Tag: podemos

New Housing Plan Will Include Aid For Renters & Evicted Families

14 December 2016 – El Mundo

On Tuesday 13 December, the Minister for Development, Íñigo de la Serna (pictured above), said that the future Housing Plan 2018-2021, which his department is currently working on, will seek to continue to support rental housing through a specific program of aid, and will add other assistance for families evicted from their habitual residences.

De la Serna emphasised that the draft plan includes financing for a program of aid for families evicted from their habitual residences that find themselves in vulnerable situations, through the constitution of social funds for rental housing.

Similarly, he expressed his intention for the new housing plan to continue to offer support for rental housing thanks to a specific program.

The Ministry of Development has already started the process to approve this new housing plan and to this end, it has invited the Autonomous Regions to a conference, which will be held on Thursday 15 December, where some of the overarching premises are expected to be discussed.

The Minister for Development recalled that last Friday, the Council of Ministers approved an extension of the Housing Plan 2013-2016 to ensure that its beneficiaries will not lose their aid from 1 January 2017 onwards.

In terms of the sale of social housing to vulture funds, De la Serna reminded the Podemos party Senator María Pilar Garrido that the Government will not carry out any sale in this sense because the duties in terms of housing are assumed by the Autonomous Regions.

“We have to comply with the law and not encroach on the regional duties that are not our responsibility”, he added.

He also said that the State can only influence the regulation of economic planning, specifically, the definition of safeguarding actions and the regulation of financing structures through the contribution of state resources.

Based on this, he explained that the Government approves the state housing plans, which are then managed through agreements with the different autonomous regions.

Original story: El Mundo

Translation: Carmel Drake

Cifuentes Presents New Land Act For Community Of Madrid

25 October 2016 – Expansión

Yesterday, the President of the Community of Madrid, Cristina Cifuentes (pictured above), submitted the draft bill for the new Law governing Urban Planning and Land in the Community of Madrid, an initiative long demanded by the Madrilenian real estate sector. The bill aims to clarify and organise the management of urban planning in the region, whereby replacing the existing regional Land Act, which dates back to 2001.

During its 15 years of life, the existing text has been partially modified 15 times, which, as the Ministry of the Environment, Local Administration and Land Planning itself admits, has ended up making it “difficult to understand and interpret”.

“Circumstances have changed considerably over the last 15 years and so the content of the Land Act has been completely distorted”, acknowledged Cifuentes yesterday during the presentation of the new draft bill. “This new law has been put together as a single piece of legislation to give coherence to the urban planning rules”, she added.

The regional Government plans to submit the Draft Bill to the Assembly before the end of the year and, according to Cifuentes, it hopes to obtain “the maximum consensus and support possible”. It is something that seems almost impossible, taking into account that eight months ago both the PSOE and Podemos left the technical and political tables that have been managing the text presented yesterday.

This was not helped either by the fact that Ciudadanos decided to put “an end” to these working tables in a unilateral way “to look for a new consensus”, according to an announcement last week from its spokesman in the Assembly, Ignacio Aguado. The orange party’s idea is to look for maximum political support to approve the law, and so it is advocating that the work of these tables be transferred to the specific report about the Land Act, which already exists in the Assembly.

“We want a Law that represents the consensus of all of the political groups and not another piece of steam roller legislation from the PP”, said Aguado. “Ciudadanos is going to fight to ensure that there is real citizen participation and genuine transparency in the way that urban plans are prepared. We want to put an end to the current opacity”, said the spokesman. (…).

New elements

In addition to the goal of making urban planning “more agile and transparent”, the Draft Bill presented yesterday by Cifuentes includes some important innovations. The most notable is its commitment to urban renovation and regeneration, compared with the model of expansionist urban planning under the previous legislation.

In this sense, one of the most innovative aspects is the fact that cities in the region will have the opportunity to undertake the renovation of large areas without the need to modify their General Plans. (…).

The new text retains the categories of urban land – buildable and non-buildable, but eliminates the category of unsectorised buildable land, which becomes non-buildable common land. Nothing can be built on this kind of land, under any circumstances, unless its classification is changed in the general plan upon request by the town halls themselves. “The aim is to achieve a more sustainable urban planning approach that avoids unnecessary urban planning developments”, say sources at the Ministry.

Other novelties include the creation of a Simplified General Urban Plan, designed for towns with fewer than 5,000 inhabitants and budgets of less than €6 million. Those towns may choose to adopt this framework, which is more flexible and agile than an ordinary plan, provided that the work focuses on historical centres and does not include any new developments. This framework may be applied to almost half of the 179 municipalities in the region.

Original story: Expansión (byLuis M. De Ciria and Carlota G. Velloso)

Translation: Carmel Drake

Sabadell & Bankia Finalise RE Portfolio Sales To Sankaty

29 June 2016 – Expansión

Spanish banks and international funds are negotiating against the clock as they seek to close operations worth hundreds of millions of euros within the next few days. Entities have offers on the table for real estate assets worth almost €4,000 million. And some of them are expected to bear fruit today or tomorrow, so that they can be accounted for in the half-year results.

The negotiations are even more frantic than in previous years due to the slowdown caused by the electoral calendar, which caused opportunistic funds to be prudent with their offers. One of the most influential factors was the fear that Podemos would enjoy electoral success.

Now that the uncertainty (surrounding Podemos) has been resolved, Sabadell and Bankia have been particularly agile in reaching agreements.

Yesterday, the Catalan entity sold a portfolio containing €460 million of problem assets linked to property developers, as part of Project Pirene. The buyer is the fund Sankaty Advisors, a subsidiary of the US giant Bain Capital. Sources in the market estimate that the investor paid Sabadell between €150 and €200 million for these assets.

Dominant investors

Sankaty’s interest in Spain has not been limited to that portfolio, given that it is close to securing another deal that has attracted significant interest from other large international investors: Project Lane, sold by Bankia, comprising 2,500 homes worth €400 million. This is the first portfolio to emerge from the carved up Project Big Bang; the entity had wanted to sell all of its foreclosed assets together, but that plan was suspended at the end of last year. Sources expect to know whether this operation will go ahead within the next few days.

The sale of the other two asset portfolios that Bankia has on the market are proceeding more slowly: one contains non-performing mortgages – Project Tizona – worth €520 million; and the other contains non-performing property developer loans – Project Ocean – amounting to €400 million.

Sankaty expects the recovery of the Spanish real estate sector to go beyond Sabadell and Bankia’s portfolios, as indicated by the fact that it is one of the main favourites to acquire Project Baracoa, from Cajamar. That will be the first sale of bankrupt loans by a Spanish bank. In total, the rural savings bank is looking to get rid of €800 million of these types of loans, which account for 70% of all of its bankrupt assets. 85% of them are secured by real estate collateral.

Another operation that is generating significant interest is Project Carlit, launched by CaixaBank, through which the Catalan group wants to transfer €790 million of doubtful loans to property developers. The bid is in its final phase with two key favourites in the running: Cerberus, which according to sources consulted is “putting all of its eggs into one basket”; and the alliance between Goldman Sachs and TPG, two US investors who have joined forces in the past. The US fund D. E. Shaw is also through to the final round, but it has not participated in any operations in Spain for a long time and the market considers that it is less likely to win the portfolio.

CaixaBank has another major operation underway: Project Sun, through which it wants to sell 155 hotel assets worth almost €1,000 million.

Another one of the most active entities is Abanca, which recently sold €1,400 million in non-performing loans to EOS Spain and which will be negotiating the sale of €400 million property developer loans over the next few weeks.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Sareb Plans To Return €6,000M To Its Shareholders

16 June 2016 – Expansión

Sareb has a business plan on the table that involves returning its shareholders all of their investments, including an annualised return of between 1% and 2%. According to the explanation provided yesterday by the Chairman of the company, Jaime Echegoyen, these plans involve paying back €6,000 million to the banks and insurance companies that hold its share capital, together with the Fund for Restructuring (the Frob).

Between 2012 and 2013, those shareholders invested €4,800 million in Sareb – €1,200 million in share capital and €3,600 million in subordinated debt. The investors have already written off around three quarters of that amount.

Echegoyen, who was speaking yesterday at an event organised by UIMP, Apie and BBVA, did not specify whether the €6,000 million would be returned in cash or by handing over assets that the bad bank has not been able to sell by the time it has to be wound up, November 2027.

The Chairman of Sareb praised the role of the entities that supported the creation of the company, all of the major banks with the exception of BBVA. (…). The company’s most senior executive said that it was “time to help the whole country” (…).

Podemos’ plans

Echegoyen also made reference to the possibility that Sareb may be converted into a public housing stock, as proposed by (the political party) Podemos, something that in his opinion would have serious consequences for the Spanish economy.

“I don’t think we should forget that Sareb owes €43,000 million. If anyone wants to do anyhing with Sareb, they would have to deal with Parliament first and then Brussels”, he explained, before adding that “those €43,000 million would mean raising the deficit by 4 percentage points”.

Meanwhile, Sareb’s Chairman reported that the company has now sold 35,000 properties since it was created, although the rate of sales has decelerated slightly in 2016, to 25 homes per day, compared with the average of 27 since 2013. Despite that, he said that “we are performing in line with budget” and he maintained the goal to “stop losing money in 2017”.

This slight slowdown has happened despite the fact that the real estate market is experiencing a “sweet moment”, according to Echegoyen. This is reflected by the fact that new, more conservative, investors, “such as Socimis, family offices, insurance companies and private banks have covered the gap left by the opportunists”.

The importance of property

According to the executive, low interest rates are encouraging investors to pay attention to real estate assets. “Property is intrinsic to human beings, above all Spaniards”, he said. “Banks are still granting finance, but are no longer allowing any nonsense”, he added.

The Chairman of Sareb acknowledges that competition is being felt from other banks when it comes to selling properties, although he pointed out that the financial institutions are in more of a hurry to sell given the pressures (they face) from the stock market and capital requirements.

“We have time, a trump card, on our side, which lasts for the next 12 years. Furthermore, we are never going to be listed on the stock exchange, which means that we are not subject to pressure from the financial markets”, he noted.

Original story: Expansión (by J. Z. and S. A.)

Translation: Carmel Drake

Socimis Fear Rise Of Left-Wing Coalition, Unidos Podemos

26 May 2016 – El Economista

Since 9 May 2016, when the political leaders of Podemos, Pablo Iglesias (pictured above, right), and Izquierda Unida, Alberto Garzón (pictured above, left), announced their intention to stand together in the upcoming General Election on 26 June, the possibilities of them beating the Socialist Party and, even, forming a Government, have increased considerably (the D’Hondt electoral law penalises minority groups).

The fact that Unidos Podemos has become a real option, according to the latest polls, is being felt on the stock exchange in sectors such as real estate. The Socimis have seen an average decrease in their share prices of 1.5% since 10 May, which represents a difference of 3.6 percentage points with respect to the Ibex 35, which has risen by 1.6% during the same period.

In its election manifesto, the purple party – which now has the support of IU – proposes reforming the tax regime for Socimis (as well as for the Sicavs). The real estate vehicles are currently exempt from paying Corporation Tax, provided they fulfil certain requirements, such as distributing 80% of their net profits as dividends.

“What it (the regime) does is raise the taxation (liability) up to the shareholders. They bear the taxation through their remuneration in the form of capital income (provided their share stakes exceed 5%), says Ana Hernández, an expert in Socimis.

Merlin Properties, the largest Socimi in the market, with a market capitalisation of €3,100 million (more than twice the size of the second largest firm, Hispania), is suffering more than most from the downward trend. Within the last month, short positions of the company’s shares have almost tripled, from representing 0.4% to 1.15% on 13 May, according to data prepared by the CNMV. Meanwhile, its share value had decreased by 20% since the last General Election was held on 20 December, more than double the 8% drop that the Ibex 35 has seen during the same period.

Concern amongst investors

“There is noise (in the market)”, acknowledged sources in the sector, although “maybe it is excessive”. (…).

“Spain is an attractive country for real estate investment” said Jesús Amador, analyst at Bankinter, who recognises, nevertheless, that the latest “initiatives” motivated by Town Halls close to Podemos “may influence” the investments made by the Public Administration, following “the cuts to investment for Operación Chamartín, the controversy with Plaza de España and the problems in Barcelona”. (…).

The left-wing coalition proposes a minimum tax rate for Companies of 15%, which, in the absence of more data, would also become the future tax rate for the Socimis. “If they make the work more complicated”, said the President of one Spanish firm, “they will kill many of them off”.

Original story: El Economista (by Laura de la Quintana)

Translation: Carmel Drake

Podemos Positions Itself Against Socimis & The RE Recovery

26 April 2016 – Negocios.com

The political party led by Pablo Iglesias (pictured above) wants to put a stop to these investment companies, which are responsible for investing billions of euros each year.

Podemos has proposed an attack on the Socimis (listed real estate investment companies), whose appearance has helped the recovery of the real estate sector in recent times. Pablo Iglesias has put the tax structures of Socimis, private equity firms and entities holding foreign securities (ETVE) in the firing line; he says that he wants to “ensure productive investment and tax equity”. And it is true that the tax treatment of Socimis is different to the rules that apply to other companies, but the Socimis also have to comply with certain requirements, such as holding share capital of €5 million, and not €3,000 like an SL, and listing on the stock exchange, such as the MAB, IBEX 35 or Main Market.

– Tax rate of 0%. Socimis are taxed at a rate of 0% for Corporation Tax purposes.

– Special rules need to be taken into account for entities that have been taxed under a general regime that start paying tax under the Socimi regime: if ownership of a property is transferred prior to the application of the Socimi regime, then the rental income shall be understood to be generated on a linear basis (unless proven otherwise) during the holding period, and so the previous tax regime and the Socimi regime will be applied to the rental income on a proportional basis.

In addition, Podemos also wants to axe Sicavs, control the shareholders and the money in cash, limit the maximum percentages per shareholder and have them monitored by the Tax Authorities and not by the CNMV like now.

Encourage “informers” and allow tax inspectors to work under cover in order to combat tax fraud. The informer would be rewarded with some of the economic fine imposed on the offender, whilst a fund would be created for paying tax confidants.

This is part of the Comprehensive Plan to Combat Fraud that will be presented to the Economic Committee on Wednesday. According to the text, tax revenues would increase by between 1% and 1.5%.

Moreover, Podemos considers that it would be worthwhile to integrate all of the networks of the Tax Authorities and the regional and state Social Security departments for greater coordination.

Meanwhile, Podemos’s proposals also include lowering the criminal liability threshold for tax offences to €50,000, as well as increasing, in general, the “prescription period” to ten years, applying the penalties currently provided for when the defrauded amount exceeds €120,000.

Original story: Negocios.com

Translation: Carmel Drake

Cifuentes Abolishes Madrid’s 3-Storey Land Act

11 December 2015 – Expansión

On Thursday, the Plenary Assembly of Madrid abolished the section of the Land Act that prohibits the construction of buildings of more than three storeys, thanks to support from members of the PP and Ciudadanos and despite the opposition votes by members of Podemos and the PSOE.

Enrique Veloso, one of Ciudadanos’s members, who defended the draft Law for the modification of the Land Act in the Community of Madrid, said that the now abolished law “has done a lot of damage to town planning”. He criticised the fact that this restriction to construct only three storey properties was applied in a blanket fashion across all towns, without taking into account the characteristics of each municipality.

Ramón Espinar, member of Podemos, said that this partial reform of the Land Act “has circumvented the agreement” that existed between all of the parliamentary groups to draft a new Land Act. He added that the current PP is “the same as ever” and he criticised its rejection of a comprehensive reform of the aforementioned law, which “understood that land was being preyed upon as a resource”.

The socialist member Rafael Montoya declared that his party’s town planning model is “compatible with the interests of residents and is respectful of the environment”, and he confirmed that the abolition of the three-storey restriction “would not help to generate consensus”. He advocated a comprehensive reform of the current Land Act and he criticised Ciudadanos’s collaboration with the PP, stressing that both parties “form part of the same right (wing)”.

The PP member Diego Lozano accused Podemos and PSOE of abandoning the motion for the reformation of the Land Act and said that they do not understand “the urgency” of the need for a comprehensive modification of the law that was approved eight years ago.

Original story: Expansión

Translation: Carmel Drake

International Funds Encouraged By Decline In Podemos Support

4 November 2015 – El Confidencial

An air of tranquillity has returned to the offices of the large international funds following the uncertainty that was unleashed on 24 May. Then, the success of groups linked to Podemos in the municipal elections caused many institutional investors to rethink their positions in our country, they slammed on the brakes and chose to move cautiously, as they awaited developments.

This attitude affected the rhythm of several sectors that were enjoying a real boom at the time, including the real estate sector, where large buyers were responsible for driving the recovery. The electoral calendar meant that they had no choice, with the upcoming regional elections in Cataluña (which Junts Pel Sí was trying to hijack as a referendum on independence) and the general elections scheduled for the end of the year, the second half of the year was set to be very quiet. But the latest election polls are changing everything.

The decline of the group led by Pablo Iglesias and the growing expectations surrounding the alliance between PP and Ciudadanos has given the large international funds reason for hope. The results of the opinion polls are showing them that our country’s politics will continue in line with the reforms undertaken in recent years and, above all, that it will not fall into the hands of a leftist coalition involving a Government seeking to resemble the Greek Syriza party.

As one source in the sector explains “now that Podemos is becoming weaker, our concern regarding the country’s political risk has decreased siginficantly – any scenario involving stability is welcome. In other words, the change in the perspective of the international funds has not been driven so much by the rise of PP-Ciudadanos, but rather because the decline in support for Podemos significantly reduces the risk of instability”.

In fact, to say that overseas investors have a preference for one party or another is, in the opinion of the professionals in the sector, completely incorrect. “Investors are not saying ‘I want this party or that party to win’, overseas investment in real estate has been the same under the PSOE and the PP. The good news now is that Ciudadanos is no longer regarded as a risk”.

Several investors specialising in the real estate sector acknowledge that this change of perspective is being felt by the day, a domino effect that has been accelerating with the wave of polls in recent weeks, all of which are marked by the common denominator of the decline of Podemos with respect to the rising trend that started with the European elections and peaked with the municipal elections, and the consolidation of Ciudadanos as the great emerging force.

Tensions continue in Cataluña

(…). The only exception to this rule is Cataluña, “where the separatist tensions mean that there is a great deal of uncertainty”, says one M&A expert. “I have decided to delay any decisions until next year, it only means waiting a few more months. What difference does that make?”.

Just as there is a general feeling of calm amongst the large international investors regarding Spain in general, their views regarding the future of Cataluña are divided. Many are convinced that independence is a utopia that will never actually happen, but there are others that regard it as a credible option, in which case they prefer to wait and see.

The direct consequence of these fears, besides the delay in terms of closing operations, is the downward pressure on the prices of those operations already underway. Similarly, the return of confidence is a revulsive in favour of the vendors, which still have almost two months to reach agreements (before year-end), but now with the factor of economic stability in their favour. Provided that is, that the opinion polls are correct.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Eugenio Hinojosa Resumes Empark Negotiations

13 October 2015 – Expansión

The Spanish businessman Eugenio Hinojosa has resumed his plans to purchase Empark, the leading car park company in Spain and Portugal. The operation could amount to around €900 million, including debt. Hinojosa, one of the largest operators of parking spaces in Madrid, has resumed talks to purchase Empark after exclusive negotiations broke down between the shareholders of the parking company and the funds that control Vinci Park (Ardian and Crédit Agricole), the car park giant in France.

Last week, sources close the operation said that the negotiations are progressing and only a few minor details now need to be resolved relating to avals, guarantees and creditor approvals (mainly bondholders) due to the change in control of the company. “Financing is not a problem”, assured the sources consulted.

Hinojosa plans to join forces with other partners, including the company Andersen Partners, to buy Empark. Empark declined to comment on the matter. Empark’s controlling partner with a 50.3% stake, is Assip, a vehicle named after the Portuguese company A. Silva & Silva, which is in turn controlled by the founding families of the company who participate in the management of the group. The main executives of Empark, which manages 500,000 parking spaces in Spain, Portugal, UK and Turkey, are José Augusto Tavares (Chairman), Pedro Mendes (CEO) and Antonio Moura.

The remaining capital is divided amongst several investment funds, managed by BES (22%) and Ahorro Corporación (8.2%). The Mello family holds a 2.6% stake. In theory, these partners are also selling their respective stakes in the company. Ahorro Corporación’s stake is now being managed by the fund GED Capital.

Political risk

In July, Vinci Park reported that the negotiations to purchase Empark had broken down after the due diligence (audit of the assets) was completed with findings that were not satisfactory. Sources close to the company say that behind the decision was the high exposure that Empark has to town halls governed by parties linked to Podemos following the municipal elections in May.

Eugenio Hinojosa, who is a related by marriage to the founding family of Cortefiel, has been building up a sizeable portfolio of car park assets in Madrid, and now owns more than 12,000 parking spaces. He was one of the main competitors in the tender for the Aena car parks in 2013, but was his offer was outbid by Empark and Saba. He managed to suspend the award after filing a special appeal with the Central Administrative Court of Contractual Appeals against the airport operator’s decision, but then lost the ruling.

In 2014, the controlling shareholders of Empark engaged JPMorgan and Caixa Banco de Investimento (CBI) to find a buyer. One of the reasons for their exit from the company (they purchased it from Ferrovial in 2009) has been the financial problems of its Portuguese partners, which have undergone a complicated bankruptcy process and have had to make loan repayments in recent months.

Empark closed 2014 with sales of €180 million and an EBITDA of €66 million. As well as managing some of the busiest car parks in Madrid, Aena awarded the group the operation of its car parks in the Western region (including Barajas) in 2013, requiring the management of 40,600 parking spaces. Two years ago, the company also won the tender to manage 82,000 ground-level parking spaces in Madrid.

Original story: Expansión (by C. Morán)

Translation: Carmel Drake

Election Fallout: Large Investors Rethink Their Strategies For Spain

2 June 2015 – Expansión

Election fallout / International funds are worried about the impact that the new (political) environment will have on their purchases of: social housing, problem mortgages and portfolios of homes from banks.

The rise of Podemos in the municipal and regional elections could clog the bank’s real estate drain once again. After years of provisions and foreclosures, the financial sector had started to sign large transactions in recent months, and whereby reduce the high burden of property on their balance sheets. Transactions worth more than €10,000 million are currently underway. However, some potential investors have begun to rethink their strategies and fully expecting that the projects that are already underway will be affected, at least in terms of price.

(….)

The fears of the larger international funds revolve around what might happen in three specific segments: subsidised social housing (VPO homes), where Blackstone and Goldman Sachs have been very active; the suspension of evictions; and the possibility that new measures will be taken to deal with vacant homes.

Subsidised social housing

Subsidised homes were one of the assets that the funds that first arrived in Spain expressed interest in. Blackstone and Goldman purchased more than 8,000 homes of this kind between 2013 and 2014 from the Community of Madrid, the Town Hall of Madrid, FCC, Sareb and Bankia.

Now, after a couple of years managing these real estate portfolios, the funds fear that the expected arrival of Ahora Madrid in the Town Hall will change the rules of the game and may even cause them to reverse their purchases (i.e. exit their investments) (…).

Mortgage portfolios

The second wave of concerns relates to mortgage portfolios, which were expected to generate a large volume of transactions during 2015. A priori, financial sources indicate that it would be easier if there was no legislative change until the general elections, in case Podemos gains strength as an alternative Government. However, the mere uncertainty in this regard means that funds are going to really take care with the purchase of any portfolio.

Blackstone is again the fund that is most exposed to these assets, since in 2014 it purchased a portfolio of problem mortgages from Catalunya Banc amounting to €6,400 million. This acquisition involved around 50,000 mortgage contracts, of which 57% were overdue or non-performing; and more than half were located in the province of Barcelona, where the possible arrival of BComú – which groups together Podemos, Esquerra Unida and other left-wing parties – generates real real amongst international investors.

Following this transaction, agreed in 2014, Bankia and BMN have put their own problem mortgage portfolios up for sale.

Sources close to the funds explain that eviction is the last resort used for this type of portfolio, and that the main objective is to reduce the debt so that loans become more affordable or “daciones en pago” in exchange for holding onto the home. But, they add, that the legal concept of eviction helps them to put pressure on certain delinquent borrowers, something they would have to stop doing based on the election promises of some of the political parties.

Tax on vacant homes

Given the uncertainty surrounding the general elections, a more immediate fear is the new taxes that local councils in the major regional capital cities may introduce: such as the tax on vacant homes. That would certainly have an effect of some of the loan portfolios that the banks have put on the market in recent months. (…)

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake