Tag: lender

Metrovacesa to Invest €400M in a 2,870-Home Residential Project in Sevilla

7 June 2018 – Eje Prime

Metrovacesa is looking south in its growth plan for the next few years. The listed property developer has unblocked, together with the Town Hall of Sevilla, what is going be its largest project outside of Madrid and Barcelona and what constitutes the largest development currently being planned in the Andalucían capital.

The project is going to bear the name of the Sevillan neighbourhood in which it is located, Palmas Altas Sur, and will consist of a 2,870-home development, of which 2,000 units will be built by Metrovacesa. The remainder will be social housing properties and their construction will be entrusted to the Town Hall, according to El Confidencial.

For the property developer, this land is the most significant plot that it has undeveloped at the moment in its Andalucían portfolio – that region accounts for 25% of the company’s total land bank. The first 600 homes in Palmas Altas Sur will start to be handed over from 2021. Moreover, Metrovacesa will also build 400 VPO homes as part of its construction plan for the area, which will last for five years.

In terms of investment, in the access routes and urbanisation of the land, Metrovacesa is going to invest €60 million, which will come from the corporate loan the firm signed with seven financial institutions at the end of 2017. For the construction of the residential buildings, Pérez de Leza has announced that they will be financed through property developer loans for each phase.

Original story: Eje Prime

Translation: Carmel Drake

Gov’t Approves New Mortgage Bill That Favours Borrowers

7 November 2017 – Inmodiario

The Government has approved the Mortgage Bill, which transposes the corresponding European Directive and seeks to increase the transparency of mortgage contracts, according to explanations provided by the Minister for the Economy, Industry and Competitiveness, Luis de Guindos (pictured below, left).

In terms of the transposition, De Guindos said that the legislation has opted for the alternatives that are most favourable for the mortgage holder in every case. In this way, commissions for the early repayment of variable rate loans will be reduced, and even cancelled from the fifth year onwards; a maximum commission (cap) will be set for fixed-rate loans, compared to the current situation where up to two commissions may be applied, one of which has no kind of limit.

Moreover, the legislation establishes the right of consumers to change the currency of a loan taken out in a foreign currency to the domestic currency or any other; plus it prohibits cross-selling – which obliges the consumer to contract a series of financial products as conditions to obtaining a mortgage – and it regulates the legal framework for mortgage brokers.

The Ministry of Economy has said that the bill is not limited to simply transposing the EU Directive, but also responds to legal rulings that have expressed the need for greater transparency in terms of mortgage regulation.

In this sense, the legislation facilitates the conversion of variable rate mortgages to fixed-rate products, for both new mortgages as well as those already underway. The commissions for making such a change will be cancelled from the third year and the notary and registration fees will be reduced.

Other changes mean that the lender must provide the client with detailed documentation about the mortgage, including the most “sensitive” clauses and scenarios showing the evolution of instalments. Moreover, the borrower will be entitled to receive free advice from the notary about the contents of the contract for seven days prior to signing.

The legislation also regulates the early repayment of loans, “in such a way that it avoids any kind of discretion when it comes to agreeing this clause”, according to Luis de Guindos. The requirement for a financial entity to be able to initiate the foreclosure of a mortgage is extended to nine unpaid monthly instalments or an amount that exceeds 2% of the capital granted during the first half of the mortgage term; and 4% or twelve unpaid instalments during the second half.

Original story: Inmodiario

Translation: Carmel Drake

Allianz Real Estate Opens Branch In Spain

22 September 2016 – El Economista

The real estate arm of Allianz has arrived in Spain, attracted by the investment opportunities on offer here. Allianz Real Estate has just opened a branch in Madrid to track its operations in the Iberian Peninsula and take responsibility for the management of the properties owned by the group.

To lead the project, the firm has hired Miguel Torres, ex-Arthur Andersen, who has been linked with GE Capital Real Estate since 1995, according to the Commercial Registry. “After the recovery of the real estate markets, Spain and Portgual are once again in the focus of international real estate investors”, explained the CEO of Allianz Real Estate, François Traush, who highlighted that the incorporation of Torres into the team aimed “to identify attractive investment opportunities to allow us to continue constructing a diversified portfolio”, for our shareholders.

With more than 20 years of experience in the real estate and structured financing sectors, Torres joins the company from GE Capital in Mexico, where he served as Director General, leading a team of 50 specialists and an unit with almost €3,500 million in real estate financing. Prior to that, he held various management positions at GE entities in Madrid, New York and Stamford.

Allianz Real Estate’s portfolio contains €41,700 million in assets under management: €29,300 million in direct and indirect investments, plus loans amounting to €12,400 million, based on figures at 2015 year end, when it closed operations amounting to €7,400 million. Its goal is to reach the €60,000 million threshold “within the next few years”.

The company, which has subsidiaries in Germany, France, Italy – into which the operations in Spain will report -, Switzerland and the USA, includes the office in Madrid as part of its regional expansion.

Its investment aspirations cover almost the entire sector: from taking stakes in debt, to investing in listed companies, direct and indirect positions in financing and building a significant property portfolio.

It debuted as a lender in Spain a year and a half ago, with a loan for €133 million that allowed the Socimi Merlin to acquire the Marineda Shopping Centre, which, at the time, was the largest investment in this type of complex since 2008.

The strategic logic is two-fold. The low interest rate environment is causing insurance companies to dust off old commitments to property in light of the meagre returns being offered by public debt and the high capital consumption involved with other investments. Companies such as Mapfre, Mutua Madrileña, Santalucía, Reale and Línea Directa have acquired properties recently and are looking for opportunities, although their involvement as financiers is residual or non-existent, unlike the role performed by multi-national firms such as Axa and Allianz.

The sector hopes that Brussels will smooth the path, easing the burden of callable capital, given that the Juncker Plan itself wants to involve infrastructure projects that Europe needs.

In addition, the real estate sector is presenting itself as an alternative that offers higher returns, especially given the security of their operations. The high expectations of growth in terms of office rents and a notable increase in the number of small operations, is converting this segment of the market into one of the most attractive options. In the case of the most cutting-edge buildings and those located in prime areas, rents may increase by up to 22% over the next three years. For the other more modest assets, the annual yield amounts to around 7%. Similarly, yields of commercial premises amount to around 7.5%,and rents are expected to increase by an average of 2.4% p.a. in Madrid over the next two years.

Original story: El Economista (by Eva Contrerar and Alba Brualla)

Translation: Carmel Drake

Deutsche Bank Lends €50M To RE Firm Aktua

18 April 2016 – Expansión

Deutsche Bank was involved in the largest direct lending transaction in Spain last year. Moreover, 2016 is only three and a half months old, but the same bank is already the lender in one of the largest operations of the year. And with the same borrower.

In 2015, the real estate services platform Aktua was the recipient of a €150 million injection, which Deutsche Bank granted to refinance its debt and allow it to pay a dividend to its owner, the fund Centerbridge. Within the next few days, the details will be finalised regarding the transfer of that platform to Lindorff.

Now, the German bank has increased its loan amount by €50 million. The aim is for Aktua to be able to finance the purchase of the management of Ibercaja’s real estate assets, which the company announced in February.

With these two operations, the financing that Deustche Bank has granted to Aktua, the former real estate subsidiary of Banesto, amounts to €200 million, which increases the volume of direct lending operations that the German bank has completed in Spain. “In the corporate segment alone, we have lent more than €500 million in two or three years”, explains Jesús Medina, Director of Structured Finance at Deutsche Bank.

That amount also includes the funds loaned to the chocolate company Natra at the end of 2015. The German financing entity entered into a syndicate of lenders after purchasing the firm’s debt from a Spanish bank in the secondary market, and as a first step, it participated in the restructuring that Natra needed to complete to survive. But the second step involved putting new money on the table to enable the chocolate company to do more than survive. And it did so in the form of a direct loan, together with another debt fund, amounting to around €20 million. “Our feeling is that there are operations in the market and that the structured financing segment is going to continue to grow, but we have to meet the needs of the moment and the windows of opportunity that arise”, added the executive.

Original story: Expansión (by I. Abril and D. Badía)

Translation: Carmel Drake