Tag: overseas investment

British Groups Invest Heavily In Spain’s RE Sector

9 May 2017 – Expansión

The Grosvenor group is embarking on its first residential project in Spain, developing luxury homes in Madrid. It is following in the footsteps of other compatriot companies such as Intu, Taylor Wimpey and Benson Elliot.

One of the latest real estate companies to show its commitment to Spain has a history that spans 340 years. The firm in question is Grosvenor, the centuries-old British firm, which closed its first investment in the Spanish residential sector about two months ago.

The project chosen by Grosvenor for its arrival in Spain is a luxury residential development on the Golden Mile of Madrid. To this end, Grosvenor, through its subsidiary Grosvenor Europe, completed the purchase of a plot of land measuring around 820 m2, located at number 53 on Calle Jorge Juan, for the development of six exclusive apartments and one penthouse with views over the Retiro Park. (…).

Grosvenor’s operation on Jorge Juan forms part of a joint venture signed by the Asian firm Amcorp in July 2016, whereby it undertook to invest €70 million during the first phase. “We hope to build a significant real estate portfolio in Spain during 2017”, said sources at the British group, which was founded in 1677 by Sir Thomas Grosvenor, and which is nowadays one of the largest landowners in the United Kingdom.

In light of this commitment to Spain, Grosvenor, which has four divisions through which it operates in Europe, Asia, America and the United Kingdom, has strengthened its office in Madrid, led by Fátima Sáez del Cano, by hiring Miguel Silmi, who formerly served in interim roles at firms such as Altamira, owned by Banco Santander. (…).

Investment

Grosvenor’s commitment to Spain is not a unique case amongst the large British groups. “Investors from the United Kingdom have always liked the Spanish real estate market and they have invested throughout the economic cycle. For example, Heron International, which is known today for the shopping centres that it built in Madrid, Barcelona and Valencia, used to hold a significant portfolio of office buildings in Madrid, in the 1990s”, said Javier García-Mateo, Partner in Financial Advisory at Deloitte. (…).

Meanwhile, Benson Elliot has been present since 2011. That fund has just closed the purchase of the Hotel Silken Diagonal, together with the joint venture between Walton Street and Highgate. Previously, BE had purchased two other assets in Barcelona, which it has now sold. “Another British firm, London Regional, has purchased hotels and offices in Spain and has also taken advantage of the cycle to sell them at a profit”, said Rafael Bou, Partner in Real Estate at PwC.

“Having invested more than €2,147 million since 2011, British funds are the second most significant international investor in the Spanish real estate market, after the United States (…)”, according to Savills. During the first quarter of 2017, British firms have already made real estate purchases amounting to €550 million, according to Deloitte.

One example of this commitment is the return of British Land to Spain, which last year purchased the Nueva Condomina shopping centre in Murcia, and the more than €120 million that has been invested by the UK & European Investment group in operations in Madrid, Barcelona and Marbella. (…).

In addition to real estate companies and investment funds, some of the large British insurance companies are also placing their focus on the Spanish real estate sector, such as the case of Prudential and Aviva, which just closed the purchase of the Tormes shopping centre in Salamanca.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

District 22@ Attracts 500 New Companies Each Year

18 August 2016 – Inmodiario

There are 8,300 companies operating in District 22@ (in Barcelona). Since 2012, 2,000 new companies and 12,000 jobs have been created, taking the total number of employees in the district to 95,000. The proliferation of companies is going hand in hand with an increase in the commercial sector, whose presence in the district is growing year after year and District 22@ looks set to become an extension of the main shopping areas in Barcelona.

In this sense, in just a few years, 22@ has become one of the most sought-after areas for the purchase of real estate assets to attract businesses and for the sale of land for offices. In fact, 20% of all of the space leased in the city is signed in this district. The area will become a natural extension of the first-class shopping and office districts over the next few years, such as the part of La Diagonal that adjoins el Ensanche, la Rambla de Catalunya and el Paseo de Gracia.

“District 22@ is going to play a fundamental role in the expansion of the commercial centre and powerhouse of the city towards the east. Its international prestige and potential for growth to create businesses has turned it into a “prime area” for setting up companies in Barcelona and the expansion of the main shopping areas to this part of the city”, said Miquel Laborde, founding partner at Laborde Marcet, a real estate and investment company.

Centre of attraction for large companies

One of the district’s primary assets is its ability to attract large companies. One out of every four operations signed in 22@ involves large offices. In fact, 23% of the operations signed in 2015 were for surface areas spanning more than 2,000 sqm. In this sense, although only 3% of the companies in the district have more than 50 employees, their staff account for 60% of the total workforce employed in 22@.

Hand in hand with the large companies come the opening of multiple secondary retail premises, which are expected to grow exponentially in number over the coming years. “There is money, business and almost 100,000 workers per day in the district and so companies have all of the factors in their favour to expand and consolidate successfully”, said Laborde.

District 22@ has confirmed itself to be a district for business and real estate expansion with considerable power to attract investment from domestic and overseas players. The high presence of international companies is also reflected in the workforce of the companies operating there, where 1 out of every 10 workers is foreign. In addition, 30% of the companies are export businesses and 40% of their sales come from overseas markets. By sector, companies linked to IT and communication are the most prolific, followed by companies in the energy and design sectors.

Original story: Inmodiario

Translation: Carmel Drake

Wanda Negotiates Purchase Of 75% Of Marina d’Or For €1,200M

2 December 2015 – Expansión

The Wanda group is holding negotiations to acquire 75% of the shares in the Spanish holiday complex Marina d’Or, located in Oropesa del Mar (Castellón), which is currently owned by the businessman Jesús Ger.

The purchase will amount to around 8,200 million Chinese Yuan (i.e. around €1,200 million), according to reports yesterday by Diario del Pueblo.

The newspaper reports in its digital edition that the founder and president of the group, Wang Jianlin, the richest man in China, has already visited the complex (which includes a golf course, a theme park, five hotels and a spa, amongst other buildings) together with other representatives from the company.

The official body of China’s Communist Party cites own sources for the basis of its information. When contacted by Efe, the Wanda group declined to make any comments on the subject for the time being.

Meanwhile, the Castellon group did not want to confirm or deny the talks and merely stated that it has been in touch with several Arab, Chinese and other investors over the last few months regarding their interest in its iconic project: Marina d’Or Golf, an urban development plan that was suspended several years ago. The group itself valued the project at €1,300 million, even though not a single brick has yet been laid.

In July, Jianlin revealed that his company would make at least three major overseas acquisitions over the next six months, after it expanded its entry into the sports sector this year with the purchase of Triathlon Corporation, the owner of events’ rights such as Ironman, and Infront, one of the largest sports rights companies in the world. (…).

Original story: Expansión

Translation: Carmel Drake

Foreigners Bought 12.5% Of All Homes Sold In H1 2015

2 October 2015 – Expansión

Investment / In some autonomous regions, foreign citizens are purchasing up to one third of the houses being sold.

Foreign investors are buying one out of every eight homes sold in Spain. And in some autonomous regions, that figure increases to one in every three. That is the main finding from data released by the Association of Registrars, which published a guide – in English – yesterday aimed at foreign citizens interested in purchasing a home in Spain…”.

Foreign purchasers accounted for 12.5% of all residential property sales registered during the first half of 2015, “and even represented between one third and one quarter of purchases in certain autonomous regions, such as the Balearic Islands, where they accounted for 33.5% of all purchases made during the second quarter”, said the registrars.

The Balearic Islands were followed by the Canary Islands (27.5%) and Valencia, where overseas buyers were responsible for 25.7% of all home purchases. Murcia, Andalucía and Cataluña recorded percentages of between 12% and 15%, whilst in Madrid, 4.7% of all home purchases were made by foreigners.

Those were the headlines presented by Beatriz Corredor, the Director of Institutional Relations at the Association of Registrars. The former Housing Minister said that “the trend is rising”. In other words, foreigners are expected to continue their activity over the next few quarters. “The level of interest is not waning”, at least for the time being, added Corredor.

The guide, entitled “Guide to buying a property in Spain” has been prepared in collaboration with the Royal Institution of Chartered Surveyors (RICS) and the International Association of Property Professionals (‘Asociación Internacional de Profesionales de la Propiedad’ or AIPP). The intention is for registrars to accompany foreigners seeking to buy a home in Spain through each stage of the process. “The booklet guides potential buyers through the different stages, in chronological order, from the search for a property through to the registration of the purchase in the Property Register, with detailed explanations about the procedures that need to be followed during each phase, along with useful advice and warnings about the precautions that should be taken and the differences compared with other legal systems”. In fact, the guide contains a list of information and considerations that would be of interest to any purchaser thinking of buying a home: information that can be obtained from the Commercial Register, location and physical characteristics of the home, energy efficiency certificate, licences and insurances.

The intention is to “make the way in which homes are sold in Spain more professional”, says Afredo Millás, the Chairman of RICS. Millás confirmed that the guide is aimed primarily at buyers from the UK, which is hardly surprisingly, given that British citizens are responsible for one in every five foreign buyer purchase (19.85%), well above the purchases made by the French (8.1%), Germans (7.65%) and Belgians (6.5%).

Original story: Expansión (by J.M.L.)

Translation: Carmel Drake

H1 2015: Foreign Inv’t In Spain Up By 73% To €8,533M

24 September 2015 – El País

Foreign investment in Spain experienced a sharp increase during the second quarter of 2015, almost tripling with respect to the previous quarter, according to data published from the investment register by the Ministry of the Economy and Trade. Madrid and Cataluña, which increased their respective shares of the total, attracted more than 88% of the €8,533 million foreign investment that Spain received during H1 2015. This figure represents an increase of 73% compared with the same period in 2014.

The health of the Spanish economy is reflected in the confidence of investors. The second quarter of this year has represented a sample of the opportunities that foreign investors are glimpsing in our country. Foreign investment between April and June amounted to €6,150 million, the best quarter in recent years. This figure means that the volume of foreign funds entering Spain more than doubled in Q2 2015 compared with the same period last year.

Most of this foreign capital was invested in Madrid (€4,229 million) and Cataluña (€1,302 million) in Q2 2015. They represent the two main magnets for foreign investment in Spain, together accounting for almost 90% of the funds received, up by 8 p.p. with respect to the same period last year. (…).

The figures for foreign investment in Cataluña during the second quarter of the year reversed the situation seen last year when investment decreased there by 13%, even though it grew in the rest of the country, by 14%. During the first six months of the year, investment in Cataluña almost quadrupled, up from €515 million in H1 2014 to €1,959 million in H1 2015.

“The figures are better than normal”, said the Minister for the Economy, Luis de Guindos (pictured above), during an interview, where he explained that “productive investment is growing in Cataluña because no one thinks that secession will happen”. And he added: “Investors consider that the independent secessionist scenario is impossible from a legal point of view”. Some of these investments related to automobile factories in Cataluña.

Meanwhile, the Community of Madrid attracted foreign investment amounting to €4,229 million during the second quarter of 2015, 61% more than in the same period in 2014. The autonomous region led by Cristina Cifuentes (PP) issued a statement yesterday celebrating the fact that “Madrid managed to attract 68.8% of all of foreign investment in Spain, i.e. three times more foreign investment than the next largest autonomous region, Cataluña”. Foreign investment in the País Vasco decreased during the first six months of the year.

The Community of Madrid has analysed the evolution of foreign investment during the period 1993-2015 and concluded that the capital is becoming an increasingly attractive region for investors. 22 years ago, investment in Madrid accounted for 57% of total investment, but that weight has grown in recent years. “Since the start of the crisis, international investors have increased their commitment to Madrid versus other regions”, said the statement from the Community of Madrid, which attributes the improvement to “policies based on the removal of obstacles impeding the creation of companies, the liberalisation of trading hours and the reduction of the tax burden”.

Original story: El País (by Jesús Sérvulo González)

Translation: Carmel Drake

Belgian Interest In Spanish Holiday Homes Skyrockets

6 April 2015 – El Mundo

Last year Belgian citizens purchased 21% more homes in our country (than during 2013), attracted by the low prices.

The Belgian group Stella predicted it in the early 90s, in one of the most popular songs in the country’s history: “on ira tous, tous tous a Torremolinos” (we will all, all all, go to Torremolinos). That omen is now a reality since Belgians are coming to Spain in increasingly large numbers and not just for one-off holidays, but also to become homeowners. During 2014, the citizens of the country acquired 3,507 homes on Spanish soil, almost 21% more than in 2013 and, although at the time they had a certain predilection for the Malaga town, the truth today is that their interest has spread across the whole country.

“Prices have risen so much in Belgium and have fallen so much in Spain that it has become very affordable (for us) to buy a home on the Mediterranean (Coast)”, says Bertrand Florent, resident of Woluwe-Saint-Pierre, one of the most expensive neighbourhoods in Brussels, where it costs more than €300,000, on average, to buy a home.

This reasoning has led him to think about investing his money in a second home in Spain where, for less than €100,000, he could increase the statistics that show how (interest in) our domestic market has become an authentic boom for Belgian citizens.

The increase in house prices in Belgium, together with the decline in the Spanish market during the crisis, has converted the Belgians into the main non-resident foreign purchasers of homes in Spain, on a proportional basis.

They are only slightly exceeded (in absolute terms) by the citizens of the United Kingdom and France, two countries where the number of inhabitants is several times higher than the Belgian population of just over ten million.

Nevertheless, “several factors should be taken into account”, says Antoine Bourgeois, real estate advisor in Brussels. “Belgians used to spend time on the Belgian coast or in the South of France. However, real estate prices have risen sharply there, and so Belgians have decided to focus on other destinations”. This exodus has also been helped by the evolution in the means of transport and the fact that now there are more – and cheaper – flights than ever linking Belgium with various locations in Spain.

The rise in prices has been observed across the whole country, where the market has grown like wildfire in recent years, to the extent that average house prices doubled in Belgium between 2002 and 2012.

This development has led the OECD – Organisation for Economic Cooperation and Development – to consider Belgium as one of the countries in which house prices are most over-valued in the world, with rates that, in 2013, significantly exceeded the averages in other western countries, both in terms of the differences between prices and wages, as well as between sales and rentals. This data led the credit ratings agency Standard & Poor to warn about the creation of a real estate bubble in the country although, since last year, the market has shown signs of stabilisation.

Original story: El Mundo (by Alberto F. De Quer)

Translation: Carmel Drake

KKR Considers Buying One Third Of Acciona’s RE Subsidiary

18 March 2015 – El Confidencial

The group owned by the Entrecanales family is looking for a partner to allow it to ‘ride the wave’ of the real estate recovery and has invited the US fund to be its travel companion.

KKR. The acronym of Kohlberg Kravis Roberts has become Acciona’s most important partner in recent times. Last June, the private equity giant purchased a third of the international renewable energy business owned by the Entrecanales family’s group for €417 million, and in a stroke, that allowed the Spanish group to clean up its accounts, fulfil its divestment plan six months early and rethink other sales that it had on the table, such as Bestinver and Acciona Inmobiliaria.

The sale of the latter became more attractive after the company was strengthened through the hiring of Walter de Luna, who was until then the number two at Sareb, as the CEO, and Luis Moreno, who was his right hand man at the bad bank; they joined the company with the clear challenge of designing a plan for growth. Nevertheless, that plan requires resources and, once again, Acciona’s American friend seems to be willing to help out.

According to knowledgeable sources, KKR is considering buying share capital in Acciona Inmobiliaria; and if the negotiations between the two parties go well, they will culminate in a third large transaction between the fund and the Spanish group, because, as well as having acquired the international renewable energy business from the construction company, KKR has also created a joint venture with the Spanish group, containing wind assets, the famous ‘yieldco’, which it expects to list on the Nasdaq soon.

In recent official presentations, Acciona itself has formally acknowledged the badly-kept secret that it is looking for a partner to inject the money it needs to reinvigorate its real estate subsidiary and thus be in a position to benefit from the recovery that is emerging in the sector, now that it has managed to sort out the direction of the parent company.

The book value of Acciona Inmobiliaria amounts to c. €1,500 million and market sources indicate that the goal of the Entrecanales family would be for the new partner to take ownership of around one third of its share capital. Nevertheless, other alternatives have also been put on the table (in the discussions with KKR), such as tackling projects together, since the Spanish group has (lots of) projects (in the pipeline) and the American fund has cash.

KKR’s commitment to Spain

Spain has become a priority market for KKR in Europe, where its Operations Director, the Spaniard Jesús Olmos, has been the main driver behind the firm’s growth in our country in recent years. He has led the investment of more than 2,400 million dollars in companies such as Saba, Telepizza, Uralita, Grupo Alfonso Gallardo, Port Aventura, T-Solar and, of course, Acciona. These transactions have been strengthened by the fund’s decision to open an office in Madrid and recruit Alejo Vidal-Quadras, who was the CEO of 3i España until last December.

Now, one of KKR’s next goals in our country is to position itself as a player of reference in the real estate sector, as well as to open its sphere of operation to investments in credit and to continue its growth in infrastructure.

Meanwhile, after seven years of crisis and various failed sale attempts, Acciona Inmobiliaria managed to recover in 2014 to record positive results; it closed last December with an EBITDA – earnings before interest, tax, depreciation and amortisation – of €3 million, compared with losses of €2 million a year earlier.

The group owned by the Entrecanales family values its subsidiary at €1,529 million, of which it considers around 70% (€1,199 million) to be gross gains by the group. By geographical region, 87% of the subsidiaries’ assets are located in Spain and only 13% are overseas; whereas if we analyse the subsidiary in terms of turnover, 45% relates to property (primarily residential), 37% corresponds to land in Spain, 8% is land overseas and development activity accounts for the remaining 10%.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake