Tag: major investors

Heron International Engages CBRE To Sell All Its Assets In Spain

11 September 2017 – El Confidencial

The group that revolutionised the concept of shopping centres in Spain has completed its cycle in our country. The British firm Heron International, the developer of the Heron City retail and leisure spaces, has decided to divest all of its establishments in Spain. To this end, it has just engaged CBRE to organise a restricted sales process, in which only a limited number of investors, who have already been selected, are going to be invited to participate.

Sources at the real estate consultancy acknowledge that they have been awarded the exclusive mandate for this process, but they declined to comment further. Nevertheless, sources familiar with the process say that all of the potential buyers on the closed list (which includes major investors, Socimis and institutional funds)have now been contacted and that the portfolio is worth between €230 million and €250 million.

Specifically, the portfolio comprises the Heron City Las Rozas centre (Madrid), the Heron City Paterna centre (Valencia) and Heron Diversia Alcobendas (Madrid), which have a combined gross leasable area of 84,000 m2, along with 6,100 parking spaces and more than 12 million visitors per year. Those figures make this transaction one of the most important in the retail segment at the moment.

The operation includes the right to use the Heron City brand, which will allow the new owner to continue to fly the flag of a concept that arrived in our country almost three decades ago. It represents more than just a shopping centre, since it also encompasses leisure, restaurants and experiences, and is committed to outdoor spaces and partnerships with iconic brands.

For example, in terms of cinemas, Heron always works with Kinépolis and Cinesa to develop large, high-end cinema complexes; whilst Virgin is its typical travelling companion for gyms; moreover, the gastronomic offering always includes some premium concepts, steering clear of classic fast food.

History in Spain

Since it first arrived in Spain, Heron International has only starred in one sale operation involving a retail centre, that of Heron City Barcelona, which it sold at the end of 2006 to Babcock & Brown and GPT for €138 million. Almost a decade later, that complex was acquired by ASG, the Spanish subsidiary of Activum, in that firm’s first operation in the Catalan capital.

Both the Catalan centre as well as those in Las Rozas and Paterna were constructed by the British company, whereas Diversia was purchased in 2003 in a 50:50 alliance with Realia; a decade ago, Heron took over all of the share capital, after it acquired the 50% stake from FCC’s subsidiary.

Nevertheless, although the property developer is known for its retail centres, its history in Spain goes well behind that concept and is directly linked to the turbulent times of the 1980s and the purchase that it made then of the real estate division of Rumasa, as well as of Las Torres de Colón.

Following those acquisitions, it made a commitment to the Government to undertake investments in our country amounting to 30,000 million pesetas (equivalent to €180 million), an agreement it more than fulfilled with the development of its shopping centres. Moreover, its good work in our country also includes the construction of several hotels that, subsequently, have been sold.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Sareb Wants To Sell 4 Large Portfolios Before Year-End

19 November 2015 – Cinco Días

The fourth quarter of the year is usually the most hectic for any real estate business, but this year Sareb’s activity is off the scale as year-end approaches. On the one hand, this is because following the decrease in the rate of house sales to individuals during the year, the company is looking to benefit from the traditional retail boom that always happens in the final quarter.

On the other hand, it is because a new, and onerous, accounting circular has just been officially approved, and it will govern the results of the so-called bad bank for this year end, which means that, amongst other things, it has been forced to launch a race against the clock to re-appraise, and value at market price, at least half of the €44,000 million assets it still owns.

Moreover, because it is trying to at least partially alleviate both effects, Sareb is also preparing the relaunch of several macro-operations with large investors. Specifically, according to sources, it has launched the sale of four portfolios with a combined nominal value of €1,500 million.

All of the portfolios contain loans, which represent 80% of Sareb’s total burden, and those loans are secured by real estate assets as collateral. In this way, the purchasers of these packages, who will have the option of acquiring specific tranches in each case and not necessarily each of the portfolios in their entirety, may invest with the objective of trying to recover the loans or of enforcing them and repossessing the properties that secure them.

The first two portfolios, which have a combined nominal value of €800 million, comprise loans secured by unique assets as collateral, in other words, luxury properties or large buildings, which could lend themselves to being shared between a group of buyers.

The third portfolio, worth €400 million, contains loans secured by both finished homes and land. In this case, the portfolio could be sub-divided into tranches to allow various buyers to participate if they are interested in acquiring just one specific part of the portfolio.

Finally, the fourth portfolio has a nominal value of €200 million and comprises loans secured by hotels, warehouses and retail premises. As an additional feature, besides the loans in this portfolio, the package also includes certain physical assets, specifically some industrial warehouses that have already been foreclosed.

Although the sales prices that Sareb will obtain for these portfolios remains to be seen (the figure of €1,500 million represents the combined nominal value), market sources claim that the conditions in the market have improved and so the bad bank could well obtain good prices. Those same sources reveal that the most demanding international investment funds have reduced the size of their discounts from 20% of asset values to around 12%, on average.

Either way, Sareb’s objective is ambitious (…), given that the assets for sale in these portfolios significantly exceed the volume sold at the end of last year, when the bad bank divested portfolios worth €1,000 million to large investors. (…)

Original story: Cinco Días (by Juande Portillo and Ángeles Gonzalo Alconada)

Translation: Carmel Drake