Blackstone to Sell its Socimi Corona for c. €220M

16 April 2019 – El Economista

Having spent the last 5 or 6 years accumulating one of the largest real estate portfolios in Spain, Blackstone is now starting to rotate some of its properties. To this end, it is looking to divest the Socimi Corona, which owns five office buildings – 3 in Madrid and 2 in Barcelona.

The US fund had previously put the 5 offices on the market as a portfolio, but has now decided to put them up for sale on an individual basis. As such, it hopes to generate revenues of €220 million, which would represent significant capital gains, since it acquired the group of assets (with the exception of the Delta Nova complex) for around €135 million from CBRE Global Investors in 2014.

Blackstone has already agreed the sale of the first property, the MB One Building in La Moraleja spanning a GLA of 22,129 m2, which Grosvenor is going to acquire for around €80 million.

Original story: El Economista (by Alba Brualla)

Translation/Summary: Carmel Drake

Warren Buffett Wants to Buy Torre Agbar for €150M

6 February 2019 – Expansión

The multi-millionaire investor Warren Buffet wants to buy the iconic Torre Agbar in Barcelona for around €150 million through his investment vehicle, Berkshire Hathaway, which the US magnate uses to deploy his asset purchase policy around the world. The information was revealed by Efe and confirmed by Berkshire Hathaway itself, which has announced several real estate investments in Spain in recent days, but without specifying any details.

The plan has been decided “directly” by Warren Buffett, one of the richest men in the world, in collaboration with Alessandro Proto, the senior executive at Proto Group, the company associated with Buffett in Barcelona.

The purchase proposal for one of the real estate icons of the Catalan capital, which currently belongs to the Socimi Merlin, and which was renamed Torre Glòries a few months ago, will be formalised before a notary within the next few days.

A few days ago, Berkshire Hathaway reported that it is going to invest €35 million in Spain to open 150 real estate agencies during the course of this year with Proto Group (…).

Berkshire Hathaway, which has more than 1,300 offices in 47 states around the USA and which employs 43,000 agents in the real estate sector, started its international expansion two years ago, primarily in Latin America and Europe, focusing on medium, medium-high and high-level residential properties (…).

Torre Glòries comprises offices and has an occupancy rate of 75%, with several technological tenants, including Facebook and Oracle. The tower spans 37,614 m2.

Original story: Expansión

Translation: Carmel Drake

Holdreit Negotiates Sale of the Socimi Kingbook & its Exclusion from the MAB Before June

23 May 2018 – Eje Prime

Besides the purchase of assets and their subsequent management, Spain’s Socimis are also gradually starting to enter the business of corporate operations. Such is the case of Holdreit, which is negotiating with an investor to sell 100% of its Socimi specialising in gas stations, Kingbook, according to sources at the company speaking to Eje Prime. If the operation is closed before the end of June, the new owner will exclude the Socimi from the Alternative Investment Market (MAB), where its shares are currently traded.

The Socimi, owned by Holdreit, the company’s sole shareholder and controlled by GL Europe Reit (60%) and JZ Real Estate (40%), has been subjected to a due diligence process by an investor, whose name has not been revealed.

The purpose of this study is to purchase 100% of the shares in Kingbook Inversiones Socimi. “This offer is being analysed by both the shareholder and the Board of Directors, and the month of June 2018 has been set as the period for the acceptance and signing of the operation. During that time, all of the due diligence and legal work is expected to be completed successfully”, explain sources at the group.

In the event that the aforementioned due diligence process is concluded satisfactorily and “in the best interests of the company, the sole shareholder will request the exclusion from trading of all of the shares no later than 30 June 2018”, they explain. In this way, Kingbook would cease to trade on the MAB.

The Company’s Board of Directors has agreed to ask Renta 4 to begin the appropriate procedures to obtain a one-off exoneration from compliance with its “selling obligations under the liquidity contract signed with the company” from the Market Supervisory Committee, as a step prior to the sale of all of Kingbook’s shares.

The group’s complicated financial situation could be one of the reasons for the sale of the Socimi. At the beginning of the month, Kingbook injected additional funding of €1.4 million in order to “reduce the company’s demandable liability and increase its own funds”. Following that increase, the company’s share capital amounted to €10.9 million.

This move by Kingbook comes after the Socimi increased its share capital by €21.6 million last November to offset losses. The company explained that the Socimi has been generating losses since it started operations. As at 30 September 2017, the result for the year was negative, with losses of €1.25 million (…).

Nevertheless, Kingbook owns a solid portfolio of assets that could prove attractive to a new investor. The company owns land worth €10.3 million and buildings worth €20 million (…).

Moreover, last year, Kingbook added more than a dozen service stations to its real estate portfolio. (…). In total, Kingbook spent €7.5 million on new acquisitions during 2017.

The Socimi currently manages 57 real estate assets through which fuel distribution activities are carried out, and it owns one hotel and one industrial warehouse for rent.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Nyesa’s Share Price Soars by 23% as it Announces Negotiations with Spanish Investor

9 March 2018 – Eje Prime

The stock market is rewarding Nyesa. The company has seen its share price soar by 23% due to negotiations with a Spanish investor. The company has informed Spain’s National Securities and Exchange Commission (CNMV) that it is negotiating an investment contract to not only carry out a non-monetary capital increase but also to incorporate new real estate assets into its portfolio in Spain.

“The investment contract establishes that the capital increase is conditional upon Nyesa considering that the technical, legal, tax, labour, financial and urban planning reviews of the assets to be contributed are undertaken in a completely satisfactory way”, say sources at the group. “Moreover, the deal will also be subject to the investor accepting the new valuation of the assets to be contributed, based on a preliminary valuation of more than €17 million”, they conclude.

The forecast issue rate for the capital increase is €0.060 per share (of which €0.015 corresponds to the nominal value and €0.045 to the issue premium). In this regard, it was also reported that as a consequence of the execution of the capital increase, the investor would reach a percentage stake of less than 13% in the share capital of Nyesa Valores Corporación.

The operation forms part of the process to search for partners, investors and real estate projects that help to define and support the strategy and strengthen the development of the company’s business. Specifically, with the execution of this capital increase, the company’s equity position would be strengthened through the incorporation of assets that generate recurrent income.

Original story: Eje Prime 

Translation: Carmel Drake

Aelca to Invest €200M Per Year in Land Purchases

28 February 2018 – Expansión

Aelca is moving forward with firm steps and already forms part of the new generation of listed property developers controlled by funds or, in its case, is on the verge of making its stock market debut. The firm constituted in 2012 by Javier Gómez and José Juan Martín, now the joint CEOs of the group, closed last year with a profit before tax (PAT) of €25.5 million, up by 154% YoY, and revenues of €132.2 million, up by 27%. And, it is preparing to continue growing through purchases.

“In 2018, we are going to have a production capacity, both in terms of construction work as well as pre-sales, of around 6,300 homes and, in 2019, we should reach cruising speed, with the delivery of around 2,000 or 2,500 homes. We have been working on and handing over developments since 2014, and growing at sustainable rates”, explains Javier Gómez to Expansión.

Specifically, the company sold 1,118 units in 2017 and handed over almost 500 homes. This year, pre-sales are expected to exceed 1,600 homes and revenues are expected to amount to around €160 million or €170 million.

Aelca wrote a new chapter in its history in the middle of 2016 when the US fund Värde purchased a 75% stake in the property developer from Avintia for €50 million and gave a boost to the business. “Investment in the company over the last 18 months since then has been significant, with more than €400 million spent on land purchases. Over the next few years, we plan to invest between €150 million and €200 million per year in land”, explains the director.

After several capital increases, Värde currently controls 80% of Aelca, whilst the remaining 20% remains in the hands of the founders.

In terms of the stock market debut, Gómez acknowledges that going public is a natural exit for the funds and expects that it could be an option in 2019. For the director, although Aelca is already the right size to list, the group’s plans involve continuing to grow and taking advantage of opportunities.

Gómez acknowledges that to debut on the stock market after its competitors may be a risk, but adds “we have a history of deliveries, a strong track record and a set of results that support us”.

Madrid and Andalucía

Specifically, the group has purchased land in Dos Hermanas (Sevilla), mostly from CaixaBank, for a mega-project involving 2,100 homes.

Moreover, like its rivals such as Neinor, Aelca is looking at the possibility of buying up non-finalist land and is analysing operations worth between €50 million and €70 million. “We are analysing the option of acquiring land under development, at the most advanced stage possible, in Madrid and Andalucía”, he explains.

Currently, Aelca has a land portfolio spanning 1.3 million m2, worth more than €1 billion and with capacity to launch around 13,000 homes.

The company has six regional offices in País Vasco, Cataluña, Madrid, Málaga and the Comunidad Valenciana and is not planning to expand its footprint at this stage. “There are still great opportunities in those locations”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Sabadell Seeks Investors to Develop More Than 2 million m2 of Land

28 December 2017 – Expansión

The bank, through Solvia, has spun off the management of assets worth €600 million into a new company, which will be headquartered in Madrid.

Solvia, the real estate management company of Sabadell, wants to replicate the operation that it carried out in the hotel sector earlier this year, when it sold its hotel business to Blackstone for €630 million, generating profits of €55 million.

As such, the entity has decided to carve out its activity relating to the development of land into a new company called Solvia Desarrollos Inmobiliarios. That company will manage 2.22 million m2 of land in total, equivalent to almost 300 football pitches. The construction of 4,000 homes, across more than 84 developments, is already underway.

The portfolio of assets under management amounts to €600 million, equivalent to approximately 15% of Solvia’s total income. That size places it in the second division in the sector, just behind the listed real estate companies, led by Metrovacesa, Neinor, Aedas and Vía Célere. The largest owner of land in Spain is Sareb.

This new company will be headquartered in Madrid and will be led by Francisco Pérez, former CEO of the Catalan property developer Vertix. “The idea is to grow hand in hand with the large overseas investors that are looking for high returns in Span, but which do not have any structure here. Most of the funding will come from outside of the country”, explains Javier García del Río, CEO of Solvia (pictured above).

The plans

Solvia Desarrollos will develop not only Sabadell’s land – the bank owns 83% of the portfolio – but also plots owned by family offices that the bank manages and the developments that Sareb is granting it. Solvia was one of the four entities chosen by the bad bank in 2014 to help it sell its homes to the general public. Specifically, it took over the problem loans proceeding from Bankia, Ceiss and Banco Gallego.

Sabadell has been developing land since 2013 and has grown a considerable business in that time. It was the first bank to get back on the horse after the real estate bubble burst. “Land is behaving magnificently, although we do not expect to see any abrupt growth. Areas that were very risky in 2013, such as Huelva, are no longer”, said García del Río.

The experts in the sector endorse his opinion. “The turning point in this market came in 2015 and 2016. This year has been exceptional, with more than 20,000 transactions involving land”, explains Samuel Población, National Director of Residential and Land at the consultancy firm CBRE. He calculates that property developers are capable of generating margins of between 18% and 22% from the construction of private housing blocks in Spain.

“The funds that left Spain have returned and investors are interested in buying land”, says José García Montalvo, Professor of Economics at the Universidad Pompeu Fabra and an expert in the real estate sector.

Solvia manages a portfolio of 148,000 real estate assets, whose value exceeds €31 billion. Last year, it generated a gross profit of €57.8 million and brokered the sale of 20,321 properties. Between 2011 and 2016, it sold more than 91,000 assets.

Sabadell granted new financing of €1.35 billion to property developers in 2016, up by 56%. Last year, it started granting property developer loans again in CAM’s area of influence after four years of restrictions imposed by Brussels.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

EspañaDuero Finalises Sale of its Madrid HQ

19 December 2017 – El Economista

Over the next few weeks, EspañaDuero will close the sale of its headquarters in Madrid, located on Calle Titán 8, according to confirmation from various sources in the sector, who say that the entity is holding advanced, exclusive negotiations with an investor.

The entity, which is soon going to be completely integrated into Unicaja Banco, declined to comment about the operation. However, this sale is reminiscent of the divestment strategy that the entity has been carrying out in recent years.

The office block that is about to be sold is located in the Méndez Álvaro area of the Spanish capital, overlooking the M-30 ring road. It also houses the offices of Enagás and Nozar, the former owner of the property. In this way, Caja Duero acquired the building for €55.8 million in 2008, a price that is €9 million higher than its current valuation.

At the end of 2011, following the merger of the entity with Caja España, which resulted in the creation of the current EspañaDuero, the combined company moved its offices to Caja Duero’s headquarters in Madrid, on Calle Marqués de Villamagna, 6.

In 2015, the company began a period of office restructuring, which led it to sell one of its real estate jewels: the former headquarters of Caja España in Madrid, on Calle Velázquez 23, in the heart of the Salamanca neighbourhood.

A year later, in the middle of 2016, EspañaDuero decided to move its headquarters again and vacate the offices on Marqués de Villamagna, very close to Madrid’s Paseo de la Castellana. The entity put them up for sale for €90 million and moved to Titán 8. Now, history is repeating itself, as the entity continues to sell off property, in a discrete sales process being advised by the consultancy firm Irea, according to the same sources.

The 13-storey building, including one underground floor and three basement levels for parking, has a total surface area, including the outside space, of 18,152 m2, of which 10,711 m2 are offices and 6,643 m2 are garages, with 212 parking spaces.

Currently, the property has almost 3,000 m2 of office space available for rent, which is being marketed by Knight Frank and Aguirre Newman.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Morgan Stanley Joins Forces With Gestilar To Build 1000+ Homes

15 September 2017 – Expansión

A new alliance between international funds and Spanish real estate companies has been forged in the market. This time, the stars are the fund Morgan Stanley Real Estate Investing and the Madrilenian property developer Gestilar.

Created in 2009 by Javier García-Valcárcel (pictured above), the real estate company specialising in residential property development has become a leading player in the north of Madrid, following the construction and completion of more than 800 homes in just four years. With García-Varcárcel as the sole shareholder, the company launched the so-called Project Orizone, with the aim of finding a strategic partner. Through a process led by A&G, more than a dozen international funds interested in the project were invited to participate, and in the end, the winner was the fund owned by Morgan Stanley.

“The investor was looking for a partner in Spain and after a year of negotiations, we have reached an agreement. We were never looking for a corporate operation but rather a strategic partner to work with over the next four or five years”, explains Javier García-Valcárcel, President of Gestilar.

The agreement between the fund and the real estate company has materialised in the creation of a joint venture, in which the former will hold a majority stake of the share capital, whilst Gestilar will take care of searching for the land and of the construction and sale of the homes. “The objective is to launch 14 or 15 new projects, with around 1,000 homes”, said the executive.

Currently, Gestilar has a portfolio of 1,000 homes under development, which will generate revenues of €500 million for the company. Its land portfolio has involved investment of more than €350 million.

After closing the agreement with Morgan Stanley, Gestilar has already selected three plots of land to contribute to the joint company, to which it will also incorporate new assets soon, says its President.

“Although our current developments are located in Madrid and Cataluña, following the agreement with Morgan Stanley, we could increase our activity right across Spain”, explain sources at the company.

This is not the first time that the real estate company has reached an agreement with a fund to invest jointly in housing. Nevertheless, on this occasion, it is a long-term alliance for more than one development.

Return to Spain

The agreement between Gestilar and Morgan Stanley represents the return of one of the investors that backed the Spanish real estate market most heavily before the burst of the bubble.

In this way, in 2006, the American fund announced that it had €1,000 million proceeding from various funds to invest in real estate assets in Spain.

As part of its commitment to this market, Morgan Stanley launched a joint venture with another real estate group Lar (managers of the Socimi Lar España). In February 2005, the fund joined forces with the real estate company owned by the Pereda family to construct shopping centres and holiday homes on the coast. In 2009, they closed that company after investing in 5 holiday home projects (comprising more than 1,500 units) and ten shopping centres.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Royal Metropolitan Buys Bancoval’s HQ In Madrid For c. €20M

25 July 2017 – Expansión

The headquarters of Bancoval in Madrid has a new owner. The fund manager Royal Metropolitan has closed an agreement with Inversis to purchase the building, located at number 20 on the Madrilenian street Calle Fernando El Santo.

The operation has been closed for a price of just over €20 million, which is equivalent to around €7,400/m2, according to market sources.

Last year, Inversis – owner of Grupo Banca March – acquired the subsidiary of Royal Bank of Canada (RBC) – later renamed Bancoval – and inherited this asset.

A year later, the financial institution decided to put the building up for sale to take advantage of the good times in the real estate sector and the interest from investors in assets in the best locations. Savills has participated in the transaction, which has been closed in record time, advising the buyer, and Deloitte has advised the vendor.

The building has a gross leasable area of almost 2,700 m2, distributed over seven floors, as well as two basement floors for parking with more than 700 m2 of additional space. The building, constructed in 1967, was renovated in 1998 and received a special mention from the Town Hall of Madrid in 1999 for the urban planning, architecture and public work awards, within the renovated building category.

This property is located in the Almagro district – one of the most-sought after in Madrid for investors due to the scarcity of prime products there -. The location, its renovation potential and the possibility of using it for offices (for one or more tenants) or for residential purposes, since it has licences for both uses, constitute some of the main advantages of the asset.

Investor interest

The office market is still one of the star segments in the real estate sector. In the first half of the year alone, the volume of investment in the office market in Madrid and Barcelona exceeded €1,100 million. Although the growth in rents is still in its infancy, an improvement is starting to be felt in buildings located in the business district and in the best-located areas, and upwards movements are forecast for the second half of the year.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

BBVA Completes Sale Of Torre Puig To Grupo Puig

7 June 2017 – La Vanguardia

BBVA has completed the sale of Torre Puig, in Plaza Europa, L’Hospitalet de Llobregat (Barcelona) to Grupo Puig, which has occupied the building in its entirety, as a tenant, since 2014. Aguirre Newman has managed the operation, which has now been signed, after it was announced on 24 April.

The building, constructed in 2014 and designed by the prestigious architect Rafael Moneo, measures 14,288 m2 and has 199 parking spaces.

A group of international investors with varying profiles participated in the sales process, including family offices – firms that manage the investments of wealthy individuals -, insurance companies and institutional funds, although in the end the best offer was made by Inmo, the real estate company owned by the Puig family, which participated in the process like any other interested investor.

“It has been a long and complex process given the characteristics involved, but in the end, we have closed the deal to everyone’s satisfaction”, said Hipólito Sánchez, Director of Investment at Aguirre Newman, in a statement. He is convinced that this will be “one of the most important operations of the year in the investment market in Barcelona”.

Original story: La Vanguardia

Translation: Carmel Drake