Tristan Capital & Savills IM Buy 6 Office Buildings in Madrid

6 October 2018 – Real Estate Press

Tristan Capital Partners, together with its local operating partner Savills Investment Management, has acquired a portfolio of offices spanning 78,000 m2 in Madrid from the Socimi Inmobiliaria Colonial for the added value fund Episo4.

The portfolio comprises six Grade A office buildings located in established sub-markets outside of the Spanish capital’s business district: Campo de las Naciones, Josefa Valcárcel (A2) and Arroyo de la Vega (A1), as well as Agustín de Foxá, in the district of Chamartín. The portfolio offers immediate and large-scale exposure to the office market in Madrid, as well as a well-diversified tenant mix, and has the capacity of capturing an expected increase in rents.

Nikolay Velev, CEO of Tristan Capital Partners, said: “After several years of solid economic growth, job creation and a shortage of new developments, an imbalance has been generated between supply and demand in the office market in Madrid, which has resulted in a high net absorption of space and a considerable growth in rents. This trend has been particularly strong inside the M-30 and the differential in rents between offices located inside and outside the central district is now at a historical high. We hope that this gap will be reduced over time”.

The local operating partner will be Savills Investment Management with which CCP 5 LL (Tristan’s core-plus fund over the long term) successfully completed the acquisition of the Manoteras business park (Madrid) in 2017 for €103 million.

Fernando Ramírez de Haro, Head of Savills Investment Management in Spain, stated: “We are delighted to expand our relationship with Tristan through this portfolio. The buildings are of an excellent quality and are highly energy efficient. Moreover, they offer modern and flexible spaces, making them ideally positioned to capture the increase in rents and the growth that is expected to take place outside the M-30”.

Tristan Capital and Savills Investment Management have been advised by Savills Aguirre Newman, Uría Menéndez, Currie & Brown and PwC.

Original story: Real Estate Press

Translation: Carmel Drake

Inmo Acquires 4.7% Of Colonial & Buys Puig’s HQ From BBVA

25 April 2017 – El Español

Inmo, the real estate company owned by the Puig family, has acquired shares in Inmobiliaria Colonial to take its stake in the company to 4.7%. Meanwhile, it has also purchased the headquarters of the Puig perfume and fashion company that BBVA put up for sale in October.

Inmo encompasses the real estate activity and assets of the family-owned group, and Inmo’s investment in Inmobiliaria Colonial comes in response to its “willingness to diversify” its exposure in the real estate sector, according to a statement issued on Monday.

Regarding the acquisition of Puig’s headquarters in Plaza Europa de L’Hospitalet de Llobregat (Barcelona), the property has 21 storeys and covers a surface area of 14,300 m2. (…).

Inmo’s announcement on Monday comes after Colonial reported in February that it had teamed up with the real estate company owned by the Puig family to develop a new office tower in Barcelona, an “iconic” building in the Catalan capital that will involve investment amounting to €32 million.

The project forms part of the investment in new real estate assets that the real estate company announced in its three markets: Madrid, Barcelona and Paris, for €400 million in total.

In the case of the new tower in Barcelona, the project will be constructed through a joint venture, which Colonial will constitute together with the Puig family’s real estate arm (50% each). The latter will contribute the land on which the property will be built.

The new tower will be located in Plaza Europa, next door to the headquarters that the perfume group rents out. The project involves building a 60m tall, 21-storey building, which will have a surface area of 14,000 m2. (…).

Colonial announced the new tower under the framework of investing in new assets that forms another part of its growth strategy, which it launched in 2005 after completing its clean-up and restructuring process.

Since then, the firm has accumulated investments in new assets amounting to €1,760 million, according to its President, Juan José Brugera. (…).

Original story: El Español

Translation: Carmel Drake

Perry Will Pay Colonial A Bonus If It Launches Axiare Takeover

27 October 2016 – El Economista

Perry Partners has kept an ace up its sleeve during the sale of the 15.09% stake that it held in the Socimi Axiare to Inmobiliaria Colonial. The British fund, which is currently being wound up, is now playing a card that would allow the real estate company to record higher revenues (from the sale) if it decides to launch a takeover bid (OPA) for the Socimi, as explained by sources familiar with the negotiations.

The unstated objective of Colonial is to increase its stake in the Socimi’s share capital to acquire, at least, 25%, according to the same sources consulted, however the pressure in the market points to an offer or, at least, an effort to try and provoke one.

Meanwhile, the real estate company, chaired by Juan José Bruguera, said at the time that this purchase was a “quick and opportunistic gesture” by Colonial, which wants to strengthen its portfolio of prime office assets.

As this newspaper went to press, Axiare had notified the CNMV of its intention to look for investment banks and legal advisors “to analyse and study the possible effects of Inmobiliaria Colonial’s recent share purchase”.

This move by the Socimi’s Board of Directors may respond, according to sources in the sector, to the Board’s need to demonstrate that it is analysing the surprise operation, which clearly affects the company’s shareholders, given that Colonial is now Axiare’s majority shareholder. Similarly, Axiare may try to veto the inclusion of a board member from Colonial given that the firm is a competitor.

The move came on Friday 14 when the real estate company acquired 15.09% of the Socimi, off market, at a price of €12.50 per share, for a total investment of €135.6 million. Colonial paid a premium of 11.18% above the closing share price on Friday, but Banco Sabadell’s analysts said that the price represented an 8% discount compared to its estimate of Axiare’s NAV and an 11% discount on the target share price, which amounts to €14.10, compared with the closing share price on the day of the purchase (€11.18).

As a result of this operation, the real estate company will have a guaranteed flow of income in the form of dividends from Axiare, which, given its Socimi status, is obliged to distribute at least 80% of the profits from rental income to its shareholders. Colonial is hereby replicating the model that it has applied in France for years, where it is a shareholder of the Socimi Société Foncière Lyonnaise, with a 57.7% stake.

Original story: El Economista (by Rubén Esteller, Alba Brualla and Araceli Muñoz)

Translation: Carmel Drake

Axiare May Veto Colonial’s Purchase Of Its Share Capital

25 October 2016 – Cinco Días

The Board of Directors of Axiare Patrimonio has submitted a relevant fact to the National Securities and Exchange Commission (CNMV) in which it states that it has delegated to its CEO “the authority to select and engage the investment banks and legal advisors deemed necessary to analyse and study the possible effects of the recent entry of Inmobiliaria Colonial into its share capital”.

Colonial announced the acquisition of a 15.09% stake in Axiare on 17 October, as part of its strategy to strengthen its position in the area of rental properties in Madrid. It paid €135 million for its stake in the Socimi, which manages assets amounting to €1,050 million and which is obliged to distribute dividends each year. Those dividends will represents a steady cash flow for the Catalan company.

Original story: Cinco Días

Translation: Carmel Drake

Armabex: The Avalanche Of Socimis Continues

17 October 2016 – El Economista

There are 29 listed Socimis on the Spanish stock market, of which 24 are listed on the Alternative Investment Market (MAB). And there are lots more on their way. All of them are subject to the following basic conditions: they must have a minimum share capital of €5 million, distribute 80% of their profits as dividends and hold each rental property in their portfolios for at least three years. But, other than that, they are all completely different.

Socimis, which is the acronym for collective listed real estate investment companies, have come to replace the former real estate companies, which are now just shadows of their former selves (firms such as Quabit and Inmobiliaria Colonial) in a country where investing in property is the typical thing to do. “For every one million euros invested or saved in financial assets, another €25 million is invested in property in Spain”, according to Antonio Fernández, Chairman at Armabex.

Arrival of foreign capital

A few years ago, the Socimis found the perfect breeding ground for construction in Spain. Following the real estate boom, which did away with much of the sector and the subsequent burst of the price bubble, overseas investors decided that it was time to return to Spain. From there, the large Socimis were born in our market, such as Merlin Properties, Hispania, Lar España and Axiare, which all have significant overseas shareholders.

Fernández called these companies the Alpha Socimis – they are used by overseas investors to enter the Spanish real estate market because “by buying shares in them, they are, in turn, acquiring major buildings in the country’s largest cities”. By contrast, the Beta Socimis are those that focus on the development of their assets and, therefore, they make investments (capex).

According to the latest data from Eurostat, house prices in Spain rose by 3.8% YoY during the second quarter of 2016, i.e. by almost one percentage point more than the 2.9% increase registered across the Eurozone as a whole. As such, the increase in house prices has now been higher in Spain than across the EU (on average) for seven months in a row.

The different types of Socimis

(…).

– On the one hand, we have the large Socimis in the market. If an investor is looking for real estate vehicles, such as Merlin Properties, he should know that he is mainly investing in high quality homes and premises that will generate regular rental income. In addition, they are monitored by at least ten brokerage houses, such as in the case of Lar España. According to Bloomberg, these two companies, along with Axiare and Merlin, i.e. the four large players in the Spanish market, all have “buy” recommendations.

– On the other hand, we have the mainly family-run Socimis, where “there may be just a single person taking the decisions”, said Fernández, “and that involves risk”, even more so when they are dealing with single assets that could be sold at any time. Five Socimis have been constituted on that basis, with just one property. (…). A fair few others own between three and five properties only.

– There are also Socimis that own land. “It is worth noting that their returns are higher because they involve greater risk”. According to the expert, these firms rent land and invest in it, which means that, in many cases, the company does not generate any profits and therefore it does not distribute dividends to its shareholders. (…).

– And there are also Socimis that more closely resemble funds of funds, in other words, Socimis that invest in other Socimis, but that do not possess their own assets. Corpfin Capital holds four Socimis under its structure; and Optimum Re Spain Socimi manages several real estate funds.

Original story: El Economista (by Laura de la Quintana)

Translation: Carmel Drake