Tag: Procisa

Procisa To List La Finca Business Park As A Socimi

12 May 2016 – Cinco Días

The real estate company Procisa is finalising a major corporate restructuring process, which will culminate in the IPO of its office business. The company, renowned for having constructed the luxury La Finca urbanisation in Pozuelo de Alarcón (Madrid) will separate its activity into two companies. The residential development business will be called La Finca Procisa and the RE asset business will be called La Finca Global Assets.

The new RE asset (offiec) company will be converted into a listed Socimi, according to sources familiar with the operation. These types of companies have the advantage of being exempt from corporation tax, in exchange for having the obligation to distribute dividends every year. Like all Socimis, La Finca Global Assets will have a period of two years to debut on the stock market.

From the beginning, the Socimi will benefit from having Värde Partners as one of its shareholders – the US fund is currently finalising the acquisition of a 40% stake in the real estate company. The fund, created in Minnesota (USA) in 1993 has been very active in the Spanish market in recent years. (…). The consideration to be paid by Värde in this operation has not been revealed, but the deal is expected to close within the next few days.

The company, founded by the late Luis García Cerceda, is now being led by the second generation – Susana García Cereceda is the Chairman, and it controls the property developer through the holding company Michigan 42. The real estate company recorded revenues of €83.8 million in 2014, the most recent figures available in the registry, and losses of €19 million, along with long-term debt of €511 million.

The new Socimi’s main asset is the La Finca business park in Pozuelo, constructed alongside the luxury residential urbanisation where several footballers live, including Cristiano Ronaldo, Karim Benzema and Fernando Torres. The complex comprises 20 buildings, including 16 offices.

Tenants include companies such as Microsoft, Orange and Accenture. The Hotel AC La Finca is also located there. It is one of the most sought-after business parks in Madrid, given that it has just 0.3% of free space, according to market sources (…).

The future Socimi Finca Global Assets will manage a surface area of offices covering 227,000 sqm. As well as the complex in Pozuelo, the company also owns other office buildings, which will be included in the operation. These include the Marcelo Spínola business centre, constructed in 1991, comprising seven buildings.

In the Méndez Álvaro area, the company owns the Torre Suecia, which is currently leased to the technology firm Ericsson. Close to the A-2, it manages the Martínez Villergas business centre, which houses, for example, Warner’s headquarters in Spain. Moreover, it owns other office buildings on the sought-after streets of Serrano and Almagro.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Värde Finalises Acquisition Of 40% Of La Finca Business Park

28 April 2016 – Expansión

Procisa– the real estate company owned by the García Cereceda family – is finalising an agreement with the American fund Värde Partners to sell it a 40% stake in its office business, which includes, amongst others, assets in the exclusive La Finca Business Park, located in Pozuelo de Alarcón (Madrid), according to sources in the sector. (…)

Procisa, the group that specialises in offices and luxury residential developments, recently constituted a company under the name Grupo La Finca and divided its business into two distinct areas: one operating in the office segment, which is where Värde will acquire its stake; and the other operating in the residential business, which will continue to be fully owned by Procisa.

Susana García Cereceda will continue to lead the new Grupo La Finca, where she will serve as CEO, the same role that she currently performs in Procisa’s family business.

In the same way, García Cereceda will lead the two business lines into which the group has been divided.

To complete the organigram of the new real estate company, it is expected that new members with experience and background in the sector will join the company over the next few months.

Residential business

In terms of the residential business, Grupo La Finca wants to expand through new housing developments, as well as in the exclusive development in Pozuelo de Alarcón, next to the Parque Empresarial. The main features of this urbanisation include security, privacy and exclusivity. The group’s intention is to develop a new complex, to complement the detached and terraced houses that currently comprise La Finca.

With its upcoming investment in La Finca Global Assets (the name of La Finca’s office division), Värde Partners, which currently controls the real estate division of Grupo San José, with a 51% shareholding, and which also owns a stake in Popular’s servicer Aliseda, will take a leap into the high standing office business, which will allow it to expand its presence in the commercial and professional business segment in the future.

The private equity fund Värde Partners has been one of the most active investors in Spain since the crisis began. Its first major operation was closed last August, when it acquired 51% of the real estate company San José to construct 1,500 homes in Spain.

In 2014, it purchased 51% of Banco Popular-e’s card business, whereby the entity recorded profits of more than €400 million.

Moreover, a year earlier, it acquired, together with Kennedy Wilson, the real estate arm of Popular, Aliseda, for approximately €800 million. At the global level, the fund, founded in Minnesota in 1993, manages more than USD 40,000 million and has 200 employees around the world, of which 65 are professional investors with more than 12 years of experience.

From now on, its assets in Spain will include La Finca Global Assets, whose assets comprise not only the La Finca business park, but also other iconic buildings owned by Procisa, including a business centre comprising seven, 7-storey buildings on Calle Marcelo Spínola and another property comprising three, 7-storey buildings on Calle Martínez Villergas. (…).

Meanwhile, the park in La Finca, has a surface area of premium leasable space covering 27,000 m2, comprising 20 buildings (16 offices and 4 for the provision of services for use by office workers). Current tenants include companies such as Orange and Microsoft. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

TPG & GS Buy Loan Portfolio From Caixabank For €240M

23 December 2015 – El Confidencial

TPG and Goldman Sachs have managed to close one of the largest debt operations of 2015 just before year end. They have just acquired a portfolio of unpaid property developer loans (Project Atalaya) from Caixabank, an entity that has been particularly active in this kind of divestment during the second half of the year. It is understood that the consideration paid amounted to €240 million.

In addition to Atalaya, the bank led by Isidro Fainé (pictured above, right) has also managed to successfully close the sale of Project Tourmalet, acquired by Blackstone for almost €800 million, as well as Project More, another €700 million of non-performing loans, which sparked interest from several international funds and which ended up being acquired by Cerberus.

In total, as a result of these three operations, the Catalan entity has succeeded in transferring almost €2,300 million of debt from its balance sheet during the second half of the year alone, a figure that makes it the most active entity during the period for this type of operation. That is unless there is a last minute surprise from Bankia, which has withdrawn its plans to close the sale of Big Bang this year.

The funds that are interested in acquiring the €4,800 million that comprise the Big Bang portfolio have demanded that the bank led by José Ignacio Goirigolzarri slice it up before they can reach any agreement. This request has forced the entity to recalculate its numbers, which has delayed the completion of the operation, which was expected to be the largest in 2015.

As a result, Caixabank has been the star of the year for this type of operation, to the extent that the three portfolios that it has sold represent some of the largest banking operations closed this year. In fact, if we take the data as at the end of Q3 as the reference point (the most recent official statistics), then the bank has reduced its portfolio of loans to property developers by 30%, which has played a crucial role in enabling it to lower its default rate to 8.7%, compared with the sector average of 11%.

Atalaya is the second major operation that TPG has closed with Caixabank, given that two years ago it also acquired 51% of Servihabitat from the Catalan entity for €189 million, an operation that allowed the US fund to take over the management of the entity’s real estate services for a period of ten years.

Meanwhile, the most important operation involving Goldman Sachs in the Spanish real estate sector in recent times has been its purchase of almost 3,000 flats from IVIMA, together with Azora, in the Summer of 2013, for €201 million. But the US entity is also very active in the analysis of these kinds of operation. For example, it was on the brink of signing an agreement to acquire Procisa, the property development company behind La Finca (in Madrid), which is suffering from a significant debt problem. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

The Cerecedas Seek Financial Partner To Buy 30% Of Procisa

3 June 2015 – El Confidencial

Procisa, the real estate company made famous for developing the luxury La Finca estate is looking for a financial partner to provide the financial resources that it needs to continue with its other developments.

At a time when the interest of international funds in the Spanish real estate market is being called into question, one of the country’s iconic property developers is attracting interest from several overseas investors. Procisa, the company owned by the Cereceda family, which was made famous for its development of the luxury La Finca estate, is negotiating the sale of up to 30% of its share capital and is holding talks with several institutional investors.

The process, which is being managed by N+1, has been on the radar of the large players in the sector for several months – they see this as an opportunity to invest in a company that owns some of the most important plots of land in the capital.

After initially exploring the option of an IPO, which was dismissed following analysis with Citi, the real estate company has made progress in its talks with a small number of funds to which it has proposed the deal, with the clear message that their role will be limited to one of financial partner.

In line with the deals closed by other companies in the sector – GMP sold a 30% stake to GIC, and Acciona agreed to allow KKR to join as an investor – Procisa plans to form an alliance with a major investor, which will take a minority stake, but which will provide the financial resources the RE company needs to continue with its promotions.

N+1 has knocked on the doors of giants such as Goldman Sachs, JP Morgan, Cerberus, Bank of America, KKR and Blackstone to propose the deal to them. They could end up acquiring a stake of less than 30%, but this would be represent a historic milestone for this family company, led by Susana Cereceda, following death of her father, Luis Cereceda García, five years ago.

(…)

A RE giant, heavily dependent on bank financing

With assets of €900 million, own funds of almost €200 million, debt amounting to €600 million and losses of €13 million in 2013 (the last year for which official results are available), the company is looking for a financial partner, after it reached an agreement with its lender banks last year to accommodate a loan amounting to €400 million, dating back to December 2009 and after it consummated the merger with Agruva and Luarce, some of the other companies through which the Cereceda family has constructed its real estate empire.

(…)

During these talks, the banks imposed a series of conditions on Procisa, which explains why the Cereceda family is now keen to find a financial partner that will allow it to resume its activity, after years of decreasing results and the creditors’ sword of Damocles hanging over its head.

(….)

As well as La Finca, Procisa is also the owner of Parque Empresarial La Finca, an office complex on Calle Cardenal Marcelo Spínola (Madrid), as well as several office buildings spread across the capital and it is planning the development of two replicas of its famous Somosaguas development in La Romana (Dominican Republic) and Cartaya (Huelva).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake