Blackstone Considers Buying Neinver from the Losantos Family for €500M

23 January 2019 – El Confidencial

Neinver, a property developer and operator of shopping centres, specialising in outlets – focused on offering discounted products – is up for sale and the US fund Blackstone is one of the buyers that is evaluating the operation. The Losantos family is asking around €500 million for the company, which has become one of the major operators in the shopping centre sector in Europe, and which would fit well into Blackstone’s portfolio given the stable rents generated by its properties and land, according to explanations provided by sources in the real estate sector.

Spokespersons from Neinver consulted about the negotiations indicated that “they decline to comment on rumours” regarding the sale operation, one of the largest underway in the sector in Spain this year from a corporate perspective.

Nevertheless, other financial sources have assured that the Losantos family has entrusted the sale of the company to Credit Suisse, which has drawn up a sales book that it has been promoting since the end of the year and which is being considered by several funds.

Blackstone is the favourite because it has already acquired assets from Neinver. In November last year, the property developer placed a package of industrial warehouses and logistics assets with Blackstone for €290 million. Therefore, this fund, the largest overseas investor in the Spanish real estate sector, is an old acquaintance of the Losantos family.

Neinver is chaired by José María Losantos del Campo. It is the largest operator of outlet centres in Spain and Poland, where it operates under two own brands: The Style Outlets and Factory. It has developed some of its assets in association with the fund TH Real Estate. In total, it has promoted and managed 16 outlet centres, and six shopping centres and retail parks (…). It has a presence in seven countries, including France, Italy, Germany, Portugal and the Czech Republic.

Neinver in numbers

Neinver recorded revenues of €93.6 million in 2017, according to the consolidated accounts filed with the Mercantile Registry. That figure represented an increase of 27% compared with the previous year.

Nevertheless, the strong performance in terms of sales was not reflected in its profits. Neinver is selling more but earning less. In 2017, its net consolidated profit amounted to €4.7 million, a third of the €16.1 million that it earned in 2016. The decrease in profitability was due in large part to the projects underway and its indebtedness.

According to the group’s consolidated accounts, the gross debt at the end of last year amounted to €466.3 million, €30 million more than during the previous year, “due to debts stemming from the new companies incorporated into the Neptune joint venture”. Neptune is the joint venture owned by Neinver and TH Real Estate.

Valuations

The €500 million asking price is without the debt. The book value of the company’s assets amounts to €913 million, according to Neinver’s own accounts. The main appeal of the company is the revenue stream stemming from the rental of its assets (…).

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

Urbas’s Share Price Rallies Following the Publication of its 5-Year Strategic Plan

8 January 2019 – Idealista

Few events are as long-awaited by investors and analysts as the presentation of the strategic plan of a listed company. Above all, when that company has had a difficult year on the stock market, such as the case of Urbas. The real estate company, a classic amongst the ‘small cap’ or companies with a small market capitalisation in the Spanish market, is leading the first stock market rally of 2019 in the sector after losing almost 75% of its value in 2018.

During the first week of the year, Urbas’s share price has recorded a large rise of 30%. In reality, the reaction began during the final week of last year, when the group revealed the broad strokes of its strategy for the period 2019-2024. Its plan pivots around a reduction in the level of debt, generating value from its assets and the payment of a dividend from 2022.

The market has picked up on the company’s message, which with a land portfolio of almost 18 million m2, also wants to provide a new boost to its property developer business. But its number one objective is to reorganise its debt balance, which amounted to €194 million at the end of the third quarter, up by 3.7% compared to the same period a year earlier. The figure contrasts with the just over €16 million that the company is currently worth on the stock market.

The objective is to reduce the debt figure to €86 million. To achieve that, Urbas faces the challenge of moving forward with the dual negotiations that it is holding on the one hand with its creditor banks and on the other hand with Sareb to refinance its indebtedness to the necessary levels to allow it to handle new investments.

Therefore, the group’s plans are aggressive, as shown by the fact that Urbas wants to finish the first year of its new business plan with revenues of more than €20 million and a net profit of more than €14 million. By the end of the period, in 2024, the forecasts skyrocket. But, today, the reality of the group is very different. Until 30 September, Urbas lost €5 million due to the effect of the financial interest adjustment made and its revenues slightly exceeded €2 million.

In any case, the sharp rise in Urbas’s share price so far this year should be considered with the utmost caution. It is a very small security with very limited liquidity, which means that its movements may be brusque and fast, both up and down. In recent years, it has recorded large fluctuations. With the sole exception of 2017, the share price has always moved by at least 33% in each of the last nine years (…).

Original story: Idealista 

Translation: Carmel Drake

Vitruvio Submits €32M Bid to Acquire Única Real Estate

8 November 2018 – Eje Prime

Vitruvio is planning to grow from inside the Alternative Investment Market (MAB). The Socimi chaired by Joaquín López-Chicheri has submitted an offer amounting to €31.96 million for Única Real Estate, the manager that is also listed on the same exchange, according to a statement filed by the company with the MAB.

The bid covers 100% of Única’s share capital, for which the Socimi has established a payment of approximately €27.14 per share, on the basis of the number of shares in circulation to date and the valuation that Vitruvio has determined for the company.

The team led by López-Chicheri has agreed that the payment may be made both in cash as well as by exchanging shares in Vitruvio. Each shareholder that participates will have to accept a share exchange as the payment form for at least 25% of the shares that they sell and a maximum of 75% in cash, explained the company.

Moreover, the Socimi is offering Única the possibility of postponing the appointment of a representative to its Board. After learning about the interest of the listed company in purchasing it, the operation must be approved at the General Shareholders’ Meeting by 51% of Vitruvio’s shareholders, once the favourable reports have been received from an independent expert designated by the Mercantile Registry and following the legal, technical and financial review.

Vitruvio: profits up by 22% to June to €580,000  

The Socimi, specialising in the management of office buildings, homes and commercial premises, recorded a profit of €578,459 during the first half of 2018, up by 21.8% compared to the same period in 2017.

Supported by its 288 investors, of which only one owns more than 5% of the company, Vitruvio owns around thirty real estate assets located all over Spain. Nevertheless, the Socimi has a clear focus on Madrid, given that the Spanish capital accounts for 79% of its portfolio. The other assets are located in Bizkaia (10%), Barcelona (4%) and a number of other cities ranging from Palencia to Salamanca, and including Ourense, Badajoz and Zamora.

Original story: Eje Prime 

Translation: Carmel Drake

VBare’s Revenues & EBIT Rise by 28% & 46%, Respectively, in the 9 Month to September

2 November 2018 – Eje Prime

VBare Iberian Properties saw its net result for the first nine months of the year decrease YoY. The Socimi recorded a profit of €1.84 million to September, down by 15.6% compared to the same period in 2017, according to a statement filed by the company with the Alternative Investment Market (MAB).

Similarly, the company recorded gross revenues from rental income of €1 million between January and September, exceeding the turnover obtained during the same period last year by 28%. Meanwhile, its EBIT was 46% higher at €611,000.

Currently, VBare’s portfolio has an appraisal value of €35.1 million. So far this year, the company has acquired 37 homes and two commercial premises in the towns of Móstoles, Málaga and Madrid for €3.7 million. The Socimi also undertook a capital increase in June amounting to €3.2 million.

At the beginning of October, the company also completed its largest investment to date in a single asset. That involved the purchase, for €10.5 million, of a residential property located in Madrid. The building purchase, which has a surface area of 3,285 m2, was financed by the company through a mortgage loan amounting to €5.25 million and own funds.

VBare is a real estate investment vehicle specialising in the acquisition and management of residential assets for their rental. The company was constituted in March 2015 with the aim of generating high returns for its shareholders through the implementation of a value-added strategy and benefitting from the existing opportunities in the Spanish residential market.

Original story: Eje Prime 

Translation: Carmel Drake

Neinor Evaluates Rental Market but Insists on Maintaining its Margins

31 October 2018 – El Economista

Neinor Homes sees a clear business opportunity in the rental market in Spain. Nevertheless, it is not going to enter the segment if doing so would reduce its profit margin.

That is according to Juan Velayos (pictured above), the CEO of the firm, who indicates that Neinor “must be clear about what it is and what it wants to be, and we want to be a property developer, and as such, our profitability is sacred”. On that basis, Velayos recognises that “there is a clear business opportunity in that sector and very few companies have the capacity that we have to produce rental homes”.

In fact, he says that “many players who want to take positions in the rental market are approaching us, and although I am not going to close an operation tomorrow, we are evaluating lots of options, whenever they are coherent with our business model. Common sense tells me that we ought to be capable of meeting that need in the market and for the business to be profitable for Neinor”, said Velayos.

The property developer, which had managed to multiply its operating EBITDA by four by the end of September, to reach €9.5 million, expects to close this year in the black, “in a comfortable way”, highlights Velayos, who believes that the firm’s EBITDA at the end of December will amount to around €50 million, in line with the consensus of the market.

At the end of September, the firm had recorded a loss of €1.2 million and revenues of €156 million. “The most interesting aspect is that €100 million of that turnover came from the development arm, whilst €32 million came from the Legacy business and €23 million from Servicing”, highlights the director.

Neinor has committed to handing over 1,000 homes this year, spread across 14 promotions. “Nine of them have already been handed over and during the last quarter, the keys to the remaining five will be handed over, given that they now have their final construction certificate”, specifies the director, who assures that the 1,000 units are almost all pre-sold. “We only have 2% left, which we have not been marketing because we are waiting until the end to maximise the price of the best units”.

“We have been on a journey that has involved a lot of work over the last three years and now we are starting to hand over a significant volume of homes, which actually represent more than all of our major competitors put together. Neinor started first and so now we are reaping the rewards”, highlights Velayos.

Specifically, the company has an order book comprising 3,049 homes, which represent a volume of pre-sales of €1.019 billion. Moreover, comparing units with the same characteristics, the property developer has managed to achieve an 8.2% increase in prices and has also increased its margin to 28%.

That has allowed the firm to handle rising construction costs, which have increased by 3.8%, without any problems. Those costs “are expected to continue to rise, by 6%, but we will also seek to increase our margins”, says Velayos.

For next year, the company has set itself the target of handing over 2,000 homes in 31 developments where building work is already underway. “We also have some very solid pre-sales figures for 2019 of 78%; and the rest are not being marketed, given that the best way of protecting our margin is to wait to sell those units”, explains the CEO of Neinor (…).

Currently, the company has one of the largest land banks with capacity for 13,700 homes (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Solvia: Sabadell Puts its Real Estate Subsidiary Up For Sale

17 October 2018 – El País

Sabadell is going to listen to offers from several real estate vulture funds that are interested in acquiring its subsidiary Solvia, the manager of its properties. The entity, which declined to comment, has now entrusted the sales process to an investment bank. In the summer, Jaime Guardiola, CEO of Sabadell, justified holding onto Solvia due to “the great contribution it makes to the bank”, but now he is taking a step towards selling it. Sources in the sector indicate that Sabadell wants to strengthen itself and take advantage of the good climate still being enjoyed in the real estate market.

The banks are getting rid of properties before the booming market deflates. They are selling not only portfolios, but also the companies that specialise in the management of those real estate assets, known in the sector as servicers. Until now, it was typical for the banks to include their servicers in the package of asset sales: that is what CaixaBank did with Servihabitat and BBVA with Anida.

But, Sabadell wanted to get more mileage out of its subsidiary and so decided not to sell Solvia when it divested around €12.2 billion of its properties to Axactor, Cerberus, Deutsche Bank and Carval. Nevertheless, Sabadell has now taken the definitive step and is open to offers from the interested vulture funds. According to sources in the market, the interested parties include Cerberus and Oaktree.

148,000 assets under management

Based on data as at May 2018, Solvia is one of the leaders in the real estate services market in Spain, with a portfolio of 148,000 units in assets under management, whose value exceeds €31 billion, according to the entity. In a report from Goldman Sachs, Sabadell indicates that Solvia’s annual profit amounts to €40 million.

The company has extensive experience in the marketing of new build developments, given that it has placed more than 10,000 homes in new developments on the market since 2015. At the moment, Solvia has 55 developments up for sale. In terms of rental, as of October, the firm was managing 32,000 assets, of which 74% belong to Sabadell. Solvia also works with other clients, including Sareb.

The report from Goldman Sachs noted that Sabadell could sell Solvia as a way of raising its capital ratios, with little detriment to its income statement.

Market sources agree with these arguments to explain the step taken by Sabadell. On the one hand, as the European Central Bank has indicated, entities must accelerate the sale of all businesses relating to the real estate sector. The banks are aware that times of lower economic growth will come and understand the importance of taking advantage of the appetite that the large international funds still have for Spanish property.

On the other hand, the sale of Solvia will also result in cost savings, a reduction in the workforce and, above all, lower capital consumption. In the last quarter, between March and June, Sabadell’s capital ratio decreased by one point, from 12% to 11% for its CET 1 fully loaded capital ratio (the highest quality indicator). The limit on the basis of which the ECB applies severe measures is 10.5%.

This decrease was due to the problems that Sabadell has been facing with its British subsidiary TSB, which was left without a service for weeks. Between March and June, the bank lost €138 million in provisions against real estate portfolios and the problems at TSB.

Original story: El País (by Íñigo de Barrón)

Translation: Carmel Drake

Aedas Homes has a Landbank Covering 4+ years of Visibility

8 October 2018 – Nasdaq

Aedas Homes, a leading property developer in the new real estate cycle in Spain, already has enough land in its portfolio to cover deliveries until 2022, as well as a significant part of 2023, thereby confirming the delivery targets set out in its IPO prospectus. The company’s landbank (close to 90% is classified as ready-to-build) will allow it to develop up to 14,521 homes in Spain’s key residential markets and is considered by analysts to be the best in the country.

So far in 2018, the publicly traded company, with CEO David Martínez at the helm, has completed the construction of 222 homes scheduled for delivery this year, 190 of which have already been sold.  As of August 31, the company had 6,287 active units, 55% more than in December 2017, and of those, 1,623 were already under construction. These figures reflect the strength of the property developer’s operating capacity during its first year.

In 2019, the developer plans to deliver almost five times as many homes, with a delivery target of 1,055 residential units; 1,071 homes are currently under construction and 761 have been sold. In 2020, Aedas Homes will deliver 1,986 homes and reach its cruising speed in terms of launches (3,000). The plan for 2021 is to deliver 2,438 homes and begin 2,471 new projects. 2022 will mark the moment when the developer reaches its cruising speed in terms of deliveries, with plans to put 3,063 homes in the hands of customers and launch another 3,000. In 2023, the number of homes being delivered will reach 3,326.

Martínez highlighted the company’s strict compliance with the goals announced at its IPO, noting that the company returned a profit one year ahead of schedule. Specifically, the property developer earned €3.7 million during the first half of 2018, making it the first of the new large developers in Spain to become profitable, and doing so only eight months after being listed on the Madrid stock market.

“We designed a realistic business plan, meaning that we will reach our targets in the coming years: by 2020, for example, we will have delivered more than 3,200 homes. Right now, we have almost 6,300 active units across 117 developments which gives us the visibility we need in terms of our objectives,” Martínez explained.

About Aedas Homes

The property developer Aedas Homes became a listed company on 20 October 2017 in Madrid, with a market capitalization of over €1.5 billion. Aedas is an industry leader at the national level and aims to play an important role in the new cycle of the Spanish real estate sector, which must be marked by professionalism and an adherence to rigorous standards.

Aedas Homes has a fully permitted residential landbank with more than 1.5 million buildable square metres (the highest quality landbank in Spain, according to analysts). This will permit the development of 14,500 residential units in the key markets, and their surrounding areas (both in terms of real estate and finance) where Aedas operates: the Centre, Cataluña, the East & Mallorca, Andalucía and the Costa del Sol.

Original story: Nasdaq 

Edited by: Carmel Drake

Colonial Earns €254M in H1 Following the Integration of Axiare

30 July 2018 – Eje Prime

Colonial recorded a net attributable profit of €254 million following the merger of Axiare. That represented a decrease of 42% for the Catalan real estate company, although it did increase its net recurrent profit, which excludes the impact of the merger, by 12% to €41 million, according to a statement filed by the company with Spain’s National Securities and Exchange Commission (CNMV).

The Socimi led by Pere Viñolas recorded revenues from rental income of €170 million to June, up by 21%. Meanwhile, the value of Colonial’s asset portfolio amounted to €11.19 billion, up by 29% with respect to the same period last year.

In terms of its value on the stock market (the group is listed on the main exchange), the new Colonial, following the integration of Axiare, achieved a market capitalisation of more than €4.4 billion at the end of the first half of the year.

Original story: Eje Prime

Translation: Carmel Drake

Quabit Generated Profits of €1.1M in H1 2018

27 July 2018 – El Economista

Quabit Inmobiliaria recorded a net profit of €1.1 million during the first half of the year, compared with losses of €3.5 million during the same period in 2017, according to information submitted by the company on Friday to Spain’s National Securities and Exchange Commission (CNMV).

The firm’s net turnover amounted to €9.1 million during H1, which more than tripled the €2.8 million recorded a year earlier; and the operating result entered positive territory, amounting to €3.6 million.

The real estate firm closed land operations amounting to €24 million, spanning a buildable surface area 85,130 m2, during the first six months of the year.

In total, since kicking off its growth plan in 2017, Quabit has invested €193 million in plots to build almost 4,850 homes, which means that it has already fulfilled 75% of its target to promote 7,900 homes by 2022.

As at 30 June 2018, the firm’s residential portfolio comprises 3,237 homes, which will generate an estimated turnover of €672 million that will be reflected in the income statement as they are handed over in 2018 and 2019. In June, handover began of 116 homes on the Quabit Aguas Vivas urbanisation in Guadalajara, and the firm will finish the year with a total of 215 homes delivered.

The group highlighted that it will see the sale of almost 1,000 homes in 2019 before it reaches its “cruising speed” of 3,000 deliveries per year in 2022.

Original story: El Economista 

Translation: Carmel Drake

Solvia Acknowledges That it Will Have to Generate Value from Solvia “Sooner or Later”

27 July 2018 – La Vanguardia

The CEO of Banco Sabadell, Jaime Guardiola, has acknowledged that “sooner or later”, he will have to generate value from Solvia, highlighting the “great job” that the entity has done and how “proud” he feels of the servicer.

That was according to the bank’s most senior executive at the presentation of Sabadell’s half-year results, where he reported that the entity has recorded a net profit of €120.6 million, down by 67.2% compared to the same period a year earlier, due to the provisions recognised as a result of the reduction in problem assets and the migration costs of the platform of TSB, its British subsidiary.

“Solvia not only serves assets on the bank’s books but also those of other clients such as Sareb. Beyond its financial value, it has a great industrial value, with some great professionals with a very different profile from those in the banking sector”, he specified.

In Guardiola’s opinion, Solvia is one of the bank’s entities that has done “a great job”, and so if at any time this value were to be realised and recognised, then selling the asset could become an option, although currently, it contributes in a positive way to Sabadell’s accounts.

Recently, the entity chaired by Josep Oliu disposed of four portfolios comprising problem assets with a gross value of €12.2 billion, which were awarded to the funds Axactor, Cerberus and Deutsche Bank, together with Carval.

The day on which it announced the sale of the largest batch of assets, worth €9.1 billion, Sabadell reassured the market that Solvia would continue to form a critical part of the bank and would continue to provide integral management services of the real estate assets subject to the operation on an exclusive basis.

Original story: La Vanguardia 

Translation: Carmel Drake