Tag: office buildings

Axiare Invests €173M In RE Assets In Madrid & Cataluña

11 August 2015 – Expansión

The Socimi Axiare has purchased eight real estate assets in Madrid and Cataluña for €173 million. That quantity represents 45% of the proceeds the company obtained from its recent capital increase.

Specifically, the company has purchased two office buildings in Madrid (one on Calle Ramírez de Arellano, 15 and the other on Calle Don Ramón de la Cruz, 82), a retail store located in the Velazquez building (central Madrid), a portfolio of four buildings also located in the capital, comprising three office buildings and a larger retail outlet, and two logistics warehouses in the Les Puntes industrial estate, in Constantí (Cataluña).

Axiare has invested €761 million in total in just one year. With this transaction, the Socimi adds 108,654 m2 of surface area to its portfolio and increases its gross leasable area to more than 550,000 m2.

Capital increase

The transaction announced yesterday involves the investment of 45% of the funds the Socimi obtained from its recent €395 million capital increase, in June, which was fully subscribed. The company doubled in size as a result of that increase.

Axiare has said that it plans to invest the remaining funds “in new acquisitions with the aim of continuing to increase its portfolio of high quality properties in established locations”.

Since its debut on the stock exchange, the Socimi has closed 18 transactions, acquiring 28 properties in total, with an investment value of €761 million.

Original story: Expansión

Translation: Carmel Drake

Colonial Earns 64% Less & Neutralises Effect Of Asentia

30 July 2015 – El Economista

The real estate company Colonial has closed the first half of the year with earnings of €202 million, down by 63.8% with respect to the same period last year, when it recorded earnings of €559 million, due to the deconsolidation of Asentia, its bad bank.

In a statement, Colonial said that its recurring net profit for the first half of the year, i.e. the profit generated by the real estate company’s ordinary activities, amounted to €11 million in H1 2015, an increase of 39.2% compared with the first six months of 2014.

Although Colonial’s accounts for H1 2014 included a positive extraordinary item for Asentia amounting to €704 million, the accounts in H1 2015 also included a €348 million revaluation of the company’s assets. Colonial said that the value of its assets has increased by 21% in twelve months.

Colonial’s business model is simple – essentially, it purchases buildings in prime areas of Barcelona, Madrid and Paris, renovates them for rental and then collects the corresponding rental income. Most of the company’s assets are leased as offices.

In terms of revenues, the real estate company, whose main shareholder is Grupo Villar Mir with its 24% stake, earned €111 million during the first six months of 2015, up by 6%.

So far this year, Colonial has invested €165 million in the acquisition of buildings, including three properties in the centre of Madrid and one in the centre of Paris.

To illustrate the strong performance of the business, Colonial highlights that during the first six months of the year, it has signed rental contracts for space covering 107,692 m2, which is equivalent to the entire surface area that it signed contracts last year as a whole.

Original story: El Economista

Translation: Carmel Drake

Hispania Closes Best Trading Period Of The Year

20 July 2015 – Expansión

The Socimi has completed its best trading period of the year – its share price exceed has exceeded €14 for the first time and it has overtaken Merlin in terms of profitability.

Discretely, whilst two of its competitors are hitting the headlines with significant capital increases (Merlin Properties is raising €1,033 million for pay for its purchase of Testa; whilst Lar is looking to raise the more modest figure of €135 million), the Socimi Hispania Activos Inmobiliarios has been recording its best numbers of the year on the stock exchange and has become the most profitable company in an emerging sector that is attracting some of the largest investors in the world.

Before experiencing a slight decline of 0.78% last Friday, the Socimi led by Concha Osácar and Fernando Gumuzio had recorded six consecutive days of increases, taking its share price to over €14 for the first time, a new historical high for the group that is now worth almost €1,150 million on the stock exchange.

It has been the best trading period of the year for Hispania, whose share price has increased by 28.3% since the start of 2015, and means that the company has replaced Merlin (whose share price has increased by 25.2%) as the Socimi whose share price has appreciated by the most in 2015…Meanwhile, Axiare’s price has increased by 10.5% and Lar by 8.2%.

The stock’s rally is generating profits for the group’s largest shareholders. And the gains are being shared by both historical shareholders, those who acquired shares at €10/share when the Socimi debuted on the stock exchange in 2014 (George Soros is the largest shareholder with a stake of 16.7%, followed by John Paulson’s investment fund, which owns 9.85%; the Dutch pension fund APG and the fund that specialises in this kind of company Cohen&Steers have also owned stakes in the company from the start), as well as those that joined as a result of the €337 million accelerated capital increase that was closed in April (such as BW Gestao de Investimentos, Fidelity, CBRE Clarion and Novo Viseu).

There was significant demand for the placement, which was completed in just three hours; demand amounted to €844 million, which meant that the requests for shares exceeded supply by more than two times. Market sources say that many funds were left wanting to buy more shares and have since gone to the market to make those purchases. And other new companies are hooked on the stock as its price continues to increase.

The result is that the stock’s rally, as well as the capital increase, has allowed Hispania (which operates as a pure Socimi, but still retains its structure as an ordinary limited company to afford greater flexibility to its investments) to almost double its market value since the end of last year, when it stood at less than €600 million.

The trading volume has gone through the roof in the last two sessions. Almost 600,000 shares have changed hands, which is well above the average daily volume in July. With its charged portfolio following the capital increase in April, Hispania’s corporate activity is frenetic. Last month, the company acquired two hotels in the Canary Islands for €105 million. A few days later, it announced the purchase of two office buildings in Madrid for €54.4 million from the German company Deka.

Original story: Expansión (by Enrique Utrera)

Translation: Carmel Drake

Hispania Buys 2 Office Buildings From Deka For €54.5M

25 June 2015 – Hispania Press Release

Hispania, through its 100% subsidiary company Hispania Real SOCIMI, S.A.U., has acquired two office buildings in Madrid from Deka. (…)

The Foster Wheeler building is located on C/ Gabriel García Márquez, 2, in Las Rozas, to the Northwest of Madrid. It has a Gross Leasable Area (GLA) of 11,058 m2, spread over three floors and 544 parking spaces. The asset has an occupancy rate of 100%, since it houses the headquarters of Foster Wheeler under a lease agreement.

The 4B Cristalia building (pictured above) is located in the Cristalia business park to the Northeast of Madrid, and has a GLA of 10,928 m2, spread over seven floors, plus 202 parking spaces. (…)

The purchase price agreed for both buildings was €54.5 million, which was fully disbursed with Hispania’s own funds. JLL acted as advisor to Hispania in this transaction.

These two acquisitions perfectly fit with Hispania’s strategy for the office segment in consolidated areas of Madrid.

Both buildings are very well maintained and in optimal condition.

Original story: Hispania Press Release

Edited by: Carmel Drake

Lar España Evaluates €200M Capital Increase

18 June 2015 – Europa Press

Lar España is analysing the possibility of increasing its share capital this year to take advantage of the “new opportunities” for investment in the real estate sector that it has identified.

The capital increase would amount to a maximum of €200 million, since the Socimi has been authorised by its shareholders to increase its capital by up to 50% of its current level, according to reports filed with Spain’s National Securities Market Commission (CNMV).

Lar España is evaluating whether to raise further capital after its recent bond issue (€140 million) in February, which it also undertook to raise funds to invest in the real estate sector.

With this latest increase, the company will join many of the other Socimis constituted last year, such as Hispania, Merlin and Axiare, which have also resorted to capital increases to raise funds with which to purchase new real estate assets to grow their portfolios.

In the case of Lar, the company claims to have identified “new investment opportunities”, which have led its board of directors to “launch a process to analyse the possibility of undertaking a capital increase in 2015”.

Nevertheless, the Socimi says that, the final operation “will be subject to changes in market conditions”.

Since its constitution and IPO in early 2014, Lar has purchased assets worth around €550 million, including seven shopping centres in several regions, four office buildings in Madrid, eleven logistics warehouses, three medium-sized retail premises and a residential building in Madrid.

Original story: Europa Press

Translation: Carmel Drake

The Major Players In The New RE Sector

11 June 2015 – Expansión

Since Colonial’s exit from the Ibex 35 in March 2008, none of the major players in the Spanish real estate sector have been listed on the stock exchange. However, in parallel to the return of large international investors, some real estate companies are starting to emerge, and are knocking on the door of the selective Madrid index. They are the new giants in a sector, which is gaining strength and becoming fashionable again.

These companies include several newcomers, such as Merlin Properties. The Socimi, which went public on 30 June, has managed to create a portfolio of properties worth €2,322 million and has just purchased Testa, the real estate subsidiary of Sacyr, for almost €1,800 million. The operation will create a group with assets worth €5,500 million and a market capitalisation of €4,000 million. Another example of a new company success is Hispania.

The real estate company, which has a Socimi subsidiary, has a market capitalisation of €1,120 million. After purchasing assets worth €422 million and creating a hotel Socimi with the hotel chain Barceló containing 16 properties, it has launched a takeover bid over another listed company in the sector, Realia.

Lar España and Axiare are the other two large Socimis, with portfolios worth around €500 million each.

Traditional giants

Some of the traditional real estate companies are looking to regain the status they lost when the real estate bubble burst. The survivors include only companies whose main activity is the rental of buildings and not property development. This is the case of Testa (which will soon be integrated into Merlin), Realia, Colonial and Metrovacesa.

In the case of the latter, its main shareholders (Santander, Sabadell, BBVA and Popular) excluded it from the stock exchange in May 2013 in order to clean up the (balance sheet of the) company, which had debt of almost €6,000 million. At the end of 2014, Metrovacesa had reduced its net financial debt to €3,285 million and cut its losses by half.

Realia should undertake a similar exercise when the takeover war between Hispania and Carlos Slim for control over the entity has been resolved. The Mexican businessman is already a shareholder in the real estate company, after he purchased the 24.5% stake that Bankia held and he is also a major shareholder in FCC, which owns another 36.9% stake in Realia. In both purchase proposals, the objective is to get rid of the housing and residential land stock held by Realia to focus on the management of office buildings and shopping centres.

In the case of Colonial, the restructuring is much more on track, after the Villar Mar Group became its major shareholder. The real estate company owns office buildings across Madrid and Barcelona worth more than €1,290 million, and also holds a majority stake in the French real estate company SFL.

Original story: Expansión

Translation: Carmel Drake

Reale Finalises Purchase Of Sabadell’s HQ In Madrid

11 June 2015 – El Confidencial

The building at number 125, Calle Príncipe de Vergara, one of the most important thoroughfares in Madrid, is about to change hands. Sabadell opened a competitive process for the sale, which is about to come to an end, with Reale as the favourite to seal the deal.

The insurance company, which is being advised by Inmospace, has submitted a bid for more than €45 million, compared with the asking price of €40 million that was set at the beginning of the process. This figure virtually makes Realia the sure-fire winner in a deal that has attracted interest from up to eight bidders, according to sources close the deal.

The other interested parties include other insurance companies, such as Plus Ultra, although, unless there is a last minute surprise, Reale will end up signing the definitive agreement with Sabadell within the next two or three weeks.

This timetable matches the one being managed by the Catalan entity for its relocation to a new headquarters in Las Tablas, a process that will begin in July and will be carried out in several stages, in a phased way. Once completed, Reale will establish its new headquarters in Príncipe de Vergara.

(…)

Solvia transaction

Solvia, the real estate subsidiary of the Catalan entity, has led this whole process, which has not required any external advisors. It has culminated in the reorganisation of the properties and headquarters that the bank has carried out recently.

Last year, Sabadell was one of the major players in the real estate office market in Madrid, thanks to the sale of Vodafone’s new headquarters, an office complex measuring 50,000 m2, to the British fund London & Regional for €117 million and with the commitment of the telecommunications operator to continue as the tenant.

In parallel, the entity reached an agreement with Vodafone to acquire its former headquarters, located in the neighbourhood of Las Tablas, an area in which firms such as Telefónica, BBVA and FCC have also chosen to locate their headquarters. This move, which many industry experts viewed very positively, was also orchestrated by Solvia, the real estate company led by Javier García del Río.

With capacity for 1,500 people, all of Sabadell’s central services will move to this new headquarters in the North of Madrid, with exception of its territorial operations, which will remain in Calle Velázquez, and its private banking division, which will continue in Calle Serrano. The Presidency will also remain in Calle Serrano, which accommodates both the Chairman, Josep Oliu, and the CEO, Jaime Guardiola, when they are in the capital.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Axiare Closes Accelerated Placement Ahead Of Its Capital Increase

18 May 2015 – Expansión

The Socimi has just closed an accelerated placement with investors ahead of its capital increase.

The listed real estate investment company (Socimi) Axiare Patrimonio wants to maintain the speed of investment that has enabled it to disburse €460 million since its IPO last summer. To this end, the company has announced a capital increase of €394 million, with the aim of doubling its share capital.

Last week, the Socimi led by Luis López de Herrera Oria launched a brochure containing the details of the transaction, which would involve the issue of around 35.87 million new shares, at a nominal value of ten euros per share, plus a premium of one euro (per share).

The capital increase will have preferential subscription rights. The Socimi’s shareholders include funds such as T. Rowe Price and Taube Hodson, and Citigroup.

Axiare owns assets worth €507.95 million, including office buildings in Madrid and logistics warehouses in Guadalajara (pictured above). During the first quarter of 2015, the Socimi generated revenues of €7.59 million and a profit of €2.32 million.

Placement

Ahead of this capital increase, Axiare closed an accelerated placement of the shares of one of its largest shareholders, Perry Capital, on Friday. The objective of this placement was to provide greater liquidity for the company’s stock.

The placement of 3.5 million shares (representing 9.721% of its share capital) was closed in record time (one hour) and with a slight issue premium (€12 per share). Buyers of these shares included institutional investment funds from the US, Britain and Norway, according to sources at the company.

The subscription rights for these shares will begin trading on 20 May, whilst the shares themselves will begin trading on 10 June. On Friday, Axiare’s share price closed down 0.29% on the stock exchange at €11.94 per share.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

S&P Assigns Investment Grade Rating (BBB-) To Colonial

13 May 2015 – El Mundo

Within the next few months, Colonial will launch its first bond issue amounting to more than €1,000 million.

The company is seeking to refinance some of its debt (€1,040 million, i.e. 40.5% of its total liabilities).

The company Colonial has obtained a ‘BBB-’ rating from Standard & Poors, making it the first Spanish real estate company to achieve an ‘investment grade’ rating. It intends to use (that rating) to debut on the capital markets in the coming months with a bond issue of more than €1,000 million.

Through this operation, the real estate company, in which the Villar Mir Group holds a stake, is seeking to refinance €1,040 million of debt, i.e. 40.5% of the company’s liabilities.

Specifically, it is seeking to take advantage of the conditions in the market to extend the maturity period (of its debt) and reduce its financing costs, according to market sources.

Colonial has engaged Morgan Stanley, BBVA, Banco Sabadell, CaixaBank, Crédit Agricole, ING and JP Morgan to coordinate the operation.

The company will begin a ‘road show’ within the next few days in the main European markets, to analyse demand for the up-coming launch of what would also be the first bond issue by a Spanish real estate company.

Colonial will specify the amount and other terms and conditions of the operation once it has completed the so-called ‘demand evaluation’ phase, according to a communication made to Spain’s National Securities Market Commission (CNMV).

Phase of growth

The real estate company will therefore debut on the capital markets at the same time as it embarks on its new growth strategy, having completed its restructuring, refinancing and recapitalisation plan at the beginning of last year, through which it reduced its debt and opened up its share capital to new shareholders.

As part of the new phase, Colonial has expressed its interest in Realia and has also said that it would be willing to evaluate a possible purchase of Testa, the real estate subsidiary of Sacyr, in the event that the group decides to sell the company rather than list (some of) it on the stock exchange.

These corporate movements are taking place during the current period of recovery in the real estate sector in Spain, after several years of decreases – the recovery has attracted interest from international investors.

Colonial owns a portfolio of office buildings for rent in the prime business districts of Paris, Madrid and Barcelona, which together have (a surface area of) almost one million square metres. Through this debt restructuring program, the real estate company is seeking to ensure not only that its assets are ‘prime’, but also its liabilities.

Original story: El Mundo

Translation: Carmel Drake

Large Funds & Socimis Invest €2,500M In RE In Q1 2015

20 April 2015 – Expansión

Q1 2015 / Major international investors and Socimis purchased more non-residential property in Spain during the first quarter of 2015 than during the whole of 2012.

The investor frenzy that began in the Spanish real estate sector at the end of 2013 and intensified last year is on track to smash all historic records (this year), including the peak levels of the boom years. Between January and March, large international funds, companies from Spain and the rest of Europe and new listed real estate real estate investment companies (Socimis) made purchases worth €2,463 million, according to the consultancy firm C&W, i.e. three times the volume recorded during the same period last year.

This figure exceeds the total volume of investment made during 2012 in its entirety, when the global crisis really hit the Spanish real estate sector and only €2,087 million was invested in the market, according to Deloitte Real Estate. Having been boosted by domestic and international purchasers who spent more than €8,500 million in 2014, the start of this year reflects a “unique” time in the sector for various reasons, according to market experts.

On the one hand, the Spanish economy is recovering well, which is resulting in higher consumption and more recruitment, which is in turn influencing commercial and office buildings.

On the other hand, the decrease in prices, of up to 40% in the case of assets, has meant that many opportunities exist in terms of price in the Spanish market, in contrast to what is happening in other European countries. “The low profitability of fixed income assets has turned real estate into an important sector in terms of investment portfolios. Furthermore, prices are stabilising, access to credit is opening up and the economy is growing”, say sources at Aguirre Newman. The confluence of these elements has led all of the players in the real estate sector to show their support Spain: from the most opportunistic funds seeking properties with significant discounts to more institutional investors, such as sovereign and pension funds, and including Spanish and foreign real estate companies.

Battle for assets

All of this has led to a real war for the best assets (known in real estate jargon as trophy buildings), which means that this year looks set to be a record year in terms of purchases. “We expect to see great figures in 2015, approaching €7,000 million in terms of direct non-residential investment”, explain sources at JLL España.

“If the level of interest in Spanish real estate assets from major global investors continues for the rest of the year, then we could see historic record figures in 2015, even higher than the peak recorded in 2007, when transactions with a total value exceeding €12,000 million were closed”, add C&W.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake