The 4 Largest Socimis Have Raised €3,000M In 1 Year

13 June 2016 – Cinco Días

George Soros has just endorsed his commitment to the Socimi Hispania. Soros Fund Management, managed by the US magnate, subscribed once again to his share of the Socimi’s second capital increase, in which he is the majority shareholder. It is the most visible example of how international investors are still interested in these specialist listed real estate investment vehicles.

Since their creation, the four largest Socimis have raised more than €5,350 million in own funds, primarily from institutional funds and investors. In their respective debuts on the stock market, which all took place in 2014, they raised €2,600 million. Since then, all of them have also raised additional resources through capital increases. In total, they have raised €2,746 million of new financing in this way in the last 12 months.

Hispania completed the most recent operation at the beginning of June amounting to €230.6 million, and Soros participated in order to maintain his 16.7% stake, which required an investment of around €38 million. It was the second operation of its kind, after the Socimi undertook an accelerated placement in 2015 to raise a further €337 million. Its main investors include the international funds Paulson&Co and FMR.

The special tax framework that applies to Socimis, which has revitalised these firms since 2014, establishes that they are exempt from Corporation Tax, although they are obliged to distribute an annual dividend, on which its shareholders are taxed. These structures, which already existed in the USA (known there as REITs), have attracted international funds, who are backing the recovery of the real estate sector in Spain. The assets of the large Socimis, worth €9,235 million at the end of 2015, are rented out and include office buildings, shopping centres, bank branches, other premises, hotels and logistics warehouses.

The largest Socimi Merlin Properties, which is listed on the Ibex 35, has also completed two capital increases to raise €1,650 million. It completed its second round in August 2015, to raise €1,034 million, the largest in this sector. Following its purchase of Testa from Sacyr, the company chaired by Ismael Clemente now owns assets worth more than €6,050 million. Its shareholder structure is very fragmented and includes fund such as Blackrock, Invesco and Principal Financial Group.

Axiare Patrimonio, led by Luis López de Herrera-Oria, also raised €395 million in a capital increase last June. Finally, Lar España – which specialises in shopping centres – issued new shares worth €135 million last summer.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Metrovacesa Sells 16 Logistics Warehouses To CBRE GI

11 April 2016 – Expansión

The company has decided to focus its activity on the operation of its portfolio of commercial and office buildings.

Metrovacesa has sold a batch of 16 logistics warehouses located in one of the country’s main hubs, next to the A-2 Madrid-Barcelona motorway, to the real estate asset manager, CBRE Global Investors.

The real estate company, controlled by Santander, has described the operation as the divestment of assets from its real estate portfolio that it considers are non-strategic.

The batch contains 16 logistics warehouses with a combined surface area of 250,000 m2, which are leased to a dozen logistics operators, including FM Logistics and Luis Simoes.

The asset manager CBRE Global Investors said that it has acquired this batch of real estate assets on behalf of one of its main clients, which is investing in logistics warehouses across Europe.

Metrovacesa is currently focusing its business on operating its portfolio of commercial and office buildings, which it recently expanded through a non-monetary capital increase in which Santander and the real estate company’s other shareholder banks contributed a batch of office buildings worth around €1,000 million.

Original story: Expansión

Translation: Carmel Drake

2015: A Record Breaking Year For RE Investment

3 December 2015 – Expansión

Real estate investment in Spain will close 2015 at record breaking levels. According to the consultancy CBRE, the purchase of hotels such as the Ritz in Madrid, shopping centres such as Plenilunio and offices such as Torre Espacio, as well as operations such as the purchase of Testa, have driven up investment volumes in the sector to reach €12,250 million by 1 December. CBRE expects the sector to close the year with volumes of around €13,000 million, a figure never seen before in the Spanish market.

“2014 was a record year in terms of tertiary investment (non-residential assets). This recovery in the market saw investment volumes of more than €10,000 million, which equalled those seen in 2007 – the previous record-breaking year -. 2015 has not only seen a strengthening of this trend, it has also seen growth of 25%”, said Mikel Marco-Gardoqui, Head of Investment at CBRE España. “Moreover, it is worth noting that asset prices are now 30%-40% lower than they were in 2007”, adds Julián Labarra, Director of the real estate consultancy.

This record level has been boosted by the largest operation ever seen, namely the Socimi Merlin Properties’s purchase of the real estate company Testa for €1,800 million. Testa holds a portfolio of assets – mainly offices – worth more than €3,000 million. Nevertheless, even excluding that transaction, investment is growing at “an exponential rate”, with increases in the purchase of all types of assets. (…).

Offices, which continue to be investors’ preferred asset, have now reached an investment volume of €5,600 million, thanks to purchases such as Torre Espacio, by the Philippine businessman Andrew Tan for €558 million, and Castellana 89, by Corporación Financiera Alba for €144 million.

Currently, these properties in Spain offer investors minimum yields of between 3% and 3.75% in the case of well-located commercial premises and maximum yields of 6.5% in the case of specific logistics assets.

Hotels

Hotels, in particular, have experienced a significant boost this year. “In 2014, hotel investment volumes amounted to around €1,100 million and so far this year, that figure has already surpassed €1,900 million, which means that we expect to close the year with an investment volume of €2,000 million”, says Marco-Gardoqui.

The boost from investors has not only been felt in the purchase of non-residential assets, interest has also increased in the acquisition of land and property developments for joint promotion with local property developers. (…).

Looking ahead to next year, the experts at the consultancy firm expect that interest from the funds will continue. “We think that investment will amount to around €10,000 million in 2016, because although there will be fewer operations, prices will increase. Many funds are still raising funds, with specific amounts earmarked for Spain”, says Heriberto Terual, Director of Corporate Finance at CBRE.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Merlin Invests €153M In 5 “Express” Operations

2 October 2015 – Expansión

Following its purchase of Testa, the Socimi has purchased several logistics assets and 50% of a shopping centre in Madrid.

The Socimi Merlin Properties is continuing to grow its real estate portfolio. Yesterday, the company announced the completion of five new operations, with a total investment volume of €153.1 million.

The assets include five logistics warehouses located in Madrid and Guadalajara and 50% of the Arturo Soria Plaza shopping centre, also located in the capital. To obtain this stake in the Madrilenian property, Merlin has acquired the company Obraser, administered by Joaquín Molpeceres, for €34.8 million. The remaining 50% of the shopping centre, which has a surface area of 6,965 m2, is controlled by Acciona Inmobiliaria. The chain Sánchez Romero is the owner of the supermarket for which the property is renowned.

Logistics assets

In a second operation, Merlin has purchased three logistics warehouses located in Cabanillas del Campo (Guadalajara). The assets, which have a total gross leasable area (GLA) of more than 103,000 m2, are still under construction and are due for completion at the end of 2016. Merlin will pay €46.6 million for these warehouses.

Meanwhile, Merlin has also acquired two other warehouses, in the Gavilanes industrial estate, in Getafe, for €28.1 million. Those properties are also under construction. Finally, the Socimi has completed the purchase of a logistics platform in Los Olivos, also in Getafe, which is rented to Gefco. Merlin has paid €11 million for this platform, which has a surface area of 11,488 m2.

These are the first purchases that the Socimi, led by Ismael Clemente, has made since it reached an agreement with Sacyr to purchase its real estate subsidiary Testa for €1,793 million. To complete that acquisition, Merlin Properties launched a capital increase of €1,034 million.

Months earlier, in May, it completed another capital increase, amounting to €614 million, to raise finance to purchase new assets.

Prior to this operation, Merlin had a portfolio worth €5,616 million, including €3,202 million from Testa, in which it now holds a 77% stake.

Merlin’s shares closed at €10.65 per share on the stock exchange yesterday, taking its market capitalisation to €3,440.3 million.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Lar España Evaluates €200M Capital Increase

18 June 2015 – Europa Press

Lar España is analysing the possibility of increasing its share capital this year to take advantage of the “new opportunities” for investment in the real estate sector that it has identified.

The capital increase would amount to a maximum of €200 million, since the Socimi has been authorised by its shareholders to increase its capital by up to 50% of its current level, according to reports filed with Spain’s National Securities Market Commission (CNMV).

Lar España is evaluating whether to raise further capital after its recent bond issue (€140 million) in February, which it also undertook to raise funds to invest in the real estate sector.

With this latest increase, the company will join many of the other Socimis constituted last year, such as Hispania, Merlin and Axiare, which have also resorted to capital increases to raise funds with which to purchase new real estate assets to grow their portfolios.

In the case of Lar, the company claims to have identified “new investment opportunities”, which have led its board of directors to “launch a process to analyse the possibility of undertaking a capital increase in 2015”.

Nevertheless, the Socimi says that, the final operation “will be subject to changes in market conditions”.

Since its constitution and IPO in early 2014, Lar has purchased assets worth around €550 million, including seven shopping centres in several regions, four office buildings in Madrid, eleven logistics warehouses, three medium-sized retail premises and a residential building in Madrid.

Original story: Europa Press

Translation: Carmel Drake

Deutsche Will Invest €200M In 2015 Through Its RE Fund

1 June 2015 – Expansión

Following the arrival of the first investors, which had a more opportunistic profile, the Spanish real estate market is now starting to show the first signs of stability, with the arrival of more conservative investors. That is the case of the German institutional funds, which manage the savings of wealthy investors and insurance companies in the European country.

These German funds include Ara (Alternative and Real Assets), which is the real estate division of Deutsche Bank. “There is a clear commitment to the recovery of the Spanish real estate sector. In 2014, investment in the non-residential sector amounted to €8,000 million, but we should remember that at the peak of the boom, that volume amounted to €11,000 million. We believe that there are still a lot of good products that have not yet come onto the market”, explains Carlos Manzano, head of Real Estate España at Deutsche Asset & Wealth Management.

For this year, Ara has set a target of investing around €200 million in property in Spain. “We have the capacity to invest twice as much as we (currently) hold (in the portfolio)”, he says.

Change of course

The former Reef has focused its activity in recent years on managing its portfolio, which has included a few divestments. “Pre-2006, we made a lot of investments but then we stopped investing due to the crisis and focused on managing. Now the market has changed and we believe that there is still a lot of good property that has yet to come onto the market”, he explains.

One of their recent major transactions included the purchase of a batch of 1,350 branches from BBVA in the summer of 2009. Those properties, managed by Magic Real Estate, ended up in the hands of the Socimi Merlin Properties. “We decided to sell BBVA’s branches even though there was a business plan (for them) until 2018. But we wanted to take advantage of the opportunity in the market and in the end we obtained a better return than we initially expected. In December, we also sold an office building in Las Rozas (purchased in 2011). But we do not want to be sellers in the Spanish market, but rather buyers. We have now divested everything that we wanted to”.

Currently, Ara is on the look out for good assets. “There are lots of German funds and private clients that are expressing their interest and their preferences have not changed. They are looking for good assets in central locations. It is a product profile that is hard to find”.

Its targets include offices, commercial assets and logistics warehouses; these products are “very much in vogue”, according to the head of the German fund.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Lar Acquires 3 Logistics Warehouses From UBS For €18.5M

27 May 2015 – Expansión

The Lar Group has purchased three logistics warehouses in the Alovera de Corredor del Henares (Madrid) and Juan Carlos I de Almussafes (Valencia) industrial estates for €18.5 million from UBS Real Estate GmbH, through its two fully owned subsidiaries.

Original story: Expansión

Translation: Carmel Drake

CBRE: Madrid Is 6th Most Attractive City For RE Investment

19 May 2015 – Expansión

Madrid is the sixth most attractive city in the world for real estate investors, behind London, Tokyo, San Francisco, Sydney and New York, according to the Global Investors Intentions Survey, compiled by the real estate consultancy CBRE, based on responses from 700 international investors.

Thus, the Spanish capital is more attractive that most other major cities, including Paris and Los Angeles, thanks to a 98% increase in the volume of real estate investment in 2014 with respect to the previous year; the second highest increase after San Francisco, which rose by 126%.

The study notes that optimism has returned to the international investment market thanks to improvements in the economic outlook and in confidence, although it underlines the intense competition that exists when it comes to acquiring assets and the doubts that still exist about the weakness of the economy.

Thus, 53% of international investors expect to increase their exposure to the real estate sector.

Moreover, it seems that demand exceeds supply and that there is significant interest in trans-regional transactions, with Western Europe being the most favoured region, followed by Asia Pacific.

By sector, offices are the assets of choice for 33% of investors, whilst retail sales have experienced the largest decrease.

It also notes the increased interest in logistics warehouses, up from 14% last year to 17% in 2015.

The acquisition of real estate debt is another option that investors are seeking, as well as student accommodation (halls of residence), assets relating to the health sector and retirement homes.

International investors seem to be willing to take on increasingly more risk, in search of higher returns. 51% of those surveyed said that this year they will focus on opportunistic and value added assets, whereas last year only 43% were interested in such assets.

This increase has been observed above all in the United States and in the regions of Europe, the Middle East and Africa. By contrast, there seems to be greater interest in prime assets in Asia-Pacific.

Original story: Expansión

Translation: Carmel Drake

Axiare Closes Accelerated Placement Ahead Of Its Capital Increase

18 May 2015 – Expansión

The Socimi has just closed an accelerated placement with investors ahead of its capital increase.

The listed real estate investment company (Socimi) Axiare Patrimonio wants to maintain the speed of investment that has enabled it to disburse €460 million since its IPO last summer. To this end, the company has announced a capital increase of €394 million, with the aim of doubling its share capital.

Last week, the Socimi led by Luis López de Herrera Oria launched a brochure containing the details of the transaction, which would involve the issue of around 35.87 million new shares, at a nominal value of ten euros per share, plus a premium of one euro (per share).

The capital increase will have preferential subscription rights. The Socimi’s shareholders include funds such as T. Rowe Price and Taube Hodson, and Citigroup.

Axiare owns assets worth €507.95 million, including office buildings in Madrid and logistics warehouses in Guadalajara (pictured above). During the first quarter of 2015, the Socimi generated revenues of €7.59 million and a profit of €2.32 million.

Placement

Ahead of this capital increase, Axiare closed an accelerated placement of the shares of one of its largest shareholders, Perry Capital, on Friday. The objective of this placement was to provide greater liquidity for the company’s stock.

The placement of 3.5 million shares (representing 9.721% of its share capital) was closed in record time (one hour) and with a slight issue premium (€12 per share). Buyers of these shares included institutional investment funds from the US, Britain and Norway, according to sources at the company.

The subscription rights for these shares will begin trading on 20 May, whilst the shares themselves will begin trading on 10 June. On Friday, Axiare’s share price closed down 0.29% on the stock exchange at €11.94 per share.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Who Are The New Property Owners?

20 April 2015 – Expansión

Plans / International funds and Socimis are the main players in the sector

Apollo, Blackstone, Cerberus, HIG, Hispania, Intu, Lone Star, Merlin and Oaktree have gone from being virtually unknown names to being the key players in the Spanish property market (in a matter of months).

Over the last year and a half, large international funds have been investing hundreds of millions of euros in the purchase of property in Spain, both directly as well as through listed real estate investment companies (Socimis).

Värde, Apollo and Lone Star all burst into the market by purchasing real estate platforms from financial institutions. The latter has said that it wants to become the largest land developer in Spain and to that end, it is considering purchasing not only portfolios of land but also small and medium-sized (land) developers. Lone Star has already purchased the real estate arm Neinor from Kutxabank for €930 million, as well as Eurohypo’s loans in Spain for a further €3,500 million.

HIG and Castlelake are looking to buy land in Spain too.

Another investor that is backing Spain with more strength than ever is Blackstone. The largest fund manager in the world has purchased 1,860 homes for rent, as well as a group of office buildings, located in Madrid and Barcelona. One of the players that is most interested in the office market is the Spanish fund Meridia Capital, led by the former Sareb (director) Juan Barba; it has purchased a portfolio of office buildings from General Electric. It is competing against IBA Capital – the French manager has created a Socimi, which has not yet been listed, with headquarters and commercial buildings.

Along with these offices, the other assets that are sparking the most interest amongst investors are shopping centres. Green Oak has already invested €160 million together with Baupost on the acquisition of 6 properties from Vastned. The British group Intu wants to become the leading player in this segment in Spain and to that end, it paid €451 million for Puerto Venecia. Oaktree spent €100 million on Gran Vía de Vigo.

Other important players in this new era for the real estate sector are Socimis. Axia RE, Hispania, Lar España and Merlin have invested almost €3,000 million in assets, which include hotels, offices, logistics centres and warehouses. This last type of asset is attracting considerable interest. The fund Colony has just formed a partnership with the Spanish company Neinver to purchase 16 logistics warehouses.

Finally, in the hotel segment, Cerberus and Orion have purchased Sotogrande, the real estate subsidiary of NH for €225 million.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake