Tag: parking lots

Kingbook Injects €22M to Offset Losses & Buy New Assets

29 November 2017 – Eje Prime

Kingbook is reorienting its financial situation. The Socimi, which specialises in gas stations, has announced a capital increase amounting to €21.6 million to offset its losses, according to explanations provided by the company. The company, which is owned by GL Europe Reit, which owns a 60% stake, and JZ Real Estate, with a 40% stake, will use this capital injection to eliminate a considerable part of its current liabilities and to increase its own funds.

According to the information document prepared by Kingbook, “the purpose of this increase is to resolve the company’s equity imbalance”. This increase has been subscribed by Holdreit in its entirety, the company’s sole shareholder. On 11 July, the company decided to increase its share capital by €4.52 million, through the issue and launch into circulation of 4.52 million new shares with a nominal value of €1, through the offsetting of credits, with an issue premium that amounted to €17.1 million in total. At present, “the company is waiting for final approval from the Alternative Investment Market (MAB) before its share price reflects the increase in value resulting from the capital increase, which should happen within the next few days”, according to the group.

The report also highlights that the Socimi has incurred losses since it started operating. As at 30 September 2017, the result for the year was negative, with losses of €1.25 million. The group has seen its losses increase, given that during the same period last year, it made a loss of €767,390. “Following this move, the company’s equity position has been restored, with own funds of €23.3 million”.

Nevertheless, Kingbook has a solid portfolio of assets to continue operating for the next few years, which it has managed to increase by 21.5% over the last year, to €38.9 million. The company owns land worth €10.3 million and buildings worth €20 million, compared with €16.3 million a year ago.

Moreover, in the last year, Kingbook has added more than a dozen gas stations to its real estate portfolio. The company has acquired gas stations in León, in San Andrés de Rabanedo, for €900,000; in Cantabria, in Castro Urdiales, for €1.4 million; and in Burgos, in Miranda del Ebro, for €2.3 million, amongst others. Kingbook has spent €7.5 million on new acquisitions in total so far this year.

Moreover, the company announced in October that it is in the process of expanding its asset portfolio into other business areas besides gas stations.

Although the group explained that it has achieved high levels of efficiency in the management of its portfolio thanks to its specialisation, it has indicated that it does not want to limit its activity to a niche as specific as gas stations, given that it considers that “it has the financial potential and management resources to venture into other areas and to achieve competitive returns”.

In terms of the new business areas that Kingbook is exploring to incorporate into its portfolio, potential assets include parking lots and other infrastructure linked to the world of transport.

The Socimi currently manages 57 real estate assets where fuel distribution activities are carried out (gas stations) and also owns one hotel and one industrial warehouse (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

C&W: Inv’t In RE Assets Amounted To €10,300M During YTD Sept

20 October 2017 – Expansión

The interest from investors in the Spanish real estate sector is far from slowing down; in fact, it has intensified in recent months. Specifically, during the 9 months to September, the total volume transacted on direct purchases, in other words, excluding corporate operations, amounted to €10,300 million, up by 74% compared to the same period last year, whereby exceeding the figure recorded during the whole of 2016, according to a report compiled by Cushman & Wakefield.

The report also forecasts that “the appropriate environment for investment that Spain offers” will allow the volume of investment in direct purchases to reach €12,000 million by the end of the year.

By area, one of the best performing segments so far this year has been the retail sector (retail premises, stores, shopping centres, retail parks and outlets). Between January and September, €3,100 million was invested in the segment, which represents 30% of the total investment in the real estate sector. The consultancy firm calculates that the investment volumes for the whole year could reach record levels, last seen in 2015, when purchases amounting to €4,150 million were made.

Offices were the second most sold asset by volume, with a 24% share of investment. Investment in offices during the first nine months of the year reached €2,500 million, of which almost €1,500 million corresponded to Madrid and €816 million to Barcelona.

Tourism is still one of the main attractions for investors. Hotel investment rose by 67% during the 9 months to September, to €2,000 million, thanks to the push from the Costa Brava, Costa del Sol, Palma de Mallorca, Canary Islands and Madrid.

Another niche segment with a strong outlook is the logistics sector. Cushman & Wakefield forecasts that investment in that area will amount to €1,000 million in 2017. The consultancy firm explains that the good figures in terms of leasing and the scarcity of high-quality assets are boosting the development of land up to 500,000 m2, in both Barcelona and Madrid.

New opportunities

In addition to the traditional segments, investors are paying attention to alternative assets, such as student residences, parking lots and petrol stations, which generate better returns.

In terms of the forecast evolution, the consultancy firm explains that the major activity recorded in recent years will result in a lower level of supply and will incentivise new acquisition formulae with indirect purchases through corporate operations and joint ventures. Moreover, the new cycle of property development will encourage investors to participate in the initial phases of developments, whereby redistributing the burden of property developer risk and facilitating investment.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

 

Alternative Assets: Investors In Spain Get More Adventurous

16 March 2017 – Expansión

Over the last two and a half years, investors’ appetite for real estate assets and the lack of investment alternatives have resulted in a compression in yields in Spain. Parking lots, storerooms, gas stations, student halls and nursing homes/hospitals have sparked interest from investors specialising in alternative assets.

Although in some European countries, such as the UK, these business segments are already well established, the markets are not very mature in Spain. Nevertheless, they have potential for growth, according to the experts. “In Europe, total real estate investment volume amounted to around €254,000 million in 2016, of which 14% related to alternative assets. In Spain, that percentage was much lower”, explained Alberto Valls, Partner in Financial Advisory at Deloitte.

Nick Wride, Director of Alternative Investments at JLL, said that these sectors are consolidating in other countries, which means that the yields that investors can achieve in those countries are not as attractive anymore due to the (high level of) competition. “European markets such as Spain are becoming interesting again”, he said.

The Director of the Corporate Finance department at Aguirre Newman, Alfonso Aramendía Peralta, said that although it is a “relatively new” segment in Spain, it is sparking a lot of interest “given that it offers more attractive returns than those generated by more established products such as offices, residential assets and shopping centres, where there is more competition”. (…).

Valls highlights the advantages of these assets, which include, the high management component, as this leads to higher returns, albeit with higher risk, and the fact that these assets are less exposed to economic cycles than traditional properties. (…).

Sources at Knight Frank explain that these kinds of assets are known for their long-term lease contracts, which tend to last more than 10 years; moreover, they offer returns of around 6% or more in some cases. (…).

Fragmented market

The alternative real estate investment market includes assets ranging from parking lots to storerooms – a very fragmented segment – to health centres, nursing homes and student halls of residence, with a very significant management component. In this sense, Aramendía points out that they are assets that suffer more wear and tear, due to their intensive use and therefore, they require tenants that are able to commit CapEx to maintain them in good condition.

Whilst the volume of transactions involving alternative assets has been relatively low in recently years, if we consider the corporate operations undertaken by industrial groups that have a strong real estate component such as Quirón, Parkia, Vitalia and SARquavitae, then we see that 2016 was, in fact, a record year.

Consolidation

Experts think that the likely consolidation of these industrial groups will allow investors demanding higher volumes to enter Spain and may even lead to a boom in specialist Socimis, like has happened in other countries.

Moreover, according to the consultancy firms, one of the ways of financing the growth of these groups now involves the sale of properties to a fund specialisation in the real estate sector. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Ardian Puts Its Parking Lot Business Up For Sale

8 February 2017 – Expansión

The infrastructure fund Ardian and the French financial institution Predica have engaged two investment banks to look into the sale of Indigo (formerly Vinci Park). “Ardian and Credit Agricole have engaged two investment banks to handle the sale of Indigo”, said sources close to the process to Reuters. On the basis of prices paid in the most recent parking lot transactions, Indigo’s shareholders could ask for more than €3,000 million for the company.

Ardian and Credit Agricole, through its subsidiary Predica, both own a 49.2% stake in Indigo. The remainder is in the hands of small shareholders. Sources in the sector indicate that Morgan Stanley and Rothschild are the banks responsible for the sale.

With an EBITDA of almost €300 million in 2016 (€285 million in 2015), the sale of Indigo is likely to attract interest from other international parking lot operators, as well as from large investment funds.

During the first half of 2016, Indigo generated revenues of €416 million, up by 9% compared to the same period in 2015. Last week, it announced a detailed review of its strategy after winning several contracts in Europe and America and it committed to undertaking a series of acquisitions in Canada, the USA and Colombia. “The group’s shareholders have started a strategic review to support the company’s upcoming developments”, said the company.

Other operations in the sector in Spain, such as the sale of Parkia, have been sold for more than 15x EBITDA, although in that case, the operation was smaller with a more limited geographical presence.

Between 2014 and 2015, the French services and infrastructure group Vinci sold its parking business to the current shareholders in two phases. Indigo is one of the largest operators of parking lots in Europe, with a presence in 17 countries and more than 500 cities. It manages more than 4,000 underground parking lots, 2,500 kilometres of parking areas on urban roads and more than 2 million parking spaces.

Original story: Expansión

Translation: Carmel Drake