JLL: Foreign Investment in Catalan Real Estate Rose by 137% in 2018

15 June 2019 – La Vanguardia

According to data published by the real estate consultancy JLL, overseas investment in the Catalan real estate sector rose by 137% during 2018, despite the fact that total investment fell from €1.13 billion in 2017 to €995 million in 2018.

In fact, domestic investment plummeted by 85% to €363 million from €859 million, but almost all of that decrease was offset by the arrival of funds from overseas. Of those, investment funds deposited 57% YoY more in 2018 (€574 million) and Socimis invested 47% YoY more (€326 million).

Having overcome the political uncertainty seen in 2017, international investors showed their commitment to Cataluña in general and Barcelona in particular, not least because the city has been declared as one of the world’s influencer cities by JLL.

In the business context, the city is particularly attractive for investment in the office, logistics and commercial sectors, ranking in first place in all 3 markets when compared with its European counterparts.

Specifically, the Catalan capital’s offices generate yields of 3.75%, whereby outperforming Milan (3.6%), London, Madrid and Stockholm (all 3.5%). Its logistics assets generate returns of 5.10%, compared with 5% in Madrid, and its shops in central locations generated yields of 3.25% in Q1 2019, compared with Madrid (3.15%) and Paris (2.75%).

All of this is welcome news for the region that has been hit hard by the political uncertainty of recent years.

Original story: La Vanguardia (by Pilar Blázquez)

Translation/Summary: Carmel Drake

Grupo Ortiz Completes 5-Year Bond Issue Worth €50M

10 July 2018 – Eje Prime

Grupo Ortiz has finalised the placement of bonds worth €50 million with the aim of replacing a previous issue that is due to expire next year. Thanks to this operation, the company will reduce the cost of its debt and extend its maturity period.

The new bonds, subscribed by qualifying investors, are being launched over five years, in such a way that they will expire in 2023. The interest rate on the bonds is 5.25%. The new securities replace those issued for the same total amount in 2014, which are due to expire in 2019 and which generate a cost of the company of 7% per annum.

The new bonds, just like their predecessors, will be admitted for trading on the Alternative Fixed Income Market (MARF). Grupo Ortiz was the third company to launch debt securities on that market.

In 2017, Grupo Ortiz completed a portfolio of building work pending execution worth €6 billion, up by 45% compared to the previous year, boosted by the expansion of its international business, primarily in Latin America. More than two-thirds of the company’s business is generated overseas.

Original story: Eje Prime 

Translation: Carmel Drake

The Matutes Family Considers Future of the Ayre Hotel in Oviedo

20 January 2018 – La Voz de Asturias

Palladium Hotel Group, the hotel group owned by the Matutes family, is reconsidering the future of its hotel in Oviedo, the Hotel Ayre. The Director-General of the company, Abel Matutes Prats, is considering including the establishments from the Ayre brand within the Only You brand (a concept of boutique city hotels), but it has not ruled out selling certain establishments.

The Ibiza-based hotel company has owned Ayre Hotels together with Parinver, the investment arm of El Corte Inglés since 2006. The chain comprises ten establishments (located in Oviedo, Barcelona, Madrid, Valencia, Córdoba and Sevilla). Some of these hotels may be included within the Only You brand and others may be sold in a commitment by the company to strengthen its hotel management business over hotel ownership. Nevertheless, in August, sources at El Corte Inglés said that “there were no plans afoot to sell any stakes”.

“We are making a significant effort to move towards a management model. We are a company that owns everything and our objective is to move towards a similar mix to that of our competitors. Over the medium term, we have to go down that route”, explained the director who wants to strengthen his firm’s role as a manager through agreements with owners and investment funds to grow faster.

The company considers that in Spain there is space to grow with the Only You brand in places such as Sevilla, Málaga, Valencia, Bilbao and San Sebastian, as well as in other European countries such as Portugal and Italy. “Once we are established in Europe, the plan will be to make the leap to North America”, he revealed.

The hotel group is very satisfied with the performance of its Only You Hotels brand (boutique city hotels), which currently comprises two establishments in Madrid. And the future outlook is so positive that it is looking for new operations for this brand both within and outside of Spain.

“We want to grow quickly with this brand but everything will depend on the welcome it receives when it opens”, said the company’s Director General, Abel Matutes Prats, who explained that the idea is to also incorporate hotels outside of Spain in both cities and tourist areas.

Turnover

With the repositioning of its brands, the hotelier owned by the Matutes family forecasts “an important jump” in terms of revenues over the next two years, which could rise by 10% and whereby exceed the €600 million reached in 2017 thanks to the consolidation of the Only You brand, the opening of new hotels in Mexico at the end of the year and another couple of projects “which are currently under consideration”, but which will also close in 2018.

Palladium closed 2017 with investment in Europe and North America amounting to more than €88 million in terms of renovations and €125 million in new builds. In terms of the hotel company’s objective for the coming year, it plans to spend €50 million on renovations and €180 million on new constructions.

Original story: La Voz de Asturias

Translation: Carmel Drake

Swedes Are On A Mission To Buy Homes In Spain

17 July 2017 – Economía Digital

Foreigners are buying more homes than ever in Spain. Last year saw a new historical high, with more than 53,000 purchases by overseas buyers, despite a decline in acquisitions by the Brits and the French and a stagnation in purchases by the Germans. Instead, the Swedes have arrived and with them, Swedish real estate companies.

Swedes have risen to fourth position in the ranking of house purchases by foreigners. In its latest statistical annual, the College of Property Registrars in Spain highlights that overseas buyers are showing the “greatest strength”. According to the annual, Britons continue to occupy first place in the ranking, accounting for 19% of total sales to foreigners, although that figure has decreased with respect to 2015 (21.3%). They are paying for the effects of Brexit. The French have also lost strength, to account for 8.05% of the total, compared to 8.72% a year earlier. The Germans remained at 7.69%, just a few tenths more than in the previous year. By contrast, the Swedes increased their share to 6.72% from 5.89% a year earlier, which means that they purchased almost 4,000 homes in 2016.

When analysing this data, it is worth taking into account the demographic weight of the respective countries. Sweden had a population of 10 million in January, whilst Germany has a population of 82 million, France 67 million and Great Britain 58 million. And so, although the population is much smaller, Swedes are buying almost as many homes in Spain as the Germans and French.

The strength of the krona compared to the euro

Sources at the Swedish agencies attribute this interest in Spain to several reasons: the exorbitant prices of properties in their own country; the strength of the krona with respect to the euro; the desire of their compatriots to own a second home near a sunny beach; and, also, the publicity campaigns being carried out.

The most well-known of the Swedish real estate companies is Fastighetsbyrán, which forms part of the Swedbank group, the country’s main bank. It has a dozen franchises in Spain. Its CEO, Daniel Nilsson, said that it sold 1,050 homes in Spain to Swedish compatriots last year for a total amount of €250 million. Its market share in the housing segment for Swedes in Spain is almost 25%.

In terms of location, Swedes concentrate their purchases along the coasts in the south of the peninsula – preferably between the province of Alicante to the Portuguese Algarve – as well as in the Canary and Balearic Islands. (…). Investment funds have also arrived, such as Catella, which is headquartered in Stockholm and which last year closed four operations amounting to €84 million: two residential buildings in Madrid, another one in Barcelona and a retail park in Vinaroz (Castellón)

The Swedish real estate companies are unique in that the vast majority of the personnel and clients of the franchised offices come from the same country. (…).

The second largest Swedish real estate company in terms of sales is Bjurfors, with half a dozen franchises in Spain. From their offices in Marbella, they explain that they are open to clients from everywhere, but they acknowledge that, for the time being, all of their clients are Scandinavian, and most of them are Swedish.

Homes with sunny terraces

All of the employees consulted agreed that there is increasingly more demand. Scandinavian clients want homes with outdoor space: they have to have large sunny terraces or patios. Otherwise, they are not interested.

According to a study conducted by the Svenskar i Väriden organisation in 2015, more than 90,000 Swedes live for most of the year in Spain. According to data provided by the Swedish embassy in Madrid, in June 2016, there were 27,000 Swedes registered (empadronados) in Spain and two million travelled here for tourism last year. It is expected that 2.2 million will come this year.

Original story: Economía Digital (by Josep María Casas)

Translation: Carmel Drake

Mazabi Prepares To Debut Its Socimi On Stock Market In 2018

12 June 2017 – Expansión

The family property management firm Mazabi is preparing to debut its Socimi – Silicius Inmuebles en Rentabilidad – on the stock market. It plans to list it on the stock exchange at some point next year, with a target valuation of €400 million.

The multifamily office, which was created in 2009 and which currently manages assets worth more than €1,000 million in 14 countries, wants its Socimi to be constituted as an ideal investment vehicle for families interested in obtaining returns from their assets and improving liquidity, as well as for institutional investors interested in obtaining a coupon from their investments.

Silicius was incorporated in 2015 and was registered under the Socimi framework last year. The company, promoted by El Arverjal – a family office owned by the Mencos family – and managed by Mazabi, will debut on the stock market before September 2018.

Currently, Silicius owns assets worth €90 million and generates revenues of around €5 million. It is finalising additional financing amounting to between €20 million and €30 million so that it can undertake new investments before the summer. In parallel, the group is negotiating the contribution to its fund of assets from other partners and the incorporation of investors who will contribute capital depending on the opportunities that are generated.

Incorporation

“The objective is to debut on the stock market with a value of between €200 million and €250 million next year and, once listed, incorporate an individual or institutional shareholder with a placement on the stock market to try and reach the target market capitalisation of €400 million”, explained the CEO of Mazabi, Juan Antonio Gutiérrez.

The Director said that the Socimi’s average debt will be in the order of 25%: “The objective is to pay a coupon and, for that, the level of debt has to be low”.

The company focuses its investments on assets worth between €5 million and €30 million and is currently analysing purchase opportunities amounting to €100 million. “We focus on the segment that private investors can’t afford, but which fall below the level of interest of the funds and large Socimis, which is where there are more opportunities and less competition”, explained Juan Díaz de Bustamente, CEO of the Socimi.

Currently, the firm’s portfolio includes a hotel in Conil (Cádiz), two office buildings in Madrid – one on Calle Obenque and another on Calle Virgen de los Peligros – and four retail assets – including a store leased to Cortefiel on Paseo de la Castellana, 18 (pictured above) and another set of premises leased to Vips on Calle Velázquez 136. It also owns a stake in Lazora.

The company is not going to limit its acquisitions to Spain and will analyse opportunities in the main European capitals. “Our investments have to fulfil three principles: diversification, liquidity and coupon”, they state. Specifically, the company is currently evaluating the possibility of completing an acquisition in Portugal.

The Directors explain that it would be reasonable for 20% of its assets to be located outside of Spain. “You lose the tax effect, but it allows you to diversify geographically”, they add.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Mexican Investor Buys Residential Building In Madrid For €48M

13 March 2017 – El Mundo

A new and important real estate operation has been closed along the so-called Golden Mile, in the most exclusive area of Madrid. A Mexican investor has purchased the majestic building located on Plaza Marqués de Salamanca, 11 for €48 million, according to comments by Pierre-Célestin & García-Argüelles Partners, a firm that specialises in brokering the sale of prime assets in major international capitals and which has brokered this super-operation.

If this figure is correct, it will be the highest grossing transaction involving a residential building in the city for at least a decade. The historical property, which is used for both residential and hotel purposes, has an above ground surface area of 8,797 m2, spread over eight storeys including the ground floor (which contains storerooms, the concierge’s house and a commercial outlet) and the roof top terrace. Each floor has a surface area of 1,000 m2 and is currently divided into two homes with ceilings measuring more than 3.5 m high.

Javier García-Argüelles, one of the partners of the company that advised the sale, highlighted the great interest that this asset has sparked. He reportedly received nine expressions of interest – five from funds and four from individual investors – from two domestic and seven international buyers – two Venezuelan, one Colombian, one Brit, one Dutch and one Canadian -. “The property was awarded to the first investor who was willing to pay the non-negotiable figure of €48 million and make the 10% deposit”, he said.

Regarding the new owner, for confidentiality reasons, García-Argüelles is only able to reveal that he is Mexican, features on Forbes’ list and works in the international real estate market. (…).

Until now, Marqués de Salamanca, 11, whose homes were being operated under a lease arrangement, belonged to an aristocratic family from Oviedo.

“This operation is a clear sign that the luxury real estate sector is experiencing a real boom”, said García-Argüelles, who revealed that the new owner intends to invest heavily (“spending no less than €10 million”) on the renovation of the building to transform it into exclusive apartments.

Apparently, although the property could be converted into a five-star hotel, the new owner’s plans involve creating three 250-300m2 homes per floor and holding onto the whole of the top floor for his own personal use (the rooftop terrace will be left untouched. It has views of the entire city of Madrid as it is the highest point in the neighbourhood of Salamanca). In total, around 15 high-end apartments will come onto the market as a result. Their price? According to García-Argüelles and Pierre Célestin, and based on comments made by the buyer, the asking price for the homes will start at €14,000/m2.

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake

Former SARquavitae Director Creates Fund With Oaktree

1 December 2016 – Expansión

The former CEO of SARquavitae, Jorge Guarner, has joined forces with Oaktree Capital to launch a new fund, Healthcare Activos, an investment vehicle specialising in real estate assets in the healthcare sector. The fund has a minimum size of €100 million, according to sources in the sector.

Healthcare Activos, which is headquartered in Barcelona, places its focus on acquiring real estate assets such as hospitals, clinics and other medical centres, both in Spain and overseas. The vehicle has not made any purchases to date.

The project is led by Guarner, who served as the CEO and Director General of the nursing home and services group between 2003 and 2015.

Guarner is an expert in the field of healthcare. He is currently a Director of the group Confide Correduría and a partner at the international consultancy firm Sphera Global Healthcare. At a more institutional level, he is a member of the Board of Directors of the Spanish Association of Directors and a member of the advisory board for Esade’s Health and Pharmacy Club. Meanwhile, Oaktree is a fund that has starred in several major operations in Spain, such as the sale of Panrico to Bimbo.

The Board of Directors of Healthcase Activos includes Guarner as the Chairman; Karim Khairallah as the Director General of the investor group; and Carlos Gila as the expert in business restructurings. Sergio Sánchez Solé, a lawyer from Garrigues, has been appointed as the Secretary to the Board.

Original story: Expansión (by G. Trindade)

Translation: Carmel Drake

ACR Emerges From The Crisis Thanks To RE Recovery

20 May 2016 – Expansión

After the slump of 2013 and 2014, the Spanish construction company ACR, which specialises in the construction and development of residential housing, has experienced significant growth thanks to the recovery of the real estate market in Spain. “The residential construction segment has clearly improved”, said Michel Elizalde (pictured above), the CEO of the company, which saw its turnover soar by 45% in 2016, to reach €130 million.

The fruits of 2015 (€100 million in new contracts) have contributed to increase the size of the portfolio to €125 million, of which only 10% comes from abroad. Spain, unlike the trend in other construction companies, has offset the irregular nature of the business overseas. ACR is withdrawing from France and is analysing Colombia very carefully, where it is starting to feel the lack of projects due to the difficult economic situation, driven by the unfavourable exchange rate versus the euro, the decrease in the price of oil and in fall in prices of raw materials. “Our international expansion is costing us more than we expected it would when we launched the initiative in 2011”, acknowledges Elizalde. ACR will continue to analyse opportunities in Colombia, but it will abandon the French market, due to the barriers to entry against foreign groups and the different culture there in terms of contracting suppliers.

ACR performs most of its work for third parties, and the remainder relates to developments in different cities, primarily, in Madrid and Barcelona. Currently, the group has around 1,900 homes under construction. According to ACR, the factor that has most contributed to the mobilisation of the Spanish residential market has been the entry of new investors, primarily investment funds, which require the support of groups with experience in construction to develop their projects. “In addition, there was pent-up demand, which is now flourishing, although we are still a long way off the production speeds of 100,000 homes per year”.

ACR, with a controlled debt of €26 million, expects its turnover to reach €140 million this year, on the basis of its performance during the first four months of the year. “We are evolving from a real estate construction firm into a project management partner”, said the CEO of ACR.

Elizalde gave the example of his firm’s agreement with the fund Allegra to develop two housing complexes in Madrid.

Original story: Expansión (by C.Morán)

Translation: Carmel Drake