GSA Wants to Invest €0.5bn in Student Halls in Spain

7 December 2017 – Expansión

The British firm Global Student Accommodation (GSA), which specialises in student accommodation, arrived in Spain in June with the purchase of Nexo Residencias from Oaktree Capital Management. This move, which allowed it to add a portfolio of 2,300 beds in the country, was just the beginning, given that the company plans to reach 10,000 beds by 2025 and invest approximately €0.5 billion in the country. In this way, Spain would account for between 20% and 25% of the firm’s portfolio in Europe, which in turn is expected to account for 45% of the total worldwide.

“To date, we have invested €0.2 billion and we expect to invest approximately €0.5 billion in total”, explained the founder and CEO of GSA, Nicholas Porter, in an interview with Expansión.

Spain represents one of the company’s priority markets, although the firm also plans to expand its presence to other countries in Europe and Latin America, to reach 250,000 beds around the world by 2025. GSA is present in eight countries and thirty cities in two regions: EMEA (Europe, Middle East and Africa) and Asia-Pacific.

“Over there next ten years, there are going to be 100 million more students in university education. That trend is going to be driven by the growth of the middle class in China, India and other regions in Asia. The globalisation of university higher education and educational institutions exporting their brands will allow us to reach more markets than ever”, he states.

Porter explains that, of the company’s objective of reaching 250,000 beds around the world by 2025, “right now, we have achieved 10% of that figure”.

GSA promotes, manages and invests in student halls in locations close to the most important universities in the world.

Specifically, the company currently has projects underway with forecast investment of USD 1 billion around the world and a portfolio under development of around 21,000 beds. Moreover, to achieve its objective, the firm plans to leverage its brand through franchises in other markets, such as, for example, Latin America.

New markets

The company operates its halls of residence through the brands Uninest Student Residences, The Student Housing Company and Nexo Residencias, which it acquired in June 2017, representing its debut in Spain. “We see Nexo as an expansion platform, not only in Spain, but also in the south of Europe and Latin America”.

Currently, GSA has 1,500 operational beds in Spain and 900 beds under construction in Barcelona, which it plans to open in September 2019. Specifically, the operating portfolio is located in the centre of Madrid and includes: Galdós, with 370 beds, in Ramiro de Maeztu; El Faro, inaugurated in September 2016 and located in Moncloa with 358 beds; and Claraval, on c/ San Bernardo, with 186 beds. It also owns the Lope de Vega hall of residence in Alcalá de Henares, which it recently opened and which houses 468 students, both from Spain and overseas.

Moreover, it has two additional development plans underway in Barcelona, which will be ready for use in 2019 with 900 more beds (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

 

Oaktree Sells Hotel Dolce Sitges For €40M

3 July 2017 – Preferente

The US fund Oaktree Capital Management is going to sell the Hotel Dolce Sitges in Barcelona. Specialising in conferences and conventions, the establishment will now be taken over by Talus Real Estate, together with the US fund Angelo Gordon.

According to Expansión, the negotiations are already well advanced and the transaction is expected to be closed this week, for just over €40 million. Oaktree has been looking to sell this hotel for a year; it acquired the property in 2015.

Operated by Wyndham, the Hotel Dolce Sitges opened its doors in October 2004. It specialises in the MICE segment (meetings, incentives, conferences and exhibitions), as well as in high-end holiday tourism.

The 5-star property has 263 rooms, a spa and fitness centre. It also has four outdoor pools and one indoor pool, as well as 2,175 m2 of space dedicated to meeting and conference rooms, spread over 38 meeting rooms and an amphitheatre.

This operation comes shortly after Iberdrola Inmobiliaria sold 55% of the Hotel Hilton Diagonal Mar in Barcelona to Axa Investment Managers Real Assets for €80 million.

The area of Barcelona where this latest hotel is situated, Sitges, has more than 5,000 hotel beds and is enjoying a boom as a tourist destination, following several recent operations, such as HI Partners’ acquisition of Hotel Terramar and Leo Messi’s recent purchase of the boutique Hotel Mim.

Original story: Preferente (by R. P.)

Translation: Carmel Drake

Project Gaudí: Oaktree Acquires Reduced Portfolio For €260M

25 June 2015 – CoStar Finance

Oaktree Capital Management has finalised the purchase of a reduced non-performing loan portfolio from FMS Wertmanagement (Project Gaudi) paying around €260m in cash, after a back bid sale of a Bilbao shopping centre to Grupo Lar and the removal of two loans prior to transaction close.

According to CoStar News, Grupo Lar, the Spanish developer and investor, has acquired the 1.35m sq ft Megapark Barakaldo shopping centre in Bilbao, in a back to back bid for just over €150 million.

Megapark Barakaldo was previously owned by Resolution Property, who acquired the retail centre for more than €200 million in January 2006, from Arcona Iberia and its joint venture partners, financed by Hypo Real Estate Bank International and the Royal Bank of Scotland. Resolution Property sold Megapark Barakaldo to another investor in 2012, which inherited the encumbered debt.

In addition, FMS Wertmanagement removed two loans from the original €735 million portfolio, contraining 18 NPL loans (Project Gaudi):

1) The first was a loan securing the circa 333,700 sq ft Plaza Éboli shopping centre in Pinto in the south of Madrid. HIG Capital recently acquired Plaza Éboli from Doughty Hanson, the UK private equity firm, for €30m, repaying the loan back to FMS Wertmanagement at par.

2) The second was a combined €125 millioin investment, development and VAT financing facility, granted to Bluespace, formerly known as Blue Self Storage, in July 2007. It was used to fund the acquisition of 17 self-storage properties – in Barcelona, Madrid and Valencia. FMS Wertmanagement has retained that non-performing loan.

These two removed loans are thought to account for an unpaid loan balance of around €100 million in aggregate. This reduces the original nominal value of Project Gaudi’s NPL portfolio (€735 million) to an unpaid balance of €635 million.

CoStar News understands that Oaktree paid €410m for the slightly slimmer Project Gaudi, reflecting a discount of 35.4%.

Furthermore, the immediate back bid purchase of Megapark Barakaldo by Grupo Lar for circa €150 millions implies the net price that Oaktree paid was €260 million, which was likely paid on an all-cash basis by Oaktree given the final size of the deal.

FMS Wertmanagement closed the sale of Project Gaudi with Oaktree two weeks ago. This was the German bad bank’s maiden NPL portfolio sale in Europe.

CoStar News understands that FMS Wertmanagement is considering two further country-focused loan portfolio sales for the bad bank’s Netherlands and Italian sub and non-performing loans. (…)

Original story: CoStar Finance (by James Wallace)

Edited by: Carmel Drake

Oaktree Enters Exclusive Negotiations On Project Gaudi For c.€500m

13 April 2015 – CoStar Finance

Oaktree Capital Management has entered exclusive negotiations with FMS Wertmanagement for the predominantly Spanish Project Gaudi commercial real estate loan portfolio for a price thought to equal just over €500m, CoStar News has learned.

Negotiations are ongoing and the Board of FMS Wertmanagement is still to approve the sale, but Colony Capital, the second finalist, is no longer in the running to acquire the bad bank’s prospective maiden European NPL.

Project Gaudi, named after the legendary Catalan architect, has an unpaid balance of €740m, and is expected to trade at around 68 cents in the euro.

Cerberus Capital Management and Orion Capital Managers made up the top four, as revealed by CoStar News at the turn of the New Year.

Project Gaudi loan portfolio, which is being sold by Cushman & Wakefield’s Corporate Finance team in London, is comprised of 18 loans with broadly an equal split of performing, sub-performing and non-performing loans.

Project Gaudi, comprised of 16 loans secured by Spanish assets and two loans secured by Portuguese commercial properties, includes:

  • two five-star hotels in Barcelona and Cascais;
  • five shopping centre and leisure centres;
  • four business parks in Madrid and Barcelona;
  • a portfolio of 17 self-storage assets; and
  • several residential and industrial development sites.

The marquee asset in Project Gaudi is the 483-bed Hotel Arts in Barcelona (pictured), managed by Ritz-Carlton.

A consortium comprised of Host Hotels & Resorts, Dutch pension fund Stichting Pensioenfonds ABP and Jasmine Hotels Pte, an affiliate of Singapore sovereign wealth fund’s GIC Real Estate paid €417m in July 2006 for Hotel Arts, which at the time was the largest ever single-asset real estate transaction in Spain.

FMS Wertmanagement, founded in 2010 after the German government nationalised Hypo Real Estate, brought the Project Gaudi loan portfolio for sale in October.

The four second round finalists all placed bids above 60 cents in the euro, which reflects a price of €444m or above.

First round bidders included Davidson Kempner in a joint venture with Värde Partners, Blackstone, Deutsche Bank, Marathon Asset Management, Sankaty Advisors, BAML, Colony Capital, Starwood Capital, Apollo Global Management and Lone Star.

FMS Wertmanagement had as much as €13.4bn in remaining commercial real estate loans, as at the end of 2013, including €5.8bn of German loans, €1.8bn of US loans, €1.7bn worth of UK commercial real estate loans and €0.8bn and €0.6bn of loans secured by assets in France and Netherlands, respectively.

Spain has returned to economic growth in 2014 following seven difficult years of rising unemployment, salary deflation and depressed consumer spending.

But an increase in business activity has led to unemployment reducing and consumer confidence has reached its highest level since 2001 with improvements in disposable income and recovering house prices reinforcing this optimism.

All parties declined to comment.

Original story: CoStar Finance (by James Wallace)

Edited by: Carmel Drake

Charles Blackburn Quits Deutsche Bank For Oaktree

13 April 2015 – CoStar Finance

Charles Blackburn, head of Deutsche Bank’s EMEA commercial real estate special situations group, has quit the investment bank after nearly 10 years and is expected to join Oaktree Capital Management later in the summer, CoStar News has learned.

Blackburn is thought to be taking up a senior role continuing a remit for distressed real estate debt and equity investments at the US private equity firm, having already left Deutsche Bank.

Earlier this morning, CoStar News revealed that Oaktree has moved to exclusive negotiations to acquire FMS Wertmanagement’s Project Gaudi CRE loan portfolio for a price thought to be just north of €500m.

At the turn of the year, Blackburn’s Deutsche Bank team won NAMA’s €287m Project Boyne, loans secured by property developer Willie Smyth, paying around €95m, and just before Christmas the team also won a €234m tranche of the Project Kaplan NPL from Sareb.

The most significant NPL win of last year by Blackburn’s team was the acquisition of around €1.5bn in tranches from IBRC’s giant €9.3bn Project Stone NPL, acquiring the two largest tranches by nominal balance and the highest quality of assets in the loan portfolio.

Deutsche Bank also won tranches of IBRC’s Project Quartz and NAMA’s Project Spring.

Blackburn joined Deutsche Bank in September 2005, prior to which he spent three years at O’Connor Capital Partners.

All parties declined to comment.

Original story: CoStar Finance (by James Wallace)

Edited by: Carmel Drake