Azora Prepares a Fund to Invest €1.3bn in Hotels & Hostels

30 May 2019 – El Confidencial

Azora is currently holding conversations with various investors to launch a new fund through which it hopes to invest between €1.2 billion and €1.3 billion in hotels in Spain as well as in hostels in the main tourist markets across the Mediterranean.

The company founded by Concha Osácar (pictured above) and Fernando Gumuzio expects to launch the vehicle within the next few weeks as soon as agreements have been signed with the first anchor investors.

Azora, which used to manage the Socimi Hispania, until it was sold to Blackstone last year, has been very active in the Spanish hotel market in recent months after it purchased a hotel portfolio in Benidorm and the Costa del Sol in March comprising 1,670 rooms.

The company is also expected to enter the market for nursing homes for the elderly in conjunction with another fund, with the aim of investing up to €300 million over the next few years.

Original story: El Confidencial (by E.S.)

Translation/Summary: Carmel Drake

BNP Paribas: Investment in the Real Estate Sector Amounted to €2.0bn in Q1 2018

1 April 2019 – Eje Prime

Investment in real estate assets amounted to €2.0 billion during the first quarter of 2019, down by 5% compared to the same period in 2018, according to data from the consultancy firm BNP Paribas Real Estate.

Investment in the office sector amounted to €900 million, accounting for 47% of the total, with prime yields remaining stable at 3.25% in Madrid and 3.5% in Barcelona.

Investment in the retail segment amounted to €410 million, where prime yields reached 3% on high street stores, 5% on shopping centres and 5.75% on retail parks.

Investment in alternative assets amounted to €305 million, with investors increasingly interested in halls of residence for students and nursing homes for the elderly.

Finally, in the logistics sector, investment amounted to €206 million, boosted by the growth in e-commerce and consumption.

By type of investor, 50% of the transacted volume proceeded from investment funds, whilst Socimis contributed 18% of the total volume.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

C&W: Investment in High Street Premises Soared by 70% in 2018 to €1.7bn

6 March 2019 – Eje Prime

According to the latest edition of Cushman & Wakefield’s Investment Insight report, investment in high street assets in Spain soared by 70% in 2018 to reach €1.7 billion. In total, 52 operations were closed last year, accounting for 38% of all investments in commercial assets. The fashion and banking sectors accounted for the most deals.

Meanwhile, 32 operations were closed in the shopping centre segment, where the total investment amounted to almost €1.9 billion, down by 25% compared to 2017. In addition, 7 retail parks were sold last year for €236 million.

In the office sector, investment rose by 29% YoY in 2018 to reach €3.1 billion, with Madrid accounting for 66% of that total (€2.1 billion) and Barcelona accounting for 31% (€950 million).

In the logistics sector, e-commerce drove a sharp increase in investment to reach €1.2 billion, with 890,000 m2 of logistics space leased in Madrid and 345,000 m2 in Barcelona.

In terms of alternative assets, investment in student halls amounted to €220 million in 2018, whilst investment in nursing homes leapt to €281 million.

Original story: Eje Prime

Translation: Carmel Drake

Proa Capital Sells Hospital de Llevant to Caser

15 November 2018 – Expansión

Proa Capital is stepping on the sales accelerator in 2018. The private equity manager has completed its fourth divestment of the year: Hospital de Llevant. According to financial sources, the fund – which exerted control over the asset with 70% of the share capital – and the other minority shareholders have sold the medical centre to Caser. The insurance group is strengthening its network of own hospitals through this acquisition.

Market calculations indicate that the transaction valued the company at around €30 million, which represents around 10 times its forecast EBITDA for this year of c. €3 million. The centre’s revenues amount to around €20 million.

Proa became the owner of the centre located in Mallorca in 2013. At that time, Hospital de Llevant targeted the care market for the elderly, focusing particularly on residents from overseas. Since then, Proa – in partnership with the management team, some of whom are also shareholders – has promoted the hospital aspect of the centre. The fund announced that it had completed its mission a few months ago and that it, therefore, considered that it was time to exit.

Now, in an industrial investor, it has found the appropriate replacement owner. For Caser, the purchase fits with the group’s objectives, which a decade ago committed to building a network of own centres for its hospital division as part of its diversification strategy.

Hospital de Llevant will thereby be incorporated into a group that already comprises five other centres, located on the Canary Islands and in Extremadura, and which operate under the brand Hospitales Parque, according to information from Caser. The insurance company also has a section specialising in geriatrics, Caser Residencial, through which it operates 16 nursing homes for the elderly.

Accounting to the sources, the intention is for the current directors of the hospital in Mallorca to continue to lead the centre, which currently employs a workforce of 170 and offers 140 beds, split into equal parts between hospital care and care for the elderly. It also has three operating theatres and an intensive care unit.

Original story: Expansión (by M. Ponce de León)

Translation: Carmel Drake

IBA’s Socimi Zambal to Complete €80M Capital Increase

30 July 2018 – Eje Prime

Just over a year after expanding its share capital by more than €91 million, Zambal is preparing to undertake a new operation. The Socimi managed by IBA Capital has convened its shareholders for a General Meeting in September to carry out a new capital increase, in this case, amounting to €80 million.

According to a statement filed by the company with the Alternative Investment Market (MAB), the capital increase will be undertaken through the issue of 80 million shares with a nominal value of €1 and an issue premium of €0.25, which “will be subscribed and fully paid up through the offsetting of loans”.

Without resorting to bank financing, Zambal has built a portfolio worth more than €730 million. The company’s main assets include, for example, the property at number 77 Avenida San Luis (which houses the headquarters of Gas Natural in Madrid); the Vodafone Building on Avenida de América, and number 18 Avenida de Burgos, which is leased in its entirety to BMW.

The Socimi, which started life in 2013, is an investment vehicle managed externally by IBA Capital Partners. The company specialises in the investment and subsequent management of assets in cities such as Madrid and Barcelona in the office and retail segments, although the company is also looking at other assets such as nursing homes, hospitals, retail parks and logistics platforms.

One of the most recent operations undertaken by Zambal was the purchase of two office buildings on Calle Albarracín in Madrid, which is leased to the French multi-national Atos. That operation involved an investment of €38 million.

Original story: Eje Prime 

Translation: Carmel Drake

Veracruz Properties To Debut on the MAB with a Market Valuation of €76M

19 July 2018 – Eje Prime

A new Socimi is going to make the leap onto the Alternative Investment Market (MAB). Veracruz Properties is going to become the first real estate company from the Community of Valencia to ring the bell at the MAB. The company will make its stock market debut on 24 July with a market valuation of €76.7 million and a debut price of €32.60 per share.

The MAB’s Coordination and Incorporations Committee has given the green light for the Socimi to join the stock market. The real estate company specialises in the acquisition and management of shopping centres and nursing homes for the elderly.

Veracruz entered the nursing home sector just a few months ago when it purchased two homes for the elderly in Valencia from the French fund Omega, which has remained as the tenant of both assets.

Veracruz was created in 2014 by investors from Latin America and, currently, is led by Salvador Fonduer, a businessman linked to the Dominican company Agilant. In addition to the Plaza Mayor de Gandía and Xátiva shopping centres, the company owns two other assets in Spain, Parla Natura, in Madrid, and El Arcángel, in Córdoba.

The Valencian Socimi closed the first quarter of the year with a profit of €495,268, up by 1.03% compared to its results during the same period in 2017, according to València Plaza. Nevertheless, quarterly revenues from asset rentals decreased by almost 8% to €1.71 million.

Original story: Eje Prime

Translation: Carmel Drake

Resa’s Former CEO Creates 12 Investment Vehicles & Finalises the Purchase of Land for Tertiary Use

27 June 2018 – Eje Prime

Jorge Guarner (pictured below) used to be the boss of the student hall sector in Spain and now he is looking to do the same in the nursing home sector. The director, formerly the CEO of Resa from 1996 to 2002, is guiding the path of Healthcare Activos, a real estate asset manager operating in the healthcare segment, which is pushing ahead with financial support from the fund Oaktree and one aim: to debut on the stock market in 2020. In its process of becoming a Socimi, the company is going to create twelve vehicles to purchase tertiary land throughout Spain.

During the first half of the year, the company has constituted the seventh and eighth of its series of vehicles, whose aim is “the performance, both in Spain and overseas, of property development and construction activities for all kinds of real estate developments, urban planning and land development projects, be they for industrial, commercial or residential purposes”, as noted yesterday in the Official Gazette of the Mercantile Registry (Borme).

Guarner, as the sole representative of the company, has created the companies with the minimum required share capital (€3,000) and he has domiciled them all at the manager’s Madrilenian headquarters, number 26 Calle Raimundo Fernández Villaverde.

Over the next two years, until it debuts on the stock market, a priori, on the Alternative Investment Market (MAB), Healthcare Activos plans to invest almost €500 million in properties in Spain, primarily in nursing homes for the elderly.

The group’s first investment came in December 2016, when Guarner’s firm purchased four buildings that are today leased to the nursing home operator Amavir. Since the first acquisition to date, the group has invested €107 million in eleven assets, of which €62 million were disbursed in 2017 and the remaining €45 million have been spent since 1 January 2018.

The future Socimi also has €14 million committed for the creation of a portfolio of more than forty properties, in different degrees of progress, such as nursing homes, hospitals and clinics, be they fully operational, ready for renovation and launch, or as land development projects.

Guarnar has funds to invest up to €150 million per year until 2021 in the acquisition of assets and development of new nursing homes for the elderly across the country. The latest operation that the manager carried out was the purchase, a month ago, of a property in Vitoria from the specialist operator Abertia-Etxea, for which it paid €5 million.

In addition, in April, Healthcare Activos spent €40 million on three nursing homes in Gijón, Burgos and Valladolid. For that project, the company joined forces with La Saleta Care, owner of the buildings until then, which will continue to manage the properties for the next 25 years.

Guarnar, who was also the CEO of Sarquavitae for twelve years, the main Spanish company in the nursing home sector, has his company central headquarters in Barcelona, where last summer, he invested €15.5 million in the purchase of the Los Tilos nursing home (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

CaixaBank Sells Office Building in Valencia to Bancalé

9 March 2018 – Levante EMV

The Aragonese holding company Bancalé has just acquired an office building measuring more than 7,300 m2 on Avenida del Puerto in València. And it seems that the firm, which owns the electronic goods chain K-tuin, has put the building up for rent, as evidenced by the enormous sign that has been hanging from the façade for several weeks now.

According to sources at the company, the building was acquired from CaixaBank a few months ago, in an operation whose economic consideration has not been revealed. The property used to belong to Banco de València, which used to operate some of its services from there. However, the seven-storey building has been empty since 2012.

With the sale of the historical Valencian entity to CaixaBank for €1 in 2012, the building was taken over by Building Center, the real estate subsidiary of the Catalan bank. In 2017, it was finally sold, after it was put on the market and Bancalé made the best offer.

Sources at the group, which is headquartered in Zaragoza, and which comprises a family office linked to the businessman Juan Ramón Fabre, believe that they will be able to let the entire building to a single tenant. The offer includes the ground floor, which is currently occupied by a branch of CaixaBank. “The feeling we have is that there are no products like this in Valencia, with 7,000 m2 of office space available and concentrated in a single space”, say sources at the company. The new owners intend to invest in the building and will do so to adapt it to the needs of the client that rents it out.

With this operation, Bancalé has made its first incursion into the real estate sector in Valencia. The holding company has a real estate division, with offices in Madrid, Barcelona and Zaragoza. It is also a majority shareholder in a hotel investment vehicle that has a presence in Washington, New York, London, Brussels, Berlin and Cologne, according to its website.

Student halls of residence are another focus for the firm’s investment, as well as the logistics sector, where it owns assets in the Plaza de Zaragoza platform. In recent times, the group has also been positioning itself in the renewable energy field with projects in Aragón.

All in all, one of the most well-known facets of the Aragonese group is its chain of electronic shops K-tuin. Bancalé owns the network of 17 establishments in Spanish regional capitals, which sell Apple products and generate a global turnover of more than €150 million.

In addition, Bancalé has also had interests in the social healthcare field, specifically in Valencia. Fabre’s firm had a fleeting experience in the retirement home sector, as the owner of the La Seu nursing home, an establishment with 155 beds on Calle Gobernador Viejo in the old town. The Aragonese firm sold that building to Sanitas at the end of 2016, after experiencing problems with the management of the centre.

Original story: Levante EMV

Translation: Carmel Drake

Experts: Foreign Investors will Continue to Back the Spanish RE Sector in 2018

11 January 2018 – Expansión

The experts believe that the residential sector is going to be the main protagonist of 2018, in terms of both development and investment. The banks are expected to continue their balance sheet clean-ups with more portfolio sales.

The real estate sector is expected to continue to constitute a mainstay of the Spanish economy in 2018 thanks to the growth of residential property development and the commitment from international investors to Spanish property as a safe haven for their investments, according to the experts consulted by Expansión.

For Adolfo Ramírez-Escudero, President of CBRE España, property developers will be some of the most dynamic investors in 2018. “Last year, they underwent an expansionary cycle and, through specialisation and the sophistication of their product, they will continue to increase their prominence in the sector”, he explains.

The CEO of JLL España, Enrique Losantos, forecasts that 2018 will maintain the positive rhythm of recent years and that figures will remain in line with 2017, with a total investment volume of around €13 billion. Losantos also expects that portfolio operations, which were the major stars of 2017, thanks to the sale of assets by Banco Popular and BBVA, will continue to strengthen their position in 2018 (…).

Rents

For Santiago Aguirre, President of the Board of Directors of Savills Aguirre Newman, “we are entering a year of consolidation in terms of the upward cycle that we have been immersed in since 2014. Several segments, such as offices and logistics, have reached maximum leasing levels, nevertheless, we still see potential for rents to reach the maximum levels seen in the previous cycle”.

In terms of investment in tertiary assets, Oriol Barrachina, CEO at Cushman & Wakefield, explains that there is a perception that there will be more liquidity than product, despite caution being erred in light of the local and international uncertainty. “The main difference with respect to the last two years is that one group of buyers, the Socimis, are now also going to be selling assets. For years, they have purchased lots of assets and after generating value from them, they are going to put them up for sale, a fact that will also help to bridge the gap between supply and demand”, adds Barrachina.

Sandra Daza, Director General at Gesvalt, thinks that this year those investors who entered the cycle during the opportunistic period, between 2013 and 2015, will be replaced by long-term investors, such as insurance companies and pension funds.

In terms of trends, Mikel Echavarren, CEO at Irea, considers that residential development will continue to generate news this year, both in terms of land transactions, as well as price rises and the recovery of secondary markets (…).

Humphrey White, Director General at Knight Frank, highlights that Spain is currently at the beginning of an expansion period, with forecast demand of between 120,000 and 150,000 new homes per year, even though it closed 2017 with just 47,500 new home transactions (…).

No sign of a bubble

White considers that the growth in the sector in Spain rests on “some very firm foundations in terms of the law of supply and demand, whereby moving firmly away from a possible real estate bubble”.

For Gonzalo Gallego, Partner in Financial Advisory at Deloitte, buildable land will be one of the major challenges in the property development sector.

In terms of the rental market, Ramírez-Escudero explains that in 2018, we will see “quite a lot” of activity in the market from institutional investors backing rental homes. Over the last decade, the number of rental homes has increased significantly to reach 22.5%. Nevertheless, Spain still has major potential given that the average in the EU is 33% (…).

Javier López-Torres, Partner in Real Estate at KPMG, agrees. He considers that the rental segment will continue to gain weight due to the difficulties involved in accessing credit, mobility and cultural change (…).

Asset types

By sector, Thierry Bougeard, Director General at BNP Paribas Real Estate, says that demand for office space will continue its strong performance (seen in 2017), above all in Madrid, where leasing volumes are expected to increase to around 600,000 m2.

Meanwhile, in the logistics market, e-commerce will continue to be the main motor of demand, whilst in retail, many owners are betting on improving the quality of their centres, boosting leisure areas and the quality of them, with the aim of encouraging customers to stay longer, he explains.

The experts also agree in highlighting the high level of interest expected in alternative real estate assets, such as student halls and nursing homes.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Savills: Spain Leads RE Inv’t in Southern Europe

12 December 2017 – Expansión

Real estate investment in Spain is on the verge of setting a new record and positioning the country as the leader of the sector’s boom amongst its counterparts in Southern Europe. Specifically, investment in the tertiary market (offices, retail, hotels and logistics assets) in Spain looks set to amount to €8.9 billion in 2017, which represents an increase of 5% compared to the previous year and the highest figure in a decade, according to a report from the consultancy firm Savills.

The report reveals the strong performance detected in the retail and hotel sectors and also highlights that the growth in e-commerce in Spain is expected to result in greater demand for logistics and storage space, a segment that has lagged behind the main markets in Europe until now.

Luis Espadas, Director of Capital Markets at Savills España, also points out that, to the extent that demand in the more traditional sectors grows, so investors are starting to focus on alternative products, such as student halls and nursing homes. “That market may be small still but it has the potential to develop more attractive returns and price differentials”.

Other countries

The recovery of the sector in Spain has been followed by an upturn in other countries such as Italy, Portugal and, more recently, Greece and Cyprus. In this way, after a few years of weak investor activity, the volume of investment in Southern Europe increased by 277% in 2017, compared to the minimum of €5.2 billion recorded in 2012.

Overall, total investment volumes increased by 8% YoY. The markets in Southern Europe now account for 10% of the total investment in the European Union, compared to the 5% that they represented in 2012. “Economic growth, the decrease in unemployment rates and renewed consumer confidence are attracting investors back to Southern Europe”, says Alice Marwick from the Europe Research department at Savills.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake