Tag: renewal

Sareb’s Socimi Makes it MAB Debut with 1,383 Homes on the Outskirts of Spain’s Large Cities

3 April 2018 – Expansión

Sareb’s Socimi is making its debut today on the Alternative Investment Market (MAB) with a total valuation of €152.7 million. The company owns 1,383 homes, inherited from the rescued savings banks, located close to Spain’s large and medium-sized cities. Most can be found in very dynamic metropolitan areas such as Vallecas, with annual price rises of 10%-12%, and Hospitalet de Llobregat, as well as in places further afield, such as Manresa (Barcelona).

Témpore Properties, which has just two employees on its payroll, has delegated all of its management work to Azora, which will charge €1.5 million for its services in 2018 and €1.7 million in 2019, provided it fulfils all of the objectives set out in the business plan in terms of profitability and occupancy rates.

Azora, which is also the management firm for Hispania and Goldman Sachs, employs 140 people, half of whom work for Sareb directly or indirectly.

“Our greatest challenge is to increase the profitability of the rental portfolio from 3.7% to 5.5%”, explains Nicolás Díaz Saldaña, CEO of Témpore Properties and former Head of Rentals at Sareb.

As a first measure, the company is going to increase its rents, taking advantage of the renewal of its rental contracts. 33% of them expire in 2018, another 36% in 2019 and the remainder in 2020. “The prices that were applied by the savings banks are very out of date”, explains Díaz Saldaña. The average increase will amount to 15% and will rise to 20% in the outskirts of Madrid and Barcelona. The company assures that, despite those increases, 80% of its tenants are renewing their contracts.

Témpore is tightening up the requirements to access its homes in an effort to reduce its default rate, which currently stands at 4.8%. It demands the payment of a rental insurance from future tenants, which has a cost of €10 per month, as well as the one-month mandatory deposit. Moreover, the monthly rental cost may not account for more than 40% of the total income of the family unit.

In total, 24% of Témpore’s homes are located in Barcelona. “The Catalan political risk is not holding back rental prices. The rise in the metropolitan area of Barcelona stands at around 6%-10%”, says the CEO. 36% of the new package of homes that Sareb is going to transfer to the Socimi this year are located in Cataluña.

Témpore does not have any bank debt and has a credit line open with Sareb amounting to €2 billion, which it has not made use of yet.

The bad bank owns 98.5% of the Socimi and the intention is to allow investors (primarily institutional) to acquire shares, in such a way that will end up with a minority stake within three years. Témpore assures that there are many real estate funds, insurance companies and pension funds with liquidity willing to invest.

“Our business is one of scale. Témpore has to aspire to being as large as Testa Residencial, our best comparable”, says Díaz Saldaña.

Testa, in which Santander, BBVA, Acciona and Merlin all hold stakes, is planning to make its stock market debut at the end of May or beginning of June this year.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

Sareb Considers Slicing Up Haya Real Estate’s €24bn Mega-Contract

27 March 2018 – Voz Pópuli

Sareb is already working on a new tender for its largest management contract. Specifically, it involves old real estate loans from Bankia worth €24 billion that are currently being administered by Haya Real Estate, the real estate arm of Cerberus. The contract is due to terminate at the end of 2019, but Sareb is already working on different options to launch a tender in the short-term and for the portfolio to be awarded in just over a year.

One of the options on the table involves slicing up the contract into two or more mandates, according to confirmation provided by Sareb to this newspaper.

There are several options under consideration at the moment. The first, placing the €24 billion (in gross terms, the figure amounts to €13 billion in net terms) servicing contract, as it stands today, with a single manager, which could be Haya Real Estate or could be one of its large competitors, such as Altamira, Aktua, Servihabitat, Solvia or Aliseda-Anticipa (Blackstone).

That scenario is the one that most interests Haya Real Estate, which has a lot at stake with this contract, given that it represents 60% of its assets under management, and the firm is in the midst of its stock market debut. It is interested because Cerberus’s platform is the one that knows the assets the best and has the advantage of not having to migrate them, which would slow down Sareb’s rate of sales.

Other options

Alternatively, the mega-contract could be shared out between several platforms. One of the options under consideration is to tender a contract linked to the ownership of the assets. In other words, a large operation like those that Santander and BBVA starred in last year with Blackstone – Project Quasar – and Cerberus – Project Marina -, respectively.

That would also involve the creation of a joint venture company, like the FAB. In this way, Sareb would kill two birds with one stone: deconsolidate assets without forgoing potential gains; and award the management of the assets to a fund-platform.

Another option on the table is to split Haya’s portfolio into two or more batches. That split could be performed by type of asset, linked to the debt (tertiary, residential, land…), or by geographical area, whereby benefitting from the specialisation of the platforms.

The first contract to be renewed is Haya Real Estate’s. The other three are not due to terminate until 2021: Altamira’s with 28,000 properties from the portfolios of Catalunya Banc, Caja 3 and BMN; Solvia’s with 34,000 properties proceeding from Bankia; and Servihabitat’s, with properties and loans from NCG, Liberbank and Banco de Valencia.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Sareb Sold 13,796 Properties Between Jan & Sept, Up By 55% YoY

15 November 2017 – Expansión

Yesterday, the bad bank reported updated figures for its commercial business. Between January and September, it sold 13,796 properties, up by 55% compared to the same period last year, boosted by commercial campaigns and the change in the real estate cycle. These figures imply a drop in the growth rate compared to the previous quarter, most likely influenced by the lower activity typically seen in August. Note, the data relates to the first 9 months of the year until 30 September and therefore does not reflect the suspension of real estate activity in Cataluña since that date.

The sale of residential properties grew by 50% YoY, whilst the sale of warehouses, retail premises, hotels and offices rose by 99%. The bad bank also sold 710 plots of land, up by 31% compared to the previous year.

Sareb is also involved in property development activity. This year, the company has sold eleven developments that it received when they were unfinished.

The bad bank’s total revenues grew by 3.6% during the 9 months to September – after increasing by 21% during the first 6 months of the year – to €2,394 million.

Sareb has never made any money. Its cumulative losses amount to €781 million. Since its creation, it has reduced its toxic asset balance by 23% and has repaid 19% of the debt it issued initially.

Renewal of the board

Sareb is going to subject the renewal of its Board of Directors to the General Shareholders Meeting for approval. The former minister and former President of Endesa, Rodolfo Martín Villa, who represents the Frob, will depart for reasons of age. He will be substituted by Eduardo Aguilar, former CEO of Seguros. The representative of Popular will resign from the board to make way for Jaime Rodríguez Andrade, Director General of Problem assets, restructurings and corporate investments at Santander. And the representatives of CaixaBank will be replaced: Jorge Mondéjar and Antonio Cayuela will take over from José Ramón Montserrat and Antonio Massanell.

Original story: Expansión

Translation: Carmel Drake

Vesta Real Estate Fund Invests €100M In Renewal In Portgual

26 October 2017 – Iberian Property

The new Vesta Real Estate Fund, which is headquartered in Luxembourg, is preparing to invest a total of €100 million in the acquisition and renewal of residential real estate in Portugal, and its subsequent retail sale.

The fund is the result of a partnership between Quantico, an investment company founded and headed by Carlos Vasconcellos Cruz (pictured above), Ubeda, from Carlos Mallo, and Bank of Andorra, specialised in private banking Andbank, and it is going to focus on opportunities in Lisbon, Estoril, Cascais and potentially Oporto.

With a lifespan of 6 years, this vehicle adopts the form of a SICAV-RAIF, supervised by the Luxembourg monetary authorities, and each property to renew will be acquired by a separate vehicle under Portuguese law. Clients of Andbank, Quantico and Ubeda, are the main participants of this fund, which has €100 million to apply over the next 12 to 18 months, according to a Quantico press release.

Carlos Vasconcellos and Carlos Mallo, advisors of the fund, explain that “despite an increase in the acquisition prices of real estate to renew in premium areas, there is still much work to be done and good investment opportunities in well-located buildings in prime areas of the city and Cascais, and which require deep renewal and high technical complexity”.

The managers explain that “we do not buy at speculative prices, and we believe that in Lisbon, Cascais and Oporto, there is room for selling prices to remain stable or even rise, as there is a significant gap between prices there and in other comparable European cities. Portugal, and particularly Lisbon/Cascais offer unbeatable levels of attractiveness and quality of life”.

Original story: Iberian Property (by Ana Tavares)

Edited by: Carmel Drake

Carmena Grants Partial Demolition Licence For Former MOD Building

9 December 2016 – Expansión

The Town Hall of Madrid has granted a licence for the partial demolition of the Precision Artillery Workshop, on Raimundo Fernández Villaverde, despite opposition from Ganemos.

Cooperativa Maravillas, the property developer behind the residential project that is going to be constructed on a plot of land that used to be owned by the Ministry of Defence, on Calle Raimundo Fernández Villaverde, has received some good news this week. The Town Hall of Madrid has granted the management company Domo a licence to demolish the Precision Artillery Workship, now in disuse, despite opposition from Ganemos, one of the parties that forms part of the municipal government’s coalition.

Following a favourable report from the Community of Madrid’s Local Heritage Committee, the Town Hall has authorised the partial demolition of the building. The remodelling of the property forms an essential part of the management company’s plans, which involve the construction of more than 300 homes on this street, located in the Madrilenian neighbourhood of Chamberí.

In any event, the licence for the complete demolition is pending a decision by the Heritage Committee to determine whether the building’s basement still contains any old air-raid shelters from the Civil War, in which case, they should be preserved. In addition, the cooperative is waiting for the agreement reached between the Town Hall and the management company to be ratified.

Details of the agreement

According to this agreement, the Town Hall of Madrid will receive 5,422 m2 of land for residential use, corresponding to 10% of the obligatory concession.

Similarly, the Town Hall of Madrid will receive 3,360 m2 of green space and 1,000 m2 of space on the ground floor of the building, where it plans to building a primary school. It will also receive 250 m2 of free space.

Manuela Carmena’s urban planning team has reached an agreement with the property developer to assign the property in this way, rather than monetise it, with the aim of “covering the deficiencies of these types of facilities in the district of Chamberí”, explained the Town Hall.

The agreement, which is necessary for the approval of the urban planning project and the subsequent work and construction licence, will be circulated for public information purposes and referred to the Town Hall for its ratification.

Opposition from Ganemos

The decision to demolish this building does not have the blessing of Ganemos. The municipal platform, which forms party of Ahora Madrid, considers that “there is no reason” to grant a licence to allow the demolition of the historical building, given that the management agreement required to be able to construct the new buildings has not been approved. According to the platform, several legal cases are still open with the Prosecutor’s Office and the High Court of Justice of Madrid that may still result in the cancelation of the urban planning project. (…).

Meanwhile, the cooperative pointed out that the buildings belonging to the former Workshop are not classified as being of cultural interest, nor do they have any kind of offical protection. “The General Urban Planning Plan of 1997 and its subsequent review did not foresee the need to classify buildings or land as urban land for residential use.”

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

What Can We Expect From The Housing Sector?

30 November 2015 – Cinco Días

It goes without saying that the real estate sector was the most vilified during the crisis. Blamed for almost all of the problems that ended the greatest economic boom in recent history, the sector has been striving to rise from the ashes since the end of 2013. International investors returned to Spain first, attracted by the low prices – according to statistics, property prices have now decreased by between 30% and 40% since their peaks.

Next, came a rise in the number of transactions, driven by improvements in the labour market and expectations of an economic recovery. Following this increase in sales, came a moderation in the price decreases and, finally, the cranes returned to the urban landscape of the large cities, albeit in a very piecemeal way. The housing stock, i.e. the huge surplus of new homes (389,00 units in total, according to a recent study from Tinsa), has stopped representing such a problem in certain cities and therefore, the moment to return to property development has arrived.

The problem is that the crisis has practically destroyed the real estate sector along the way. Today, sales represent just one third of their levels in 2006, firms are constructing only 4% of their historical peak volumes and instead of property developers and construction companies, the business has now diversified and is in the hands of the banks, Sareb and new servicers.

Macro-economic figures

The truth is that the key macroeconomic figures are starting to show real signs of the real estate recovery. Employment is growing by more than 3% and the flow of financing is increasing. Mortgage lending continued to increase at rates exceeding 20% in September, which means that it has now been recording double digit increases for 16 consecutive months.

Nevertheless, the experts warns that the “exit from the crisis is not going to be the same for everyone”, says Luis Corral, CEO of Foro Consultores. “There is a dual market. The euphoria being seen in Madrid, and to a lesser extent in Barcelona, contrasts starkly with those places where the surplus has not yet been digested and, therefore, nobody wants to build there”, he says.

The evolution of these two variables, employment and credit, will determine whether the recovery strengthens or stagnates at its current modest figures. Demographics are working against it, since the rate of household creation that was seen at the end of the 1990s, which really spurred on real estate demand, is not expected to be repeated, according to the population projections made by Spain’s National Institute of Statistics. That is why nowadays, almost no-one, except from the sector association Asprima and the appraisal company Tinsa, dares to venture a projection about what demand for homes will be like in the future. Both entities forecast that between 200,000 and 250,000 homes will be constructed over the next few years.

New Projects

Prudence is one of the key words that everyone is talking about in the market at the moment. Prudence in terms of projections, lending, construction etc.

Refurbishments

Moreover, the logical evolution for Spain’s stock of more than 25.5 million homes involves renovations and refurbishments. The vast majority, almost 95% of homes, do not comply with basic energy efficiency criteria and many established neighbourhoods in large cities could be rejuvenated with good urban renovation and renewal projects, with the corresponding boost to activity and employment that such projects would involve.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

NH Has Raised Its Room Rates By Between 15% & 40% After Renovating Hotels In Spain

13 February 2015 – Expansión

The CEO of the NH hotel Group in Spain, Hugo Rovira, says that “customers are not fools, if you offer them quality, then they are willing to pay for it”, but he recognises that “if you give out peanuts, then you will attract monkeys”, after sharing his opinion that “retaining customers through low prices is not sustainable, there will always be cheaper competitors”.

The NH Hotel Group is spending 25% of its turnover on the renewal of its gastronomic offer, a major commitment for the hotel chain, which regards high quality gastronomy as the “saviour” of the sector as a means of differentiating itself.

And so it is with good reason that NH has invested almost four million euros in the renovation of its gastronomic offer, a fundamental part of the transformation that the chain is undertaking in virtually all of its hotels.

The renovation of its facilities has resulted in “an increase in the room rates at NH hotels across the country, of between 15% and 40% of the original cost, depending on the establishment”, according to the CEO of the NH Hotel Group in Spain, Hugo Rovira.

Rovira stresses that “it is hard to see how it could have got any worse in Spain” and that the commitment to high quality culinary tourism has led to the “salvation” of the sector, differentiating NH accommodation thanks to its wide-ranging gastronomic menu, without renouncing the commitment to offer customers the best service.

“Coffee for everyone is not good” said Rovira categorically to journalists on Thursday morning at a business breakfast. Specifically, the executive was referring to NH’s decision to provide a top class service both in room and in its restaurants.

By way of example, Roviro explained that NH continued to serve the best products in its minibars throughout the crisis and generated more or less the same volume of sales, with an increase of up to 20% in recent years.

Rovira also wanted to highlight the trend towards recovery in the Spanish market and he noted a “slight recovery”, although he made it clear that “we still have a long way to go, but at least we are on the right track”.

Positive outlook for 2015

In fact, the outlook for 2015 in our country is “good”, according to the CEO, who said that results from the last quarter of 2014 showed signs of recovery “both in terms of corporate clients and families”.

And he said that “clients are not fools, if you offer them quality, then they are willing to pay for it”, but he recognises that “if you give out peanuts, then you will attract monkeys”, after sharing his opinion that “retaining customers through low prices is not sustainable, there will always be cheaper competitors”.

NH seeks to differentiate itself and continue to maintain its image of high quality service through two clear commitments (a line of restaurants that serve products with Designation of Origin (Denominación de Origen or DO) and “show-cooking” or “Domos”, led by renowned chefs and apprentices from the hotel chain’s culinary school).

Renovations and relaunches

The NH Hotel Group is immersed in its renovation and relaunch plan, for which it has a total budget of €220 million to spend between 2013 and 2018; 55 hotels have signed up to the plan, of which 20 are located in Spain.

Other lines of action, such as the so-called “open bars” represent another model for the local market, as the company offers a service “similar to those provided in VIP lounges at the airport” in which clients can access “self service” bars.

Original story: Expansión

Translation: Carmel Drake