Tag: La Finca

Värde Finalises Its Purchase Of Residential Property Developer Aelca

9 May 2016 – El Confidencial

Värde Partners is getting ready to become the largest player in the property development business in Spain. After acquiring 51% of Aliseda, the real estate arm of Banco Popular; having purchased San José Desarrollas, the residential branch of the Galician construction company…and in the middle of negotiations to buy a share of La Finca, the US fund is now one step away from another big trophy.

According to three sources, Värde has made the best offer to acquire Aelca, the property developer that the Avintia Group has put on the market and in which a large group of foreign funds have expressed interest. Amongst them, Castlelake and Värde stand out, although the latter is the only one that has reached an agreement in principle.

With the caution that must be maintained until the operation is definitively closed, which could happen before the end of the month, Värde is taking another step forwards in its strategy to become one of the largest real estate groups in Spain. It has been committed to the market since the darkest days of the crisis, as it demonstrated four years ago, when it joined forces with Anchorage to purchase five premium buildings in Madrid and Barcelona, which previously belonged to Monteverde.

A year later, came the acquisition of Aliseda for €815 million, a deal that allowed it to take over the management of mortgage loans with a net value of €9,350 million and foreclosed assets worth another €6,500 million. In addition, that purchase, which it undertook together with Kennedy Wilson, helped to heal the wound opened with CX Inmobiliaria, the platform owned by Catalunya Caixa, with which it had reached an agreement for almost €30 million, but which broke down at the last minute.

The story goes on, because thanks to the acquisition of San José Desarrollos alone, Värde Partners expects to construct 1,500 homes across Spain in the short term, numbers that will increased even further if it manages to acquire Aelca, a young property developer, which has great appeal thanks to its strong presence in areas where the residential sector is recovering the most in Madrid, such as Aravaca, Boadilla del Monte and the Madrilenian neighbourhood of Las Tablas.

Värde’s commitment to the real estate business has led it to invest more than €1,000 million in the acquisition of Aliseda and San José Desarrollos alone, two sides of the same coin, given that as well as managing and selling the assets of the company that it shares with Popular, the fund is particularly interested in fully benefitting from the expected recovery in the residential market through its own property developer, as it is showing with its frenetic activity in these businesses.

By contrast, Värde is exiting its positions in the shopping centre segment, as it demonstrated in February with the sale of the Mallorcan Festival Park outlet, and in July 2015, with the sale to Lar of three large retail outlets in the Parque Comercial Galeria de Pamplona.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Värde Finalises Acquisition Of 40% Of La Finca Business Park

28 April 2016 – Expansión

Procisa– the real estate company owned by the García Cereceda family – is finalising an agreement with the American fund Värde Partners to sell it a 40% stake in its office business, which includes, amongst others, assets in the exclusive La Finca Business Park, located in Pozuelo de Alarcón (Madrid), according to sources in the sector. (…)

Procisa, the group that specialises in offices and luxury residential developments, recently constituted a company under the name Grupo La Finca and divided its business into two distinct areas: one operating in the office segment, which is where Värde will acquire its stake; and the other operating in the residential business, which will continue to be fully owned by Procisa.

Susana García Cereceda will continue to lead the new Grupo La Finca, where she will serve as CEO, the same role that she currently performs in Procisa’s family business.

In the same way, García Cereceda will lead the two business lines into which the group has been divided.

To complete the organigram of the new real estate company, it is expected that new members with experience and background in the sector will join the company over the next few months.

Residential business

In terms of the residential business, Grupo La Finca wants to expand through new housing developments, as well as in the exclusive development in Pozuelo de Alarcón, next to the Parque Empresarial. The main features of this urbanisation include security, privacy and exclusivity. The group’s intention is to develop a new complex, to complement the detached and terraced houses that currently comprise La Finca.

With its upcoming investment in La Finca Global Assets (the name of La Finca’s office division), Värde Partners, which currently controls the real estate division of Grupo San José, with a 51% shareholding, and which also owns a stake in Popular’s servicer Aliseda, will take a leap into the high standing office business, which will allow it to expand its presence in the commercial and professional business segment in the future.

The private equity fund Värde Partners has been one of the most active investors in Spain since the crisis began. Its first major operation was closed last August, when it acquired 51% of the real estate company San José to construct 1,500 homes in Spain.

In 2014, it purchased 51% of Banco Popular-e’s card business, whereby the entity recorded profits of more than €400 million.

Moreover, a year earlier, it acquired, together with Kennedy Wilson, the real estate arm of Popular, Aliseda, for approximately €800 million. At the global level, the fund, founded in Minnesota in 1993, manages more than USD 40,000 million and has 200 employees around the world, of which 65 are professional investors with more than 12 years of experience.

From now on, its assets in Spain will include La Finca Global Assets, whose assets comprise not only the La Finca business park, but also other iconic buildings owned by Procisa, including a business centre comprising seven, 7-storey buildings on Calle Marcelo Spínola and another property comprising three, 7-storey buildings on Calle Martínez Villergas. (…).

Meanwhile, the park in La Finca, has a surface area of premium leasable space covering 27,000 m2, comprising 20 buildings (16 offices and 4 for the provision of services for use by office workers). Current tenants include companies such as Orange and Microsoft. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

TPG & GS Buy Loan Portfolio From Caixabank For €240M

23 December 2015 – El Confidencial

TPG and Goldman Sachs have managed to close one of the largest debt operations of 2015 just before year end. They have just acquired a portfolio of unpaid property developer loans (Project Atalaya) from Caixabank, an entity that has been particularly active in this kind of divestment during the second half of the year. It is understood that the consideration paid amounted to €240 million.

In addition to Atalaya, the bank led by Isidro Fainé (pictured above, right) has also managed to successfully close the sale of Project Tourmalet, acquired by Blackstone for almost €800 million, as well as Project More, another €700 million of non-performing loans, which sparked interest from several international funds and which ended up being acquired by Cerberus.

In total, as a result of these three operations, the Catalan entity has succeeded in transferring almost €2,300 million of debt from its balance sheet during the second half of the year alone, a figure that makes it the most active entity during the period for this type of operation. That is unless there is a last minute surprise from Bankia, which has withdrawn its plans to close the sale of Big Bang this year.

The funds that are interested in acquiring the €4,800 million that comprise the Big Bang portfolio have demanded that the bank led by José Ignacio Goirigolzarri slice it up before they can reach any agreement. This request has forced the entity to recalculate its numbers, which has delayed the completion of the operation, which was expected to be the largest in 2015.

As a result, Caixabank has been the star of the year for this type of operation, to the extent that the three portfolios that it has sold represent some of the largest banking operations closed this year. In fact, if we take the data as at the end of Q3 as the reference point (the most recent official statistics), then the bank has reduced its portfolio of loans to property developers by 30%, which has played a crucial role in enabling it to lower its default rate to 8.7%, compared with the sector average of 11%.

Atalaya is the second major operation that TPG has closed with Caixabank, given that two years ago it also acquired 51% of Servihabitat from the Catalan entity for €189 million, an operation that allowed the US fund to take over the management of the entity’s real estate services for a period of ten years.

Meanwhile, the most important operation involving Goldman Sachs in the Spanish real estate sector in recent times has been its purchase of almost 3,000 flats from IVIMA, together with Azora, in the Summer of 2013, for €201 million. But the US entity is also very active in the analysis of these kinds of operation. For example, it was on the brink of signing an agreement to acquire Procisa, the property development company behind La Finca (in Madrid), which is suffering from a significant debt problem. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

The Cerecedas Seek Financial Partner To Buy 30% Of Procisa

3 June 2015 – El Confidencial

Procisa, the real estate company made famous for developing the luxury La Finca estate is looking for a financial partner to provide the financial resources that it needs to continue with its other developments.

At a time when the interest of international funds in the Spanish real estate market is being called into question, one of the country’s iconic property developers is attracting interest from several overseas investors. Procisa, the company owned by the Cereceda family, which was made famous for its development of the luxury La Finca estate, is negotiating the sale of up to 30% of its share capital and is holding talks with several institutional investors.

The process, which is being managed by N+1, has been on the radar of the large players in the sector for several months – they see this as an opportunity to invest in a company that owns some of the most important plots of land in the capital.

After initially exploring the option of an IPO, which was dismissed following analysis with Citi, the real estate company has made progress in its talks with a small number of funds to which it has proposed the deal, with the clear message that their role will be limited to one of financial partner.

In line with the deals closed by other companies in the sector – GMP sold a 30% stake to GIC, and Acciona agreed to allow KKR to join as an investor – Procisa plans to form an alliance with a major investor, which will take a minority stake, but which will provide the financial resources the RE company needs to continue with its promotions.

N+1 has knocked on the doors of giants such as Goldman Sachs, JP Morgan, Cerberus, Bank of America, KKR and Blackstone to propose the deal to them. They could end up acquiring a stake of less than 30%, but this would be represent a historic milestone for this family company, led by Susana Cereceda, following death of her father, Luis Cereceda García, five years ago.

(…)

A RE giant, heavily dependent on bank financing

With assets of €900 million, own funds of almost €200 million, debt amounting to €600 million and losses of €13 million in 2013 (the last year for which official results are available), the company is looking for a financial partner, after it reached an agreement with its lender banks last year to accommodate a loan amounting to €400 million, dating back to December 2009 and after it consummated the merger with Agruva and Luarce, some of the other companies through which the Cereceda family has constructed its real estate empire.

(…)

During these talks, the banks imposed a series of conditions on Procisa, which explains why the Cereceda family is now keen to find a financial partner that will allow it to resume its activity, after years of decreasing results and the creditors’ sword of Damocles hanging over its head.

(….)

As well as La Finca, Procisa is also the owner of Parque Empresarial La Finca, an office complex on Calle Cardenal Marcelo Spínola (Madrid), as well as several office buildings spread across the capital and it is planning the development of two replicas of its famous Somosaguas development in La Romana (Dominican Republic) and Cartaya (Huelva).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Spain property: Madrid waits for the signal to ‘go’

27 April 2015 – Financial Times

Is the influx of Latin American buyers a sign the capital has turned a corner?

Over the past decade and a half, making even a modest investment in Madrid’s housing market has been a bit like taking a rollercoaster ride. Since the market reached its peak in early 2008, average house prices in Spain have dropped by 35 to 40 per cent, according to a report issued in March by the Spanish Savings Banks Foundation, known by its acronym Funcas. New developments on the outskirts of Madrid have been some of the hardest hit.

Other figures suggest an even greater drop in values: also in March, the Spanish property portal Fotocasa.es calculated that the average home in Spain has lost 45 per cent of its value since the peak of the Spanish housing boom, with values in Madrid (a 44.6 per cent drop) representative, more or less, of Spain as a whole.

But both Funcas and Fotocasa.es report glimmers of light at the end of the tunnel: Fotocasa.es recorded a 1 per cent increase in home prices in Madrid in February, while Funcas says that the Spanish housing market is now in an “incipient, gradual recovery”.

As in Barcelona and the Balearic Islands, where small price rises have also been recorded in recent months, overseas buyers are helping to create a mild sense of optimism.

In Madrid, the most enthusiastic foreign homebuyers are heading from across the Atlantic, rather than Europe, according to Alberto Costillo, prime residential director at Knight Frank Spain. A “perfect storm” is bringing a new wave of wealthy Latin American house-hunters to Madrid, particularly from Mexico, Colombia and Venezuela.

“Madrid has advantages of culture and language, and Latin American buyers have long thought of Madrid as a safe haven. But with an improving Spanish economy, and the recent fall in the value of the euro [Latin Americans are more likely to have savings in dollars than euros], they see now see a real opportunity here,” says Costillo.

With its pretty boating lake and rows of statues, many wealthy foreign buyers look to purchase property near the city’s celebrated Retiro Park.

In the grid-like Salamanca district adjacent to Retiro Park, Knight Frank is selling a three-bedroom, two-bathroom apartment with 187 sq metres of living space, parquet floors and air conditioning in a building dating from the early 20th century for €1.47m.

In the well-heeled neighbourhood of El Viso, part of the Chamartín district north of the city centre, a 402 sq metre duplex apartment with four en suite bedrooms and a txoko — a combined cooking and dining space more commonly found in homes in the Basque Country — has an asking price of €4m. On sale through the agency Rimontgó, the unit has three parking spaces and the building has a pool and a gym for residents’ use.

“[El Viso is] quiet and exclusive, but also well-connected with the rest of the city and within easy reach of the downtown,” says José Ribes, director-general of the agency handling the sale. “This is a part of town most associated with aristocrats and intellectuals, but in recent years it has attracted people working in the financial sector, politicians and sportsmen.”

Salamanca and Chamartín are home to many of Madrid’s best restaurants. The capital has 12 Michelin-starred restaurants, compared with 23 in Barcelona. But Madrid is the only one of the two cities with a three-star restaurant — David Muñoz’s DiverXO, where dishes are called “canvases” and diners are asked to arrive “with an open mind”.

Central districts of Madrid are densely populated, but some of the city’s satellite communities, particularly to the northwest, offer more leg room for buyers. In Pozuelo de Alarcón, nestling among pine trees and benefiting from cool breezes from the nearby Sierra de Guadarrama mountains, a gated housing estate called La Finca is home to some of the capital’s wealthiest residents, including footballers from Real Madrid such as Cristiano Ronaldo.

Typical of the sprawling, cubist-style homes at La Finca is a five-bedroom, seven-bathroom house with almost 2,000 sq metres of living space. The property has a two-bedroom housekeeper’s apartment, a lift, indoor and outdoor pools, a gym, a sauna, a cinema, a wine cellar and a carport for six vehicles. On sale through La Finca Real Estate for €11m, the house stands on a plot of just over a hectare. However, according to one estate agent who prefers to remain anonymous, potential buyers are sometimes put off La Finca “because of its reputation as a playground for soccer stars”.

On Calle de Serrano, a broad, tree-lined avenue in the Salamanca district which is sometimes referred to as Madrid’s golden mile for its high-end shopping, there are few signs of the economic downturn, dubbed la crisis in Spain. However, the recession has hit some of the city’s public infrastructure.

Guillermo Bernardo, a former banker with two young daughters who now runs his own cabinet-making business, points to cutbacks in the maintenance of neighbourhood parks and gardens. “The Retiro is Madrid’s calling card, and it’s immaculate, but there is less money these days to clean and repair local playgrounds,” he says. “The perception that most people have is that the state of the economy hasn’t changed a lot but we may be about to turn a corner. Nothing is forever, not even la crisis”.

Buying guide

● Buyers should budget 6 per cent of the sale price to cover land registry taxes

● Estate agents typically charge vendors a commission of 3 to 5 per cent

● Madrid has the third largest metropolitan area in the EU by population size

● Units in a building without a lift are unpopular and may be difficult to resell

● Madrid has hot, dry summers and cool, usually sunny, winters

● Violent crime is rare but pickpocketing and bag snatching can be a problem

What you can buy for . . .

€500,000 A modern, 90 sq metre flat with two bedrooms in the Chamartín district of Madrid

€1m A 140 sq metre, three-bedroom apartment in the Salamanca district, within walking distance of Retiro Park

€5m A seven-bedroom house in El Viso with an outdoor pool on a plot measuring 1,000 sq metres

Original story: Financial Times (by Nick Foster)

Edited by: Carmel Drake