The 4 Largest Socimis Will Specialise By Asset Type

31 January 2017 – Cinco Días

Hotels, logistics assets, offices, shopping centres. The four largest Socimis – Merlin, Hispania, Lar España and Axiare – are entering their third year of life, and as they do so, they are embarking upon a new phase of specialisation by type of asset – the aim is to make their management more effective and ensure that they remain attractive to large international funds. (…). 

Between them, Merlin, Hispania, Axiare and Lar España now own assets worth almost €14,000 million – they have created small empires out of nothing.

Hispania looks set to become one of the major stars of 2017 with a series of operations planned to strengthen its already high degree of specialisation in hotels. The Socimi, in which the magnate George Soros owns a 16% stake, has a portfolio worth €1,793 million (including its most recent purchases at their acquisition prices). 61% of the portfolio value relates to hotels and most are located in the Canary Islands (70%) and the Balearic Islands (16%).

The experts forecast that this company, managed by Azora and led by Concha Osácar, will put the majority of its offices and residential assets on the market, and at the same time, will continue to buy up hotels. (…). 

Meanwhile, Merlin has taken steps to divest its residential and hotel assets, transferring them to Testa and Foncière des Murs, respectively, and is continuing to expand its core portfolio with its recent purchase of the Torre Agbar office block in Barcelona for €142 million. The Socimi’s portfolio currently comprises offices (48%), shopping centres (18%) – Merlin is now one of the major players in this segment – retail premises (22%) and logistics assets (5%). Experts consider that the latter have enormous potential to generate higher returns for this Socimi.

Axiare, led by Luis López Herrera-Oria, has already focused heavily on offices, which account for 73% of its €1,300 million portfolio. It has enhanced its presence significantly in recent weeks through its acquisitions of the headquarters of PSA, Cuatrecasas, McKinsey and Vocento for €242 million in total.

The Socimi’s high decree of specialisation in offices has led Colonial to take advantage of the fund Perry Capital’s departure from its share capital to acquire 15% of the Socimi. Some in the sector view this move as a precursor to a possible takeover bid, but the Catalan real estate company has denied the claim repeatedly. (…). 

Finally, Lar, led by José Luis del Valle and Miguel Pereda, has managed to specialise mainly in shopping centres, which now account for 75% of its €1,201 million portfolio. With shareholders that include Pimco and Franklin Templeton, the company owns 17 assets including shopping centres, retail parks and hypermarkets.

In just three years, Lar España has risen up the ranks to become the third largest owner of shopping centres in Spain, behind Unibail and Merlin. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Axiare Closes Accelerated Placement Ahead Of Its Capital Increase

18 May 2015 – Expansión

The Socimi has just closed an accelerated placement with investors ahead of its capital increase.

The listed real estate investment company (Socimi) Axiare Patrimonio wants to maintain the speed of investment that has enabled it to disburse €460 million since its IPO last summer. To this end, the company has announced a capital increase of €394 million, with the aim of doubling its share capital.

Last week, the Socimi led by Luis López de Herrera Oria launched a brochure containing the details of the transaction, which would involve the issue of around 35.87 million new shares, at a nominal value of ten euros per share, plus a premium of one euro (per share).

The capital increase will have preferential subscription rights. The Socimi’s shareholders include funds such as T. Rowe Price and Taube Hodson, and Citigroup.

Axiare owns assets worth €507.95 million, including office buildings in Madrid and logistics warehouses in Guadalajara (pictured above). During the first quarter of 2015, the Socimi generated revenues of €7.59 million and a profit of €2.32 million.

Placement

Ahead of this capital increase, Axiare closed an accelerated placement of the shares of one of its largest shareholders, Perry Capital, on Friday. The objective of this placement was to provide greater liquidity for the company’s stock.

The placement of 3.5 million shares (representing 9.721% of its share capital) was closed in record time (one hour) and with a slight issue premium (€12 per share). Buyers of these shares included institutional investment funds from the US, Britain and Norway, according to sources at the company.

The subscription rights for these shares will begin trading on 20 May, whilst the shares themselves will begin trading on 10 June. On Friday, Axiare’s share price closed down 0.29% on the stock exchange at €11.94 per share.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

D.E. Shaw Buys €700 Million Of Company Bad Debts From CaixaBank

12/08/2014 – Expansión

The investment fund acquires a portfolio of loans to business which are in administration, many businesses of Cívica Bank. D. E. Shaw has more than 400 employees in Spain.

D. E. Shaw, the opportunist investment fund of David E. Shaw, is doing business with CaixaBank once again. The North American multi-millionaire, former advisor to Bill Clinton and Barack Obama, has acquired through his investment fund a portfolio from the Catalan entity of €700 million in large company defaulted loans, some of which are secured by property, according to financial sources consulted by EXPANSIÓN.

This sale is part of the project known as Project Valonia, the latest large divestment of unpaid loans by CaixaBank. Initially this transaction involved loans for a value of €1.050 million, but finally the Catalan group has decided to not assign part of the portfolio. According to sources close to the negotiation, this change of pace has been due to a lack of agreement on the price.

Investment funds normally acquire these portfolios for prices of around 4% of the nominal value of the loans – which would put the CaixaBank sale at around €30 million – but the figure can be multiplied by up to 20-30% if the loans have property security.

Of the loans sold by CaixaBank more than half are those of companies in administration and which began to stop paying their debts between 2009 and 2010. More than 50% of the portfolio is situated in Andalusia – where Cívica Bank had a large presence – and in Madrid.

D. E. Shaw was already the winner of the last auction of loans by CaixaBank in 2014, Project Flandes. The group presided by Isidro Fainé transferred 1.000 million euros in unpaid loans from SMEs to Perry Capital and Savia Asset Management, and another €70 million to Shaw, which were secured by assets such as offices, warehouses and commercial properties.

An escape route 

This type of transaction allows the banking sector to obtain profits from a part of its portfolio which is totally provided for, and to focus the efforts of the recovery team on loans which have better chances of getting up to date on repayments. Furthermore, in the case of loans with property guarantees, it avoids making the list of foreclosed assets even longer.

CaixaBank is not the only bank following this strategy. The bulk of the sector is making the most of the emerging interest of foreign investment funds in this market in order to get rid of the most problematic assets. For example, BBVA has just put on sale the largest portfolio of defaulted debts.

The purchase of loans from CaixaBank stregthens D. E. Shaw’s strategy in Spain, following the recent acquisition of Multigestión, a debt recovery business with more than 400 employees, from GFKL.

This fund is one of the most active in the Iberian Peninsula in recent months. In fact, it purchased a 2,7% share of the bank Banco Espírito Santo (BES) barely a week before the bail out.

Original article: Expansión (by J. Zuloaga)
Translation: Aura REE