Lería-Luksic, the Chilean Magnates Arriving in Spain’s Wealthiest Municipality

11 August 2018

“Wealthy Chileans.” That was the answer much of the real estate sector gave when El Confidencial was investigating the identity the people who just became the third largest landowners in the Pozuelo Oeste Distribution Area (ARPO), in Pozuelo de Alarcón, the wealthiest municipality in Spain.

The buyers are the executives Óscar Lería Chateau and Paola Luksic Fontbona, the couple who have just acquired 40,000 square meters of land, 8% of the total area, from La Caixa for 30 million euros. The couple plan on developing 396 homes on the land, according to sources in the sector. The transaction was executed through Paola Luksic’s family office Wildsur and Óscar Lería’s Osim, the Chilean newspaper ‘La Tercera’ confirmed.

ARPO is the largest urban development area in the municipality of Madrid, which has been in force for more than a decade, amounting to more than six million square meters. The construction of a total of 5,500 homes is planned for the area, of which 2,900 will have some type of protection. Sources consulted by El Confidencial noted that Luksic is likely to have signed an agreement with a local partner to build the homes houses, “possibly one of the landowners in the area,” as he had done before in other projects in which he was involved.

At the beginning of June, this newspaper reported on three operations in that area. Santander, Iberdrola and Servihabitat had sold or were about to sell their holdings in Pozuelo. Twin Peaks Capital was the first to snap up property, purchasing land controlled by the bank run by Ana Patricia Botín. Oaktree took over land from the power company and has allied itself with Banco Sabadell for the development. Only the identity of the buyers’ of La Caixa’s land had still to be revealed. Though he is known to value his privacy, Oscar Lería himself then made the transaction public, in which he partnered with the A&G Group.

Lería is married to Paola Luksic, daughter of Iris Balbina Fontbona (daughter of the Catalan Luis Fontbona Buxallen, who emigrated to Chile at the beginning of the last century) and stepsister of the Chilean magnate Andrónico Luksic, who control much of the business inherited from the Croatian billionaire Andrónico Luksic Abaroa (1926-2005). The Luksic family is one of the richest in the Andean country and, through Aeris Invest, one of its investment vehicles, recently demanded from Santander payment of the 113.02 million it had invested in 145.14 million shares of Popular in May 2017, one month before its resolution. Furthermore, the Chilean family’s fund threatened the Single Resolution Board (SRB for its acronym in English) with additional lawsuits should it not publish the valuation report 2 on Popular, since it considers that the 3 is irrelevant and “does not correspond to the real situation of the entity at the time of the resolution.”

The most expensive municipality in Spain

As Lería explained to the Chilean newspaper, the group set its eyes on the richest municipality in Spain three years ago, although they have been present in the country for years, especially on the Costa del Sol. After the end of the crisis, when investors were still avoiding the country, other large Latin American investors began landing in Madrid in search of opportunities. At that time, the Lukisc family again looked carefully at the Spanish market, where they plan to invest about 480 million euros.

“The family has been investing intermittently in Spain, but I decided to go and stay for the next 40 years. To create something that will last,” Óscar Lería declared to La Tercera, a newspaper that noted that the family had arrived in Andalusia in 2012 to “resuscitate a project” that had “died.” This project was the Lagoon Alcazaba, the first development with a crystalline lagoon in Europe. With 60 million euros, they also invested in half a dozen retail stores on Madrid’s Serrano street.

ARPO, the major urban development area in Madrid, is under the developers’ spotlight. Vía Célere bought in a year ago; iKasa has had land there for years, and Metrovacesa, which owns more than 46,000 square meters with a market value of 25 million euros, as shown in its IPO prospectus, are some of the principal property owners in the region. They are joined by Pryconsa, with long-term holdings in the area, and the newcomers Twin Peaks and Oaktree.

Four months ago, the city council of the district of Madrid finally approved the Partial Plan for the development. The procedure triggered the first real estate transactions and had caused the developers to begin taking positions before the final approval of the reparcelling and urbanisation plan takes place, the last procedure needed before the first homes can begin to be built. Also, fifteen days ago the project for a rainwater collector for Pozuelo, which will have to supply water to the new homes, was also definitively approved.

With an approximate cost of about 40 million euros, the Pozuelo de Alarcón city hall will contribute 20% of the amount, and the rest will be invested by the private landowners. ARPO, for example, corresponds to 52%, Eje Pinar 11% and Huerta Grande 7% – there are 16 urban sectors in Pozuelo. “This approval opens the way to launch public tenders for the works, with execution possibly beginning at the start of 2019. Also, it will also permit the execution of the urbanisation works in the rest of the sectors and make Pozuelo’s 2002 PGOU a reality”, the Board of Compensation for the region noted. “The collector is now a reality thanks, to a large extent, to ARPO’s new management team – the manager is the architect José Luis Oñate, while Pryconsa holds the presidency of Arpo and Ikasa has the vice-presidency – and the city hall’s technical-political team, which has demonstrated a true desire to move things ahead.”

The same sources assured El Confidencial that in a few months, construction for the collector would be tendered and the approval of the project of urbanisation and reparcelling of the Arpo is foreseen for the end of the year. “The plan is to combine construction on the collector with the urbanization, for which the approval of the Hydrographic Confederation of the Tagus will be needed and, subsequently, to be able to combine the urbanization works with the construction of the houses, for which the City Council of Madrid’s authorisation will be needed.”

Of all these urban procedures will depend, to a large extent, on the price that developers will be willing to pay for the land and, consequently, the final price of future homes will depend on a location with high demand and a very limited supply of new construction.

According to sources, the residual land value is at present around the 1.000 euros per square meter, well below the 1,600-1,800 euros currently paid in Valdebebas. “There are still urban procedures ahead, the land is not yet ready for construction, hence the price differential,” the same sources explained. At those prices, future homes could go on sale starting at 2,250 euros per square meter.

“Taking into account the price that is being paid for the land, the venture would already be profitable for the developers. That does not mean that, if the urbanization proceeds without complications, the prices might not be higher, considering the high level of demand in Pozuelo by people with elevated purchasing power who have been displaced to Majadahonda, Las Rozas and Boadilla del Monte in the absence of new builds,” says a real estate expert at El Confidencial.

The Madrid municipality was not oblivious to the crisis. From its high of 2007, when the square meter reached 3,807 euros, the price of new housing fell by 38% to 2,360 euros, just below the 40% nationwide, according to data from the appraiser Tinsa. However, in two and a half years, prices have increased by around 20%, largely due to the enormous shortage of product in the area and the elevated demand.

According to data from Foro Consultores, the average price of multi-family homes in Pozuelo de Alarcón hovers, on average, at 3,500 euros per square meter, with the average per house going for 610,000 euros, without garage or storage. Single-family homes average roughly 900,000 euros and 3,000 euros per square meter. However, as pointed out by this company, what characterises this municipality is that, depending on the location, you can find affordable housing in apartment buildings, while prices in better areas easily surpass one million euros, both for flats and single-family homes.

Venezuelans, Argentines, Chileans…

Since 2014, when the real estate market hit bottom in Spain, numerous Latin American investors have put money into Spanish property. The biggest Venezuelan investors have been the most active, especially in the neighbourhood of Salamanca, where, for four years they have rehabilitated many buildings to place on the luxury market.

The entrepreneurs Miguel Ángel Capriles and Axel Daniel Capriles, relatives of the Venezuelan opposition leader Henrique Capriles, bought, through Gran Roque Capital, more than a dozen properties in the most exclusive neighbourhoods of Madrid, totalling more than a hundred luxury homes. Barquillo Doce, Serrano Anguita, Pablo Aranda, Lagasca 38, Fernando VI and their latest project, Españoleto 19. However, the Capriles has also extended their investments to “more modest” projects. For example, they bought land in the vicinity of the Vicente Calderón stadium from Prosegur, while they are the financial partners of Grupo Ibosa in the purchase of ready-to-build land north of Madrid. The Venezuelan family Pizzorni, through Italinmuebles, is also behind several luxury projects in the capital such as Alfonso X and Montalbán 11.

On the other hand, the Argentines Jorge Pepa – brother of Juan Pepa, former head of Lone Star in Spain and architect of Neinor’s IPO – and Francis Btesh, manage through their company 1810 Capital, investments by the Argentine-Israelis Zev and Sergio Gustavo Marynberg. The firm’s purchases include properties at Santa Isabel 21, Tirso de Molina and Barceló. All of them are being converted into luxury homes.

Among the Mexicans, the best known and most active investor has undoubtedly been Carlos Slim (FCC, Realia …), while the less known Mexican investor Moisés El-Mann Arazi has also carried out operations in Spain, and is behind the purchase 253 branches leased to Banco Sabadell from Moor Park Capital Partners for €290 million.

After the fiasco at Banco Popular, the Luksic family will bet on the Spanish property market, where it plans to invest a total of 480 million euros

The Chilean family Luksic, the main shareholders in the mining company Antofagasta, Banco de Chile and the Compañía de Cervecerías Unidas (CCU), took a 3% stake in Banco Popular last year, valued at more than 2.9 billion euros. Óscar Lería and Paola Luksic’s plans for Spain, after their family’s failed investment in the financial institution, are limited to the Spanish property market, where they expect to invest a total of 480 million euros, Lería revealed to La Tercera. In the short term, they will invest 200 million euros, focusing on Seville and the Balearic Islands, especially Ibiza.

In fact, the couple signed an agreement with Mediterranean Capital Management, a firm based in Barcelona, to search for land. The two groups are going to begin developing a project in Mallorca in the next few months, near the Marivent Royal Palace, resulting in about twenty luxury flats costing between 1.3 and 1.5 million euros, according to the Chilean newspaper.

Pozuelo is Óscar Lería Chateau’s most recent investment. Through the Osler company, he has been making important real estate investments in Spain since 2012, during the middle of the property crisis, working with local investors. He currently has several second-residence projects in Marbella, between Estepona and Puerto Banús.

Original Story: El Confidencial – E. Sanz / Ó. Giménez

Translation: Richard Turner

Israeli Fund Adar Asks for Two Seats on Neinor’s Board

15 March 2018 – Expansión

The Israeli fund Adar is claiming its space at the table of Neinor’s most senior executive body. After taking ownership of 24% of the property developer and buying almost 18% of the real estate company’s shares in just one month, Adar has requested two seats on the Board of Directors.

To this end, Adar has asked that its request be included on the agenda of the next meeting, which is scheduled for 17 April at the first call, or, if the necessary quorum is not reached, for 18 April.

Adar has proposed the appointment of Jorge Pepa and Francis Btesh as proprietary directors. In this way, the group’s Board of Directors would comprise nine members, up from the current number, seven.

The last change in Neinor’s Board of Directors took place with the departure of Dominique Cressot, a Director who represented the fund Lone Star, which sold the last remaining share package that it owned in the company last January.

In his place, the shareholders appointed Alberto Prieta, Managing Partner of the Real Estate team at BDO, as an independent director.

Adar, which first acquired shares in Neinor when the firm made its stock market debut almost a year ago, is now the real estate company’s largest shareholder, ahead of the Bank of Montreal (5.2%), Norges Bank (5.06%), Invesco (5.02%), Wellington Management Group (4.96%) and Ksac Europe (4.2%). The fund controls a package worth €296 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake