Tag: private equity

CVC to Purchase the Universidad Alfonso X for c. €1.1bn

26 March 2019 – El Confidencial

Following Permira’s acquisition of Universidad Europea de Madrid in December for €770 million, CVC Capital Partners is following suit. The private equity firm is on the verge of completing negotiations to buy Universidad Alfonso X El Sabio (UAX), also in Madrid.

The consideration for the operation could amount to €1.1 billion, equivalent to 14 x EBITDA, an investment record that reflects the huge interest in the sector from private equity firms.

The main shareholders of UAX are Jesús Núñez, who owns a 72% stake and Manuel Piñera Gil Delgado, who owns 15.67%, together with his ex-wife María Teresa Gallego García, heir of the alcoholic beverage company DYC. Another 7% is owned by their nephew José Jaime Núñez.

Currently, the most significant investments owned by CVC Capital Partners in Spain are its 20% stake in Naturgy, worth €3.8 billion, which it shares with Corporación Financiera Alba; its 25% share of CLH worth €1 billion; Deoleo, the olive oil company that is facing serious financial problems; and Lecta, formerly Torraspapel.

Jesús Núñez created UAX in 1993 after reaching an agreement with the Town Hall of Villanueva de la Cañada, which granted him the right to use 1 million m2 of land for 75 years on which to build the campus. The university now educates 15,000 students per year, generates a turnover of €104 million and makes a net profit of €45 million.

Original story: El Confidencial (by Agustín Marco)

Translation/Summary: Carmel Drake

Habitat Invests €19M in the Development of 72 Homes in Madrid

17 October 2018 – Eje Prime

Habitat is expanding its portfolio of land in the Community of Madrid. The real estate company chaired by Juan María Nin has invested €19 million in the development of 72 homes in the municipality of Collado Villalba. The company plans to start marketing the assets at the end of the year.

The homes will have storerooms, 108 parking spaces, common areas, green spaces and gardens. The future urbanisation, located between Avenida de las Eras and Calle Adelfas, is the fifth land acquisition that Habitat has made in the Community of Madrid. Specifically, the plot has a surface area of 6,300 m2.

In recent months, the Catalan property developer has acquired more than 27,500 m2 of land in the region for the construction of new residential developments. It already has a presence in the Madrilenian municipalities and neighbourhoods of Valdemoro, Móstoles and El Cañaveral.

Similarly, the operation forms part of the land acquisition plan that Habitat launched after being absorbed by the US private equity firm Bain Capital in December 2017. The most recent purchase by the company was made in September. As Eje Prime reported, on that occasion, the real estate company invested €10 million in the purchase of two plots in Santander for the development of 62 homes.

The property developer is planning to build more than 9,000 homes over the coming years in different phases of development. Its residential portfolio is distributed across various parts of Spain, primarily Andalucía, Levante, Cataluña, Madrid, the Canary Islands and Cantabria.

Original story: Eje Prime

Translation: Carmel Drake

Ardian Places Indigo Sale On Hold after Raising €700M in Debt

4 May 2018 – Expansión

Ardian and its partner Predica (Credit Agricole) have decided to put on hold the sale of their parking lot subsidiary Indigo, one of the giants in the European sector with significant interests in Spain. The shareholders, which have been looking at various options for their investment over the last year, have opted to re-leverage the company in the end, with a €700 million bond issue, which will be used to refinance some of the debt that expires in 2020, and also, to distribute an extraordinary dividend to shareholders.

With this move, the possible sale of the former VinciPark has been put on hold, after Ardian went off the idea of divestment in 2017 when it did not obtain satisfactory offers for the asset. According to sources close to the operation, Indigo’s shareholders were left with three options: put the “for sale” sign back up; re-leverage the company and distribute an extraordinary dividend to the shareholders; or encourage a merger agreement with other parking lot groups.

Until a few weeks ago, all three options were on the table. One of the possibilities involved exploring an alliance with the Spanish firm Saba. The parking lot group controlled by Criteria (La Caixa) is also undergoing a process of transformation after the decision was taken by its minority shareholders, which together hold a 49% stake, to exit the company. That round of contact did not prosper and Indigo decided to begin the procedure to launch a macro debt issue, which took place on 12 April.

Sources in the sector believe that a merger between Saba and Indigo would have business logic given the minimal overlap and their capacity to form a group with sufficient critical mass to explore a stock market listing. Trading on the stock market has always been the ultimate dream of Saba’s founding partners. By contrast, Ardian avoids investments in listed groups (…).

Indigo is, together with Qpark and Apcoa, the largest parking lot group in Europe. According to the latest available figures, the company recorded turnover of €897 million in 2017, with an EBITDA of €310 million. The company’s net financial debt amounts to €1.666 billion. Saba and Empark also feature in Europe’s Top 8 ranking of the largest parking lot groups, but their turnover figures are significantly lower than those of Indigo and QPark.

According to experts, another factor that would contribute to accelerating the corporate movements in the sector is the ownership structure. The giants in the sector are owned by investment funds and private equity firms with a relative dearth of long-term investors. QPark is controlled by KKR, whilst the German firm Apcoa is owned by Centerbridge. Ardian controls Indigo and Macquarie is the new owner of Empark. Saba is the only company with an industrial shareholder – Criteria – and a long-term interest (…).

Although not its largest market, Indigo conducts significant business in Spain. Revenues amounted to €41 million in 2017, with an EBITDA of almost €20 million. It is Indigo’s third largest market in Europe, after France and the United Kingdom. The outlook for Spain is positive. According to the consultancy firm DBK, revenues from the rental of parking spaces (…) in Spain and Portugal amounted to €1.145 billion in 2017, which represented an increase of 3.8% with respect to the previous year. In 2016, that figure grew by 4.5%.

Original story: Expansión (by C. Morán)

Translation: Carmel Drake

The RE Sector Is On Course For Record-Breaking Year

12 September 2017 – Expansión

The real estate sector is experiencing a whirlwind year. After breaking the investment record in 2016, experts now expect the pace to continue this year and for a new investment record to be registered, excluding corporate operations.

For Adolfo Ramírez-Escudero, President of CBRE, 2017 is going to be an “exceptional” year, once again. “Investment could reach €12,000 million, whereby exceeding the expectations at the beginning of the year, which would make 2017 the best year since records began, if we exclude the corporate transactions carried out by Merlin in 2015 and 2016”, he says.

The CEO of JLL, Enrique Losantos, says that investors are maintaining their interest in the Spanish market “attracted by the strong underlying economics, returns that are still higher than in certain other European markets such as Paris and prices that are much more affordable, comparatively”.

For Oriol Barrachina, the CEO of Cushman & Wakefield, although the ECB is expected to inject less money, the appetite from investors will continue into 2018, given that the growth in wealth and the performance of assets comes from economic activity and not from the issuance of money by the Central Bank”.

Meanwhile, according to Alberto Valls, Partner in Financial Advisory at Deloitte, whilst institutional stability continues and the expectation of growth and the creation of employment in the economy is sustained, Spain will continue to be an attractive country. “We are not ruling out consolidation in the sector towards larger vehicles, involving Socimis and property developers, therefore I forecast a high level of activity in terms of corporate operations in the sector in 2018 due to concentration”.

The star players

In this sense, the Partner responsible for the Real Estate sector at KPMG in Spain, Javier López Torres, says that “the trend of consolidation amongst the new real estate companies, and their debuts on the stock market, is going to continue, and there will also be new inter-relations between new players”.

In terms of the most powerful players, institutional investors with the lowest capital costs will be the stars of operations with less need for management, which are becoming increasingly fewer because most of what could be sold has already changed hands, explains the Partner in Financial Advisory at Deloitte, Javier García-Mateo. “In the face of a pipeline of operations where there is a need for a strong transformation component, the PERES (Private Equity Real Estate) will be the players that will likely lead the sale and purchase of properties”, he adds.

Meanwhile, the Socimis will have more freedom to divest their assets as most have now fulfilled the three year period since their purchase, the fundamental requirement to be able to enjoy the tax benefits afforded to these vehicles, says Alejandro Campoy, Director General of the Investments Divisions at Aguirre Newman.

Increase in rents

In terms of the behaviour of rents in the office segment, Mikel Echevarren, CEO at Irea, says that “the economic recovery and the creation of employment will lead to an increase in occupancy rates and rents in Madrid and Barcelona”.

Sources at CBRE indicate that Barcelona is already ahead of Madrid, due to the even greater scarcity of high-quality office space in the Catalan capital. Moreover, that situation is giving rise to a significant number of pre-rental operations.

“The growth forecast in rental income is clear and very robust. Our data estimates that for the period 2017-2019, office rental prices in Barcelona will grow by around 5.2% p.a. on average, and in Madrid by 4.3% for the same period”, explains Losantos (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Arcano To Raise €125M For Its Second RE Fund

19 May 2017 – El Economista

Arcano is preparing to launch its second real estate fund following the success of its first vehicle, through which it managed to raise €80 million to acquire assets in Spain.

In this case, the objectives of the firm are more ambitious – it hopes to raise between €100 million and €125 million, according to Eduardo Fernández-Cuesta, Partner at the management company.

“Arcano’s platform was essential when it came to obtaining capital for the first fund”, explained the Director, who said that the process was complicated, given that it was the first time that it had operated in that field, but that it was supported by the firm and its own experience with other kinds of assets, such as private equity and European corporate debt (where it already manages assets worth more than €3,000 million).

Since Arcano Spanish Opportunity Real Estate Fund launched its operations “€60 million has been invested or committed to date, and by the end of the year, we expect to have disbursed the remaining €20 million (from the first fund)”, said Fernández-Cuesta.

Just like in the case of the first fund, the new vehicle will focus on value-added operations, “given that it is a niche in the market that we think we can do it better, focusing on operations of between €10 million and €15 million”.

The firm, which seeks “a net return of 15 percent” operates mainly through off-market transactions with private owners, as well as with financial institutions.

“We will likely begin raising capital (for the second fund) from September onwards, but it will depend on how the investments that we have left to close in the first fund are going at that point”, said the Director.

With the first fund, Arcano invests in value-added operations in all types of properties, with a clear focus on residential assets in Spain’s main cities and along the Costa del Sol, without forgetting other assets including office buildings, logistics assets, retail premises and shopping centres, provided they are opportunities that generate value within the fund’s investment philosophy.

“In this way, Arcano covers a gap in the real estate sector in Spain by concentrating on value-added and medium-sized operations (between €5 million and €25 million in equity) with a clear local focus”, explained the firm.

Original story: El Economista

Translation: Carmel Drake

B&B Sells 8 Hotels In Spain To Corum For €30M

19 May 2017 – Expansión

The hotel chain B&B Hotels and the investment fund Corum have reached an agreement to allow the former to divest the assets that it owns in Spain, whilst continuing to manage them, and the latter to strengthen its presence in the country with the purchase of eight hotels.

According to the terms of the agreement, B&B will sell the establishments to Corum for €30 million, although it will continue to operate them under a lease arrangement for at least 15 years. The hotels included in this operation are located in Figueres, Girona, Granollers, Mollet, Viladecans, Valencia, Albacete and Fuenlabrada.

The two groups also plan to explore new opportunities to collaborate in Spain and Portugal during 2017.

B&B Hotels, owned by the fund PAI Partners, operates 20 hotels in Spain after it purchased the low-cost chain Sidorme last October. The French hotel group, which tripled its turnover in Spain in 2016, to exceed €20 million, wants to double in size in the country within three years and is evaluating its expansion into Portugal.

Meanwhile, the real estate investment fund Corum, which manages more than €1,300 million in assets across Europe, is planning to invest more than €450 million in various European countries, including Spain, in 2017.

Corum made its debut in Spain in 2013 with the purchase of a commercial property in Tarragona. This is the sixth operation that the fund has completed in the country.

For Jairo González, CEO of B&B Hotels in Spain and Portugal, this operation allows the chain to “lighten the load” on its balance sheet in Spain to be able to incorporate more hotels into its network.

Philippe Cervesi, Director of Investment at Corum, said that the agreement reflects Corum’s capacity to find “interesting assets, with a good return and excellent guarantees, in an attractive market such as Spain”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

KKR & Dunas Capital Purchase The Intertur Hotel Chain

9 May 2017 – Expansión

For €100 million / The hotel chain owns five hotels in Mallorca and Ibiza, containing 1,119 rooms. The new owners are going to modernise and reposition the assets.

The private equity fund KKR and the asset manager Dunas Capital have reached an agreement to purchase the hotel chain Intertur Hotels, which owns five establishments in Mallorca and Ibiza.

The terms of the transaction have not been disclosed, but sources in the market have indicated that the acquisition was closed for a price of just over €100 million. In addition, the investors plan to modernise and reposition the acquired hotel portfolio, which contains 1,119 rooms.

Freshfields, Deloitte, Bird & Bird and Deerns advised the buyers to the operation, whilst the law firm Buades advised the vendor.

Once the agreement enters into force, Alua Hotels & Resorts will be responsible for managing the hotels, which will be marketed under that brand from 2018 onwards. The Aula hotel group, in which the alternative asset manager Alchemy Partners owns a stake, manages 15 hotel assets and almost 3,200 rooms in the Balearic and Canary Islands.

Specifically, Intertur owns two hotels in Mallorca –Hotel Hawaii Mallorca & Suites and Palmanova Bay, both in Palma Nova–, and three assets in Ibiza –Hotel Hawaii Ibiza (in San Antonio) and apartments and a hotel (in Santa Eulalia)–.

Guillaume Cassou, Head of European Real Estate at KKR, said that this portfolio constitutes a “very solid base” for creating value in a market that is benefitting from a very favourable environment and he underlined the interest expressed by KKR, Dunas Capital and Alua in “undertaking more projects together”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Playasol Hotels Forecast Sales Growth Of 13% In 2017

24 April 2017 – Expansión

Three years after it rose from the ashes and was taken over by the venture capital fund Hiperion, Playasol Ibiza Hotels – whose portfolio contains more than 4,000 rooms – is planning to complete the refurbishment of its hotel stock and is preparing to make acquisitions and expand its business.

The CEO of Playasol Ibiza Hotels, Antonio Domenech, explained that, after the judicial and liquidation administration process, Hiperion took over the operation and management of Grupo Playasol, whilst the real estate company Sunparty Real Estate took control of the assets. From that point on, the shareholders implemented a business plan, which has just seen the completion of its third year.

“Although the fund’s initial intention was to create value and sell, at the moment, its vocation is more industrial. We are not considering a fast-selling scenario”, said Domenech, in an interview with Expansión.

The director explains that, in the framework of this commitment by the shareholders, Playasol is analysing opportunities for growth, both in the Canary Islands, as well as on the peninsula. “We are analysing operations in nuclei where there is a critical mass and in the holiday segment”. In this way, Playasol is evaluating opportunities in mature destinations in the Canary Islands, Costa del Sol and Levante. “We are focusing on the Spanish Coast and the islands”, he said.

Forecasts

Playasol, which closed last year with revenues of €69 million, up by 24.7% compared to the previous year, expects to increase its sales by 13% this year. The hotel chain employs an annual average workforce of more than 600, peaking at 1,200 workers in the high season.

“These results not only fuel the group’s growth prospects, they also endorse the current strategy based on the search for greater efficiency, reinvestment in assets and financial discipline”.

Domenech highlighted Playasol’s current “solvency”. “We have scrupulously fulfilled all of the objectives agreed with the unions, we have even created jobs and our relationship with the local administrations is excellent. We have very much been part of the solution to the problem”.

Hotel refurbishment

Domenech said that the company has invested more than €12 million renovating its establishments and that it plans to allocate between €16 million and €25 million to improve its other assets between now and 2018, “depending on what we managed to agree with the local administrations in terms of procedures and licences”. “This year we are refurbishing fourteen establishments, including the complete renovation of four. The hotels in our portfolio are in excellent locations, but the properties were built in the 1960s and 1970s and so they need intensive investment”. (…).

The group has 37 hotels and apartments in total (36 in Ibiza and one in Mallorca) plus four others that are not currently operational. “The aim is for them to be operational for the 2019 season”. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Meridia Acquires Minority Stake In Andilana

30 January 2017 – Expansión

The private equity firm Meridia Capital has acquired a minority but significant stake in the restaurant group Andilana, which operates 25 restaurants in Cataluña and Madrid and five hotels in Barcelona, the Costa Brava and Madagascar.

The aim of the operation is to simplify Andilana’s ownership structure and support its growth plan, which involves new openings in the Spanish capital, as well as in other cities with tourist potential.

Andilana generates turnover of €40 million, employs 645 people and receives 2.5 million clients per year.

Original story: Expansión

Translation: Carmel Drake

Aguirre Newman: RE Inv’t In Barcelona Amounts To €2,500M In 2016

19 December 2016 – La Vanguardia

The real estate market in Barcelona is on course to break records again this year. It is expected to end 2016 with total investment operations amounting to €2,500 million, compared with €1,978 million last year, according to data presented by the real estate consultant Aguirre Newman on Thursday.

2016 will also be a “historical” year for Spain as a whole, with investment figures once again exceeding the level recorded in 2007, the year before the outbreak of the crisis. Investment operations worth almost €14,000 million are forecast to be closed.

Cataluña accounts for 20% of Spain’s total investment in this sector, although that figure is set to increase to 25% in 2017, given the significant potential of Barcelona.

The Director General of Aguirre Newman in Barcelona, Anna Gener, explained that; demand in Barcelona is still very active; there is still a lack of available land for sale; international demand is very active; and the real estate market is regarded as an attractive sector for investment.

Of the total investment volume expected this year, €860 million correspond to offices, down by 2.8% compared to last year, given that 2015 was a year of “blossoming”, when several major corporate operations were recorded after years of crisis.

The residential market will reach €120 million this year, shopping centre investment will amount to €865 million, retail investment will reach €100 million and investment in the industrial sector will amount to €144.1 million, up by 61%, due to the scarcity of land.

Around 80% of the investment volume has been made by international buyers; and domestic investors “are back again” after years away, according to Hipólito Sánchez, Director of Investments.

57% of the investments were made by funds, 26% by Socimis, 10% by private equity firms, 3% by institutional investors and 2% by insurance companies.

The leasing of office space continues to be a very active market; the availability rate has been decreasing since 2012 and now stands at 9.9%.

Construction activity is continuing to recover, with a 40% increase in the number of new construction permits compared to 2016.

The average price of free (unsubsidised) housing increased by 9% in Barcelona this year and by 4.5% across Cataluña. There was also a great deal of interest in renovation projects and in changes of building use status towards high standing residential properties in the centre of Barcelona, where more than 60% of buyers are foreign. (…).

The retail sector has continued to receive interest from investment funds and private equity firms in the main areas of the centre of Barcelona.

La Diagonal has established itself as an area of expansion following its renovation, with a 30% increase in rental income in just two years and the opening of megastores by certain brands, such as Massimo Dutti, Zara, Uniqlo and H&M.

The most important operation in the shopping centre sector was the sale of Diagonal Mar to Deutsche Bank for €495 million.

Another sector that continued to attract investors was logistics, whose investment volume increased by 60% with respect to last year, due to the shortage of land. (…).

The hotel sector has also continued to perform very well, given that prices per room have increased, thanks in part to the fact that there are no new competitors.

The forecasts for 2017 indicate that the real estate sector will continue to attract international investors, demand will continue to be very active, and products will continue to be scarce, although prices are not predicted to rise by very much.

Original story: La Vanguardia

Translation: Carmel Drake