Q21 Real Estate & Baupost Buy Luxury Property Developer Levitt

1 March 2018 – Eje Prime

A new corporate operation has been closed in the Spanish real estate sector. Q21 Real Estate, a company created by the former Grupo Pinar and the US fund Baupost, has acquired the luxury property developer Levitt. Following the purchase, the group will consolidate its position as one of the reference players in the luxury residential market in Madrid, as well as in the northeast and northwest of the Community of Madrid.

With this purchase, Q21 is going to increase its existing portfolio, comprising more than 1,700 homes, with 145,000 m2 of residential buildability in the northeast and northwest areas of the region, and with more than 75,000 m2 of buildable surface area in the tertiary sector. Levitt is going to provide the buying company with a contribution of land and housing under development in prime areas of Madrid.

According to the latest information available in the Mercantile Registry, Levitt-Bosch Aymerich had net assets worth €162 million at the end of 2016. The company recorded turnover of €61 million last year.

Besides Baupost, some of the other US investment funds that are very active in Spain also submitted bids for Levitt, such as Lone Star, Värde and Castlelake; they all expressed their interest in the property developer in recent months.

Levitt, founded in 1929 to construct luxury homes in New York, arrived in Spain in 1971 at the hand of José María Bosch Aymerich. In 1973, the company completed its first development, the Monteclaro urbanisation, on the outskirts of Madrid. Since then, it has constructed various high-standing developments in Madrid and Barcelona, as well as several office developments.

Original story: Eje Prime

Translation: Carmel Drake

Top 5 Socimis’ Earnings Soared by 70% in 2017

1 March 2018 – Expansión

Spain’s large listed Socimis – Merlin, Colonial, Hispania, Lar España and Axiare – are continuing their rise. They closed last year with a combined profit of almost €2.4 billion, which represents an increase of almost 70% with respect to the previous year, after increasing their revenues from rental income by 20%, to €1.1 billion.

These companies, which, with the exception of Colonial, made their debuts on the stock market between March and July 2014, now own assets worth almost €26.4 billion, which represents an increase of 17% with respect to the previous year. The five Socimis also have a combined market valuation of €13.4 billion.

The stars of the year were, once again, the Socimis on the Ibex. Specifically, Merlin doubled its earnings in a record year, to exceed €1.1 billion, whilst Colonial earned €683 million, up by 149%.

The firm led by Ismael Clemente generated a recurring profit – proceeding from the core business – of €289 million, up by 31%, and increased its revenues by 34%, to €470 million. Merlin’s asset portfolio had a gross value of €11.3 billion.

Meanwhile, Colonial, which is going to merge with Axiare during the second half of this year following its successful takeover, recorded a 22% increase in recurring profits, to reach €83 million, boosted by rising rents, a better financial result and a lower corporation tax charge due to its conversion into a Socimi in May last year.

Unlike its rivals, Hispania saw a reduction in its profit of 27% to €228 million, after recognising provisions amounting to €95 million for the payment of incentives to its management firm Azora. Moreover, the company in which George Soros owns a stake registered a negative impact in its accounts amounting to €46 million due to the payment of incentives and the cancellation of guarantees following the purchase from Barceló of 24% of Bay for €172.4 million.

Hispania, which increased its revenues by 9.5% last year, had a portfolio of assets with a gross value of €2.5 billion at the end of the year, compared with €2.0 billion at the end of the previous year.

Meanwhile, the Socimi specialising in retail, Lar España, earned 48% more, at €136 million, thanks primarily to the performance of its shopping centres. The company recorded revenues from rental income of €77.6 million in 2017, up by 29%, and has announced divestments of non-strategic assets amounting to €470 million, including offices, residential properties and logistics assets, in processes that are already underway.

Meanwhile, Axiare’s net profit soared by 47% last year, to €218 million. The Socimi, controlled by Colonial since January, closed 2017 with turnover of €69.7 million, up by 36.6%, and assets worth €1.8 billion.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake