Mitiska REIM Acquires Portal Mediterráneo Retail Park

29 September 2016 – Real Estate Press

Yesterday, Mitiska REIM, the leading specialist investor in retail parks in Europe, announced its entry into the Spanish market with the acquisition of the Portal Mediterráneo retail park in Vinaroz.

It is the first of several acquisitions that Mitiska REIM plans to make in Spain over the next few months, as a result of the improvement in the macroeconomic environment and the increased interest from commercial operators in retail parks in Spain.

Portal Medierráneo is a retail park that has a gross leasable area of 12,400 sqm, spread over 11 stores leased to brands such as Jysk, Bricorama, Norauto and Sprinter, amongst others. Located in Vinaroz, on the east coast of Spain on the border between the Community of Valencia and Cataluña it has a catchment area of 130,000 people, which increases to 250,000 during the summer. Similarly, Portal Mediterráneo benefits from the tourists that visit this area and from its location in a major retail area, alongside several other large stores including: a Carrefour hypermarket, a Decathlon shop, an Aldi supermarket and a McDonald’s restaurant.

The asset has been acquired by an institutional fund recently launched by Mitiska REIM, known as First Retail International Fund 2 (FRI 2), which has received support and advice from Catella Asset Management Iberia.

Mitiska REIM has also announced the appointment of Christophe Mouton as its Director in Spain and Portugal. Christophe will be responsible for acquisitions, developments and the management of partnerships with property developers and investors in retail parks across Spain and Portugal, with a special focus on the development of new retail parks. (…).

Mitiska REIM is a private company specialising in fund management and real estate investments, which is headquartered in Brussels (Belgium). Mitiska REIM invests exclusively in the peripheral retail park sector in Europe, in accordance with its strategy of (co)-development and adding value. (…).

Mitiska REIM recently announced the second satisfactory closure of its First Retail International 2 Fund (FRI2) for €190 million, which significantly exceeds its original aim of €150 million. (…).

Original story: Real Estate Press

Translation: Carmel Drake

Project Macarena: Sareb Sells 1,300 Homes & 30 Plots

16 October 2015 – Expansión

The company has put up for sale one of the at least three portfolio that it plans to sell before the end of the year.

Sareb has officially started its busiest season of the year. The company, led by Jamie Echegoyen, has now begun to put large asset portfolios on the market, aimed at overseas funds. It hopes to increase its annual sales as a result. According to financial sources, over the last few days, the entity has distributed information about Project Macarena, a portfolio comprising debt amounting to €410 million, which is secured by residential assets.

The portfolio has been divided into three tranches: the higher quality debt tranche, which is backed by 810 homes – including 11 complete developments – and 2 plots of land; one unpaid debt balance, which has 450 home as collateral; and overdue credits, with 29 plots of land as guarantees, located primarily in Madrid, Tarragona, Barcelona and Málaga.

Aside from the land, the majority of the portfolio is located in Madrid, which accounts for 24.5% of the portfolio’s nominal value; Barcelona (21.4%); and Málaga (16.3%). The sale is being advised on the financial side by Irea and on the legal side by Ashurst. According to the information distributed to investors, this project offers “a potential upside resulting from the macroeconomic improvement and in particular, the current recovery in the Spanish residential market”.

According to financial sources, this portfolio has been designed specifically for the large overseas funds operating in Spain, since it contains residential properties only and the assets are clustered together in a handful of areas – this makes the portfolio more manageable for these investors.

In the case of the unpaid loans, Sareb reports in the sales brochure that around 70% of them are already in the process of asset foreclosure or debt recovery. Meanwhile, the tranche of higher quality credits is secured by homes with an occupancy rate of 95%, which increases the chance of recovering the debt.

Other portfolios

In addition to Project Macarena, Sareb has two other portfolios ready to launch, which it will bring onto the market very soon: one contains debt from a few property developers, worth €600 million; and the other contains credits backed by tertiary sector assets – hotels, offices, retail premises and logistics sites – amounting to €200 million. And the entity has not ruled out the possibility of launching further operations before the end of the year.

These three portfolios join two others that were launched over the summer. The first, at the hand of Sareb’s asset manager Haya Real Estate. That was Project Silk, advised by N+1, whose portfolio comprises €1,000 million of overdue loans to small property developers. The second was Project Vega, through which the company hopes to get rid of €180 million of debt, backed by land.

If Sareb manages to complete the sales of these five portfolios only, then it will reduce its balance sheet by €2,400 million between now and the end of the year. These operations are even more important in 2015, given the slowdown experienced in the retail sales channel, caused by the migration of assets to new managers: Haya, Altamira, Solvia and Servihabitat.

Sareb also needs to strengthen the top half of its accounts to be in a better position to deal with the provisions that it is going to have to recognise following the new accounting circular, approved two weeks ago. And all of this, with the aim of continuing to repay debt -€3,000 million in 2015 – which Echegoyen has committed to and which is key to enabling it to reduce the financial costs of the company.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

S&P: House Prices To Rise By 2.5% In 2015 & 2016

3 August 2015 – La Razón

The ratings agency Standard & Poor’s (S&P) expects house prices in Spain to increase by 2.5% this year and next, and to rise by 4% in 2017, driven by the economic recovery, which is gaining strength, and low interest rates.

If these forecasts are correct, house prices will rise again after years of decreases following the burst of the housing bubble.

According to data from S&P, the downwards trend was finally broken in 2014, when prices remained stable.

The improving economic conditions and low interest rates will also push prices up in other European countries.

In fact, within the Eurozone, real estate prices are set to record the greatest increase in Ireland this year, which will see growth of 9%, followed by Germany (5%), Portugal (4%) and the Netherlands (3%).

The markets in Ireland and the Netherlands, which were amongst the worst affected by the crisis, will continue to improve in 2016, with average price rises of 5% and 3.5%, respectively.

Just like in Spain, prices are also expected to stop falling in Italy this year, although unlike in Spain, they are not expected to increase, rather they will remain stable.

Only the French and Belgian markets are expected to register decreases this year, of 3% and 2%, respectively. In the case of Belgium, the downwards trend is forecast to continue into 2016.

Beyond the Eurozone, S&P expects that prices will continue to grow from strength to strength in the United Kingdom, specifically by 7%, although at a lower rate than in 2014 (10%).

The Bank of England may increase interest rates this year and whereby curb the increases over the next few years, to 5% in 2016 and 2.5% in 2017.

In the case of Switzerland, house prices will experience a slight recovery, with an increase of 1.5% this year, after rising by just 0.1% in 2014.

Original story: La Razón

Translation: Carmel Drake

AEV Less Optimistic About Real Estate Recovery In 2015

4 February 2015 – Cinco Días.

House construction will not be revived until the upwards trend in prices grows stronger.

Analysts believe that the crisis “has cleaned up” the sector.

The macroeconomic recovery will come first, driven by increased activity and job creation, and then an improvement in the real estate sector. That is the expected path of recovery for the house building sector, one of those hardest hit by the recent crisis.

Paloma Taltavull, Head of the Department for Applied Economics at the University of Alicante explained this yesterday. She is one of the experts that has participated in a study conducted by the Spanish Association of Value Analysis (AEV), which represents more than 90% of the appraisers that operate in the market.

Thus, unlike the forecasters that resolutely claim that the real estate market will recover in 2015, the members of this organisation are much more cautious.

“Construction activity is still at historically low levels, with house prices now bottoming out, having been in decline since 2008”, state the conclusions of the study. However, for how long will prices remain at these low levels? That is the million-dollar question that all of the experts are asking themselves and to which investors, developers, vendors and buyers want the right answer. The problem is that getting the forecasts right with everything that still might happen seems, at the least, very complicated, according to the Chairman and Secretary of the AEV, Gonzalo Ortega and José Manuel Gómez de Miguel, respectively.

Two variables, in particular, always determine the future of this market: employment and access to credit. Although the official statistics for 2014 still need to be corroborated, it seems that there were more house sales in 2014 than in the previous year for the first time since the crisis began. And prices showed a clear trend towards zero growth or stabilisation.

Less property, more rent

And that was because last year was the first year in which Spain created jobs again, rather than destroying them. Moreover, financing terms were relaxed, thanks to the lowering of interest rates and the overall improvement in the banking sector.

However, according to the experts who prepared the AEV’s report, this recovery in employment is still insufficient to boost the housing market. Furthermore, the report highlights the “precariousness of the new jobs that have been created, along with wage deflation and mass youth unemployment” as the three most important factors that give us “few reasons to be optimistic”.

In this context, and given that the restrictive conditions surrounding access to credit for those that do not have a stable job and/or a certain level of income, the appraisers and experts at the AEV are unanimous in their view that “it will take a real and prolonged recovery for young people to be able to buy their own homes. Therefore, everything suggests that the majority of young people will opt to rent homes, whereby aligning with the European average”.

This is causing a build up in the back-log of demand from buyers, who still do not meet all of the requirements to make buying a house a reality. The appraisers’ report reveals that the most recent census data (2011) shows that almost 900,000 nuclei of new homes could have potentially been formed, but were not. If the improvement in employment continues, a large part of this potential demand will become effective and house prices will start to rise slowly as a result, “although we do not expect them to do so on a widespread basis or across the whole country until the end of this year”, predicted Taltavull.

And as for the construction of homes, the experience of past crises indicates that the return to previous levels of construction will be very slow over the next few years and will not become a reality until prices have recovered.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake