Tag: PwC

Azora, CBRE GIP & Madison Create a Fund with €750M & 6,500 Homes

10 September 2018 – Expansión

The real estate companies Azora, CBRE GIP and Madison have constituted a joint venture for residential rental properties in Spain. They have created it with 6,458 homes and €750 million in own funds in order to expand the portfolio to 10,000 homes over the next two or three years.

In a statement, the three companies have announced the joint venture agreement, with an initial asset value of €870 million. The fund’s 6,458 homes are located in 65 buildings and 70% of them are located in the metropolitan area of Madrid.

Azora’s new subsidiary for residential rental has emerged from the recapitalisation of another previous one, Lazora. The investment and integral management of the new fund will be borne by Azora, which has also acquired a minority stake in the entity.

The Director for Continental Europe at CBRE Global Investment Partners, Alexander van Riel, said that “the residential market in Spain is very fragmented, and so this portfolio and its size are unique in that it acts as an important consolidator in the sector”.

“This investment increases CBRE GIP’s exposure to the residential sector in Europe to more than €2.5 billion and is in line with our key strategy: to follow demographic and real estate development trends in markets with a scarcity of products”, added Van Riel.

Meanwhile, the co-head of the securities portfolio at Madison International Realty, Derek Jacobson, said that the investment “represents a unique opportunity to acquire a large-scale and high-quality residential portfolio located primarily in the Spanish capital”.

The head of the residential area at Azora, Javier Rodríguez-Heredia, said that the intention is to hold onto the 6,458-rental unit portfolio for 15 years.

“Rather than opting for the liquidation and sale of these units, through this strategic association with CBRE GIP and Madison, we have not only found a way of ensuring that these homes remain available for families, we are also going to increase the investment in the rental products to build a new supply over the long term”, added Rodríguez-Heredia.

CBRE GIP and Madison have been advised by Jones Day, Pérez-Llorca, PwC, Howden, CBRE, Arcadis and Knight Frank, whilst Kempen, Freshfields and Deloitte have advised Lazora.

Last May, Azora postponed its planned debut on the stock market and, in August, its management contract with the real estate firm Hispania was terminated, as a result of which it agreed to receive €224.5 million from Blackstone, which had acquired 74% of Hispania through a takeover.

Original story: Expansión 

Translation: Carmel Drake

Alantra Creates Leading European Advisor for Sale of Toxic Asset Portfolios

12 July 2018 – Expansión

Alantra has just signed a document that is going to make it the leading advisor to banks in Europe for the sale of toxic asset portfolios. The deal was signed yesterday in London and involves the purchase of KPMG’s international business specialising in those kinds of bank cleanups. The team comprises more than 35 professionals, mainly seniors, who will move across to form part of Alantra and who will take with them the sales mandates, worth €16 billion, that they are working on at the moment, according to sources at the firm.

After almost a year of negotiations with KPMG, the division is finally going to join forces with the investment banking team led by Santiago Eguidazu (pictured above) to create a new company with more than 75 professionals. The new company will be a subsidiary of Alantra and will be dedicated to advising banks regarding the best exits options for their portfolios of non-performing assets.

To date, Alantra has advised 80 operations in this business across five countries since 2014, for a total nominal value of more than €65 billion. Meanwhile, KPMG’s team has advised on more than 100 transactions worth €180 billion during the same period. The resulting company has averaged 45 transactions per year for the last four years and has advised an operation volume of more than €61 billion. The transaction will involve a cash disbursement for the Spanish firm of €2.83 million.

Banks and funds

The new division will be particularly active in the medium-sized transaction market generated by both banks and funds. The focus will be primarily on Europe, but also other countries around the world where the firm has a presence. In its activity, Alantra will compete above all with PwC, the other major player in the European portfolio business alongside KPMG, and with the US giants Morgan Stanley and Goldman Sachs for the largest contracts.

KPMG’s international team is headquartered in London, with local offices in Milan, Athens, Dublin and Lisbon. Alantra adds Madrid to that list, from where it has organised its global coverage of the portfolio business to date, which has seen it advise operations not only in Spain but also in Portugal, Italy, Greece and Eastern Europe.

The team at Alantra has been responsible for the sale of portfolios by almost all of the Spanish banks, ranging from Sabadell (with which it is working at the moment) to Santander, and including BBVA, CaixaBank, Bankia, Liberbank, Ibercaja and the domestic subsidiary of Deutsche Bank.

The current Head of Alantra’s Portfolio Business, Joel Grau, will lead the new subsidiary, together with Andrew Jenke and Nick Colman, from KPMG.

Global advice

Between the three of them, they will pursue the objective of replicating on a European scale the model that Alantra has been adopting in Spain, and which is based on providing global advise to banks from three perspectives: corporate operations, real estate (large properties and loans from financial entities, as well as those relating to shopping centres and hotels) and portfolios of toxic assets, according to sources at Alantra.

They will operate from two main centres: Madrid and London, where many of the funds that buy the banks’ portfolios are located and thanks to which the business is expected to soar, by reselling financial assets acquired or securitising them to put them on the market.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

PwC Forecasts Record RE Inv’t in Spain This Year

17 May 2018 – Expansión

The real estate market in Spain is striding towards a new investment record. That is according to the partner responsible for this area at the consultancy firm PwC, Rafael Bou, speaking yesterday at the presentation of a report about trends in the real estate market in Europe – he highlighted that the best international scenario favours the arrival of new projects.

Bou affirmed that there is “widespread optimism” amongst the main players in the sector. “Even 2017, with Brexit and Trump, was a year of record investment, and so 2018 ought to be even better, given that we do not have any of that”, he said. In this sense, he also indicated that there is greater political stability in Europe following the elections in France and Germany,

Another factor that will favour the achievement of this investment record is that the European Central Bank (ECB) is going to maintain interest rates low. Bou confirmed that the uncertainty hanging over the sector is not knowing when the current expansive cycle will end; he put a date on the horizon. “Next year, the uncertainty in this regard may increase with the appointment of a new Chairman of the ECB”.

Madrid, the fifth most attractive city

PwC’s survey, compiled in collaboration with the Urban Land Institute, places Madrid as the fifth-ranked European city for conducting real estate business. If we look at the small print, the Spanish capital is ranked in sixth place in terms of the development of projects and in fifth place for the capture of investment.

The research confirms that significant growth is expected in the capital’s office rentals. “Compared to other European capitals to the north, the growth in rental prices has been restricted by the setback that the Spanish economy suffered following the global financial crisis”, he said. PwC highlights the evolution of the retail and hotel sectors, and the repositioning of offices. Madrid has risen four places in the ranking with respect to last year.

Barcelona, which has risen by five places, is now ranked in eleventh place overall. The Catalan city was ranked in thirteenth place in terms of investment and in ninth place for the development of real estate projects.

The report indicates that Barcelona is one of the cities that could most benefit as a result of Brexit, although it warns of the dangers of secessionism. The analysis highlights that the retail, office and residential sectors are currently at a critical point. So too is logistics. “Boosted by demand from e-commerce companies, investors and property developers are buying logistics warehouses and developing new spaces in Barcelona in a speculative way, for the first time since the global economic crisis”, according to the report. “Some people are now talking about a price bubble in the logistics sector in light of the boom that it is experiencing”, added Bou.

The 800 surveys that have been used to compile the study were conducted prior to 1 October 2017, and so they do not reflect the impact on the real estate sector of the political crisis resulting from the Cataluña-independence process. “Having overcome the initial shock, investment has been recovering gradually”, explained Bou. Most overseas investors have returned. “Some people have decided not to invest, but others saw an opportunity in terms of prices and competition and came back quickly”, he said.

Would Barcelona and Madrid have occupied similar positions in the ranking if the surveys had been carried out after 1-O (1 October 2017)? Bou highlighted that Madrid is always ranked higher than the Catalan capital because it is a larger city.

Original story: Expansión (by Gabriel Trindade)

Translation: Carmel Drake

Socimi Vbare Hires Former PwC Director as its New CFO

7 May 2018 – Eje Prime

Vbare is strengthening its leadership team. The Socimi has recruited Alberto García, former director of the audit firm PwC, as its new CFO, according to a statement issued by the group.

García de Novales has extensive experience in the real estate sector given that, as well as having performed financial audits of companies in the sector for many years, he has also formed part of the finance team at the Socimi Autonomy Spain Real Estate since September 2015.

Prior to his incorporation into that company and since the beginning of his professional career, in 2009, García de Novales was a member of PwC’s audit division in the construction and real estate sector, working in both the Madrid and Luxembourg offices.

In recent months, Vbare has carried out a capital increase amounting to €7 million and in 2017 it recorded profits of €2.2 million. Vbare is currently immersed in a new capital increase process with the aim of expanding its existing portfolio in the future.

Original story: Eje Prime 

Translation: Carmel Drake

Sareb Seeks Partner(s) to Create Joint Venture With NPLs Worth €10bn

20 March 2018 – Expansión

Sareb has decided to emulate the large financial institutions and find a partner to help it digest its portfolio of foreclosed assets. The entity chaired by Jaime Echegoyen (pictured below) has decided to create a vehicle into which it will place loans with real estate guarantees (known as NPLs) and in which it will retain a minority stake.

Into this joint company, Sareb will place loans with a gross value of €10 billion, although the definitive figure has not been finalised yet, explain sources in the sector. It would be the largest sale ever made by the company that was itself created with assets proceeding from the intervened banks, and loans with all different kinds of real estate guarantees would be included: from land to tertiary assets. Sareb’s objective is to open up this new company to one or more financial partners and it has engaged the firms EY and CBRE to lead the negotiations. The process is still in a preliminary analysis phase, but the aim is to close it during the second half of the year or at the beginning of 2019.

Contacts

In making their preliminary contacts, the consultancy firms have approached the main international funds and managers with investments in the Spanish real estate sector to gauge their possible interest in this portfolio, which will initially be called Project Ebro. Once investors have confirmed their interest in the vehicle, thought will be given to defining how the alliance will be forged, say sources in the sector. Possible interested parties include investment giants such as Cerberus, Bain Capital, Blackstone, Apollo, Kennedy Wilson and Goldman Sachs. With Project Ebro, Sareb would be following in the footsteps of entities like Santander, which has reached an agreement with Blackstone to create the company Quasar, with real estate assets proceeding from its purchase of Popular.

In that case, the US fund owns a 51% stake, whilst Santander retains 49% of the shares.

This is not the only loan portfolio that Sareb currently has up for sale. The company has three other processes underway, although Ebro, given its size, is the star project. In this regard, it has engaged Arcano to sell the Nora portfolio, comprising non-performing loans (NPL) backed by residential collateral worth around €400 million; the Vilasoa portfolio, which includes €300 million in loans secured by land; and project Dune, a portfolio that has been relaunched in 2018 comprising €2.6 billion in unsecured loans. In that case, Sareb has engaged PwC to coordinate the sale.

These processes are happening in parallel to the search for a partner to strengthen its property development business. In that case, Sareb is holding talks with large real estate companies and funds with activity in the residential sector with the aim of working together on the development of buildable land and construction projects in progress.

In total, that portfolio is worth around €800 million and Sareb would contribute those assets to a company in which its partner would hold a majority stake.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Project Sintra: BBVA Engages PwC to Sell €1bn of Toxic Loans

13 March 2018 – Voz Pópuli

BBVA does not want to waste any more time on the real estate clean-up exercise. In the last few days, the entity chaired by Francisco González has launched a €1 billion portfolio on the market: Project Sintra, according to financial sources consulted by Vozpópuli. It is being advised in the operation by PwC. Neither the bank nor the consultancy firm wanted to comment.

This portfolio is the penultimate step for BBVA in the reduction of its real estate exposure to zero, after the agreement it reached with Cerberus to transfer €13 billion of foreclosed assets, as this newspaper revealed. That sale, Project Marina, is still pending the necessary authorisations and is scheduled to be closed in the middle of this year.

The balance of BBVA’s divestments is as follows: before Project Marina, the entity had a gross exposure (not including provisions) of almost €16 billion, which will end up at just over €3 billion. Of that figure, two-thirds relate to unpaid loans linked to land and completed developments, with a coverage ratio of 54%.

With this new operation, BBVA wants to be crowned as the first major entity to get rid of its inheritance from the crisis. Last year, Santander closed the sale of €30 billion from Popular to Blackstone, but it still has €11.7 billion left to divest.

The same stars

With Project Sintra, BBVA has now awarded the mandate for three consecutive operations to PwC. It did so with Project Jaipur, worth €600 million, which was acquired by Cerberus; and Project Marina, which had the same advisor and buyer.

The latter operation generated unease amongst certain funds, which complained to the bank because it had not opened a competitive process, but instead chose to negotiate one on one with Cerberus. Sources close to that operation defended that a bilateral sale could optimise both the price and an auction, thanks to the threat of opening the process to more rivals.

In this way, BBVA is one of the entities that has decided to accelerate the sale of portfolios during the first quarter, like Sareb, which is finalising the sale of between three and four packages: Nora, Bidasoa, Dune and Slap, with a combined volume of €3.2 billion.

One of the most fashionable assets and one that entities are increasingly including in their portfolios is land. In this way, Sareb is preparing an operation containing land only and Kutxabank is evaluating a similar process.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

ActivumSG Launches New €500M Fund with Projects in Marbella & Salamanca

22 January 2018 – Eje Prime

The international group ActivumSG is continuing to back its business in the Spanish market. The company, which operates under the brand ASG in Spain, is launching a new €500 million fund to make real estate investments across Europe, according to explanations provided by the company to Eje Prime. Some of the first projects that have already been financed thanks to this fund, the fifth to be promoted by ActivumSG, include three projects in Berlin and three in Spain, located in Marbella, Salamanca and Estepona.

This new fund promoted by ActivumSG is one of the group’s most important in terms of investment, with funds raised mostly from investors that have already participated in the group. Of the €500 million, the fund has already committed more than €200 million in Spain and Germany.

In the Spanish market, ActivumSG has already launched Project España, located in Salamanca. Initially baptised as Project Victoria, the fund has now started construction on this luxury residential development in the centre of the city. “The project involves the demolition of an office building located at number 5 Plaza España to convert it into a high-end residential property, comprising 27 apartments”, say sources at the German company.

The second project that ActivumSG is going to promote with this new fund is Parque Central, in the centre of Estepona. The German fund is already finalising the details to start work on the construction of this residential development, which will span 12,600 m2 and which is already being marketed.

Finally, the fund is working on Project Sierra Blanca, in Marbella. That project, which is in its preliminary phase, will be located in the neighbourhood of Sierra Blanca, in Marbella, and will involve the development of 40 luxury homes, with gardens and parking.

The latter two projects are located in the province of Málaga, one of the main tourist destinations in the south of Spain. ActivumSG has been advised in the acquisition by the group’s Spanish subsidiary, ActivumSG Iberia, which is currently being led by Brian Betel, former Director of Cerberus Iberia Advisor and Citibank.

ActivumSG’s team in Spain is completed by Víctor Pérez Arias, former Director of CBRE; Juan Alonso Bartolomé, a director who has worked for companies such as GE Capital Real Estate and ING Real Estate; Alejandro Adan Manes, who joined the firm from Axa Real Estate; Carlos Molero Sánchez, formerly of PwC and KPMG, and Ignacio Gaytan, who previously held the position of maximum responsibility at Grupo Lar, amongst others.

ActivumSG in Spain

Currently, ActivumSG’s portfolio in Spain comprises a dozen assets, with the exception of two that have been divested in recent months, located in Manuel de Falla and Santa Leonor, both in Madrid (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

KCRE Acquires 5,600 m2 Office Building in Madrid

18 December 2017 – KCRE Press Release

Kefren Capital Real Estate (KCRE) has closed the acquisition of an office building located on Calle Juan de Mariana, 15 (Madrid). The property was Grupo Segur Iberica’s headquarters until the company filed for insolvency during the summer. PwC, the receiver administering the liquidation proceedings, awarded the asset to Kefren Capital, as the winner of a competitive bid process.

The building was completed in 1994 and comprises c. 3,600 m2 above ground, spread over 5 floors, and more than 2,000 m2 below ground, including 39 parking spaces. “The building is very flexible – it would be ideal as the headquarters for: a company wanting a central location at a competitive rent; a co-working office in the south of Madrid, very close to the high-speed train; or as a mixed-use building offering the possibility of servicing last-mile logistics thanks to a loading dock at street level” states Pelayo Primo de Rivera, CEO of KCRE.

It is located in the Méndez Álvaro-Delicias district, a consolidated business area home to large companies such as Repsol, Amazon, Gas Natural, Ericsson, CLH and Mahou, with excellent public transport and road connections. The building is just a 15-minute walk from Atocha train station and Parque del Retiro (to the north), and a 5-minute drive to the M-30 ring road (to the south).

Over the last 10-15 years, Méndez Álvaro has benefited greatly from the general gentrification of Madrid’s southern neighbourhoods and the comprehensive supply of services that new office and residential developments have brought with them.

KCRE has been advised by Araoz y Rueda on legal matters and Mace on the technical side. The c/Juan de Mariana 15 office building is the 4th successful value-added transaction that Kefren Capital Real Estate has completed in 2017.

Kefren Capital Real Estate

KCRE is a real estate asset management company created in 2012 by the investment firm Kefren Capital. KCRE offers investors the full range of services required for real estate transactions: sourcing, analysis, financing structuring, deal negotiation and asset management. What differentiates KCRE from other platforms is its ability to co-invest and its investment philosophy – assets are managed from the perspective of the owner and not simply as a third-party manager.

Original story: KCRE Press Release (by Pelayo Primo de Rivera)

Translation: Carmel Drake

Sabadell Engages Alantra, KPMG & PwC To Sell Its Toxic Assets

17 November 2017 – Expansión

Sabadell has decided to go one step further in its strategy to clean up its balance sheet. To this end, the entity has engaged Alantra, KPMG and PwC to sell the real estate assets that it inherited during the crisis, which amount to approximately €12,000 million. The plan involves dividing that volume of doubtful loans into three different portfolios, with the aim of facilitating their digestion in the market. It would be the largest portfolio sale ever carried out by the entity, which has divested €1,750 million in toxic loans and assets so far this year.

Financial sources say that the firms engaged to sell the portfolio have already started to sound out the market in search of potential buyers. If everything follows the agreed timetable, the operation will come onto the market during the first few months of 2018 with the intention of being closed at some point next year. The bank itself declined to comment on the news.

Protection of assets

Most of the toxic property that Sabadell plans to sell was inherited from Caja de Ahorros del Mediterráneo (CAM) and was acquired in the summer of 2012 under an Asset Protection Scheme (EPA) capable of covering losses of up to €16,610 million. The EPA, which is valid for up to 10 years following the purchase, covers Sabadell for 80% of the loses incurred on the savings bank’s asset portfolio, whose value at the time amounted to €24,644 million. The potential cost of those losses is assumed by the Deposit Guarantee Fund (FDG).

Now, five years after the purchase of CAM, Sabadell has managed to divest 51% of the doubtful loans. This means that €11,940 million still remain on the bank’s balance sheet.

Sources in the market indicate that pressure from the Bank of Spain for entities to clean up their balance sheets, especially those linked to EPAs, has been one of the reasons that has led Sabadell to launch this operation. The supervisor wants to liquidate these agreements to free the FGD from further charges and to open the door to a new European fund. This comes in addition to the renewed investor appetite towards these types of assets.

“We have seen that there is significant demand from international funds in relation to the banks’ portfolios of non-performing assets. Nevertheless, the supply is immense and it is important to choose the timing very carefully to avoid having to offer excessive discounts”, explain the financial sources.

General trend

In addition to Sabadell, other Spanish entities have stepped on the accelerator with the sale of toxic assets in 2017. So far this year, 10 entities have managed to divest up to €36,458 million. It should be noted that the aforementioned figure has been significantly impacted by the macro-operation undertaken by Santander, which sold 51% of Popular’s real estate, worth €30,000 million, to Blackstone.

In fact, Sabadell’s effort to reduce its doubtful loans has been one of the arguments most used by analysts to support the significant rise in share prices on the stock market in its reports. Before the crisis in Cataluña started to undermine the confidence in the markets, the entity saw an increase of up to 49% in its share price, to €1.94.

Original story: Expansión (by Andrés Stumpf)

Translation: Carmel Drake

PwC: Madrid Is One Of Europe’s Top 5 Most Attractive Cities For RE Investment

13 November 2017 – Eje Prime

Madrid is really winning over European investors. The Spanish capital is one of the top five cities to invest in over the course of the next year, as recommended by the consultancy firm PwC, according to its annual study Emerging Trends in Real Estate: Europe 2018. Whilst Madrid rose from 9th to 5th position, Barcelona managed to avoid the tense political situation in Cataluña to rise from 16th to 11th.

One of the reasons that led the consultancy firm to highlight Madrid as a safe house for real estate investment over the next year is its office market, which “after a cycle of compression”, has seen an increase in rental prices in the segment. “The increase in office rental prices suggests that Madrid is one of the most attractive opportunities for investors in Europe”, say sources at PwC.

With the (national) political uncertainty now “dissipated”, the recovery across Spain and, specifically, in Madrid is progressing “at full speed”. Real estate investment volumes in 2017 are on track to exceed records, especially in segments such as retail, where investment in this kind of asset is expected to soar by the end of the year, to exceed €4,000 million. Moreover, Madrid is also starring in alternative investment operations, such as those involving Resa and Nexo in the student hall segment, and the opening of the first Spanish WeWork office in Madrid, in the co-working sector.

During the 9 months to September, Spain closed transactions worth €10,300 million, according to a study compiled by the main real estate consultancy firms in Spain. In the third quarter alone, investment in real estate assets amounted to €3,000 million (…).

Offices remained the second most popular asset by investment volume (accounting for 24% of the total investment volume in Spain). Investors tend to focus on Madrid and Barcelona in this segment, with the two cities accounting for 90% of total office investment (…).

Logistics assets are also sparking a great deal of interest, especially warehouses located in Madrid and Barcelona. The volume of investment in these types of assets has not stopped growing since 2012 and so far this year, investment has reached €811 million, up by €100 million compared to 2016 as a whole (…).

Barcelona rises but misses out on Top 10 place

Outside the top ten by one position, Barcelona is nevertheless above average for the European cities recommended by PwC for investment. After rising several places from 16th to 11th in the ranking, the Catalan capital has caused alarm bells to ring due to the political situation, which has led some funds to put their real estate investments in the autonomous region on standby.

PwC says that, although there is a certain degree of concern, after interviewing a large number of investors for the preparation of its report, it concludes that no one is going to stop taking Barcelona into account for their real estate investments. “Investors are applying almost zero political risk, given that they do not believe that Cataluña is going to become independent”, said one of the main directors of a Spanish real estate business to the consultancy firm (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake