Tag: Luxembourg

Corestate to Invest €100M in Student Halls By 2019

4 December 2018 – Eje Prime

Corestate is growing in Spain three years after its arrival. The Luxembourg-based fund manager is going to invest €100 million in the development of new student halls in the Spanish market between the end of this year and 2019, according to comments made by Christopher Hütwohl, the Head of the company in the country, speaking to Eje Prime.

Currently, the group has several plots in its sights, located in the main provincial capitals of Spain. “Valencia, Málaga, Pamplona, Sevilla, Madrid, Barcelona, Bilbao and Alicante are on our radar”, explained the executive, who also confirmed that between December and the first quarter of next year, the company plans to close at least three operations.

Corestate’s main objective involves becoming one of the top three players in the student hall market in Spain. “It is a segment that still has a lot of potential, which is why we do not want to limit ourselves to a specific number of projects”, says Hütwohl. In fact, the director confirmed that the company plans to develop around three developments in each city, with capacity for between 200 and 350 beds, “except for in Alicante due to the limitations of that territory”.

Similarly, the group has the intention of expanding its range of investments in Spain from 2019 onwards. “Now we are very focused on the market for student halls, but we also want to undertake more operations, especially in the office, retail and residential segments across the whole Iberian Peninsula”, explained the executive. In this way, Hütwohl made clear the company’s objective of entering the Portuguese market before 2020.

Corestate sweeps across Europe

This year, Corestate has undertaken one of the largest operations in Europe in the market for student halls of residence with the purchase of CRM Students for €17 million. It is the largest manager of student halls, which operates in the United Kingdom, with 24,000 beds spread across 145 cities. “The type of collaboration that we will carry out has yet to be determined, but thanks to that acquisition, we have exceeded the 30,000-bed threshold in the European market”, said the executive.

Headquartered in Luxembourg and with 560 employees, Corestate has 41 offices around the world, located in cities such as Frankfurt, London, Madrid, Singapore and Zurich. In Spain, the company’s team comprises three people, a number that will grow as new projects are delivered.

The company led by Michael Bütter ended 2017 with revenues of €195 million and the group expects to achieve a turnover of €230 million in 2018. The gross operating profit (EBTIDA) amounted to €123 million in 2017, whilst the net result amounted to €93.3 million.

Original story: Eje Prime (by B. Seijo)

Translation: Carmel Drake

Corestate Acquires 24 Commercial Properties for €212M

9 November 2018 – Eje Prime

Corestate has acquired a portfolio of retail assets. The Luxembourg-based fund manager has purchased 24 commercial properties, located in 17 German cities, for €212 million. The properties comprise a total surface area of 100,000 m2.

The tenants of these assets include retailers such as New Yorker, Rewe, Müller and Dm. With this operation, Corestate is fulfilling its latest investment program launched in April, through which it plans to invest €250 million in total, according to reports from Property EU.

“Our investors are still convinced by the success of retail assets in the pedestrianized areas of medium-sized and prosperous German cities”, said Thomas Landschreiber, co-founder of Corestate. “We will continue with this focus and we will also diversify our range of products in the retail sector with more investment programs”, he added.

Corestate arrived in Spain in 2015 hand in hand with the Villar Mir Group, but it has a long history in markets such as Germany, where it owns 6,000 beds in student halls of residence. The company’s investments include retail assets (with premises on the high streets of medium-sized German cities), offices, residential and micro-flats.

Original story: Eje Prime 

Translation: Carmel Drake

Just Four Socimis Own Almost 20,000 Rental Homes in Spain

22 July 2018 – El Diario

The debates over rental housing, rising prices and the risk of a new real estate bubble are all continuing to rage. Whilst Pedro Sánchez’s government has started to outline its new policy to avoid a hike in prices, investors are not letting up in their frenzy to take positions in the sector. Proof of that is the continuous trickle of new listed Socimis specialising in the residential rental sector.

One of the latest entities to hit the headlines in this regard is Testa Residencial, whose General Shareholders’ Meeting approved its debut on the Alternative Investment Market (MAB) this week. That secondary market, specialising in Socimis and companies with smaller market capitalisations, will have 19 companies that either specialise in housing or own a significant portfolio of rental homes. Together they own a volume of assets that now comprise almost 24,000 homes, with a combined value of just over €4.1 billion.

Specifically, Testa is going to make its debut on the MAB as the largest rental home real estate company on the secondary market. Following its most recent operations, the Socimi now has 10,573 homes. The entity is owned by BBVA, Santander and Merlin, amongst other shareholders. It is followed, in terms of the number of assets owned, by Albirana, Fidere and Torbel, the three residential Socimis owned by the vulture fund Blackstone, which together own more than 9,300 homes.

Those four companies alone own almost 20,000 rental homes, according to data registered by the companies themselves in their issue brochures or annual accounts. That figure coincides with the plan outlined by the Minister for Development, José Luis Ábalos, which includes the creation by the Government of a stock of public housing for rent over the next four to six years.

Another of the most important Socimis in this field is Témpore, a subsidiary of the bad bank, Sareb, in which the company that owns the toxic assets of the rescued savings banks has placed some of its best homes and which made its stock market debut in March. It owns almost 1,400 homes and announced recently that it will be increasing its portfolio with new assets from Sareb.

Madrid is the province that is home to the most homes owned by the almost twenty Socimis that are listed on the MAB, accounting for 47% of the total (…). It is followed by the province of Barcelona, with 22%, and to a lesser extent, Valencia, with just over 4%. Together, those three provinces account for almost three-quarters of the assets owned by those entities.

Rising yields

The real estate consultancy firm JLL justifies this interest from the Socimis in rental housing by the significant returns that they generate. According to that firm, over the last year, rental homes generated a yield of 11.4%, compared with 10-year public bonds, for example, which generated a return of 1.6%. “Our forecasts indicate that yields will grow by 6.1% over the next three years”, they add, although they highlight that there are differences by region.

JLL specifies that the market is “highly fragmented” despite the “profound transformation” that is happening in the rental housing sector due to the development of Socimis and the arrival of institutional investors. The consultancy firm points out that these types of real estate investors are faced with the limitation of a shortage of entire buildings available for rent, a model that they prefer because it allows for a more efficient management. For that reason, they say that investors such as Testa and Azora are looking to grow their portfolios by building new rental homes in collaboration with property developers and construction companies.

Another noteworthy point about this growth in the number of Socimis dedicated to rental housing is the ownership of the companies. Almost half of the real estate companies that are listed on the MAB, eight to be precise, are controlled by companies that have their headquarters in Luxembourg. Such is the case of Albirana, Elaia, Elix Vintage, Fidere, Hadley, and Torbel, a company that is also indirectly controlled from the Cayman Islands. Another of the companies is located in The Netherlands (Barcino) and two others, Galil and VBare, are linked to Israeli investors (…).

Original story: El Diario (by Diego Larrouy)

Translation: Carmel Drake

Mapfre & GLL Launch New €300M Office Fund

8 March 2018 – Iberian Property

The insurance company Mapfre and GLL have just formed a new partnership for the launch of a new investment fund amounting to €300 million.

The vehicle will focus on the purchase of offices in some of the major European markets, such as Germany, France, the Netherlands, Italy and Luxembourg, according to the Spanish real estate firm. The idea is to achieve returns of 4%-6% per year, diversifying the portfolio of the entities.

In Spain, Mapfre already owns a portfolio of buildings including Plaza de la Independencia, 6 in Madrid and Torre Mapfre in Barcelona.

Original story: Iberian Property

Edited by: Carmel Drake

Vesta Real Estate Fund Invests €100M In Renewal In Portgual

26 October 2017 – Iberian Property

The new Vesta Real Estate Fund, which is headquartered in Luxembourg, is preparing to invest a total of €100 million in the acquisition and renewal of residential real estate in Portugal, and its subsequent retail sale.

The fund is the result of a partnership between Quantico, an investment company founded and headed by Carlos Vasconcellos Cruz (pictured above), Ubeda, from Carlos Mallo, and Bank of Andorra, specialised in private banking Andbank, and it is going to focus on opportunities in Lisbon, Estoril, Cascais and potentially Oporto.

With a lifespan of 6 years, this vehicle adopts the form of a SICAV-RAIF, supervised by the Luxembourg monetary authorities, and each property to renew will be acquired by a separate vehicle under Portuguese law. Clients of Andbank, Quantico and Ubeda, are the main participants of this fund, which has €100 million to apply over the next 12 to 18 months, according to a Quantico press release.

Carlos Vasconcellos and Carlos Mallo, advisors of the fund, explain that “despite an increase in the acquisition prices of real estate to renew in premium areas, there is still much work to be done and good investment opportunities in well-located buildings in prime areas of the city and Cascais, and which require deep renewal and high technical complexity”.

The managers explain that “we do not buy at speculative prices, and we believe that in Lisbon, Cascais and Oporto, there is room for selling prices to remain stable or even rise, as there is a significant gap between prices there and in other comparable European cities. Portugal, and particularly Lisbon/Cascais offer unbeatable levels of attractiveness and quality of life”.

Original story: Iberian Property (by Ana Tavares)

Edited by: Carmel Drake

RE/MAX: The RE Recovery Is Spreading Across Europe

12 June 2017 – El Mundo

The real estate market is growing, not only in Spain, but also in Europe, according to the Housing Report compiled by RE/MAX Europa. This improvement is being reflected in high levels of demand and rising prices, a trend that looks set to continue over the coming months in the property sector of the Old Continent. The good borrowing conditions and the incentives, especially for those buying their first home, are two of the main factors that are driving this growth.

Specifically, in Spain, house prices are stable, with potential for growth. “The increase in wages in Spain, the access to financing, as well as the political stability are posited as the most important factors for driving this upward trend in prices”, explain RE/MAX Europa.

Specifically, since 2015, the sales prices of family homes, as well as of flats and apartments, have increased by 4.5% on average in urban areas, where the average price per square metre has risen from €1,651/m2 to €1,727/m2. House prices in urban areas are expected to increase by 1.8% in 2017 and by 1% in the case of properties located in small towns.

And the picture is even more buoyant in the rental market. Prices per square metre have risen by 9.8% in the large cities and by 7.7% in small towns. In this way, the average monthly rental cost in a Spanish city amounts to around €800/month, whilst in the smaller towns, that figure stands at around €600/month.

The recovery of the real estate sector at the European level is based, above all, on low interest rates and, therefore, loans that are accessible to the public. This situation is “currently being seen in almost every country in Europe”, said the study. “That is resulting in higher demand, which is driving up prices in almost every segment and area”, it adds.

In Slovakia and Estonia, for example, thanks to these favourable conditions, there has been a significant increase in the construction of new homes, said RE/MAX Europa. In Malta, there has also been growth in the rental market, due to the rising number of overseas employees living on the island. Markets such as Portugal, Greece and Scotland “have been recovering really well over the last few years and are now showing clear signs of stable growth, with the prospect of more transactions in the future”.

Cities are improving

The experts at RE/MAX confirm that between 2015 and 2016, sales prices rose for apartments and family homes. In particular, prices per square metre rose significantly in the case of urban apartments, specifically, by 13% in certain cities in Lithuania, Germany and Luxembourg. The sales prices of houses in small towns also rose and are expected to increase by 4% in 2017 in Austria and Estonia. Nevertheless, prices are predicted to remain stable in France, Greece and Switzerland.

Rental prices also increased in 2016. Specifically, by 10% for urban apartments in The Netherlands, Romania and Spain, and by 16% in Malta. The experts at RE/MAX predict that rental prices will increase or remain stable in the majority of Europe during 2017.

One of the most important criteria in determining differences in prices is location. According to Michael Polzler, CEO of RE/MAX Europa, “the sales prices of apartments vary by 64%, depending on whether a property is located in an urban area or in a small town. For family homes, that difference amounts to 44%”.

Original story: El Mundo

Translation: Carmel Drake

Armabex: “Spain’s Socimis Share Several Common Denominators”

15 November 2016 – Idealista

(…). According to a report prepared by the firm Armabex, the registered advisor of the Alternative Investment Market (MAB), most of the Spain’s Socimis share the following features: ownership structures, location of their assets and even the type of properties that comprise their portfolios.

“A study of the sector shows that, nowadays, the standard Socimi is: listed on the MAB; belongs to non-resident shareholders; holds between 5 and 20 assets in its portfolio; invests primarily in offices and rental housing; invests in properties that are primarily located in Madrid and Barcelona; and has very controlled levels of debt”, explains Antonio Fernández, Chairman of the advisory firm.

There are currently 25 listed real estate investment vehicles on the MAB and more than half have debuted on the platform during 2016. So far this year, 14 companies have listed on the MAB, up by 75% compared to last year. Those companies have a combined market value of more than €3,230 million (equivalent to the market capitalisation of giants such as Mediaset), have assets worth around €7,600 million; and they share several characteristics.

One of the most important is the proliferation of foreign shareholders. According to data from Armabex, 56% of these companies depend on non-resident capital. They tend to be funded by international, professional and specialist investors, who have extensive knowledge about management and the real estate sector and who use companies established in Luxembourg to channel their investments, (….), which allows them to be more tax efficient.

There are currently 14 vehicles on the MAB that display these characteristics; and together, they hold assets worth more than €5,300 million, equivalent to 70% of the total value. Examples include Euro Cervantes, owned by the Singapore Government; and ISC Fresh Water Investment, which is headed up by Mosiés El-Mann Arazi, a famous Mexican property developer. (…).

The second point that the Socimis have in common is their clear commitment to Spain’s capital city. “68% of the Socimis hold assets in Madrid in their portfolios and 32% own properties in Barcelona. Moreover, the two cities account for almost 60% of the total market value of these entities’ real estate assets, which have a combined value of €4,519 million. (…)”.

The third common denominator is the type of asset most frequently contained in these vehicles’ portfolios, which are, undoubtedly, offices. Since the beginning, offices have been the real estate asset of choice, accounting for 32.68% of total investment, followed by homes, which account for 18.95%, premises (16.55%) and shopping centres (16.42%). The least common assets are hotels and plots of land, which together account for just 7%.

In terms of the number of assets in the Socimis’ portfolios, it is most common for them to contain between 5 and 20 real estate assets (there are 11 examples in this range), although another four Socimis have been constituted with just one asset in their portfolios and another four own more than 200 properties.

Changes ahead

According to Armabex, we can expect to see some changes over the next few years. For example, we can expect to see an increase in the number of hotel assets and plots of land (for the development of homes) held in the portfolios of these vehicles.

In addition, “over the next few years, we can expect to see a significant increase in the number of family vehicles”, says Fernández. (…).

On the other hand, although Madrid currently leads the investment figures in terms rental properties, “the difference between the capital and Barcelona will decrease over the medium term. (…)”.

In the meantime, more than 30 Socimis are expected to debut on the stock market next year and some may even debut on the main stock exchange, where they would join three of the heavy weights in the sector: Lar, Axiare and Hispania (…).

Original story: Idealista (by Ana P. Alarcos)

Translation: Carmel Drake

Merlin To Complete Its €850M Bond Issue Imminently

4 April 2016 – Cinco Días

The Socimi Merlin Properties, which is listed on the Ibex 35, will issue BBB-rated bonds amounting to €850 million within the next few days, for the first time in its short history. This operation forms part of the debt restructuring process supported by Testa, the real estate company acquired from Sacyr.

Within the next few days, the market will be filled with bonds from the Socimi Merlin Properties, which will use this financing instrument for the first time since it debuted on the stock exchange in June 2014. The entity chaired by Ismael Clemente (pictured above) hopes to launch €850 million of this type of security with a BBB rating, imminently, through an issue aimed at institutional investors, according to financial sources.

This operation forms part of the company’s debt restructuring plan following its acquisition, last year, of the real estate company Testa from Sacyr for around €1,800 million. As a result of that deal, the Socimi took on debt amounting to €1,700 million, which it needs to refinance soon (…).

Merlin’s first step involved refinancing a €1,700 million loan with ten overseas banking institutions to pay off the debt. The debt was structured into two tranches, amounting to €850 million each, which are due to mature in December 2017 and June 2021, respectively.

The upcoming €850 million bond issue relates to the first tranche, which matures in December 2017 and which Merlin plans to repay by approaching the capital markets. The bond issue will probably be registered in Luxembourg this week, which according to Ismael Clemente, is the most active market alongside Ireland and Frankfurt for this type of operation.

The roadshow will begin next week

Next week, the heads of Merlin will hold a roadshow for international institutional investors to explain the operation. They expect pension funds, debt funds and insurance companies to be most interested in the purchase. Financial sources indicate that the underwriting banks will be JP Morgan, Credit Suisse, ING, Goldman Sachs and BNP Paribas, amongst others. (…).

The Socimi will decide the term of the new bonds on the day that it places them, but in theory, the term will be between five and eight years, depending on demand from investors, and the interest rate will range between 2% and 3%. Merlin’s current loan with the 10 banks accrues interest at Euribor plus 100 basis points, which will increase to Euribor plus 200 basis points from December. (…).

The banks with which Merlin currently holds its €1,700 million loan are: Société Générale, Credit Suisse, BNP Paribas, Crédit Agricole, ING, Intesa Sanpaolo (an Italian bank with a limited history in Spain), Mediobanca, Deutsche Bank, JP Morgan and Goldman Sachs. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake