Tag: investment vehicles

Savills: House Sales will Exceed 500,000 Again in 2019

19 February 2019 – Voz Pópuli

For the first time since 2008, more than half a million homes were sold in Spain last year, and the good performance is expected to be replicated in 2019 with forecasts that between 500,000 and 600,000 homes will be sold.

The deceleration of the Spanish economy – which will move from growing at a rate of 2.5% in 2018 to around 2% this year – is not expected to prevent the residential sector from consolidating its growth, although the maximum levels recorded in 2007, when 775,300 operations were signed in the country, is not going to be repeated.

“We do not think that we will return to those figures. Staying at the sales levels seen over the last two years, of close to 550,000 units sold, will be an excellent result”, explained Arturo Díaz, Executive Director of the residential market at the consultancy firm Savills Aguirre Newman, speaking to Voz Pópuli.

He considers that this rate of growth is reasonable if we take into account the rate of household creation in the country, the levels of purchases for investment and the purchases for holiday homes (…).

The real estate consultancy CBRE agrees with this outlook (…). In fact, the firm is more ambitious with its forecasts as it expects 625,000 house sale operations to be closed in 2019, due to an increase in demand (…).

The growth profile

The main real estate consultancy firms all agree that there will be an increase in new build sales in 2019, in parallel to a slight decrease in the sales of second-hand homes, and so the gap between the two will begin to close.

Moreover, they confirmed that a change has taken place in terms of the profile of house buyers in Spain, with large international investors playing an increasingly greater role.

“Whilst a decade ago, demand for residential assets was dominated by domestic private families (individuals), nowadays, the market is characterised by investment vehicles, institutional funds and insurance companies – owned by foreign capital in many cases – the most active players in this segment”, said Lola Martínez Brioso, Head of Research at CBRE.

House prices in Spain rose by 8.2% in 2018, according to the Real Estate Statistics Registry from the College of Registrars, which means that they are still well below the peaks reached during the construction boom. In 2019, the sector expects the price rises to moderate (to around 4-5%) (…).

Although the price rises will be more moderate overall, there will be important differences by area (…). By region, the experts forecast that the large cities and their metropolitan areas will continue to lead the charge in terms of house price rises, specifically, Barcelona, Madrid, Málaga and the major municipalities in those areas.

Díaz also adds that “other large cities such as Valencia and Sevilla are starting to show a high level of activity”, along with certain holiday markets, “such as the Costa del Sol, Costa Blanca and Costa de la Luz, where the recovery in domestic demand, together with the appeal that those regions have for international buyers, is generating a high volume of purchasing activity”.

Original story: Voz Pópuli (by Alejandra Olcese)

Translation: Carmel Drake

Corpfin Sells 13 Commercial Premises to Swiss Life for €83M

10 July 2018 – Idealista News

The Swiss do not only come to Spain to go on holiday. Through its real estate arm, the insurance company Swiss Life has purchased thirteen premises from the fund Corpfin Capital Prime Retail Assets (Ccpr) for €83 million.

The sales have been carried out through the two Corpfin Socimis that are listed on the Alternative Investment Market (MAB): Corpfin Capital Prime Retail II Socimi (Ccpr II) and Corpfin Capital Prime Retail III Socimi (Ccpr III). The contract for the sale of the portfolio was signed in June, according to Idealista News.

Swiss Life is investing in Spain for the first time. It already tried to enter the  Iberian real estate market with the acquisition of a package of offices from Hispania. The Socimi, which put that portfolio up for sale for €500 million, subsequently pulled out of the sale following the public takeover bid from Blackstone and the political instability in the country.

With assets worth €69.2 billion in the Pan-European market, Swiss Life focuses its investment in the office business, which accounts for 37% of its portfolio, followed by the residential business with 32%. Retail accounts for just 16% of its investments and the remainder of its portfolio is split between the logistics sector, the hotel segment and alternative assets.

In the case of Corpfin, the group founded by Javier Basagoiti created a new Socimi in April with €400 million to invest in high street stores. The roadmap for Basagoiti’s company involves raising €200 million this year to double the capital by the end of 2021.

Original story: Idealista News

Translation: Carmel Drake

Will 2017 Be The Year Of Mergers Between The Socimis?

24 February 2017 – Expansión

The Socimi boom continues unabated. Ores – the listed real estate investment vehicle owned by Bankinter and Sonae Sierra – debuted on the Madrid stock market on Wednesday, and in doing so became the thirty-first company of its kind to have its shares traded on the MAB (Alternative Investment Market). Moreover, all indications are that this phenomenon is going to continue to grow.

An attractive tax regime and capital appetite for real estate assets has led to a flood of Socimis debuting on the stock market in recent years.

Heading up the list of Socimis, by size, are Merlin – the only real estate company whose shares are traded on the Ibex – Hispania, Lar España and Axiare. These four companies, which debuted on the Madrid stock exchange between March and June 2014 with €2,560 million to invest, now own a combined portfolio worth more than €10,500 million.

In addition to these Socimis, there are around thirty other companies that have joined the MAB in recent years. Following the tsunami that the real estate sector has experienced in just three years, the question now is: What will happen next?

Limitations

According to a report prepared by CBRE, “In 2016, the number of Socimis is expected to continue growing. Nevertheless, given that an increasing number of Socimis are competing in a somewhat limited market, it is likely that 2017 will be a year in which there is pressure for them to increase in terms of size and specialisation, with the aim of obtaining competitive advantages, driving merger and acquisition activity, and selling off non-strategic portfolios of assets between Socimis”.

In this sense, it is expected that existing investment vehicles owned by family offices and private banking will be converted into Socimis. The experts at CBRE point out that pooling assets into existing investment vehicles, in return for ownership stakes in them, generates value growth for investors. (…).

The analysts also point out that the Socimis are likely to move towards more specialisation in the future. In this sense, Hispania is planning to focus its activity on hotels, whilst it divests its residential business and rotates its offices. (…).

Merlin – the largest real estate company in Spain and one of the ten largest Socimis in Europe – decided to sell off its portfolio of hotel assets to Foncière des Regions for €535 million to focus on its significant office portfolio, which has just grown thanks to the Socimi’s acquisition of the iconic Torre Gloriés building, also known as Torre Agbar (pictured above), in Barcelona, for €142 million.

Meanwhile, Axiare is focusing above all on offices, whilst Lar España is centring its attention on shopping centres.

Investment

Operations such as Merlin’s purchase of Torre Agbar on 12 January and Axiare’s acquisition of the headquarters of Capgemini and PSA last month reflect the fact that, after the record investment figure recorded in 2016 – €14,000 million, a figure hitherto unseen in Spain – the real estate market is still very attractive.

“We expect 2017 to also be a very active year for the Spanish investment market (…)”, say sources at CBRE (….) thanks to the more attractive returns being offered by the real estate sector compared to other sectors, the outlook for economic growth across Europe and the continuous improvements in financing (…).

Original story: Expansión (by R.Arroyo and R.Ruiz)

Translation: Carmel Drake

Neinver & Colony Buy 2 Logistics Warehouses For c. €9M

6 February 2017 – Expansión

The joint venture created by the Spanish real estate company Neinver and Colony Logistics – which is owned by severa investment vehicles that are managed by subsidiaries of Colony Capital – has strengthened its portfolio of logistics assets in Spain, with the purchase of two new warehouses in Barcelona and Pamplona.

Market sources have indicated that these two logistics warehouses, which have a combined constructed surface area of 15,000 m2, have been sold for around €9 million.

The warehouse in Pamplona is located in the Arazuri-Orcoyen industrial area, three kilometres from the city centre, and has a surface area of 10,000 m2. The asset, acquired from Corpfin, is leased to the logistics operator Logiters.

Meanwhile, the logistics warehouse in Barcelona has a surface area of 5,000 m2.

The real estate consultancy firm CBRE advised the vendor in both cases.

Following these two new acquisitions, the joint venture that Neinver and Colony created at the beginning of 2015, with the aim of investing €200 million, now has a portfolio comprising 39 logistics and industrial centres, covering a surface area of more than 276,500 m2.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Foreign Socimis Arrive In Spain To Compete With The Locals

10 June 2016 – El Economista

Spain’s Socimis have come face to face with a new competitor. The appeal of the real estate sector has brought their foreign counterparts to Spain; they are interested in the same type of assets and some are even willing to assume more risk.

Although their arrival will generate more competition between the Spanish vehicles, the truth is that this news is being welcomed by all players in the sector, as they consider it to be yet another sign that the market is entering a new phase of its recovery.

The first to arrive in Spain following the crisis were the French, operating through SCPI (Société Civile de Placements Immobiliers); they are now ready to close transactions with more risk. Nevertheless, the experts in the sector indicate that it won’t be long before other more core profiles arrive, such as the British, Dutch and Americans.

The Socimi Actipierre Europe has already taken its first steps in Spain with two operations amounting to around €25 million. The firm, which focuses solely on commercial assets and is able to make 40% of its investments outside of France (but within the European Union) acquired the Tres Caminos Retail Park in Puerto Real (Cádiz).

According to sources in the sector, the transaction value amounted to approximately €14.5 million. The retail park has a constructed surface area of 20,270 sqm and 820 parking spaces.

The French Socimi, which has a market capitalisation of €430 million and was created in September 2007, has also purchased a retail outlet leased to MediaMarkt in the Les Gavarres de Tarragone Retail Park.

The vendor of that asset was Corum Asset Management, which had owned the property since 2013. In just three years, it generated gains of almost 50% on its capital investment. The Socimi, advised by Invesco, has paid €9.7 million, whilst Corum paid €7.4 million at the time with a return of 8.1%. In addition, Corum received two years worth of rental income.

These kinds of transactions are attracting a lot of attention from other international investors, which see significant opportunities to generate gains from Spanish assets in just a few years. As a result, experts predict that there will be quite a few operations in Spain over the coming months, financed by capital from France.

Favourable context

The experts also say that with interest rates at 0% “and the volatility of the Asian and European stock markets, investor interest in real estate assets has increased even further”. As such, “the combination of surplus liquidity and the return of possible operations involving prime assets, which are now appearing in the market, could accelerate the arrival of these vehicles”.

The experts highlight another statistic that is very interesting for investors – the fact that the yield on non prime assets in secondary cities has decreased from 8.12% to 6.50% in about two years, a compression that is already very similar to that seen in the case of prime products in the major cities, such as Barcelona and Madrid.

This situation favours the arrival of investment in Spain and softens the impact being generated by the political uncertainty in the country.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake