Spain’s Property Developers Glimpse the First Signs of a Moderation in Prices

29 May 2019 – Expansión

Yesterday, several of the largest property developers in Spain met for a Medcap roundtable event moderated by Deloitte to discuss the outlook for the residential market.

Specifically, representatives from Metrovacesa, Aedas, Quabit, Insur and Lar participated in the discussions, during which they observed that house prices in Spain are starting to moderate in some of the more mature markets, although they acknowledged that there are still many secondary cities where the new (growth) cycle is just beginning.

In this context, the representatives identified a number of focuses and challenges facing the sector, namely:

Licences: All of the property developers are pushing for great agility from the public administrations when it comes to the granting of construction permits.

Construction: The labour shortage in the construction sector is pushing up prices and leading to delays in project finishes.

Concentration: Property developers are larger and more professionalised now than before the crisis; they require critical mass to be resilient to real estate cycles.

Industrialisation: Prefabricated homes allow construction periods to be shortened and for greater control over the processes.

Access: Young people are finding it increasingly difficult to afford to buy a home.

Overall, the experts consider that the residential sector is still immersed in the early stages of the new cycle, but only time will tell whether they are right.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

Lar to Invest €200M Buying Retail Assets After Divesting Other Assets Worth €425M

25 April 2019 – El Economista

Lar is entering a new phase in which it will specialise in retail after divesting all of its offices and logistics assets. The Socimi has received total proceeds of €425 million from its recent sales, of which it intends to dedicate around €200 million to new purchases over the next three years.

According to José Luis del Valle, President of Lar España Real Estate, the Socimi is now going to focus on operations in the commercial segment only, including both asset purchases and new developments, to continue to expand its €1.5 billion portfolio.

Lar is coming to the end of the development of Vilanova Park in Sagunto (Valencia), Lagasca 99 in Madrid and Lagoh in Sevilla and so it has the capacity to take on more promotion projects in the future, according to Miguel Pereda, CEO of the Socimi.

Following its recent asset sales, Lar has approved the distribution of an extraordinary dividend amounting to €25 million, charged against the accounts for 2018, equivalent to €0.80 per share. This represents the largest dividend in the Socimi’s history and is 67% higher than last year’s payout.

On Wednesday, the Socimi completed the sale of the last office building left in its portfolios – the property located at Calle Eloy Gonzalo in Madrid, which is now in the hands of Swiss Life.

In addition to its forecast new operations, Lar is also working on the repositioning of its assets, with plans to invest €40 million in total.

Original story: El Economista (by Alba Brualla)

Translation/Summary: Carmel Drake

AEW Buys an Office Building in Barcelona from Lar for €28.8M

31 January 2019 – Eje Prime

The German company AEW has completed the purchase of a building in Barcelona from Lar. The real estate fund manager has completed the acquisition of a building from the Socimi, which is on a mission to divest its non-strategic assets.

The purchase of the building, which is located on Calle Joan Miró in the Catalan capital, has been closed for €28.8 million. The property, which has an approximate surface area of 10,500 m2, will be subjected to a comprehensive renovation for the construction of offices.

“The strong labour market and the limited available supply has convinced us to enter the office market in Barcelona for the first time”, explained Carsten Czarnetzk, Head of Operations at AEW in Spain.

AEW is one of the largest administrators of real estate assets in the world, with assets worth €63.5 billion. AEW has more than 600 employees, and its main offices are located in Boston, London, Paris and Hong Kong. The group opened its office in Spain in January 2017 and has completed more than €400 million in transactions since then.

Original story: Eje Prime 

Translation: Carmel Drake

Blackstone Negotiates the Purchase of 37 Logistics Centres from Neinver for €290M

22 November 2018 – Eje Prime

Blackstone is on a mission in the Spanish logistics sector. The US giant is finalising the purchase of 37 logistics centres that the Spanish group Neinver and the Californian fund Colony Capital own in the country, which span a total surface area of 261,000 m2, for €290 million.

In this way, Neinver, owned by the businessman José María Losantos, and Colony will put an end to an alliance that was created in 2015 to invest €200 million over the medium term in properties relating to the logistics sector in Spain, according to reports from Expansión.

For Blackstone, the operation represents a new boost to its investment strategy in Spain, where it already owns a portfolio worth more than €22 billion. The fund has managed to convert itself into the largest owner of real estate in the country with operations in the residential, hotel and logistics sectors.

In terms of this latest segment, the group already owns 1 million m2 of industrial space in Spain, through Logicor, in which it retains a 10% stake. In July, Blackstone purchased Lar’s logistics portfolio for €120 million, its first major industrial acquisition in the country.

Meanwhile, Neinver divides its activity between investment in land and logistics warehouses and the management of 19 outlets. The group carries out its activity in Spain, Portugal, Italy, Germany, France, the Czech Republic and Poland. Moreover, Colony Capital is a US company specialising in real estate operations with USD 44 billion in assets under management.

Original story: Eje Prime

Translation: Carmel Drake

Grupo Lar to Invest €250M in New Logistics Developments

28 October 2018 – Expansión

The property developer Grupo Lar is going to bet on the logistics segment in Spain over the coming years, with a planned investment of around €250 million to purchase land and build warehouses.

The Managing Director of Grupo Lar, Miguel Amo, explained that the first project included in that investor package is being carried out in Quart de Poblet (Valencia), where the firm is on the verge of purchasing a plot spanning 40,000 m2. The pre-agreement to the purchase was negotiated in July and the audit has recently been completed prior to the construction of a warehouse measuring 25,000 m2 on the site.

Following that project in Valencia, the new team for the logistics segment at Grupo Lar is preparing and negotiating other investments in Barcelona, Madrid, Málaga, Sevilla and País Vasco, with the “same structure”: minority shareholders and in-house management.

The investments in logistics land have been decided by the property developer Grupo Lar – which is owned in its entirety by the Pereda family – after it was announced that the new strategy of the Socimi, Lar España Real Estate, will focus purely on the shopping centre segment (“retail”).

Grupo Lar owns 10% of Lar España and is that firm’s second largest shareholder. It will also operate the Socimi’s management contract until 2021.

Lar España’s focus on retail has caused the Socimi to divest from other segments, such as residential, offices and logistics.

According to Amo, the difference is that the Socimi’s logistics investments involved finished warehouses, whereas those planned by the group include the acquisition of land and development. In the residential segment, Grupo Lar has a portfolio of land for 15,000 homes, of which around 4,000 are active in the seven markets in which it operates: Mexico, Spain, Peru, Colombia, Brazil, Poland and Romania.

The firm expects to close 2018 with around 2,000 homes delivered, for almost €450 million.

In Spain, the group has around 2,000 homes in its portfolio, of which 350 are active, with plans to handover around 250 during 2018.

Original story: Expansión

Translation: Carmel Drake

Lar puts its Office Portfolio up for Sale for €110M

5 October 2018 – Eje Prime

Lar is strengthening its plan to divest its non-commercial assets. The Socimi has placed its office portfolio on the market for €110 million. The package comprises two buildings, one located in Madrid and the other in Barcelona.

The two properties span a combined gross leasable area (GLA) of 23,800 m2. The building in Madrid is located on Calle Eloy Gonzalo and has a surface area of 6,363 m2. The Socimi acquired the asset in December 2014 for €12.7 million, according to Expansión.

The office building in Barcelona has a surface area of 8,610 m2 and is located on Calle Joan Miró. The property cost Lar €19.7 million in total when it purchased it in June 2015.

This operation follows other divestments that Lar has been carrying out since September 2017 when it sold its office building on Calle Arturo Soria in Madrid to Colonial for €32.5 million. Similarly, last July, the Spanish Socimi completed the sale of its logistics portfolio to Blackstone for €120 million.

To date, the divestments carried out by the company amount to €265 million, more than half the figure established in Lar’s business plan to 2021. In parallel, the Socimi plans to continue investing in shopping centres and retail parks. The group’s most recent acquisitions have included the purchases of the Rivas Futura shopping centre in Madrid for €62 million and the Adadía shopping arcade in Toledo for €14 million.

Original story: Eje Prime

Translation: Carmel Drake

Lar España Sells 2 Out-of-Town Stores in Pamplona to AEW for €11.5M

3 August 2018 – Eje Prime

Lar España is continuing its selling spree. The Spanish Socimi has divested two out-of-town stores in the Parque Galaria Retail Park in Pamplona for €11.5 million. The buyer is the company Fructiregions Europe, owned by the fund AEW, which has acquired a gross leasable area (GLA) of 4,108 m2, according to a statement filed by Lar with Spain’s National Securities and Exchange Commission (CNMV).

With this operation, the Socimi is strengthening its divestment and asset rotation plan, which it currently has underway and which has allowed it to raise up to €276.5 million to “focus its efforts on strategic commercial assets”, according to explanations from the company.

For the assets sold in Pamplona, Lar España has managed to obtain profits of 37% with respect to the €8.4 million that it paid for them in July 2015. In total, the two out-of-town stores occupy a gross leasable area (GLA) of 4,108 m2.

As well as divesting its non-strategic assets, Lar España has launched a three-year plan that includes the purchase of strategic commercial assets, such as the deal it carried out recently with the Rivas Futura Retail Park (Madrid), which it acquired for €62 million, and the Abadía Shopping Arcade (Toledo), which it purchased for €14 million.

In total, the Socimi has funding to invest €247 million in commercial developments. Examples include Palmas Altas in Sevilla, which will open its doors in 2019, and for whose construction the company has raised almost €100 million in bank financing; and Vidanova Parc, in Sagunto (Valencia), which recently debuted its first phase. Moreover, Lar España is going to spend €49 million on the renovation of retail assets that it holds in its portfolio.

After divesting its logistics portfolio a few weeks ago, for which the fund Blackstone paid €120 million, Lar España now has 18 real estate assets in its portfolio worth €1,401.5 million, of which €1,136.5 million correspond to shopping centres, equivalent to 81% of the total. 6% of the portfolio comprises office buildings, worth €85 million, and the remaining 13% belongs to the residential market, where the company has €180 million in developments under construction.

Original story: Eje Prime

Translation: Carmel Drake

BCA: How one Architecture Studio Became a Leading Player in Barcelona’s 22@ District

7 May 2018 – Eje Prime

Albert Blanch and Merche Conca founded BCA in 1994 without a portfolio of clients and working from the living room at home. 25 years later, the architecture studio is a leading player in Barcelona, where it has carried out projects with Socimis and funds such as Colonial, Lar and Blackstone, and has generated an assembly line in which thirty of its own professionals work on 45 projects each year. That number is the average that Blanch likes working with – “fifteen projects coming in, fifteen underway and fifteen being completed”, says the architect – who, from his office in the Sant Gervasi-Galvany neighbourhood, confirms to Eje Prime that, “when projects don’t come to your door, you have to go and look for them”. It was this approach that enabled BCA to overcome the crisis without leaving Barcelona and to grow its turnover by 200% over the last few years.

Proof of this is its presence in the 22@ district, the new fashionable neighbourhood for the tertiary sector in Barcelona. In the so-called technological hub of the Catalan capital, a melting pot for large office projects being developed in the city, BCA has worked on fifteen jobs, including the Cornerstone building, the UA1 property and Torre Pujades (…).

But in order to handle this volume of buildings in the most rapidly growing prime area of Barcelona, BCA has had to win the trust of various real estate players over the last two decades. Once again, Blanch refers to his motto of not waiting for the opportunities to come to you. In this way, he and Conca launched their studio with clients that were “very important but with very small projects, including several in the banking sector”, says the architect. Leading entities in Cataluña such as La Caixa and Banco Sabadell backed their firm, which started out designing bank branches, “a product that its very limited from an architectural point of view but for which there was a lot of demand at that time and that guaranteed us income to allow us to survive”, adds Blanch.

That specialisation carried out by BCA also boosted the growth of the studio. Heads of the banks that they worked with recommended Blanch and Conca to their superiors for most high-profile projects such as entire buildings and regional offices, but “combining these larger jobs with the bank branches, that was our formula for success”, says the architect.

The remodelling of Vía Augusta, 21 for Colonial launched them into the office sector 

The next success story came with the complete remodelling of a building owned by Colonial on the corner of Vía Augusta and Diagonal, in the heart of Barcelona. That project, which was completed in 2000, “really put us on the map in the office sector”, says Blanch. More than one property developer and fund called at BCA’s door after that and allowed the firm to participate in larger projects (…).

Following the building on Vía Augusta 21, many more projects emerged, mainly in Cataluña but also in Madrid, the Community of Valencia, Navarra, Murcia, the Canary Islands and Aragón. And BCA does not only survive on offices. The studio also carries out projects in the residential, hotel, facilities and urban planning sectors (…).

Like many other large architecture studios, BCA has also undertaken work at airports. The firm won a public tender to expand Terminal C at El Prat (…).

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Socimi Lists its €46-Million Portfolio of Homes and Land in Madrid

27 April 2018

The countdown has started for Spain’s stock exchange to become home to a new real estate investment company listing. AP67 has received the approval to start trading on the Mercado Alternativo Bursátil (MAB).

Although the exact date of the listing is still unknown, the socimi will debut at a price of 6.65 euros per share and a market value of about 34 million euros.

The vehicle is specialised in the residential sector and has residential buildings, one residential plot of land, two industrial plots of land and several commercial premises. All the assets are located in the municipality of Leganés (Madrid) and have a market value of €46.5 million, according to calculations by the appraiser Gesvalt.

The two most valuable assets in its portfolio are a residential building and a housing development that is currently under construction: between them, they total 25.8 million euros, more than half of the total.

There are several major shareholders behind the vehicle: the minority interests that the MAB requires for a listing, as well as the architects Álvaro Rubio Garzón and Francisco Escudero López, who control more than 90% of the capital. According to the document published by the MAB, both created a property management company in 2001, based on real estate development for rental in the area of Leganés, “specifically in the main streets of the urban centre, in locations near the Universidad Carlos III and industrial property in the suburbs.”

AP67 will be added to the fifty-one socimis that are already present in the MAB and to the sector’s main players, which are on the Ibex 35 and the continuous market: Merlin Properties, Colonial, Axiare, Hispania and Lar. In its debut, the company will be advised by the registered adviser Armabex. The Renta 4 bank will act as a liquidity provider.

Original Story: Idealista

Photo: Gtres

Translation: Richard Turner

 

Lar España Excites the Market with its Logistics Portfolio

23 April 2018 – Expansión

The Socimi, which owns five complexes in Guadalajara and Valencia, has received a dozen offers for its assets, all of them for a price of more than €75 million.

Some of the players that have bid for Lar España’s logistics portfolio include the US fund Blackstone, P3 Logistic Parks – a platform controlled by the Singapore sovereign fund -, Palm Capital, CBRE Global Investors, Ares Management and Nuveen, according to market sources speaking to Expansión.

In the logistics sector, the Socimi in which the fund manager Pimco holds a stake, owns four complexes in the municipality of Alovera (Guadalajara), in the heart of the Corredor del Henares.

Together, that site comprises ten logistics warehouses with a total constructed surface area of 142,630 m2 occupied by tenants such as Saint Gobain Isover Ibérica, Tech Data, Carrefour and Factor 5. In addition, the Socimi owns a logistics complex in Almussafes (Valencia) containing a logistics warehouse with a constructed surface area of 19,211 m2. That warehouse is occupied by Valautomoción, the supplier of car parts and accessories to Ford, which was acquired by Ferrostaal in 2015.

According to the latest figures published by the Socimi, its portfolio of logistics assets has a valuation of almost €90 million. Moreover, Lar owns around 200,000 m2 of space for a new logistics development in Cheste (Valencia), which it is not planning to sell until it has finished construction there, to make the investment profitable, according to information reported by the company at the time.

According to Lar’s accounts, the land, which it purchased less than a year ago from Bertolín, has doubled in value since the investment was made. The Socimi paid €2.2 million for the 112,813 m2 plot in Cheste in May 2017 and, at the end of last year, it had a market value of €5.2 million.

Other divestments

Lar España has launched an asset rotation plan to raise cash and undertake new investments in shopping centres After selling two office buildings to Colonial, both in Madrid, for €112 million, the company now has three office buildings in Madrid and Barcelona worth around €85 million.

Moreover, it expects to raise €110 million from the sale of its stake in the luxury residential development Lagasca 99 (Madrid), which it owns jointly with Pimco.

In parallel, the company is going to maintain its investment plan. It expects to allocate €220 million to new acquisitions in retail centres and parks and will invest €247 million in developments, especially commercial ones, and another €49 million on improving its assets.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake