2018: The Year that Blackstone was Crowned the King of the Spanish Real Estate Sector

17 December 2018 – Eje Prime

Blackstone wants it all and it wants it now. That is the sensation that the US investment fund, the new king of the Spanish real estate market, is transmitting throughout the real estate sector. Its portfolio is worth more than €20 billion after an accelerated period of purchases during 2018.

One of the objectives of the US fund manager has been, precisely, to expand its network in the Spanish real estate sector by entering markets such as the logistics segment. At the beginning of December, the company closed its latest operation in the country with the purchase of a logistics portfolio from Neinver for €300 million.

Nevertheless, the deal involving the giant Neinver is by no means the most significant operation that Blackstone has undertaken this year. Over the last twelve months, the group has taken control of Hispania, to grow in the hotel sector; it has acquired 80% of Testa, to manage thousands of rental homes, and in the logistics sector, it has accumulated 1 million m2 of space with the 55 assets from Neinver and the purchase of an industrial portfolio from Lar España.

Blackstone has disbursed almost €4 billion in the Spanish real estate sector this year, a figure that far exceeds the €127.5 million that it spent on its first investment in the domestic market in 2013. Moreover, that debut was not free from controversy, given that the group purchased 18 residential developments, containing 1,860 social housing units, which the Town Hall of Madrid sold the fund through the Municipal Housing and Land Company of Madrid (Emvsa).

Five years later, Blackstone is one of the largest owners of residential assets in Spain and the leader of the hotel sector. It leapt to first position in the hotel market ranking this year following its successful takeover of the Socimi Hispania. The company paid €1.99 billion for that vehicle, managed by Azora. With that operation, the fund added 46 assets and almost 13,150 rooms in Spain to a portfolio that it started to grow in 2017 with the purchase of HI Partners, the hotel arm of Banco Sabadell, for €630 million. In total, the manager owns 63 assets and almost 18,000 hotel rooms across Spain.

Hispania also provided Blackstone with residential assets worth €230 million, as well as 25 office buildings whose market value exceeds €600 million. Also in that segment, the company added the iconic Planeta office building in Barcelona to its portfolio during 2018, which it purchased from the Lara family in July for €210 million.

Spain, 20% of its global portfolio

Today, Spain accounts for 20% of Blackstone’s global investment. In total, the US firm owns property worth almost USD 120,000 million (€105,387 million) around the world. This real estate giant has become the largest unlisted real estate company in Spain (…).

The superiority of Blackstone’s portfolio in Spain with respect to those of the large domestic real estate firms is clear. The two largest players, Merlin and Colonial, are ranked within the top 15 Socimis in Europe and, yet, their portfolios are worth just half of that of the fund, at €11.785 billion and €11.19 billion, respectively.

Santander’s best friend

As well as mixing with other real estate players, Blackstone has made friends with some of the Spanish financial institutions. The banks, big losers in the previous real estate cycle, have worked hard over the last two years to place their property with the highest bidder, taking advantage of the new boom in the residential market.

In this way, in 2017, Banco Santander agreed with Blackstone the largest operation involving the sale of toxic assets from the real estate sector in the country. The fund manager purchased 51% of Popular’s property, a portfolio with €30,000 million in assets.

The relationship with the bank owned by the Botín family has been strengthened in 2018 with Project Quasar, the real estate firm created by the financial institution and the fund. The joint venture received a capital injection amounting to €300 million in May. Through this vehicle, the transfer of Popular’s assets is being carried out.

In order to place this property into circulation, as part of the operation in 2017, Blackstone also acquired the bank’s servicer, Aliseda, led by Eduard Mendiluce (…), who also manages the Socimi Albirana.

Albirana Properties is one of four residential Socimis that Blackstone currently has listed on the Alternative Investment Market (MAB). The others are Fidere Patrimonio, Corona Patrimonial and Torbel Investments.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Patrizia is On The Hunt for New Purchases in Bilbao, Sevilla & Valencia

10 December 2018 – Eje Prime

Patrizia Immobilien is confirming its interest in the Iberian real estate market. The German investment manager, which has been present in Spain and Portugal since 2015, has set itself the short-term objective of entering Bilbao, Sevilla, Valencia and Oporto, through the purchase of new assets, according to comments made by Borja Goday, the Director General of the company in the Iberian Peninsula, speaking to Eje Prime.

Until now, the company has invested €870 million in total in real estate in the Spanish and Portuguese markets. Madrid, Barcelona, Málaga and Lisbon are the cities in which Patrizia is already present, “with minimum investments of €15 million but where that figure could exceed €500 million if the operation is worth it”, explained the executive.

In fact, the manager participated in the process to acquire one of the office buildings that comprise the Cuatro Torres Business Area in Madrid. Moreover, the company not only invests in the office segment, it is also committed to other markets such as the residential, retail, hotel, logistics and alternative asset segments (including student halls, complexes for the elderly and parking spaces).

Currently, Patrizia’s asset portfolio in Spain includes Serrano 90, located on Madrid’s golden mile and Gran Vía 21, also in the Spanish capital, which houses a hotel and a retail premise. Nevertheless, the latest major operation by the manager on the peninsula was the purchase of an industrial plot spanning 66,424 m2 in Toledo for €37.5 million. The other three logistics platforms that the company owns in Spain are located in Madrid and Barcelona.

Patrizia and its great interest in Spanish property

With its headquarters in Madrid and a staff of eleven, Patrizia arrived in Spain just three years ago. “At the end of 2017, we purchased Triuva and Rockspring, two companies that already owned assets on the peninsula”, explained Goday, who added that “the rapid growth of the group in both the Spanish and Portuguese markets is due to those two acquisitions”.

“Spain is still an attractive market, we still have demand and that is why we are launching new operations on such a frequent basis”, said the director. Since the beginning of the year, the manager has been on the hunt for capital from Spanish institutional investors, although, as Goday explains, it is not an easy task, since “they do not invest from one day to the next”.

One of Patrizia’s other plans on the peninsula is to strengthen its presence in the rental market. “It is a segment that we like a lot and for that reason, if we find an appropriate residential or office building, then we would not rule out buying it”, explained the executive. Nor does the group rule out alliances with Socimis or the acquisition of a property developer to grow in the Spanish residential sector. In this sense, Goday says that “a good opportunity has not presented itself yet” and that “it would all depend on the quality and location of the land that they own”.

Patrizia is currently present in more than twenty European countries, including, besides Spain and Portugal, important markets such as Italy, France, the United Kingdom, Ireland, Belgium and Luxembourg. The group’s main focus of activity is Germany, where it launched its activity 32 years ago and where it is a listed company (…).

Original story: Eje Prime (by B. Seijo)

Translation: Carmel Drake

Elix VRS Purchases a Building in Barcelona for €4M

3 December 2018 – Eje Prime

Elix Vintage Residencial Socimi is continuing to back Barcelona. The company, led by the businessmen Jaime Lacasa and Jorge Benjumeda, has purchased a building in Barcelona for €4 million, according to a statement filed by the company with the Alternative Investment Market (MAB).

The purchase of the asset, located on Calle Tamarit in the Catalan capital, has been financed in part (42.5%) by own funds and in part (57.5%) by a loan. The loan, granted by CaixaBank, has a duration of five years with a quarterly repayment schedule.

This operation follows the purchase of another residential property that the Socimi carried out at the end of October. On that occasion, Elix VRS acquired a building on Calle Consell de Cent for €4.1 million, according to a report filed by the company with the MAB. Moreover, in August, the firm purchased a portfolio of four assets in the centre of the Catalan capital for €34 million.

The Socimi, controlled primarily by the property developer Elix and the funds KKR and Altamar Capital Partners, has a portfolio containing more than 25 assets located in Madrid and Barcelona. The company’s plans involve purchasing around forty buildings between now and 2021 to subject them to comprehensive renovations and then put the homes up for rent. That rental income will sustain the Socimi, which plans to rotate its portfolio of assets every three years.

Elix VRS made its debut on the stock market in July. The company, which is headquartered in Barcelona, was created with a share capital of €100 million, the majority of which was contributed by KKR and a group of international and domestic investors including Altamar and Deutsche Finance Group. The rest of the shares are owned by Jaime Lacasa and Jorge Benjumeda, the founders of the Socimi.

Original story: Eje Prime (by B. Seijo)

Translation: Carmel Drake

Arum Group Invests Another €80M to Expand La Manga Club

20 November 2018 – Eje Prime

Arum Group is getting its wallet out to expand its resort in Murcia. The Spanish property developer, chaired by the magnate Jordi Robinat, is planning to invest more than €80 million in the upcoming expansion of La Manga Club, its residential complex located in the municipality of Cartagena, according to explanations provided by sources at the group speaking to Eje Prime.

The company is already processing a new partial plan to expand the resort by more than 48,000 m2, with the aim of developing new homes. Moreover, if the operation goes ahead, the group forecasts that the building work will begin between the end of next year and the beginning of 2020. The scheduled execution period is between three and four years.

Currently, La Manga Club has a surface area of 1.3 million m2, contains 2,300 homes, two 5- and 4-star hotels, three golf courses (one of which has 18 holes), thirty clay tennis courts, eight soccer fields and a cricket pitch.

With the majority of the residential assets now sold, Arum Group is developing the last one hundred homes, which will be primarily dedicated to international buyers. “English investors are the most common, although increasingly, we are closing more operations with Norwegian clients, as well as Belgians and people from other countries in the north of Europe”, explain sources at the company.

La Manga Club is the only project that the Arum Group has underway in the Region of Murcia. In fact, the property developer owned by Robinat purchased the complex from the Anglo-American cruise company, The Peninsular&Oriental Steam Navigation (P&O), in 2004 for €146 million.

Since then, the Spanish company, headquartered in Barcelona, has undertaken several expansions of the resort, which is one of the largest in southern Europe. The company owns three other residential projects currently underway in Spain, two in Cataluña and one in Tenerife.

The transformation of the Arum Group

The origins of the Arum Group date back to the 1990s, when Jordi Robinat, one of the people responsible for the launch and subsequent sale of the iconic Palace and Ritz hotels in Madrid, decided to set up on his own. He did so initially by creating the firm Med Resort before then formalising the expansion of the company in the Spanish real estate sector, under the brand Medgroup.

With that company, which at the time included George Soros and the former Goldman Sachs banker, Richard Perry, amongst its largest shareholders, Robinat introduced the tourist resort complex to the Spanish coast by integrating homes, hotels, golf courses, spa centres and commercial premises into the same complex.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

Socimi Vitruvio to Sale its Industrial Assets worth €12.8M

2 November 2018 – La Información

The Socimi Vitruvio, which focuses on the residential market, wants to take a new step on its journey and get rid of its industrial assets. In this way, the Socimi, which has Joaquín López-Chicheri as its CEO, will focus on the residential sector, above all, although without neglecting its commercial assets or offices. On the other hand, it will dispose of the least glamorous part of its real estate portfolio, its logistics warehouses.

This part of its business, worth €12.8 million, according to the company’s own accounts, generates a return of 9.3% – the highest of any of its divisions – and has an occupancy rate of 100%. Despite that, the company’s plans involve forgetting about these types of assets, which they consider to be “residual” and “non-strategic”.

“We have always thought that residential is the safest type of asset”, say sources at the company. On the other hand, they recognise that diversification is due, in large part, to the need to generate higher profits to access dividend payments to shareholders. “Residential has the capacity to generate a lower recurring return, unless you assume one more level of risk”, said the CEO of the firm.

Where are this Socimi’s industrial assets located? The firm led by López-Chicheri owns properties of an industrial nature in Mercamadrid and Yunquera de Henares, a town close to Guadalajara.

The first of them, located in the aforementioned distribution platform, has a market value of €2.82 million, which represents a price of €526/m2. The second, on an industrial estate in the town of Yunquera de Henares, Guadalajara has a market value of €5.2 million. That asset has a surface area of 13,587 m2 and a price of €381/m2.

The Socimi that now wants to divest the logistics component of its assets has a “patrimonialist” vision, according to its CEO. In this way, the firm has diversified its assets to reduce risks. “The portfolios that traditional patrimonialist firms have are normally distributed between residential, well-located commercial premises and offices. And that is what Vitruvio has”, said the executive.

This real estate investment company was constituted in June 2014, under the Socimi tax regime. Since then, it has undergone several capital increases – raising almost €30 million in total – to acquire assets and position itself ahead of its stock market debut.

The bell was rung in July 2016, two years after its creation, at a price of €12.63 per share and with 126 shareholders. Nowadays, Vitruvio’s shares are listed on the Alternative Investment Market (MAB) through the fixing system – with two daily auctions – at a price of €13.70 per share.

In January of that same year, the company carried out its largest capital increase to date raising €11.5 million. Thanks to that, the number of assets increased along with their value to exceed €100 million.

Original story: La Información (by Lucía Gómez)

Translation: Carmel Drake

The Venezuelan Capriles Family Creates a Socimi: Kowo Real Estate

26 October 2018 – Idealista

Increasingly more families are deciding to channel their investments in property through Socimis. Whilst in August, it was the Koplowitzs who decided to create their own investment vehicle using that structure, now, it is the Venezuelan Capriles family that is throwing itself into the real estate market with its first Socimi, Kowo Real Estate, according to explanations provided by sources in the sector speaking to Idealista News.

In recent years, the Capriles family has become one of the most active in terms of investment in luxury housing through the company Gran Roque Capital. On its shoulders stand the recovery of three developments in Madrid, in the Chueca area (two on Calle Fernando VI and the other on Calle Barquillo). At the end of last year, the company started to market homes on Calle Pablo de Aranda in the El Viso area with the aim of reaching €11,000/m2.

Now, the company is pushing ahead with one of the vehicles of the moment in the real estate sector. The businessman Miguel Ángel Capriles has launched Kowo Real Estate Socimi, with the aim of buying and developing real estate assets of an urban nature for their subsequent rental.

But this is not the first time that the company has considered launching a Socimi. At the beginning of this year, the family announced that it was finalising the constitution of a Socimi to position itself as a leader in the tourist accommodation segment The initial investment in that project amounted to €40 million, according to the business plan provided by Edric Capriles.

The Bluemoon apartments are owned by that Socimi, according to reports from La Celosía. They are located in the El Carmen neighbourhood of Valencia, a stone’s throw from the cathedral and its first commitment in Spain. The company invested €5 million in that aparthotel, comprising homes for tourist use of a residential nature. In addition to Valencia, Málaga and Sevilla are also in the spotlight of the Venezuelan investors.

The real estate business of the Capriles family in Spain comprises luxury housing development and renovation projects. Its corporate network in Spain contains more than twenty companies dedicated to real estate development (Craski Inversiones, Madriski Inversiones…), the sale and purchase of real estate assets on their own behalf (Gran Roque Capital and Invecap Inversiones Inmobiliaria) and the rental of real estate assets (MACL Castellana 56).

Between them, all of those entities own total assets worth €125 million. Invecap Inversiones Inmobiliarias is the most important entity, with total assets of €53.3 million and from which almost all of the other entities depend. The latter, moreover, is the sole shareholder of the recently created Socimi.

Original story: Idealista (by Custodio Pareja)

Translation: Carmel Drake

Barcino Purchases a Mixed-Use Property in Barcelona for €2.8M

7 October 2018 – Eje Prime

Barcino is fattening up its portfolio of residential assets. The Socimi has acquired a residential property in Barcelona for €2.8 million, according to a statement filed with the Alternative Investment Market (MAB). The operation has been financed using a capital increase amounting to more than €9.7 million, which the company undertook at the beginning of September.

Barcino has purchased the property at number 57 Calle Joaquín Costa, in the Raval neighbourhood of the Catalan capital. The building comprises nine homes and two commercial premises in total. The current occupancy ratio of the asset amounts to 45%.

Barcino, which made its debut on the stock market at the end of 2017, defines itself as a company whose main activity involves the “acquisition and renovation of urban assets for their rental”. The company invests primarily in central locations in the metropolitan area of Barcelona and is controlled (50%) by the Dutch fund Barcino Management.

One of the Socimi’s most recent operations, completed in the month of September, was the acquisition of two residential buildings in Barcelona for €3.9 million in total: one of the properties comprises fourteen homes and one commercial premise in the Poble Sec neighbourhood, whilst the other comprises twelve homes and is located in the heart of the Raval neighbourhood.

Original story: Eje Prime

Translation: Carmel Drake

On the Hunt for Capital: Socimi Quonia Considers Issuing Bonds to Finance its Growth

11 July 2018 – Eje Prime

Quonia does not want to put any limits on its capacity for indebtedness. The company is considering carrying out a corporate bond issue to increase its financing options and, whereby, continue with its development plan, according to explanations provided by the company’s CEO, Eduard Mercader, speaking to Eje Prime. Through this move, Quonia would also open itself up to institutional investors.

The fact that Socimis must dedicate at least 80% of their profits to dividends “limits their capacity to accumulate debt”, explains Mercader. In this way, the main option for these types of companies when they are looking to grow is primarily through capital increases. However, the company’s executive is looking for “alternative formulae”, to apply “in the short term”.

Mercader’s decision to resort to bonds is also a consequence of the difficulties faced when completing capital increases with investors outside of Europe, such as in this case. Quonia was created in 2014 by the Mexican investors Divo Milán and Ana Saucedo and investors from that country currently contribute the majority of its resources.

Quonia has just completed a €3 million capital increase, although the company had approved the possibility of raising up to €26.5 million. Before the end of the year, the company will obtain another €1 million through the capitalisation of investor loans.

Although the resources forecast by the Socimi were greater, Mercader says that the final amount does not limit the company’s development plan. “We adapt ourselves to the capital that we receive”, says the executive, and adds that Quonia “is continuously raising funds”.

After its launch with the purchase of an asset in Barcelona, Quonia has been attracting different investors from Mexico, Europe and the USA. In July 2014, the company adopted the Socimi regime and in July 2016, it made its debut on the Alternative Investment Market (MAB) where it is currently listed.

“We are very much a real estate Socimi, we do not have a financial profile at all”, explains Mercader – “we buy assets with a lot of potential”. The company’s portfolio currently comprises seven assets, located in Barcelona, Lagreo and Sevilla, of a residential, hotel and commercial nature. The valuation of the company’s portfolio in October 2017 amounted to €85 million, with a gross value of €57 million.

The company is currently finalising the sale of one of its properties. Specifically, the building located at number 166 Calle Balmes in Barcelona. It is an eight-storey residential property, with commercial premises on the ground floor, constructed in 1930 in the rationalist style. Both this property and the one at number 45 on the same street are being used as residences for students.

Quonia, whose average investments range between €10 million and €13 million, is on the lookout for opportunities in Spain to continue growing its portfolio. With Barcelona and Madrid always in its sights, the company is branching out to new destinations for its new investments in cities such as Málaga and Sevilla, as well as País Vasco, where it is analysing several operations. Palma is another city where it is considering investing (…).

Original story: Eje Prime (by P. Riaño and J. Izquierdo)

Translation: Carmel Drake

Barcino Increases its Share Capital by €10M

25 June 2018 – Eje Prime

Barcino is injecting cash into its Socimi to continue its progress in the Spanish real estate sector. The manager has increased the entity’s share capital by €10.3 million through the issue and launch into circulation of the same amount of shares with a nominal value of €1 each, according to a statement filed by the company with the Alternative Investment Market (MAB).

The Socimi, which has been listed on the MAB since December, is in the middle of growing its residential portfolio. A month ago, the company invested €2 million in the purchase of around twenty assets in Barcelona, the city in which it has focused all of its operations. Most of its buildings are rental homes, although the manager also owns office properties and commercial premises spread over the metropolitan area of the Catalan capital.

Previously, two days before the end of 2017, the Socimi spent €1.6 million on a residential building on Calle Girona. The company’s Board of Directors comprises Mateu Turró, as the President of the company, and Francesc Ventura and Ralph Weichelt, who both serve as members.

At its stock market debut, Barcino was worth €19.1 million. Specialising in real estate investment and management, the Socimi is controlled (50.01%) by Barcino Management and is managed by a company linked to Vistalegre Property Management.

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Sareb Activates the Transfer of a Second Batch of Homes to its Socimi

11 June 2018 – La Información

“Investors are asking us for a larger portfolio, more geographical diversification and, above all, more liquidity”. The CEO of Témpore Properties – the Socimi launched by the bad bank to generate returns from its portfolio of residential rental assets -, Nicolás Díaz Saldaña, speaking at a recent conference organised by the Stock Exchange of Madrid, linked the success of the project with the acceleration of the milestones established in its strategic plan and reaching the objective of listing on the main stock market – which is planned for 2020 – as soon as possible.

The first step in that direction was taken just a few days ago by the team at Témpore Properties when it exercised “the right to submit the first offer” extended to it by the framework of the relationship signed with Sareb and which gives the Socimi priority when it comes to accessing rental assets that the bad bank wants to put on the market, according to sources at the Socimi speaking to La Información (…). On 24 May, the first window was opened for Témpore to expand its portfolio of assets by resorting to Sareb’s funds and the Socimi did not want to miss out on the opportunity.

Témpore made its stock market debut on 3 April 2018 with a portfolio containing 1,553 residential rental assets, worth €152.7 million in total. Its plans – according to its own IPO prospectus – include the intention to expand its portfolio to almost double the size this year with the addition of 1,000 new residential assets worth €160 million, which Díaz Saldaña’s team – which is very familiar with Sareb’s portfolio – has already cast its eyes over.

The Socimi has two opportunities to do this: now in May or later in November when the second window will open for incorporating assets from the bad bank into its portfolio (the agreement that gives priority over Sareb’s assets to Témpore expects such a window to open every six months over the next three years). The problem in both cases is how to finance the operation. The Socimi has a consolidated portfolio of assets but hardly any available capital. Sareb’s 98.51% stake reflects the value of the assets transferred for the creation of the Socimi and the minority stake is distributed between 24 small investors, who have contributed €2.12 million.

Sareb neither wants to nor could increase its stake in the share capital of the Socimi, which means that the acquisitions of the assets proceeding from the bad bank that Témpore executes will have to be undertaken at market prices and following their valuation by an independent expert: otherwise, the entity will either have to borrow or increase its share capital, or both, which according to the sources consulted is the most viable solution given that the Socimi has self-imposed a restriction on its debt capacity equivalent to 40% of its asset value, which leaves a margin of €80 million through that route.

Díaz Saldaña acknowledges that the lack of liquidity on the MAB is a barrier when it comes to attracting institutional investors, but he also recognises that he doesn’t have any choice but to do this if the Socimi wants to strengthen its portfolio to configure a project capable of debuting on the main stock market. For the time being, he says that he has a list of 40 investors interested in providing the €100 million that the company needs to finance this operation.

Geographical diversification

According to the sources consulted, Témpore’s team is already analysing the portfolio of assets offered by Sareb, although the real scope of the operation will depend on the Socimi’s capacity to incorporate new investors into its share capital.

Nevertheless, the objective of the operation is very clear: the geographical diversification of the Socimi’s portfolio of assets (…). Currently, 84% of the Socimi’s residential assets – calculated by market value – are concentrated in Madrid and Barcelona.

The priority is to open up the range of possibilities. The sources consulted specify that options are being evaluated in Valencia, Málaga, Sevilla, Alicante, Valladolid and Logroño (…).

Original story: La Información (by Bruno Pérez)

Translation: Carmel Drake