Tag: John Paulson

BlackRock Acquires 3% Of Hispania’s Share Capital

22 September 2016 – Expansión

BlackRock has acquired shares in the Socimi in which George Soros and John Paulson also own stakes. According to Spain’s National Securities and Exchange Commission (CNMV), the private equity firm has acquired a stake of 3.28%, worth around €42 million, at current market prices.

The US fund has thereby extended the stakes that it already held in a large number of Ibex 35 companies to the Socimi sector, including the Socimi Merlin Properties. BlackRock owns almost 4.8% of that company, which is controlled by Ismael Clemente, although that percentage may vary as a result of the merger with Metrovacesa and the entry of banks such as Santander and BBVA into the Socimi’s share capital.

In the case of Hispania, BlackRock has acquired a package of 3.54 million shares in one of the first Socimis ever launched in Spain, which represents 3.28% of its share capital, according to the CNMV’s registers.

Investors

BlackRock has whereby joined a list of distinguished foreign investors with stakes in Hispania, which include: George Soros, the firm’s main shareholder with a stake of 16.6%, John Paulson, who controls 9.8% of the Socimi’s capital, the fund Fidelity (6.4%), Canepa Management (5.9%) and Cohen & Steers (3%), amongst others.

Hispania holds a portfolio of assets, worth around €1,627 million at the end of the first half of the year, which represented an increase in value of 7.5% with respect to the start of the year and 14.2% compared to the previous year.

The Socimi chaired by Rafael Miranda made €120 million during the first half of the year, up by 110%, and generated revenues of €60.8 million, up by 60%.

Original story: Expansión

Translation: Carmel Drake

Q1 2016: 4 Largest Socimis Almost Their Triple Profits

18 May 2016 – El País

The Socimis have become one of the most attractive investment vehicles in the financial market. With an annual return of around 5%, the four largest Socimis – Merlin Properties, Hispania, Lar and Axiare – earned €73.3 million in total during the first quarter of this year, which represents almost triple the €28.8 million that they achieved during the same period last year. These companies now own property-related assets amounting to more than €5,600 million.

The Socimis are key players in the Spanish real estate market. The four largest companies have starred in high-profile acquisition of buildings, shopping centres and hotel chains in recent months. During the first quarter alone, they have bought properties for €285 million and they are now preparing new acquisitions for the months ahead. These companies are revitalising a depressed sector thanks to, amongst other reasons, the tax advantages that they enjoy.

The returns that these firms are generating are overwhelming. The four largest Socimis – Merlin, Hispania, Lar, Axiare – generated income of €127 million during the first three months of the year and a profit of €73.3 million, according to information published by Spain’s National Securities Market Commission (CNMV). Most of their revenues come from the lease of shopping centres, hotels, offices and other properties that they acquire using funds raised from investors. (…).

Their rise has been meteoric. The largest Socimi, Merlin Properties, has a portfolio of 1,017 assets (buildings, offices, retail premises, leisure centres) worth more than €3,218 million. During the first quarter of the year, it earned €45.24 million, up by 131% compared to the same period in 2015 and it is rubbing shoulders with the country’s largest companies in the Ibex 35 after buying Testa from Sacyr last year for €1,794 million.

Hispania also stands out in the sector thanks to the prestige of its major investors. The magnate George Soros (16.7% of the capital) and the popular investment fund manager John Paulson (9.85%) feature amongst its shareholders. (…). The company is the owner of properties that it leases to hotel chains such as Barceló, Meliá, NH and Vincci, amongst others.

Another one of the largest Socimis is Lar España, which doubled its revenues during the first quarter of the year. This company is undergoing expansion, like all of the firms in the sector, which led it to purchase a retail complex in Barakaldo, the Palmas Altas Norte shopping centre (Sevilla) and to formalise the purchase of the remaining stake in the La Marina shopping centre in Ondara (Alicante) for €70.6 million.

Meanwhile, Axiare recorded a profit of €5.1 million, which represents a 1% increase with respect to the same period last year. Nevertheless, its revenues have grown by 38% due to the operation of new acquisitions signed last year. During the first three months of the year, Axiare spent €33 million acquiring two buildings: one property on Josefa Valcárcel (Madrid) and one shopping centre in Roquetas de Mar (Almería).

Original story: El País (by J. Sérvulo González)

Translation: Carmel Drake

Hispania Set To Invest €1,500M In Hotels & Offices

26 April 2016 – El Español

(…). “Currently, Hispania, (the company in which George Soros (pictured above) and John Paulson hold stakes of 16.7% and 9.85%, respectively, and which will soon be converted into a Socimi) is evaluating investments worth approximately €1,500 million”, said Isabel Troya, the company’s Head of Investor Relations.

It has one objective in its line of sight: hotels. The Director says that 75% of the investments that it is evaluating will be in that segment. The second focus will be offices, but investment volumes there will be much lower.

In 2015, its first full year, Hispania invested €841 million in properties, above all, in hotels (€633 million) and earned €66.6 million. During that time, its assets appreciated by 15.6%. Basically, the company buys assets, does them up and then looks for a tenant to increase the return from the properties. Hispania’s management is in the hands of Azora, a firm founded in 2003, which specialises in the real estate sector.

More hotels and office but not more homes

The problem being faced by the large firms now is that there are not as many interesting offices in the market as there were a few years ago. Thoroughfares such as Madrid’s Paseo de la Castellana no longer have as many “for sale” signs up. That is because wealthy individuals, such as Amancio Ortega, the main shareholder of Inditex, are opting to buy those premium assets and whereby raise prices. For that reason, the Socimis in general and, in this case, Hispania, are looking for offices that are close to the centre, but not in it. And in those cases, the returns vary depending on location, access and the number of tenants that already occupy them.

Meanwhile, Hispania has no plans to expand its residential portfolio. “We are not planning to make any more investments in the residential segment”, said Troya firmly. They are focusing, therefore, on hotel assets because they regard them to be more profitable than conventional properties. For those assets, “the risk-return ratio is higher than elsewhere”, she said.

Hispania made its first major step into the hotel sector alongside Barceló. Together, they constituted a Socimi in which Hispania ended up taking a majority stake. “We want to double our existing portfolio in the hotel sector, to complement it with investments in markets where we have less exposure, such as the Balearic Islands and Marbella, for example; and also in markets where we have no presence yet, such as specific places along the Levante Coast”, says Troya. In all cases, she said, they will focus on European tourists.

The goal of becoming a Socimi

At the general shareholders’ meeting in May, the company will have to approve its full conversion into a Socimi. Why? Because it can. Until now, it has used a parent company to invest in assets that were too “risky” for this still small structure. “Since the beginning, Hispania has always wanted to become a Socimi”, says Troya. “However, we also wanted to have the flexibility to invest in non-qualifying assets”. Socimis may only invest 20% of their funds in assets regarded as “non-qualifying”. (…).

Original story: El Español (by Cristina G. Bolinches)

Translation: Carmel Drake

The RE Sector Attracts Overseas Investors Once More

12 April 2016 – Cinco Días

(…) Overseas capital is focusing on the property market once again. And Spain is one of the main European markets for offices, hotels and logistics. Madrid and Barcelona are leading the charge and the Socimis at the forefront of the revitalisation of the market. (…)

According to data from the Foreign Investment Register, published by the Ministry of Finance, the construction sector and real estate-related activities secured almost €7,700 million of direct foreign investment in 2015, i.e. 34.5% of the total. As such, one out of every three euros of international funds received by the Spanish economy last year was invested in the property sector.

Productive foreign investment (that which generates activity and employment) grew for the third consecutive year, to close 2015 with an increase of 11%, to €21,724 million. Of that amount, €4,706 million, i.e. 21.7%, was allocated to the construction of residential buildings and property development, compared with €1,762 million in 2014….Meanwhile, real estate-related activities (sales, purchases and rentals) accounted for 13.8% of the total, i.e. €2,992 million. (…).

In the context of this new activity, the Socimis have emerged as the main supporters of the market. The large Socimis experienced a real boom in 2015, when they flooded the MAB with their stock exchange debuts and came close to tripling their profits, which rose from €89.5 million in 2014 to €251.2 million last year, according to data from the CNMV.

Within the last year, the four largest Socimis (Merlin Properties – which has been listed on the Ibex 35 since December -, Hispania – thanks to its partnership with Barceló -, Lar España and Axiare Patrimonio) have doubled the value of the properties they own, to more than €9,200 million in total. (…).

The Socimis accounted for 41% of all funds invested in the purchase of real estate assets in 2015 – they spent €5,237 million on asset transactions. In this way, the increase in the volume of their investments amounted to 129%, in particular due to Merlin’s purchase of Testa for almost €1,800 million.

Wealthy individuals and several international funds have invested fully in these investment vehicles, attracted by the low prices in the sector and the tax advantages on offer (Socimis are exempt from paying corporation tax). The Qatar sovereign fund is trying to become the largest shareholder in Colonial; it now owns almost 30% of the Catalan real estate company.

George Soros has strengthened his commitment to Hispania, in which the millionaire John Paulson holds a stake of almost 10%. Carlos Slim controls Realia…Amancio Ortega, with his investment arm Pontegadea, now manages a very interesting and diverse asset portfolio.

The experts agree that the sector has left behind the turbulent times that it experienced following the burst of the real estate bubble. It is undergoing a period of normalisation and stabilisation – albeit a long way from its pre-crisis levels – and it is facing a new environment, with sustainable growth, in a market that is more mature and more professional.

Original story: Cinco Días (by Pablo Pico)

Translation: Carmel Drake

Investment In Commercial RE Exceeds Pre-Crisis Levels

1 December 2015 – El País

The real estate companies are dealing with the recovery in the sector by restructuring their portfolios in favour of commercial properties. During the first nine months of the year, according to the consultancy CBRE, investment in offices, hotels, shopping centres and industrial warehouses amounted to €10,791 million. That figure exceeds the total amount invested during the whole of 2014 and ranks above pre-crisis levels. Operations undertaken by listed real estate companies and Socimis amounted to €6,300 million, i.e. almost 60% of the total, when in 2014, they accounted for 36%.

The €10,791 million spent on commercial properties during the first three quarters of the year by the Socimis, real estate companies, investment funds and individuals overtakes the total investment recorded during 2007, the best year of the real estate bubble era. The Director of Capital Markets at CBRE, Mikel Marco-Gardoqui, says that by this point in the year, total investment will have exceeded €11,500 million. “This is going to be a record year, and we expect investors’ appetite to continue in 2016”, he says. But the sector also warns that the “aggressiveness” associated with certain purchases raises concern against “semi-bubbles” in certain assets.

Socimis accounted for 46% of total investment during this period, which has allowed them to continue increasing their portfolios. Merlin Properties, which acquired the real estate company Testa for €1,793 million, leads this group of companies dedicated to rental properties, with assets worth €5,800 million, followed by Hispania (€775 million), Axiare (€773.4 million) and Lar Real Estate (€594.9 million). The ten Socimis listed on the Alternative Investment Market (‘Mercado Alternativo Bursátil’ or MAB) own around €3,058 million assets between them.

Strategic plans

It is not just these companies, with their tax advantages, that are participating in the bids for assets. Real estate companies – both listed and unlisted – have participated in another 13% of operations. The seven largest real estate companies on the stock market hold a portfolio of commercial properties worth almost €16,000 million.

Colonial, with a portfolio worth €6,290 million, expects to invest €1,500 million between now and 2019 through the purchase of new buildings, whilst Renta Corporación will spend another €500 million on acquisitions over the next two years. (…).

The restructurings carried out and the plans announced have been applauded by the markets, which have rewarded the majority of these companies with an improvement in their share prices. During the year to date, the value of Renta Corporación has increased by 55%; Realia by 39%; Hispania by 25%; Colonial and Axia, by 18.7%; and Merlin by 17.6%.

Moreover, Socimis and real estate companies are mediating a large part of the overseas investment arriving into the sector. For example, the main shareholders of Colonial include the sovereign fund Qatar Investment Authority and the English millionaire Joseph Lewis; meanwhile, various overseas funds holds stakes in Merlin Properties, and George Soros and John Paulson are shareholders of Hispania.

According to Marco-Gardoqui at CBRE, a significant difference between the investment that arrived in 2007 and this year is that the majority of the volume associated with the bubble was achieved through debt; today the funds come from private capital, although the banks have started to open the financing tap for the sector. (…).

Original story: El Páis (by Lluís Pellicer)

Translation: Carmel Drake

Hispania Buys 4 Hotels In Gran Canaria For €75M

21 October 2015 – Expansión

Hotel assets are whetting the appetite of investors once again and proof of this is the firm commitment made by the real estate company Hispania for that kind of establishment. The company, which channels most of its investments through its subsidiary Socimi Hispania Real, has spent €780 million buying hotel assets, out of a total amount invested (including debt) of €1,300 million since the company debuted on the stock exchange in March 2014.

“Hotels have been strategic assets for us ever since we launched Hispania, because we already had experience in Azora – the managers of Hispania – which manages 12 hotels through a fund”, explains Javier Arús, Head of Hotels at Hispania.

The latest milestone in this strategy has been the purchase of five hotels through two operations. Firstly, it has agreed the acquisition of Hotel Holiday Inn in Madrid for €25 million. (…).

Secondly, the real estate company has also agreed to purchase four hotels located in Maspalomas, in the south of Gran Canaria, which together have 1,183 rooms. “We have been working on this deal since April 2014. It has been a very complex process, given that the company filed for bankruptcy in June. Now we have drafted a proposed agreement to purchase the debt from the creditors and recapitalise the company, and we are waiting for the legal confirmation”. Hispania will invest €75 million to acquire these establishments (three 4-star hotels and one 3-star) and will spend a further €9 million on their repositioning.

Bay

Following these transactions, the company in which George Soros and John Paulson hold stakes, will have more than 9,000 rooms, spread across both the urban and holiday segment. Many of these hotel apartments are owned by Bay, the Socimi that Hispania and the hotel chain Barceló have just launched, in which Hispania holds a 80.5% stake.

Nevertheless, some of the assets that Hispania owns outright could also be moved into the joint venture. “The Dunas portfolio – recently acquired in Gran Canaria – or Bahía Real – in Fuerteventura – may end up in Bay, since it would be logical for the whole holiday portfolio to end up in this company, some operations that must be approved by the Socimi’s Steering Committee”.

Currently, Bay owns 11 hotels, managed by Barceló, with 3,946 rooms, to which Hispania will soon add another five establishments also managed by its partner.

Hispania plans to continue on its shopping spree, despite the fact that there are many investors looking for opportunities in the Spanish hotel sector. “The market in Spain is very large and there has been very little institutional money until now, since investors used to be the hotel chains themselves. We will continue working to sign a couple more operations before the end of the year”, said Arús.

Between January and September, total investment in the hotel sector amounted to €1,273 million, up by 54%, according to the consultancy firm Irea, which forecasts that 2015 will surpass the record of €1,780 million registered in 2006. JLL estimates that that figure will reach €2,000 million. The experts in the sector agree that (this level of) investment will continue into 2016.

Original story: Expansión (by R. Ruiz and Y. Blanco)

Translation: Carmel Drake

Hispania Buys 80.5% Of Socimi Bay For €123M

20 October 2015 – Expansión

The real estate company Hispania and the hotel chain Barceló are pushing ahead with the launch of their Socimi Bay, dedicated exclusively to hotel assets. After signing a partnership agreement in April, Hispania closed the purchase of 80.5% of the company through its subsidiary, Hispania Real, for €123 million, yesterday. The remaining 19.5% is owned by Barceló. The consideration was paid entirely in cash, with an initial disbursement of €95 million paid in May as an advance.

Currently, Bay is the owner of 11 hotels – which are all operated by the Barceló Group through a rental contract – with 3,946 rooms in total, located in the Balearic Islands, Huelva, Almería and above all, the Canary Islands (three in Fuerteventura, one in Lanzarote and another one in Tenerife). Moreover, it is the owner of a shopping centre in Fuerteventura. These assets have a purchase price of €207 million and a current appraisal value of €229 million.

Having completed this first phase, the Socimi is going to incorporate five other hotels and one new shopping centre into its portfolio in a second phase, which is expects to complete before the end of 2015. These assets are valued at €227.5 million, which means that before the start of 2016, the Socimi Bay will have 16 hotels and two shopping centres worth €456.5 million.

In addition to its majority stake in Bay, the real estate company Hispania, in which George Soros and John Paulson hold stakes, also owns other assets worth more than €700 million, including several resort hotels with another 1,918 rooms. Hispania’s share price closed down 0.75% on the stock exchange yesterday at €12.52 per share. (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Socimis Are The Real Stars Of The RE Sector

14 August 2015 – Cinco Días

The Socimi Merlin Properties now owns a 77% stake in Testa, formerly a subsidiary of the Sacyr group. By the time the integration of the two companies has been completed, scheduled for 2016, the new entity will own assets worth more than €5,000 million, according to a report submitted by Merlin to the CNMV at the time of acquisition. It will then become the largest real estate company in Spain dedicated to the rental of space. (…).

However, Merlin, led by Ismael Clemente, is not the only firm seeking to become the king of the property sector. Hispania tried unsuccessfully to acquire Realia, the real estate company owned by Caja Madrid and FCC, but had to withdraw its takeover bid last July. Only the interest from the tycoon Carlos Slim, who in turn controls FCC, was able to stop the Socimi from completing the transaction.

According to the most recent information submitted to the CNMV, Merlin Properties currently owns properties worth €2,231 million; that figure increases to €5,166 million if we include the assets owned by Testa. Merlin’s market capitalisation has reached €3,406 million. It owns 904 assets, including a portfolio of BBVA’s bank headquarters and the Marineda shopping centre (A Coruña). Through its new subsidiary Testa, for which it will pay €1,793 million, it will acquire assets as iconic as Torre PwC – one of the four skyscrapers at the north of the Paseo de la Castellana in Madrid – and the headquarters of Endesa and L’Oreal.

Hispania, in which the investors George Soros and John Paulson hold a stake, owns properties worth €710 million and has a market capitalisation of €1,175 million. In April, the company completed a capital increase amounting to €337 million. Moreover, the listed company signed an agreement with the Barceló group during H1 2015 to create Bay, the first specialist hotel Socimi. According to reports to the CNMV, Hispania’s portfolio included a total of 1,439 hotel rooms during the first half of 2015. In addition, it has a further 6,097 hotel rooms that it will contribute to the Bay portfolio.

Another one of the large players is the Socimi Lar España Real Estate, which announced a few days ago that it will resume a shopping centre project that is years behind schedule in Sagunto (Valencia). The company, managed by Grupo Lar, has so far acquired property worth more than €852 million, of which €588.7 million relates to the purchase of 12 shopping centres.

Meanwhile, the Socimi Axiare Patrimonio completed a capital increase amounting to €346.6 million in June, with the aim of raising the funds needed to continue with its investment plan, according to a statement by the company, in which Citigroup, Deutsche Bank, Perry Partners and JP Morgan hold a stake (…). Since its debut on the stock market in July 2014, it has closed 18 transactions, where 71% of its portfolio are offices.

Between them, these four large Socimis now own assets worth €7,500 million.

In fact, these Socimis are almost the newcomers to the sector. They have become the leading players in just over a year, since the PP reformed the law that gave rise to their creation in 2013. The Socimis have tax advantages – they do not pay corporation tax – and they are required to pay dividends. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Deutsche’s Socimi Trajano To List On MAB On 30 July

27 July 2015 – El Día

The Socimi Trajano Iberia, which is managed and promoted by a division of Deutsche Bank, will begin trading on the Alternative Investment Market (Mercado Alternativo Bursátil or MAB) on 30 July, whereby becoming the sixth listed real estate investment company to be publicly traded on the stock exchange.

Trajano will debut on the MAB once it has completed its €94.8 million capital increase, which is being led by investors of the Wealth Management division of Deutsche Bank in Spain.

Under the ticker “YTRA”, the company will debut on the stock market at a share price of €9.98, according to a statement by the Spanish Stock Exchanges and Markets (‘Bolsas y Mercados Españoles’ or BME).

The listing will be performed through a price-fixing system with the matching of supply and demand in two daily auctions or “fixing” periods (at 12:00h and 16:00h).

Trajano Iberia will invest in offices in “semi-prime” locations in Madrid and Barcelona and in “prime” areas of secondary cities. It will also seek out shopping centres and retail parks, as well as logistics assets in Madrid, Barcelona, Zaragoza, Valencia and the País Vasco.

According to the company’s strategic plan, Trajano Iberia will materialise its investments within a maximum period of 24 months, however the management team considers that this period could be reduced on the basis of the strong prospects that the real estate sector is currently enjoying.

The company will be managed by the team responsible for the real estate division of Deustche Asset & Wealth Management in Spain and Portugal.

Currently, Deutsche Bank manages real estate assets worth more than €46,000 million around the world and €740 million in Spain and Portugal.

Deloitte is acting as the registered advisor and BEKA Finance as the liquidity provider. Since last year, several companies have listed publicly under the Socimi structure.

The first company to debut on the stock exchange was Lar España Real Estate, on 5 March, with initial capital of €400 million. The next company to list in the sector was Hispania, the listed company controlled by the fund manager Azora and owned by the multimillionaires George Soros and John Paulson, who subsequently created a Socimi through which they have made several purchases.

Meanwhile on 30 June, the Socimi Merlin Properties, starred in the largest IPO since 2011 with a valuation of €1,250 million. Axiare also listed on the stock exchange, with a valuation of €360 million, as did Uro Property, the Socimi that owns one third of Santander’s branches.

Original story: El Día

Translation: Carmel Drake

Hispania Closes Best Trading Period Of The Year

20 July 2015 – Expansión

The Socimi has completed its best trading period of the year – its share price exceed has exceeded €14 for the first time and it has overtaken Merlin in terms of profitability.

Discretely, whilst two of its competitors are hitting the headlines with significant capital increases (Merlin Properties is raising €1,033 million for pay for its purchase of Testa; whilst Lar is looking to raise the more modest figure of €135 million), the Socimi Hispania Activos Inmobiliarios has been recording its best numbers of the year on the stock exchange and has become the most profitable company in an emerging sector that is attracting some of the largest investors in the world.

Before experiencing a slight decline of 0.78% last Friday, the Socimi led by Concha Osácar and Fernando Gumuzio had recorded six consecutive days of increases, taking its share price to over €14 for the first time, a new historical high for the group that is now worth almost €1,150 million on the stock exchange.

It has been the best trading period of the year for Hispania, whose share price has increased by 28.3% since the start of 2015, and means that the company has replaced Merlin (whose share price has increased by 25.2%) as the Socimi whose share price has appreciated by the most in 2015…Meanwhile, Axiare’s price has increased by 10.5% and Lar by 8.2%.

The stock’s rally is generating profits for the group’s largest shareholders. And the gains are being shared by both historical shareholders, those who acquired shares at €10/share when the Socimi debuted on the stock exchange in 2014 (George Soros is the largest shareholder with a stake of 16.7%, followed by John Paulson’s investment fund, which owns 9.85%; the Dutch pension fund APG and the fund that specialises in this kind of company Cohen&Steers have also owned stakes in the company from the start), as well as those that joined as a result of the €337 million accelerated capital increase that was closed in April (such as BW Gestao de Investimentos, Fidelity, CBRE Clarion and Novo Viseu).

There was significant demand for the placement, which was completed in just three hours; demand amounted to €844 million, which meant that the requests for shares exceeded supply by more than two times. Market sources say that many funds were left wanting to buy more shares and have since gone to the market to make those purchases. And other new companies are hooked on the stock as its price continues to increase.

The result is that the stock’s rally, as well as the capital increase, has allowed Hispania (which operates as a pure Socimi, but still retains its structure as an ordinary limited company to afford greater flexibility to its investments) to almost double its market value since the end of last year, when it stood at less than €600 million.

The trading volume has gone through the roof in the last two sessions. Almost 600,000 shares have changed hands, which is well above the average daily volume in July. With its charged portfolio following the capital increase in April, Hispania’s corporate activity is frenetic. Last month, the company acquired two hotels in the Canary Islands for €105 million. A few days later, it announced the purchase of two office buildings in Madrid for €54.4 million from the German company Deka.

Original story: Expansión (by Enrique Utrera)

Translation: Carmel Drake