JLL: 3 Large Funds Want To Buy Student Halls In Spain

29 March 2016 – El Economista

Investment funds have been buying real estate in Spain for years and during that time they have acquired the best hotels, skyscrapers and shopping centres in the market. Now that those assets are no longer offering such high returns, investors are starting to look at alternative assets, including student halls of residences.

The US fund Oaktree, through the company Knightsbridge Student Housing, Round Hill Capital and The Student Hotel (TSH) are just some of the players that are currently looking for investment opportunities in this sector, according to Nick Wride, Director of Alternative Investments at JLL.

“For the best assets in operation, yields should be between 6% and 6.5% for the best locations”, says Wride, who recalls that these properties have to generate a higher spread than residential products, because they require more management”. The user is more demanding, there is more rotation and, in many cases, in addition to accommodation, these sites also provide catering services”.

Currently, Knightsbridge Student Housing is the most active firm in Spain. “They saw the opportunity before anyone else and they have led the way for other investors, who are now showing a great deal of interest in these types of assets in the country” explains Wride.

The firm owned by Oaktree currently owns one hall of residence in Madrid with 370 rooms, namely the Galdós hall, located in the Ciudad Universitaria.

At the end of last year, it acquired the Sucesores de Rivadeneira print works, which used to house the former printing press of the Gaceta de Madrid, located on the Cuesta de San Vicente, in the centre of the capital. The project, which will have 350 rooms, has not been started yet but is expected to become operational for the 2018/2019 academic year.

The manager is also preparing to open halls of residences in La Plaza de Cristo Rey (El Faro) and Calle de San Bernardo (Claraval), with 550 rooms, next year and is working on a 500-room project in the historical centre of Alcalá de Henares, which is due to be completed between 2017 and 2018.

The group also has a presence in Barcelona, where it was awarded two concessions by the Administration. Nevertheless, both projects have been suspected due to the hotel moratorium imposed by the mayoress, Ada Colau. (…).

Operation in Barcelona

The Student Hotel, the platform that was acquired by the US fund manager Perella at the end of 2014, is the other firm specialising in the sector that is looking for more projects in Spain. Last year, it participated in an important transaction in Barcelona, where it acquired a portfolio of two halls of residences in the Melon District (Poble-Sec and Marina). Both had belonged to BBVA and contain 597 rooms and 152 parking spaces, as well as around 3,465m2 of adjoining restaurant space in different areas of each building.

According to sources at the time, that operation amounted to almost €45 million. (…).

On the other hand, Nick Wride says that Round Hill Capital is also interested in investing in the country. “They have not made any purchases here yet or developed any projects for students in Spain, but they are looking actively”.

That firm starred in one of the most significant transactions at the European level last year when it sold The Nido Collection to the US firm Greystar Real Estate Partners for €847 million. (…).

Expectation and competition

(…). Nevertheless, halls of residence in Spain often do not comply with the criteria that these investors are looking for. “Funds have to justify movement of capital into a country with large projects, those containing at least 200 rooms. The typical halls found here tend to be smaller and many have double rooms. Now, the trend is increasingly moving towards individual rooms”, says Wride. (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

KKH & Perella Pay €91 Mn For Deutsche Bank Building in Barcelona

11/07/2014 – Expansion

In the first large real estate transaction of the KKH Property Investors (set up by ex-CEO of Renta Corporación Josep Maria Farré) and U.S. manager Perella Weinberg, the teamed-up companies bought yesterday the tower of Deutsche Bank situated at 111 Paseo de Gracia street in Barcelona.

According to sources with knowledge of the operation, KKH Property Investors and Perella paid around €91 million for the property to three Andorran families: the Ribas, the Reig and the Cerqueda. They purchased the building in 2002 for about €80 million.

Initially, the one who was interested in the bidding for the tower was fund Emin Capital, the same that acquired the Torre Agbar also in Barcelona, which consulted KKH Property Investors. However, facing the alliance of KKH and Perella, the fund left the auction.

The buyers´target is to convert the office building into a luxury, five-star hotel with commerce added. Currently, the property houses the Cuatrecasas lawyers office that will stay as its tenant until the end of 2016.

KKH Property Investors foresees spending €500 million on the real estate shopping.


Original article: Expansión (by S. S.)

Translation: AURA REE

KKH Property Investors JV Born to Invest €500 Mn in Madrid & Barcelona Buildings

4/07/2014 – Expansion

International investment funds continue their poach in the Spanish real estate market. Perella Weinberg, a private equity fund from the United States, has just created a joint venture with Spanish firm KKH in order to do a building shopping for €500 million in Madrid, Barcelona and Lisboa. The vehicle received a name of KKH Property Investors, gathering €200 million in own funds supplemented by a €300 million loan.

The New York – based equity manager will inject the amount through its European RE investment arm Perella Weinberg Real Estate Fund II. The vehicle disposes of €1.3 billion in committed funds and has repeatedly acquired property in the other Old Continent countries. It is supported by institutional investors from all around the world, as well as most active sovereign wealth funds and public and private pension funds.

Perella Weinberg will be the majority stakeholder at KKH Property Investors, whereas KKH will hold a small stake in it but will manage the joint venture.

The new company “will initially give priority to development of hotel and high-end residential projects which are most demanded by the international buyers.”

KKH Capital & Property was founded by ex-CEO of Renta Corporación, Josep Maria Farré, in 2012. It is based in Luxembourg and has got an expert delegation team in Barcelona. He assures “the fear and doubts among the foreign investors have disappeared and now they believe in the turning point in the Spanish market.”

At present, KKH Property Investors has assigned €250 million to several ongoing projects. The first three buildings were purchased with an aim of converting them into hotels. One of the properties is situated in downtown neighbourhood Born in Barcelona, very close to the Santa Caterina market.

According to Farré, Perella Weinberg targets buildings which might gain some value in 5-7 year term.


Original article: Expansión (by Marisa Anglés)

Translation: AURA REE