Martinsa’s Creditors Put 45 New Assets Up For Sale

30 April 2017 – Expansión

A year and a half after its liquidation was approved, the property developer Martinsa Fadesa is still working on the process, with the aim of returning to its creditors at least a small part of the more than €6,000 million that the company owed when it filed for bankruptcy.

To that end, the heads of the process have launched several auctions of the assets that Martinsa still owns, including homes in some of its macro-developments and plots of land for development, amongst others.

The latest initiative in this sense has been the creation of a special lot containing 45 assets, including finished homes, others under construction and a plot of land for development.

Highlights include a 2-bedroom home in Ayamonte (Huelva), measuring 95 m2, that has a terrace, private garden and parking space, which has an asking price of €108,290.

In Paterna (Valencia), Martinsa is selling homes and parking spaces alike at its Mas del Rosari development. For example, the real estate company is selling a social housing flat, measuring 90 m2, for a minimum price of €120,020.

This lot, the seventh to be created by the liquidators of the real estate company, also includes buildable land in El Saboyal de San Mateo de Gállego (Zaragoza), measuring almost 10,000 m2 and with a buildability of approximately 7,020 m2 for the construction of 39 semi-detached family homes. The initial price of the plot for auction amounts to €2.3 million.

To carry out the sale of these and other assets, those responsible for the liquidation, have created a website (martinsafadesaliquidacion.es), through which bids can be made for the real estate company’s plots of land, homes, storerooms and parking spaces. In the case of this latest batch, the deadline for participating is 8 May.

According to the latest data presented by Martinsa Fadesa, at the end of 2014 (the company formally requested to file for liquidation in March 2015), the hole in its balance sheet amounted to €4,603 million. Specifically, it owned assets worth €2,392 million to cover total liabilities of €6,995 million, of which €3,200 million corresponded to debt with financial institutions.

In December 2014, the real estate company chaired by its largest shareholder, Fernando Martín, presented a new proposal for its repayments after failing to fulfil the schedule set out in its first plan, approved in 2011, and which allowed it to emerge from the largest creditor bankruptcy ever seen in Spain. Then, Martinsa Fadesa had been negotiating with its financial creditors, including Sareb, CaixaBank, Popular and Abanca, for more than a year regarding a repayment plan for the more than €6,600 million that it owed.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Martinsa Fadesa Puts 300 RE Assets Up For Auction

6 February 2017 – Expansión

The bankruptcy administrators of Martinsa Fadesa are getting ready to initiate successive notarial auctions of various real estate assets owned by the firm, as well as of several of the companies in the Group that have filed for liquidation.

These auctions will be carried out through the auction portal of the Official State Gazette (BOE), according to information provided by the current managers.

To this end, the administrators of the company will publish information sheets about the assets to be auctioned, with the aim of providing as much information as possible to users about the assets in question.

According to sources close to the process, the liquidation of Martinsa Fadesa may be completed in 2017 once the creditors have been returned “the present value” of the assets that they financed.

The jewels in Martinsa Fadesa’s crown included a group of buildings and plots of land in Paris, as well as assets located in Poland and Morocco.

The liquidation of the company, which was one of the largest real estate companies in the country during the boom years, involved the sale of assets at discounts of around 30% on their respective book values.

It also included the auctioning off of assets and the assignation of unsold assets to creditors so that they could choose whether to carry out “daciónes en pago” or sell the assets in return for cash.

The liquidation process, which was agreed in March 2015, was structured into three phases.

The first phase included the company’s most liquid assets, particularly those located in Madrid and Barcelona and along the coast.

During the second phase, the bankruptcy administrators put mortgaged assets on the market, whose revenues were used to repay those mortgages.

The third phase was orientated towards the repayment of debt lent by the ordinary creditors with assets not sold during the first phase. Once completed, the other assets were assigned to the creditors that so desired them through a notarial procedure.

The real estate company’s liquidation process began before the summer of 2015, after the ruling was issued by the judge in Mercantil Court number 1 in La Coruña.

And, even through on 11 March 2011, an agreement was approved for Martinsa to repay debt amounting to €7,200 million over a 10 year period, without any discounts, the company’s breaches and liquidity shortages forced it to file for liquidation.

Original story: Expansión 

Translation: Carmel Drake

Manuel Jove Joins Forces With BBVA To Construct New Homes

8 November 2016 – La Opinión A Coruña

Inveravante, the corporation owned by the A Coruñan businessman Manuel Jove, has joined forces with Anida, the real estate arm of BBVA, to create a new firm, Avantespacia Inmobiliaria, which will focus on building new homes in Spain, according to a statement made today by the two companies.

During the initial phase, the partnership will build 850 new homes in the centre of several cities such as Madrid, Málaga and Las Palmas de Gran Canaria and, in a second phase, it will take on other new developments, also in large capital cities.

With this initiative, the Galician businessman makes a return to the residential property development business in Spain, given that it is the first project that he has undertaken in the sector in the last decade, following the sale of Fadesa to Martinsa in 2006. Nevertheless, during the intervening years, through Avantespacia, the real estate division of Inveravante, Jove has developed housing complexes in cities in the north of Africa, specifically in Casablanca and Tanger, and is considering embarking on projects in Mexico and Brazil.

Now, “given the strong outlook for the real estate sector in Spain”, Jove’s firm and the subsidiary of BBVA have decided to unite some parts of their respective buildable land portfolios in a return to house construction.

Inveravante will control 70% of the partnership, called Avantespacia Inmobiliaria, whilst Anida will own the remaining 30% stake.

The two partners have already launched their first project in Malaga, involving the development of 135 homes, which will be constructed on a plot of land formerly owned by Tabacalera, in one of the areas “with most potential” in the city, next to the new Paseo Marítimo.

The next initiatives, which have already been put on the market, will be undertaken in Madrid, on Calle Francisco Silvela and in the neighbourhood of Las Rosas.

Avantespacia will be in charge of the architecture and construction aspects of the properties, as well as the marketing, although the homes will be included on BBVA’s specific websites. Manuel Jove used to be a shareholder of Spain’s second largest bank.

Original story: La Opinión A Coruña

Translation: Carmel Drake

The New RE Kings: Professional & Discreet

7 November 2016 – El País

The property sector still suffers from its soiled reputation as the cause of the bubble that led to the ruin of so many real estate companies, savings banks and families, ultimately bringing down the Spanish economy. But in a very discrete way, the sector is recovering its strength and real estate companies are becoming involved in major corporate operations once again, from purchases to mergers to stock exchange IPOs. The large corporations have also turned their business models on their heads. Whilst previously they undertook all kinds of activity (from property development to rental), we are now seeing specialist companies, many of whom are controlled by overseas investment funds.

The kings of property have also lost the glamour that those self-made businessman, such as Enrique Bañuelos (Astroc), Luis Portillo (Colonial) and Fernando Martín (Martinsa) enjoyed as their fortunes shined on the Forbes rich list (…). Nowadays, the new real estate companies do not have a visible face but rather are professional undertakings, and in many cases the managers are anonymous. The Socimis have taken up their place alongside the private equity funds and the large international investors such as the US businessman George Soros; Wang Jianlin, the richest man in China; and the Mexican magnate Carlos Slim.

Real estate stalwarts, such as Martinsa-Fadesa, Metrovacesa and Astroc, whose names used to feature on property developments, were left for dust, devoured by the black whole of gigantic debt. Their place has been occupied by the Socimis Merlin, Hispania, Lar and Axiare, whose names are barely known by the majority of the general public; by property developers such as Vía Célere and Neinor Homes, some of which have been created by overseas capital either investing directly in their capital or through partnerships for specific projects; and even by the former real estate arms of the banks, most of which are now owned by international funds.

One of the few exceptions to the empires from the last decade that has managed to survive is Colonial, which has cleaned up and transformed into a company that specialises in rental properties, and which is back with new investment plans. Last month, the company chaired by Juan José Brugera acquired 15.1% of the Socimi Axiare for €135 million. “Most of the companies that are left are a selection of the most professional enterprises”, said the Professor of Applied Economics at the Pompeu Fabra University, José García Montalvo. (…).

“The new managers of the real estate companies are more professional”, argues García Montalvo. In addition, the companies are more specialised and some even focus only on specific segments. One example is Lar España, a Socimi that specialises in shopping centre management (although it does also own a few office buildings), which has launched a €240 million investment plan for next year, supported by the major funds that comprise its shareholders, such as Franklin Templeton, Blackrock and Pimco.

Another example is Hispania, in which the US multimillionaires and fund managers George Soros and John Paulson hold stakes. It has also grown rapidly since it debuted on the stock market in 2014 and now manages assets amounting to almost €1,500 million. Its strategy is clear: to grow in size. Although it failed in its purchase of Realia, the company led by Concha Osácar and Fernando Gumuzio has absorbed the hotel Socimi Bay and all of the experts in the sector have tipped it to play an important role in upcoming operations. (…).

Original story: El País (by Ramón Muñoz and Lluís Pellicer)

Translation: Carmel Drake

Spain’s New ‘Property Kings’

2 March 2015 – El Mundo

2006 was a key year for Fernando Martín. Not only did the Chairman of Martinsa hold the presidency of Real Madrid for a short time, he also acquired the real estate company Fadesa for €4,000 million. Two years later, the burst of the (real estate) bubble put an end to his reign. Since then, the businessman has tried to resist (his downfall) until this week, when the banks and Sareb put an end to his adventures, by plunging Martinsa into bankruptcy. His creditors say that throughout the bankruptcy negotiations, Martín has demanded that he continue in his role as Chairman of the company and also retain his company car, his secretary and his salary of around €1.5 million, even though the company’s activity has been minimal.

With this defeat falls the last of the property lords who led the Spanish economy’s most important sector during the boom years, with negotiation tactics that many associate with lobster lunches and (VIP) boxes at football matches.

However, Martín’s fall coincides with the rebirth of the empire. Last year, institutional investors closed transactions amounting to €14,000 million in Spain (a volume of activity that was only exceeded in 2006 and 2007) and data from the housing market also shows that the property sector has turned the corner towards recovery. In fact, in 2014, the number of new mortgages taken out increased for the first time, after six years in decline.

This rebirth is accompanied by new businessmen with profiles more akin to those of bankers than (property) developers. The property kings’ successors are more used to having canopes for lunch, in true British style, and many of the important decisions about the future developments that will see the return of cranes to Spain’s landscape, are no longer being made in (VIP) boxes at the Bernabéu, but instead in offices in Madrid, the City of London, Dallas, New York and Beijing.

Former developers, such as Fernando Martín, Enrique Bañuelos (Astroc) and Rafael Santamaría (Reyal Urbis) have now made way for Wang Jianlin (Wanda), Ismael Clemente (Merlin Properties), Juan Pepa (Lone Star) and Concha Osácar (Azora).

These are executives who no longer depend on the banks to finance their projects; instead they are backed by large insurance companies, sovereign funds and even highly qualified investors, such as George Soros and Carlos Slim.

“We are facing a paradigm shift. During the boom (years), developers wanted to make more than they were able to and they focused on stocking up on land, due to the peculiarities of that raw material. However, (property) development is like manufacturing and no manufacturer purchases (his) raw materials 10 years in advance. When we hit economic difficulties, that model collapsed. Now, we are seeing different management and development models exist side by side. We are moving towards a more professional model, in which fewer developers compete, with stronger brands”, explains Luis Ruiz Bartolomé, co-author of the book ‘Return, property, return’ (‘Vuelve, ladrillo, vuelve’).

Under this model, the large investors, cooperatives and local developers that have managed to survive the difficult years, are going to co-exist. All of them will compete with a different mentality and with new ways of managing assets.

“The new players in the real estate sector will have to analyse the current key factors (effectively) to enable them to have a more global profile through increased specialisation and professionalization”, says the partner responsible for Real Estate at KPMG, Javier López Torres.

Wang Jianlin (pictured above)

On his trips to Spain, the Chinese tycoon has enjoyed evenings at the Teatro Real, but he also likes football. In fact, his first investments in this country were in the Torre España – a building he bought from Santander – and a stake in Atletico de Madrid. Now, the owner of the Wanda Group wants to launch the development of the so-called Wang mega-complex, a residential and leisure park that may be constructed on land that used to house former barracks in Madrid. Nevertheless, to date, the Asian millionaire’s investments in Spain have merely represented a token gesture, in the context of the global figures for his real estate business. The Wanda Group is the largest land-owner in China and it is constructing the largest residential skyscraper in London, next to the Thames. According to the Chinese press, Jianlin is also considering the purchase of the AC Milan football team.

Jaime Echegoyen

It is likely that when the Chairman of Sareb was CEO at Bankinter and Head of Barclays in Spain, he never imagined that it would end up holding the reins of the bad bank. This banker, who always works with office door open, is responsible for managing the real estate giant that was created in 2012 with 200,000 assets (80% financial and 20% property) amounting to €50,781 million. Echegoyen’s team is working on the completion of 1,000 homes (which it received ‘unfinished’ from the banks) across 52 sites. In addition, it is studying the development of some of the 5,000 plots of land that it received as inheritance, to be able to better market them before 2027, when the semi-public company will have to be dissolved.

Juan Pepa

This Argentine, who lives in London, is the Managing Director of the North American fund Lone Star and in 2013, he managed to convince US investors to back Spanish property. When Pepa comes to Spain and announces that his is going to launch the largest developer in the country this Spring, he does so with a level of enthusiasm that may surprise (people) after the hard times experienced in recent years. “We are going to fill the country with cranes”, he likes to declare. In recent years, Lone Star has purchased the real estate company Neinor from Kutxabank and Eurohypo’s loan business (together with JP Morgan) to launch this project. With a financial background and an MBA, Pepa plays polo and is the patron of the Pro Alvear Foundation, which works to promote education and technology in the La Pampa province of Argentina. This executive, who is less than 40 years-old, does not like the press referring to his fund as a vulture; he assures them that he has not come to Spain with a short-term view and although, he does not provide any details about his project, he says that the proof will be in the fact that it will generate value for the Spanish economy.

Ismael Clemente

Also a banker by trade – he used to work at Deustche Bank for example – but more closely related to property than Echegoyen and Pepa, Clemente founded Magic Real Estate during the worst year of the crisis (2012) and now is the head of Merlin Properties, the Socimi that debuted on the stock exchange in an IPO that raised €1,250 million.

George Soros and Carlos Slim

The tycoon who devalued the pound in 1992 and the Mexican multi-millionaire represent the many international investors who want to get involved in the recovery of the (real estate) sector through their financial investments. Soros is one of Hispania’s shareholders, whilst Slim has taken a stake in FCC. From there, he wants to acquire Realia to complete his business empire, which includes valuable assets from around the world, in many different sectors; América Móvil is one of the jewels in his crown.

Leopoldo Moreno

In addition to the businesses of large investors, cooperatives are also proving themselves to be a successful formula for development, as banks have closed the (financing) taps. The CEO of Ibosa has known how to take advantage of this model with numerous developments in the Community of Madrid.

Santos Montoro

This businessman from Murcia is a good example of how a family developer can compete in the (new) real estate model that has been imposed by the investment funds. In fact, his company, Monthisa (which was created in 1968) has managed to reinvent itself during this crisis to form a partnership with the fund H.I.G. to manage the Bull portfolio, a batch of apartments and garages that the US vehicle purchased from Sareb.

Enrique Bañuelos

After the fiasco involving Astroc, this deposed king has resumed his activity in London. From the City he wants to develop (property) in Spain through his new company called Veremonte and participate in BCNWorld, the tourism and leisure macro project that the Catalan authorities are looking to build

Original story: El Mundo (by María Vega)

Translation: Carmel Drake