Kronos to Invest Another €500M by 2021 to Become the New Real Estate King

16 May 2018 – Press Release

The real estate developer created by a former director of Fortress now owns a  land portfolio spanning more than 1 million m2 for the construction of 8,000 homes.

Led by the investment manager Kronos, the real estate company Kronos Homes has become one of the largest property developers in the country, in just four years, with a land portfolio that exceeds 1 million m2.

Saïd Hejal leads the company. The Parisian founded Kronos in 2014, after several years studying the Spanish market from London as the head of one of Fortress’s investment funds. “I was in charge of investments in Southern Europe (Portugal, Spain, Greece and France) for Fortress, with a particular focus on Spain from 2012 onwards. We chose Spain because we believed that it was the market with the greatest future growth potential with respect to the other European countries”, explains Hejal, Managing Partner of Kronos.

Unlike other investors, the former executive of Fortress opted to create his own property developer and grow it to become one of the largest landowners in the country. “I have worked for years in the US, and there, the property developers were focused on design; in Spain, we saw the opportunity to create a company based on design, that’s why we chose to create a company, with a new image, rather than acquiring an existing one”.

To carry out this project, Hejal went to a group of investors who, through Kronos Asset Management, put together the funds to create the Spanish developer. “Kronos is the owner of Kronos Homes, the brand of the residential developer. We have an office in London since most of our investors are based all over Europe; they are family offices and global investors. In total, we have around 15 investors, who arrived after the company was created, although the family that founded Kronos is also still with us”, explains.

Since its creation, Kronos Homes has invested €500 million in the purchase of land. “We have a portfolio spanning 1 million m2, which will allow us to develop 8,000 homes. The plots are located in Madrid, Cataluña, Costa del Sol and Alicante. Now we are entering some of Spain’s large capitals such as Córdoba, Sevilla, Tarragona and Cadiz”, says Hejal who predicts more new acquisitions. “We plan to invest another €500 million over the next 24 to 36 months”.

To this end, Kronos is backing the selective purchase of land. “We have acquired two thirds of our current portfolio from banks and the other third from developers; we have also completed several operations with Sareb and we will continue to work in this way”.

Thus, he rules out the possibility of corporate operations, giving priority to organic growth. “We are not interested in buying other companies. Such deals typically involve very difficult processes, combining corporate cultures and requiring a lot of time for integration.”

Kronos closed 2017 with 500 homes sold, among their developments in Madrid, Barcelona, Costa del Sol and Alicante. “2017 was quite a good year, better than expected, and 2018 is going very well, too. We have some very expensive projects and others that are more affordable. Our cheapest house costs around €145,000 and the most expensive, €2 million. The latter is a spectacular project in Estepona (Málaga), designed by Rafael de La-Hoz”.

“Our typical customers are first-time buyers, who have budgets of between €300,000 and €400,000.”

Stock market

Unlike other investors, the head of Kronos Homes is not planning to debut his firm on the Stock Exchange – “we are not interested, there are too many distractions”, he says – but he does plan stay with the company for many years. “Our plans in Spain are long term, we have already developed ten projects, this year we will deliver more than a hundred homes (133) and launch six new promotions. In 2019, we will launch another 20, including a project in Valencia that will be the tallest residential building in the city, with 34 floors”.

The plans of Kronos coincide with other ambitious bets from property developers such as Aedas, Vía Célere and Metrovacesa. “I think it is good that there is competition, it is healthy and positive for the consumer. We have positioned ourselves in a certain niche, with a focus on design and architecture, and that is what makes us different.”

Original story: Press Release

Edited by: Carmel Drake

Colonial Concludes that Axiare Holds Non-Strategic Assets Worth €300M

26 February 2018 – El Confidencial

Axiare has assets susceptible to divestment worth €300 million”. That is according to the President of Inmobiliaria Colonial, Juan José Brugera (pictured below, left), and his CEO, Pere Viñolas (pictured below, right), at the presentation of the company’s results.

“We are least interested in the Socimi’s logistics and retail assets, but that does not mean that we are going to sell off all of those assets or that said divestment is going to be undertaken this year. We have not yet been able to determine whether the assets will be sold in the end or when, due to the fact that we are not yet involved in the ordinary management of the company”, they said.

What assets are we talking about? As at September 2017, Axiare held logistics assets with a net value (GAV) of €192.6 million, spanning more than 466,235 m2. The vast majority are located in Madrid and the rest in Barcelona and other markets. To give us an idea, Axiare’s portfolio at the end of the third quarter of last year comprised 74% offices (50% in prime areas), 18% logistics platforms and 8% commercial assets (…)

Colonial, which registered a record net profit of €683 million in 2017, more than doubling (+149%) the figure obtained in the previous year, boosted by growth in the rental income of its office buildings and the appreciation in value of its assets, also estimates making net future investments of between €300 million and €400 million, in line with those undertaken to date.

In other words, between investments and investments, the net result is going to hover around the €300 million mark. These investments are going to focus on those markets where the firms already have a presence and so they will strongly back Madrid, Barcelona and Paris. Moreover, they are expected to be financed, to a large extent, through the traditional mature asset rotation policy. “We are going to continue investing, and also selling”, said both directors.

The merger will be ready in H2 2018

In this way, the real estate company is going to continue with the organic growth strategy that it has been pursuing since 2015, whilst working on the integration process with Axiare, which it estimates will take between four and five months to complete. As such, Colonial expects to close its merger with the Socimi during the second half of the year, which will materialise through a share exchange to take around 13.1% of the firm that it does not control yet.

“Of the possible alternatives, a merger is the most likely”, although both Bruguera and Viñolas have said that all of the options are currently being evaluated and that there will not be any decision in this regard until the second half of the year. Similarly, they said that they are “in conversations with Axiare to join its Board of Directors”, where they do not have a presence yet even though they increased their stake to 86.86% through the takeover, so as to take part in the Socimi’s management whilst the merger goes ahead (…).

New real estate giant

For the time being, the integration between Colonial and Axiare, which constitutes the first merger between the new generation of Socimis, will give rise to a company with real estate assets worth €11.079 billion, thus surpassing Merlin Properties. Of those assets, €9.282 billion will correspond to office buildings that Colonial owns in the centre of Madrid, Barcelona and Paris, spanning a surface area of 1.36 million m2, and the remaining €1.797 billion will correspond to assets contributed by Axiare, most of which are also offices, according to the year-end valuations completed by both companies.

In addition, the two companies generated a joint net profit of €700 million and turnover from rental income of €355 million in 2017. Nevertheless, Colonial calculates that the combined group’s revenues will increase to €500 million once the projects it currently has under development come onto the market.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

VPS Seeks Local Partners To Boost Growth In Spain

21 July 2016 – Expansión

The vacant building manager VPS (Vacant Property Specialists), which is headquartered in London and which has been controlled by PAI Partners since 2014, has set its sights on Spain to target its growth. The multi-national company, which has been managed by David Taylor-Smith since May of this year, recorded turnover of €300 million in 2015 and considers that the Spanish market has the most potential for growth in Europe. It has prepared a plan to position VPS as the market leader in the country. Moroever, at the international level, it plans to triple its revenues over the next four years.

The company has hired Oscar Aragón to be its new CEO in Spain – he has previously worked for firms including Compass Group, Sotkon, ISS and Gas Natural – with the aim of making VPS the market leader.

According to Aragón, “until now, no companies in Spain have been dedicated exclusively to the management of vacant properties”. And, yet, there is significant demand for these types of services, “given the volume of assets that are still owned by the banks and that are not being used, for example”, explained the executive.

Property developers also require their services: “In a property development, if there are squatters, even in just one of the properties, then it makes it very difficult to sell the rest”. The disused buildings and homes may be closed, sealed off or protected “in a rudimentary way” or under the supervision of a professional company. In addition, he added, many financial institutions and large real estate companies prefer to work with a single company that can handle all of their properties across the whole of Spain, rather than with small local firms.

The headquarters of VPS’s Spanish subsidiary is located in Cornellà de Llobregat (Barcelona) and the firm also has offices in Madrid, Sevilla and Valencia. Aragón said that the company’s growth plans include opening offices in at least twelve provincial capitals, as well as increasing the workforce from its current size (50 people) to 150 within the next year.

Its aim is to grow both organically and through the acquisition of small companies. “We can expect to see a process of consolidation in the sector”, predicted the executive.

Original story: Expansión (by M. Anglés)

Translation: Carmel Drake

JLL España Plans To Double Revenues By 2020

14 April 2016 – Expansión

JLL España, the consulting firm that specialises in real estate management has appointed Enrique Losantos (pictured above) as its new CEO. Until now, Mr Losantos has served as the Director General of the Investor Business area, a task that he will continue to combine with his new responsibilities as the head of the company.

In a meeting with Expansión, Losantos has fleshed out the business plan that he will have to execute as the company’s most senior executive. The new CEO of JLL España explained that the consultancy firm’s strategy involves strengthening its Corporate Solutions area, to bring it in line (in terms of weight) with the Investor Business area, and to provide new value added services that place the customer at the centre and that operates “ by project, not by product”.

Losantos explained that this new strategic focus will allow the group to offset the different economic cycles. “This model behaves well in times of a cyclical change, because both areas complement each other”, he said. Thanks to these two main business lines and the strategic purchases that JLL is analysing, the professional services firm expects to double its turnover in Spain by 2020, from €58 million in 2015.

Strategic purchases

In terms of acquisitions, Losantos did not provide details about the type of company, or the amount of forecast investment, but he did reveal that they are assessing local companies with operations in Europe, as well as European companies with activities in Spain that generate added value and provide additional services. “We are responsible for studying the local businesses, meanwhile the global acquisitions department analyses (overseas) companies with businesses in Spain”, he said.

Losantos said that JLL considered purchasing Tinsa, which the market valued at around €300 million, but that it ruled out that operation on the basis that it did not generate the required value. “We have the capability to make investments of that kind and we have authorisation from the Board to submit deals of that size or even larger, but we are going to focus on operations that have basic economic rationale and that generate value for the company. In this case, we thought that those conditions were not met, for several reasons”, added Losantos. JLL España’s other priorities include digital transformation and investment in technology and big data.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

CBRE Enters The Real Estate Wealth Management Segment

18 March 2015 – Expansión

CBRE, the multi-national consultant and real estate services company, has launched a Wealth Management division in Spain, which will specialise in the management of large property estates. To this end, the US company has hired Etienne Brocas, who will advise domestic and international investors in the acquisition of properties in the country, where assets are particularly “attractive in terms of price and yields compared with those in other European countries”.

The entry of CBRE into the Wealth Management segment is one of the goals mentioned by the company in its Strategic Plan for 2014–2016. The objective of that plan is to double the company’s turnover “through organic and inorganic growth, and to expand into new and innovative business streams”.


Etienne Brocas has more than 25 years of experience in the real estate market and 16 in private banking. He was the CEO of Santander Private Banking’s real estate arm and CEO of the same sector for Western Europe at UBS Wealth Management.

Original story: Expansión (by J.B.)

Translation: Carmel Drake