Busining Leases 4,900 m2 in one of the Kio Towers to Open a Coworking

20 February 2019 – Eje Prime

Busining is going to create a new business centre in Torre Realia The Icon, one of the former Kio Towers in Madrid. The company, which specialises in coworking spaces, has leased 4,900 m2 of space from Realia, the owner of the property. The space is distributed over five floors in the iconic building located at number 216 Paseo de la Castellana where it is going to open offices and meeting rooms. The operation has been advised by Cushman&Wakefield.

The tower, known as The Icon, is one of the most iconic buildings in the Spanish capital and is considered to be the first skyscraper in the world to be built at a sloping angle. Its architect, Philip Johnson, was the first recipient of the Pritzker award.

With this operation, Busininng, which has five business spaces in Madrid, is expanding its offer in the business district of the Spanish capital. “This new operation is another example of the consolidation and growth of the coworking phenomenon in the Spanish market”, said Ignacio Oyarzun, Associate in the Business Space area at Cushman & Wakefield.

Original story: Eje Prime

Translation: Carmel Drake

Realia Completes its €149M Capital Increase

2 January 2019 – Eje Prime

Realia has completed its capital increase. The real estate firm owned by the Mexican magnate Carlos Slim has completed its €149 million capital increase with a final injection of €42.1 million, according to a statement filed by the company with Spain’s National Securities and Market Commission (CNMV).

In its latest expansion phase, the company has issued 175.4 million new shares in total, for a nominal value of €0.24 and an issue premium of €0.61 per share. The company’s share capital has thereby been consolidated at €197 million, divided into 820 million shares.

Since Slim took control in 2015, Realia has undertaken three capital increases in total. The latest is the operation closed today, which was approved in November to try to decrease the company’s debt, which amounts to €672 million, and to provide a financial boost to its real estate businesses.

Slim controls 70.76% of Realia’s capital, 33% in a direct way and 36.98% through the construction group FCC, which is also led by the Mexican businessman. The real estate company also has an asset portfolio spanning approximately half a million square metres, which includes one of the Kio Towers in Madrid.

Original story: Eje Prime

Translation: Carmel Drake

Realia Will Resume House Building In Spain This Year

13 March 2017 – Cinco Días

Realia, the real estate company controlled by Carlos Slim, is planning to relaunch its house construction and property sales business, by starting new developments in areas with “a consistent demand and limited supply” of new homes, such as Madrid and the central region, as well as Barcelona and Palma de Mallorca, amongst other locations. In this way, the Mexican businessman will enter the Spanish residential segment and whereby join other international investors who have already committed to building homes in Spain in light of the recovery in the real estate sector.

Currently, the main players in this sector include the funds Lone Star, Värde and Castlelake, through their respective real estate companies Neinor Homes, DosPuntos and Aedas Homes, which they constituted to buy assets during the crisis. Other, domestic firms, include Quabit and Acciona, amongst others.

In the case of Realia, Carlos Slim took over control of the company in the middle of 2015 and since then has been working to clean it up. The real estate company is now reactivating its residential business with the aim of “improving and strengthening” its revenues, which mainly (60%) comprise rental income from its real estate portfolio.

To this end, the firm raised funds amounting to €145 million through a recent capital increase and also owns a portfolio of buildable land covering 1.85 million m2. The bulk of that portfolio is located in the central region and Cataluña, both of which are areas chosen by the real estate company to resume its property development business, according to the company’s annual report for 2016. Realia is now going to start building new homes even though at the end of last year it still had a stock of 490 finished homes, pending hand-over.

Refinancing, the main challenge in the short term

One of Realia’s other objectives for the year ahead includes improving its margins, “through the rationalisation and optimisation of production costs and expenses, and improvements in prices”. Nevertheless, the main milestone for Slim’s real estate company in the short term involves closing the refinancing of the €678.15 million debt that is linked to its real estate business, equivalent to 75% of its total liabilities, which matures on 27 April.

In this sense, in its annual report, Realia ratifies its conviction that the refinancing of this loan, which it is currently being finalised, “will end successfully” before the maturity date.

The ultimate goal is to “consolidate” its real estate division “financially and over the long term”, which does not rule out the acquisition of new assets “depending on the market opportunities and always with the aim of improving the income statement and creating value”.

Realia owns a portfolio of office buildings and shopping centres with a combined surface area of 405,359 m2, worth around €1,500 million. Its portfolio includes iconic buildings such as one of the Kio Towers in Madrid and the As Candelas shopping centre in Santiago de Compostela.

Original story: Cinco Días

Translation: Carmel Drake

Carlos Slim Rises To 33.2% His Stake In Realia

14 February 2016 – El Economista

Carlos Slim will increase to 33.2% his stake in Realia on the eve of Initial Public Offering (IPO) the entrepreneur will voluntarily carry out for the 100% of the real estate company.

The Mexican businessman will strengthen his stake above the level of the 30% in the company owner of one of the Kio Towers in Madrid by capitalizing part of a loan of EUR 50 million which Realia had with SAREB and the tycoon bought in December.

Specifically, Slim will exchange EUR 29 million of credit by 14,070,000 million of Realia shares, equivalent to 2.96% of its capital, as he said in his takeover bid.

The transaction is expected to materialize tomorrow Monday, February 15th, thus allowing Slim to increase up to 33.26% his current stake of 30.30% of the real estate company.

Carlos Slim announced it will launch a voluntary bid for 100% of Realia late last January, when it exceeded the threshold of 30% in the company.

The entrepreneur exceeded the percentage that forces to bid due to the underwriting of a capital increase the real estate company carried out to repay debt. Slim – to ensure the operation, took more shares than those corresponding to him by keeping the share surplus.

The same path in FCC

This is similar process to that the Mexican is also likely to follow in FCC group, which in turn, is the first partner of  Realia with 36.8% of the capital.

In the case of FCC, Carlos Slim, the current major shareholder with 27.4%, also guarantees the capital increase of 709 million the construction company has just started.

Thus, in the event that the entrepreneur takes the new FCC shares that will eventually remain as a surplus, he will also exceed the level of 30% in the group and would have to make bid for the100%.

In fact, Slim and Esther Koplowitz recently agreed to lift restrictions to exceed that percentage that had been self-imposed, before the need for FCC to carry out this capital increase to reduce debt and get recapitalized.

Regarding Realia, Mexican entrepreneur has announced a takeover bid in order to implement a strategic plan that allows the real estate company to restructure and achieve a recurring and stable level of revenue.

Original story: El Economista (by Europa Press)

Translation: Aura Ree

FCC Suspends Sale Of Realia And Threatens Hispania’s Takeover Bid

6 February 2015 – El Confidencial

Carlos Slim’s impact on FCC is starting to be noticed. The new majority shareholder of the infrastructure group has laid his cards on the table and has decided to officially suspend the sale of the 36.886% stake FCC holds in Realia, a decision that threatens the takeover bid (OPA or public offer for the acquisition of shares), launched by Hispania for the real estate company, whose prospectus is pending approval by the CNMV – Spain’s National Securities Market Commission.

The other major shareholder of Realia, Bankia, which owns 24.9% of the capital, is standing by its decision to sell, despite the change in its partner’s position. This leaves the floodgates open for a war to seize control of the company, which owns desirable assets such as one of the KIO towers.

The market has known that this scenario could arise since the beginning of the year, during which time Realia’s shares have soared by more than 40%, from the price of €0.51 per share at the end of the year, in line with Hispania’s offer, to reach the current price of €1.30.

The pieces in this game of chess are placed in the perfect position for a wave of strategic moves to be unleashed. Hispania has the upper hand in that it holds an exclusive agreement with Realia’s creditor funds, a deal that may be extended for the whole of 2015, even if the takeover bid that is currently underway were to fail.

Fortress, King Street and Goldman Sachs are Realia’s preferential creditors with a debt of €793 million, from which Hispania has successfully negotiated a haircut of €167 million. This saving allowed them to launch their takeover bid at €0.49 per share. In addition, the funds have exempted Hispania from an onerous clause that obliges any potential buyer to liquidate their debt within a period of five days.

Against this competition, Slim has his own upper hand: he is free from this clause, since it is only applicable when a change of control occurs and, if the player that enters the arena is FCC itself then there would be no such change of control, since the infrastructure group has always held the reins of Realia, which is widely known as its real estate subsidiary.

This means that the Mexican tycoon now has several options on the table: from waiting and seeing whether Hispania’s takeover bid fails and then entering the fray; to starting to negotiate a new transaction with Hispania and its associated funds; to starting an operation with new players, since Bankia is determined to sell and if Hispania’s takeover bid does not going ahead then it will open a new process to close the sale.

The Socimi (Hispania), meanwhile, has conditioned the success of its bid on taking over 55% of Realia’s share capital. In fact, in an ideal world, Hispania would take control of the smallest number of shares possible, above this threshold, to enable it to take full control of the real estate company for the lowest price possible.

From this point of view, both the 24.9% stake that Bankia has put up for sale and the almost 13% stake that Sareb holds (through the debt associated with the former stakes held by Lualca and Prasa, which controlled 9.5%) are key, as well as the participation loans that should be exchanged from this month onwards and which would allow it to takeover another almost 3%.

Meanwhile, Slim’s initial plans do not include the option of launching a counter-bid, or of establishing bilateral negotiations with Bankia, since that entity is obliged to undertake all of its sales in concurrent processes. But that would not be an impediment if Hispania’s bid fails and the entity launches another sales process, since the Mexican would enter the bidding.

In any case, only an official announcement, through a significant event with the CNMV, to suspend the sale of its stake in Realia would go against the interests of the Socimi, because Realia’s list price is well above the price of the takeover bid, which in theory discourages minority shareholders from accepting the offer, above all, when they also know that the world’s third richest man is also interested. And Slim certainly has acccess to credit.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake