Tag: investment fund

Blackstone will be the Landlord of 25,000 Rental Homes by the End of 2019

31 January 2019 – Voz Pópuli

Blackstone, one of the largest investment companies in the world, expects to end the year with 25,000 rental homes under management in Spain.

Eduard Mendiluce (pictured above, left), the man from Blackstone who leads the US giant’s real estate emporium in Spain, has explained that the firm believes in the Spanish market, as it has done since 2014, and will end 2019 managing 10,000 more rental homes that it currently owns (15,000).

“We continue to believe in the fundamentals of the residential sector in Spain”, said Mendiluce at a conference about the real estate sector organised by Iese in Madrid. “Spain was one of the countries that suffered the most during the real estate crisis of 2008; prices are still 30% below their maximums”, he said.

The CEO of Aliseda and Anticipa explained that the US fund’s strategy in Spain in terms of real estate involves renting or buying and selling second-hand homes worth between €120,000 and €150,000. “When you have more than 200 homes under management in a given municipality, the business becomes profitable”, he explained.

Blackstone has invested almost €26 billion in the Spanish market over the last five years. In March 2014, it purchased 40,000 problem mortgages from Catalunya Caixa for €3.6 billion.

Since then, it has purchased: Banco Popular’s toxic property, together with Santander, for more than €5 billion; the Socimi Hispania for €2 billion; and 50.01% of the rental home Socimi Testa for €947 million. Last year, it bought Cirsa, a leading company in the gaming industry in Europe in a deal worth €2 billion.

In terms of the criticisms directed at the rental policies of Blackstone and other funds from certain sectors, Mendiluce has highlighted that in Spain, the funds own just 3% of the total rental housing stock, and that the rest is in the hands of individuals.

“I think that it is difficult to manipulate prices when you only account for a small percentage (of the market)”, he said. “I firmly believe that if there has been very concentrated price inflation in a handful of towns, then that has been due to a lack of supply”, and he pointed out that Spain has the lowest percentage of social housing in Europe.

Fashionable market

Juan José Brugera, President of the real estate company Colonial, was very optimistic about the real estate sector in Spain.

“We are in an expansive phase of the cycle, we are facing lower growth, but growth is growth, and it’s strong in Spain”, he said at the conference organised by Iese. “In the rental cycle, we are still in the growth phase, we have potential for rental growth that we believe ensures a strong performance over the next two or three years” he said.

“The Spanish market is fashionable at the moment, we predict expansive behaviour”, he said. “I have a positive vision, the stock market is behaving a bit strangely, but I think that is due to certain turbulences, both external and internal, that are generating uncertainty”.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Marathon Buys an Office Building & a Hotel in Madrid for c. €30M

21 November 2018 – Expansión

The US investment fund Marathon is increasing its commitment to Spain with the acquisition of a mixed-use complex of buildings in Madrid, which houses an office block and a four-star hotel managed by the Mallorca-based chain Barceló.

Specifically, the US investment fund has closed an agreement with Credit Suisse Real Estate, owner of the asset until now, to acquire the complex for around €30 million, according to market sources speaking to Expansión.

The complex has a total surface area of 14,000 m2 and is located at numbers 19 and 21 Calle de Julián Camarillo in Madrid, one of the most established office districts in the east of the capital, a few minutes by car from the Ifema exhibition centre and Adolfo Suárez-Barajas airport.

The operation has been advised by the real estate consultancy firm Knight Frank.

The complex includes an office building, with a surface area of more than 9,100 m2, occupied by several tenants: Adquira, the company specialising in e-commerce; Lebara, the telephony company; Ixion, the robotics and drone firm; and Norgine, the pharmaceutical business, amongst others.

The complex also has retail and leisure areas and indoor and outdoor parking.

In addition, the asset houses a four-star hotel, managed by Barceló Group, now under the Occidental Hoteles brand.

The Hotel Occidental Madrid Este – previously known as Barceló Torre Arias – has 108 rooms, four of which are junior suites, as well as a gym, sauna and restaurant. The establishment also has two meeting rooms with capacity for up to 80 people.

With this operation, Marathon is strengthening its presence in the Spanish real estate market. The US fund is, together with Attestor, Bank of America Merrill Lynch, Barclays, Deutsche Bank and JP Morgan, one of the minority shareholders of the property developer Vía Célere, which is controlled by Värde (75%).

Moreover, the investment fund acquired the Bahía Azul shopping centre in Málaga in 2016.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

BBVA Sells its Former HQ in Bilbao to Angelo Gordon for c. €100M

25 September 2018 – Expansión

The former corporate headquarters of Banco de Vizcaya is being converted, 50 years later, into Torre Bizkaia. BBVA, the owner of the property at number 1 Gran Vía in Bilbao, has reached an agreement with the investment fund Angelo Gordon to sell it the building for around €100 million.

The sale – which has been subject to negotiations since before the summer – will close within the next few days, according to sources in the sector, and will become the US fund’s largest operation in Spain, where it purchased the Hotel Dolce Sitges in Barcelona from Oaktree a year ago for €40 million.

The new owner already has tenants for the property. In addition to the Irish multi-national textile retailer Primark, which has committed to lease the ground and first five floors for 30 years, the Bilbao local government is going to lease the remaining floors to centralise its provincial services in the tower, which is going to be called Torre Bizkaia.

That move was announced yesterday by the President of Bizkaia, Unai Rementería (…). According to Rementería, BBVA’s departure from the building represented the end of an era, with which the financial weight of Bilbao was extinguished. “Now the provincial government is lighting up the tower again and is starting a new era of new ideas and businesses”, he said.

In addition to the services of the provincial council, the property will house on eight of its floors, an international centre for entrepreneurship, a project promoted by the provincial council and the Town Hall of Bilbao. According to Rementería, those eight floors will be “the heart” of the tower, and through them, they will seek to boost activity, recover economic weight, and reinforce the innovative profile and entrepreneurial spirit of Bilbao and Bizkaia.

The property on Gran Vía was constructed in 1969 as the headquarters of Banco Vizcaya, on the location occupied by the financial institution’s first headquarters. The building has 21 storeys in total, as well as the ground floor, and spans a total above-ground surface area of 23,000 m2.

Abandon

Following the merger with Banco Bilbao, the BBVA tower housed the operating headquarters of the bank, although the corporate headquarters remained – as it does today – in the former headquarters of Banco Bilbao in Plaza de San Nicolás. In recent years, the financial institution has gradually abandoned the property, which all of the employees left in March 2016.

Original story: Expansión (by M. Á. F.)

Translation: Carmel Drake

Blackstone has Created a RE Giant in Spain Worth €20bn

4 September 2018 – Expansión

In just five years, the US fund has become the largest owner of hotels and one of the biggest landlords in the country. Moreover, it manages several major mortgage portfolios.

Blackstone made its first foray into the Spanish real estate market in July 2013, with the purchase from the Municipal Housing and Land Company of Madrid (EMVS) of 18 residential developments, containing 1,860 homes in total, in the Madrilenian neighbourhoods of Carabanchel, Centro, Villa de Vallecas and Villaverde for almost €126 million.

Since then, the US fund, one of the largest investment firms in the world, has turned the Spanish real estate sector into one of its favourite destinations for investment, encouraged by the boom that the market in Spain has experienced over the last five years.

Blackstone’s dominance in the Spanish market is now unquestionable. Since 2012, the US fund has acquired property in the country worth almost €20 billion and it is now the owner of several listed vehicles, as well as of some of the main asset managers in the country.

With that figure, which accounts for 20% of the €100 billion that Blackstone Real Estate has invested around the world, the firm is the country’s largest private manager of real estate assets, including properties and portfolios of mortgages.

In Spain, the fund was one of the first to back the residential segment when the real estate market was still struggling and it has been one of the most active players in the purchase of asset portfolios containing NPLs and REOs from financial institutions.

The fund’s purchase of homes in Madrid from EMVS in 2013 was soon followed by the acquisition of another 1,000 social housing properties from Sareb and FCC. Those homes are owned by Fidere, the fund’s first Socimi, which made its debut on the Alternative Investment Market (MAB) in 2015.

In the same year, Blackstone completed its first major operation with the purchase from Catalunya Caixa of a portfolio comprising 40,000 loans in total, worth €6.4 billion. Blackstone paid €3.5 billion for that portfolio, known as Hercules.

A year later, the US fund purchased the Catalan entity’s real estate manager (without any assets), which was later renamed Anticipa.

Nowadays, that company manages the more than 12,000 rental homes which Blackstone has been purchasing from the banks in different portfolios and which it controls through the Socimi Albirana, which made its stock market debut in 2016, and Torbel Investments.

Popular’s property

Two years after purchasing the Hercules portfolio, Blackstone hit the headlines again with the purchase from Santander of 51% of Banco Popular’s real estate business, with a book value of around €10.3 billion. With that acquisition, Blackstone increased its commitment to Spain and become the most active overseas investment fund in the country. To group together those assets, months later, Blackstone and Santander created Project Quasar Investment, a company that also includes the marketing platform Aliseda (…).

In addition, (…) the US fund has launched itself into the hotel segment, to take advantage of the good times being enjoyed in the tourist sector at the moment. Blackstone’s first incursion into that market in Spain was the acquisition of HI Partners from Sabadell last summer for €630 million. Through that platform, Blackstone owns 17 hotels in Spain comprising more than 4,500 rooms.

Takeover of Hispania

A few months after that acquisition, the US investment firm made a bid for Hispania, the Spanish Socimi specialising in hotels managed by Azora, which owns 46 assets and almost 13,150 rooms in Spain (…). Following that operation, which valued the Socimi at €1.99 billion, the US fund controls almost 91% of Hispania.

As well as hotels, Hispania owns 25 office buildings, with a market value of more than €600 million and residential assets worth €230 million, which now also form part of the fund’s assets (…).

Blackstone is also a star player in the logistics sector. The fund currently controls 10% of the Pan-European platform Logicor, which manages approximately 1.2 million m2 of logistics space in Spain (…).

Also, in July, it purchased five logistics warehouses from the Socimi Lar (…) for almost €120 million.

The fund’s most recent purchase was the headquarters of Planeta, located on Avenida Diagonal in Barcelona, which it acquired from the Lara family for €210 million (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

M&G Teams Up With Quadratia to Invest in Residential Assets on the Alicante Coast

30 July 2018 – Alicante Plaza

The strategy being pursued by the investment funds to create joint ventures with local property developers through which to star in the resurgence of the real estate sector has reached a new high in the province of Alicante with the alliance between the British fund M&G Investments, a subsidiary of the insurance company Prudential, and the Alicante-based consultancy Quadratia. After starring in one of the largest land purchase operations in the province, with the acquisition from Sareb of the debt associated with the PP-27 of La Vila at the end of last year, M&G and Quadratia have decided to take their partnership to the next level. To this end, they have formed a joint venture company to invest in unique projects on the Costa Blanca and other points along the Spanish Coast: Quadratia Investment Partners (QIP)

“Following the successful launch of the Allonbay Village project in the El Torres de la Vial cove”, explain sources at the company, the British fund has teamed up with the Alicante-based property developer “through its fund DOF IV to back the development of unique residential projects along the Mediterranean coast”. The objective of Quadratia Investment Partners is “to acquire urban land and projects under construction, primarily in the hands of financial institutions in complex situations”, to manage that land and develop unique residential properties close to the sea. The target audience of these projects will be domestic and overseas buyers looking for second homes.

Following its constitution, QIP has already acquired another plot in the La Tellerola sector of La Vila on the beachfront, taking advantage of its strong presence in this municipality, and it has entered the market in Calp, with the purchase of two plots, one of which is going to be used for the development of a building with 100 homes, standing more than 25 storeys high, with views over the Peñón de Ifach and Playa del Arenal. But the new investment group’s interest is not limited to the Costa Blanca. According to the same sources, the firm is looking for land with the same characteristics on the coast of Valencia, and is also already closing several operations on the Costa del Sol, a market that is similar to that of Alicante but which “warmed up” first, according to their explanations.

According to the sources, the consultancy firm Quadratia has specialised in working as a local expert for various investment funds (on behalf of which it undertakes the integral management of projects), including Kronos Homes and ASG Homes, which have also starred in several operations in the sector in the province. In this case, however, the partnership with M&G Investments goes further: the Alicante firm has acquired a “significant” stake in the share capital of the new group, and the CEO of Quadratia, Enrique Gallego, has been appointed to the new group’s Board of Directors. Moreover, the former director of Mediterranean, Pablo Lucas Guerrero, was recently appointed as an independent director, to support this same investment strategy on the Costa del Sol, where the group has now completed its first investment in the Torrox-Nerja area: a 131-home development with panoramic views over the sea (…).

With more than GBP 240 billion under management, M&G is the investment fund management company of the Prudential plc insurance group, listed on the London Stock Exchange and member of the FTSE 100, with more than 160 years in the insurance, investment and loan businesses. In terms of Quadratia, it is led by the second generation of Grupo Alicante Urbana. Founded in 2014, it makes contact with investment funds interested in the residential sector in the province of Alicante and provides them with a comprehensive range of legal services (…).

Original story: Alicante Plaza (by David Martínez)

Translation: Carmel Drake

Vukile’s Socimi Plans to Grow its Asset Portfolio by 2.5x to €1bn in 3 Years

25 June 2018 – Expansión

Castellana Properties is accelerating its growth plans with the aim of becoming the largest Spanish Socimi specialising in the retail sector in Spain and fighting off competition from its rivals Lar and Merlin. The company controlled by the South African fund Vukile Property is seeking to grow its asset portfolio to €1 billion over the next three years, which would see it multiply the size of its current portfolio, comprising 15 properties with a value of around €400 million and spanning 197,000 m2, by 2.5 times.

“We are going to do this through organic growth, in other words, by buying new assets”, explains Alfonso Brunet, CEO of Castellana Properties. The director has extensive experience in the real estate sector, in particular in retail, after his time at the fund Pradera and the consultancy firm CBRE.

“We are an income fund – over the long term – and we seek stable, predictable rental income, with potential for future growth. Given the current macroeconomic environment and recovery, we see clearly that there is upwards potential in the retail market”, he says.

To achieve its objective, the Socimi is analysing the purchase of both portfolios and individual assets, above all in secondary cities and prime locations. Currently, the company “is studying operations worth €2 billion”.

In terms of its immediate plans, Castellana Properties will make its debut on the Alternative Investment Market (MAB) before September. “We are not going to undertake any capital increases ahead of the MAB debut. We want to grow in size so that, in the future, we will be able to attract new investors to help us grow”, he adds.

The firm’s objective involves achieving sufficient volume to make the leap onto the main stock market. “Our main shareholder is Vukile, which is a Reit (an entity equivalent to a Socimi) and it is interested in securing new investors.

Background

Castellana Properties started life in December 2015 with the purchase of two office buildings in Madrid and Sevilla. A year later, the South African fund Vukile purchased 98% of its share capital and prepared its next major operation: the purchase of a portfolio of nine retail parks spread over several Spanish towns for almost €200 million. The latest acquisition in May of this year involved the purchase of the Habaneras shopping centre in Alicante for €80 million.

Currently, the firm owns 13 retail parks and shopping centres and two office buildings, and its activity accounts for 21% of Vukile’s business.

Brunet acknowledges that, after the start of the recovery in Spain, the prices of real estate assets have risen due to interest from investors. “We think that there is a lot of potential for rental incomes to rise following the decreases of the crisis. Given that we are an income fund, that is what interests us the most”, he adds.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

CBRE GI Invests €10M in Star Project in Plaza de Colón (Madrid)

21 June 2018 – Eje Prime

CBRE Global Investors (CBRE GI) is increasing its commitment to Spain with its latest project. The investment arm of the CBRE group is going to invest €10 million in the project to renovate the building at number 1 Plaza de Colón and, to this end, the multinational firm has engaged one of the most sought-after architects in the world, Norman Foster. The new property, which is going to be constructed on the site of the former Barclays headquarters, will become the star of CBRE GI’s growth plan in Spain.

The asset manager acquired the former Barclays headquarters in 2017. In November of the previous year, the financial institution started to sound out the possibility of selling the building on Plaza de Colón (at the intersection of Paseo de la Castellana and Paseo de Recoletos) to move to another location and, three months later, in January, it sealed the deal.

Three years after the acquisition, CBRE GI is preparing to transform the building, a project that has formed part of its plans since it completed the operation. The former Barclays headquarters is now beginning a renovation that will convert it into Axis, where offices and a commercial area are going to be opened on the four floors that will comprise the new asset.

This project forms part of an investment plan that will amount to €800 million. The company has almost one hundred properties in its portfolio, spread across the retail, office, logistics and hall of residence markets.

Nevertheless, in May, the company announced that it is going to enter the residential sector in 2018. The consultancy firm’s investment fund wants to access that segment through the rental market (…).

The company’s objective for this year is to repeat or even exceed the investment figure recorded last year. In 2017, the manager closed transactions amounting to €1.3 billion.

In addition, CBRE GI, which works with eight investment funds in Spain, manages a portfolio of assets worth €3.2 billion (…).

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Madrid Court Annuls Sale of 2,935 IVIMA Homes to Azora in 2013

25 May 2018 – El Mundo

Administrative Court number 29 of Madrid has annulled the sale by the Housing Institute of Madrid (‘el Instituto de la Vivienda de Madrid’ or IVIMA) of 32 housing developments, comprising 2,935 homes in total, to the investment fund Azora Gestión, which was completed in 2013.

According to the explanations provided in the court ruling, the award “does not comply with the law” and is not justified by any “supplementary report or analysis of a technical, economic, financial or legal nature”.

The ruling maintains that although the sale of the homes was justified by the statement that “they are not necessary”, no explanation or justification was provided for that claim, even though, according to the court, they fulfilled “a social function, specifically, to provide decent housing for the disadvantaged classes”.

The ruling “reveals that there was a lack of motivation or justification for the unnecessary nature of those promotions, as claimed by the plaintiff (…), to be able to authorise the sale of the assets, which were owned by the Public Administrations”, adds the ruling.

The almost 3,000 homes belonged to the Youth Plan of the Housing Institute of Madrid. They were sold for €201 million, almost 20% more than the established asking price (€168.9 million).

The annulment of this sale is included in the judgement in which the court considers the claim of a resident of Navalcarnero, through which the transfer of his rental contract with IVIMA to a vulture fund has been annulled, and regarding which the option to appeal exists.

The President of the Community of Madrid, Ángel Garrido, argued that the sale of the public homes to an investment fund (which has just been annulled by the judge) “was not a success” and he recalls that his Executive has committed “to never sell public housing to the investment funds”.

“Logically, the interpretation of the ruling lies with the legal services and they will inform us of the appropriate way to comply with it”, he said, before adding that these sales should have never taken place.

Original story: El Mundo (by Roberto Bécares)

Translation: Carmel Drake

Starwood & Carlyle Bid for San Fernando Business Park (Madrid)

11 May 2018 – Expansión

One of the major real estate operations of the year in the office segment is entering the home stretch.

The US fund Oaktree, which engaged the real estate consultancy CBRE to coordinate the sale of San Fernando Business Park, has been receiving binding offers for this office complex, located in San Fernando de Henares, in the east of the Community of Madrid.

The international investors that have expressed their interest in the asset include the investment fund Starwood Capital and the private equity firm Carlyle, both of which have submitted binding offers and so entered the final round of bidding for the business park.

Oaktree acquired the San Fernando Business Park three years ago, when the US fund purchased a portfolio of unpaid debt worth €750 million from the German bad bank FMS Wertmanagement (FMS WM), which included, in addition to the office complex: luxury hotels, such as the Arts Hotel in Barcelona and another establishment in Cascais (Portugal); five shopping centres, including two in Madrid (Plaza Éboli and Heron City Las Rozas); several storeroom buildings; and other residential and industrial assets.

San Fernando Business Park comprises 13 buildings and spans a total surface area of 86,000 m2, as well as 2,500 parking spaces.

Moreover, the business complex boasts 40,000 m2 of green space and recreational areas. San Fernando Business park is accessible directly from the A2, M45 and M50 motorways and its onsite facilities include a gym, banks, a children’s nursery, meeting rooms and an auditorium.

Office market

As we wait to see how the sale of Hispania’s office portfolio pans out, which is worth almost €600 million but which is up in the air due to the takeover bid (OPA) that the US fund Blackstone launched for the Socimi, the purchase of San Fernando Business Park looks set to be one of the most important operations of the year in the office segment.

Investment

Last year, investment in the office segment amounted to €2.3 billion, less than half the previous year, due to less activity by the Socimis, a shortage of supply in good locations and the challenge for investors to find the desired returns.

So far this year, investment in the office segment has accounted for 42% of the total transacted volume, reaching €1.72 billion, given that the figure includes Colonial’s takeover of Axiare, which was successfully closed in February and which has caused the investment figure to soar.

More than 600,000 m2 of office space was leased in Madrid last year, which represents the best figure in the last decade, whilst in Barcelona, 345,000 m2 of office space was leased during the same period.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Mapfre & GLL Launch New €300M Office Fund

8 March 2018 – Iberian Property

The insurance company Mapfre and GLL have just formed a new partnership for the launch of a new investment fund amounting to €300 million.

The vehicle will focus on the purchase of offices in some of the major European markets, such as Germany, France, the Netherlands, Italy and Luxembourg, according to the Spanish real estate firm. The idea is to achieve returns of 4%-6% per year, diversifying the portfolio of the entities.

In Spain, Mapfre already owns a portfolio of buildings including Plaza de la Independencia, 6 in Madrid and Torre Mapfre in Barcelona.

Original story: Iberian Property

Edited by: Carmel Drake