Grupo Lar to Invest €250M in New Logistics Developments

28 October 2018 – Expansión

The property developer Grupo Lar is going to bet on the logistics segment in Spain over the coming years, with a planned investment of around €250 million to purchase land and build warehouses.

The Managing Director of Grupo Lar, Miguel Amo, explained that the first project included in that investor package is being carried out in Quart de Poblet (Valencia), where the firm is on the verge of purchasing a plot spanning 40,000 m2. The pre-agreement to the purchase was negotiated in July and the audit has recently been completed prior to the construction of a warehouse measuring 25,000 m2 on the site.

Following that project in Valencia, the new team for the logistics segment at Grupo Lar is preparing and negotiating other investments in Barcelona, Madrid, Málaga, Sevilla and País Vasco, with the “same structure”: minority shareholders and in-house management.

The investments in logistics land have been decided by the property developer Grupo Lar – which is owned in its entirety by the Pereda family – after it was announced that the new strategy of the Socimi, Lar España Real Estate, will focus purely on the shopping centre segment (“retail”).

Grupo Lar owns 10% of Lar España and is that firm’s second largest shareholder. It will also operate the Socimi’s management contract until 2021.

Lar España’s focus on retail has caused the Socimi to divest from other segments, such as residential, offices and logistics.

According to Amo, the difference is that the Socimi’s logistics investments involved finished warehouses, whereas those planned by the group include the acquisition of land and development. In the residential segment, Grupo Lar has a portfolio of land for 15,000 homes, of which around 4,000 are active in the seven markets in which it operates: Mexico, Spain, Peru, Colombia, Brazil, Poland and Romania.

The firm expects to close 2018 with around 2,000 homes delivered, for almost €450 million.

In Spain, the group has around 2,000 homes in its portfolio, of which 350 are active, with plans to handover around 250 during 2018.

Original story: Expansión

Translation: Carmel Drake

International Funds Take Control Of Spain’s Real Estate Companies

6 November 2017 – Expansión

Together they own stakes worth €4.3bn / International funds and managers have become the largest shareholders of the listed companies in the sector. Seven of the top ten have foreign majority shareholders.

Seven of the ten large listed real estate companies are held in foreign hands. That is the new reality of the Spanish real estate market, which is enjoying a new period of growth ten years after the last boom.

Whilst during the previous upwards peak in the sector, the owners of the property companies were domestic businessmen, now it is the turn of the international funds to hold majority stakes in these companies in the sector. That is the case of the new leaders in the property developer sector: Aedas and Neinor Homes. These two companies made their stock market debuts this year, in October and March, respectively. In both cases, the property developers making their IPOs were owned by two large international funds: Lone Star in the case of Neinor; and Castlelake in the case of Aedas (…).

In the case of Aedas, which debuted on the stock market on 20 October with a valuation of €1.518 billion, two international firms became reference shareholders: T. Rowe Price, with a stake of almost 3.8%, and Fidelity Management and Research (FMR), with a 3.6% stake. It is not their first investment in a Spanish real estate company in either case. T. Rowe was one of the funds that participated in the IPO of the Socimi Axiare, in July 2015, acquiring a 9.7% stake; meanwhile, FMR is the third largest shareholder in another Socimi, Hispania, and in the property developer Neinor Homes. In the case of the latter, another international investor is the second largest shareholder, Wellington Management, which already owns 8.5% of the capital, worth around €120 million.

In the case of the traditional real estate companies, the status of the international funds varies. Realia (…) is currently controlled by Inversora de Carso, a firm owned by the Mexican businessman Carlos Slim. In addition to the Mexican magnate’s stake (70.77%), Polygon Global own 10.5% and JP Morgan own 6.026% (…).

By contrast, two of the classic real estate companies on the stock market still have Spanish businessmen as their main shareholders: Quabit, whose largest shareholder is its President, Félix Abánades, with a 21% stake (…); and Renta Corporación, in which Dinomen, a company controlled by its President Luis Hernández, holds a 29.97% stake. In the latter real estate company, Baldomero Falcones also holds a stake, of more than 5%, making him the fourth largest shareholder.

Quabit’s second-largest shareholder is a Spanish company: Sareb. The public company holds a 7.66% stake in that firm (….). By contrast, the second largest shareholder in Renta is Morgan Stanley, with an 8.1% stake.

In total, foreign investors hold shares worth more than €4.343 billion in the five main Socimis and four largest property developers.

Spanish shareholders

(…), the number of domestic investors who control these types of companies is much lower, but they have a very prominent weight.

Such is the case of the banks Santander and BBVA, the largest shareholders in the largest real estate company on the Spanish stock market: the Socimi Merlin Properties. (…). Currently, Santander holds a 22.26% stake in that company, worth €1.162 billion, more than half of all Spanish investment in the ten largest listed real estate companies (around €1.8 billion). BBVA’s stake is worth around €336 million.

Alongside the two large Spanish banks, two real estate groups stand out as prominent investors in the listed companies in the sector. Such is the case of Colonial, which holds a stake worth €200 million in Axaire (…). Meanwhile, Colonial is controlled by three overseas investors, after Villar Mir reduced its stake.

Moreover, the real estate group Lar, controlled by the Pereda family, is the third largest shareholder of the Socimi Lar España, with a stake of more than 5.6% (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake