Colonial Finalises the Sale of its Logistics Centers Worth €480M

14 June 2019 – La Vanguardia

Colonial is finalising the sale of a portfolio of 15 logistics centres worth €480 million that it inherited from Axiare. The assets span a surface area of 574,462 m2 and are located on the outskirts of Madrid, Barcelona and Sevilla.

The Socimi led by Pere Viñolas hopes to complete their sale within a maximum of two months as it seeks to take advantage of the strong demand for these types of assets thanks to the boom in online commerce.

Colonial’s core portfolio comprises office buildings located in the centres of Madrid, Barcelona and Paris, with a market value of around €11.4 billion. The firm is also working on fourteen new projects located in its three key markets, which have an associated investment of €1.3 billion.

At its recent General Shareholders’ Meeting, Colonial approved the appointment of two new independent directors and ratified the distribution of a dividend amounting to €0.20 gross per share, up by 11% YoY.

Original story: La Vanguardia 

Translation/Summary: Carmel Drake

Qatari Sovereign Fund Becomes Colonial’s Largest Shareholder

8 November 2018 – Europa Press

Colonial has approved a capital increase at an extraordinary shareholders’ meeting, whereby enabling the Qatari Sovereign Fund to become the Socimi’s largest shareholder since it will see its stake in the company double to 20%.

Qatar is becoming the largest shareholder of the second largest Socimi in Spain, a firm that owns office buildings in Madrid, Barcelona and Paris worth €11 billion, through an agreement reached with Colonial to exchange the shares of its French subsidiary Société Foncière Lyonnaise (SFL).

Specifically, Colonial is going to give Qatar the own shares that it issues during the capital increase and, in exchange, the fund is going to hand over the 22% stake that it holds in SFL.

In this way, Qatar will double its presence in Colonial from its current position of 10% to the aforementioned figure of 20% and will become its largest shareholder. Meanwhile, the real estate firm will increase the controlling stake that it holds in SFL from 59% to 80.74%.

It is an operation worth €718 million, which Colonial is framing in the context of simplifying the group’s shareholder structure and of strengthening its position in SFL and in France, a company and market that it considers to be “strategic”.

The real estate company is tackling this transaction after completing the merger of the Socimi Axiare and at a time when it is immersed in a full growth strategy through investments in purchases and the new build developments.

In the case of Qatar, it is strengthening its position as the largest shareholder of the second largest listed real estate firm in the country, in line with the commitment that many large international funds are making to the Spanish real estate sector. Moreover, it will retain an indirect stake in SFL.

No changes on the board

These shareholder exchanges will not have any impact on the Board of Directors of Colonial, given that the Qatari fund will retain the two seats that it has had on the management board for a while, when it had a larger stake, according to a statement made by the President of the Socimi, Juan José Brugera, after the meeting.

Brugera said that the operation was approved unanimously by all of the shareholders, whereby ruling out any bad feeling on the part of Colonial’s largest shareholder until now, the Mexican group Finaccess, not only for losing its status (as the largest shareholder), but also for seeing its stake diluted from 18% to 16% as a result of the capital increase.

Original story: Europa Press

Translation: Carmel Drake

BNP Paribas: RE Inv’t in Europe Reached Record High of €259bn in 2017

2 April 2018 – Expansión

Madrid is placed in third position in the ranking behind Paris and London.

Real estate investment in Europe reached a record figure of €259 billion in 2017, which represents an increase of 11% with respect to the previous year, according to a report compiled by BNP Paribas Real Estate, which has attributed this growth to the improvement in the global economy.

Madrid (-14%) was placed in third position in the ranking of real estate investment in Europe behind Paris (-18%) and London (+26%).

Almost half of the investment volume in 2017 involved “mega-deals” worth more than €100 million a piece.

The research also reveals that offices continue to be the most sought-after asset for European investors, given that they account for 43% of the total investment figure.

Moreover, the logistics sector grew by 56% last year, boosted by major corporate agreements, according to the report.

On the other hand, yields continued their downward trend to reach historical lows by the end of the year. Prime or exclusive yields in the office market in Madrid amounted to 3.25%.

Original story: Expansión 

Translation: 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

Colonial Increases Its Stake In Axiare To 29% & Launches Takeover Bid

13 November 2017 – Inmodiario

Colonial has acquired an additional 13.3% stake in the share capital of Axiare from some of the company’s former key shareholders, including 9% from Pelham Capital. Moreover, it has formulated a voluntary takeover bid for the remaining 71.4% stake in “Axiare Patrimonio Socimi, S.A.”. The consideration on offer consists of a cash price of €18.50 per share and is subject to Colonial acquiring a stake that represents no less than 50% plus one share of the total share capital of Axiare.

Colonial, which first acquired shares in Axiare just over a year ago with the purchase of 15% of the company’s shares, plans to close the operation during the first half of 2018. The offer price represents a premium of 13% above Axiare’s current share price and 21% above the most recent NAV reported in June 2017.

A Spanish giant worth €10,000 million

With this operation, Colonial would consolidate is position as one of the leading European platforms in the prime office market in Paris, Madrid and Barcelona. Axiare’s portfolio, comprising 74% offices and with 77% of the portfolio located in Madrid, clearly complements the strategy to develop the location and characteristics of Colonial’s asset portfolio.

“This operation continues Colonial’s path of growth and consolidates its leadership position as one of the leading European real estate companies with a great capacity to generate real estate value”, explains Juan José Brugera (pictured above, right), President of Colonial.

The acquisition of Axiare would allow the entity to add €1,710 million in value to its existing portfolio, whereby taking the total asset value to €10,000 million. The resulting portfolio would span an operating surface area of 1.7 million m2, plus 330,000 m2 under development. Colonial, which currently holds a portfolio comprising solely office buildings, 75% of which are situated in prime locations and 97% of which are occupied, would whereby accelerate its commitment to the market in Madrid, where the entity would have a portfolio of office buildings worth €2,600 million.

Following the operation, the exposure to Spain, which currently accounts for 31% of Colonial’s asset value, would increase to represent 42% of the total. The entity’s combined portfolio would have 58% of its value located in Paris, whilst the office portfolio in Madrid and the portfolio of assets in Barcelona would represent 27% and 10%, respectively.

Seizing the optimal moment in the market

Combined, the two portfolios would generate forecast turnover of €350 million, based on the current asset base in each case. Plus, revenues from the potential to generate future income from the various value-added and renovation projects underway by both companies would also have to be added to that figure. Those projects are mainly focused on the market in Madrid and could increase the combined entity’s forecast rental income to €470 million (…).

Full financial backing

The operation is being financed in its entirety by JP Morgan through a bridge loan, which includes capital underwriting (…).

Ramón y Cajal are Colonial’s legal advisors.

Original story: Inmodiario 

Translation: Carmel Drake

Lar Sells Office On c/Arturo Soria To Colonial For €32.5M

2 October 2017 – Eje Prime

New divestment in the real estate business. The Socimi Lar España has sold the office building located at number 336 Calle Arturo Soria to Colonial for €32.5 million, according to a statement made by the company. This asset had formed part of Lar’s portfolio since 2014.

The office building is located in the centre of Madrid. It comprises nine storeys and has an above-ground gross leasable area of 8,663 m2, plus 193 parking spaces. Both companies highlight that the strong future of this property, whose occupancy rate has increased from 80% when it was acquired by Lar España to the current level of 100%, following an initial investment in its renovation undertaken by the company.

José Luis del Valle, President of Lar España, highlighted “the importance of this first divestment, which fulfils the plan that the company initially forecast: acquire attractive properties, increase their value through good management and, having implemented the business plan designed at the time of the purchase, consider the possibility of divestment to continue investing in strategic assets that maximise the value for our shareholders”.

For Pere Viñolas, CEO of Colonial, this purchase forms part of the asset acquisition strategy in the three markets in which the company has a presence. They are all continuing to show “momentum and good performance in the context of policies to convert and reposition assets”. The operation in question has been completed off-market and has been advised by Aguirre Newman.

Lar España Real Estate currently owns thirty real estate assets whose combined value amounts to €1,419.1 million, of which €1,040.8 million corresponds to shopping centres, located in Madrid, Toledo, the Balearic Islands, La Rioja, Vigo, Valencia, Sevilla, Alicante, Cantabria, Lugo, León, Vizcaya, Navarra, Guipúzcoa, Palencia, Albacete and Barcelona; €149.8 million to three offices buildings; €83.3 million to four logistics assets; and €145.4 million to four developments under construction.

Meanwhile, the Colonial group is a listed real estate company specialising in the prime office market in Europe, with a presence in the main business districts of Barcelona, Madrid and Paris, and a portfolio of properties worth more than €8,600 million.

Original story: Eje Prime

Translation: Carmel Drake

Alpha 2: Colonial Invests €400M In RE In Spain & France

7 February 2017 – Expansión

On Monday, Colonial, the second largest real estate company in Spain (after Merlin Properties) unveiled its new strategic plan, known as Alpha 2. Under this plan, the company has invested €400 million in four operations: three in Spain and one in France (Paris). The group has opted to undertake operations to reposition its assets. In this way, it will allocate €250 million to property acquisitions this year and the remainder will be spent on renovation work.

The group will invest €51 million on an office building on Paseo de la Castellana, 163, which has a surface area of 11,000 m2. The property is currently occupied and will be renovated floor by floor, as the current tenants vacate the property.

In Barcelona, the group has acquired the headquarters of Fundación Bertelsmann, on Travessera de Gràcia, 47-49. The operation, including the remodelling work, amounts to €41 million. On the other hand, Colonial will spend €32 million to build a new office tower in Plaza Europa, number 46-48. This operation will be performed through a joint venture with the perfumery and fashion group Puig. The future building will be located opposite the Catalan company’s current headquarters.

Finally, the fourth operation involves the acquisition of a building at number 112-122 Avenida Emile Zola in Paris. In total, the group will spend €245 million on this purchase, in an operation that was announced a few weeks ago.

This plan complements another one, executed last year, known as Alpha, which initially planned to make investments amounting to €400 million, but in the end spent more than €500 million.

Its purchases included the acquisition of 15% of the Socimi Axiare’s share capital. The company led by Pere Viñolas (pictured above) spent €135 million to become the largest shareholder of that listed company, which debuted on the stock market in the summer of 2014 and which has been setting itself up as one of the main owners of office buildings in Madrid and Barcelona – it has very similar portfolio to that of Colonial.

Currently, Colonial owns 59 properties in Paris, Madrid and Barcelona, with a combined value of €7,543 million, according to the most recent estimates, performed as at 30 June 2016. Its most recent acquisitions include several office buildings, such as IBM’s headquarters in Madrid, located on Calle Santa Hortensia, worth €154 million. The Mexican group Finaccess (former owner of the Modelo group, the manufacturer of Corona beer) sold that property, along with another building on Calle Serrano, in exchange for a stake in Colonial.

Alpha also included the purchase of a 4.4% stake in the French firm SFL, which the Reig family sold for €106 million.

During the 9 months to September 2016, the real estate company in which the Sovereign fund of Qatar, Finaccess and Villar Mir hold stakes, generated revenues of around €205 million, up by 21% compared to the same period in 2015.

During the same period, Colonial earned €249 million, up by 17%, whilst its level of indebtedness (LTV) amounted to 40.3%. Just three months ago, the real estate company carried out a bond issue amounting to €600 million.

Original story: Expansión (by G. Trindade and R. Ruiz)

Translation: Carmel Drake

Madrid & Barcelona Renew Their Main Thoroughfares

5 September 2016 – Expansión

Total investment of €900 million / Investment in retail assets at street level doubled to reach record levels in 2015. Pontegadea’s purchase of the building located on Gran Vía, 32 for €400 million accounted for 40% of total investment. Spain is still in the Top 10 target markets for large fashion operators.

The busiest, most touristic and sought-after streets in Madrid and Barcelona, such as Gran Vía and Las Ramblas, have always been an object of desire for the major players in the restaurant and leisure sector; and, for several years now, they have also been attracting the attention of the major fashion chains, which are choosing to showcase their flagship stores on these avenues.

The high footfall rates on these central streets make them the perfect target for housing the flagship stores of major fashion and accessories brands and, in exchange, these historical avenues have renewed their offer and rejuvenated their image.

In parallel, and in line with the rise of the flagship stores, the retail sector has experienced a general increase in the sale and purchase of large premises. Specifically, more than twenty new international brands arrived in Spain in 2015, of which 60% chose Madrid to open their first store and 32% opted for Barcelona, according to a report prepared by CBRE. As such, in 2016, Spain continues to rank in the top ten target markets for major international companies.

The next major brand expected to arrive in Spain is the Japanese fashion chain Uniqlo. It will begin by opening a flagship store in Barcelona, however, the Asian group is also looking for premises in Madrid. Other firms that have expressed an interest in entering the Spanish market include the Italian brands Terranova and OVS.

Overall, investment in the high street (retail assets at street level) broke records last year, with €900 million invested, twice as much as in the previous year, largely fuelled by Pontegadea’s purchase of the building that Primark now occupies on Gran Vía, 32, for €400 million. That operation alone accounted for 40% of total investment.

In Barcelona, the lack of available supply meant that investment in the high street was not as intense and sales mainly involved mix-used buildings, with a retail component, such as Diagonal 490 and the historical Torre Muñoz, in Fontanella.

The strong demand and shortage of availability in terms of prime supply have caused yields to decrease, to around 3.5% for the best products, in both Madrid and Barcelona. Nevertheless, according to CBRE, that figure is above those reported in other European cities such as London and Paris.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Derby Hotels’ Assets Are Worth €800M

23 June 2016 – Expansión

Family owned chain / The Group chaired by Jordi Clos owns 12 hotels and 10 apartment buildings, and has a gearing ratio of 11.2%.

The Catalan businessman Jordi Clos, owner of Derby Hotels and the Egyptian Museum of Barcelona, and the Chairman of the Barcelona Hotel Association, has created a real estate empire from scratch that is now worth €800 million. Few hotel chains in Spain are so asset rich, given that the group owns all twelve of its hotels and all ten of the tourist apartment buildings that it operates. Its gearing ratio is also unusually low: 11.2% of the total asset value, at around €90 million.

In addition to the properties for tourist use, which are located in London, Paris, Madrid and Barcelona, the group also owns several office buildings, homes and car parks, which it holds purely for real estate investment purposes.

Derby Hotels, which moved its headquarters from Barcelona to Madrid a few months ago, recorded revenues of €74.3 million in 2015, up by 6.4% compared with the previous year. Of that amount, €67 million was generated by the hotel business and the remainder, from the operation of the tourist apartments.

The only building in this family-owned chain that precedes Jordi Clos is the Hotel Derby, which his father-in-law opened in Barcelona in 1968. The businessman has opened all of the other properties, over a thirty year period from 1983 until 2013.

In some cases, Clos acquired his properties with investment partners, before going on to buy out their stakes years later. Such is the case of the Caesar Hotel in London, which he purchased together with the Metropolis real estate fund in 2004 for €30 million (each party acquired a 50% stake). In 2009, he joined forces with that fund again to acquire the Hotel Banke in Paris for €75 million. In 2013, Clos purchased the shares that Metropolis held in those two hotels in an operation that valued the assets at €120 million in total.

A similar case was that of Hotel Bagués in Barcelona, which he opened in 2010 with the Bagués Masriera family, owners of the building that the jewellers of the same name had occupied for decades. Last year, Close purchased the remaining 40% stake that the jewellers still held for €3.8 million.

Searching for new properties

Now, having digested the purchase of the 50% stakes of the hotels in London and Paris, Derby wants to continue to expand its empire in Europe. “Barcelona has been ruled out due to the hotel moratorium there and, we already have two five-star hotels in Madrid”, explained Clos. “Instead, we want to continue to diversify our risk by opening hotels in other cities, such as Amsterdam and Munich, although we are also looking at Copenhagen and Stockholm”.

The terrorist attacks in Paris in 2015 directly affected the Group’s hotels in the French capital. Clos estimates that the occupancy rate there fell by 15% and average prices decreased by 20%. “If we weren’t a diversified chain with a low gearing ratio, it would have been hard for us to survive the winter in Paris”, he added.

Indeed, Hotel Banke had just increased its rating from four to five-stars following the remodelling of its 91 rooms. Now, the group is planning to raise the category of its hotel in London too, to a superior four-star property. To this end, it plans to increase the size of its rooms and reduce the total number from 140 to 120.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Q1 2016: Colonial’s Net Profit Rose By 131% To €11M

13 May 2016 – Expansión

Colonial closed the first quarter of the year with an attributable net profit of €11 million, up by 131% compared with the same period in 2015, after increasing its revenues from rental income by 20%. The real estate company generated €66 million from renting out its offices, which are primarily located in the major business districts of Madrid, Barcelona and Paris.

The company highlighted that it leased 40% more office space during the quarter, specifically, 45,000 sqm during the three months to March, which represents half of its objective for 2016 as a whole.

The greatest increase was recorded in Barcelona, where Colonial renewed the lease contract of the building that houses Gas Natural’s headquarters, measuring 22,400 sqm, and where it also leased out almost 3,000 sqm to the audit firm Grant Thornton.

Colonial’s share price increased by 0.32% yesterday to €0.633.

Original story: Expansión (by J.O.)

Translation: Carmel Drake