Tag: Orange

Sevilla: The Slow Re-awakening of the Real Estate Sector in the Andalucían Capital

2 August 2018 – Eje Prime

Sevilla, the third largest Spanish city by population, is seeing the first signs of recovery in its residential market (…).

The capital of Andalucía, which is home to almost 690,000 inhabitants, has seen its population decrease on a gradual basis since 2012 when it exceeded 702,000 inhabitants. The slow but progressive decline of the population is probably one of the reasons why house prices have not risen there and why new builds account for an all but residual percentage of the market.

Nevertheless, some of the data does indicate that Sevilla is jumping on the bandwagon in terms of the improvements in the real estate market that are being seen across Spain: a sharp increase in prices in 2017, an on-going rise in sales and, finally, investment in the city by groups of the calibre of Habitat and Ayco.

The city of NO8DO, Sevilla’s traditional motto, saw its population peak at 710,000 inhabitants in 2003, before falling below the 700,000 threshold in 2007. That figure rose above 700,000 again in 2009 before reaching a decade high of 704,000 in 2010, but it has fallen continuously since then to the current figures.

Real estate dynamism

Despite that, the dynamism in terms of house purchases has been considerable in recent years. In 2013, operations in the sector were still registering strong decreases, with a fall that year of 24.4% to just 4,715 house sales. However, the rises have been unwavering since then: up by 12.1% in 2014; 11.3% in 2015; 15.1% in 2016 and 14.1% in 2017, with a total of 7,732 sales.

According to data from the Ministry of Development, during the first quarter of this year, 2,234 house sales were recorded in the city, of which more than 95% corresponded to second-hand homes. With just 98 sales, new homes accounted for just 4.4% of the residential activity during the first quarter.

Nevertheless, and despite this growing activity in terms of sales, residential prices in Sevilla remain stagnant. In recent years, average appraisal prices per square metre in the fourth quarter of each year have decreased steadily, with the exception of 2014 only, when they rose by a measly 0.3% (…).

Currently, house prices amount to €1,468.70/m2 on average (€1,754,40/m2 for new builds and €1,464/m2 for homes aged five years or more). That value is 26.3% lower than the prices in Sevilla in 2012 and 35.9% lower than the peaks of 2007, before the outbreak of the crisis, when the average house price amounted to €2,316.10/m2.

Governed by the socialist Juan Espadas since June 2015, the weight of social housing in the city is greater than that of many other Spanish cities, at least based on data for the first quarter of 2018. In this sense, 177 of the purchases recorded in the city between January and March involved social housing properties, which accounted for 7.9% of the total.

New projects

Habitat is one of the companies that has invested in the Sevillan market this year. In July, the property developer announced a €30 million investment in a new development in the Andalucían capital comprising 199 homes. The acquired land is located in Mairena del Aljarafe, one of the fastest growing areas in the local residential market (…).

Another active player in the city is Ayco, which has acquired a batch of buildable plots this year in the municipality of Camas (Sevilla). In total, that company has purchased land spanning 18,000 m2, where it plans to build around 200 homes.

Another emerging business for the city is the office market, which closed 2017 with 919,173 m2 of space leased, up by 4% YoY, and approaching the records of 2013, according to a report by the Sevilla-based consultancy Inerzia (…).

In the commercial sphere, the Torre Sevilla project is the most important in the city at the moment. Six years after inheriting this macro-project, CaixaBank has let 100% of the office space and the shopping centre is on the verge of opening its doors.

Aenor, Deloitte, Everis, Orange and the Chamber of Commerce are some of the entities present in the 18-storey office block, which account for just half of the skyscraper. The rest of the tower is occupied by a hotel managed by Eurostars, belonging to the Hotusa Group.

Original story: Eje Prime (by C. De Angelis)

Translation: Carmel Drake

Procisa Group Undergoes A Corporate & Financial Makeover

30 December 2016 – Expansión

Procisa, the group owned by the Cereceda family, which in turn owns La Finca, the business and luxury residential complex, in Pozuelo de Alarcón (Madrid) has embarked upon a profound corporate and financial restructuring process involving: a capital injection amounting to €395 million; the entry of the US fund Värde; and the strengthening of its corporate governance.

In terms of the corporate changes, from now on, the company will be organised around the Grupo La Finca holding company, which will in turn own three separate companies: La Finca Global Assets, dedicated to the real estate business and to the operation of the high-end office market; La Finca Casablanca, which will construct the largest luxury residential development containing more than 500 homes; and La Finca Real Estate, upon which the group’s future development will hinge.

Under the framework of this operation, the US fund Värde, owner of Dospuntos (the former real estate division of Sanjose) and owner of a stake in Aliseda, Banco Popular’s real estate asset manager, has acquired 39% of La Finca Global Assets. The US private equity firm, which manages more than $40,000 million in assets around the world, has been one of the most active investors in Spain since the outbreak of the crisis.

Portfolio

By virtue of the agreement signed yesterday, Värde, which must have paid around €130 million for its stake, will become a shareholder of the current office buildings in the portfolio and of the new projects in this area of the business. In addition to the La Finca business park, La Finca Global Assets’s properties include a property located on Calle Marcelo Spínola – a business centre comprising seven seven-storey buildings – and another property on Calle Martínez Villergas, comprising three seven-storey buildings.

Meanwhile, the La Finca business park, covering 220,000 m2 of premium rental space, comprises 20 buildings, 16 of which are used as offices plus the remaining four, located in the centre of the complex, which are used to provide the necessary services to the users of these offices. The complex’s current tenants include technological companies such as Orange and Microsoft.

In terms of the injection of funds, the company has signed a financing agreement with a syndicate led by Société Générale, CaixaBank and Santander amounting to €395 million, which it will use to pay off existing debt and tackle new projects. According to the latest available balance sheet, Procisa’s debt amounts to €525 million.

Specifically, the subsidiary La Finca Casablanca is planning to construct a development containing 515 luxury and exclusive homes, a shopping and leisure centre, as well as sports facilities and a golf course, in the south of Pozuelo de Alarcón.

New directors

Meanwhile, the group owned by the Cereceda family has strengthened its corporate governance by hiring some new directors. Susana García-Cereceda, the current Chairman of Procisa and one of the heiresses of the family empire created by the businessman Luis García Cereceda, who died in 2010, will lead the holding company and each of its subsidiaries, as the CEO.

In addition, Grupo La Finca will hire Jorge Morán as the Vice President of the holding company. (…). Moreover, Värde will join the Board of La Finca Global Assets with the appointment of three board members. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Värde Given Green Light To Buy 40% Of La Finca Global Assets

14 November 2016 – Real Estate Press

In August, a judge suspended the sale of part of Procisa to the fund Värde, due to a family dispute, which left the operation up in the air. Now, the precautionary measures have just been lifted and the BOE has published its proposal for the carve out of the firm into three companies, which will allow the definitive sale to go ahead.

The agreement carves out Procisa into three companies: La Finca Global Assets, containing the office assets; La Finca Promociones y Conciertos Inmobiliarios, containing the residential assets; and La Finca Somosaguas Golf. Sources close to the operation indicate that this is the final step in the process for the agreement with Värde to be signed.

The new company that owns the office assets will be converted into a Socimi. For the time being, the consideration paid for the operation will not be revealed. Meanwhile, Procisa, founded by the late Luis García Cereceda, is being led by the second generation of the same family, in the form of Susana García Cereceda.

The new Socimi’s main asset is the La Finca business park in Pozuelo, constructed alongside the luxury residential urbanisation. The company contains 20 buildings, of which 16 are offices and the rest are used for social and commercial purposes. Tenants at the site include companies such as Microsoft, Orange and Accenture. The Hotel AC La Finca is also located there. This is one of the most sought-after business parks in Madrid, with an occupancy rate of almost 100%, according to market sources. The future Socimi will manage an office surface area covering 227,000 m2, which includes other office properties in addition to the complex in Pozuelo.

Original story: Real Estate Press

Translation: Carmel Drake

Procisa To List La Finca Business Park As A Socimi

12 May 2016 – Cinco Días

The real estate company Procisa is finalising a major corporate restructuring process, which will culminate in the IPO of its office business. The company, renowned for having constructed the luxury La Finca urbanisation in Pozuelo de Alarcón (Madrid) will separate its activity into two companies. The residential development business will be called La Finca Procisa and the RE asset business will be called La Finca Global Assets.

The new RE asset (offiec) company will be converted into a listed Socimi, according to sources familiar with the operation. These types of companies have the advantage of being exempt from corporation tax, in exchange for having the obligation to distribute dividends every year. Like all Socimis, La Finca Global Assets will have a period of two years to debut on the stock market.

From the beginning, the Socimi will benefit from having Värde Partners as one of its shareholders – the US fund is currently finalising the acquisition of a 40% stake in the real estate company. The fund, created in Minnesota (USA) in 1993 has been very active in the Spanish market in recent years. (…). The consideration to be paid by Värde in this operation has not been revealed, but the deal is expected to close within the next few days.

The company, founded by the late Luis García Cerceda, is now being led by the second generation – Susana García Cereceda is the Chairman, and it controls the property developer through the holding company Michigan 42. The real estate company recorded revenues of €83.8 million in 2014, the most recent figures available in the registry, and losses of €19 million, along with long-term debt of €511 million.

The new Socimi’s main asset is the La Finca business park in Pozuelo, constructed alongside the luxury residential urbanisation where several footballers live, including Cristiano Ronaldo, Karim Benzema and Fernando Torres. The complex comprises 20 buildings, including 16 offices.

Tenants include companies such as Microsoft, Orange and Accenture. The Hotel AC La Finca is also located there. It is one of the most sought-after business parks in Madrid, given that it has just 0.3% of free space, according to market sources (…).

The future Socimi Finca Global Assets will manage a surface area of offices covering 227,000 sqm. As well as the complex in Pozuelo, the company also owns other office buildings, which will be included in the operation. These include the Marcelo Spínola business centre, constructed in 1991, comprising seven buildings.

In the Méndez Álvaro area, the company owns the Torre Suecia, which is currently leased to the technology firm Ericsson. Close to the A-2, it manages the Martínez Villergas business centre, which houses, for example, Warner’s headquarters in Spain. Moreover, it owns other office buildings on the sought-after streets of Serrano and Almagro.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Värde Finalises Acquisition Of 40% Of La Finca Business Park

28 April 2016 – Expansión

Procisa– the real estate company owned by the García Cereceda family – is finalising an agreement with the American fund Värde Partners to sell it a 40% stake in its office business, which includes, amongst others, assets in the exclusive La Finca Business Park, located in Pozuelo de Alarcón (Madrid), according to sources in the sector. (…)

Procisa, the group that specialises in offices and luxury residential developments, recently constituted a company under the name Grupo La Finca and divided its business into two distinct areas: one operating in the office segment, which is where Värde will acquire its stake; and the other operating in the residential business, which will continue to be fully owned by Procisa.

Susana García Cereceda will continue to lead the new Grupo La Finca, where she will serve as CEO, the same role that she currently performs in Procisa’s family business.

In the same way, García Cereceda will lead the two business lines into which the group has been divided.

To complete the organigram of the new real estate company, it is expected that new members with experience and background in the sector will join the company over the next few months.

Residential business

In terms of the residential business, Grupo La Finca wants to expand through new housing developments, as well as in the exclusive development in Pozuelo de Alarcón, next to the Parque Empresarial. The main features of this urbanisation include security, privacy and exclusivity. The group’s intention is to develop a new complex, to complement the detached and terraced houses that currently comprise La Finca.

With its upcoming investment in La Finca Global Assets (the name of La Finca’s office division), Värde Partners, which currently controls the real estate division of Grupo San José, with a 51% shareholding, and which also owns a stake in Popular’s servicer Aliseda, will take a leap into the high standing office business, which will allow it to expand its presence in the commercial and professional business segment in the future.

The private equity fund Värde Partners has been one of the most active investors in Spain since the crisis began. Its first major operation was closed last August, when it acquired 51% of the real estate company San José to construct 1,500 homes in Spain.

In 2014, it purchased 51% of Banco Popular-e’s card business, whereby the entity recorded profits of more than €400 million.

Moreover, a year earlier, it acquired, together with Kennedy Wilson, the real estate arm of Popular, Aliseda, for approximately €800 million. At the global level, the fund, founded in Minnesota in 1993, manages more than USD 40,000 million and has 200 employees around the world, of which 65 are professional investors with more than 12 years of experience.

From now on, its assets in Spain will include La Finca Global Assets, whose assets comprise not only the La Finca business park, but also other iconic buildings owned by Procisa, including a business centre comprising seven, 7-storey buildings on Calle Marcelo Spínola and another property comprising three, 7-storey buildings on Calle Martínez Villergas. (…).

Meanwhile, the park in La Finca, has a surface area of premium leasable space covering 27,000 m2, comprising 20 buildings (16 offices and 4 for the provision of services for use by office workers). Current tenants include companies such as Orange and Microsoft. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake