Tag: Renta 4

Témpore Finalises Purchase of 1,100 Flats from Sareb worth €160M

31 October 2018 – Eje Prime

Témpore Properties is shopping at home. The Socimi, listed on the MAB, is finalising the acquisition of a portfolio of 1,110 homes from Sareb worth €160 million. The company, created by the bad bank, is planning to sign the operation before the end of the year, according to explanations provided by its CEO, Nicolás Días Saldaña, during the Investment in the real estate sector through a Socimi listed on the MAB day, organised by Renta 4 and the CEOE.

The Socimi, which specialises in the rental market, will use own funds to complete the purchase of this package, through which it will benefit from the right of first refusal that it has over Sareb’s assets.

This privilege reflects the interest that the bad bank has in ensuring that Témpore achieves portfolio growth over the next few years to become a reference play in the rental segment and debut on the main stock market before 2021, with a portfolio worth €500 million.

On the other hand, the Socimi is working on the sale of 20% of the company’s dispersed assets. The aim of that plan is to raise capital to use to make new investments in developments and entire blocks.

Currently, Témpore has 1,330 homes in its portfolio and generates revenues from rental income of around €7 million. The Socimi has an occupancy rate of more than 90% and obtains an average gross yield of 4.1% from its assets. The management company’s delinquency rate is 3%.

Original story: Eje Prime

Translation: Carmel Drake

Santander & Sabadell Need To Recognise c. €400M in Provisions to Cover Sareb’s Losses

2 July 2018 – El Confidencial

The bad bank is continuing to generate problems for the Spanish financial sector. Both for the State, due to the stake held by the Spanish Fund for Orderly Banking Restructuring (FROB), and for the large banks, which own 55% of the entity’s share capital. In this way, the deterioration of the Company for the Management of Assets Proceeding from the Bank Restructuring (Sareb) is going to have repercussions for the banks, which will need to recognise additional provisions worth €402 million.

Specifically, the company chaired by Jaime Echegoyen (pictured above) has updated its business model to reflect forecast losses of 73% of the initial investment, which amounted to €4.8 billion in 2012 split between share capital (€1.2 billion) and subordinated debt (€3.6 billion). “It has performed a reality check, so now we know the figures that we have to stick to”, said one banking executive.

The entities most affected by these revised forecasts are Santander, following its incorporation of Popular, which now owns 22.22% of Sareb; CaixaBank with 12.24%; and Sabadell with 6.61%. Nevertheless, “the impact ought to be very limited, given that “the banks already have provisions to cover the majority of those losses”, explains Nuria Álvarez, analyst at Renta 4, in a note from the bank analysing Sareb’s revised business plan.

Banco Santander has a €1.07 billion exposure to Sareb, although it has now provisioned 50% of that figure, and so it needs additional provisions amounting to €246 million, according to calculations by JP Morgan. The analysts reduce the impact to less than 2% of the profits of the group chaired by Ana Botín.

Impact for Sabadell

The other entity that stands out in this sense is Sabadell, which, according to the US bank, has an exposure amounting to €323 million with current provisioning levels covering 29%, divided between €228 million in share capital and €95 million in subordinated debt. Therefore, according to these calculations, Banco Sabadell needs to recognise additional provisions amounting to €142 million.

The third bank with provisioning needs is CaixaBank, on the basis of these estimates, although they are somewhat residual. The bank chaired by Jordi Gual has an exposure amounting to €593 million, but with a 70% provision, meaning that its shortfall amounts to just €18 million. Meanwhile, Bankinter and Bankia do not have any provisioning needs, according to JP Morgan, and BBVA did not participate in the creation of Sareb.

The bad bank was created in 2012 to assist with the digestion of toxic property in the financial sector. Under the then presidency of Belén Romana, who has recently joined Santander’s Board ahead of the upcoming departure of Rodrigo Echenique, the entity promised profits to the banks to attract capital. The deadline for the completion of Sareb’s work is 2027, the year for which the revised business plan forecasts losses with respect to the initial investment.

Original story: El Confidencial (by Óscar Giménez)

Translation: Carmel Drake

Holdreit Negotiates Sale of the Socimi Kingbook & its Exclusion from the MAB Before June

23 May 2018 – Eje Prime

Besides the purchase of assets and their subsequent management, Spain’s Socimis are also gradually starting to enter the business of corporate operations. Such is the case of Holdreit, which is negotiating with an investor to sell 100% of its Socimi specialising in gas stations, Kingbook, according to sources at the company speaking to Eje Prime. If the operation is closed before the end of June, the new owner will exclude the Socimi from the Alternative Investment Market (MAB), where its shares are currently traded.

The Socimi, owned by Holdreit, the company’s sole shareholder and controlled by GL Europe Reit (60%) and JZ Real Estate (40%), has been subjected to a due diligence process by an investor, whose name has not been revealed.

The purpose of this study is to purchase 100% of the shares in Kingbook Inversiones Socimi. “This offer is being analysed by both the shareholder and the Board of Directors, and the month of June 2018 has been set as the period for the acceptance and signing of the operation. During that time, all of the due diligence and legal work is expected to be completed successfully”, explain sources at the group.

In the event that the aforementioned due diligence process is concluded satisfactorily and “in the best interests of the company, the sole shareholder will request the exclusion from trading of all of the shares no later than 30 June 2018”, they explain. In this way, Kingbook would cease to trade on the MAB.

The Company’s Board of Directors has agreed to ask Renta 4 to begin the appropriate procedures to obtain a one-off exoneration from compliance with its “selling obligations under the liquidity contract signed with the company” from the Market Supervisory Committee, as a step prior to the sale of all of Kingbook’s shares.

The group’s complicated financial situation could be one of the reasons for the sale of the Socimi. At the beginning of the month, Kingbook injected additional funding of €1.4 million in order to “reduce the company’s demandable liability and increase its own funds”. Following that increase, the company’s share capital amounted to €10.9 million.

This move by Kingbook comes after the Socimi increased its share capital by €21.6 million last November to offset losses. The company explained that the Socimi has been generating losses since it started operations. As at 30 September 2017, the result for the year was negative, with losses of €1.25 million (…).

Nevertheless, Kingbook owns a solid portfolio of assets that could prove attractive to a new investor. The company owns land worth €10.3 million and buildings worth €20 million (…).

Moreover, last year, Kingbook added more than a dozen service stations to its real estate portfolio. (…). In total, Kingbook spent €7.5 million on new acquisitions during 2017.

The Socimi currently manages 57 real estate assets through which fuel distribution activities are carried out, and it owns one hotel and one industrial warehouse for rent.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Témpore Properties Appoints Directors & Finalises its IPO

6 March 2018 – Expansión

Témpore Properties, the Socimi created by Sareb, has started the countdown to its debut on the stock market. It will make the leap within the next few weeks, possibly before Easter, once the bureaucratic procedures have been completed. It will list on the Alternative Investment Market (MAB), like the vast majority of the 50 Socimis whose shares already trade on the stock market.

The company has been created with a selection of 1,500 assets, of which 1,383 are urban residential properties that generate returns of 3% per annum. The remainder are storerooms and garages. The combined value of the assets amounts to €175 million. Témpore’s size places it in the low-medium bracket in the sector, excluding Socimis backed by family capital. Its perimeter may be increased depending on the needs of Sareb, which has been backing property development in recent times. “Other Socimis do not have that option”, explain sources at the bad bank.

Azora is the manager of the Socimi and Renta 4 and Clifford Chance are advising the IPO process.

Yesterday, the Board of Témpore Properties held its first meeting after approving agreements relating to the entity’s internal operation and the listing process. The Socimi is chaired by Juan Ramón Dios Rial, Director of Real Estate Development and Promotion at Sareb. During the course of his career, Mr Dios has held various positions at TSB Bank, Citigroup, General Electric Capital Bank and Barclays España.

The Board of Directors comprises five members: three independent directors, one executive director and one proprietary director. They are Juan Ramón Dios, Nicolás Díaz Saldaña, Socorro Fernández, Rafael de Mena and Galo Juan Sastre.

Appointments

Témpore Properties is going to be led by Nicolás Díaz Saldaña, who has been the Director of Rental Mangement at Sareb until now. He will serve as the CEO and will sit on the Board as an executive director. Previously, he worked at BBVA, was Director of the International Team at Metrovacesa and CEO of the French Socimi Gecina. The company’s Finance Director is going to be Pelayo Barriga, who has been performing the same role at Sareb until now.

With Témpore Properties, the managers of Sareb are intending to open a window into the rental market, which is proving more profitable than property sales in certain segments. Moreover, through this route, the bad bank is going to be able to access new private capital and slightly reduce its high level of indebtedness.

By law, Socimis are obliged to remunerate their shareholders, and so Sareb can expect to receive dividends from Témpore.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

Témpore Properties Starts Out with a Portfolio of 1,383 Homes

28 November 2017 – Sareb

Témpore Properties, the Socimi constituted by Sareb, the ‘Company responsible for the Management of Assets Proceeding from the Restructuring of the Banking System’, has started its journey with a package of 1,554 assets, of which 1,383 are homes and the rest are associated assets (storerooms and garages). The total value of the transferred assets amounts to €175 million.

The portfolio transferred by Sareb is concentrated in the metropolitan areas of Spain’s large capitals (80%); the remainder is located in geographical areas that have high demand in the rental market, such as the provinces of Valencia, Sevilla, Zaragoza, Málaga and Almería. The homes have an average size of 93 m2 and have two or three bedrooms.

The management of this portfolio has been assigned to Azora, which is going to be directly responsible for the work required to administer and market the assets. In parallel, Sareb is continuing to work with its advisors Renta 4 and Clifford Chance on Témpore’s stock market debut on the Alternative Investment Market (MAB), which will take place at some point in the next few weeks, once all of the necessary procedures have been completed.

Diaz Saldaña, Head of the Socimi

The culmination of the asset transfer process coincides with the configuration of the management team of Témpore Properties, headed by the Director of Rentals at Sareb, Nicolás Díaz Saldaña.

Diaz Saldaña has extensive experience as a senior manager in the real estate and financial sectors, with a special focus on the international market. Between 1991 and 1997, he developed analysis services for the Institute of Economic Studies. Subsequently, Saldaña held different positions at BBVA between 1997 and 2008, where he rose to lead the bank’s subsidiaries in Benelux and Germany. Before joining Sareb, Saldaña led the international division at Metrovacesa during the toughest period of the real estate crisis.

Original story: Sareb

Translation: Carmel Drake

Barceló Offers €2.48bn For NH & Sets 3-Month Negotiation Period

21 November 2017 – Expansión

To create a hotel colossus with more than 600 hotels and 109,000 rooms in Europe, Latin America and the USA, and one of the largest tourism companies in Spain. With this objective in mind, the Barceló group has initiated contact with the NH Hotel Group to propose one of the largest hotel mega-operations in recent years in Spain.

Barceló is offering a swap equation that involves valuing each NH share at €7.08. In other words, it is willing to pay €2.48 billion for the company in total. That valuation represents a premium of 27% over the group’s average share price during the three months leading up to 30 October, of €5.56. Moreover, that premium rises to 41% if we consider the company’s closing price last Friday of €5.

Yesterday at 12:30, Spain’s National Securities and Exchanges Commission (CNMV) lifted the suspension on trading that had been weighing down on NH’s shares, but the avalanche of purchase orders meant that it took another 45 minutes for the shares to actually start trading again. By the close of business, NH’s list price had soared by 11.8%, to €5.59. In this way, its market capitalisation rose from €1,751 million on Friday to exceed €1,950 million. So far this year, the hotel company has seen its share price rise by more than 46%, however, it is still well below the €14.70 per share that it reached in 2007, at the height of its stock market boom.

Barceló submitted to the CNMV a letter sent by Simón Pedro Barceló, Co-President of Group Barceló, to the Chairman of the Board of Directors of NH, Alfredo Fernández Agras, in which he proposes considering the merger of the two companies. According to the initial proposal, the Mallorca-based firm would end up owning 60% of the merged group. Barceló explains that his interest in this merger stems from “the great strategic sense and the exceptional potential for the creation of value for the shareholders of both companies”.

The letter also opens the door for the merged group’s corporate headquarters to be located in Madrid and it proposes that the maximum governing body of the merged company, in which Grupo Barceló would hold a majority stake, would have sufficient members to ensure that the existing shareholders of NH are represented.

Barceló proposes a merger, in other words, “the integration of Grupo Barceló and NH through the delivery of new shares issued by NH to Grupo Barceló, keeping the company listed”. “Our intention is to integrate all of the assets and liabilities of Grupo Barceló, including our Hotel and Travel divisions, which we believe could contribute value to the combined group. Nevertheless, we are willing to consider different alternatives regarding the perimeter of the assets and liabilities in order to facilitate the success of the transaction”, said Barceló.

Three months to reach an agreement

The offer, which is non-binding and conditional upon a due diligence (detailed analysis) provides for a period of “up to 3 months for the completion of this work, to reach an agreement between the two parties and submit a transaction to our respective governing bodies for definitive approval”. In fact, Barceló said that he is willing to consider alternatives with respect to the perimeter of the operation to facilitate it.

If the proposal ends up going ahead, it would result in the creation of the largest Spanish hotel group, ahead of Meliá, which at the end of 2016, had 375 hotels and 96,369 rooms. It would become one of the largest players in the sector in Europe, behind only the British firm InterContintental and the French company Accor.

Barceló has engaged Santander as financial advisor for the operation and has not hired any legal advisor.

NH views the offer with suspicion

From the get-go, the offer has been viewed with suspicion by NH, which indicated to the CNMV that it had received “an unsolicited, preliminary and non-binding expression of interest” from Barceló for the merger of the two businesses.

According to this offer, Barceló would have “a majority on the administrative board”. Moreover, NH reminded the regulator that its Board of Directors recently approved a 3-year strategic plan “involving an independent project for significant growth, which is still valid today”.

NH’s largest shareholder is the Chinese giant HNA, which holds a 29.5% stake, but it is not represented on the Board of Directors following its expulsion last year due to a conflict of interest. After HNA is the British fund Oceanwood, with a 12% stake; and Hesperia, the chain chaired by José Antonio Castro, with a 9% stake.

Analysts think the merger makes “strategic sense” 

Analysts at Renta 4 and Bankinter agree with Barceló that the operation makes “strategic sense”.

Original story: Expansión (by Rebeca Arroyo and M. L. Verbo)

Translation: Carmel Drake

Elaia, Socimi Focusing on Hotels and Tourist Apartments, Debuts on Stock Exchange Valued at €119 Million

31 October 2017

The hotel and tourist apartment socimi Elaia will be listed on the Alternative Stock Market (MAB) this Thursday, November 2, at 10.55 euros per share, a price that values the company at 119.1 million euros.

The Coordination and Incorporation Committee of the Alternative Stock Market (MAB) has sent the Board of Directors a favourable evaluation report on compliance with the incorporation requirements of the company ELAIA INVESTMENT SPAIN SOCIMI; after all the submitted documentation was studied.

The company will trade under the code “YEIS”, and its contracting will be done through the “fixing” pricing system. Renta 4 Corporate is the Registered Advisor and Renta 4 Banco will act as a Liquidity Provider.

Previously called Eurosic, it has a portfolio composed of two residential buildings located in the centre of Madrid, as well as five tourist apartment buildings, in which it has Pierre & Vacances as its partner, and five hotels, all of them spread over Gerona, Málaga, Barcelona and Mallorca.

Controlled by the French group Batipart, it invested a total of 145 million euros in the assets. The company also includes Euler Hermès, with 13.8%, and Allianz Invest, with another 9.21%.

Currently, it is performing rehabilitation works on the two buildings in Madrid. Both are nineteenth-century buildings, located in the centre of the capital (Bailén and Atocha streets, respectively). The socimi will invest almost 15 million euros on the renovations, and the associated flats will be subsequently placed in the rental market.

With Elaia’s foray into the stock market, the firm is seeking to increase its capacity to attract resources within a strategy focused on the search for new opportunities for development and long-term cooperation with hotel operators.

Specifically, the socimi’s growth policy focuses on acquiring new assets in coastal areas “with a high potential for appreciation” through a strategy of “repositioning and comprehensive reform” of the assets.

At the end of last June, Elaia held a gross financial debt of 43.7 million euros, according to the information the firm provided to the MAB.

Original Story: Inmodiario

Translation: Richard Turner

Sareb Appoints Azora To Manage Its First Socimi, Témpore Properties

21 September 2017 – El Confidencial

Sareb has chosen one of the largest experts in the management of rental housing in Spain to commandeer its first Socimi. The expert in question is Azora, an independent firm with almost 15 years experience and more than €3,000 million of assets under management. Azora’s key milestones include the creation and management of Hispania, one of the largest Socimis in Spain.

After organising a competitive process between several candidates, the entity chaired by Jaime Echegoyen (pictured above), has chosen the management firm founded by Concha Osácar and Fernando Gumuzio to take the reins at Témpore Properties, the name that Sareb has given to its first Socimi. The appointment is still pending the final approvals.

Sareb’s new vehicle will own around 1,500 rental properties, worth almost €200 million. The entity wants to place the assets, which have been valuedby CBRE, on the market before the end of the year.

Having engaged Renta 4 as the registered advisor and Clifford Chance as legal counsel, the next major challenge for Sareb will be to convince the greatest possible number of investors about the virtues of the Socimi, given that, although its market debut will be made on the MAB – the Alternative Investment Market – Echegoyen’s aim is to sell the highest percentage of share capital possible.

In this way, Azora will play an important role, given that over the course of its history, it has managed more than €1,700 million from institutional investors through its five funds, as well as having a cover letter from Hispania, whose illustrious shareholders include none other than George Soros.

Nevertheless, in recent times, the management firm has been focusing on the divestment of the bulk of these vehicles, given that they are now reaching maturity.

In fact, this week, the firm closed the sale of Resa, the largest student hall of residence company in Continental Europe, which formed part of Lazora, a vehicle with which the manager started when it focused exclusively on rental homes.

Moreover, since the spring, the firm has been actively working on the liquidation of the fund Azora Europa 1 as well as of the Socimi Hispania, which is on the verge on selling its entire office portfolio to the insurance firm Swiss Life.

Azora is also behind the sale of 3,000 homes in the Community of Madrid to Goldman Sachs, which now comprise the company Encasa Cibeles, and of the purchase of four Consell Comarcal de Barcelonés developments from several Catalan town halls, assets that it has just debuted on the MAB through its Socimi Colón Viviendas.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

MAB Approves Socimi VBare’s Debut On The Exchange

24 November 2016 – Expansión

The Socimi will debut on the stock exchange at a price of €12.90 per share, which represents a total company value of €20.6 million.

The MAB’s Coordination and Incorporations Committee has issued a favourable report to the exchange’s Board of Directors confirming the Socimi VBARE Iberian Properties’ compliance with the joining requirements, after studying all of the documentation submitted by the company.

Prior to joining the MAB, the company will launch a share subscription offer. According to the Spanish Stock Exchange and Markets (Bolsas y Mercados Españoles), the incorporation still requires the approval of the MAB’s Board of Directors.

Renta 4 Corporate is the Socimi’s registered adviser. Renta 4 Banco will act as the placement entity, liquidity provider and agent entity and, in addition, Value Base Underwriting and Securities Distribution will serve as the placement entity for the shares that are going to be issued in Israel, amongst qualifying investors only.

The company’s Board of Directors has set the reference value for each share at €12.90, which represents a total company value of €20.6 million. This estimate has been performed taking into consideration the share valuation report performed by the independent expert Grant Thornton.

VBARE Iberian Properties specialises in residential rental assets. Its strategy focuses on the acquisition of real estate assets, for their subsequent renovation and rental. It currently owns 183 real estate assets, all of which are located in Madrid.

Original story: Expansión

Translation: Carmel Drake

GMP Socimi Finalises Its Debut On The Stock Exchange

17 May 2016 – El Confidencial

One of Spain’s largest real estate groups is about to list on the stock exchange. GMP Socimi, the company jointly owned by the Montoro family (70%) and the Government of Singapore (30%), now has all the pieces in place for its stock market debut.

To this end, the company has engaged the entity Renta 4 as registered advisor and has commissioned CBRE to value its assets, according to sources familiar with the company.

The debut on the stock market is a mandatory requirement for GMP, which was constituted as a Socimi in October 2014. The rules for this type of company grants a maximum period of two years to become a listed company. In fact, this rule has been behind all of the recent debuts of such companies on the MAB.

In parallel with its stock market listing, the real estate company has been negotiating with its creditor entities to secure the refinancing of its financial commitments, which exceed €750 million, according to its accounts for 2014, the most recent year for which figures are available, and the majority of its debt is due to mature in 2017.

Although the gross value of the company’s assets amount to €1,300 million, the company was valued at just over €600 million two years ago, when the Singapore sovereign fund, GIC, acquired its 30% stake for €200 million.

Nevertheless, it was precisely the involvement of the Asian giant that allowed the Montoro family to adjust its financial situation and secure the necessary financing to sign operations such as the purchase of Castellana 77. All of this, combined with the recovery of the real estate market means that the group’s next valuation is expected to be much higher than the amount assigned by GIC at the time of its investment.

The Montoro family’s Socimi has been one of the great survivors of the crisis and its buildings include the iconic Torre BBVA on Paseo de la Castellana, as well as the property on Calle Génova, 27.

Since GIC became a shareholder, the company has handled operations such as the aforementioned purchase of Castellana 77 for €90 million; the former headquarters of Altadis, on the Madrilenian Calle Eloy Gonzalo, for €30 million; the office building located on Condesa de Venadito 1; the headquarters of Cortefiel and SGS in Madrid; and the development of a corporate building in Las Tablas.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake