Tag: Project Empire

Blackstone to List New Socimi with 4,000 Rental Homes Purchased from Sabadell

29 May 2018 – El Confidencial

One of the first funds to bet on the boom in rental housing in Spain, Blackstone, is on the verge of listing its fourth Socimi to specialise in this market, an area that is really blossoming.

The Socimi in question is Torbel Investments, a vehicle that primarily comprises the so-called Project Empire, a portfolio containing almost 4,000 homes, parking spaces, premises and storerooms that Banco Sabadell sold to the US fund two years ago.

At the time, the operation was worth around €600 million, although in net book value terms, Blackstone has recorded the assets at €113 million, according to Torbel’s most recent official accounts, corresponding to the year ending 2016.

Currently, the fund is on the home stretch of the procedures necessary with the CNMV – Spain’s National Securities and Markets Commission – to list the vehicle, whose natural destination is the MAB – Alternative Investment Market – given that Blackstone’s objective is, simply, to fulfil the demands of the Socimi regime to list the company so that it can benefit from the tax advantages.

That point means that this placement is completely different from the one being finalised by Testa, another giant in the rental housing sector in Spain, which is expected to make its debut on the main stock market in June, with €1.834 billion in assets.

Plethora of Socimis

Since it acquired these homes from Sabadell, Blackstone has managed all of the flats through its own servicer company, Anticipa, the firm that is behind the day to day operations of all of the large residential acquisitions carried out by the fund.

By geographical distribution, both in terms of property value and rental income, the main markets in which the Socimi has a presence are Madrid, Alicante, Murcia and Valencia, in other words, regions where the former entity CAM – Caja de Ahorros del Mediterráneo – had its greatest presence before it was acquired by Sabadell and whose foreclosed assets comprise this portfolio.

Blackstone is competing head to head with Testa to be the largest landlord in Spain, but it is adopting a very different strategy given that whilst the firm in which Santander, BBVA, Acciona and Merlin all hold stakes is opting to concentrate the greatest number of homes possible in a single company, the US fund is playing its hand by backing several smaller vehicles.

For the time being, Blackstone has already listed Fidere, which owns more than 5,700 homes, many of which have some kind of public protection;  it also has Albirana Properties, owner of another 5,000 rental assets; and Corona Patrimonial. But, in addition, the fund has been creating other Socimis such as Tourmalet and Pegarena.

All of these companies are expected to continue expanding their portfolios with assets from Project Quasar, the portfolio that Blackstone acquired from Santander, and which contains a sizeable portfolio of homes from the former Banco Popular.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Blackstone Buys 4,500 Rental Homes From Sabadell

13 January 2016 – Expansión

Blackstone has won one of the largest ever real estate auctions and it did so during the final days of 2015. A few weeks ago, the US fund completed the acquisition of 4,500 rental homes from Banco Sabadell, according to financial sources consulted by Expansión.

This represents the largest block sale of homes by a Spanish bank in recent years, given that the sale is still pending of two larger portfolios that Bankia and Ibercaja have put on the market.

The latest operation, which forms part of Project Empire, has now been signed by both parties; a few conditions precedent are still outstanding, but they are expected to be resolved within the next few weeks. Given that the agreement was actually reached in 2015, it will be accounted for within last year’s results, which Banco Sabadell will announce on 29 January.

The portfolio was initially valued at around €600 million, however, after it was first put on the market, the number of flats included in the portfolio decreased from 5,000 to 4,500 (bringing the valuation down to €540 million). The interested funds had been demanding discounts of between 40% and 70% for banks’ portfolios of homes, on the basis of the quality of the assets. In the case of Project Empire, since the homes in the portfolio are all rented out, the price obtained by Sabadell could have been higher, given that Blackstone will obtain regular rental income, as well as taking ownership of the assets.

Firm commitment

This purchase strengthens the US fund’s position in Spain, whose senior advisor is Claudio Boada. The homes will be managed by Blackstone’s real estate subsidiary, Anticipa, the entity formerly known as CatalunyaCaixa Inmobiliaria, led by Eduard Mendiluce. In addition, the fund has three other subsidiaries in Spain, which also manage property investments, namely: Fidere, which focuses on homes for rent (many of which are social housing properties); Logicor, which concentrates on the logistics asset segment; and Multi Development, which specialises in shopping centres.

Blackstone completed its largest ever investment in Spain last year, with the purchase of 40,000 mortgages from Catalunya Banc, worth €6,400 million for €3,600 million. Anticipa manages that portfolio, together with a few others acquired from entities such as CaixaBank, taking the entity’s total assets under management to €10,000 million.

Another one of the most active investors in Spain in recent months has been Oaktree, which competed against Blackstone to take over Sabadell’s portfolio.

For the Catalan entity, this operation allows it to continue improving the quality of its balance sheet through the sale of non-performing assets. Sabadell has reduced the volume of problem assets on its balance sheet by €3,500 million since the start of 2014 ,to €22,350 million at the end of September 2015.

In addition to Project Empire, Sabadell sold other portfolios last year to investors such as Pimco, Aiqon and Sankaty. Altogether, it transferred assets worth €2,400 million to those funds in 2015.

Original story: Expansión (by J. Zuloaga/S. Saborit)

Translation: Carmel Drake

Blackstone & Oaktree Compete For 5,000 Sabadell Homes

10 December 2015 – Expansión

Banco Sabadell is finalising what could be the largest block sale of homes by a Spanish bank in 2015. The Catalan entity is negotiating with the US funds Blackstone and Oaktree to transfer 5,000 rented homes, as part of Project Empire. Sources at the entity declined to comment on the operation.

Although there have been larger portfolio sales involving debt this year, all indications are that this sale will be the largest in the foreclosed asset segment, a space that only BMN and Bankinter have been active in so far in 2015. Popular considered it, but suspended its sale in the end and the portfolio sales that Bankia and Ibercaja currently have underway may be delayed until the first quarter of 2016.

Project Empire is an operation that Sabadell has been preparing for a long time and which has generated significant interest in the market. The 5,000 homes have a nominal value of €600 million. The fact that they are already rented out means that the most established funds in Spain have expressed their interest in them.

Such is the case of Blackstone, which owns the Anticipa platform – formerly CatalunyaCaixa Inmobiliaria – and which has purchased several bank portfolios. Meanwhile, Oaktree has unleashed itself as one of the major international investors in Spanish property, with the purchase of assets from Bankia, Ibercaja and FMS, the German bad bank.

Sabadell has reduced the volume of problematic assets on its balance sheet by €3,500 million since the start of 2014, down to €22,350 million by September 2015.

Original story: Expansión (by J. Z.)

Translation: Carmel Drake

Sankaty Buys CAM’s RE Companies From Sabadell

4 December 2015 – Expansión

The fund Sankaty is finalising the purchase of a large package of real estate subsidiaries from Banco Sabadell, which the entity inherited from CAM. The US investor, which is itself a subsidiary of Bain Capital, has won a competitive auction held as part of Project Chloe, which will be signed before the end of the year, according to market sources.

The operation includes stakes in the companies’ shares, as well as debt, together worth €800 million. According to various sources, the sales price will range between €200 million and €250 million, which represents a discount over the nominal value of around 30%.

By purchasing the companies’ shares and debt, the fund will exert direct control over their real estate assets: land, work-in-progress property developments and finished properties.

This is Sankaty’s second major operation in Spain in 2015. In May, the fund acquired 40 large real estate loans from Bankia, worth €500 million.

Like many other overseas investors, Sankaty is committing itself to the acquisition of land and work-in-progress property developments in the hope of benefitting from the recovery of the Spanish economy, with an improvement that is already taking shape in the real estate market. These funds are joining forces with local property developers and, by purchasing at deep discounts, are hoping to obtain returns on their investments of up to 20%.

For Project Chloe, Sankaty will delegate the management of the assets to Altamira Inmuebles, the management platform owned by Apollo (85%) and Santander (15%), which has advised the fund during the process.

For Sabadell, this divestment is the latest in a series of similar deals undertaken in recent months, such as Project Cadi, which involved the transfer of €240 million of property developer loans to the US giant Pimco and the platform Finsolutia. In addition, it sold a portfolio of written-off receivables worth €800 million to the Malaysian fund Aiqon and it is negotiating the transfer of 3,000 rental homes, as part of Project Empire.

Exposure to real estate

Just like the rest of the Spanish financial sector, Sabadell is trying to reduce its exposure to real estate by combining the sale of homes through its network – its subsidiary Solvia is responsible for this – with the sale of portfolios to large international funds.

The bank, led by Josep Oliu, has one of the highest degrees of exposure to the real estate sector, due, in large part, to its purchase of CAM in 2011, although that was partially covered by an asset protection scheme (un ‘esquema de protección de activos’ or EPA) of up to €14,000 million. The entity has been working for several quarters now to reduce its volume of problem assets, which amounted to €22,350 million in September, and in recent months it has managed to stabilise its balance of foreclosed assets at €9,200 million, i.e. it has reached the point where the amount of (newly foreclosed) properties being incorporated onto its balance sheet is lower than the amount (of previously foreclosed properties) it is selling.

As the entity explained when it presented its results for the third quarter, it sold 7,654 foreclosed assets between January and September 2015, which represented an increase of 6% compared with the same period in 2014, and it achieved this even though it offered lower discounts on those properties compared with prior year.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake