Sabadell Completes the Sale of its Platform Solvia to Intrum

24 April 2019 – Cinco Días

Banco Sabadell and Intrum have definitively closed the operation whereby the entity chaired by Josep Oliu has sold 80% of its real estate platform Solvia to the Swedish group, more than four months after it was initially announced, having obtained the corresponding approvals.

The operation values 100% of the company at €300 million and so Sabadell will receive €240 million for the 80% stake, an amount that may increase by another €40 million depending on the evolution of the business.

The bank will record a gain of €138 million as a result of the sale and its capital ratio will improve by 15 basis points.

The entity is also waiting to complete the sale of its property developer Solvia Desarrollos Inmobiliarios (SDIn) during the next quarter. The funds Cerberus and Oaktree have made it through to the final round of that operation, according to sources.

Original story: Cinco Días (by A. G.)

Translation/Summary: Carmel Drake

BNP Paribas: Valencia’s Logistics Stock Set to Rise by 100,000 m2

12 February 2019 – Valencia Plaza

The logistics capacity in the province of Valencia is going to increase by 99,457 m2 this year with the launch of five new platforms located in Riba-roja, Torrent, Paterna and Loriguilla, according to the latest report from BNP Paribas Real Estate.

Moreover, there are locations that will offer the possibility of “turnkey” constructions with a total constructed surface area of more than 200,000 m2.

The purchase price of logistics space has risen to €200/m2-€220/m2 in the most sought-after locations due to the interest in the purchase of land from property developers and investment funds, in an area where available logistics space currently accounts for just 2.8% of the total, and 77% of that surface area is located in Riba-roja.

Due to the lack of availability, maximum rental prices have increased slightly to reach €4.5/m2/month in Riba-roja.

In 2018, demand for logistics space remained high and 24 operations were signed, three more than during the previous year. The most sought-after area was Riba-roja, which accounted for 30% of the space leased.

Nevertheless, last year closed with 127,502 m2 of logistics space leased, a very similar figure to the average for the last four years although somewhat lower than in 2017 (by 30,000 m2).

The fourth quarter of 2018 saw high leasing activity and accounted for 43% of all of the surface area leased during the year.

Original story: Valencia Plaza 

Translation: Carmel Drake

Mercadona Buys Land in Barcelona to Open its Second Warehouse for e-Commerce

20 November 2018 – Eje Prime

Mercadona is doubling its commitment to e-commerce in Barcelona. The Valencian supermarket chain has purchased a plot of land measuring 25,668 m2 in the municipality of Ripollet, where it is going to build a logistics platform to support its online business.

This new hive, which is what the group calls this new type of asset that it is promoting, will measure 14,650 m2 and will be the second establishment that the company has launched in Barcelona, after the premises it occupied in the Zona Franca, owned by Goodman, which is expected to be operational by 2020.

In Valencia, Mercadona already has a first warehouse specialising in online commerce. It is a platform with a surface area of 13,000 m2, which was inaugurated in May. The company led by Juan Roig is already looking for new locations in other parts of the country, primarily, in Madrid.

Original story: Eje Prime 

Translation: Carmel Drake

Scope: Spain’s Most Exposed Banks are set to Boost their Toxic Assets Sales

25 October 2018 – Expansión

The large real estate sale operations formalised during the last year by Santander, BBVA, CaixaBank and Sabadell, amongst other entities, have allowed the Spanish banking sector to reduce its total volume of problematic assets (NPLs) by approximately 60% from the peak of €200 billion reached in December 2013, to €82 billion recorded at the end of the first half of this year.

This massive clean up of a large part of the banks’ balance sheets has caused analysts at the credit rating agency Scope to consider the current ratios of toxic assets as “manageable and more of a legacy left over from the crisis than a real concern”. That is according to the authors of a recent report which evaluates the improvement recorded in the quality of assets in the Spanish banking system as a result of property sale operations such as those of Santander with Blackstone (€30 billion), BBVA and Sabadell with Cerberus (€13 billion and €9.1 billion, respectively) and CaixaBank with Lone Star (€12.8 billion).

Despite the effort carried out by a large part of the sector, those responsible for analysing the Spanish banks at Scope assume that those banks with comparatively worse levels of property exposure will accelerate their cleanups over the coming quarters, either by carrying out large sales or by placing several smaller portfolios.

Sources at Scope expect to see more large operations involving the sale of problem assets over the coming months, given that the large funds are now operating full steam ahead in the real estate segment, and “they are trying to gain scale and capitalise on their recently purchased platforms”, explains the report. Such is the case, for example, of Lone Star, which acquired Servihabitat from CaixaBank, and whichever fund ends up buying Solvia from Sabadell.

Financial sources agree that the cycle of real estate operations in Spain still has several operations in the pipeline, and they point to entities such as Bankia and Cajamar, which have relatively higher levels of problem assets than the sector, as candidates for starring in those transactions. Specifically, Scope points to Cajamar in its report, given that it is the only entity with a ratio of non-performing assets of more than 10%, according to data from the ratings agency.

The analysts at Scope also assume that Bankia will carry out movements to sell a substantial part of its toxic exposure. One of the nationalised entity’s strategic objectives is to accelerate the clean up of its balance sheet over the coming quarters. Moreover, the analysts anticipate that the global NPL ratio will continue to reduce quickly given that the other banks “are already in the process of completing the sale of several foreclosed asset portfolios”, explains the firm in its report.

The funds seek NPLs in other latitudes

Although the activity of buying credit portfolios is still intense in Spain, the funds specialising in these types of assets are setting their sights on other countries in search of opportunities to find value.

Sources in the sector explain that a large number of the opportunistic and real estate funds that have been undertaking operations in Spain are trying to close new transactions in Italy, Portugal, Greece and Cyprus (…).

Original story: Expansión (by Nicolás M. Sarriés)

Translation: Carmel Drake

Urban Hubs: The Future Pillars of the Last Mile are Seducing the Real Estate Sector

22 October 2018 – Eje Prime

Blackstone, Goldman Sachs, Prologis and Amazon have started to invest in urban hubs. The future pillars of e-commerce logistics are still in an embryonic phase, but the large real estate investors have started to track these types of assets, whereby sparking interest from other players. Forgotten old warehouses and factories (and even office buildings) in inner cities are now seducing these giants, which regard them as the new urban nuclei for handling same-day deliveries, and even, same-hour deliveries, which are demanded by e-commerce nowadays. Spanish investors are already beginning to study opening logistics centres in the heart of Madrid and Barcelona.

The Spanish market is still at the tail of the e-commerce market in Europe, where it represents just 4% of all retail sales, compared with 12% in the United Kingdom and 16% in the United States, according to the ratings agency Moody’s. Nevertheless, experts forecast that e-commerce in Spain, and on the rest of the planet, will continue to make inroads to ultimately account for one third of all retail sales.

This drastic transformation of retail is challenging for the traditional logistics system, comprising regional distribution platforms located away from urban centres that supply different local warehouses to delivery to different businesses. The new system is supported by an e-fulfilment centre (a fully automated platform), which directly supplies several urban hubs located inside cities, which make deliveries to consumers (…).

Blackstone, one of the largest real estate investors in the world, has invested around €4 million in small urban warehouses in Europe since the beginning of 2018. Unlike large warehouses on the outskirts of cities, urban hubs are smaller facilities with a lower risk in terms of their development.

The sovereign Singapore fund, GIC, has also entered the segment. The investment group even has a specific division for building logistics facilities on urban land (…).

Nevertheless, they are difficult assets to find and mould for their new function. On the one hand, because cities have grown and transformed over the last few decades, with housing replacing former industrial land (…). On the other hand, because, these facilities need to be rethought for the constant entry and exit of goods.

The future urban hubs will be built on land still classified as industrial inside cities, which is much cheaper than residential. And, given the difficulty of expanding width-wise due to the lack of land, the plans involve constructing properties with various storeys. In large cities in Asia, where land prices are very high, multi-storey warehouses are already typical.

In addition to industrial land, another option for urban hubs is to use office buildings. To the extent that new business areas in new parts of cities are created, so empty and underused spaces are being left in city centres.

Currently, new technology-based distribution companies, such as Paack and Stuart, are shaking up the market, by accelerating e-commerce deliveries using logarithmic calculations. Meanwhile, traditional express transport companies, such as Seur and MRW, amongst others, have also started to adapt to expedite last mile deliveries with small warehouses in the centre of large cities.

Small signs in Spain

Sources in the real estate sector indicate that some investors specialising in retail have started to study the implementation of these types of logistics structure to complement the flagship stores in the centre of Madrid. Specifically, some players have started to analyse the option of installing urban hubs in office buildings.

In Barcelona, we have already seen one case along those lines. In 2016, Amazon opened a warehouse in the former headquarters of the publishing house Gustavo Gili, on Calle Rosselló in the El Eixample neighbourhood, to introduce its Prime Now service offering deliveries within the hour. Nevertheless, sources in the sector indicate that Amazon may have started to question the suitability of that platform since it has not managed to make the prices of the urban land profitable (…).

Aitor Martínez, Head of Industrial & Logistic are Savills Aguirre Newman, points out that in some cities, such as London and Málaga, pilot tests are being carried out regarding deliveries of the future. A common denominator in all of them are the urban hubs. In the logistics of the future, these new logistical nuclei, will not only speed up deliveries, but they will also respond to other challenges in the sector, such as the introduction of greater restrictions over the entry of vehicles into city centres and the prohibition of polluting vehicles from the roads (…).

Original story: Eje Prime (by S. Riera & P. Riaño)

Translation: Carmel Drake

Merlin Acquires 2 Logistics Assets in Ribarroja & Henares for €42M

21 September 2018 – Finanzas.com

Merlin Properties has acquired two logistics assets for €42 million: a platform that it has purchased from the construction firm Pavasal on the Valencian industrial estate of Ribarroja, between the A7 and A3 motorways, and a plot for the construction of another warehouse in San Fernando de Henares, next to the A2 and M50 motorways in Madrid.

According to reports from the real estate consultancy firm BNP Paribas Real Estate, which has advised Merlin on the two operations, speaking to Efe, the two deals were closed in July.

The Ribarroja platform, on the Sector 13 industrial estate, has a constructed surface area of 35,282 m2, with fifty loading docks and three modules; it will be handed over during the second quarter of 2019.

The operation in the Corredor del Henares involves a logistics project that will have a surface area of 100,000 m2.

Original story: Finanzas.com

Translation: Carmel Drake

Barcelona’s Town Hall Asks Airbnb to Remove 2,577 Illegal Tourist Apartments from its Database

24 May 2018 – Eje Prime

Barcelona wants to put an end to adverts for unlicenced apartments. The Town Hall of the Catalan capital has asked Airbnb to remove a total of 2,577 illegal tourist apartments that are currently advertised on its platform. Janet Sanz, deputy mayor for urban planning in Barcelona, confirmed that the list of identified apartments has now been handed over to the company.

The Town Hall has explained that the Airbnb team responsible for removing the adverts, located in Ireland, received the list on Thursday. Moreover, it has highlighted that it has already opened sanction proceedings against the owners of those unlicensed apartments, but not against the company itself.

In this sense, the Town Hall of Barcelona is only planning to impose sanctions on Airbnb if the company refuses to eliminate the adverts for the illegal tourist apartments, as established by the regulations of the Generalitat de Catalunya. The local government expects the platform to withdraw the adverts within a few days like it did last summer.

Similarly, Sanz has explained that the Town Hall is scheduled to meet Airbnb next week to consider a technological proposal designed by the platform to avoid the advertising of illegal apartments.

Original story: Eje Prime

Translation: Carmel Drake

Housers Backs Small-Medium Property Developers by Financing Land Purchases < €5M

14 May 2018 – Eje Prime

Housers wants to build a niche market for real estate crowdfunding together with small- and medium-sized property developers. The Spanish proptech has launched this new line of business with the opening of two projects in Madrid, but it is already assessing a dozen more “of which three will be announced soon”, according to Francisco Taboada, Director of Real Estate at Housers, speaking to Eje Prime.

“We have realised that the banks are quite reluctant to finance land and, meanwhile, funds are participating in projects with a minimum budget for land purchases of €5 million”, explains Taboada. For this reason, his company has started to finance land for property developers with investments of less than that figure, when it represents around 50% of the development, as a rule of thumb. “In specific cases, that split may be higher, but only in the case of projects where the property developers already have 75% of the flats reserved, for example, which means that the certainty is greater for investors in our platform”, says the director.

Since it started its first studies to finance land in May last year, Housers has financed land worth €16 million for property developers such as ByNok, Senor, Fedezu, Vibopa, Annura, Dicam and Grupo Aransa, for which it financed a project in neighbouring Portugal, which, together with Italy, is one of the two European markets to which the proptech travelled last year to “diversify the locations for our users”, said Taboada.

The executive points out that, amongst other aspects, these type of property developers, with projects that do not tend to exceed thirty homes, are also looking to raise their profiles with Housers. “We have almost 90,000 registered investors and that appeals them”, highlights Taboada, who summarises the benefits of his platform for small property developers in three: financing, marketing and the cross-sales that are generated.

Nevertheless, “there are cases in which some of the users who invest in these projects then become interested in buying some of the units in the development”, says the executive. “Our platform is your shop window”, is what the director says to his potential (property developer) clients.

Create your own reputation through the platform 

“Just like Amazon has vendors with very good ratings, we will have property developers with good reputations”, explains Taboada. One of the projects under assessment is located in Palma de Mallorca, which will soon be home to a plot of land for residential development financed by Housers.

This point is noteworthy because the Balearic city is one of the areas where buildable land is most scarce, which has driven up house prices, generating concern amongst citizens, which demand more product in stock.

By how much is this business model from Housers going to grow? “For the time being, of the €50 million that we have financed in total, €15 million relates to this new market niche, and clearly we hope that it will be one of the main lines of business for us”, revealed Taboada.

Four new regions for 2018: Málaga, Euskadi, Sevilla and the Canary Islands

In terms of Housers’ projects for 2018, as well as travelling to the three new European countries, the firm is looking to enter the markets in Málaga, Euskadi and Sevilla, as well as in the Canary Islands. “Moreover, we want to consolidate our presence in the cities in which we already operate, namely Madrid, Barcelona, Valencia and Palma”, says the director. The company aims to accumulate investment of €90 million and to have 125,000 users on the platform before the end of the year (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Oak Hill to Allocate €400M to Finance Residential Developments

3 April 2018 – Expansión

The American investment fund Oak Hill Advisors has arrived in the Spanish residential market hand in hand with the recently created management firm Íbero Capital Management. The fund is planning to allocate at least €400 million to finance the construction of homes in the country.

Walter de Luna, former CEO of Acciona Inmobiliaria and Executive Chairman of Íbero Capital Management, explains that, given the lack of modern, structured capital for the construction of residential developments and the high-level of unmet demand for new homes, the objective of the platform is to channel financing from Oak Hill Advisors and to offer customised solutions for the real estate project.

Oak Hill Advisors, with more than USD 30 billion under management, has invested more than €1 billion in Spain through corporate loans and investments in assets and companies. The alliance between Íbero Capital Management represents its debut in this segment.

The fund is currently negotiating to offer €50 million in financing for the development of around 500 homes in several developments in the Costa del Sol and Madrid. The heads of the platform explain that they will select new projects in other regions and open the door to extending their coverage to Portugal.

Sources at Íbero Capital Management explain that the requirement to access financing is that the property developers’ plans are “commercially viable” with a minimum of €5 million. Moreover, unlike what happens currently with bank financing, they will offer funding for the purchase of developable land or plots where little (urban planning) management required.

Another difference with respect to current bank financing lies in the fact that property developers do not need to have a certain volume of pre-sales to access the funds; moreover, payment of interest and commission will not be triggered until the homes are handed over.

The investment and divestment horizon for the €400 million financing initially planned has been established at six years. “The fund has the capacity and appetite for more”, adds Luis Moreno, Director General of Íbero Capital Management.

The financing solutions proposed by Íbero Capital Management are mainly aimed at small- and medium-sized property developers, although the firm is also open to reaching agreements with large listed companies for land co-investment agreements or specific projects.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Spain’s Regional Gov’ts Clamp Down on Tourist Apartments

28 January 2018 – El Economista

Spain is breaking records in terms of visitor numbers and, in the age of the globalisation of communications, many people are wanting to make money from renting out their homes. This trend has forced autonomous governments and town halls to introduce legislation so that the so-called collaborative economy does not end up turning into unfair competition.

The tourist housing sector has been calling for the homogenous regulation of its activity for some time now, but for the time being, it has had to make do with the regulations approved by certain autonomous governments and town halls, above all those in the most central neighbourhoods, which are seeing their resident populations emptying out in the face of rising rental prices.

The latest to join the regulation train is the Town Hall of Madrid, which has approved a one-year moratorium for the granting of operating licences for all kinds of accommodation in residential buildings exceeding 90 days.

The moratorium will result in the suspension of licences for the opening of new hotels in the centre, a paralysis that in the case of tourist homes also extends to the districts of Chamberí, Salamanca and Arganzuela.

The Community of Madrid is also preparing a decree to regulate homes for tourist use, which will require owners to have a certificate of suitability to guarantee that their properties fulfil the conditions necessary and which will define digital platforms such as Airbnb as “tourist companies”, liable to fines of up to €300,000.

One of the pioneers in regulating this activity was the Town Hall of Barcelona, which prohibits the opening of new accommodation of this kind in the centre of the city, but does allow the closure of existing ones in the outskirts to be compensated, provided the new units are located in exclusive buildings and have not been used for residential purposes.

Moreover, it has strengthened the detection and sanctioning of illegal tourist apartments and, in the application of Catalan law, has fined operators that publicise them.

The Balearic Islands’ Government is also fining people who let their apartments to tourists up to €40,000, and in the case of real estate agents, tourism brokers and the digital platforms that publish them like Airbnb and HomeAway, it is levying fines of up to €400,000.

In fact, last month, sanction files were opened against Airbnb and Tripadvisor for their illegal supply of rental apartments in the Balearic Islands.

Meanwhile, since 2016 in Andalucía, the Junta has obliged homes used for tourist purposes to be recorded in a register, in order to avoid fraud, intrusion and unfair competition against hotel establishments (…).

After a great deal of controversy with tourist associations, the Canarian Government regulated the use of holiday rentals in 2015, and although the High Court annulled the article that prohibited holiday rentals in tourist areas, the law is still valid because the Executive filed an appeal with the Supreme Court, which has not ruled yet (…).

Any apartment offered through a digital platform in the Community of Valencia must be registered with the Valencian Tourism Agency and is subject to governing regulations in terms of safety and quality.

Murcia, meanwhile, has implemented a specific plan to reduce the current mismatch between the regulated and unregulated supply, putting a stop to intrusion and reinforcing the fight against employment on the black market, which is typically precarious and exploitative.

By next spring, the Community of Castilla-La Mancha will have drafted a law that will put an end to the legislative vacuum in this regard and which, according to the regional Government’s calculations, will allow it to shed light on between 1,500 and 2,00 tourist homes that are advertised on several online portals, but which offer no guarantees for clients and generate no tax revenues for the administration.

In Euskadi, last month, the Basque Government approved a draft decree that seeks to regulate the most tourist aspects of homes, providing guarantees to advertisers, neighbours and tourists, given that the decision to grant licences lies with the town halls, such as those of Bilbao and San Sebastián, which account for two thirds of the almost 2,500 tourist apartments in the País Vasco (…).

In March 2017, the La Rioja Government approved a general tourism regulation, which distinguishes tourist apartments – those that contain three or more accommodation units in the same building – from homes for tourist use, including those that are advertised online.

Last year, a decree entered into force in Asturias to regulate tourist apartments and, according to the most recent available figures, 640 registrations have been recorded and 159 sanction files have been opened (…).

Finally, the Junta de Extremadura is working to reform Law 2/2011, dated 31 January, governing the Development and Modernisation of Tourism in Extremadura, which will materialise this year and which will offer new instruments to help in the fight against fraud involving tourist apartments.

Original story: El Economista

Translation: Carmel Drake