Tag: InmoGlacier

German Fund Manager Aquila Capital Launches its own Property Developer in Spain

1 August 2018 – El Economista

The German fund manager, Aquila Capital, is demonstrating its commitment to Spanish property by launching a new property developer called AQ Acentor.

Until now, the firm has worked in Spain by delegating its development activities and in partnership with other real estate companies such as Inmoglacier, with which it has undertaken several projects. “The strategic partnership with the property developer has been positive and has resulted in the construction of three successful real estate developments, which have contributed to Aquila Capital’s expansion plans in the Spanish market under its own brand, AQ Acentor”, explains Sven Schoel, CEO of the German manager in Spain.

Aquila has been operating in Spain since 2014, focusing its business on the real estate sector, with projects worth more than €800 million. With the creation of this new brand, the firm has incorporated a management team to boost growth through in-house development.

AQ Acentor has been created with more than 3,000 new homes under construction, of which around 500 will be handed over during the course of this year. Currently, the firm is working on residential projects in metropolitan areas, primarily in Madrid, Barcelona, Málaga and Valencia.

“The company has a multidisciplinary team comprising more than 40 professionals located in offices in Madrid, Barcelona and Málaga”, explain sources at the firm.

“The creation of AQ Acentor responds to our firm commitment to the Spanish market and is backed by a pipeline amounting to €1 billion over the next five years”, specifies Schoel.

The manager is also present in the logistics market in Spain, one of the other real estate segments that is experiencing a boom, besides the residential segment. In that case, it has launched an investment plan amounting to between €350 million and €400 million for the Iberian Peninsula and Italy.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Overseas Funds Compete to Finance & Buy Land in Spain

15 April 2018 – Voz Pópuli

At the beginning of 2012, at the height of the economic crisis, one of the directors of the Bank of Spain – José María Roldán, now the President of the AEB – faced a tough meeting with investors. One of them told him that land in Spain was worth nothing. “If that’s the case, then I’ll take it all”, replied Roldán.

And if he had done so, today, the executive would be a millionaire and the same funds that raised doubts over the banks’ balance sheets would today be knocking at his door to buy that land and finance developments on it.

The good times in the Spanish economy and the real estate recovery are causing the opportunistic funds to look for ways to take advantage of the situation. They are buying assets, real estate companies – Habitat and Inmoglacier are the most recent examples – and trying to fill the gap left by the banks in the financing arena. That is where they have set their sights on land, the last bastion, where traditional entities are still wary of lending.

“Bank financing is available for projects and occasionally for parts of plots, but it is inflexible and restricted to certain locations and pre-sales levels. Ours (financing) is flexible in terms of volume, periods and conditions”, says Luis Moreno, Senior Partner at Ibero Capital Management, a firm that has just teamed up with Oak Hill Advisors to lend the property developer at least €400 million. In just a few weeks, they already have projects on the table exceeding that amount.

Types of investors

“Bank financing is still almost non-existent and is only granted in very low percentages in situations of high pre-sales”, says Pablo Méndez, National Director of Capital Markets at Savills Aguirre Newman.

The example of Oak Hill is just one of many. Julian Labarra, National Director of Corporate Finance at CBRE, explains the different types of investors that are interested in land. A first group comprises funds that provide bridge loans. Whilst the banks require “that a development already has the necessary permits and a certain level of pre-sales”, some of the funds financing certain projects with “yields of 14-15%”. And they exit after 18-24 month, by which point the development meets the requirements of the traditional banks (…). Active funds in this segment include Incus, Oquendo and Avenue.

Other funds have chosen to team up directly with Spanish property developers: they put up the capital to buy and develop land and the managers contribute their knowledge. There are several examples: Lone Star with Neinor, Castlelake with Aedas, Cerberus with Inmoglacier; Bain Capital with Habitat; and Morgan Stanley with Gestilar.

Another similar, more recent, example is the association between FS Capital – from Finsolutia – and Inmobiliaria Espacio, a company owned by the Villar Mir group, to relaunch the construction business and sell homes by investing €400 million on land purchases (…).

Other funds also interested in land are those committed to financing the whole process, such as Oak Hill, and those that are buying portfolios of land from the banks and from Sareb, but not to resell them, such as Deutsche Bank and Blackstone.

By location, the experts agree that financing has gone from being limited to the large capitals to appearing in increasingly more cities. “(…). Until two years ago, interest was limited to Madrid, Barcelona, Málaga and the Balearic Islands. Now we are seeing operations along the whole coast, as well as in Sevilla, Zaragoza and Pamplona, amongst others (…)”, says Labarra, of CBRE. “This year we will see operations in cities such as Bilbao, Vigo, Salamanca, Zaragoza and Murcia, which have recently come onto the radar of the large investment groups”, adds Méndez, of Savills (…).

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Inmoglacier Acquires 8 Residential Plots in Arganda del Rey (Madrid)

12 April 2018 – Inmodiario

The project, Residencial Ciudad Futura, is going to be located in an important area in the centre of Arganda del Rey and will constitute one of the most significant new developments in the southeast of the Community of Madrid.

The total buildable surface area amounts to 102,220 m2, of which 6,706 m2 will be dedicated to commercial use and the remainder to residential use (homes to buy and rent).

The firm also announced the acquisition of land in Boadilla for 157 homes.

Grupo Inmoglacier, one of the most important property developers in the country, has completed the purchase of eight plots of residential land in Arganda del Rey, with an expected investment of €165 million. The plots have a surface area of 20,883 m2 and a total buildable surface area of 102,220 m2 of which 6,706 m2 will be dedicated to commercial use and the remainder to residential use, reaching a maximum density of 1,057 homes. Marketing of the project, which is going to include homes to buy and to let, is expected to begin in June this year.

Inmoglacier’s development is going to be located in the UE-124 Sphere “Central Area” of Arganda, opposite the Line 9 metro station. The project constitutes a new reference point for the population of Arganda, considered the capital of the southeast of Madrid, and will involve the creation of a completely new neighbourhood. The objective of Inmoglacier is to reactivate this urbanisation, which has been paralysed for years, turning the area into a unique space with high-quality designer buildings, in a green, family, pedestrian environment to meet demand in Arganda, Rivas-Vaciamadrid and the whole of the eastern area of Madrid.

This project represents the largest investment that Grupo Inmoglacier has made in a land purchase since its creation more than 35 years ago.

Boadilla del Monte

Inmoglacier has also announced the signing of a land purchase for the development of 157 homes in the west of the capital’s metropolitan area, in the Madrileñan town of Boadilla del Monte, specifically in the area known as “Cortijo Norte”. The total investment in that project will amount to €58.5 million.

The acquisition of land for new residential developments forms part of the group’s strategy to boost and maintain its organic growth thanks to the development of new projects, to which end it combines its extensive experience in promotion and robust financial stability.

Through these operations, the company is consolidating its position as one of the Spanish property developers with the largest land bank in Spain and one of the major players in the residential market in the Community of Madrid, with more than 2,000 homes currently under construction, 1,100 of which it plans to hand over in 2018. Inmoglacier is the fifth largest residential property developer in the country and the largest in Madrid by volume of homes handed over.

Ignacio Moreno, CEO of Inmoglacier said: “With our new partner, Cerberus, we have exponentially increased our investment capacity to develop a large residential supply in the country and that undoubtedly strengthens our position within the property development sector in Spain”.

Original story: Inmodiario

Translation: Carmel Drake

ASG Homes Is Planning to Build 10,000 Homes in Spain

9 April 2018 – Cinco Días

Metrovacesa, Aedas, Neinor, Vía Célere, Aelca… they are the everyday names of the new players that are reviving the house building sector following the real estate crisis. They are the companies that have stolen the limelight thanks to their ambitious plans and the return of these kinds of businesses to the stock market. But there is a quieter successor that is silently gathering a giant portfolio of land and with some ambitious plans of its own in the residential development sector. The company in question is ASG Homes, backed by the British fund manager ASG Capital Management and its subsidiary ASG Iberia.

Recently, the initiative has been baptised ASG Homes, the brand that will reach out to potential homebuyers. That will be the logo that clients will see when they visit one of the developments. Behind the brand is the ASG Iberia team, which in recent years has been acquiring a collection of plots in different provinces across Spain to accumulate 500,000 m2 of land in total, one of the largest portfolios in the country.

“We are the great dark horse”, recognises Víctor Pérez Arias, CEO of ASG Homes for Spain and Portugal. The current portfolio of land gives the company the possibility of building 5,000 homes. “The aspiration is to double our existing capacity”, he adds. That means investing more over the coming months to accumulate a portfolio with the potential for the construction of 10,000 homes. To date, the company has invested €400 million of its own funds to obtain its current land portfolio.

The property developer focuses on operations involving the purchase of debt with real estate collateral and on complex situations to reduce the prices it pays. Precisely for those reasons, the company rules out competitive tenders for acquiring land.

Currently, its plots are located in Valencia, Alicante, Málaga, Costa del Sol, Madrid, Salamanca and Sevilla. Specifically, in the Andalucían capital, the company is already planning to build 1,100 homes. So far, it has not entered the market in Barcelona, above all because prices are high in the city, but it does not rule out future opportunities.

Based on data provided by the companies, ASG is positioned in fifth place in the ranking of property developers planning to build the most homes, with around 2,000 units in the pipeline. It comes in behind only Neinor, Metrovacesa, Aelca and Amenabar.

Moreover, this year, the property developer plans to sell 1,500 new homes and hand over 500 homes to its clients. The market is looking at all of these new companies with a magnifying glass, above all of those that are listed on the stock market, to check whether they are capable of fulfilling their plans. Pérez Arias says that the company is already handing over its first developments in Alicante.

In Spain, these types of international funds have starred in the recovery of the house building sector, either through the creation of new property developers, such as in the case of ASG, or by refloating companies with problems.

The new property developers include Neinor, backed initially by Lone Star, after it purchased Kutxabank’s real estate business for €935 million. It was the first property developer to debut on the stock market in more than a decade and its main shareholder has already collected its profits after selling all of its share on the market.

It was followed on the stock market by Aedas Homes, backed by Castlelake. The 100-year old Metrovacesa also returned to the stock exchange, in that case, led by Santander and BBVA. Moreover, the fund Värde has two property developers that are currently sounding out the same path (Aelca and Vía Célere). In turn, Baupost has created Q21 Real Estate. Cerberus has also acquired the historical Inmoglacier and in the same vein, Bain Capital has purchased Habitat. Another example is the alliance between Gestilar and Morgan Stanley.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Are Spaniards “Condemned” to Buying Second-Hand Homes?

4 February 2018 – El Confidencial

Only 18% of the homes sold last year were new build properties. 

It is the dream of thousands of Spaniards: to buy their own home and, wherever possible, for that home to be brand new. Nevertheless, it is a dream that now, more than ever, only a lucky few are managing to realise. In 2017 – based on data for the 11 months to November from the National Institute of Statistics (INE) – more than 350,000 second-hand homes were sold in Spain – comprising second and subsequent sales for statistical purposes – compared with just 77,500 new homes – first sales -. In other words, the latter accounted for just 18% of the total number of transactions.

That has not always been the case. At the height of the crisis – between 2008 and 2013 – and as a consequence of the huge stock of unsold new homes that was generated during the real estate bubble, sales of both types of homes were pretty much the same. However, all indications are that new homes are going to continue to be a scarce product and only affordable for the lucky few, given that estimates for the property development sector as a whole indicate that activity is going to normalise at an output rate of around 150,000-200,000 units per year, a figure which the experts consider corresponds to the natural demand for housing, in other words, to the creation of new homes. These numbers come in stark contrast to the 850,000 new homes that were approved in 2006, the highest figure in the historical series.

To put it in context, 81,500 (new home) permits were granted last year, up by 27% compared to the previous 12 months, but still only half the number that property developers expected to reach and 10 times fewer than at the height of the boom.

Property developers dream of reaching those figures in the short term, nevertheless, some voices have already started to warn about the possibility that they may not be able to achieve it due, on the one hand, to a lack of land – plans and urban development projects have been suspended all over Spain, and in particular in markets with lots of demand for housing such as Madrid – but also, and above all, due to a lack of financing.

There will not be financing for 150,000 homes

That was stated publically this week by the President of Property Developers in Madrid (Asprima), Juan Antonio Gómez-Pintado. “The problem is that the market is heading towards 150,000 homes per year, whilst bank financing looks set to provide for just 65,000 homes” (…)

Despite those storm clouds, if there does end up being enough money to go round, will people on the buy-side be able to afford the new homes? For months, real estate debates have been raging about the fact that the homes that are being built at the moment are not affordable for most buyers, which primarily constitute owners looking to reposition themselves – people who already own a home and who want to sell it to buy a better one -.

“The demand is not willing to assume future increases in house prices (…)”, said Ignacio Moreno, CEO of Inmoglacier just a year ago.

The lack of product for sale and the high costs of construction are being passed on in the final prices of homes and also in the prices of land. And all indications are that the rising spiral is set to continue and may even intensify. “Land prices are going to continue to rise, following in the footsteps of housing but multiplied by three. In other words, if house prices go up by 5%, land prices will rise by 15%”, calculates Mikel Echavarren, CEO at Irea.

Price gap

In this way, according to data from INE, during the third quarter of 2017,  the prices of both new build and second-hand homes rose by 7%. And it is the very lack of new build product that is inevitably pushing up prices. But that same shortage is also forcing demand towards the second-hand market, which is also pushing prices up, although, at the national level, the price gap between second-hand and new build homes has been increasing in favour of the latter (…).

Nevertheless, the price per square metre of a new build home is not always more expensive than a second-hand property. El Confidencial has compared the prices per square metre of new build homes in several districts of Madrid and Barcelona, as reported by Socieded de Tasación at the end of 2017, with the prices of second-hand homes, according to the real estate portal Fotocasa, and found that in some cases second-hand homes are more expensive.

How is that possible? The real estate portals show asking prices – not the prices at which operations are actually closed. According to a recent study performed by this real estate portal, in the last year, 71% of buyers obtained an average reduction (on the asking price) of €14,000, a figure that in the majority of cases represented a discount of 10% on the initial sales price (…).

On the other hand, for statistical purposes, when we talk about second-hand housing, we are not always taking into account the age of the property, but rather the number of times that the home has changed hands. Many developments in the hands of the banks are considered second-hand because there has already been a prior transaction involving that property – from the bankrupt property developer to the bank, for example – This means that when such a home is sold it is considered as a second-hand property, even though it may never have actually been lived in. And the prices of those units tend to be higher than those of homes that are several years old (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Sareb Seeks to Integrate its Residential Business into a Listed Property Developer

22 February 2018 – Cinco Días

Sareb has started on a road that it has not yet explored in its short life. The so-called bad bank is evaluating the possibility of entering the residential property development business with a bang, as it plans to team up with a partner in the sector, in exchange for providing land to a joint venture company. That is according to several sources familiar with the process that has reportedly just started.

According to the sources, Sareb has started a process to divest land and developments in progress for around €800 million, which would result in the largest transaction in the history of the entity.

But on this occasion, the managers of Sareb are seeking to use a new formula, which would involve it contributing land to the share capital of a large property developer, be it one that is already listed or one that is considering its market debut. In return, it would enter the residential property development business and benefit from the high profit margin generated by the house construction business.

The operation is in its initial phases and several sources explain that the size of the land portfolio that Sareb wants to put up for sale may still vary, as may the formula for entering the share capital of the real estate company that ends up winning the tender. Sources at the entity declined to comment.

In any case, Sareb would enter the share capital of the property developer with the final aim of the joint venture making its debut on the stock market, which would allow the bad bank to easily divest its stake in the market in the future, in the same way, for example, that Santander and BBVA have done in the case of Metrovacesa’s return to the stock market.

The intention of the entity is to enter as a minority shareholder, ceding the management, of one of the large real estate companies that are currently starring in the new upward cycle in terms of residential development.

This would be a very similar operation to the one carried out by Santander and BBVA with Metrovacesa. In recent years, the banks have been increasing the property developer’s portfolio by contributing land from their balance sheets in exchange for stakes in the company’s share capital. For example, in July last year, the two banks injected land worth €1.1 billion into Metrovacesa through a non-monetary capital increase.

According to the sources, entering the share capital of a property developer would allow Sareb to benefit from the upward cycle in the housing sector since that business generates high profit margins on the construction of homes, much greater than those generated on the simple sale of land portfolios.

The idea could be summarised by the integration of all of Sareb’s residential and land development business by a property developer, to gain a long-term partner.

Only a limited number of candidates have been invited to participate in the process to become Sareb’s strategic ally, around six potential partners, according to the sources.

The perimeter of the assets, worth around €800 million, would make the operation the largest undertaken by the entity chaired by Jaime Echegoyen (pictured above). Until now, the largest direct sale was the so-called Eloise portfolio, which was acquired by Goldman Sachs, for €553 million. Initially, Sareb even considered a larger contribution of land, worth up to €1.2 billion, but the experts consider that such a volume would be too difficult for any partner to digest.

In fact, the candidates to integrate Sareb’s assets are very limited because of the volume of the operation. All sights are set on the large listed companies in the sector, such as Neinor, Aedas and Metrovacesa, as well as on the other property developers that are backed by international funds, which are not currently trading on the stock market. In the case of the latter, the formula whereby that company ends up on the market would have to be analysed to facilitate the liquidity that would allow Sareb to divest over the medium term. In that case, the list is much more extensive: Aelca (Värde), Vía Célere (Värde), Gestilar (Morgan Stanley), Q21 Real Estate (Baupost), Inmoglacier (Cerberus), Habitat (Bain Capital) and ASG Iberia (Activum).

In terms of the timings fixed by the entity, the sources indicate that the operation will be closed before the summer, although they acknowledge the difficulty of the process to complete the finishing touches of the negotiations to find a strategic partner.

According to sources in the sector, the timings may also be determined by Sareb’s intention to pre-empt other major land operations that are expected to take place over the next few months.

Such is the case of Blackstone, which acquired 51% of Popular’s property portfolio, assets worth around €10 billion. Cerberus is also expected to be active in the market, through Haya Real Estate and Anida – after acquiring 80% of BBVA’s portfolio worth €5 billion – and, finally, Bain Capital, with Liberbank’s property.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Haya Signs Agreement with ING to Manage its Foreclosed RE Assets

28 December 2017 – Voz Pópuli

Haya Real Estate is continuing to expand its real estate network in Spain. In just two months, Cerberus, the owner of the platform, has purchased 80% of BBVA’s real estate, acquired the property developer Inmoglacier and signed a new alliance with a bank: ING.

This latest agreement was signed in November and establishes that, from now on, Haya RE will be responsible for the management and sale of ING’s foreclosed assets, including not only those properties the bank already controls but also those that it inherits in the future due to defaulted loans. Although the real estate exposure of the Dutch institution in Spain is low (no figures were revealed), the deal shows that Haya Real Estate is continuing to win clients in a highly competitive market.

Cerberus España already controls the assets of BBVA (once Project Marina is approved in the middle of the year), Sareb, Bankia, Liberbank, Cajamar and those of other funds such as Waterfall. In total, it has property worth more than €50 billion under its management.

Another contract won by Haya recently was Waterfall’s, comprising 400 assets worth €57 million, purchased from Cajamar. That agreement made amends for the fact that Altamira won the contract to manage the assets of Liberbank that were acquired by Bain Capital.

Mergers

All of the real estate platforms (also known as servicers) are trying to win business ahead of a possible consolidation in their market in 2018. Haya Real Estate, Servihabitat (in which TPG and CaixaBank hold 51% and 49% stakes, respectively), Altamira (owned by Apollo 85% and Santander 15%), Aktua (Lindorff) and Anticipa-Aliseda (Blackstone) are the largest.

Another recent move in the sector saw the entry of Axactor, with the acquisition of Unicaja’s assets.

Solvia, the real estate arm of Sabadell, is one of the major unknowns in the sector. Two years ago, it negotiated a possible merger with Haya Real Estate, which has still not been ruled out as we head into 2018.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

 

Cerberus Buys Property Developer Inmoglacier

15 December 2017 – Expansión

On Friday, the investment fund Cerberus announced the purchase of the property developer Inmoglacier. According to sources in the sector consulted by Europa Press, the fund has taken control of 75% of the firm controlled until now by the Moreno family.

The transaction represents a new bet by the US fund for the Spanish real estate market. At the end of November, BBVA sold 80% of its real estate portfolio to Cerberus for €4 billion.

Cerberus, which has not revealed the amount involved in this operation, plans to use the company as a platform to strengthen its commitment to the sector and undertake new purchases.

Inmoglacier plans to deliver more than 1,000 homes in 2018 of the almost 2,000 that it has under construction. Currently, the real estate company is focusing its construction activity in Madrid, Barcelona, Tarragona, Zaragoza and Granada.

The head of the European advisory office at Cerberus, Lee S. Millstein, has said that this operation has been carried out due to the growth opportunities that the Spanish market offers at the moment.

Meanwhile, the CEO of Inmoglacier, Ignacio Moreno, has said that for his company, the sale means consolidating its position financially over the long-term with a “major strategic partner”.

Original story: Expansión

Translation: Carmel Drake

How Cerberus Became Spain’s Largest RE Company

3 December 2017 – Voz Pópuli

If you are thinking about buying a home over the next few months, statistically, it is likely that Cerberus will be the vendor. The US fund is one of the players that arrived in Spain at the height of the financial crisis (between 2010 and 2012), with the objective of acquiring banks and real estate companies, just like it had done in other countries. The former did not happen, despite several attempts to take over some of the former savings banks. But the conquest of the property sector went a lot better: so much so that the fund now controls more than €50 billion in assets and has just starred in the second largest operation in the Spanish real estate sector in recent years.

Those close to Cerberus define it as a fund that is meticulous, aggressive in its negotiating style and persistent. It has proven that last quality with the patience it has shown searching for major operations in Spain over many years. Last week, it finally was in a position to purchase BBVA’s property. It is the fund’s largest acquisition to date in Spain and it is going to cost €4 billion, most of which will be financed by Morgan Stanley.

Five key people inside the fund have been instrumental to the success of this operation, namely: Frank W. Bruno, one of the main directors of the fund at the global level; Lee S. Millstein, another key director of Cerberus, who has been overseeing the business in Spain for years; Manuel González-Cid, Senior Advisor to the fund and former Finance Director at BBVA, and his team; David Teitlebaum, head of the fund in Europe; and Daniel Dejanovic, head of the real estate business in Europe.

The Aznar junior factor

Several other people have also participated, although to a lesser extent: Carlos Abad, CEO at Haya Real Estate, the real estate servicer of Cerberus in Spain; Juan Hoyos, former President at McKinsey in Spain and President of Haya; John Snow, President of Cerberus, who met with the President of BBVA, Francisco González, to propose the deal in the first place; and José Maria Aznar Botella, son of the former Spanish President. The story of this fund in Spain has been inextricably linked to the incorporation of Aznar junior in recent years, at least from the point of view of the media. The bankers who have worked with him describe him as a “strong professional” who has been key to the fund’s success in Spain.

Both Hoyos and Aznar were most certainly instrumental during Cerberus’s first operation in Spain, in 2013, when it purchased Bankia Habitat, in the so-called Project Platform. It was a purchase that revolutionised the sector and paved the way for other similar deals, such as the sale of Altamira, Servihabitat and Anticipa.

Unlike what has happened with BBVA, Cerberus’s operation with Bankia did not involve an asset purchase, but rather the management of that entity’s assets. Like in other similar operations, the fund takes control of the workforce and the administration and sale of debt and foreclosed assets, in exchange for management commissions. Bankia Habitat became Haya Real Estate and subsequently expanded its perimeter after teaming up with Sareb, Cajamar and, this year, Liberbank. Those deals involved the disbursement of around €0.5 billion by Cerberus. Added to the €4 billion paid to BBVA and the fund’s other portfolio purchases, the total figure exceeds €5 billion.

The result of this strategy is that Haya Real Estate has reached a management volume of more than €40 billion, has almost 700 employees and recorded a profit of €31 million (in 2016).

Cerberus’s networks in Spain do not end there: it owns a doubtful debt management firm, Gescobro; a securitisation firm, Haya Tutulización; a stake in another manager of bank debt, Hipoges, whose sale it is currently negotiating with KKR; and dozens of companies where it keeps its real estate assets. As if they were not enough, it will soon be able to add the property developer Inmoglacier to this list.

And that is only one of the strings to Cerberus’s bow in Spain, it also engages in large business ventures such as Renovalia, which is currently up for sale. Operations such as the one involving BBVA reflect the fact that funds like this are still very interested in Spain, despite the uncertainties being generated by Cataluña. And beyond the foreign money that they bring, they should be seen as the new influential players, capable of moving markets such as the real estate sector. And they are here to stay. For the time being at least.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

The New Kings Of The Residential Market

17 November 2016 – Expansión

The crisis in the real estate sector not only led to the disappearance of some of the historical giants, such as Martinsa Fadesa, Reyal Urbis and Nozar, it has also resulted in a structural change in the residential landscape, with the emergence of new players, including several international investment funds, which have revived the market by injecting their capital. (…).

“Traditionally, the residential sector has been a very polarised market, with lots of local developers playing key roles. Nevertheless, the residential business model has changed following the crisis. In 2014, we began to see new players emerging in the form of partnerships between local property developers and international investment funds, with the funds providing the capital and the developers the local knowledge and ability to manage the market”, explains Ernesto Tarazona, Partner-Director of Residential and Land at Knight Frank.

Meanwhile, the National Director of Residential at CBRE, Samuel Población, explains that the partnerships created by the international funds and local developers bring together the local developers’ capacity to manage and know the local market, and the funds’ capacity to invest and provide solvency levels (…). “Grupo Lar and Pimco; Renta Corporación and Kennedy Wilson; Momentum Real Estate and HMC; Aquila Capital and Inmoglacier; Mina Inmobiliaria and Eurostone; Aelca and Värde; and Q21 Real Estate and Baupost, are just some of the partnerships that have been formed in recent months”, he says.

In this way, we are seeing “the professionalisation of the sector with institutional money that wants to enter this market”, says Borja Ortega, Director of Capital Markets at JLL. (…).

Enrique Isla, Partner at King & Wood Mallesons (KWM), explains that, in addition, some of the funds have burst into the market by purchasing real estate companies in order to access their portfolios of land as well as their management teams. “That was the case with Lone Star’s purchase from Kutxabank of its real estate subsidiary Neinor; and Värde’s acquisition of Sanjosé’s real estate subsidiary to create Dospuntos; it also explains Castlelake’s interest in Aedas, the property developer that has emerged from the ashes of Vallehermoso”, he adds.

Isla thinks that the investment funds see great potential for growth and profitability in the residential sector, given the improvement in the Spanish economy and employment, as well as the favourable financing conditions.

In this sense, Población points out that the new developments in Spain will have to respond to the depletion in the stock of new housing that we are seeing. “Given the high number of housing permits granted in 2015, we expect between 60,000 and 65,000 new homes to be ready in 2016”. (…).

In addition to the funds, Spain’s banks, through their servicers – companies created during the crisis to streamline the administration and sale of portfolios of properties and loans by financial institutions – are becoming increasingly involved in property development.

In this sense, Anida, one of the few large platforms that is still completely owned by its parent company, BBVA, has just signed an agreement with Inveravante, a holding company owned by Manuel Jove. During the first phase, the new company, in which Jove holds a 70% stake and BBVA the remaining 30% stake, will develop 850 homes in Málaga, Madrid and Las Palmas.

The experts think that other movements of this kind may well take place in the real estate market, given that many of the banks are still major land owners.

Meanwhile, Sareb is continuing to be a major player in the residential market, with its stock of almost 100,000 units as at June last year.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake