Tag: McKinsey

BBVA, CaixaBank & Sabadell Recorded Revenues of €5bn from House Sales in 2017

2 April 2018 – Expansión

Last year, BBVA, CaixaBank and Sabadell recorded revenues of more than €5,065 million from the sale of homes that came onto their balance sheets due to non-payment during the years of the crisis. Santander obtained €1,295 million in this regard, and Bankia and Bankinter received €457 million and €138 million, respectively. In total, the banks in the Ibex 35 recorded sales of €6,955 million from the sale of homes, which represented a YoY increase of 6%.

In parallel to the signing of agreements to launch the transfer of the bulk of their portfolios of toxic assets to specialist funds, year after year, the banks are marketing properties through their own distribution platforms to clean up their balance sheets and return them to the figures that they registered before the outbreak of the crisis.

BBVA recorded the highest revenue figure, of €2,121 million, which represents an increase of 7.5% YoY, from the sale of 25,816 properties. Its subsidiary Anida is responsible for distributing its products in the market.

By the end of last year, BBVA’s exposure to the real estate sector had decreased by 37.2%, to €6,416 million, due, primarily, to the wholesale operations undertaken.

Last year, the bank chaired by Francisco González made a turn in its real estate strategy by agreeing to create a joint entity with Cerberus to which it will transfer some of its properties, worth around €13 billion. The bank will hold a 20% stake in that entity and the fund the remaining 80%. The operation is expected to be closed during the second half of 2018.

Last quarter

The largest increase in the sale of homes was achieved by CaixaBank, which saw its revenues rise by 20.4% YoY to €1,610 million. Most of those operations were concentrated in the final quarter of the year when proceeds of €561 million were received.

Through Servihabitat, CaixaBank markets the properties of the group’s subsidiary BuildingCenter online, as well as through the branch network and API. The bank has €5,878 million in foreclosed assets up for sale and €3,030 million allocated for rent.

The bank has engaged KPMG, Oliver Wyman and McKinsey to redefine its strategy and gain efficiencies in the divestment of the foreclosed real estate assets.

As part of that roadmap, last week, CaixaBank sold 1,458 homes to Testa for €228 million.

Meanwhile, Sabadell cut its property sales by 14% to €1,334 million due to fewer sales to institutional investors, which fell from €233 million in 2016 to €57 million a year later. Last year, Sabadell divested 14,924 properties, up by 2.6% compared to the previous year. Its subsidiary Solvia is its main distribution channel.

In parallel, Sabadell has placed two toxic real estate portfolios up for sale, proceeding in part from the former CAM, under advice from KPMG.

Last year, Santander recorded revenues of €1,295 million from the sale of foreclosed assets, which represented a YoY increase of 19.5%. The gross value of the assets sold by that bank last year was €2,168 million, up by 33% compared to the previous year. Santander obtained profits of €95 million from its sales, up by 64%.

Altamira is Santander’s distribution platform, which held €11,661 million in foreclosed assets at the end of 2017, of which €5,943 million proceeded from Popular. To that figure, we have to add €3,619 million in assets from Popular included in the operation agreed with Blackstone, which will allow the clean up of the group’s toxic assets (…).

Finally, Bankia sold 8,430 properties in 2017, which represents 20.2% of the stock it had held at the beginning of the year, for which it recorded revenues of €457 million, down by 2.9%. Bankinker, one of the banks with the lightest real estate load obtained €138 million, up by 2.2%.

Original story: Expansión (by Elisa del Pozo)

Translation: Carmel Drake

How Cerberus Became Spain’s Largest RE Company

3 December 2017 – Voz Pópuli

If you are thinking about buying a home over the next few months, statistically, it is likely that Cerberus will be the vendor. The US fund is one of the players that arrived in Spain at the height of the financial crisis (between 2010 and 2012), with the objective of acquiring banks and real estate companies, just like it had done in other countries. The former did not happen, despite several attempts to take over some of the former savings banks. But the conquest of the property sector went a lot better: so much so that the fund now controls more than €50 billion in assets and has just starred in the second largest operation in the Spanish real estate sector in recent years.

Those close to Cerberus define it as a fund that is meticulous, aggressive in its negotiating style and persistent. It has proven that last quality with the patience it has shown searching for major operations in Spain over many years. Last week, it finally was in a position to purchase BBVA’s property. It is the fund’s largest acquisition to date in Spain and it is going to cost €4 billion, most of which will be financed by Morgan Stanley.

Five key people inside the fund have been instrumental to the success of this operation, namely: Frank W. Bruno, one of the main directors of the fund at the global level; Lee S. Millstein, another key director of Cerberus, who has been overseeing the business in Spain for years; Manuel González-Cid, Senior Advisor to the fund and former Finance Director at BBVA, and his team; David Teitlebaum, head of the fund in Europe; and Daniel Dejanovic, head of the real estate business in Europe.

The Aznar junior factor

Several other people have also participated, although to a lesser extent: Carlos Abad, CEO at Haya Real Estate, the real estate servicer of Cerberus in Spain; Juan Hoyos, former President at McKinsey in Spain and President of Haya; John Snow, President of Cerberus, who met with the President of BBVA, Francisco González, to propose the deal in the first place; and José Maria Aznar Botella, son of the former Spanish President. The story of this fund in Spain has been inextricably linked to the incorporation of Aznar junior in recent years, at least from the point of view of the media. The bankers who have worked with him describe him as a “strong professional” who has been key to the fund’s success in Spain.

Both Hoyos and Aznar were most certainly instrumental during Cerberus’s first operation in Spain, in 2013, when it purchased Bankia Habitat, in the so-called Project Platform. It was a purchase that revolutionised the sector and paved the way for other similar deals, such as the sale of Altamira, Servihabitat and Anticipa.

Unlike what has happened with BBVA, Cerberus’s operation with Bankia did not involve an asset purchase, but rather the management of that entity’s assets. Like in other similar operations, the fund takes control of the workforce and the administration and sale of debt and foreclosed assets, in exchange for management commissions. Bankia Habitat became Haya Real Estate and subsequently expanded its perimeter after teaming up with Sareb, Cajamar and, this year, Liberbank. Those deals involved the disbursement of around €0.5 billion by Cerberus. Added to the €4 billion paid to BBVA and the fund’s other portfolio purchases, the total figure exceeds €5 billion.

The result of this strategy is that Haya Real Estate has reached a management volume of more than €40 billion, has almost 700 employees and recorded a profit of €31 million (in 2016).

Cerberus’s networks in Spain do not end there: it owns a doubtful debt management firm, Gescobro; a securitisation firm, Haya Tutulización; a stake in another manager of bank debt, Hipoges, whose sale it is currently negotiating with KKR; and dozens of companies where it keeps its real estate assets. As if they were not enough, it will soon be able to add the property developer Inmoglacier to this list.

And that is only one of the strings to Cerberus’s bow in Spain, it also engages in large business ventures such as Renovalia, which is currently up for sale. Operations such as the one involving BBVA reflect the fact that funds like this are still very interested in Spain, despite the uncertainties being generated by Cataluña. And beyond the foreign money that they bring, they should be seen as the new influential players, capable of moving markets such as the real estate sector. And they are here to stay. For the time being at least.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

CaixaBank Hires KPMG to Accelerate Sale of Rental Homes Worth €3bn

29 November 2017 – El Confidencial

Spanish financial entities have put their foot down on the accelerator to remove a decade’s worth of real estate crises from their balance sheets. The starting gun was fired by Banco Santander in the summer, when it transferred 51% of the €30 billion in toxic assets that it had inherited from Popular to Blackstone; and yesterday, another milestone was marked by the agreement announced between BBVA and Cerberus, which will allow the bank to deconsolidate more than €12 billion in foreclosed assets.

The next major step may involve CaixaBank after the entity engaged KPMG to try to accelerate the sale of a significant batch of real estate assets, with a net value of €12.1 billion. Specifically, the professional services firm is already working on organising one or more processes to allow the sale of some of the €3 billion that the bank owns in rental assets, according to sources familiar with the process.

That portfolio contains almost 40,000 units and, if it ends up being sold, will represent one of the most significant divestments made by the entity to date. Sources at CaixaBank acknowledge that they are working with KPMG and admit that one of the services that the firm is rendering “may include the sale of certain foreclosed rental assets” but they point out that it would only for a portion of the aforementioned €3 billion.

The sale to Testa of 135 homes, announced in September, fits within this strategy – a small appetiser ahead of the main course that the bank led by Gonzalo Gortázar really wants to serve. Its efforts are aimed at trying to taking advantage of the excess liquidity held by the large funds and the current attractiveness of Socimis to find an exit for its foreclosed rental assets.

Despite CaixaBank’s interest in reducing its real estate exposure, something that both the Bank of Spain and the European Central Bank are asking the entire sector to do, the entity is choosing to be cautious. It is pushing ahead one step at a time, according to market sources, who say that the bank is working to redefine the future of its whole real estate division.

New route map

CaixaBank’s real estate activity is currently divided into two large subsidiaries, Building Center, the real estate company that owns the bulk of the entity’s foreclosed assets; and Servihabitat, a platform (servicer), in which the bank holds a 49% stake, whilst the other 51% is owned by the fund TPG.

The second company, which has been given the mandate to manage the bank’s properties, but not ownership of them, has just hired Iheb Nafa as its new CEO, to replace Julián Cabanillas. It has also engaged McKinsey and Oliver Wyman to analyse all of its future options; any change would require the firm to reach an agreement with TPG; moreover, that giant may be interested in increasing its stake in Servihabitat.

CaixaBank has net real estate assets amounting to €12.1 billion according to its most recent quarterly report as at 30 September. All of this “property” is included in the area known as Non-Core Real Estate, which generated losses of €330 million during the first nine months of the year. The jewel in that crown is the real estate company Building Center, owner of the majority of the foreclosed assets, whose accounting coverage ratio stands at 49%.

Sources in the sector expect the bank to make its big move within the next year, and for it to be in line with those already made by BBVA and Santander. For the time being, the entity is limiting its expectations to the field of research, by indicating that “KPMG, Oliver Wyman and McKinsey are redefining operating processes to improve logistics and efficiency”.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

TPG & CaixaBank Hire Cerberus Director To Lead Servihabitat

3 November 2017 – Voz Pópuli

The times are changing at Servihabitat, the real estate arm of CaixaBank and one of the largest servicers in Spain. The platform, which is owned by the fund TPG (51%) and the Catalan bank (49%), has appointed a new board of directors after Julián Cabanillas’ decision to leave the firm; he had served as CEO until now.

The historical director of La Caixa has decided to step down after fulfilling the term that he had committed to undertake with the bank and the US fund. According to financial sources consulted by Voz Pópuli, Servihabiat has hired one of the key directors at Cerberus in Spain to replace him: Iheb Naffa, the CEO of Gescobro until now.

For more than a decade, Nafaa was one of the directors of the financial arm of General Electric (GE Capital) in Spain, serving in roles such as the Director of Risks, Director of Operations and Director General. Gescobro hired him in 2015, at the same time as that firm was acquired by Cerberus.

Nafaa will have another former director of General Electric as one of his right-hand men at Servihabitat, namely, Edelweiss Obiol, with whom he worked at the US company. Obiol replaces Feliu Formosa, another former La Caixa director who is leaving Servihabitat,  as Finance Director.

McKinsey and Oliver Wyman

The changes in Servihabitat’s leadership come at a time when the real estate company is carrying out a significant internal review. To this end, it has engaged two consultancy firms: McKinsey and Oliver Wyman. Sources consulted explain that these two firms are focusing on improving the real estate company’s internal processes, rather than on involving it in a merger or sale.

One possible corporate operation has been flying over Servihabitat for years. Conversations were even held with the private equity group Investindustrial last year. Various options have been explored, ranging from CaixaBank’s repurchase of TPG’s stake to then look for another operation, or for the fund to sell its 51% stake itself.

All indications are that changes may be afoot in 2018, in the face of the more than likely consolidation of the servicer market. Cerberus, where Nafaa is moving from, Apollo and Blackstone are all lining themselves up as possible buyers.

Servihabitat manages assets worth almost €50,000 million, according to figures as at 2016. They are mainly owned by CaixaBank and Sareb, and so they are not held on its balance sheet. The firm is mainly dedicated to administering the debt and assets and selling them. In 2016, it recorded total sales of €1,645 million. And between January and September of this year, it recorded turnover of €1,300 million, up by 17% compared to the same period last year.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

The 4 Largest Socimis Will Specialise By Asset Type

31 January 2017 – Cinco Días

Hotels, logistics assets, offices, shopping centres. The four largest Socimis – Merlin, Hispania, Lar España and Axiare – are entering their third year of life, and as they do so, they are embarking upon a new phase of specialisation by type of asset – the aim is to make their management more effective and ensure that they remain attractive to large international funds. (…). 

Between them, Merlin, Hispania, Axiare and Lar España now own assets worth almost €14,000 million – they have created small empires out of nothing.

Hispania looks set to become one of the major stars of 2017 with a series of operations planned to strengthen its already high degree of specialisation in hotels. The Socimi, in which the magnate George Soros owns a 16% stake, has a portfolio worth €1,793 million (including its most recent purchases at their acquisition prices). 61% of the portfolio value relates to hotels and most are located in the Canary Islands (70%) and the Balearic Islands (16%).

The experts forecast that this company, managed by Azora and led by Concha Osácar, will put the majority of its offices and residential assets on the market, and at the same time, will continue to buy up hotels. (…). 

Meanwhile, Merlin has taken steps to divest its residential and hotel assets, transferring them to Testa and Foncière des Murs, respectively, and is continuing to expand its core portfolio with its recent purchase of the Torre Agbar office block in Barcelona for €142 million. The Socimi’s portfolio currently comprises offices (48%), shopping centres (18%) – Merlin is now one of the major players in this segment – retail premises (22%) and logistics assets (5%). Experts consider that the latter have enormous potential to generate higher returns for this Socimi.

Axiare, led by Luis López Herrera-Oria, has already focused heavily on offices, which account for 73% of its €1,300 million portfolio. It has enhanced its presence significantly in recent weeks through its acquisitions of the headquarters of PSA, Cuatrecasas, McKinsey and Vocento for €242 million in total.

The Socimi’s high decree of specialisation in offices has led Colonial to take advantage of the fund Perry Capital’s departure from its share capital to acquire 15% of the Socimi. Some in the sector view this move as a precursor to a possible takeover bid, but the Catalan real estate company has denied the claim repeatedly. (…). 

Finally, Lar, led by José Luis del Valle and Miguel Pereda, has managed to specialise mainly in shopping centres, which now account for 75% of its €1,201 million portfolio. With shareholders that include Pimco and Franklin Templeton, the company owns 17 assets including shopping centres, retail parks and hypermarkets.

In just three years, Lar España has risen up the ranks to become the third largest owner of shopping centres in Spain, behind Unibail and Merlin. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

BBVA Reorganises Its RE Team To Accelerate Divestments

27 December 2016 – Vozpópuli

BBVA is reorganising its real estate management team to accelerate the divestment of its property portfolio. The entity chaired by Francisco González has agreed to the early retirement of Agustín Vidal-Aragón (pictured above), the Director who has been responsible for Anida and BBVA Real Estate since 2014. His departure, at 55 years old, comes at a time when the bank wants to shake up its business and make the real estate hangover disappear from its balance sheet as soon as possible, according to financial sources consulted by Vozpópuli. Sources at the bank declined to comment.

Javier Rodrígeuz Soler, Director of Strategy and M&A will take over the reins. He is one of the directors who has gained the most influence in the bank’s organisational chart in recent times. He reports directly into González and comes from McKinsey, like the bank’s number two in charge, Carlos Torres.

Over the last few years, Vidal-Aragón had held several different roles in BBVA, incuding Director of Pensions and Insurance in Latin America and Regional Director in Andalucía, before he was appointed Head of Real Estate in May 2014. At the time he replaced Antonio Bejar, who moved to take over the reins at Operación Chamartín.

Sources in the market consider that BBVA has fallen behind its competitors in terms of divesting its real estate portfolio under Vidal-Aragón’s mandate. According to the most recent publicly available figures, the bank still has more than €22,000 million in real estate exposure in Spain, one of the largest balances in the sector.

Rodríguez Soler is expected to place much greater emphasis on the sale of large real estate packages through the wholesale markets, aimed at large international funds. One example of this is the operation that the bank put on the market two months ago: Project Buffalo, through which it is seeking to remove 4,000 homes from its balance sheet.

Another strategic turn is linked to a change in philosophy. Until now, the culture at BBVA was to preserve the maximum value of its properties on the balance sheet, rejecting offers even if they equated to book value. From now on, they will think about property as an inheritance that they need to get rid of as soon as possible and at the best possible price, in that order in terms of priorities.

New team

Rodríguz Soler has created a team of his own to handle this challenge. The following people will report directly into him: Juan de Ortueta (Foreclosed assets), Juan Pedro del Castillo (Financing) and Ana Fernández Manrique (Strategy and Finance). In addition, he has recruited Pedro Egea from the Secretary General’s team, who will take care of all of the administration and control aspects of the real estate business.

Another change is that Cesáreo Rey, Head of Investments, will report into Rodríguez Soler’s area. He will do so directly to one of his trusted executives, José Ferrís. On balance, the new strategy seeks to get rid of the old inheritance.

Original story: Vozpópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Axiare Seeks Tenant For Its Newly Renovated Office In Madrid

21 December 2016 – Expansión

The Socimi in which Colonial owns a stake has put the office building that it owns on c/Ramírez de Arellano up for rent. The property, which has a surface area of 10,515 m2, has been undergoing renovations for the last year.

The Socimi Axiare Patrimonio has accelerated its investments as 2016 draws to a close. The company, which has a significant cash balance after doubling in size last year, has closed acquisitions amounting to around €180 million in the last month and a half, including the purchase of the corporate headquarters of both Cuatrecasas and McKinsey. It is also negotiating the purchase of the Vocento group’s offices for another €35 million, say sources in the sector.

Besides expanding its real estate portfolio, which is worth more than €1,200 million, the Socimi is working to improve its assets and to that end, has invested tens of millions of euros over the last few months. These projects include the building on Ramírez de Arellano, 15. Axiare acquired the building last year for €16.5 million and in May 2016, the Socimi whose largest shareholder is the real estate company Colonial, engaged the consultancy firm Colliers to undertake the complete renovation of the property, which was completed just two weeks ago. “The complete renovation, which was designed and executed by Colliers International, has transformed Ramírez de Arellano, 15, into a modern and functional building, with high quality specifications that fulfil the most demanding requirements in terms of sustainability, energy efficiency and technology”, say sources at the consultancy.

After 8 months of construction work and an investment of around €3 million, the new office building has a surface area of 10,515 m2, spread over seven floors and 108 parking spaces, distributed over two underground parking floors”. There is a lot of interest for the office given its location, in the Arturo Soria neighbourhood, where the A-2 highway meets the M-30 ring-road”. The objective is to lease it in its entirety to a single company looking to locate its corporate headquarters there, according to the heads of the project.

During 2016, Axiare has signed 24 lease contracts covering a gross leasable area (GLA) of more than 100,000 m2. That figure that will soon increase by another 11,000 m2 (…).

The arrival onto the market of the office on c/Ramírez de Arellano comes at a time of shortage of office products in certain areas of Madrid, which has driven by rents in the prime area of the capital. In this way, prices in the CBD (central business district) increased by 6% YoY during the third quarter to amount to €27.5/m2/month, whilst theoretical prices in the prime areas outside of the M-30 ring-road and in secondary areas rose by 4% on average.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Vocento Finalises Sale Of Its Madrid HQ To Axiare

15 December 2016 – Cinco Días

Axiare has put its foot down on the accelerator to complete several purchases during the final month of the year. In addition to its acquisition of the headquarters of Cuatrecasas and McKinsey in Madrid, the Socimi is now finalising the purchase of the building from where Vocento operates its business in Madrid. The operation will be closed imminently, for around €35 million, according to several sources familiar with the operation.

Vocento is following the strategy of moving from being the owner of the property to becoming the tenant, in exchange for making some money. Currently, the group has debt amounting to €128.5 million, according to data submitted to the CNMV relating to the third quarter.

The building, located on Calle Juan Ignacio Luca de Tena (the historical director of the ABC newspaper and member of its founding family) has been home to the newspaper since 1989, when it abandoned its headquarters on Paseo de la Castellana, where the ABC Serrano shopping centre is now located.

The holding company has negotiated a rental contract with the Socimi, which allows its companies to continue to occupy the headquarters in Luca de Tena for five years. In addition to ABC, Vocento has several online businesses, such as Infoempleo; several influential regional newspapers resulting from the merger of Prensa Española with Grupo Correo; a number of magazines; and the Colpisa agency, amongst others.

The building is located at exit Km 7 on the A-2 motorway. This area of the capital has been enjoying a busy few months, with Popular constructing its new corporate headquarters on the adjoining plot of land, and the University Clinic of Navarra building its first major hospital in Madrid just a few metres away, which is expected to open next year.

Through this acquisition, Axiare Patrimonio adds another new building to its growing portfolio, which comprises offices, retail and logistics assets. The Socimi, which debuted on the stock market in 2014, has now accumulated assets worth €1,230 million in just over two years. These types of listed real estate investment company have beneficial tax regimes, whereby they do not pay corporation tax, but they are obliged to distribute dividends on an annual basis. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Axiare Buys Cuatrecasas’ HQ In Madrid For €124M

13 December 2016 – Expansión

After a record third quarter in terms of real estate investment, the Socimis and funds in Spain are facing a frenetic pace of work as we head into the last few weeks of the year.

That is the case of Axiare Patrimonio. Yesterday, the real estate company controlled by Luis López de Herrera Oria closed its largest acquisition so far in 2016. The Socimi has invested €124 million to acquire the headquarters of the law firm Cuatrecasas in Madrid.

The property is a modern office building, which was completely refurbished in 2012. It has a gross leasable area of 15,094 m2 and 201 parking spaces. Constructed in 1982, the building used to house the headquarters of Mutua Madrileña until 2006 when it was sold for €120 million to Reig Capital, the holding company owned by the Andorran Reig family, the former owners of Banca Reig and the tobacco firm Puritos Reig.

The complete refurbishment was performed especially for Cuatrecasas, which, following the change of owner, will not change the terms of its 18-year rental contact, say sources at the law firm.

As a result of this operation, Axiare has increased the value of its asset portfolio to €1,230 million, having invested €275 million this year. 71% of the assets in its portfolio are offices, whilst commercial assets account for 11% and logistics assets for 18%.

“This is our third operation in just three weeks and is further proof that Axiare Patrimonio remains firmly committed to fulfilling its business plan. We are approaching the end of 2016 with a very good outlook”, said Luis López de Herrera Oria, CEO at the Socimi. Prior to this purchase of Cuatrecasas’ offices, Axiare’s most recent operation involved the acquisition of two logistics warehouses for €14 million on 2 December. Moreover, in the office segment, the Socimi bought McKinsey’s headquarters on 23 November for €42 million.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

The Socimi VBA Will Debut On The MAB In November

16 August 2016 – El Confidencial

Another new Socimi, VBA Real Estate, is planning to list on the stock exchange and has decided to accelerate its debut. It is now working against the clock ahead of its listing on the MAB (Alternative Investment Market) in November. But that is just the beginning, given that the company hopes to move onto the main stock market and to start competing with the large Socimis in the field, in other words, with Merlin, Hispania, Lar and Axiare.

In fact, its strategy on the stock market partially replicates those adopted by these large vehicles, given that the reason why VBA is debuting on the MAB is not just to comply with the legal requirements imposed on Socimis to benefit from their special tax regime. In this case, VBA also wants to raise money to finance new purchases and grow in size, a policy that would involve future capital increases, and that means that its upcoming debut on MAB will be structured as an IPO (Initial Public Offering or Oferta Pública de Suscripción or OPS).

To accompany it on its stock market debut, the Socimi has hired Renta 4 and Aguirre Newman, and has also hired professionals from firms such as PwC and McKinsey to comprise its management team, with David Calzada at the helm, as the CEO of VBA.

The Socimi already owns assets for rent in its portfolio, comprising 166 homes, 17 parking spaces and 68 storerooms, spread over four complete buildings; as well as others, scattered across several properties. It has performed these operations with a net direct profitability of 5%, without gearing, and a discount of between 10% and 30% on the market value, which has allowed it to accumulate an increase in its asset value of 34%.

To build this portfolio, VBA has invested €14 million, after having analysed operations worth €420 million and having raised €16.2 million, as well as having closed financing amounting to €3 million. With its upcoming debut on the stock market, the Socimi hopes to secure another €15 million, which will allow it to continue to progress towards its investment objective of €100 million.

According to its roadmap, the company hopes to have a gearing or Loan to Value (LTV) ratio of close to 50%, an ambitious challenge, given that it currently amounts to 16%.

Diversified shareholding

To give credibility and transparency to these numbers, VBA subjects its accounts to a quarterly review and publishes the corresponding financial statements, along with a valuation of its assets, a policy that adopts in order to provide a period point of references to investors interested in investing in its shares. This approach means that it is already complying with the practices of the (main) stock market, even though the obligation does not apply to MAB-listed companies.

Currently, the Socimi’s share capital is owned by 35 different shareholders, from Israel, USA and Spain, and none of them owns more than 15% individually. Part of its decision to accelerate its debut on the stock market (it could have waited until 2017) was based on the fact that several investors are interested in buying its share capital, but they will only do so once the company is listed.

Madrid, Málaga, Valencia, Sevilla and Bilbao are the cities where VBA has set its sights. It tends to close its investments in specific areas and neighbourhoods outside of the centre of those capitals, focusing instead on more popular areas, where rental prices are more affordable.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake