The Junta de Andalucía Sells 15 Industrial Plots for c. €1M

March 2019 – Onda Cero

The Agency for Housing and Rehabilitation in Andalucía (AVRA) has sold 15 industrial plots of land in the province of Jaén for around €1 million. The buyers expect new companies to open facilities on the plots and existing companies to expand.

Together, the plots span a total surface area of 11,967 m2, and the interested parties have paid €904,508 in total. Six of the plots are located on the Llanos del Mazuelo industrial estate, in Alcalá la Real; three are situated in Torredelcampo, two in Arjona, two more in Torredonjimeno, one in Villacarrillo and one in Huelma.

Original story: Onda Cero 

Translation/Summary: Carmel Drake

Blackstone Puts 2 million m2 of Popular’s Residential Land up for Sale

1 October 2018 – Cinco Días

Now that the banks have offloaded their real estate portfolios onto the opportunistic funds that acquired them, it is time for the next move. Those buyers are going to see at first hand whether property developers are interested in buying plots on which to homes can be built all over Spain. The first player to test the market is Blackstone, which has placed a macro-portfolio of land spanning 2 million m2 from Popular on the market; according to market sources, it has the capacity for the construction of more than 18,000 homes.

The operation is being carried out through Aliseda, a company controlled by Blackstone (51%) and Santander (49%). The value of the plots is almost €500 million, according to sources at Aliseda. That real estate firm already revealed, at the start of September, that a sales process was in the pipeline relating to so-called Project Origin (…).

This land proceeds from the toxic assets of Popular, after Santander sold 51% of the property-linked portfolio to Blackstone last year for €5.1 billion. In that portfolio, there were doubtful loans and foreclosed assets, including both homes and land linked to property developers. Of those assets, 42% corresponded to land and work in progress projects. In that operation, the servicer Aliseda was also transferred. That entity is now responsible for managing those assets, recovering doubtful loans and, when recovery is not possible, foreclosing the properties and putting them on the market, like in  the case of this macro-operation.

The details of the operation

The details of the operation reveal a gigantic portfolio. The land portfolio spans 2.05 million m2 for residential use, specifically for the construction of 18,299 homes, on plots located in 43 provinces, but excluding Madrid and Barcelona. In total, 270 assets have been put up for sale.

Blackstone and Santander, through their servicer Aliseda, are giving companies the option of bidding only for the plots that are of interest to them. The real estate firm has opened an online store in which it says around 1,000 interested investors are participating.

Local property developers are expected to be the players most interested in these plots. In fact, Blackstone has decided to put plots on the market in locations where demand has reactivated a bit later, whereby backing the recovery of the property sector across Spain. The fund has entrusted this transaction to the real estate consultancy CBRE.

The portfolio is divided into four categories, based on the type of land. Specifically, 158 assets (58% of the total) corresponding to 888,364 m2 of land, are finalist plots (which can be built on right away) with capacity for 8,691 homes. It has also put some work in progress projects up for sale, in other words, developments that were left unfinished. In that case, there are 39 assets, spanning 174,034 m2 and corresponding to 1,549 homes.

Aliseda is also marketing 33 assets for which the urbanisation process has been started, with capacity for 4,603 homes and another 42 assets without any licences for 4,772 homes.

In terms of the locations, Andalucía, Levante and Galicia account for the majority of the assets. The 10 provinces with the most homes in the portfolio are Murcia (14%), Málaga (12%), Castellón (7%), Valencia (5%), La Coruña (5%), Alicante (4%), Asturias (4%), Navarra (4%) and Zaragoza (3%).

Property developers interested in bidding for one or more of the plots will have until the end of October to do so and Aliseda expects to close the operations during December.

To put the gigantic size of the portfolio being marketed by Aliseda into context, it is worth comparing it with the land banks owned by some of the large listed property developers. Only Metrovacesa (in which Santander and BBVA hold stakes) owns more land. It currently owns plots for 38,000 homes, with a gross value of €2.686 billion, according to its most recent accounts. In the case of Aedas, it has a landbank for 14,521 homes and Neinor has land for another 13,500 units (…).

It remains to be seen whether the appetite of property developers for these locations outside of Madrid and Barcelona, the most active markets, is sufficient and whether they will be capable of swallowing up this supply. It is the first time that interest in the market for land proceeding from bank assets has been tested on such a large scale (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Lugo’s Only 5-Star Hotel Goes up for Auction for c. €5M

16 May 2018 – El Confidencial

It has been closed for four years and weeds are spreading uncontrollably across the estate. The only luxury five-star hotel in Lugo has gone up for auction for just over €5 million – the auction price includes the hotel’s furniture and a chapel in two separate lots – as part of the liquidation plan that is being followed since Mercantile Court number 12 of Madrid ruled against its owner, Alvaher 98. That company purchased the property in 2007 and built on the ruins of what used to be the Palacio del Conde de Lemos. Alberto Vázquez wanted to turn around his business activity, which focused on meat products and recover this historical and artistic gem, which originally belonged to the López de Lemos family and which had been abandoned since the beginning of the 20th century.

The bidding has now concluded with a single bidder offering €2.4 million for the hotel, below the €4.7 million auction price. As such, we will have to wait and see whether the court authorises the sale or not, given that it would not cover the debt. Meanwhile, in the other lots, €60,000 has been offered for the furniture, compared with an auction value of €450,000, and €6,000 has been offered for the chapel, above the auction value of almost €1,800.

The Hotel Palacio de Sober, whose refurbishment cost several million euros – most of which came from public funds – is also the oldest civil architecture building in Galicia, the largest estate in the autonomous region, and its chapel dates back to the 7th century. A year ago, the same court opened a sales process for possible interested parties to bid, and although several companies expressed their interest, no firm offer was submitted. Now, as part of the liquidation process of the owner company, its fate is being put to the test through a public auction (…).

The property has several financial charges, including a mortgage in favour of the Galician Institute for Economic Development (‘Instituto Galego de Promoción Económica’ or Igape), the public entity that backed the project to open the hotel at the time through loans and subsidies, as well as embargoes for non-payments to the Social Security department.

Located in the south of the province of Lugo in a natural setting, 10km from Monforte de Lemos and 38 km from Ourense, it opened its newly renovated doors in 2010 (…). It had 43 super-luxury rooms, all of which measure more than 25 m2 (…).

The price per room used to cost no less than €300 per night for the cheapest rooms, whilst sleeping in one of the suites cost upwards of €750 (…).

At the beginning of 2012, just two years after its inauguration (…), the Palacio de Sober stopped receiving guests and it definitively closed its doors in March 2014 (…). In February 2015, the owner company was declared bankrupt (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Operación Neo: Lone Star Negotiates Sale of Former Fecsa-Endesa HQ in Barcelona

28 November 2017 – El Confidencial

Lone Star is on the verge of closing another chapter in its history, with the sale of the last major asset that forms part of Project Octopus, a portfolio comprising more than €4,000 million in real estate loans from the bank Eurohypo in Spain and Portugal, which the US fund acquired three years ago, in conjunction with JP Morgan.

The asset in question is the former headquarters of Fecsa-Endesa in Cataluña, a building with a surface area of 35,000 m2, whose three chimneys form part of Barcelona’s skyline and regarding which, it is holding exclusive negotiations with the joint forces of the Tramway group and the German vehicle Indigo Capital.

The conversations are now in the home stretch and may even be closed this afternoon, according to sources familiar with the process, although they also indicate that a second finalist is waiting in the wings, which could take over if these negotiations do not end up proving fruitful.

This operation marks another step forward in Lone Star’s strategy to unwind its positions in the Spanish real estate market, following the sale of the rest of Project Octopus and of the property developer Neinor Homes. That company debuted on the stock market in the spring and following several share sales, the US fund now only controls a 13% stake. Moreover, it goes against the grain of the current situation in the real estate market in Cataluña, which has all but come to a standstill due to the ‘independentista’ challenge.

This property, which has been empty for five years, has both environmental and change of use problems, which have certainly conditioned its sale. Constructed on the site of an old coal generation plan at the beginning of the 20th century, the subsoil of the plot contains impurities from the former coal and gas operations, which constitute the main risk to this operation and which have convinced other interested parties to withdraw from the process.

Impact of the sovereign challenge

In addition, the property has a key 4 urban planning rating, which restricts its use to public services with a technical component. In fact, its former owner, Grupo Sanjosé, which acquired the building from Endesa in a “sale & leaseback” operation, did not manage to resolve the change of use, which allowed Lone Star to execute the debt linked to the building in 2015.

And so on and so forth, because the sovereign crisis in Cataluña was about to bring down the process, launched in September and managed by JLL, in which firms such as Meridia, Colonial, Oaktree, Tristan, GreenOak, Värde and Stoneweg expressed an interest, according to sources.

In the end, only two candidates have submitted bids, for around €20 million, and the winner will likely have to double that investment figure in order to be able to carry out all of the renovation work that this asset requires to be in a position to generate value again.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

“Valdebebas Is Ready To Welcome Companies Post-Brexit”

27 June 2017 – Expansión

Valdebebas – one of the largest urban planning projects in the Community of Madrid, with a land surface area of 10.6 million m2 – has fired the starting gun for what is expected to become the city’s “new financial and technological district”.

“We have land spanning more than 1 million m2 (equivalent to the surface area of almost 140 football pitches) available for tertiary use. People talk about Castellana Norte, but there is no development in Spain quite like Valdebebas. It is already ready to welcome companies from London searching for new locations after Brexit and any other multi-national companies”, explains Marcos Sánchez, Managing Director of the Valdebebas Compensation Board, which represents the owners of the land. Market sources indicate that the land owners include Monthisa, Bisbel, Vivienda Económica, Celteo, Coindeco and Inmobiliaria Espacio.

This business park will comprise twenty blocks, with buildabilities ranging between 9,000 m2 and 110,000 m2. It will house buildings that have between five and fourteen storeys.

The director said that, although they have not yet started “to sell” Valdebebas as a destination for companies, international investors, funds and hotel chains have already expressed their interest in the development: “We are still in the preliminary conversation phases. Until now, contact has been made because interested parties have been approaching us”.

For Sánchez, the aim of Valdebebas is to attract fin-tech companies and others relating to that sector. Moreover, it has the capacity to accommodate between three and four hotels and restaurant brands. “We have direct access to the airport and are well connected to the city centre. It is an unbeatable location in Europe and the world”.

In this sense, it is worth remembering that a bridge is being constructed to connect this area with Barajas Airport – T4, with a forecast investment of more than €20 million. “We have already moved earth and started building the foundations on both sides. The work, which was started in February, is going well and will be finished within two years”, he said.

Valdebebas has several advantages over the potential Operación Chamartín: the immediacy – with “windows of opportunity that can be benefitted from now” – its size and location, according to Sánchez. “Castellana Norte is our natural competitor; despite that we want that site to be developed as soon as possible and in the best way possible because we will all end up winning as a result”, he said.

Legal journey

In terms of the legal position, Sánchez acknowledges that, although Valdebebas has always been very judicialised – construction of between 800 and 1,000 homes has been suspended following a ruling by the Supreme Court – almost 100% of the residential property has been sold, the population already stands at 10,000 people and is set to reach 18,000 by the end of the year. In his opinion, it is “perfectly feasible” to reach agreements before the urbanisation is completed. “All of this administrative and judicial chaos will end when the urbanisation is handed over in two years time”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hotel Incosol Is Sold To A Spanish Hotel Group For €20M

26 February 2016 – El Mundo

The iconic Hotel Incosol in Marbella was sold on Tuesday (23 February 2016) to a Spanish hotel group and the consideration paid, more than €20 million, is thought to be sufficient for the workers to receive €2 million, according to reports from the lawyers advising the bankruptcy proceedings of the JALE group, which owns the hotel.

According to those sources, the buyers have also purchased the brand, and so it is clear that the intention is to revive the luxury establishment and benefit from the name that it has made for itself in health tourism since the 1970s. According to these sources, the banks – Sareb and Banco Sabadell – have ended up accepting a significant discount on the debt, which amounted to approx. €30 million in total.

The operation has been made possible, according to the sources, by the diligence of the judge of the Cádiz court, Manuel Ruiz de Lara, who authorised the bankruptcy administration to sell the hotel in its entirey (and not piecemeal) and for the money obtained to be paid to the bankruptcy creditors.

In any case, it is likely that a dispute will arise with the Social Security authorities, which will end up in the courts. Nevertheless, the money for the 158 workers seems to be guaranteed.

In fact, less than a year ago, the Social Security authorities opposed the sale of the hotel to a buyer, after negotiations had taken place with up to 40 different parties interested in acquiring the property. According to sources close to the bankruptcy proceedings, the debt with the Social Security amounted to around €5 million.

The Incosol Hotel was the last large asset left to be liquidated by the Cádiz group JALE, which is immersed in bankruptcy proceedings in which the owner, José Antonio López Esteras, has filed complaints to the previous bankruptcy administrators, as well as to the General Council of Judicial Power regarding the actions of the previous judge, Nuria Orellana.

Original story: El Mundo

Translation: Carmel Drake