Tag: John Paulson

Investors Spend €12,000M On RE Assets In 15m To Mar 15

5 June 2015 – Expansión

International funds, private investors and other companies have purchased assets worth almost €12,000 million during the last 15 months. American investors favour large properties, whilst Asians players prefer hotels.

The purchases of almost €12,000 million…mean that the Spanish market has returned to its pre-crisis levels and illustrate the focus that investors from around the world have placed on our country. But, what is the profile of these buyers? And which assets do they prefer?

According to data from the last 15 months, office buildings and shopping centres have been the star investments. Nevertheless, rather than making direct purchases, investors, both Spanish and overseas, have chosen to participate in the market through the new listed companies for real estate investment (Socimis).

For their stock market debuts, the four large Spanish Socimis – Merlin Properties, Hispania Real, Axiare and Lar España – raised funds amounting to more than €2,550 million; and this year they have undertaken capital increases to raise another €1,300 million…Hispania raised €550 million for the IPO of its Socimi subsidiary, from large international investors such as the US magnates George Soros and John Paulson. Just a few weeks ago, it raised a further €337 million from investors with a similar profile. Meanwhile, the real estate company GMP secured €300 million from the Singapore fund GIC.

Offices

The four Socimis have created portfolios worth around €4,000 million. These companies, headquartered in Spain, have been the major investors. Thus, 64% of the €2,727 million invested in offices was disbursed by Spanish investors. “The main Spanish investors are Socimis, but they also include investment funds, private equity firms, wealth managers and family offices. The average price for this type of transaction is €29 million, compared with the large deals carried out by British investors (above all investment banks and private investment companies), which exceed €100 million”, explain sources at the consultancy JLL.

Spanish investors have also exceeded foreigners in terms of the purchase of retail premises; 78% compared with 22%, respectively. “During 2014 and Q1 2015, Spanish investors spent €738 million on retail premises. The average price of these transactions was €37 million and the typical buyers were retail operators (such as fashion brands), family offices and private investors”, say JLL.

Meanwhile, international buyers dominate the market for shopping centres and hotels. Of the €3,092 million invested in shopping centres between January 2014 and March 2015, 82% was foreign capital, thanks to the purchases made by US funds such as Tiaa Henderson and specialist companies, such as the French firm Klépierre.

Almost €2,500 million has been invested in hotels in the last 15 months and 55% of the capital invested was foreign. Furthermore, it was very diversified, with Chinese investors such as the Wanda Group and Qatari funds, such as Katara Hospitality buying hotels in Spain – the latter acquired the InterContinental Hotel in Madrid. (…)

In the residential segment, several US funds have chosen to buy land in Spain. The clearest case is Lone Star, which has become the largest developer of land in the country. (…)

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Blackstone, Merlin, Hispania & Eurosic Bid For Testa

11 May 2015 – Expansión

The US fund, the two Socimis and the French real estate company have all submitted bids for Sacyr’s subsidiary. The construction group is also considering other options, such as performing an IPO of 30% of Testa’s share capital.

Sacyr now has four proposals on the table for the purchase of its real estate subsidiary Testa. The Socimis Merlin Properties and Hispania, the US fund Blackstone and the French real estate company Eurosic have all submitted bids to acquire Sacyr’s subsidiary, which owns assets worth more than €3,100 million.

Sacyr engaged Lazard to organise a competitive process for the interested parties to bid for Testa. The deadline for proposals was Friday and in the end, four offers were received for the construction company chaired by Manuel Manrique.

Bids were invited for 30% of Testa, the stake that Sacyr had initially planned to place on the stock exchange (it currently controls 99.2% of the capital) as well as for the entire shareholding. In the end, Merlin, Hispania, Blackstone and Eurosic have all expressed interest in acquiring 100% of the real estate company, according to sources close to the process.

Proposals

Of the four candidates, only Merlin Properties had already formally expressed its interest in Testa. Now, the Socimi, which completed a capital increase amounting to more than €613 million last Thursay, has increased its bid to include 100% of the company.

The real estate company Hispania Activos Inmobiliarios has joined Merlin, the largest Socimi by market capitalisation. Hispania is owned by George Soros and John Paulson, and channels the majority of its investments through its Socimi Hispania Real. It has now fixed its gaze on Testa after trying to acquire one of the country’s other real estate companies, Realia.

Hispania, which is still waiting for a response from CNMV to the counter offer made by Carlos Slim to its bid for Realia, will now propose a similar transaction for Testa, whereby taking advantage of its access to funds from international investors.

Another one of the candidates is the French real estate company Eurosic. Last year, the company purchased Realia and Colonial’s shares in SiiC de Paris, for a total of €868 million. Now, it is looking to expand its portfolio of assets by backing the Spanish market, where the macroeconomic forecasts and the real estate environment point to an imminent rise in rental prices. Eurosic is participating in the process along with a foreign institutional fund.

Blackstone, the largest investment firm in the world, is behind the fourth proposal. This US fund has been investing in the Spanish real estate sector since 2013, when it acquired 1,860 rental homes from the Municipal Company for Housing and Land (Empresa Municipal de Vivienda y Suelo or EMVS) in Madrid. Moreover, Blackstone is the owner of four office buildings in Madrid and Barcelona, leased to companies such as Citibank and HP, as well as several logistics centres distributed across various locations.

The sale of 100% of Testa is just one of four scenarios that Sacyr is contemplating. As well as the possible sale of 100% of the company, the construction firm chaired by Manuel Manrique is also exploring the possible entry of a strategic partner to work together with Testa to realise the original plan of placing up to 30% of the company’s share capital on the stock exchange through an initial public offering (IPO).

Furthermore, Sacyr is evaluating a transaction that would have a much greater strategic impact and would involve the merger of Testa with another large real estate group. To that end, the company has begun preliminary conversations with Colonial to create the largest company in the sector in Spain and one of the largest in Europe.

On Saturday, Colonial said that “it would evaluate any invitation to participate in the eventual sale of Testa”. However, the group said that it is not “currently” studying any integration with Sacyr’s subsidiary.

In February, the construction company approved an “accordion operation”, where Testa regularised its finances with its parent company, subject to a capital increase of €500 million, which would allow the real estate company to strengthen its balance sheet. It is during this phase that the negotiations with Colonial would be addressed, according to sources close to the process.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Cohen & Steers Increase Stake In Hispania To 5%

5 May 2015 – Expansión

The US fund Cohen & Steers has increased its stake in Hispania to 5% after participating in the €323 million capital increase conducted by the real estate company last week. Hispania’s other shareholders include John Paulson and George Soros.

Original story: Expansión

Translation: Carmel Drake

Socimis Invest €420M+ In Asset Purchases In Q1 2015

6 April 2015 – El Economista

The main listed real estate investment companies (‘sociedades cotizadas de inversión inmobiliaria’ or Socimis) have continued to make purchases in 2015. During the (first three) months (of the year), they have spent more than €420 million on the acquisition of office buildings, residential complexes, logistics warehouses and hotels.

Merlin Properties, which debuted on the stock exchange in June last year, with a valuation of €1,250 million, has invested the largest amount during the first three months of the year (€146.3 million).

Since the start of the year, the company has acquired the office building located at number 8 World Trade Center Almeda Park (WTCAP) in Cornella de Llobregat (Barcelona) for €36.5 million and has spent €38.1 million on another office building located on Calle Alcalá 38-40 (Madrid), which is entirely leased to the Ministry of the Interior.

Similarly, it has acquired a logistics warehouse measuring 16,242 m2 in Getafe (Madrid) for €12.75 million, which is leased to Transportes Souto; another measuring 72,717 m2 in Vitoria for €28.58 million, leased to Norbert Dentressangle; and has spent a further €19.8 million on another warehouse located in Coslada (Madrid), measuring 28,490 square metres, which is leased to Azkar.

Following these acquisitions, Merlin’s property portfolio exceeds 717,000 m2 and generates gross annual rental income of €132.2 million.

Meanwhile, the Socimi owned by the Lar Group purchased a plot of land jointly with Pimco measuring 26,203 m2, located on Calle Juan Bravo, 3 (Madrid), where the Juan Bravo Plaza project was being carried out, led by the property developer Eurosazor, owned by Rafael Ortiz, in which Fernando Fernández-Tapias and Paloma Mateo also hold shares.

Lar España will now take over the management of this new real estate project with the objective of constructing a first class residential building in one of the “prime” (real estate) areas of the city, close to the Golden Mile. This transaction takes the Socimi’s total investment to €458.7 million in 15 deals since its IPO.

Meanwhile, Hispania, – the listed investment company controlled by Azora and in which the multimillionaires George Soros and John Paulson hold shares – has acquired a residential complex measuring 39,000 m2 in Sanchinarro (Madrid), comprising 284 homes and 311 garages, for €61.15 million.

It has also purchased an office building located on C/Príncipe de Vergara, 108 (Madrid) measuring 7,324 m2 for €25 million, as well as the three-star Hesperia Ramblas Hotel (Barcelona) for €17.5 million and the four-star Vincci Málaga Hotel for €10.4 million.

Finally, AxiaRE has acquired two office buildings in Madrid, one located in Campo de las Naciones and the other on Calle Juan Ignacio Luca de Tena, for €40.5 million in total.

Since its IPO, the company has closed 9 investment transactions valued at €464 million, through which it has acquired 18 properties, which have a combined rentable surface area of more than 402,000 m2.

Original story: El Economista

Translation: Carmel Drake

Hispania Continues Takeover Bid For Realia Despite FCC’s Withdrawal

12 February 2015 – El Economista

The company, owned by Soros and Paulson, does not intend to increase its bid.

Hispania is continuing with its plans to buy Realia, the real estate company owned by Bankia and FCC, even though the construction company has decided not to sell its 36.88% stake.

The company, whose main shareholders are the business tycoons George Soros (pictured above) and John Paulson, announced a voluntary takeover for 100% of the real estate company at a price of €0.49 per share; and sources close to Hispania have confirmed to El Economista that they are going to proceed without making any changes to their offer. “The process is advancing normally, they are waiting for the CNMV to approve the prospectus and then they will launch a takeover bid with the same conditions as the one already announced”.

The company, which is managed by Azora, took this decision after holding a meeting to discuss the new situation following FCC’s withdrawal.

The group, controlled by the Mexican Carlos Slim, explained through a notification to the CNMV that “the decision reflects the fact that we are reviewing our investment and divestment plans, following the (capital) increase, which allowed us to strengthen the Group’s equity and financial situation”. Moreover, Slim, who took on a controlling stake in the construction company as a result of the (capital) increase, is also evaluating the legal options that would allow him to purchase Realia through one of his other companies.

Below market price

Hispania’s offer was never well received by the market, as it was considered to have offered a knock-down price for the real estate company, at 28% below Realia’s list price. Now, following FCC’s announcement, the situation is more complex, as Hispania needs its offer to be approved by 55% of its shareholders.

Besides the construction company, Realia’s second largest shareholder is Bankia, which controls 24.95%. The entity is under an obligation (having been mandated by Brussels) to sell its industrial holdings, however, it still has a margin of two years remaining to undertake these divestments.

Original story: El Economista (by Alba Brualla and Virginia Martínez)

Translation: Carmel Drake

Sacyr Seeks Investors To Inject €300m Into Testa

4 February 2015 – Expansión

Operation Accordion / The construction company will receive contributions from its subsidiary amounting to €1,180 million, as the preliminary step in the placement of up to 30% of its capital with institutional investors.

Yesterday, in a whirlwind shareholders meeting, Sacyr gave the go ahead for Testa, its real estate management company, to carry out a significant internal restructuring with the dual-objective of enabling it to pay multi-million debts to its parent and at the same time, strengthening its balance sheet from the inflow of funds through a capital increase on the stock market.

Specifically, Testa’s shareholders renewed the mandate to the Board of Directors (led by Fernando Lacadena, the new CEO, who replaced Daniel Loureda) to conduct an operation to return €1,197 million to its shareholders through an extraordinary dividend payment of €527 million and a reduction in capital of €669 million, within the next year.

Sacyr will be the main beneficiary since it controls 99.3% of Testa’s share capital. This operation is subject to a simultaneous capital increase, to allow Testa to reconstruct its balance sheet through an IPO, which has a minimum target of €300 million.

IPO

The two operations are closely linked, which is why Sacyr has taken its time to sound out the market and determine the level of investor interest in Testa. The intention of the group, chaired by Manuel Manrique, is to carry out a placement through an IPO aimed at institutional investors. In parallel, Sacyr also plans to divest some of its stake, although how much it will relinquish has still to be determined. In any case, the construction company wants to retain its role as the controlling shareholder, and so its stake after the sale will not fall below 70%.

(…)

Testa’s shares closed trading yesterday at €19.30 per share, after a strong rise of 7.3%. The company’s market capitalisation amounts to €2,230 million, which means that at current market prices, the sale of a 25% stake would generate income of €550 million.

In a second phase, Sacyr’s objective is to convert Testa into a Socimi (a real estate company that pays out 85% of its profits in dividends). This new type of company, which benefits from significant tax exemptions, has attracted interest from reputed investors such as George Soros, John Paulson and large funds, including Pimco.

For Testa, the new Socimi structure would have the advantage of starting out with a large, ready-made portfolio of assets, which generated turnover of more than €140 million during the first nine months of 2014.

According to the latest appraisal data published by the CNMV, the market value of Testa’s properties amounts to €3,287 million, which would make it the largest Socimi in the country by asset value. Currently, Merlin Properties is the largest Socimi, with assets valued at more than €1,276 million.

This year, we also expect to see the IPO of Bulwin, the Socimi created by the listed company Quabit. The historical real estate company GMP has also changed its structure to a Socimi.

Original story: Expansión (by C. Morán and R. Ruíz)

Translation: Carmel Drake