Tag: investment funds

Patrizia Looks to Invest Up to €500 Million in Spain and Portugal

2 December 2019 – The German investment fund Patrizia plans to invest up to 500 million euros in the Spanish and Portuguese real estate markets over the coming years. The fund currently intends to divide its investments between offices (40%), residences (40%) and logistics (20%) though the relative weight of each sector could vary. The firm is first looking to enter the market for student housing in 2020, either by building new facilities or acquiring in and will enter the market for student residences in 2020. Regardless, the firm would lease the facilities to outside operators.

Original Story: Eje Prime – Marc Vidal Ordeig

Adaptation/Translation: Richard D. K. Turner

ASG Homes Negotiates the Sale of 1,000 Rental Homes to Institutional Investors

19 June 2019 – Expansión

ASG Homes, the property development arm of the European manager ASG, is following in the footsteps of many of the major property developers in Spain by putting up for sale 1,000 rental homes.

The announcement comes in response to interest from institutional investors in acquiring and managing portfolios of rental homes, given the booming demand in the rental market.

Specifically, ASG Homes is negotiating the sale of 3 of its developments in San Sebastián, Madrid and Sevilla, which will be worth €200 million once finished, with investment funds, Socimis and family offices.

ASG Homes had planned to hold onto the properties and manage them itself but the strong interest from investors has resulted in a change of tack. In this way, the company is emulating the strategies of several listed property developers, such as Metrovacesa and Aedas Homes.

In total, ASG Homes has a landbank spanning 500,000 m2 with the capacity to build 5,000 homes distributed across Madrid, Alicante, Estepona, Marbella, Salamanca, Barcelona, Sevilla and Valencia. It launched its business in Spain in 2013 and invests not only in the residential sector, but also in the hotel, shopping centre and office segments.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

Knight Frank: Investment in Offices Amounted to €1.3bn in Q1 2019

7 May 2019 – Eje Prime

According to data compiled by Knight Frank, investment in the office sector amounted to €1.3 billion during the first quarter of 2019.

By type of investor, in Madrid, 45% of buyers were funds, 25% were institutions, 18% were real estate companies, 9% were corporates and 3% were Socimis. Meanwhile, in Barcelona, 64% of purchasers were investment funds, 19% were corporates, 13% were private investors and 4% were real estate companies.

Yields in the prime areas remained stable at around 3.75% in Madrid and 4% in Barcelona, which are in line with previous years and similar to those observed in other major European cities.

The average prime rent in Madrid also remained stable at around €30.50/m2/month, with prices rising to €38/m2/month in some of the most sought-after spaces in the CBD. In total, 124,000 m2 of office space was leased in the capital during Q1 2019, up by 4% YoY.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

BNP Paribas: Investment in the Real Estate Sector Amounted to €2.0bn in Q1 2018

1 April 2019 – Eje Prime

Investment in real estate assets amounted to €2.0 billion during the first quarter of 2019, down by 5% compared to the same period in 2018, according to data from the consultancy firm BNP Paribas Real Estate.

Investment in the office sector amounted to €900 million, accounting for 47% of the total, with prime yields remaining stable at 3.25% in Madrid and 3.5% in Barcelona.

Investment in the retail segment amounted to €410 million, where prime yields reached 3% on high street stores, 5% on shopping centres and 5.75% on retail parks.

Investment in alternative assets amounted to €305 million, with investors increasingly interested in halls of residence for students and nursing homes for the elderly.

Finally, in the logistics sector, investment amounted to €206 million, boosted by the growth in e-commerce and consumption.

By type of investor, 50% of the transacted volume proceeded from investment funds, whilst Socimis contributed 18% of the total volume.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

BNP Paribas: Valencia’s Logistics Stock Set to Rise by 100,000 m2

12 February 2019 – Valencia Plaza

The logistics capacity in the province of Valencia is going to increase by 99,457 m2 this year with the launch of five new platforms located in Riba-roja, Torrent, Paterna and Loriguilla, according to the latest report from BNP Paribas Real Estate.

Moreover, there are locations that will offer the possibility of “turnkey” constructions with a total constructed surface area of more than 200,000 m2.

The purchase price of logistics space has risen to €200/m2-€220/m2 in the most sought-after locations due to the interest in the purchase of land from property developers and investment funds, in an area where available logistics space currently accounts for just 2.8% of the total, and 77% of that surface area is located in Riba-roja.

Due to the lack of availability, maximum rental prices have increased slightly to reach €4.5/m2/month in Riba-roja.

In 2018, demand for logistics space remained high and 24 operations were signed, three more than during the previous year. The most sought-after area was Riba-roja, which accounted for 30% of the space leased.

Nevertheless, last year closed with 127,502 m2 of logistics space leased, a very similar figure to the average for the last four years although somewhat lower than in 2017 (by 30,000 m2).

The fourth quarter of 2018 saw high leasing activity and accounted for 43% of all of the surface area leased during the year.

Original story: Valencia Plaza 

Translation: Carmel Drake

BNP Paribas: RE Investment Rose by 8% in 2018 to €11.6bn

9 January 2019 – El Periódico

The volume of annual investment in the Spanish real estate sector amounted to €11.63 billion in 2018, which represented an increase of 8% compared to 2017. If we add the corporate operations with underlying real estate to that volume, then the figure increases to €19 billion, which represents an investment record since the end of the crisis, according to the latest report from BNP Paribas Real Estate in Spain. The report highlights that interest from investors in the Spanish real estate sector in 2018 was at its highest level for a decade.

During the fourth quarter of the year, the volume of direct investment in real estate assets – offices, logistics warehouses, hotels, retail and residential – amounted to €3.7 billion in total, which represented an increase of 58% YoY. The evolution of investor activity, therefore, exceeded the expectations of the sector at the beginning of the year.

“The good times that the fundamentals of the market are enjoying, with occupancy levels at maximums and rents that are stable or expanding in the most consolidated markets, together with the surplus capital and the limited alternatives offered by other financial products, have fostered a frenetic pace of activity in the investment market”, explains the report.

By type of asset, the commercial sector (retail) was the star of the year. The volume invested in commercial assets during 2018 amounted to €4.28 billion, which represents an increase of 23% compared to 2017. During the fourth quarter, investment reached €1.26 billion, and so the sector achieved a quarterly market share of 35%. The largest operation during the final quarter of the year was the purchase of a portfolio of three shopping centres – Max Center, Gran Casa and Valle Real – by Sonae Sierra and Perter Varbacka for €485 million.

Commercial yields

Demand from investors for high street retail assets was high, given that they consider them to be a very stable product. Similarly, there was a high interest in land for the development of retail parks, in light of the scarce supply of this type of asset. The yields continued at 3.00% for prime premises; between 5.00% and 5.25% for prime shopping centres; and at 5.75% for prime retail parks.

In terms of the office market, the investment volume recorded during the fourth quarter was €986 million taking the total figure for the year to €2.228 billion. That represented a slight YoY decrease of 4%. The shortage of products for sale meant that fewer operations materialised in 2018 than in 2017. The prime yield in the office market remained at 3.25% in Madrid and 3.50% in Barcelona.

The logistics market continues to rise. The increase in e-commerce and the strong performance of the consumer sector and the economy, in general, have encouraged investment in this type of asset. The investment volume registered during the fourth quarter of the year amounted to €400 million, whilst the total figure for the year (€1.3 billion) represented a new investment record, and an increase of 30% compared to 2017. The shortage of products, combined with the high investment pressure resulted in a considerable adjustment in yields, which amounted to 5.30% in the prime logistics market in the fourth quarter of 2018.

Investors

Investment funds were the great stars of the market, representing 61% of the total volume transacted in 2018. Socimis have been very present in the investment market, both on the buy and sell sides in the main land transactions to develop new products. Finally, the presence of family offices (private investors) stood out, with acquisitions, in general, for volumes of less than €50 million.

Alternative investments remained in the spotlight of investors, who were mainly attracted by student residences, clinics and nursing homes for the elderly. The cumulative volume invested in those types of assets amounted to €600 million in 2018.

Original story: El Periódico (by Max Jiménez Botías)

Translation: Carmel Drake

Spain’s Banks Plan to Sell Real Estate Worth €12.5bn+ over the Next 2 Years

19 November 2018 – El Economista

The banks have set themselves the deadline of 2020 to reduce the property that remains on their balance sheets to an absolute minimum. On the basis of the strategic plans set out by Bankia, Liberbank, Ibercaja and the portfolio of commercial premises put up for sale by Santander, the entities are planning to divest at least €12.5 billion in non-performing assets over the next 24 months.

At this stage, we do not yet know which objectives CaixaBank will set itself in this regard; the entity will unveil its new strategic plan in London on 27 November. Meanwhile, the entity led by Ana Botín has delayed the presentation of its new objectives to the beginning of next year, as it awaits the evolution of the outcome of the elections held in Brazil in October. The exit of the United Kingdom from the European Union, which must take place in March, is also important for the group.

Spain’s entities have accelerated the divestment of their real estate in a frantic fashion over the last 15 months. This summer, Banco Sabadell sold four portfolios of non-performing assets for a combined gross value of €12.2 billion. Those operations allowed the entity to fulfil in one fell swoop the objective that it had set itself in its Strategic Plan 2018-2020 to reduce its non-performing assets by €2 billion per year.

At the end of the third quarter of this year, the entity led by Josep Oliu held €13.62 billion in toxic property left on its balance sheet, nevertheless, once the sales undertaken this summer have been completed, that exposure will be reduced by almost half to €7.67 billion, most of which comprises doubtful loans. The exposure of foreclosed assets has been reduced to around €1.2 billion.

Orderly reduction

With respect to Bankia, in its Strategic Plan to 2020, the entity projected an annual reduction in non-performing assets of €2.9 billion, which would result in the clean-up of €8.7 billion over three years. The bank chaired by José Ignacio Goirigolzarri has divested €2.4 billion during the first three quarters of this year, according to its latest accounts at the end of September, which means that it needs to sell only another €500 million during the final quarter (…).

In the same way, Liberbank closed the third quarter of the year with gross non-performing assets amounting to €3.6 billion, 25% less than it held a year ago. The bank has set itself the objective of leaving €1.7 billion on its balance sheet by the end of 2020, in other words, €1.9 billion less than it currently has.

Finally, Ibercaja, which also unveiled its objectives to 2020 in March, announced its plans to reduce its toxic assets by 50% in three years, which would mean decreasing the balance by around €1.85 billion.

15 months of sales

Santander fired the starting gun on this race with the sale of 50% of Popular’s property to Blackstone, in an operation announced in August last year. Since then, the largest sale by the bank was a portfolio of flats and garages to Cerberus in September, for a purchase price of around €1.535 billion. Thus, the bank still has a second portfolio of foreclosed assets up for sale with a gross value of around €2.4 billion (…).

The most active investment funds to purchase portfolios over the last few months have been Cerberus, Blackstone and Lone Star. Between then three of them, they have made acquisitions of foreclosed assets and doubtful loans from the Spanish banks and Sareb amounting to €48 billion (…).

Original story: El Economista (by Eva Díaz)

Translation: Carmel Drake

KF: Inv’t in Offices Amounted to €1.3bn & €0.8bn in Madrid & Barcelona, Respectively, in 2017

13 June 2018 – ABC

The performance of the office sector in Madrid at the end of 2017 bodes well for a “historical” 2018. That is according to all of the investment indicators managed by the real estate experts. Some very positive data for the region, which consolidates the Spanish capital’s position as the most attractive place for companies to locate their headquarters. In fact, it continues to be the greatest magnet for securing capital in the office market with a business volume of €1,324 million – 61% of the aggregated total – compared with €835 million in the Catalan capital. In terms of rented office space, 570,000 m2 was leased in Madrid, compared with 300,000 m2 in Barcelona.

Those are the findings of a recent report about the sector compiled by the consultancy firm Knight Frank, which forecasts greater activity in the sector in Madrid this year due to the rotation of assets by the Socimis and funds to fulfil their business plans. In Madrid, more than 40% of the total investment in 2017 involved funds, which, together with the Socimis outperformed other real estate players during the second half of last year.

The notable differences between the two regional capitals have increased as a result of the effects of the political instability caused by the independence drive and the decrease in tourism that has hit Cataluña. The experts consulted highlight that the rate of company creation has decreased in Cataluña since last summer, whilst in the Community of Madrid, the numbers have increased, with more than 185,000 companies registered with the Social Security at the beginning of 2018.

“The Spanish capital continues to be the key location due to its wide range of opportunities. Net absorption has been increasing for several years and rental prices are still very competitive in comparison with the main European centres”, explains Raúl Vicente, Director of Offices at Knight Frank. Nevertheless, the experts indicate the path that the city should take to become a “super city”. “In terms of the major challenges that it will have to overcome, they include mobility, adaptation to the technological revolution that we are living applied to the service of the city, efficiency, access to housing and an office supply that is commensurate with international demand, amongst others”, highlights the report.

The average price of offices in Madrid’s CBD has been rising in recent years. Prices in the capital now exceed €8,000/m2 on average, whilst in Barcelona, they amount to €6,900/m2. The highest price paid last year was for the former Barclays headquarters in Plaza de Colón, which was purchased from Barclays by CBRE Global Investors for €14,000/m2.

Other notable operations stand out including the purchase of Torre Serrano by Infinorsa and the sale of the Isla Chamartín Business Park to Tristan Capital and Zaphir Asset Management for €103 million. Also, the acquisition of the Palacio de Miraflores on the Carrera de San Jerónimo for €60 million by Remer Investment and of the Los Cubos building by Henderson Park and Therus Invest for €52 million (…).

Original story: ABC (by Adrián Delgado)

Translation: Carmel Drake

Deloitte: Spain’s Logistics Sector is Hot Property Thanks to the ‘Amazon Effect’

18 May 2018 – Expansión

Investment funds want to take advantage of the collateral effects that the boom in e-commerce is going to have in the real estate market by taking positions in a segment with great potential, namely: the storage of goods and products. The logistics segment has become the “golden girl” of the real estate sector and one of the favourites of investors boosted by strong yields and the expectations of business growth. In this context, Asian investors have placed their focus on the European logistics market.

According to the Logistics Property Handbook compiled by Deloitte, last year, investment in logistics assets in Europe recorded a milestone with €42.5 billion of assets transacted, thanks to mega-operations such as the purchase by China Investment Corporation (CIC) from Blackstone of the Pan-European platform Logicor for €12.2 billion, and the acquisition of the European platform Gazeley by Global Logistic Properties (GLP), headquartered in Singapore, for €2.4 billion.

Mega-operations

In Spain alone, investment in logistics assets amounted to €1.63 billion, which represented a 75% increase compared to the previous year, and a historical record, due to significant transactions involving logistics portfolios. CIC’s purchase of Logicor implied a transaction volume of €652 million in Spain. Meanwhile, P3 Logistic Park – owned by the Singapore sovereign fund, GIC – purchased 11 assets from Green Oak in Spain for €243 million. Those operations boosted investment to historic levels.

Moreover, last year, Mango sold its logistics centre in Palau-Solità I Plegamans (Barcelona) to the fund manager Invesco for €100 million. That transaction was the largest involving a single asset in Spain and the fourth-largest in Europe.

According to the forecasts in the report, operations in the pipeline, which may be closed this year, already amount to €980 million.

“The large institutional funds that aspire to lead the logistics sector in Europe and around the world are bidding hard to accumulate the largest logistics surface area possible during this economic cycle. The location and size of their international logistics platforms are the two key variables for exercising greater negotiation power and whereby obtain the highest rents from operators”, explains Javier García-Matro, Partner in Financial Advisory at Deloitte.

Despite the record investment figure recorded last year, the volume of assets transacted in Spain represents just 4% of the total European market. “This fact is proof of the growth potential of these types of assets in our country. In 2017 alone, 865,000 m2 of logistics space was handed over in Madrid, Cataluña and Valencia. The strong demand of the current cycle is causing logistics promoters to develop more than 2 million m2 of land in these markets, in both turnkey and speculative projects”, says García-Mateo.

One of the major players in the sector is the Socimi Merlin, which has placed logistics asset at the centre of its growth strategy. Merlin’s expansion plan involves the development of land and turnkey construction, a roadmap that has allowed it to become one of the leaders in the sector in just four years.

The main players

Merlin has 2 million m2 of logistics land, both in portfolio and under management, and its plans involve increasing that volume to 3 million m2 before the end of the economic cycle. Specifically, it plans to spend around €250 million on logistics development over the next four years.

Another important player is Logicor, the Pan-European platform, which has been controlled by the Chinese group GIC since last year and which owns 1.2 million m2. Meanwhile, the alliance formed by the real estate manager CBRE GI and its local partner Montepino is going to develop a portfolio of prime assets in the main geographic areas of Spain with a planned investment of around €300 million.

They are joined by the European giants Prologic and the platform P3 Logistic Parks, which own 900,000 m2 and 400,000 m2, respectively, as well as the European investment group VGP, which owns almost 400,000 m2 of logistics space in Spain.

In terms of the types of assets, the Amazon effect has revolutionised the industrial sector and forced logistics operators to reinvent themselves to adapt to the new needs of clients (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Sareb Seeks Partner(s) to Create Joint Venture With NPLs Worth €10bn

20 March 2018 – Expansión

Sareb has decided to emulate the large financial institutions and find a partner to help it digest its portfolio of foreclosed assets. The entity chaired by Jaime Echegoyen (pictured below) has decided to create a vehicle into which it will place loans with real estate guarantees (known as NPLs) and in which it will retain a minority stake.

Into this joint company, Sareb will place loans with a gross value of €10 billion, although the definitive figure has not been finalised yet, explain sources in the sector. It would be the largest sale ever made by the company that was itself created with assets proceeding from the intervened banks, and loans with all different kinds of real estate guarantees would be included: from land to tertiary assets. Sareb’s objective is to open up this new company to one or more financial partners and it has engaged the firms EY and CBRE to lead the negotiations. The process is still in a preliminary analysis phase, but the aim is to close it during the second half of the year or at the beginning of 2019.

Contacts

In making their preliminary contacts, the consultancy firms have approached the main international funds and managers with investments in the Spanish real estate sector to gauge their possible interest in this portfolio, which will initially be called Project Ebro. Once investors have confirmed their interest in the vehicle, thought will be given to defining how the alliance will be forged, say sources in the sector. Possible interested parties include investment giants such as Cerberus, Bain Capital, Blackstone, Apollo, Kennedy Wilson and Goldman Sachs. With Project Ebro, Sareb would be following in the footsteps of entities like Santander, which has reached an agreement with Blackstone to create the company Quasar, with real estate assets proceeding from its purchase of Popular.

In that case, the US fund owns a 51% stake, whilst Santander retains 49% of the shares.

This is not the only loan portfolio that Sareb currently has up for sale. The company has three other processes underway, although Ebro, given its size, is the star project. In this regard, it has engaged Arcano to sell the Nora portfolio, comprising non-performing loans (NPL) backed by residential collateral worth around €400 million; the Vilasoa portfolio, which includes €300 million in loans secured by land; and project Dune, a portfolio that has been relaunched in 2018 comprising €2.6 billion in unsecured loans. In that case, Sareb has engaged PwC to coordinate the sale.

These processes are happening in parallel to the search for a partner to strengthen its property development business. In that case, Sareb is holding talks with large real estate companies and funds with activity in the residential sector with the aim of working together on the development of buildable land and construction projects in progress.

In total, that portfolio is worth around €800 million and Sareb would contribute those assets to a company in which its partner would hold a majority stake.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake