Tag: residential property

Imperio Fórum Buys The Vinçon Building In Barcelona

1 December 2016 – Inmodiario

Imperio Fórum, a Spanish holding company owned by the Canadian investor Marco Fabiani, has purchased the former Vinçon building, located at number 175 on Calle Pau Claris in Barcelona, through one of his companies in which other shareholders also hold stakes. Imperio Fórum has acquired the residential part of the property, which is spread over 6 floors and covers 2,000 m2 in total, comprising 10 apartments and one penthouse.

The operation, which has been completed for €6.5 million, has been advised by Jordi Coma from the consultancy firm Think Big Capital and has received financing from CaixaBank. The renovation work will begin during the first quarter of 2017.

Six months ago, Marco Fabiani also bought another corner building with similar characteristics on El Eixample in Barcelona for €5 million. That property was located on Calle Sant Antoni Maria Claret, close to the modernist complex of Hospital de Sant Pau, where the renovation and marketing of 19 apartments, 2 penthouses and 3 retail premises is already underway. That operation was financed by Banc Sabadell.

Original story: Inmodiario

Translation: Carmel Drake

Catella Asset Management Buys 4 Properties For €84M

3 November 2016 – Expansión

The fund manager Catella Asset Management has just completed its first transactions in Spain. In a period of just one month, the Swedish firm has carried out four investment operations to put the perfect finishing touches to its first year in the Spanish market.

Specifically, Catella AM has purchased a retail park in Vinaroz (Castellón) and three residential buildings in Madrid and Barcelona for a total investment of €84 million. “In the last month, we have closed four residential and retail operations, involving the type of assets that we are particularly focusing on”, explained Javier Hortelano, Partner-Director at Catella Asset Management for Spain and Portugal.

In the first operation, Catella has purchased two residential buildings located in Barajas (Madrid) and Rambla de Poblenou (Barcelona), containing almost 150 homes in total. “The building in Barcelona has a 97% occupancy rate and the building in Madrid has a 95% occupancy rate”. In addition, the properties have 66 and 82 parking spaces, respectively.

Subsequently, the Swedish management company acquired a third property, measuring 4,500 m2, on Calle Génova in Madrid. The building, which contains 24 homes, 29 parking spaces and a retail outlet, has an 85% occupancy rate.

The fourth operation has involved the acquisition of the Portal Mediterráneo retail park in Castellón; this purchase has been performed on behalf of a third party, the Belgian company Mitiska Reim.

Last year, the listed Swedish group Catella launched a new investment platform for the Spanish market. The group’s consultancy arm, Catella Property, has been operating in the country since 2008, and at the end of 2015, the company opened an office for its investment manager, which has now made its first purchases. “Catella AM’s approach is to invest using the funds that the management company has raised or to invest on behalf of investors with whom we usually work and who come from Europe, as well as Asia and America”, said Hortelano. The Director, who joined Catella from PwC, has extensive experience in the retail sector, having previously served as the President of the Spanish Shopping Centre Association and COO at Redevco.

Fund

The residential buildings that Catella has acquired will be placed in a pan-European investment fund called Catella Wohnen Europa, which Catella created this year. “This fund began operating six months ago and already has €250 million under management. It also has another €500 million of operations in the due diligence phase and it is planning to continue at a very intense pace next year”, said Hortelano. “It is not the typical fund that buys assets to sell them off piecemeal, rather its objective is to buy properties, and then manage and maintain them through long term lease contracts”, said Eduardo Guardiola, Partner at Catella AM Iberia.

Following the completion of these purchases, the Swedish management company hopes to be very active in Spain: “We hope to close one or two more operations this year to reach a total investment of €100 million and then exceed that figure next year”.

When it was launched, Catella AM set itself an investment target of between €500 million and €1,000 million over a couple of years in Spain and Portugal. Its purchases are focused on large tertiary assets (both shopping centres and retail parks), requiring management, as well as on residential rental properties in good locations.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Lone Star Will List Neinor On Stock Market In 2017

27 October 2016 – Cinco Días

The reactivation of the real estate sector in Spain has a future stock market star in the making: Neinor Homes, the former property development arm of Kutxabank, which the US private equity fund Lone Star acquired in May last year. The goal is to list the company on the stock market in 2017 and it has been assigned a preliminary valuation of around €2,000 million.

Neinor Homes belonged to Kutxabank until May 2015, although the sale agreement with Lone Star was signed in December 2014. The US private equity fund acquired the company that groups together properties from the former Basque savings banks, created in December 2012 as a bad bank, under the terms of the royal decree governing the clean up and sale of real estate assets in the financial sector.

The company was sold to the US private equity firm for €930 million, but Lone Star’s goal was not to liquidate the property developments and land that the entity’s property developer owned and pocket the corresponding gains. Instead, Juan Velayos (pictured above), CEO of Neinor Homes, announced as soon as he joined the company – previously he worked for Renta Corporación, but left in 2011 to join PwC – that the mission was to invest in land and construct developments.

Financial sources indicate that the company is already holding negotiations to engage investment banks to assist with its debut on the stock market, expected in 2017. Preliminary appraisal values, pending the publication of the company’s accounts for 2016 and the evolution of the real estate market, amount to around €2,000 million. That figure represents a valuation that is more than 100% higher than the price at which Lone Star purchased the company.

“From day one, the company was designed to list on the stock market. It is the natural step”, say sources at the company. “We are working with investment banks to evaluate the option of debuting on the stock market in 2017, but the final decision has not been taken yet. We will do it when we think that it is the optimal time in the market”, add the same sources.

It will be the first debut by a bread-and-butter property developer on the Spanish stock market in recent times, given that the only debuts in the sector since the crisis have involved Socimis (Lar, Hispania, Axiare and Merlin, which list on the main exchange); and 25 Socimis, which have debuted on the Alternative Investment Market (MAB). Neinor is a rarity, because it has moved away from the traditional real estate ownership model focused on rental income and the office market. At Neinor, revenues are driven by residential property developments.

The last traditional real estate company to debut on the stock market was Realia on 6 June 2007. The share price of that firm, hwich is controlled by Carlos Slim, has plummeted by 86% since that placement.

Velayos designed a €1,000 million investment plan for Neinor’s land. In 2015, the firm recorded sales of €340 million and EBITDA of €25 million. Nevertheless, the latest accounts filed with the commercial registry show a clear split between the two periods –the firm recorded losses of €70.9 million between January and June 2015 and losses of €11.2 million between July and December.

The company has signed an agreement with Kutxabank to administer and manage its assets for an initial period of seven years, extendable on an annual basis, which guarantees it recurrent annual income. The accounts filed with the commercial registry show that the firm recorded revenues of €14.4 million in H2 2015 by virtue of that contract. (…).

Original story: Cinco Días (by P.M. Simón, L. Salces and A. Simón)

Translation: Carmel Drake

Housers Will Build First Building In Spain Using Collective Financing

26 August 2016 – El Economista

The real estate market has evolved so much in recent years that now anyone can become a residential developer without triggering the start of a new real estate bubble, as happened before the crisis, when many entrepreneurs decided to enter this business without any prior knowledge of it.

This has been made possible thanks to an initiative developed by Housers, which has started to raise funds, through crowdfunding, for the construction of the first residential building in Madrid to be financed by this shared investment model, and the subsequent sale of its homes. This is also the first real estate project of its kind to be undertaken in Spain.

The project involves the purchase of land, the demolition of a small existing residential property on the site, as well as the complete construction of a residential building, which will comprise five homes and three duplex lofts.

According to the company, the turn-key construction projectwill begin once the financing has been raised, and will take approximately 24 months. The homes will go up for sale when the building work commences.

The cost of the real estate project is estimated to amount to €1.041 million, of which €255,228 corresponds to the gross acquisition cost of the existing building, €539,000 relates to the construction of the new building, and the remainder corresponds to processing costs, taxes and a cushion for unforeseen expenses.

The project aims to raise €748,000 (71.8% of the project) through crowdfunding, with each investor able to participate from as little as €50; and €293,000 through a mortgage to improve returns for investors.

The term for the sale of all of the homes is 24 months. During this period, the gross yield is expected to amount to 44.06% and the net yield will reach 27.94%; those profits will be distributed in the form of dividends to all of the participating investors. Housers estimates that the sale of all of the homes in the building will generate €1,242,000. The residential building will be located in Madrid, in the district of Tetuán, an area that has very high potential given the scarce stock of new homes there.

Housers celebrated its first birthday a month ago and in that time, it has created a community of more than 8,000 investors and has received contributions amounting to more than €8.5 million to finance the purchase of 38 properties in Madrid, Barcelona, Valencia and Marbella.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Lar Buys Gran Vía de Vigo Shopping Centre For €141M

8 July 2016 – Expansión

The Socimi Lar España is strengthening its position in the shopping centre market. The company has reached an agreement with the investment firm Oaktree to acquire the Gran Vía de Vigo shopping centre for €141 million. The deal is expected to be signed in Q4 2016.

Gran Vía de Vigo was acquired by Oaktree in 2014 for €115 million. This is the second purchase that Lar has made from the US fund in less than a year, after the Socimi bought the Megapark Barakaldo shopping centre in Vizcaya last October for €170 million.

The shopping centre – one of the largest in Galicia, along with Marineda City, in A Coruña – has a retail area of 41,246 sqm. The centre, opened in June 2006, spans three floors dedicated to retail space and another three for parking, with capacity for more than 1,700 cars.

Capital increase

In order to raise finance, the company has launched a capital increase amounting to €47 million through the issue of 30 million new shares with a subscription value of €4.92.

The company will use these funds to expand its current portfolio of assets. Specifically, Lar has identified investment opportunities in the market amounting to €838.5 million in total, including this shopping centre. 81% of those assets under analysis are shopping centres, 14% are offices and the remaining 5% are other types of properties.

The capital increase will be performed with subscription rights. The company indicates that, just like happened a year ago in its previous capital increase, a “solid base” of the existing shareholders have expressed their intention to execute those rights. The company’s main shareholders include the Spanish (fund) manager Bestinver, controlled by the Entrecanales family, as well as international funds, such as Pimco, BlackRock and Franklin Templeton.

JP Morgan and Morgan Stanley are acting as coordinating entities and they have underwritten the capital increase, together with Fidentiis.

The Chairman of Lar España, José Luis del Valle, indicated that this increase reflects “the strength and attractiveness” of the Socimi and adds value to its capacity to go to the capital markets with guarantees of success.

Lar España owns assets worth €1,003 million in total. Of those, €728 million corresponds to the acquisition of 13 retail spaces (shopping centres) in Madrid, Valencia, Sevilla, Alicante, Cantabria, Lugo, León, Vizcaya, Navarra, Guipúzcoa, Palencia, Albacete and Barcelona; €150 million relates to four office buildings in Madrid and one in Barcelona; €70 million corresponds to four logistics assets in Guadalajara and one in Valencia; and €55 million relates to a residential property on Calle Lagasca, 99 (Madrid).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Eurostone Buys EFE’s Former HQ To Convert Into Luxury Homes

30 March 2016 – El Confidencial

Eurostone, a real estate company headquartered in Luxembourg, has purchased the building located on the Madrilenian street Calle Espronceda, 32-34 from BBVA, which until 2013 housed the headquarters of the new agency EFE, which occupied the property for 35 years. The consideration paid for the operation has not been disclosed, but BBVA acquired it in March 2007 from SEPI (la Sociedad Estatal de Participaciones Industriales) for €51.25 million. The consultancy firm CBRE has advised the vendor, whilst Gabinete Inmobiliario and J. Pueche have advised the buyer.

The property, located just 300 m from Paseo de la Castellana, has a surface area covering more than 8,000 m2 spread across seven floors and more than 200 parking spaces. Eurostone already owns one property in Madrid following its purchase of a building on Génova 7 and three buildings in Barcelona, all in good locations.

The fund plans to convert the building on Espronceda into a luxury residential project in a neighbourhood, namely Chamberí, that has a shortage of new, high quality homes, and so it is hoping to become one of the iconic developments in the capital. The project, which will involve collaboration with the architect studio Lamela, will comprise homes and duplex apartments containing up to four bedrooms, terraces, gardens, a swimming pool, gym, etc. In addition, it will have more than 230 parking spaces and 1,700 m2 of retail space.

The building forms part of Project Zafiro, whose sale is being managed exclusively by CBRE. The portfolio of assets owned by BBVA comprises 15 buildings of different types, located in major Spanish cities, as well as in Lisbon, with a total surface area of more than 100,000 m2 and 1,300 parking spaces. This process has sparked interest from several funds, both domestic and international, and is close to being finalised. (…).

In addition, the building in question is located just 100 m from the former block of tenement flats (arranged around a patio, typical in Madrid, known as a “corrala”) that Pontegadea, the investment arm of Amancio Ortega, sold less than a year ago to the Catalan property developer Uniq, which specialises in the development of luxury homes, and which will be responsible for leading the development of the project.

According to sources at the time, Uniq will construct the homes, but another company, an investment fund whose identity has not been revealed, put up the capital to close the deal. The price of that operation amounted to around €20 million.

In addition, less than a kilometre away, on Calle Claudio Coello, number 108, another international fund, in this case the German fund Patrizia, recently entered the neighbourhood of Salamanca, with the acquisition of a residential building from Grupo Lar and Pimco for €22 million, where it plans to construct 14 luxury homes measuring 300 m2, with two or three parking spaces per flat.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Bank of Spain: Avg. Yield On Housing Was 8.8% In 2015

22 March 2016 – Expansión

Investment in residential property is strengthening due to its low risk. In 2015, the gross yield on flats – rental income plus (property price) gain over one year – recorded its best year since the real estate boom.

As the recovery of the residential market gains strength, so housing is becoming an ever more attractive investment. Nowadays, buying a property to then put it on the rental market is an operation with high returns and low risk.

In other words, the option preferred by long-term investors. Not surprisingly, housing closed 2015 with an average yield of 8.8%, the highest annual figure since 2006, according to data from the Bank of Spain.

The body governed by Luis María Linde takes into account not only the gross rental yield (which stood at 4.6% as at December last year), but also the gain (in property prices) over 12 months, which adds a further 4.2 percentage points to the figure. As a result, many small and medium-sized investors have set their sights on the residential market, as they seek refuge from the low profitability of other investments. The return on housing is six times greater than the 1.44% offered on public debt over 10 years, and 22 times higher than the 0.4% yield offered on deposits. Meanwhile, the performance of the Ibex 35 is negative (down by 24.3% in February, according to the Bank of Spain).

8.8% is the highest return recorded at the end of a year since 2006, when the figure stood at 17.7%. Not even in 2007, the year in which the bubble peaked, was a higher figure recorded (then it was 8.6%). Between 2008 and 2013, returns were negative and 2014 closed with a yield of 6.4%, 2.4 points below the figure recorded last year.

“This data is very strong and confirms the change in the trend for the residential market, which began back in 2014”, says Julio Gil, Chairman of the Real Estate Research Foundation (FEI). “The combination of the positive evolution in terms of house prices and the trend in rental income have resulted in very high profitability, which confirms the stabilisation of the market and puts housing in a strong position versus other investment assets, particularly thanks to the very strong return-risk ratio”, adds Gil. Nevertheless, although “this indicator confirms the increasingly strong stabilisation of the market”, that “should not be confused with a situation of sharp growth”, warns the Chairman of FEI. (…).

As Gil warned, the sector is currently experiencing an impasse of high returns and low risk, something that is very rare. For this reason, experts are recommending investments in homes in good locations where high is demand. Central areas and suburbs of major cities are the best places to buy a property and then rent it out. The best options are one or two bedroom flats that are less than 80 m2, as they generate the best ratio in terms of rental income per square metre.

Moreover, rental prices are on the increase. Rent became more expensive in every autonomous region in 2015, with the exception of the País Vasco, where prices decreased by 0.3%, according to Fotocasa. It is the first time that rental prices have increased in 16 of the autonomous regions since the statistic, which the Bank of Spain uses in the absence of official sources, was first created nine years ago.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Spain’s Ghost City Comes To Life

6 March 2016 – El País

Anybody who has passed Seseña, 30 minutes south of Madrid on the A4 highway, and seen the so-called residential city of El Quiñón in the distance will probably have thought it a blot on the landscape, a crazed monument to all that went wrong during two decades of frenzied property speculation. But ask the people who live there what they think and they’ll tell you a different story: they might not exactly be proud of the place, but on the whole they’re happy to be there.

Granted, its wide, car-free streets are mostly void of traffic, even though the local census puts the number of residents here at 6,411, twice the figure of four years ago: that’s because most of them are in Madrid, working. What’s more, they park their cars in the garages underneath their apartment blocks. During weekdays, the only time of day when the streets come alive is during the twice-daily 15-minute school runs. After that, the silence returns.

The majority of people living here are couples in their early thirties who moved here “for the children” – that, and the spacious, surprisingly well-built, and relatively low-priced apartments. It has to be said that there are still few amenities, but for the moment, most families seem happy with the swimming pool and gardens each apartment block is built round. The nearest cinemas require taking the car to nearby Pinto or Getafe, but then Aranjuez, 20 minutes away, has a population of 60,000 and no movie house.

El Quiñón is the brainchild of Francisco Hernando, better known as “Paco el Pocero,” a man who rose from humble beginnings in the hard years of the 1950s to become one of Spain’s most successful, and notorious, property developers.

Unlike many of the thousands of property developments built in Spain during the 1990s and early 2000s, one thing that has to be said is that Hernando didn’t skimp on quality when it came to building El Quiñón (…).

In the aftermath of the crash of 2008, journalists from all over the world made the trek out to Seseña, dubbing it the “ghost town” that symbolized the excesses of the property boom. Residents blame the media for its reputation and are still wary of talking to journalists.

But a real-estate agent based here is prepared to talk, and says that demand for apartments in El Quiñón is growing. The first people to move here, in 2007, paid up to €250,000 for a three-bedroom, 100-square-meter apartment. That was during phase one of the project, where around 3,600 people now live. The average price of the 2,300 apartments in phase two is now less than €100,000, up from the €50,000 they were being offered for in 2011.

It was thanks to the efforts of the Popular Party mayor Carlos Velázquez in 2011 that the licenses required to open phase two of El Quiñón finally came through. “We had to unblock the situation, look to the future; that’s what residents here wanted,” he says. Hernando finally agreed to pay the €6.7 million he owed the local council, and water supplies were provided.

With this, El Quiñón finally became part of the municipality of Seseña, a small community around five kilometers away, and a full range of services became available. Until then, those here were not just living in the middle of nowhere; they were living in legal limbo as well. Much remains to be done, and residents have a long list of requirements: a proper service road to the A4, a health center, another school, a nursery, better transport connections with Madrid…(…).

Original story: El País (by Iñigo Domínguez)

Edited by: Carmel Drake

Fotocasa: Rental Prices Rose In 16 CCAAs In 2015

23 February 2016 – Expansión

Rental housing represents a safe investment / Average rental prices increased by 3.6% in Spain in 2015, driven by a rise in demand. Price rises were recorded in every autonomous region, with the exception of País Vasco, something that has never happened before.

Spain is a country of property owners. Renting is not the preferred option. Specifically, one in every five homes is rented out, a figure that falls well below those recorded in other European countries, such as Switzerland, Austria, Denmark and Germany (all exceed 35%). Nevertheless, the percentage of renters – which account for around 19% of total demand at the moment, although the Bank of Spain considers that the figure is more like 15% – represents a significant increase since the real estate boom years, when rental housing accounted for just 11.4% of the total stock.

More than 3.5 million of the 18 million primary residences in Spain are rented out. If we also include holiday homes, that figure increases to almost 5 million. During 2012, 2013 and 2014 alone, 1.1 million additional properties were incorporated into the rental market. Why? Because the crisis drove out hundreds of thousands of Spanish families from the market to buy. And that demand has moved to the rental market, where it is driving up prices.

Rental properties have become more expensive in every autonomous community, with the exception of País Vasco, where prices decreased by just 0.3%, according to year end analysis performed by the real estate portal Fotocasa. It is the first time that rental prices have increased in 16 autonomous communities since the portal created its statistical database, nine years ago. The database is used by the Bank of Spain, in the absence of official sources.

Trend

Clearly, the evolution of average rental prices in Spain changed “significantly” in 2015…moreover, the YoY variation recorded at the end of 2015 (3.6%), was also the highest ever in the history of the index. “This general increase in prices is the result of the expansion of the rental market in Spain in 2015; increasingly more people are renting homes, not only because they cannot afford to buy a home, but also because there has been a change in their mentality in favour of renting”, says Beatriz Toribio, Head of Research at the real estate portal.

“In addition, the high returns offered by this market have led many investors to buy homes in order to lease them out”, adds Toribio.

Cataluña was the region that experienced the highest increase in rental prices, up by 10.7%. Rental prices increased all 10 of Barcelona’s municipalities. The average price there stood at €13.3/m2/month.

In the Community of Madrid, the YoY variation at the end of 2015 amounted to 6.5%, which represents the highest increase in the history of the index. In the case of Madrid capital, the rise amounted to 6.9%, where the average monthly rent stood at €11.2/m2. Moreover, rental prices rose in all of the capital’s districts for the first time in nine years.

Outlook

“In general, prices will stabilise in 2016 because the rental market is here to stay in Spain. But its evolution will continue to be very uneven, with rental prices continuing to rise in the main cities on the one hand, but continuing to fall in smaller towns and in neighbourhoods on the outskirts, as well as in regions with low economic activity”, concludes the Head of Research at Fotocasa.

Rental prices in Spain reached their historical high in May 2007, with a value of €10.12/m2/month. Since then they have recorded a cumulative depreciation of 30.7%. The communities that have experienced the greatest decreases are: Aragón (-40.6%), Cantabria (-36.1%), Castilla-La Mancha (-35.5%), Valencia (-34.4%) and Murcia (-32.3%). (…).

Original story: Expansión (by J. M. L.)

Translation: Carmel Drake

Judge Approves Liquidation Plan For Olga Urbana

15 December 2015 – Valencia Plaza

Commercial court number 1 in Alicante has approved the liquidation plan for the developer of the In Tempo building in Benidorm, the tallest residential skyscraper in Europe, construction of which began in 2006. Olga Urbana is the construction company behind this unfinished building, which has now been put up for sale. The company has filed for bankruptcy and Antonia Magdaleno has been appointed as the bankruptcy administrator.

The company that constructed the building filed for bankruptcy after its main creditor, Sareb, which inherited the loan originally granted by Caixa Galicia amounting to just over €100 million, requested legal intervention in the company. According to the court order, Sareb proposes that the direct sales phase last for at least five months.

In addition, if during the first three months of this phase, an offer is received to directly purchase the building for a price equivalent to at least 70% of its appraisal value, then Sareb asks that it be awarded to the bidder without waiting for the five month period to end. Nevertheless, the sale must involve the property in its entirety; offers will not be accepted for individual homes.

Original story: Valencia Plaza (by Estefanía Pastor)

Translation: Carmel Drake