar & Elix Inject €12M into their Socimi

16 March 2018 – Eje Prime

It’s non-stop for the Socimi owned by Altamar, the property developer Elix and KKR. After taking its first steps last year with the acquisition of its first assets, Elix Vintage Residencial has received a capital injection of €12 million to move ahead with the purchase of assets located in Barcelona and Madrid, as explained by company sources speaking to EjePrime. This new capital injection comes in the same year that the Socimi is planning to make its debut on the Alternative Investment Market (MAB).

According to the Official Gazette of the Mercantile Registry, the company has carried out a €12 million capital increase in its company Elix Vintage Residencial Socimi. As such, the subscribed capital of the company now amounts to €15 million. The first purchases that the company carried out were four residential assets, in Barcelona and Madrid, last year.

Currently, the company led and founded by the businessman Jaime Lacasa and Jorge Benjumeda, have 25 projects underway, which will result in the placing on the market of more than 300 homes. Of those projects, six are new builds and 19 are renovations.

Under the framework that Socimis are obliged to adhere to, the company plans to make its debut on the Alternative Investment Market (MAB) before the end of this year, whilst its mission in 2019 is going to be to start to trade on the main stock market. On the MAB, the company will start trading under the name Elix Vintage Residencial Socimi.

KKR and Altamar Capital Partners joined forces last July to invest in the Spanish market in the renovation and rental of homes. The two funds signed an agreement with one of the property developers that has most experience in this sector, Elix, to launch a Socimi that will invest more than €200 million in the purchase of properties in Barcelona and Madrid. The objective of both funds with the investment vehicle is to list it on the stock market once it has made the bulk of its investments.

This company, headquartered in Barcelona, was created with share capital of €100 million, most of which was contributed by KKR and a group of international and domestic investors including Altamar and Deutsche Finance Group. The rest of the shares are owned by Lacasa and Benjumeda

The Socimi’s plans involve purchasing around forty buildings over three years to subject them to a comprehensive renovation and put the homes on the rental market once renovated. That rental income will feed the Socimi, which plans to rotate the portfolio of assets that it builds every three years.

Elix will be the company responsible for transforming the properties, and so will act as the industrial partner. With this vehicle, the company is going to manage to scale its business model, which until now had been very concentrated in El Eixample, Barcelona. The company, founded in 2003, launched its activity in Madrid last year (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake