Addmeet: Investment in RE in Madrid Exceeded that in Barcelona by 2.5x in 2019

7 January 2020 – El Confidencial

According to the real estate portal, Addmeet, real estate investment in Spain amounted to €35.0 billion in 2019, of which 70% was concentrated in Madrid and Barcelona (€18.0 billion and €6.8 billion, respectively). The data compiled reflects all real estate operations amounting to more than €3 million in all sectors of the professional real estate market.

In the Community of Madrid, investment broke all records (€18 billion), exceeding the figures recorded in 2018 (€15 billion) and in 2008 (€10 billion). There, the office sector was the main driver, accounting for 61% of the total figure (€11 billion). The star transaction was the sale of Santander’s Ciudad Financiera, which the financial entity repurchased from Marme Inversiones for €3.2 billion 11 years after selling it to that same firm.

Other office-related deals included the sale of the La Finca business park to the Socimi owned by the Cereceda family for €423 million; and the purchase by Allianz Real Estate of Castellana 200 (comprising 20,000 m2 in office space and 6,500 m2 in retail area) for €250 million.

The next main drivers were the residential sector, which accounted for 11% of investment (€2 billion), boosted by the build to rent segment, and the retail sector, which accounted for 11.5% of the total investment.

Meanwhile, record figures were also recorded in the province of Barcelona (€6.8 billion) despite the “procés”. In fact,  the investment volume almost doubled that recorded in 2008 and far exceeded the total recorded two years ago (€5.6 billion).

Like in Madrid, the office sector in Barcelona accounted for most of the real estate investment (46% or €3.1 billion). The retail sector represented 11.5% (€0.8 billion), whilst the hotel segment attracted almost €1 billion (14%) and the residential segment just €0.5 billion.

Major deals in the Catalan capital in 2019 included the sale by Telefónica of Diagonal 00 to the Philippine magnate Andrew L. Tan for €150 million, amongst others.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

The Reuben Brothers Complete the Purchase of Santander’s HQ for €283M

14 January 2019 – El Periódico

Commercial Court number 9 in Madrid has decided that the best offer for the acquisition of Santander’s Ciudad Financiera, is the one presented by the brothers Simon and David Reuben through their investment arm in Spain, Sorlinda Investment, which bid a fixed amount of €283.73 million.

The administration responsible for the liquidation procedure of the company Marme Inversiones 2007, which is the owner of the Cantabrian bank’s headquarters, asked the Commercial Court to declare the offer presented by Sorlinda Investment as the winner after concluding that its bid was the best. In 2014, Marme Inversiones filed for creditors’ bankruptcy in light of its inability to repay the €1.575 billion loan that it had used to purchase the property from Banco Santander itself.

A few months ago, Banco Santander filed a series of allegations when it was announced that Sorlinda had won the bid. It questioned the entity in terms of the forecasts made in the liquidation plan, and because it considered that the offer submitted by the Reuben brothers did not fulfil the established requirements. The allegations were made by the banking group as creditor and offeror.

Nevertheless, the Commercial Court of Madrid explained that the execution of the liquidation plan, which regulates the procedures to be followed for the realisation of the assets, corresponds to the insolvency administration.

“The report presented explains the procedure followed for the selection of the bids submitted and the actions carried out by the insolvency administration, specifying that there are no justifications whatsoever to question it”, said the ruling, which states that the purpose of the plan is to obtain the greatest value from the asset for the benefit of all of the creditors.

In this way, despite the allegations presented by Ana Botín’s bank, the insolvency administration considers that, from an economic point of view, the offer presented by Sorlinda is the best for covering the loans of all of the creditors in the group.

The Reuben brothers, owners of other large assets

Reuben Brothers is a private investment group specialising in real estate development and debt financing. The company, created by two British brothers of Indian origin, is considered as one of the most exclusive in the world with several privileged properties in its portfolio, such as The Curtain and Members Club in Shoreditch, one of the most well-known luxury hotels in London, and Lingfield Park Marriott Hotel & Country Club.

It is also the owner of the London Oxford airport in Kidlington, the Wellington Pub Company chain of clubs and the Italian marina Portosole Sanremo, amongst others.

Ana Botín’s entity agreed the sale of its head offices in Boadilla del Monte to Marme Inversiones 2007 on 12 September 2008 for €1.904 billion.

Nevertheless, Marme Inversiones 2007 filed for creditors’ bankruptcy in 2014, before the Court then initiated the coordinated liquidation plan in October 2015 (…).

Original story: El Periódico

Translation: Carmel Drake

The Reuben Brothers Win the Bid for Santander’s Ciudad Financiera

12 November 2018 – El Confidencial

Banco Santander’s Ciudad Financiera has a new owner. The Reuben brothers have won the bid to acquire the headquarters of the Spanish bank, whose former owner, Marme Inversiones, filed for creditors’ bankruptcy. The Asian investors, who are residents in London and lovers of Ibiza, submitted the highest bid for the land in Boadilla del Monte (Madrid), fighting off competition from the bank itself chaired by Ana Botín and from the Arab fund AGC Equity Partners.

That is the result of the bid after the envelopes containing the final offers from the three candidates were opened by the bankruptcy administrator. Although the final price is not known, the offers amounted to around €3 billion, according to sources close to the operation, one of the largest operations ever in the real estate market in Spain involving a single asset.

From now on, to validate the purchase by the Reuben brothers, the judge from the mercantile court who is conducting the sale will have to certify that the offer from the London-based millionaires is correct, fulfils all of the requirements and complies with all of the analysis regarding transparency and money laundering. Nevertheless, and even if the judge gives his blessing, Banco Santander may exercise its right of first refusal, which gives it the last word for recovering the headquarters, which it sold in 2008 to a group of investors, who were also British, and with whom it agreed to remain as the tenant for forty years.

For that, the €500 million that Santander has paid Marme by way of rental over the last ten years has to be deducted from the final price, as does the €300 million of intra-group debt that is no longer taken into consideration following the entry into bankruptcy of the company.

Movements in the courts

Because what the Reuben brothers are now buying is the asset of a company that, after borrowing funds to pay even the tax on the original acquisition in 2008, can no longer keep up repayments on the loan it requested to acquire Ciudad Financiera and so filed for bankruptcy. After a long bankruptcy administration process, numerous claims by the creditors in the courts and offers from several international sovereign funds, the Spanish entity wanted to acquire the land of its headquarters in Boadilla del Monte (Madrid), where almost 7,000 people work.

The creditors of Marme Inversiones 2007 include ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank, which granted a loan amounting to €1.575 billion to Propinvest ten years ago in the form of a leaseback arrangement with Santander’s largest real estate asset. Other entities also participated in that loan, including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which started to sell their stakes in the loan to vulture funds in 2011, with significant discounts on the nominal values, when the owner started to acknowledge that it was unable to make the debt repayments.

One of those who purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. The first two submitted an offer to acquire Ciudad Financiera on 17 September, but their proposal was lower than those offers by Santander (…).

The Reuben brothers, which have purchased almost 168 hectares of land in Ibiza over the last two years, have submitted their bid for the Ciudad Financiera through Ibiza Properties LTD. That company was constituted on 1 August, with a nominal value of just GBP 100, money that it will now have to increase to cover the payment to the bankruptcy administrator.

Original story: El Confidencial (by Agustín Marcos)

Translation: Carmel Drake

The Reuben Brothers Edge Ahead in the Bid for Santander’s Ciudad Financiera

22 October 2018 – Eje Prime

The Reuben brothers are in pole position in the race for Santander’s Ciudad Financiera. Their company, Reuben Brothers, has submitted the best offer for the headquarters that the Botín family’s bank owns in Boadilla del Monte (Madrid).

The other two companies bidding in the operation, which is reportedly worth around €3 billion, are AGC and Banco Santander itself. Those three players are the only ones that submitted bids for the Ciudad Financiera on Friday, the deadline for the submission of final offers.

The sale of Santander’s headquarters is part of the insolvency proceedings in which the former owner of the asset, Marme Inversiones, is immersed. The brothers Simon and David Reuben, with the support of JP Morgan, have sent the highest bid to the court, followed by AGC and Santander, according to Vozpópuli.

The envelopes are going to be opened between Wednesday and Thursday of this week, nevertheless, the sale could still be postponed for a little longer by the courts. Not in vain, the Santander Group claims that it has the right of first refusal in the operation, which means that it could improve on the offer that emerges victorious from the bid this week. Neither the Reuben Brothers nor AGC consider that the bank holds this option; they argue that this matter was already resolved during the bankruptcy proceedings.

Original story: Eje Prime

Translation: Carmel Drake

Santander Offers €3bn for its own Ciudad Financiera

19 September 2018 – Eje Prime

Banco Santander could end up buying back its Ciudad Financiera. The Spanish bank has submitted an offer for around €3 billion for the complex in the framework of the auction organised by Commercial Court number 9 in Madrid to liquidate the assets of Marme Inversiones, the owner of the asset, according to Expansión.

Besides Santander, two other entities have submitted bids. They are the Kuwaiti fund headquartered in the British capital, AGC Capital Markets, and the British-Irani investor Robert Tchenguiz.

According to the most recent information, Blackstone was going to participate in the bid. Specifically, the US fund was going to offer more than €3 billion for the Spanish bank’s central offices.

In the end, both Blackstone and Centerbridge have ruled out participating in the auction, the resolution of which will be revealed within the next few days: the bankruptcy administrator could award the asset, or open another phase for the receipt of better offers.

Banco Santander’s Ciudad Financiera has been owned by Marme Inversiones (controlled by the investors Glenn Maud and Derek Quinlan) since 2008. The company filed for bankruptcy after it was unable to keep up the repayments on the loans it took out to sign the operation.

Original story: Eje Prime

Translation: Carmel Drake

Centerbridge & Blackstone Join Forces to Bid for Santander’s Ciudad Financiera

13 September 2018 – Expansión

A consortium led by the US funds Blackstone and Centerbridge is emerging as the main favourite to buy Banco Santander’s headquarters in Boadilla del Monte (Madrid), in one of the largest real estate operations of the year in Spain, which is set to exceed €3 billion.

The court that is overseeing the creditors’ bankruptcy of Marme Inversiones, the company that has owned the so-called Ciudad Financiera Santander since 2008, has asked the parties interested in purchasing this asset to submit their binding offers by Monday 17 September at the latest. The objective of the bankruptcy administrator is to use the funds raised to repay Marme’s debt in full.

According to market sources, the funds GSO (a subsidiary of Blackstone specialising in restructured debt) and Centerbridge are preparing a joint offer that could amount to €3.1 billion. These investors are negotiating to finance their proposal with a loan that could be led by Deutsche Bank.

Second attempt

Both GSO and Centerbridge are now creditors of Marme, given that they purchased some of the debt from the banks that loaned money to the company back in the day. Their bid could be pitted against others from creditor funds such as Avenue Capital, according to sources close to the process.

During the creditors’ bankruptcy, which began in 2014, GSO and Centerbridge already tried to take control of the company, with a proposal to buy Marme’s share capital and retain the current debt. It was a similar strategy to the one pursued for several years by Aabar (an Abu Dhabi fund) together with the British-Iranian investor Robert Tchenguiz, after buying some of the debt granted to Marme by the bank RBS.

But the administrator has decided to conduct a formal auction so that the interested parties can bid together for the Ciudad Financiera and whereby allow all of the liabilities to be repaid. The creditors believe that offers above €3 billion will be necessary to recover all of the principal and interest.

Just as Blackstone and Centerbridge seem willing to formalise an offer in compliance with the conditions established by the judge, it is not clear whether Aabar is going to participate in the auction. In recent months, the fund has been caught up in a legal dispute with Tchenguiz regarding their joint investment in the company that currently owns the Boadilla campus.

The Kuwaiti fund AGC Equity Partners is also analysing the possibility of submitting an offer for the Ciudad Financiera. Almost two years ago, that firm submitted an offer for €2.7 billion to acquire the headquarters of the Spanish bank, but it did not get the go-ahead because the creditors’ bankruptcy was in an incipient phase and because Santander threatened to exercise its right of first refusal to buy back its offices.

Long-term rental

The investors Glenn Maud and Derek Quinlan, who already owned the Citi skyscraper in London, purchased the headquarters of the Spanish bank in 2008 for €1.9 billion, for which they used a loan from a group of banks led by RBS. Shortly after the acquisition, problems started with meeting the conditions of the loan, which ultimately led to the creditors’ bankruptcy of Marme Inversores, one of the instrumental companies created by Maud and Quinlan to carry out the transaction (…).

The main appeal of the Ciudad Financiera is the fact that the bank chaired by Ana Botín has committed to remain as the tenant for 40 years, until 2048. On that date, the Spanish entity may negotiate an extension to the lease contract or repurchase the property.

Three options

Once the offers have been presented next Monday before the Mercantile Court number 9 of Madrid, which is leading the bankruptcy, three possible alternatives may ensue.

If there are several attractive bids, the judge may open a process to competitively improve the prices proposed. If there is only one offer, of an appropriate value to pay the creditors, then it may be accepted immediately (…).

The last possibility is that the offers do not reach the estimated valuation. In that case, the judge may change the strategy and allow the piecemeal sale or liquidation of the different liabilities of Marme Inversiones (…).

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

The Owner of Santander’s HQ is Set to Emerge from Bankruptcy

26 January 2018 – Voz Pópuli

There is light at the end of the tunnel in the creditor bankruptcy of Marme Inversiones 2007, the company that owns Banco Santander’s Ciudad Financiera (in Madrid). This week, a key meeting was held to unblock the bankruptcy proceedings, with deliberation over several appeals, something that the courts will come to a decision about over the coming weeks.

The parties potentially interested in this process have started to take positions regarding the possible sale of the Ciudad Financiera, which could happen in the middle of this year. The best-positioned player is the fund AGC Equity Partners, with a proposal that values that bank’s headquarters at between €2.7 billion and €2.8 billion, as this newspaper revealed.

But two competitors have emerged: a consortium formed by Madison Capital, Glenn Maud and GCA; and a proposal from the Iranian-born financier, Robert Tchenguiz, according to financial sources consulted by Vozpópuli.

The offer that most concerns AGC is the one presented by the US funds (Madison and GCA) and the British property magnate Glenn Maud, who was one of the original buyers in 2008. The price that they may put on the table is close to the figure being offered by the Arab fund, around €2.7 billion.

Months of advantage

Nevertheless, AGC is the favourite in the race because it has been negotiating the operation with Santander for several months. Santander is not only the tenant in this case, it also holds a small part of the debt and a right of first refusal. Having said that, the Commercial Court number 9 of Madrid has denied that preferential right until now. Be that as it may, an agreement with Santander would facilitate everything.

Meanwhile, in addition to these two offers, further competition has emerged in the form of Tchenguiz, owner of the company Edgeworth Capital. The Iranian national has been trying to harness his investment in subordinated debt for years. By holding one of the riskiest tranches, he has to make sure that the liquidation plan protects him, otherwise, he will be exposed to discounts. That negative scenario would become a reality with AGC’s liquidation plan.

For this reason, Tchenguiz is offering an insolvency exit plan in which he would become the owner of the Ciudad Financiera by purchasing the stake owned by Glenn Maud.

To complete the picture, we should take into account that beyond the bankruptcy of Marme Inversiones, two other companies in Spain are involved in this insolvency: its two parent companies, Delma and Ramblas. And that those creditors and investors are awaiting trials in the UK and The Netherlands. This complex legal battle is starting to see the light at the end of the tunnel.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Santander Unblocks Sale Of Ciudad Financiera After AGC’s Mega-Offer

15 September 2017 – Voz Pópuli

The soap opera involving the sale of Santander’s Ciudad Financiera is closer than ever to being resolved. The Arab fund AGC Equity Partners, Santander and the majority of the creditors have reached an understanding to unblock the process, which has been stalled for three years, after the company that administers Santander’s global headquarters, Marme Inversiones 2007, filed for bankruptcy.

The key has been the size of the new offer presented in recent months by AGC, amounting to around €2,800 million, according to financial sources consulted by Vozpópuli. With this proposal, all of the creditors would receive the amounts due to them and there would even be some funds left over to share out amongst Marme’s original shareholders: the property magnate Glenn Maud and the fund Aabar Investments, controlled by IPIC, which owns Cepsa.

AGC has already informed the judge handling the bankruptcy – at Mercantile Court number 9 in Madrid – that the situation is now ready to be unblocked. But the magistrate has left everything hinging on the Provincial Court, which still has to resolve several prior appeals. Various sources consulted indicate that these resolutions could be resolved by the end of this year or the beginning of 2018. Then the formal auction of the company that owns the Ciudad Financiera could be launched, with AGC as the main favourite, assuming no last minute surprises.

Santander’s role

One of the keys behind sorting out the sale of the Ciudad Financiera is that Santander has withdrawn an appeal that threatened to perpetuate the bankruptcy process. In this way, the bank chaired by Ana Botín, advised by Clifford Chance, decided to submit a letter alleging that the Marme liquidation plan was not taking into accounts its right to sound out the market (for potential buyers).

In addition, Santander engaged Goldman Sachs to look for offers that would better fit with their interests. Paradoxically, the firm that is now best positioned to win – AGC – is the same one that blocked the bank’s appeal. According to legal sources, Santander pays an annual rent of around €110 million for the property and the rental contract runs until 2048, neither of which would vary under the new owner. But there are other clauses in the agreement that would be changed in favour of Santander.

The final stumbling block is the position of two of the players that invested in Marme Inversiones after it filed for bankruptcy: Aabar Investment, which purchased the shares of one of the original shareholders, the British businessman Derek Quinlan, and which would like to buy the Ciudad Financiera itself; and the Luxembourg company Edgeworth Capital, led by the controversial Iranian banker Robert Tchenguiz.

Sources close to the process think that it will be hard for their appeals to gain traction in the face of AGC’s willingness to repay all the creditors; something that no other investor has offered until now. The other recent offers amounted to between €2,400 million and €2,500 million.

Origin of the problem

Marme Inversiones 2007 filed for bankruptcy in 2014 after it was unable to pay its debts. The company was created in 2008 with very heavy financial burdens, at the worst time, shortly after the bankruptcy of Lehman Brothers. Marme paid €1,900 million for Santander’s headquarters in Boadilla del Monte.

Now the situation is just the opposite. The good times in the market mean that obtaining financing is cheaper than it has been for the last decade, something that AGC wants to take full advantage of to seal this complex operation.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Three Large Funds Offer €2,800M For Santander’s HQ

12 February 2016 – Expansion

The tortuous liquidation process of Marme Inversiones, the company owner of the Ciudad Financiera of Banco Santander, is on the verge of culminating the transfer of this property complex to a group of international investors for about 2,800 million euros. This is the amount of the tender submitted by the funds Global Asset Capital (GAC), AGC Equity Partners and Cruz Capital to the Madrid Court responsible for the supervision of Marme insolvency proceedings, the company that acquired Santander‘s headquarters in Boadilla del Monte (Madrid ) in 2008 for 1,900 million. Unable to meet the payment of the interests of the debt incurred in this transaction, Marme went to bankruptcy in 2014, and last year its receivers decided upon the company liquidation and the sale of its only asset, which is the office complex of Santander.

According to sources familiar with the process, during the auction, a tender was submitted by Aabar, Abu Dhabi sovereign fund, associated with the British-Iranian investor Robert Tchenguiz. There was also a purchase proposal by Azora Capital, a Spanish investment company managed by Hispania Activos Inmobiliarios.
 But these tenders were below the price raised by GAC, AGC and Cruz, an alliance that has beaten all the forecasts when approaching 3,000 million euros, 40% more than the market expectations.


GAC is a California fund, which has taken the lead of the consortium in the negotiations. AGC Equity Partners is an Arab investors vehicle, which owns Citigroup headquarters in London among other real property assets. Cruz Capital is a New York hedge fund (high-risk investments fund ). These companies also have the support of Glenn Maud, one of the original shareholders of Marme Investments, with 50% of the capital. The British investor, together with the Irish Derek Quinlan, acquired the Ciudad Financiera in 2008, thanks to a 1,850 million euros loan, led by the Royal Bank of Scotland (RBS). 
Barely two years after the purchase, Marme began having trouble paying off the debt. The accrued interests have made the current liabilities of the company rise to 2,700 million. The money the consortium intends to pay  in order to acquire the assets of Marme would allow the return of 100% of the debt to the creditors of the company, should the judge approve the transaction. RBS transferred all its loans, which are mostly in the hands of funds. GAC, Aabar and Tchenguiz are among the creditors who bought pieces of loans. The only banks of the original loan that maintain their position are CaixaBank and ING.


Santander pays an annual income of about 80 million for its headquarters. Although it has the first refusal right to match the offer and repurchase the Ciudad Financiera, it is not expected to exercise it.

Original story: Expansion (by Roberto Casado)

Translation: Aura Ree

Ciudad Santander´s Owner Declares Bankruptcy

10/03/2014 – Expansion

Marme Inversiones, the company owning Ciudad Santander (a building complex hosting headquarters of Banco Santander) declared voluntary insolvency due to not being able to deal with a €1.600 million loan granted for the purchase in 2008.

The process may provoke changes in ownership of the campus in Boadilla del Monte (Madrid) that right now is in hands of two investors: Glenn Maud and Derek Quinlan through Spanish Marme Inversiones. (…).

Several banks and funds granted the credit to Marme that stated Ciudad Santander as collateral, which were: RBS, HSH Nordbank, Deutsche Postbank, CaixaBank, Raffeisen Zentralbank, ING and Bayerische Landesbank. (…). It is predicted that debt execution might take place via the property seizure by the creditors.

(…) However, other factors play an important role in the restructuring, as apart from a sindicated loan, Maud and Quinlan filed for a €200 million credit from RBS, this time with shares of Marme Inversiones as a collateral. In 2010, RBS sold the debt to Robert Tchenguiz and a fund from Abu Dhabi, Aabar Investments, for 80 millones. Another option is that Aabar and other investors interested in Santander´s premises (like China International Corporation) would present an offer to buy the property and pay the sindicated loan. The bank chaired by Emilio Botín has not been affected whatsoever. (…).

 

 

Original article: Expansión (Roberto Casado)

Translation: AURA REE