Patrizia Wants to Buy a Property Developer to Become Rental Giant in Spain

8 February 2018 – El Economista

Over the last six months, the German real estate fund manager Patrizia has closed three acquisitions that have turned it into the new property giant in Europe, with assets under management worth around €40 billion.

With a solid structure, the firm is pushing ahead with its plans to grow in Spain through the purchase of a property developer. “A few months ago, we were analysing two operations. We are still looking and would love to close something this year, because we have the funds and the desire”, explained Borja Goday (pictured above), Head of Patrizia Immobilien in Spain, who added that what he is looking for is “a company that is well-balanced in terms of the team and its bank of land”.

“Much of the development that we would be looking to carry out would be focused on homes for rent”, highlighted the director, who added that Patrizia’s objective is to become one of the major players in the rental market in the country.

In fact, the fund manager already has extensive experience in the residential market in some of Europe’s main countries, where it manages the rental of more than 50,000 homes.

In Spain, this business is still emerging, and there are just three large companies operating. “We want to introduce the institutional model that already works so well in other European markets, such as in Germany, and we are backing this segment because we think that the business in Spain will have an institutional base in 10 or 20 years”, explains Goday, who firmly believes that the 23% of the population that currently chooses to rent a home in Spain will grow significantly over the coming years.

Whilst it continues the search for a property developer, the fund manager will take its first steps into the residential rental market in Madrid, where it is finalising the acquisition of a property. “We are also negotiating the purchase of another building, which needs renovating, like we did with our project on Calle Claudio Coello 108, where there is just one home left for sale”, revealed Goday.

Investment strategy

The growth plans of the fund manager, which is finalising the process to integrate Rockspring, Triuva and the Danish firm SPI, are not based solely on the residential market.

“Our portfolio is very diversified, both geographically as well as by asset type, given that we have a presence in the hotel, office, high street retail and logistics segments”, said the director.

Following its recent acquisitions, Patrizia has established a portfolio worth around €1 billion in Spain and is positioning itself as an overseas real estate manager with one of the largest teams in the country, comprising 14 professionals.

“One of the major factors that differentiates Patrizia from other fund managers is that it does not invest in a country unless it has a local team with experience there”, stressed Goday.

“With these three operations, we have doubled our portfolio at the European level and we will now start to look more actively at the shopping centre segment, where we can add value”.

Moreover, the German firm, which works with investors from all over the world, wants to raise Spanish capital. “We are a wonderful partner for institutional investors and family offices who want to get involved in the real estate sector, since we give them the opportunity to also invest in Europe and to do so alongside a listed firm like Patrizia”.

Although the fund manager has doubled its volume of assets, it is committed to maintaining the same profile as always. “We are very comfortable closing operations of between €15 million and €100 million, because we think that that range is very well adapted to the reality of the current supply in the Spanish market”.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Lar & Pimco Sell A Luxury Home In Lagasca 99 For €16,000/m2

15 December 2016 – El Confidencial

They have exceeded all expectations and broken a new record in the luxury residential market in Madrid. The Socimi Lar España and the US fund manager Pimco, which jointly own (50% each) the most exclusive housing project in the capital, Lagasca 99 (previously known as Juan Bravo 3), have already sold half of the 42 super-luxury homes that make up the development, where the average sales price stands at around €10,000/m2.

But that is not the most interesting part of the story. One of the homes, measuring 800 m2 (one of the largest in the development) has been sold for around €16,000/m2, bringing its final sales price to around €13 million, including the price of the parking spaces (four or five), according to sources close to the project.

Moreover, these same sources also confirm that the project has just received the green light from the Town Hall of Madrid for the last urban planning licence necessary, not only for the definitive launch of the project, but also so that the sales of the homes can be formalised. Until now, only reservations have been accepted.

The price of €16,000/m2 undoubtedly breaks all records in the high standing market in the capital, where, until a few weeks ago, a 600 m2 penthouse on Calle Serrano 7 boasted the honour of being the most expensive multi-family home ever sold in the heart of Madrid. It was sold for €9 million, equivalent to €15,000/m2.

The transaction signed now at Lagasca 99 has even exceeded Pimco and Lar’s initial expectations, given that they had fixed a price range of between €10,000/m2 and €14,000/m2 for the properties. (…).

The identify of the purchaser has not been revealed and the utmost secrecy is being maintained. Nevertheless, several sources indicate that the buyers of Lagasca 99 include some very wealthy Latin American and Spanish investors, primarily from outside of Madrid.

The homes will be ready in 2018

The plot of land on which this exclusive development, designed by the architect Rafael de la Hoz, is going to be constructed, was sold to Lar España and Pimco at the beginning of 2015, when the two companies joined forces to purchase Eurosazor. The property developer was previously owned by Rafael Ortiz and the businessman Fernando Fernández Tapias, and owned a 26,023m2 plot of land on Juan Bravo 3 and a 5,328 m2 plot of land on Claudio Coello 108. Lar and Pimco paid €120 million for the business and since then, this asset has appreciated in value by more than 10% – the building on Claudio Coello was sold to the German firm Patrizia Inmobilien for €22 million. (…).

The homes are expected to be finished during the first quarter of 2018.

Luxury homes gain momentum

The luxury residential market in Madrid is enjoying a real boom. At the beginning of October, the homes on José Abascal 48 went on sale, with the first luxury properties now ready for their owners to move in. The building contains 17 homes measuring between 100 m2 and 400 m2, whose prices range between €6,000/2 and just over €10,000/m2. But there are also several important renovation projects being carried out right in the heart of the capital, such as on Príncipe de Vergara 11, Recoletos 13 and 8, Salustiano Olózaga 12 and Lagasca 19. (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Patrizia Acquires Claudio Coello 108 For €22M

3 February 2016 – El Confidencial

Yesterday (Tuesday), the German fund Patrizia Inmobilien completed the purchase of a residential building on Claudio Coello, 108 for €22 million, from Grupo Lar and Pimco, according to sources close to the deal.

Specifically, the property, which is currently vacant, has a surface area of 5,318 m2 and previously formed part of the operation to purchase Juan Bravo, 3. In fact, the building is located just a few metres from that plot, which houses one of the most highly anticipated luxury developments in the capital. The building acquired yesterday will be converted into 14 luxury homes, measuring 300 m2 each, with two or three parking spaces per flat.

According to the latest report prepared by TecniTasa, these homes could have a market value of around €10,900/m2. Patrizia Inmobilien will undertake a complete renovation of the property, which will require an additional investment of €7.5 million – equivalent to around €1,500 per m2 – and the company expects the building work to take 18 months.

Patrizia is one of the largest investment funds in Europe, with a presence in 14 countries and total funds under management of €18,000 million. 40% of its portfolio is invested in residential assets, equivalent to approximately €8,000 million.

The fund arrived in Spain last year, led by Borja Goday, the head of Patrizia in Spain, and the former CEO of Sotogrande, with the intention of investing €1,000 million in the Spanish market. It closed its first operation in July last year with the purchase of the H&M store in Málaga from the Nergosa group and it raised its profile further by participating in the bid for Torre Espacio.

With this operation, the fund becomes one of the new players in the luxury residential market in the capital and demonstrates its strong commitment to the real estate recovery in Spain, given its conservative profile, in comparison with the speculative capital that has entered the market in recent years.

BDO has advised the vendor, whilst the firms CMS Albiñana and MMM have advised the purchaser.

Original story: El Confidencial (by R. Ugalde and E. Sanz)

Translation: Carmel Drake