Blackstone May Cease Investing in Spain if the Rental Legislation Changes

27 February 2019 – Idealista

The senior director of Blackstone’s real estate division, James Seppala, has indicated at a meeting that his firm will continue investing in the Spanish real estate sector, but only provided that the regulatory framework for the rental sector remains stable. The declarations come at a time when the Spanish government is negotiating approval, with support from Podemos in extremis, for a royal decree that seeks to modify the Urban Rental Act (LAU) and to limit rental prices.

At a meeting organised by Bloomberg (…), Seppala added that his firm will continue to back the real estate sector, especially in Madrid, Barcelona and their metropolitan areas, which offer returns of between 6% and 7%. He is convinced that there is no risk of prices overheating in those areas (…).

Original story: Idealista

Translation: Carmel Drake

Inditex Negotiates the Sale of 16 Stores to German Fund Deka

29 January 2018 – Eje Prime

Inditex has found a buyer for its portfolio of stores. The Galician fashion retailer is holding conversations with the German fund Deka Inmobilien to sell the sixteen stores that it put up for sale in December. Both companies are holding negotiations to close the acquisition for €400 million.

The agreement is expected to be closed this week in such a way that the group may include this divestment in its results for 2017, according to reports by El Confidencial. Almost 80% of the value of the portfolio corresponds to the establishments located in Madrid (the Zara store on c/Preciados and the Lefties shop on c/Carretas), Barcelona (the Zara store on c/Pelayo) and Lisbon (Rúa Augusta y Antonio Augusto de Aguiar). The remaining stores are located in Valencia, Córdoba, Albacete, Palma, Sevilla, San Sebastián, Ciudad Real, Zamora, and Fuengirola.

Zara’s parent company has received several offers for its stores. Some buyers were only interested in part of the portfolio and many were mainly interested in the Preciados store. The operation is being brokered by Savills-Aguirre Newman.

Meanwhile, Deka Inmobilien, the real estate investment division of Grupo Deka, is a buyer interested in acquiring assets in good locations, with high profile tenants and long-term contracts. Its operations in recent years include the acquisition of the Diagonal 640 office building in Barcelona for €145 million. Inditex guarantees a five-year rental term with the option of extending for another twenty years and rental prices that offer an average return of 4% for the whole portfolio.

Original story: Eje Prime 

Translation: Carmel Drake

Iberdrola Sells 55% Of Hotel Hilton Barcelona For €80M

22 June 2017 – Expansión

Iberdrola Inmobiliaria has completed the sale of 55% of Hotel Hilton Diagonal Mar in Barcelona to the real estate division of the insurance company Axa (Axa Investment Managers- Real Assets). The operation has been closed by Axa on behalf of one of its clients, said the vendor in a statement issued on Tuesday.

The energy group’s real estate arm will retain ownership of 45% of the property. Iberdrola Inmobiliaria will receive €80 million for the percentage stake sold.

The Hotel Hilton Diagonal Mar, inaugurated in 2005, is operated by the chain Hilton Worldwide under a long-term lease contract. The four-star establishment contains 430 rooms, of which 20 are suites.

In the operation, the vendor has been advised by the consultancy firm Irea and the law firm Ashurst. Currently, Iberdrola Inmobiliaria owns a portfolio of rental assets spanning a gross leasable area (GLA) of more than 217,000 m2. Its most iconic property is the company’s headquarters in Bilbao.

Moreover, the company is developing around 300 homes, located mainly in the Community of Madrid, although it also has two projects on the coast. In addition, Iberdrola Inmobiliaria is working on a project comprising 42 villas located in the Islas del Mar area (Puerto Peñasco) of Mexico.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Ferrovial, FCC, Acciona & ACS Are Building Houses Again

25 May 2017 – El Confidencial

A decade after they sold or wrote off their real estate arms, the country’s largest construction companies are now returning to the residential property development sector. Ferrovial, ACS, Acciona and FCC have regained their appetite for property and although they have different paces and strategies in mind, they have all definitively decided to revive their real estate divisions.

In the case of the group chaired by Rafael del Pino, which sold Ferrovial Inmobiliaria to Habitat for €2,200 million at the end of 2006, it will lay the first stone of this new strategic phase in Valdebebas. It owns plot 128A there, in what is one of the most important urban planning developments in the north of Madrid, and it plans to build between 200 and 300 homes on the site.

And that is just the tip of the iceberg, given that as the group’s CEO, Íñigo Meirás, acknowledged to this newspaper, the firm “is willing to become a property developer once again”. (…).

This strategy, combined with the gradual recovery in the real estate sector, has allowed residential construction work to account for 5% of the group’s total building portfolio, having closed last year at €442 million, up by 31.7% YoY. The group aspires to increase those numbers, by resuming its property development activity, which has caused it to analyse land operations in different areas to the north of Madrid.

FCC Real Estate also wants to make a similar move. The division, led for the last year and a half by Xavier Fainé Garriga, has decided to start developing half a million m2 of land that it owns in the Madrilenian town of Tres Cantos. The company has owned the plots for years, and its construction division will also participate in their development, along with the real estate subsidiary Realia, which will collaborate on the marketing side. (…).

Meanwhile, Acciona has a more ambitious plan, after it tried, two years ago, to divest its real estate arm, by listing it on the stock market or selling a stake in it to a fund – it has now ended up deciding to return to development. That was recognised by the firm’s Corporate Development Director, Juan Muro Lara, in March, when he announced the launch of 16 housing developments: 13 in Spain and the rest in Mexico and Poland.

In parallel, the group is finalising the transfer of its rental properties to Merlin, in a deal disclosed by El Confidencial in October, which will see the former’s exit from the real estate business. It also wants to push ahead with the sale of its hotels and office buildings through individual operations.

In the case of ACS, the firm is carrying out its strategy in the development segment through Cogesa, the historical subsidiary of the group, which stands out because it is the owner of the group’s two main corporate headquarters, the office buildings located in Las Tablas and on Avenida Pío XII in Madrid, and for owning sizeable land portfolios in areas such as Montecarmelo, Arroyo Fresno, Las Tablas, Carabanchel and Ensanche de Vallecas.

The turning point for this subsidiary, which is led by the brother of Florentino Pérez, Enrique, came two years ago, when it carried out a capital increase amounting to €44 million and then acquired one of the last plots of residential land in Montecarmelo for €2,200/m2. That figure turned the operation into one of the most onerous since the burst of the bubble, but is now seen in a very different light. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Socimi Trajano Iberia Launches €47.2M Capital Increase

7 September 2016 – Expansión

The Socimi Trajano Iberia, which is listed on the MAB and managed by the real estate investment division of Deutsche Asset Management, is going to carry out a capital increase amounting to €47.2 million, with the aim of raising new funds to allow it to continue to benefit from the real estate cycle in Spain and Portugal.

The Socimi, which expects to have invested all of its initial funds (€182 million) by the end of this year, is on the look out for new investment opportunities.

On 14 June, Trajano approved a capital increase amounting to a maximum of €47,238,400, through the issue and placing into circulation of 4,723,840 new ordinary shares at €10/share, which represents a discount of 6% on the company’s current share price (of €10.65 per share) and 5% on its latest NAV, published at the end of 2015 (of €10.52 per share).

Trading of the subscription rights is expected to begin on 12 September and the preferential subscription period will last for one month.

The Company’s Board of Directors has ratified its plans to participate in the increase covering at least 58% of the maximum amount, which will amount to €27.5 million.

The team responsible for Deutsche Asset Management’s real estate division in Spain and Portfolio has undertaken transactions amounting to almost €1,000 million over the last 15 months and currently has a portfolio of assets under management amounting to around €1,300 million. To date, the Iberian portfolio comprises 17 real estate assets: 7 shopping centres, 7 office buildings and 3 logistics assets, with a combined leasable surface area of around 400,000 sqm.

Original story: Expansión

Translation: Carmel Drake

Deutsche’s Socimi Trajano To List On MAB On 30 July

27 July 2015 – El Día

The Socimi Trajano Iberia, which is managed and promoted by a division of Deutsche Bank, will begin trading on the Alternative Investment Market (Mercado Alternativo Bursátil or MAB) on 30 July, whereby becoming the sixth listed real estate investment company to be publicly traded on the stock exchange.

Trajano will debut on the MAB once it has completed its €94.8 million capital increase, which is being led by investors of the Wealth Management division of Deutsche Bank in Spain.

Under the ticker “YTRA”, the company will debut on the stock market at a share price of €9.98, according to a statement by the Spanish Stock Exchanges and Markets (‘Bolsas y Mercados Españoles’ or BME).

The listing will be performed through a price-fixing system with the matching of supply and demand in two daily auctions or “fixing” periods (at 12:00h and 16:00h).

Trajano Iberia will invest in offices in “semi-prime” locations in Madrid and Barcelona and in “prime” areas of secondary cities. It will also seek out shopping centres and retail parks, as well as logistics assets in Madrid, Barcelona, Zaragoza, Valencia and the País Vasco.

According to the company’s strategic plan, Trajano Iberia will materialise its investments within a maximum period of 24 months, however the management team considers that this period could be reduced on the basis of the strong prospects that the real estate sector is currently enjoying.

The company will be managed by the team responsible for the real estate division of Deustche Asset & Wealth Management in Spain and Portugal.

Currently, Deutsche Bank manages real estate assets worth more than €46,000 million around the world and €740 million in Spain and Portugal.

Deloitte is acting as the registered advisor and BEKA Finance as the liquidity provider. Since last year, several companies have listed publicly under the Socimi structure.

The first company to debut on the stock exchange was Lar España Real Estate, on 5 March, with initial capital of €400 million. The next company to list in the sector was Hispania, the listed company controlled by the fund manager Azora and owned by the multimillionaires George Soros and John Paulson, who subsequently created a Socimi through which they have made several purchases.

Meanwhile on 30 June, the Socimi Merlin Properties, starred in the largest IPO since 2011 with a valuation of €1,250 million. Axiare also listed on the stock exchange, with a valuation of €360 million, as did Uro Property, the Socimi that owns one third of Santander’s branches.

Original story: El Día

Translation: Carmel Drake

Acciona Hires Morgan Stanley To Sell Its RE Arm

20 July 2015 – El Confidencial

Acciona has decided to translate its words into action and accelerate the sale of some of its assets to clean up its ailing accounts. And, to that end, the energy, construction and service company has entrusted the sale of its real estate division to Morgan Stanley, the US bank that closed some of the largest property-related transactions during the real estate boom.

The holding company, owned by the Entrecanales family…has appointed Morgan Stanley, which is led by Luis Isasi in Spain, to list or sell its property-related assets, which were valued at €1,042.6 million at the end of 2014, according to Grupo Acciona’s own accounts. Based on appraisals performed by Savills Consultores and the Instituto de Valoraciones, the portfolio would have a price of €712 million, with land being the largest single item.

Nevertheless, other sources close to the group say that the book value of all of the real estate assets – which include several hotels, university halls, office buildings and 900 homes for rent in Madrid – may reach €1,500 million. “They may sell off the portfolio in parts because some of the businesses have nothing to do with each other”, said Morgan Stanley.

Morgan Stanley is going to sound out the market to decide which is the best option – i.e. whether to launch an IPO through a Socimi or to find a buyer that would take on the whole business. The operation will be similar to the one recently closed by Sacyr for its subsidiary Testa, which was acquired by Merlin Properties, for just over €1,800 million. (…).

With this decision, Acciona begins the divestment of its non-strategic businesses, which it announced at the beginning of the year after recording the worst results in its history. The group owned by the Entrecanales family, which recorded losses of €1,972 million in 2013, managed turn things around in 2014 and make a profit of €185 million, thanks to cost saving initiatives, the suspension of investments and the sale to a third party of its international energy business – this improved trend has continued in 2015 to date. (…).

Of the sales that the company announced at the beginning of 2014 – Bestinver, Trasmediterránea, real estate and energy – only the last one has taken place and then only partially. This has prevented the group from reducing its debt, which remains very high and is even growing (€5,300 million net at 31 March 2015).

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake