Metrovacesa Negotiates with Funds to Build New Offices

23 May 2018 – Expansión

Metrovacesa, the property developer in which Santander and BBVA hold stakes, wrote a new chapter in its history on 6 February with its return to the stock market after five years away and with an ambitious growth plan in its sights. Following a lacklustre debut on the stock market and with a land portfolio worth €2.6 billion, the company is now preparing to show the market that it is capable of fulfilling its planned targets for the hand over of homes and generation of returns from its portfolio of non-residential land.

In this sense, Metrovacesa is holding negotiations with international funds in order to create joint ventures to promote offices. “We are holding advanced conversations and we hope to close several joint ventures before the end of the year”, explains the CEO, Jorge Pérez de Leza (pictured above), in an interview with Expansión.

The proposed model involves creating joint ventures in which the financial partner will control 75%, whilst the remaining 25% will remain in the hands of Metrovacesa: “That would allow us to sell land at prices close to the GAV (gross asset value) or higher and to retain a stake in each project”.

Metrovacesa currently owns tertiary land spanning more than 1.3 million m2, which has an approximate value of €684 million.

In addition to the joint ventures with financial partners, the company is planning to sign more turnkey projects, like the one sealed last year with Axiare for the sale of a building under construction located at number 40 Calle Josefa Valcárcel in Madrid, which will be handed over at the end of 2018, for €30 million.

“The aim of the company was to launch 36,000 m2 through turnkey projects and joint ventures in 2018, and we are going to exceed that figure”, said the CEO. In parallel, the firm is continuing to sell tertiary land. In April, it reached an agreement with the property developer La Llave de Oro to sell a plot in the 22@ district of Barcelona for €22 million and it is negotiating other operations worth €14 million, which will allow it to exceed the objective for 2018. With these operations, the company is generating cash, whilst it prepares the launch of its primary business: the development of homes.


Pérez de Leza reveals that the company will launch between 3,500 and 4,000 units in 2018, which will allow it to advance in its goal of reaching cruising speed in 2021. According to its initial plans, it will hand over 520 units in 2018 and then 700 and 3,500 units in 2019 and 2020, respectively: “That will allow us to be on track to break even by the end of the year and follow a positive path next year”.

In the opinion of the director, one of the property developer’s competitive advantages is its land portfolio, which has capacity for the construction of 37,500 homes. “We can fulfil our delivery objectives for the next eight years without having to buy any land. That means we can take things calmly compared to our competitors”, he said.

Pérez de Leza also defends the group’s commitment to diversify its portfolio: “There is no buildable land left in Madrid, Barcelona and Costa del Sol. If you want to carry out significant deliveries (of new homes), you need to open yourself up to other markets”. And he also reveals that the firm has received offers to sell non-developable land that it has ruled out until the urban planning permits have been obtained. “Land management is an added-value strategy, we have a team ready to do it and we can obtain higher margins. Selling now would mean losing euros along the way”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

‘Metrovacesa Promoción y Suelo’ Recovers The RE Throne

13 July 2017 – Expansión

Santander, BBVA and Popular have given Metrovacesa a new lease of life. The three banks, together with Sabadell, Bankia and Banesto, were awarded the real estate company at the end of 2008 after its former owner (Román Sanahuja) was unable to meet the debt payments. It was then that a journey began that would last almost a decade, and which will now culminate, as the company celebrates its centenary (in a few months time), in the crowning of Metrovacesa as the largest residential property developer in the market.

The last step on this journey was sealed yesterday with the completion of Plan Horizon.

This process, known as Project Horizon, began at the beginning of the year. To lead it, Santander, BBVA and Popular hired Jorge Pérez de Leza (pictured above), formerly of the Socimi Lar España.

The objective was to flesh out a separate entity for Metrovacesa Promoción y Suelo, the company created in 2016 with assets, primarily land, that did not fit into the merger of Metrovacesa with the Socimi Merlin. Following the integration of the rental assets, the three shareholder banks (Sabadell and Bankia had sold their respective stakes years earlier) have spent the last six months fleshing out the company known as Metrovacesa Promoción y Suelo.

To this end, the heads of the entities and the property developer itself have been working for the last six months to choose from the banks’ balance sheets the ideal plots of land for development. In the end, land worth €1,108 million will be transferred from Santander, BBVA and Popular, to create a portfolio (…) with a land surface area of 6 million m2, on which more than 40,000 homes will be constructed.

“Commentators wondered whether this would be a garbage dump for the banks, but that has not been the case. Metrovacesa has had access to the banks’ portfolios and we have chosen the best plots of land for our shareholders”, highlighted Jorge Pérez de Leza.

“We ruled out more than 50% of the assets that we were offered. It has been a two-way process: approximately 10% of the assets have not been transferred to our company because the banks considered that they could achieve better prices for them on their own”, said Jorge Perez de Leza, CEO at Metrovacesa.

Of the €1,108 million total, Santander has contributed €574 million, BBVA €431 million and Popular €102 million. The contributions have not been made in proportion to the banks’ respective shareholdings, but rather according to the selection criteria of the assets.

Following the capital increase, Santander has decreased its stake to 61.3%, BBVA, by contrast, has increased its shareholding by 10% to 29.6%, whilst Popular retains the same stake (9.2%).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake