Tag: Procisa

Santander Grants €128M Loan to La Finca for Madrid’s Largest Ever Luxury Development

12 February 2018 – Expansión

A loan from Santander / The group owned by the Cereceda family has obtained financing for the first phase of its project, which will include the construction of 144 homes, a golf course, sports facilities and a leisure centre.

The group owned by the García Cereceda family – owners of the La Finca business and residential complex – has obtained a cash injection of almost €130 million to develop its LGC3 residential project, which will involve the construction of around 500 luxury homes in the municipality of Pozuelo de Alarcón (Madrid) for a total investment of €340 million.

Specifically, the company has signed a loan with Santander amounting to €127.5 million for the development of the first phase of the project, which will include the construction of 144 homes in three-storey blocks, a golf course, a lake, sports facilities and a shopping and leisure centre, according to financial sources speaking to Expansión.

The first phase of the project, which has been called LGC3 – an acronym that corresponds to the initials of Luis García Cereceda, the patriarch and founder of Procisa (now La Finca) who passed away in 2010 – is already underway and will involve a total investment of between €154 million and €159 million.

Prices

The homes in this first phase will have a surface area of between 200 m2 and 400 m2, approximately, and will have terraces that may extend to 600 m2, as well as private swimming pools for some of the homes. The sales prices of the units will range between €1 million and €2 million.

The LGC project will be carried out on a plot that has a total surface area of 850,000 m2 in Pozuelo de Alarcón, to the north of the capital, next to Parque Empresarial, the exclusive urbanisation were well-known footballers and Spanish businessmen live. Of the total surface area, around 100,000 m2 will be allocated to the plot where the 500 homes will be built. The first phase of the development alone, with 144 units, will occupy around 36,000 m2.

The rest of the surface area – around 750,000 m2 – will be allocated to the Country Club, accessible only to owners of the homes, which will have an 18-hotel golf course, next to a lake with a water surface area of 35,000 m2, an artificial beach, sports facilities and schools, lakes, gardens, a running track and a shopping and leisure centre with a surface area of 10,000 m2.

In addition to the security measures that the urbanisation will have, with a double perimeter fence surrounding the plot and an intrusion detection system and gatehouse, the development will also incorporate the latest requirements in terms of sustainability and energy efficiency (…),.

Property business

La Finca, chaired by Susana García Cereceda, has already started to construct the first phase of homes and has allocated around €25 million from the group’s own cash funds to the urbanisation work. The company carried out a corporate restructuring in 2016 and signed a financing agreement with a syndicated loan led by Société Générale, CaixaBank and Santander amounting to €395 million destined to pay off its existing debt and tackle new projects.

Moreover, last year, the company welcomed the fund Värde into its office property business – La Finca Global Assets – which includes its La Finca, Cardenal Marcelo Spínola and Martínez Villergas business parks.

The company has already initiated the process for La Finca Global Assets (in which Värde owns a 40% stake) to debut as a Socimi on the Alternative Investment Market (MAB) during the course of 2018.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Spain’s Housing Construction Boom Comes from Minnesota

 

17 August 2017

  • US vulture funds lead bets in the residential market
  • Blackstone becomes a huge property owner after buying 51% of Popular’s real estate assets

7,000 kilometres away from Madrid, in the US city of Minneapolis, Minnesota, decisions have been taken that have affected the recovery of the housing construction sector in Spain. The firms Värde Partners and Castlelake – known as opportunist, or vulture funds – had the opportunity to enter a depressed real estate market in the face of a foreseeable recovery. But they are not the only big U.S. investors who risked buying at bargain prices and restarted the bull market. Who is behind these companies?

One of the most active is Värde Partners, a Minneapolis-based company created in 1993, which began to buy troubled assets in Spain during the worst years of the financial crisis, at the beginning of this decade. The highlight of Värde’s participation in the Spanish market was its acquisition of Grupo Empresarial San José’s residential development business, to whose portfolio it added the land that it had been purchasing.

With that basis, Värde created the real estate company Dospuntos, one of the several firms created by the American investment funds to free up construction projects that had been paralyzed since the 2007 property market crisis. After that deal, it returned to the market at the beginning of 2017 when it bought the Spanish real estate developer Via Célere from Juan Antonio Gómez-Pintado, who was chosen to lead the newly merged company as its chief executive, and whose objective is a listing on the stock market early next year.

In parallel, Värde acquired 75% of the recently started developer Aelca from the Avintia group, which strengthened its position in housing construction. Aelca already had plans to start works on 1,900 new homes, adding to Via Célere’s 1,700 homes.

The fund has invested $50 billion since its inception and its chief executive is Marcia L. Page, a veteran alternative asset manager. Tim Mooney, responsible for Värde’s real estate business, has designed Värde’s investment strategy in Spain, which also includes the purchase of part of the property business of Procisa, which constituted the company La Finca Global Assets. In addition, Värde, together with the investment fund Kennedy Wilson, bought a majority stake in Aliseda, Banco Popular’s banking platform, that it resold recently after Santander acquired the bank.

The other Minnesotan investment fund behind the new construction boom is Castlelake, which has a total of $10 billion in assets under management around the world. It was created in 2005 and specializes in investments in troubled companies, distressed debt and mortgage loans in complicated situations. Castlelake has been buying land in Spain since 2012 and created the real estate company Aedas Homes, which is expected to go public this fall. The Minneapolis firm was created by Rory O’Neill, a manager from another similar fund called CarVal Investors, and Evan Carruthers, who serves as managing partner.

As an aside, this fund is also specialized in the purchase and management of aircraft for leasing. It has a fleet of 400 aircraft, comparable to the giant IAG, which has 530 aircraft, and 835 engines for the aircraft. The European team at Castlelake, which leads the real estate investment strategy in Spain, is located in London and led by Eduardo D’Alessandro.

Its real estate developer Aedas Homes has some of the old team from Vallehermoso and plans to begin construction on around 1,700 homes sometime in 2017.

The vulture fund which was the fastest to make its bet on the Spanish real estate market is Lone Star. The fund, based in Dallas, and whose name refers to the one star on the Texas state flag, bought the real estate developer Neinor from Kutxabank for €930 million.  Lone Star proceeded to inject new land into the developer’s portfolio and restarted its residential construction business.

Lone Star then launched an ambitious plan to turn the renamed Neinor Homes into the country’s largest real estate companies, practically the only one with plans for developments throughout Spain, a far cry from the small regional developers that survived the crisis.

In addition, it was ahead of other companies on their way to a market listing, when it debuted last March, in what became the first initial public offering of a real estate developer in the Spanish market in a decade. That move also allowed Lone Star to divest 60.1% of the capital of a company that was valued by the market at €1.3 billion.

Neinor is expected to be another of the market’s leading developers to head to the stock exchange, together with Aedas, Vía Célere and Metrovacesa, controlled by Santander (61% of capital) and which is already studying a possible IPO.

Lone Star, which in Spain is run by the Argentine Juan Pepa, was created 22 years ago in Dallas, founded by fund manager John P. Grayken. That firm has launched 17 investment vehicles in which it has bought troubled assets and debt in much of the world.

THE HOUSING GIANT

The Blackstone fund, the largest real estate owner in the world, has created a housing giant in Spain from foreclosed properties and the purchase of toxic assets from banks. Its latest move was the acquisition of 51% of a joint venture, for 5 billion euros, which will manage 30-billion euros in property assets acquired from Banco Popular, making it the largest real estate company in the country, ahead of Sareb.

Blackstone was created in New York in 1985 and currently manages assets worth $370 billion. In Spain, it created Anticipa, a platform that manages assets acquired from banks, which already has 12,000 homes for rent. To manage them, it formed the socimi Albirana Propertis, which is listed on the Alternative Stock Market. It also owns Fidere, another socimi that manages the portfolio that the asset management company bought from the Municipal Housing Company (EMV) of Madrid.

In the field of bank servicing, which appeared as banks were looking to divest their problematic real estate assets, other funds have also been active, although some have already sold off, such as Kennedy Wilson and Värde with Aliseda. TPG remains in Servihabitat, the platform linked to Caixabank. The Californian vulture fund entered the market in 2013. That year, Santander also sold its platform Altamira to the New York-based Apollo fund.

Original Story: El País/Cinco Dias – Alfonso Simón Ruiz

Translation: Richard Turner

Apollo Gets Ready To Buy Property Developers & Hotels In Spain

14 March 2017 – El Confidencial

A new player has emerged in the Spanish real estate market. Apollo, one of the largest fund managers in the word, has decided to join the fray between Värde, Castlelake and Lone Star, and analyse the purchase of its own property developer, according to sources familiar with the entity.

The firm led in Spain by Andrés Rubio is tackling this strategy through its new fund (its third), which already has €2,700 million and which plans to raise up to €4,000 million. This money will be used to acquire real estate assets, NPLs and hotel portfolios in Spain, Italy, UK, Ireland and Germany. Our country could receive around €1,000 million of investment, given that Apollo is expected to continue its commitment to the hotel sector, into which it took a giant leap last December, when it acquired two portfolios from CaixaBank and Popular, and looks set to enter the property development business with a bang.

According to the same sources, one of the companies that is on the fund’s radar is Levitt, which has some of the best plots of land and fame in the sector. Its possible sale has been mooted in the market for a while, given the generational change that the group faces and the appeal of the company, which operates in the high-end segment.

Asentia, Colonial‘s former bad bank is one of the other companies that has been making a name for itself in the market; Acciona Real Estate has also been considering its options, which range from an IPO to the entry of a large fund into its share capital; whilst Procisa, the former property developer behind La Finca, has sold 40% of its offices to Värde and continues to control important developments on plots of land in Madrid (Pozuelo de Alarcón and Brunete), Huelva (Cartaya) and Lleida (Baqueira).

In fact, Apollo was previously involved in negotiations regarding a similar operation to the one that Värde ended up signing with the Cereceda family. But the rapid consolidation that has taken place in the market, with the creation of Aedas by Castlelake, the purchase of Vía Célere by Värde and the imminent debut of Neinor on the stock market, has convinced the fund that a window of opportunity has now opened up in the property development sector.

Apollo plans to invest this new €1,000 million fund over the next three or four years, during which time it wants to become a top-tier player in the property development sector, in line with the moves made by its competitors, and to create its own hotel platform.

In the residential sector, it intends to focus on buildable land, located primarily in Madrid and Barcelona, the two provinces where the incipient recovery is being felt most strongly.

In the tourist segment, in parallel to the strategy to purchase loan portfolios secured by hotel collateral, the fund is actively looking for well-located establishments to create a vacation platform along the coast and on the islands, comprising around 20 assets.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Värde Acquires 40% Of La Finca Global Assets For €103M

15 February 2017 – El Economista

The US fund Värde is making progress with its plans to consolidate its position within the Spanish real estate sector. Last year, it launched Dospuntos, with the aim of becoming one of the main residential property developers in the country, and now it has acquired a stake in the real estate company Procisa (recently converted into Grupo LaFinca), a move that positions it as a key player in the office market in Madrid.

According to industry sources, the fund has paid €103 million for a 40% stake in LaFinca Global Assets, the firm that owns the business-related properties of the real estate company, which is in turn controlled by the García Cereceda family.

Specifically, as a result of this operation, which was advised by Alantra, Värde has become the owner of a portfolio containing 230,000 m2 of rental space – with an occupancy rate of more than 90% – as well as 6,200 parking spaces in Madrid. The jewel in the crown of this portfolio is the La Finca Business Park in Pozuelo de Alarcón, where the real estate company owns the luxury urbanisation of the same name and where many important footballers and multi-millionaires live. The group’s most iconic assets include the Cardenal Marcelo Spinola office complex and the Martínez Villergas Business Park.

LaFinca Global Asset’s new phase started with a €155 million loan from a handful of financial entities, including Allianz Real Estate as the main lender. According to the firm, this long-term loan forms part of a financing arrangement worth €395 million, which will be used to renovate and improve its office assets, as well as to acquire new properties.

“Having a partner like Allianz Real Estate, with its long-term vision and financial stability, supports our company’s strategy”, said Susana García Cerceda, President of Grupo LaFinca.

For Allianz RE, which opened an office in Madrid last year, this represents its third real estate debt operation in Spain.

Original story: El Economista (by Javier Mesones and Alba Brualla)

Translation: Carmel Drake

Värde Will Start Building c.900 New Homes In Q1

11 January 2017 – Cinco Días

The new real estate company Dospuntos, which wants to become one of Spain’s major property developers, will start the year by marketing a significant number of new build properties in a sector that has started to wake up slowly, without any star players. “We are going to start 18 developments containing around 900 homes during the first quarter of the year”, confirmed Javier Eguidazu (pictured above), CEO at Dospuntos, a company controlled by Värde Partners.

These homes will be located in Madrid, Galicia, Andalucía, Castilla y León and Cataluña, primarily in large cities and metropolitan areas. In La Coruña, the real estate company already announced last month that it was beginning its first project there, known as Casa Vega, in the centre of the city. The company will also debut soon in Sevilla, Málaga, Valladolid, Barcelona, Leganés (Madrid) and Oleiros (La Coruña).

“The market has finally woken up. There is pent-up demand because hardly any new homes have been constructed over the last decade. Every property that comes onto the market is sold”, said Eguidazu regarding the recovery in the property development sector.

His company is looking to become one of the largest property developers in the country. After the real estate crisis, almost all of the major players disappeared – went bankrupt – or took time out whilst they waited for better times. Just a handful of companies such as Pryconsa, Vía Célere, local developers, cooperative managers such as Domo and new platforms linked to the banks (Aliseda, Altamira, Solvia…) continued to build at a slow pace. Other listed companies, such as Realia – controlled by the magnate Carlos Slim – and Quabit, are only resuming their business now. Anida, owned by BBVA, also strengthened its business at the hand of Manuel Jove, founder of the now bankrupt company Fadesa.

Dospuntos emerged in June 2016, after Värde purchased the damaged real estate business from the San José Group. It was created to construct around 7,000 homes on land coming from several sources: purchases by the US fund, inherited from San José and even some new acquisitions. “The company has financial muscle. In 2016, we spent €150 million on land”, said Eguidazu.

Along with Neinor Homes, owned by the Texan fund Lone Star, Dospuntos leads this new type of property developer, owned by overseas funds and interested in investing in the real estate recovery in Spain, now that the traditional players have disappeared (…).

The real estate company’s main shareholder is Värde, which holds more than 50% of its share capital. The fund from Minneapolis manages assets amounting to more than €10,000 million all over the world. It has been particularly active in Spain, with the acquisition of Popular’s credit card business, as well as half of that bank’s real estate arm, Aliseda, in an operation for which it teamed up with the fund Kennedy Wilson. Moreover, it has entered the office business of Procisa, the owner of the La Finca business park in Pozuelo de Alcorcón (Madrid).

As a shareholder of Dospuntos, Värde (which means “value” in Swedish) is accompanied by the funds Marathon and Attestor, as well as by banks such as Bank of America and Barclays.

From 2019, the company wants to reach a cruising speed of 2,000 new homes per year on average, according to comments made by Eguidazu at a presentation last June. By then, the company forecasts that it will be generating revenues of between €500 million and €600 million per year.

The shareholders plan to invest €2,000 million between 2016 and 2021, at an average rate of €400 million per year, of which €800 million will be allocated to buying more land on which to build homes. Over the long term, between 30% and 40% of the company’s resources will come from bank financing. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Procisa Group Undergoes A Corporate & Financial Makeover

30 December 2016 – Expansión

Procisa, the group owned by the Cereceda family, which in turn owns La Finca, the business and luxury residential complex, in Pozuelo de Alarcón (Madrid) has embarked upon a profound corporate and financial restructuring process involving: a capital injection amounting to €395 million; the entry of the US fund Värde; and the strengthening of its corporate governance.

In terms of the corporate changes, from now on, the company will be organised around the Grupo La Finca holding company, which will in turn own three separate companies: La Finca Global Assets, dedicated to the real estate business and to the operation of the high-end office market; La Finca Casablanca, which will construct the largest luxury residential development containing more than 500 homes; and La Finca Real Estate, upon which the group’s future development will hinge.

Under the framework of this operation, the US fund Värde, owner of Dospuntos (the former real estate division of Sanjose) and owner of a stake in Aliseda, Banco Popular’s real estate asset manager, has acquired 39% of La Finca Global Assets. The US private equity firm, which manages more than $40,000 million in assets around the world, has been one of the most active investors in Spain since the outbreak of the crisis.

Portfolio

By virtue of the agreement signed yesterday, Värde, which must have paid around €130 million for its stake, will become a shareholder of the current office buildings in the portfolio and of the new projects in this area of the business. In addition to the La Finca business park, La Finca Global Assets’s properties include a property located on Calle Marcelo Spínola – a business centre comprising seven seven-storey buildings – and another property on Calle Martínez Villergas, comprising three seven-storey buildings.

Meanwhile, the La Finca business park, covering 220,000 m2 of premium rental space, comprises 20 buildings, 16 of which are used as offices plus the remaining four, located in the centre of the complex, which are used to provide the necessary services to the users of these offices. The complex’s current tenants include technological companies such as Orange and Microsoft.

In terms of the injection of funds, the company has signed a financing agreement with a syndicate led by Société Générale, CaixaBank and Santander amounting to €395 million, which it will use to pay off existing debt and tackle new projects. According to the latest available balance sheet, Procisa’s debt amounts to €525 million.

Specifically, the subsidiary La Finca Casablanca is planning to construct a development containing 515 luxury and exclusive homes, a shopping and leisure centre, as well as sports facilities and a golf course, in the south of Pozuelo de Alarcón.

New directors

Meanwhile, the group owned by the Cereceda family has strengthened its corporate governance by hiring some new directors. Susana García-Cereceda, the current Chairman of Procisa and one of the heiresses of the family empire created by the businessman Luis García Cereceda, who died in 2010, will lead the holding company and each of its subsidiaries, as the CEO.

In addition, Grupo La Finca will hire Jorge Morán as the Vice President of the holding company. (…). Moreover, Värde will join the Board of La Finca Global Assets with the appointment of three board members. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Värde Given Green Light To Buy 40% Of La Finca Global Assets

14 November 2016 – Real Estate Press

In August, a judge suspended the sale of part of Procisa to the fund Värde, due to a family dispute, which left the operation up in the air. Now, the precautionary measures have just been lifted and the BOE has published its proposal for the carve out of the firm into three companies, which will allow the definitive sale to go ahead.

The agreement carves out Procisa into three companies: La Finca Global Assets, containing the office assets; La Finca Promociones y Conciertos Inmobiliarios, containing the residential assets; and La Finca Somosaguas Golf. Sources close to the operation indicate that this is the final step in the process for the agreement with Värde to be signed.

The new company that owns the office assets will be converted into a Socimi. For the time being, the consideration paid for the operation will not be revealed. Meanwhile, Procisa, founded by the late Luis García Cereceda, is being led by the second generation of the same family, in the form of Susana García Cereceda.

The new Socimi’s main asset is the La Finca business park in Pozuelo, constructed alongside the luxury residential urbanisation. The company contains 20 buildings, of which 16 are offices and the rest are used for social and commercial purposes. Tenants at the site include companies such as Microsoft, Orange and Accenture. The Hotel AC La Finca is also located there. This is one of the most sought-after business parks in Madrid, with an occupancy rate of almost 100%, according to market sources. The future Socimi will manage an office surface area covering 227,000 m2, which includes other office properties in addition to the complex in Pozuelo.

Original story: Real Estate Press

Translation: Carmel Drake

La Finca Goes On Market For €700M: A Chinese Fund Is Interested

22 September 2016 – Ok Diario

Procisa, the property developer behind the business and residential complex La Finca, located in the northwest of Madrid, has put the “For Sale” sign up. Its Board of Directors is now listening to offers for the purchase of 100% of the company’s share capital, which is currently controlled by the heirs of Luis García Cereceda, founder of the family empire who died in 2010. There are already several investors interested in negotiating the purchase of the group.

According to sources close to the company’s Board of Directors, the objective right now is to continue depreciating the assets and to close the sale before the crisis that the company is undergoing hinders the operation.

According to data from the Commercial Registry, the value of Procisa’s assets decreased to €890 million at the end of 2014 (the last year for which accounts are available), an figure that falls well below the more than €1,000 million recorded in 2010. In fact, according to the sources consulted, the firm is currently reported to be worth around €700 million, a figure that concerns the company’s directors.

The key behind the success of this operation is for the majority shareholder, Susana García Cereceda, to give her approval for the sale of 100% of Procisa, something which has been denied until now. In fact, in June, the General Shareholders’ Meeting approved the carve out of the company into several companies, to allow the US fund Värde, which is investing in the Spanish real estate market, to enter the business. The majority shareholder wanted Värde to acquire 40% of the office business and for the entirety of the residential business to remain in the hands of the García Cereceda family.

According to the plans designed by the main shareholder, Procisa’s assets were going to be distributed between the new company La Finca Global Assets (which was going to manage the rental of offices and retail premises), the company Finca Somosaguas Golf (which was going to focus on building a luxury residential area under the Casablanca brand) and La Finca Promociones y Conciertos Inmobiliarios (into which the other assets and debts from the current Procisa company were going to be integrated).

Nevertheless, that operation was blocked by the Commercial Court number 11 of Madrid, in light of the opposition filed by Yolanda García, the sister of Susana and owner of 49% of Procisa. It was in this context that the company’s change of strategy arose, which is now “to listen to offers” in order to complete the sale of all of the company’s share capital. (…).

According to sources, a Chinese investment fund is already willing to make an offer for Procisa, although the sources consulted preferred not to give any more clues about the deal so as not to jeopardise the potential sale. The trump card that the company’s Board of Director have to close the operation is the recovery of the Spanish real estate sector, and the fact that a number of major companies are located in La Finca, both Spanish and multinationals. In addition, the company owns a luxury residential area, which has great potential to appreciate over the medium term.

Original story: Ok Diario (by L. Ramírez and Jaime Acero)

Translation: Carmel Drake

Family War Between The Owners Of La Finca

24 August 2016 – Expansión

An open war is raging between members of the García-Cereceda family, owner of Procisa, the property developer of, amongst other assets, the exclusive La Finca business park in Madrid.

The carve out of the property developer and the subsequent entry of the US fund Värde has represented a new chapter in the battle between Susana and Yolanda García-Cereceda, both daughters of the founder of Procisa, Luis García Cereceda, who died in 2010, and both heiresses of the family empire.

As a result of this latest encounter, a ruling from Commercial Court number 11 in Madrid, on 18 August, decided to partially adopt the injunction requested by Mercedes López, the mother of Susana and Yolanda García-Cereceda, regarding the total carve out of Procisa.

The carve out of Procisa

The carve out was approved at a general shareholders’ meeting held on 26 July 2016. Specifically, the shareholders approved the decision to divide Procisa’s assets between La Finca Global Assets – owner of the carved out company’s real estate assets, which manages the leases of the offices and retail premises; La Finca Somosaguas Golf – which included ownership of a urban development area for luxury residential use that can be executed immediately, known as Casablanca – and finally, La Finca Promociones y Conciertos Inmobiliarios (owner of Procisa’s remaining assets and liabilities).

This carve out plan also involved the entry of the US fund Värde into the office business, as Expansión revealed in April.

This line of business is the group’s most profitable and it includes, amongst other assets, La Finca business park, located in Pozuelo de Alarcón, whose tenants include multinationals such as Orange and Microsoft.

Entry of Värde

Procisa, chaired by Susana García-Cereceda, had reached an agreement to sell 40% of its office business to the fund Várde, with Procisa retaining ownership of 100% of the residential business.

According to that plan, Susana García-Cereceda would lead the two areas. The entry of new members with experience and background in the sector was also planned, to complete the organigram of the new real estate company.

Nevertheless, this decision had not been approved by all of the company’s shareholders. Some voices against the negotiations argued that the complete carve out had not been referred for consultation to the Tax Authorities or other tax bodies to confirm the existence or otherwise of tax benefits in terms of exemption from Corporation Tax.

According to sources close to the opposing shareholders, if there are no tax benefits in terms of Corporation Tax, then the younger daughter of García-Cereceda, Yolanda, and her children, would be “seriously harmed”.

The legal ruling on 18 August requires the Commercial Registrar to suspend the inscription of the corporate operation agreed at the general shareholders’ meeting in July. This decision, therefore, hampers Värde’s entry into Procisa’s office business. (…).

According to the ruling, the suspension must remain in force until the Tax Authorities have issued their binding opinion regarding the existence or otherwise of tax benefits in terms of Corporation Tax. (…).

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Värde Creates A New RE Company: Dospuntos

21 June 2016 – Cinco Días

One of the real estate firms that suffered during the real estate crisis has been reborn under a new name and with new owners. Värde Partners has created a new property developer, Dospuntos, out of the San José Desarrollo Imobiliarios structure, which it acquired from the San José Group last year. The US fund has an ambitious plan to turn the company into one of the major players in the sector as the incipient recovery starts to heat up.

“Värde and the rest of our shareholders believe in the recovery of Spain and in the growth of the real estate sector”, said Javier Eguidazu (pictured above), CEO of Dospuntos, who joined the firm in September from the Valdebebas urban development in Madrid. According to the Director, Värde and its partners paid more than €1,000 million to purchase the real estate company from San José, basically the amount equivalent to the value of its debt, and the debt clock was reset when the agreement was signed.

The company now owns land from the former subsidiary of San José, as well as from Várde, which was a dynamic and discrete purchaser of land during the recession in Spain. “We now have 800,000 sqm of land, on which we will build 7,000 homes”, said Eguidazu. “Värde is a very active operator in the market and is always studying deals. It is our majority shareholder, but that does not mean that it constructs all of its developments through our entity, nevertheless, it is likely that it will”, said the Director.

The major shareholder of this new real estate company is the US fund, with a stake of more than 50%; it manages assets worth more than €10,000 million all over the world. Värde has been particularly active in Spain in recent years, with the acquisition of Popular’s credit card bsiness, as well as half of the real estate firm Aliseda, from the same bank, in an operation that it entered into together with the fund Kennedy Wilson. Moreover, it is currently holding negotiations to acquire a stake in Procisa’s office business.

Värde (which means “value” in Swedish) is accompanied in its shareholder capacity in Dospuntos by the funds Marathon and Attestor, as well as banks such as Bank of America and Barclays.

The shareholders plan to invest €2,000 million between 2016 and 2012, at an average rate of €400 million per annum, of which €800 million will be allocated to continuing to acquire land on which to build homes. Over the long term, 30% or 40% of the company’s resources will come from bank financing. “Our aim is to create the best land bank in the country and to be the most profitable property developer in Spain”, said Eguidazu. The firm has already invested €100 million in land and another €55 million launching developments. (…).

The new property developer plans to put its first 1,300 homes up for sale in 2018, given that it is already starting to construct its first properties in Madrid, Málaga, Sevilla and A Coruña. Its other target locations include Pamplona, Valladolid, Zaragoza, Sevilla, Barcelona and Tenerife. From 2019, it plans to reach a cruising speed of 2,000 homes per year on average. By then, the company also expects to be generating revenues of between €500 million and €600 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake