GMP Becomes 3rd Largest Socimi In Spain

21 July 2016 – El Confidencial

(…) In the audit report just realised by the group owned by the Montoro family, the Socimi GMP confesses that the real estate consultancy Savills has granted its real estate investments a fair value of €1,349 million, representing an increase compared to their value last year (€1,192 million). That figure places the Socimi at the same level as Hispania, and as such, means that it is competing directly with the company led by Concha Osácar and Fernando Gumuzia for third place in the national ranking of the large listed real estate companies in Spain, behind Merlin-Metrovacesa and Colonial.

The company owns several major office buildings, including its own headquarters, located on Luchana 23, as well as the following properties: Parque Norte, Castellana Norte, Iberia Mart I and II, Génova 27, Hermosilla 3-Ayala 8, Alcalá 16, Castellana 81, Castellana 77, Goya 14, Puerto de Somport 8, Eloy Gonzalo 10, Velázquez 164, Condesa de Venadito 1, Titán 4, Llano Castellano 51 and Trespaderme 29.

In order to build up this portfolio, the company has benefitted from the invaluable assistance of the Singapore Sovereign Fund (GIC) since October 2014, following the fund’s acquisition of 32.9% of its share capital, as part of an agreement to spend €61.5 million on the shares. It has also committed to invest another €67 million before the end of March, which will allow GMP to maintain its pace of investment during its first few months as a listed company.

Given that the Socimi was constituted two years ago…the company is obliged to debut on the stock market before 30 September 2016. Nevertheless, as the company itself acknowledges in its audit report, its aim is to complete this process before it goes on holiday in August. This means that, if it obtains all the necessary authorisations, it may join the MAB – the Alternative Investment Market – within the next two weeks.

Financial situation

Despite the spectacular valuation of its assets, GMP has debt with credit institutions amounting to €800 million. The first key date in this regard will come in 2017, when debt amounting to €741.9 million is due to mature; that gives the company enough time to adapt its financial commitments, especially its syndicated mortgage loan with Société Générale.

At the end of 2015, the Socimi’s share capital amounted to €9.4 million, represented by 1.9 million shares with a nominal value of €4.92, although three weeks ago the company approved a split of the nominal value of its shares, as a preliminary step ahead of its debut on the stock market.

GMP Property’s revenues from rental income amounted to €57.35 million in 2015, compared with €65.83 million in 2014. The decrease was driven by the remodelling of some of its properties, which the company is currently engaged in, such as BBVA’s former headquarters on Castellana 81. In addition, the company received turnover of €4.35 million from the renting of car parks and €9 million from the provision of services, taking its total operating income to €59.8 million, compared with €65.8 million in 2014.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Amancio Ortega Offers €490M For Torre Cepsa

28 June 2016 – El Confidencial

Amancio Ortega has entered the bidding, through Pontegadea, to acquire Cepsa’s skyscraper, by placing an offer on the table worth €490 million, according to sources familiar with the operation.

The owner of Inditex is thereby setting himself up to undertake his largest operation in the country to date, in a deal that would rank well above the figure of €400 million that he paid for the iconic Torre Picasso, the building he acquired from Esther Koplowitz almost five years ago.

Then, like now, the businessman approached the operation without the need to request financing from the banks – he has a wealth that differentiates him from the other candidates and enables him to bid slightly below the other interested parties.

In addition to Pontegadea, two other funds have expressed their interest in putting €530 million on the table, according to sources. Clearly, those bids are higher than Ortega’s, but they are linked to certain financial and payment structures that are a long way from offering the guarantees that Pontegadea provides to all vendors.

The hunt

Thanks to his dividend from Inditex, the businessman receives an annual cheque amounting to €1,100 million, which he uses, almost entirely, to acquire properties. This policy has converted Pontegadea into one of the largest real estate owners in Spain, comparable only with the newly created Merlin-Metrovacesa and Colonial.

Nevertheless, the dimensions of this remuneration mean that it is becoming increasingly difficult for the second richest man in the world to find opportunities in Spain. His interests focus on operations with at least eight zeros in the price, and as a result he has multiplied the number of operations undertaken overseas in recent years. (…)

Despite his financial prowess and the increasing challenge of finding desirable properties, Pontegadea remains faithful to its conservative policy and avoids processes that involve increasing the price in the final stretch.

In fact, its offer for Cepsa falls a long way below the €550 million asking price that the Sheik Khadem al Qubaisi hopes to obtain. The Sheik owns the purchase option over the Madrilenian skyscraper and has until September to exercise it if he wants to stop Bankia from taking over the asset once again. (…).

Nevertheless, Pontegadea is remaining firm in its valuation of the building, a figure that, if they end up closing the operation, will be significantly lower than the €558 million paid by the Philippine Group Emperador to acquire Torre Espacio. Nevertheless, according to several experts in the sector, there are important differences between the two operations, not least the higher risk of having OHL as a tenant rather than Cepsa.

The 248 metre tall skyscraper, designed by Norman Foster, has a leasable surface area of 56,000 sqm, spread over 34 floors. The sale has sparked interest from large institutional investors, such as Invesco, AEW, Deka, Hines, Patrizia, Etoile Properties and Axa.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake