Tag: management

Quabit’s Profits Increased by 79.1% in 2017

28 February 2018 – El Economista

Quabit recorded a net profit of €14.3 million in 2017, which represents an increase of 79.1% compared with the previous year (€8 million).

The real estate firm explained that the increase in profits was due to “the greater activation of credits and discounts associated with the cancellation of its debt” with the bad bank Sareb.

According to a report submitted by the real estate company to the National Securities and Exchange Commission (CNMV) on Wednesday, its net turnover decreased by 82.6% in 2017 to €5.7 million.

Meanwhile, the EBITDA was negative at -€7.3 million, which represented a decrease compared to 2016 (-€19.6 million).

The company highlighted that the progress made in 2017 demonstrates Quabit’s management capacity and gives “visibility” over the execution of the strategic plan with a higher return than initially estimated.

Moreover, it says that it is on course to fulfil its objective of reaching a recurring sales volume of 3,000 homes from 2022 onwards.

For 2018, Quabit estimates having a commercial portfolio of 3,000 homes, as well as starting the construction of 2,000 homes, delivering 215 dwellings and securing plots of land, which will allow it to cover more than 80% of the needs of its strategic plan.

Original story: El Economista

Translation: Carmel Drake

Sonae Sierra & CBRE GI Put the ‘Max Center de Barakaldo’ Shopping Complex Up For Sale

10 February 2018 – El Correo

Bizkaia is preparing for a major commercial and real estate revolution. Sonae Sierra, the multinational owner of the Max Center shopping complex in Barakaldo has put the property up for sale, 15 years after acquiring it from ING Real Estate. The property was opened in 1994 and was extended in 2002 with the addition of the adjoining Max Ocio building. The latest transaction forms part of a national macro-operation, given that the portfolio up for sale also includes two other large complexes: the Gran Casa de Zaragoza and the Valle Real de Santander.

The company, together with its partner CBRE Global Investors, with whom it jointly shares the ownership of the three large shopping centres, calculates that it will receive proceeds of around €500 million from the sale, according to sources in the sector. Spokespeople for Sonae avoided providing further details about the operation to this newspaper on Thursday. They announced that they only discuss “closed” operations and that the installations in Kareaga, which have an approximate surface area of 60,000 m2 “are still operating in a normal way”.

Nevertheless, the negotiations have been underway for several months. Although they are satisfied with the progress of the business, which is enjoying growing sales and which seems to have left behind the worst years of the crisis, the current owners are looking to generate revenues from the sale of these assets to invest in other projects in different parts of Spain. Sonae Sierra, which is controlled by Hugh Grosvenor, the Duke of Westminster and the richest man in the United Kingdom, has a presence in seven countries with 46 buildings worth almost €7 billion. It is currently working alongside the British operator McArthurGlen on the imminent opening of a luxury outlet in the Plaza Mayor de Málaga complex, which will involve a disbursement of €140 million.

The company is looking to take advantage of the current times in the Spanish real estate market, which are being characterised by a great deal of interest from funds and overseas companies. Last year, investment in the retail sector rose in a spectacular fashion – by 31% – to reach €3.9 billion. If this latest sale goes ahead, the owners of the Max Center, which is home to 133 stores, as well as a sizeable restaurant and leisure area, would complete their second divestment process in Bizkaia in two years.

At the beginning of 2016, they sold the Zubiarte de Bilbao complex to Activum SG Iberia Fund for €150 million (…).

Modernisation of its roof

Now, all eyes are focused on the Max Center, which has just invested €3.5 million on the modernisation of its roof. Nevertheless, the improvements are not going to stop there, given that the complex is soon going to be subjected to a complete renovation. The changes undertaken in recent months to renew the roof of the building, which houses a parking lot, included the resurfacing of the surface area and its signage, as well as improvements to the lighting and security in the parking area.

In addition to the successive renovation projects, the Max Center has also improved its sustainable profile with several actions aimed at reducing water consumption, improving energy efficiency and increasing recycling rates. Together with these interventions, management has been working on an intense campaign to increase the commercial offering and renew the trust of its customers who are being offered increasingly more choice by nearby competitors, such as Megapark and Ballonti (Portugalete). Some of the new brands that have chosen the Max Center and are about to open stores there include Pablosky, Indie&Soul, San Carlos, Trendie, Loop&Coffe and Burger King. Meanwhile, other stores, which are already established, such as the footwear shop Foot Locker, have undergone major renovations.

Original story: El Correo (by Luis Gómez)

Translation: Carmel Drake

Spain’s Socimis Have Properties Worth €1.2bn up for Sale

8 December 2017 – Expansión

Hispania and Lar are looking for buyers for their respective office portfolios, whilst Colonial plans to divest Axiare’s non-strategic assets if its takeover bid goes ahead.

On the verge of starting their fifth year of life, Spain’s large listed real estate investment companies (Socimis) are now working on a new phase. After spending their first few years growing in size, Merlin, Hispania, Lar España, Axiare and Colonial (which was converted into a Socimi in June) are currently focusing on becoming large real estate companies, each specialising in a different asset type.

Hispania

Such is the case of Hispania. The company made its debut on the stock market in March 2014, with the financial backing of investors of the calibre of George Soros and John Paulson. At the time, Hispania proposed a lifespan of six years, spending the first three years focusing on building a diversified portfolio of rental properties and the remaining three years managing and subsequently divesting them.

In February, having completed the first three years, the firm’s shareholders decided to: continue with the initial plan of liquidating the company in 2020, focus on hotel assets for the next few years (in June, it became the largest hotel owner in Spain, with 38 establishments) and divest the rest of its properties. In this way, it began with the individual sale of residential assets, and it launched a block sales process for its offices.

In August, Hispania reached an agreement with the insurance company Swiss Life to sell it the portfolio of offices. Nevertheless, three months later, at the height of the Catalan sovereignty challenge, the Socimi decided to postpone the sale until next year. Now that the negotiations with Swiss Life failed, sources in the sector bet that Hispania will not launch a new block sale but rather will opt to divest the portfolio, worth €500 million in total, building by building. In fact, the Socimi managed by Azora already sold its first property in June, the future headquarters of the law firm Uría, for more than €37 million (around €7,800/m2).

Lar España

Hispania’s offices are going to come onto the market at the same time as a portfolio owned by another large Socimi. Lar España, whose major shareholder is the fund manager Pimco, has hung up the “For sale” sign on the office buildings it owns (three in Madrid and one in Barcelona) for €170 million. In addition, Lar will divest other assets regarded by the company as non-strategic, such as logistics warehouses and some medium-sized spaces, worth another €100 million.

These new divestments come in addition to the €110 million that the Socimi hopes to obtain from the sale of the 44 homes that comprise the luxury residential complex Lagasca 99 (which are being sold for an average price of €14,000/m2).

In total, Lar España expects to generate €380 million, which the Socimi managed by the real estate company Grupo Lar, will use to increase its portfolio of shopping centres.

Axiare

On 13 November, Colonial completed its entry into Axiare’s share capital, started in October 2016, with the launch of a takeover bid for 100% of the company, with the aim of creating a large Socimi specialising in offices, worth almost €10 billion.

The CEO of Colonial has already revealed that he would sell the non-strategic assets worth around €300 million from that portfolio, which spans 1.7 million m2, to finance the takeover of Axiare.

Currently, Axiare’s portfolio comprises more than a dozen industrial assets, worth around €340 million (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Sale of Hesperia Tower Threatened by Catalan Political Uncertainty

27 November 2017 – Eje Prime

The political situation in Cataluña is also affecting the sale of tall buildings, such as that of the NH Collection Tower in Barcelona. Known until last year as the Hesperia Tower, this five-star hotel owned by Grupo Inversor Hesperia (Gihsa) is struggling to find a new owner due to the governmental instability and, therefore, economic uncertainty that exists in the region.

Located in L’Hospitalet de Llobregat, the asset is situated next to the Fira complex in the suburban town and has been on the market since December 2010. The Hesperia Group put this hotel, along with five others, on the market, due to the debt that was weighing down the company at the time, estimated to amount to more than €600 million.

Now, the interested companies are not willing to go ahead with the purchase of the asset due to the political situation in Cataluña, amongst other factors, according to Crónica Global.

A year ago, the hotel company repositioned Hesperia Tower within a plan agreed with NH Hoteles, which took over the management of 31 assets from the entity led by José Antonio Castro after paying €31 million. Hesperia’s current portfolio contains around thirty hotels in Spain, as well as a 9% stake in the NH hotel Group.

Original story: Eje Prime

Translation: Carmel Drake

VBARE Appoints Fabrizio Agrimi As New CEO

20 November 2017 -Revista Centros Comerciales

On Monday, VBARE Iberian Properties Socimi (VBARE) announced the appointment of Fabrizio Agrimi (pictured below) as the new CEO of the Socimi. Agrimi is a grand connoisseur of the real estate sector and has extensive experience in investments, mergers and acquisitions, not only in Spain but also in the United Kingdom and Italy. He has worked for a number of high profile international companies and until May 2017 he was Managing Director and Partner at Altan Capital.

Prior to joining Altan Capital in 2007, Fabrizio Agrimi formed part of the Investments Department at Aguirre Newman (2004-2006), where he participated in the acquisition, management and sale of numerous real estate assets. Prior to that, he worked in Milan and London for the law firm Vita Samory, Fabrini e Associati (now part of Orrick) where he was a member of the M&A, Private Equity and Financial Services teams.

Fabrizio Agrimi holds an MBA from the ESADE business school (Barcelona) and a degree in Law from the University of Trento. Whilst at university, Fabrizio completed two international internships at the law firm Sebastià Roca i Associats (now part of Roca Junyent) in Barcelona and at the European Parliament in Luxembourg.

With this addition, VBARE strengthens its team and consolidates its base for growth. VBARE recently presented its results for the first nine months of the year, during which time it generated a profit of €2,177,000, resulting primarily from the appreciation in value of its real estate portfolio. Revenues from rental income amounted to €781,000, which represented an increase of 188% with respect to the same period last year. The total value of VBARE’s property portfolio amounts to €28.2 million, up by 17% compared to the end of 2016.

Original story: Revista Centros Comerciales

Translation: Carmel Drake

Madrilenian Investor Group Buys Hotel Las Vegas In Málaga

17 November 2017 – Diario Sur

A Madrilenian investment group has acquired Hotel Las Vegas, in the centre of Málaga, which has been operating for more than half a century. The new owners, who want to remain anonymous, have signed an agreement with the Malagan chain Soho Boutique Hotels, founded by Antonio Gordillo and Gonzalo Armenteros de Dalmases, to operate this hotel facility for a period of 30 years. Although the amount paid for the purchase operation has not been disclosed, Gordilla did reveal the future plans for the establishment: Soho Boutique Hotels is going to invest around €2 million immediately in the complete renovation of the facilities, located right on the beachfront and with 107 rooms.

With the management of this hotel, the Malagan group is now the chain with the most hotel establishments in the capital, given that it already operates the Itaca Málaga, Soho Bahía Málaga, which will see its category rise to a four-star property at the beginning of next year, following a €500,000 investment, Soho Los Naranjos, Soho Boutique Málaga and now Soho Las Vegas, encompassing 270 rooms in the city in total.

Antonio Gordillo, partner and director general of the chain, wanted to send a message of calm to the workforce and assure the thirty employees that they are guaranteed the same conditions they have enjoyed until now. “We are a young chain, we started out in 2010, and one of our maxims is that our employees represent one of the company’s greatest assets. We place a lot of emphasis on ensuring our staff are happy and motivated”, he said.

In terms of the new activity for Soho Las Vegas, Gordillo said that all of the furniture, beds and televisions, amongst other items, will be replaced immediately, to adapt them to the needs of guests and the quality standards of the group. In the second phase, they are planning more comprehensive work such as the renovation of bathrooms and the launch of new services. “We are really surprised by how well the facilities have been maintained”, he said.

Soho Hoteles does not rule out incorporating more establishments in the city. The chain is in full swing with its expansion process, with new projects in Madrid and Cádiz. It already has establishments in Sevilla, Córdoba, Jerez, Granada, Fuengirola, Cáceres and Salamanca, taking its total portfolio to fifteen, including the properties in Málaga. “The company’s turnover amounts to €16 million, and in 2018 we expect to double that figure thanks to the new additions, including Soho Las Vegas”, he said, adding that the key to the chain’s success is that all of its establishments are located in the city centre. As such, they register an average annual occupancy rate of 82% and a revenue per available room (RevPar) of €82.

Original story: Diario Sur (by Pilar Martínez)

Translation: Carmel Drake

Deloitte: Hotel Inv’t Will Exceed €3,000M In 2017

7 November 2017 – Expansión

The extraordinary tourism data in Spain, the interest from investors in real estate assets and the purchase by international funds of hotel portfolios has catapulted investment in the Spanish hotel segment so far this year to €2,600 million. That figure is 21% higher than the total amount recorded in 2016, and is very close to the record figure of €2,700 million recorded in 2015, according to The Hotel Property Handbook report, prepared by Deloitte España.

In this way, the hotel sector now accounts for 35% of total real estate investment in the tertiary sector (non-residential assets) in Spain. The firm forecasts that, by the end of this year, the investment volume figure will have easily surpassed the €3,000 million threshold.

In terms of the main operations of the year, the purchase by the US fund Blackstone of the HI Partners hotel portfolio, comprising 14 establishments, from Sabadell for €630 million and the acquisition by the British fund London & Regional of four Starmel hotels – a joint company formed by Meliá and Starwood Capital in 2015 – for €230 million, have given the investment figure a real boost.

Record operations

These operations have been accompanied by several one-off hotel transactions, such as Edificio España, which was acquired by RIU in June for €272 million (…).

Other noteworthy operations so far this year include the purchase of Hotel Silken in Barcelona by the British fund Benson Elliot for €80 million and the acquisition of 55% of Hotel Diagonal Mar in Barcelona by Axa for €80 million.

For Javier García-Mateo, Partner at Deloitte Financial Advisory, institutional investors are seeing the opportunity to build large portfolios of holiday hotels in Spain, to integrate them into their international platforms in the Caribbean, South America and South-East Asia, developing a direct channel and obtaining greater negotiating power with tour operators. “In the end, Spain is establishing itself as the world’s main tourist market”, he says.

In this sense, we are seeing the natural migration of traditional hotel owners, who are divesting property to focus on management, such as in the case of the Meliá chain, which is making way for overseas investors who have greater financial muscle and so can launch more ambitious projects, explains Patricia Pana at Deloitte Financial Advisory.

In this context, the large tour operators are also participating in the investment fever and are buying assets in order to carry out a vertical integration of their business (…).

Interest from investors is partly driven by the record number of visitor arrivals – more than 84 million international tourists are forecast to visit Spain this year – and the strong evolution of key performance indicators such as the average daily rate (ADR), revenue per available room (RevPAR) and the occupancy rate.

Peak returns

Specifically, the ADR in Spain reached an average of €82.30 in 2016, up by 5% YoY; the occupancy rate rose by four percentage points to 66%; and RevPAR increased by 10% to €53.90.

The challenges for the sector now include improving the hotel portfolio to allow for an increase in prices. “If we compare our hotels with those in other urban and vacation destinations, the price per room of Spanish hotels still has a lot of potential, provided that renovation and transformation projects are carried out with the help of the main operators”, says Ana Granado, Director at Deloitte Financial Advisory (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Insur Records Profits Of €3.7M During First 9 Months Of 2017

30 October 2017 – Eje Prime

Grupo Inmobiliaria del Sur (Insur) has seen its results soar thanks to the good times that the residential sector in Spain is enjoying at the moment. The company recorded a profit of €3.7 million during the first nine months of the year, according to a statement filed by the group with Spain’s National Securities and Exchange Commission (CNMV).

The group’s turnover also soared during the first nine months of the year. Insur’s revenue amounted to €59.7 million, which represents an increase of 82.2% compared to the same period last year. The acceleration in Insur’s property developer activity and the rise in pre-sales (up by 43.1%) helped this growth.

By category, property development contributed €32.4 million to Insur’s total turnover during the first nine months of the year, compared to €21 million in the same period last year. Revenues from construction, leases and management contributed €18.3 million, €7.5 million and €1.5 million to the group’s turnover, respectively, during the nine months to September.

One of the group’s milestones in recent months has been its entry into the co-working sector, with the launch of the iSspaces business centre in Sevilla, a building with a surface area of 1,800 m2 comprising 30 offices.

Original story: Eje Prime

Translation: Carmel Drake

Bain Establishes Joint Venture To Manage Real Estate Asset Portfolio From Liberbank

24 October 2017 – Bain Capital Credit

Bain Capital Credit, LP announced today that it has entered into a binding agreement to establish a joint venture company, which will own and manage a portfolio of repossessed real estate assets from Liberbank. Bain Capital will control and manage the JV with an 80% stake; the two other shareholders are Liberbank and Oceanwood. Bain Capital Credit now owns and manages ten loan and real estate portfolios in Spain.

The portfolio has an appraisal value of more than €600 million and primarily comprises residential units, land and work-in-progress (WIP) assets across Spain. Bain Capital Credit will actively manage the portfolio, including developing some of the land and WIPs.

“We are excited to expand our position in the Spanish real estate market and to control the majority of this JV alongside Liberbank and Oceanwood,” said Alon Avner, a Managing Director and Head of Bain Capital Credit’s European business.

“We continue to consider Spain one of the most attractive real estate markets in Europe and this portfolio’s concentration in central and northern Spain provides a great degree of diversification for our portfolio,” said Fabio Longo, a Managing Director and Head of Bain Capital Credit’s European non-performing loan & real estate business. “This is a great opportunity to participate in Spain’s recovery and to further expand our footprint in the Spanish residential development sector. Furthermore, this investment showcases our expertise in executing complex transactions that require close collaboration with the seller under compressed timelines,” added Mr Longo.

The support in executing this deal was provided by Altamira Asset Management, as real estate servicing specialists; Aura REE and Basico, as real estate valuation specialists; and Cuatrecasas, as legal counsel.

Original story: Bain Capital Credit

Edited by: Carmel Drake

 

Blackstone To Merge Popular & Sabadell’s Hotels To Create Tourism Giant

18 October 2017 – El Confidencial

Blackstone has surprised the market once again with the purchase of the hotel company HI Partners from Banco Sabadell for €630.7 million; the operation will turn the fund into one of the major players in the Spanish tourism sector overnight. Nevertheless, this acquisition is actually just the tip of the iceberg of a much larger objective, which is directly linked to the largest real estate operation seen in Europe in recent times: the €30,000 million in toxic assets that Blackstone acquired from Santander-Popular in the summer.

That huge portfolio, comprising foreclosed properties and non-performing loans, contained €800 million linked to hotel assets, some of which Blackstone wants to use to fatten up HI Partners’ portfolio, according to sources in the know. Those same sources define that move as a medium-term strategy, which will allow it to create a hotel giant, capable of competing with other large platforms such as Hispania, before debuting it on the stock market in a few years time.

Although the fund analysed its purchase of Sabadell hotels as a stand-alone operation, Blackstone’s roadmap forecasts the possible generation of synergies with its other large portfolio of hotel assets in Spain, in other words, those proceeding from Banco Popular.

As El Confidencial published, when Blackstone definitively closed the purchase of 51% of the Santander-Popular portfolio, the fund’s objective was to gradually divide it up, taking advantage of the range of vehicles that it already owns in Spain, such as the Socimis Fidere, Albirana and Corona Patrimonial, and undertake direct sales of both assets and debt portfolios.

HI Partners now forms part of that same strategy. The plan is to transfer only those hotels that comply with the group’s business model, which focuses on high category coastal hotels and very selective urban establishments. The Hilton Inn Sevilla, Gran Hotel La Toja in Pontevedra, Tamisa Golf in Mijas and Hotel Ayre in Oviedo are some of the assets that were held under the Popular umbrella.

Nevertheless, given that the bulk of this portfolio is debt whose collateral are these establishments, the transfer of the assets chosen to form part of HI Partners will have to be performed gradually, on an asset by asset basis, depending on the progress of the negotiations regarding the loan status in each case. Blackstone has time on its side since its objective with these acquisitions is to take advantage of the growth curve of the Spanish tourism sector and to do so through an asset repositioning strategy.

Management team

After selling HI Partners, along with its 14 best establishments, Sabadell will now continue with more than a dozen lower category hotels under its umbrella, which it plans to transfer gradually. All of the bank’s debt secured by hotel collateral also remained inside its perimeter for the time being; until now that was being managed by the team led by Alejandro Hernández-Puértolas and Santiago Fisas, and it will probably end up being sold off through Solvia.

The HI Partners management team will continue to be linked to the hotel group even after the completion of the sale to Blackstone, once the operation has received the green light from the Competition authorities. The team will face the challenge of continuing to make the company grow by repositioning the hotels, like they have been doing since 2015, in line with Blackstone’s plans for Popular’s establishments.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake