Lar España Sells 47% of its Portfolio of Non-Strategic Assets in Just One Year

9 October 2018

The socimi will use the 522 million euros it obtained from the sale of its portfolio of logistics assets and offices to focus on the ownership and management of its shopping centres.

Lar España is implementing its divestment plan successfully. The socimi sold 47% of its total portfolio of non-strategic assets in just one year and will use the influx of cash to focus on the ownership and management its shopping centres, a sector in which it is one of the principal players in the country.

Lar España’s assets that do not correspond to the retail segment are valued at 522 million euros. The company plans to sell the entire amount between 2018 and 2021. For the moment, it has already sold off all of its logistics properties and two of its five office buildings for a total of 276 million euros.

The socimi will take a significant additional step in its process of divestment when it delivers the luxury homes it has built in the Madrid’s city centre, at 99 Lagasca, before the end of the year. Lar España expects to raise 115 million euros through the operation. The company is also in the process of selling its other three office buildings.

The company, which is chaired by José Luis del Valle, will allocate these resources to strengthen its presence in the Spanish retail market. Lar España’s business plan envisages allocating 265 million to build and improve shopping centres, and another 250 million for acquisitions without the need to resort to new capital increases or tighten its financial structure.

Lar’s latest acquisitions include the Rivas Futura retail park, in Madrid, for 62 million euros, and the Abadía shopping mall, in Toledo, for fourteen million euros.

Original Story: EjePrime

Translation: Richard Turner

Colonial Launches €800M Bond Issue To Finance Axiare Takeover

21 November 2017 – Eje Prime

Colonial is pushing ahead with its plans for Axiare. The Socimi has launched a bond issue amounting to €800 million, funds it plans to use to partially finance the takeover that it has formulated for Axiare, with the aim of creating an office rental giant, as explained by the group in a statement.

The operation has been structured in two tranches, one amounting to €500 million over eight years and the second amounting to €300 million over twelve years. The real estate company led by Pere Viñolas (pictured above)  opened the placement books first thing on Tuesday and expected to close them by the end of the day.

Colonial is returning to the capital markets with an issue that forms part of the financial structure designed to finance the takeover of Axiare, launched on Monday 13 November, with the aim of acquiring the remaining 71% stake that it does not yet control in that Socimi.

The operation, worth €1,462 million, is currently being backed by a bridge loan facilitated by JP Morgan. The real estate company plans to replace that loan with this bond issue and, subsequently, reduce those securities with a program to sell non-strategic assets amounting to €300 million and other resources, including a capital increase, amounting to €450 million.

Original story: Eje Prime

Translation: Carmel Drake

Telefónica Seeks Buyer For Buildings In Madrid And Barcelona For €60m

28 January 2015 – El Confidencial

Telefónica has begun to shed some of its real estate weight. And it is doing so at a time when investors are no longer planning their moves in the market, they are actually closing transactions. According to sector sources, the company led by César Alierta has completed the sale of five buildings for €65 million in recent months and is now looking for a buyer for four other properties, for which it expects to receive another €60 million.

The listed company has designed a real estate efficiency plan for 2014 and 2015, which includes the sale of nine buildings that will become totally obsolete in less than a decade, in the face of impending technological change. The company itself recognises that with the proceeds, it will be able to finance the investments required to adapt its business to the changing times. Telefónica will continue to lease the buildings as the tenant – known in real estate parlance as sale & leaseback – for between seven and ten years, so that once the lease contract is up, the new owners will have full use of the properties.

Currently- and although the market expects the company to put new assets up for sale – Telefónica is looking for a buyer for three buildings in Madrid (in Calle Irún; close to Plaza de Santo Domingo; and in Moratalaz) and one in Barcelona, in the La Sagrera neighbourhood.

The building in Plaza de Santo Domingo, a few metres from Madrid’s Gran Vía, is a very attractive asset due to its location, as well as for its urban classification as residential. Although Telefónica will remain as the tenant for several years, the future buyer of the property may later convert the building into homes in an area where residential property is in short supply. Similarly, the building in Calle Irun, just a ten-minute walk from Plaza de España and Principe Pío train station, could also be converted into homes in the future. The final property for sale in Madrid, measuring 5,800 square metres, is located in Moratalez and is also for residential use, just like the one in La Sagrera, Barcelona.

Indeed, seven of the nine buildings put up for sale by Telefónica are classified as residential. Only two of them are not. The first, a building in Valencia that was acquired by the owner of Embutidos Martínez, is located in the Plaza del Ayuntamiento and has seven floors and a surface area of almost 4,000 square metres. The second, Telefónica’s historical headquarters in Bilbao, on Calle Buenos Aires, was sold a few weeks ago and measures 5,500 square metres and is classified for alternative commercial use.

Investors’ appetite outside of Madrid and Barcelona

“Investors have seized the opportunity to acquire landmark assets that have great potential for future development and meanwhile, obtain very competitive rents, guaranteed by an AAA tenant. This has facilitated a very agile sales process, which has lasted less than two months, clearly demonstrating the market’s appetite for well-located buildings that have good lease contracts to guarantee yields over the medium and long term”, says Pablo Méndez, Investment Director at Aguirre Newman.

Moreover, the assets are strategically located in the centre of some of Spain’s most important cities, which has helped to boost their appeal. “It is especially striking that investors are showing interest in buildings in cities such as Bilbao, San Sebastián and Valencia. This shows that the perception of risk is continuing to decline in the real estate market and that investors are now more willing to take positions in cities that are regarded as secondary to prime markets, such as Madrid and Barcelona”, said Patricio Palomar, Director of Office Advisory and Alternative Investment at CBRE.

He adds that “for this type of product, it is also very important that domestic investors, like family offices and private firms, are more agile in their ability to take decisions and get offers on the table as this gives them a competitive advantage with respect to foreign buyers with more institutional capital, such as insurance companies, fund managers and those with more sophisticated vehicles”.

These are not the first and they certainly will not be the last non-strategic assets to be sold by the company, given that over the coming years, it will have to gradually get rid of many of them following the demise of analogue technology and the digitalisation of all equipment. “Telefónica serves as an example of good wealth management. It knows that in a few years copper cable connections are going to become completely obsolete and that in a ten years, telephone cables will no longer be used; all connections will be fibre optic”, says Patricio Palomar.

“The sale of these assets demonstrates very professional management by a corporation such as Telefónica, which has a clear strategic vision for the business. Given that the type of activity that takes place in these buildings is destined to disappear, the company ensures through these sales that its services will continue for as long as necessary, until the move happens over to the new technology. In addition, it affords it a line of financing that is cheaper than many others and it could choose to use this liquidity to grow its core business, which is much more about providing telecommunications services than investing in real estate” he concludes.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake