Tag: ownership

Century 21’s CEO, Ricardo Sousa, On Spain’s RE Sector

9 June 2016 – Expansión

Century 21 left the Spanish market in 2007, when the tourism group Globalia took the decision to exit the country, but it returned in 2010 at the height of the real estate crisis, at the hand of the Portuguese businessman Ricardo Sousa, the master franchisor of Century 21 in Portugal since 2004. Now, the US real estate network plans to double its business in Spain, says Sousa, the CEO.

(In Spain), the chain started out in Cataluña, before moving to Madrid and the Costa del Sol; its expansion plan is now focused on Levante.

– You took a risk by returning to Spain, but now you have 40 offices….

When we arrived in 2010, the market was correcting itself. An opportunity arose and we didn’t think twice about it. A major recession was underway, but there was a clear need to change the product to serve the people. Spain was conditioned by brick and speculation, but during the crisis we saw the real needs of Spanish families. The most opportunistic operators were exiting and have now abandoned the real estate sector. The professionals have stayed, and that service and proximity (to our clients and markets) is what differentiates us.

– What are your thoughts regarding the recovery of the sector?

The recovery started in the main markets, like Madrid and Barcelona, but more peripheral areas have also begun to emerge this year. Families are starting to buy homes again, because there is more confidence and better access to mortgages. Spain has an incredible culture of ownership and now the real estate market is coming back. Moreover, areas such as Levante, which have strong international demand, are providing a huge boost.

 – With the current level of stock, do we need to build new homes?

Nothing has been built for years, and yes, demand exists for new developments and even renovations. But we may see changes in the profile of buyers, as we are increasingly depending on overseas purchasers. In particular, the instability in neighbouring countries means that we are attracting more tourists, and that is good, but we need to be prudent and anticipate the impact of the latest trends…

– Now you are planning to grow in Levante, working together with a local company…

Spain is a country of many realities and we have to specialise in each one, in order to add value. Our collaboration with Mahersol was born out of that idea. Our business outlook extends 20 years, and so we are looking at local businesses. We started this formula in the Canary Islands and are now implementing it in Levante, focusing, above all, on the Costa Blanca and Murcia.

– Do you think the political situation may restrict this progress and create instability?

In Portugal, we experienced something similar and partnerships that once seemed impossible were made possible. There is a stronger dynamic at play, namely the residential market, which moves at the margin of politics. (…).

Original story: Expansión (by Mª José Cruz)

Translation: Carmel Drake

Lindorff Acquires 94% Of Aktua For €331M

3 May 2016  – Expansión

Santander retains a 6% stake / The fund Lindorff has acquired the real estate platform, along with its 400 employees and network of 20 offices from Centerbridge.

Lindorff is redoubling its commitment to Spain and, specifically, to the real estate sector. Yesterday, the fund reached an agreement with Centerbridge and the other shareholders to acquire 94% of Aktua, the platform that manages homes and debt from BMN, Ibercaja and some from Santander. According to reports by the Norwegian group, the operation is worth €313 million, including deferred and contingent payments. Santander will retain the remaining 6% stake.

Founded in 2008, the former real estate arm of Banesto, now has more than 400 employees and a network of more than 20 offices located all over the country. Following the purchase of Gestión de Inmuebles Salduvia, formerly owned by Ibercaja, the entity went onto manage more than 42,000 real estate assets, worth more than €8,000 million.

Centerbridge acquired the company from Santander’s subsidiary in 2012 for €100 million. The fund owned 83% of the capital, 6% belonged to Santander and the remainder, 11%, was shared between its own managers, including the CEO and former director of Banesto, Enrique Dancausa.

The company generated an operating profit of €38 million in 2015. “Spain is an important growth market for Lindorff”, said Klaus-Anders Nysteen, the CEO of Lindorff. “The operation provides us with a solid platform in the market for managing foreclosed assets, incorporating new capacities to achieve higher growth in the non-performing mortgage debt sector in Spain, and subsequently in other markets”, added Nysteen.

The purchase price and refinancing of Aktua’s debt will be financed by capital investment from Lindorff, as well as through the renewal of its credit lines, to reach €195 million.

Original story: Expansión (by J.Z. and D.B.)

Translation: Carmel Drake

Lindorff Finalises Purchase Of Aktua For €200M

2 March 2016 – Expansión

Project Pegasus / The Norwegian group is in exclusive negotiations to acquire the platform that manages homes and RE debt on behalf of BMN, Ibercaja and Santander.

Centerbridge and Lindorff are negotiating the details of one of the largest corporate transactions in Spain so far in 2016. The US fund has selected the Norwegian group as the main candidate to acquire the real estate platform Aktua, a former subsidiary of Banesto, whose asking price amounts to just over €200 million, according to several financial sources.

Aktua currently manages homes and real estate debt for Santander, BMN and Ibercaja. Aktua reached an agreement with the Aragonese group just over a month ago, which has somewhat delayed the sale of the management platform.

The sources consulted explained that the main terms of the agreement have now been established, but the fine print may take a few more days to finalise before signing.

In this way, Lindorff has beat off the other two finalists in the process, known as Project Pegasus: the US fund Apollo, the owner of Altamira; and the private equity firm Activum. The investment banks Bank of America and Barclays are acting as advisors to the operation.

The Norwegian group has been operating in Spain for eight years now, although to date, it has focused on the management of unsecured loans. Within this market, Lindorff acquired the collection subsidiaries of Santander, Banco Sabadell and BMN. The acquisition of Aktua will allow the firm to enter a new business segment with higher returns.

Aktua was founded in 2008 and currently employs 400 professionals working in 24 offices. Following the purchase of Gestión de Inmuebles Salduvia, from Ibercaja, it now manages more than 42,000 real estate assets, worth over €8,000 million. (…).

According to the latest available accounts, Aktua earned almost €5 million in 2014 and generated an EBITDA of €8.5 million. The forecasts from the advisors to the sale predict that the firm will generate EBITDA of between €40 million and €50 million in 2015.

According to data at the Commercial Registry, Centerbridge owns a 83% stake in Aktua’s capital, Santander owns 6% and the company’s managers own 11%. The latter group includes the CEO and former Director of Banesto, Enrique Dancausa. (…).

Original story: Expansión (by J. Zuloaga and D. Badía)

Translation: Carmel Drake

Merlin’s Acquisition Of Testa Moves Faster Than Expected

12 August 2015 – Cinco Días

The Socimi, Merlin Properties, now owns 77% of the real estate company Testa and has paid consideration of around €1,465 million to date.

The construction company, Sacyr, was not expected to cede this stake in its subsidiary until March 2016.

The process to sell Testa, the former subsidiary of Sacyr, is moving faster than expected. The deadlines have been accelerated as the construction company chaired by Manuel Manrique has overcome various obstacles in order to generate some cash from the transaction. The restructuring of the debt and the release of the pledge over the shares in the real estate company linked to its stake in Repsol, have allowed Merlin Properties to take ownership of an additional 26.9% stake in the real estate company today for around €375 million, according to banking sources. By the end of the day, the Socimi will control 77% of the company.

On 9 June, Merlin announced its purchase of Testa for €1,793 million. The operation was designed to be completed in several stages. During stage one, the Socimi, which boasts Ismael Clemente as its CEO, acquired 25% of the real estate company. The remaining shares were pending the release of a pledge over the shares linked to Sacyr’s debt. This was because when the construction company restructured its €2,272 million liability, it pledged its 9% stake in Repsol (amongst other assets) as a guarantee. On 23 July, Merlin paid €861 million for a 25.1% stake in Testa. Sacyr was forced to allocate €600 million of the consideration received at the time, to paying off its debt with creditor banks. In turn, the Socimi took ownership of the majority of the shares as a result of its disbursement.

As such, Sacyr was able to return to renegotiate its debt and reduce the percentage of Testa’s shares secured by its shareholding in Repsol. As such, the construction company has now been able to accelerate the sales process of the next package (of shares) to be acquired by Merlin – this change in control was not originally scheduled to take place until March 2016. The same sources state that the consideration (€375 million) that the Socimi will disburse today will go straight into Sacyr’s coffers, with no obligation to reduce its liabilities, and may be allocated to its operational needs. The remaining shares in Testa continue to be pledged by the shareholding in Repsol.

In total, Merlin has now paid around €1,465 million for the three share packages in a period of just two months.

In terms of the remaining 23% stake, the sales period is due to close on 30 June 2016. Merlin’s ultimate objective is to turn Testa into a Socimi and subsequently merge with it. Based on the information provided, the transaction will give rise to the largest real estate company in Spain, with assets worth around €5,500 million, including the Torre PwC, one of the four skyscrapers in the Norte Castellana business district in Madrid. According to the purchaser, these buildings, which are primarily leased as offices, will generate gross annual revenues of approximately €290 million.

In addition, Clemente said last month that Merlin will sell off Testa’s residential and hotel portfolio, which represents around 15% of its total portfolio.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Barceló Will Acquire 100% Of Occidental

17 June 2015 – Cinco Días

Barceló Corporación Empresarial has signed an agreement with BBVA to acquire the remaining 57.5% stake in Occidental Hoteles Management, which would turn the Mallorcan hotel group, the current holder of 42.5% of the hotel chain, into the sole owner of the company.

In a statement, Barceló reported that the operation is subject to the necessary authorisation being granted by the competition authorities in Mexico. It also said that the addition of Occidential to its portfolio represented “a very significant step” in its growth strategy in Latin America.

As soon as this procedure has been completed, which is expected to take around three months, Barceló will acquire 100% of Occidental’s shares and will begin to manage the properties.

On 4 May, Barceló purchased a 42.5% stake in Occidental Hoteles, from the company’s minority shareholders….The option of acquiring 100% of Occidental’s capital was something the Mallorcan hotel group had in mind at the time. (…)

Through the acquisition of Occidental Hoteles, the Mallorcan tourism group would strengthen its position in the Caribbean with new properties in Mexico and the Dominican Republic. It would also gain a foothold in new countries such as Aruba, Colombia and Haití. (…)

Original story: Cinco Días

Translation: Carmel Drake

A Group Of Funds Takes Control Of Catalan Firm ‘Habitat’

29 May 2015 – Finanzas.com

A group of investment funds has taken control of the Catalan real estate company Habitat, after the judge gave the green light to the proposed agreement that they had submitted.

According to reports by El País, the company will now end up in the hands of firms such as Goldman Sachs, Bank of America Merril Lynch, Capston, Marathon and SC Lowy; whilst the Figueras family, which founded the real estate company, will retain a minority stake. The new owners will retain the current management team.

The company, whose debt initially amounted to €1,800 million, sought refuge in the new bankruptcy law at the end of last year after it proved impossible for it to adhere to the repayment calendar established under the previous agreement.

The investment funds have acquired Habitat after purchasing Habitat’s loans at a significant discount from banks and Sareb, the so-called bad bank, and they presented another proposed agreement to the Commercial Court number 3 in Barcelona, which was approved in the end.

The funds will become the new owners of the real estate company by converting their debt into equity.

Original story: Finanzas.com

Translation: Carmel Drake

Socimis Come To The Hotel Sector’s Rescue

17 March 2015 – Expansión

Trend / Listed real estate investment companies (REITs or Socimis) are paving the way for (hotel) groups to separate the management and ownership of properties – the vehicles provide significant tax advantages and boost the professionalism of the industry.

Socimis – ‘socidedades cotizadas de inversion inmobiliaria’ or listed real estate investment companies – are playing an increasingly important role in the hotel sector due to the tax benefits they offer and also because they allow (hotel) chains to separate the ownership of their properties from the management of the facilities, in line with the Anglo-Saxon model.

These types of vehicle, which are used to purchase and refurbish assets for rental, must invest at least 80% of their funds in property and pay out at least 90% of their rental income (from said properties) in the form of dividends. They also have a special tax regime.

To publicise this alternative funding formula, the Mallorcan Hotel Business Federation (‘Federación Empresarial Hotelera de Mallorca’ or FEHM), Armabex Asesores Registrados and Garrigues have organised a seminar entitled “Socimis as an instrument for restructuring the real estate property of hotel groups”, which will be held today in Mallorca. At the event, the tax advantages of this investment vehicle will be analysed, together with their legal status and the process for incorporating Socimis into the Alternative Investment Market (Mercado Alternativo Bursátil or MAB), amongst other considerations.

The purpose is to raise awareness amongst (hotel) chains and professionals in the real estate sector of the importance of ensuring that the management of hotels and the ownership of the property are in different hands; this is the biggest challenge facing the industry. We will also analyse in more detail the value that Socimis have as a tool for reducing risk, being more competitive and efficient and also their tax advantages”, says Inmaculada Benito, Executive Vice-President of the FEHM.

Antonio Fernández, Chairman of Armabex Asesores Registrados, stresses that “the restructuring of real estate capital in the sector has been triggered by the lack of financing, the decrease in prices and the existence of an appropriate legal and fiscal framework”. On that last point, Fernández highlights that “investors may now own properties without having to manage them and hotel groups can continue with their management without having to be owners”.

José Manuel Cardona, partner at Garrigues, says that “Socimis are a tool that help to address many of the challenges facing the hotel sector in a single solution”. In his opinion, “they not only represent a funding formula; they also facilitate expansion and internationalisation, provide a solution to the problem of succession in family businesses and pave the way for integration between larger groups and small chains”. Furthermore, “they encourage greater transparency and control, the professionalization of management teams and carry the requirement to distribute minimum dividends, which results in more objective valuations of the assets and rents”.

First case

Barceló was the first company to adopt this formula, through its alliance with Hispania. Bay, the first hotel-sector Socimi, was created with 16 hotels and two shopping centres, worth €421 million. Experts believe that it will not be the only one and that there will soon be more hotel Socimis, that will own both holiday and urban hotel properties. “2014 was the year for shopping centres (in the real estate sector) and this year, hotels will be the leading players”, predicts Fernández.

Original story: Expansión (by Yvonna Blanco)

Translation: Carmel Drake