A Family Office Buys a Mixed-Use Building in Centre of Barcelona for €7M

19 April 2018 – Mis Locales

The real estate consultancy firm Laborde Marcet has brokered the sale of a building for more than €7 million in the heart of the El Raval neighbourhood, in the district of Ciutat Vella. The property, located at number 18 Carrer Sant Rafael, has been purchased by a local family office.

Completely renovated, the building comprises five commercial premises and homes spanning around 70 m2 each, most of which are furnished. The average price per square metre exceeds €3,300/m2 and the yield amounts to 3.5%.

Gerard Marcet, founding partner at Laborde Marcet, says that “these types of buildings enjoy the locations, yields and prices that fit perfectly with the objectives of many investors. They are safe assets and so they are not associated with property speculation or very high returns and risk, but rather they are suited to investors who want good stable properties that will generate fixed returns and protect their wealth against future inflation rises, given that the rents are linked to variations in CPI”.

Ciutat Vella, a district that forms part of El Raval, attracts many operations for both the purchase of buildings and the purchase and rental of commercial premises. In fact, a vast proportion of the operations brokered by the Retail team at Laborde Marcet are located in that area of the city. In this way, over the last year, the consultancy firm has advised large brands from the beauty, fashion and restaurant sectors, such as Primor, Visionario, Toni Pons, Aragaza, Celeste, Change Group, ARTEspañol and The Ranch SmokeHouse for the rental of premises in strategic areas of Ciutat Vella.

Original story: Mis Locales

Translation: Carmel Drake

Emesa Plans to Invest €100M in New RE Projects Between Now & 2023

13 April 2018 – Eje Prime

Emesa Corporación, the investment company owned by Emilio Cuatrecasas, is committed to the real estate business. The group is going to invest more than €100 million in Barcelona and the surrounding area to launch new projects in the residential, office building and hotel sectors, according to explanations provided by Ferran Forrellad (pictured below), CEO of Emesa, speaking to EjePrime in an interview.

Launched in 1980, Emesa Corporación has been turning its activity, step by step, into a business model in which it can operate comfortably. “The turning point came in 2015 when we went from being a company that bought, managed and operated, into being a company that develops and creates business”, explains Forrellad. “We want to be a player in the real estate sector that controls its projects from the beginning until the end”, he adds.

Emesa, which in addition to its real estate arm also has a business area destined to acquiring stakes in the share capital of companies in full growth (such as the case of the company specialising in storerooms Boxinfiniti), threw itself wholeheartedly into property development with a building in the 22@ district of Barcelona, which is now the headquarters of the law firm Cuatrecasas.

The group, which has multiplied its workforce by three-fold over the last three years, from seven employees to twenty-one, is now in the preliminary phase of constructing a new office building in the 22@ district, at number 184 Calle Pallars. Designed by the architecture firm BAAS, Emesa is going to invest €25 million in the new asset, which will have an above-ground surface area of 9,200 m2, as well as 5,000 m2 below ground. “It will be finished during the third quarter of 2020”, says Forrellad.

“We want to create unique buildings in Barcelona and we are on the lookout for new plots in 22@ on which to build more offices since we firmly believe that it is one of the areas of the future in the city, both for business and homes”, said the company’s CEO.

In recent months, the company has starred in several high profile operations in the Barcelona real estate market, such as the purchase of the Diagonal 444 building, the former headquarters of Cuatrecasas; and the Diagonal 632 building, which houses the headquarters of Quirónsalud Barcelona’s Ophthalmological Institute.

And from one side of La Diagonal to the other. As Eje Prime revealed, Emesa acquired 37,000 m2 of land in Finestrellas, a new development area, which is going to include offices, residential properties and a commercial area. The project in which Emesa is participating constitutes a 90,000 m2 office development, in which it has invested €80 million and which is hopes will be fully operational by 2023 (construction work begins in 2020).

Emesa will also focus on the residential business over the next few years. The company is going to build a development comprising forty homes for rent in Badalona after investing €12 million in this project. According to the forecasts of Emesa, which is on the verge of receiving approval for its licences, the project will be launched in 2020 and has been designed by the architecture firm Barozzi Veira (…).

Last year, the company also purchased the Ullastret Palace in Girona, with the aim of turning it into a high-end hotel, which is going to be the first of a chain of select hotels in El Empordà. (…).

Currently, the portfolio owned by Emesa Corporación spans more than 180,000 m2 and is worth more than €750 million. Emesa Corporación Empresarial generated turnover of €8.07 million last year.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Aquila Wants to Invest €800M in Logistics & Residential Assets in Spain

6 April 2018 – Eje Prime

Aquila Capital is displaying its charms in the Spanish market. The investment fund, which has already invested more than €500 million in Spain, is going to allocate another €800 million to the purchase of logistics and residential assets over the coming years. Moreover, as sources from the company explained, Aquila Capital plans to spend some of its investment on new residential developments.

Aquila’s new plan of attack focuses on the entire European market but is looking very closely at Spain and its real estate market given that it is now fully recovered having survived one of the worst economic crises of recent times. The fund is going to launch three funds specialising in different types of assets, with the first dedicated to logistics properties.

That fund will be the one that looks at more markets, above all those in the south of Europe. Aquila is going to raise between €200 million and €250 million from institutional investors and will have a gearing ratio of 50%, which means that the total investment capacity allocated to countries such as Spain, Portugal and Italy will amount to €500 million.

Aquila, which has operated in Spain since 2012 through an office located on Paseo de la Castellana (in Torre Europa) in Madrid, is going to allocate the assets that it buys (which must be core or core plus) through this fund to short-term rentals.

Moreover, the group is preparing two other funds, both of which will specialise in the residential business. The first is going to specialise in the purchase of residential rental properties in cities such as Madrid, Barcelona and Málaga. The second is going to focus on the construction of residential projects.

For those two funds, Aquila has set the challenge of raising between €200 million and €300 million to buy new residential buildings in association with property developers and to purchase assets that are already rented out. To carry out these plans, the group has doubled its workforce in Spain, which has gone from 17 people to a team of 30 professionals over the last year.

Projects in progress 

Aquila Capital’s interest in Spain is nothing new. At the end of last year, the company acquired six plots of land in Málaga and Huelva, which represented the German group’s first foray into Andalucía.

That transaction comprised almost 120,000 m2 of land on which around 1,300 homes will be constructed, according to El Economista. Specifically, the acquired portfolio constitutes six plots of land located in the centre of Málaga, Estepona, Rincón de la Victoria and Huelva.

With this acquisition, the asset manager is continuing its expansion in the Spanish market, where it is currently building more than 1,500 homes, as well as two hotels in Madrid, through alliances with local partners. Aquila Capital is currently managing thirteen real estate projects in Spain with a total investment volume of more than €500 million.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Forcadell: RE Investment Fell by 3.5% in 2017 to €13.5bn

27 February 2018 – Eje Prime

Investment in real estate continued to perform well last year but actually fell with respect to 2016. In total, €13.5 billion was invested in the domestic real estate market in 2017, which represents a decrease of 3.5% compared to the €14 billion that was registered during the previous year, according to data from the consultancy firm Forcadell.

Spain was the fourth-ranked country in Europe in terms of the most money received in the sector, behind only Germany, France and the United Kingdom, in that order. Moreover, Madrid and Barcelona were the two cities that received the most demand, accounting for 85% of the total capital invested in the domestic real estate market last year.

The office market was the sector that stood out the most in terms of investment volumes. And within that sector, Madrid and Barcelona, which together captured €2.455 billion of investment, were the main drivers of the segment, accounting for 95% of the total. In those two cities, prime rents reached 4.25% in Madrid and 5% in Barcelona.

On the other hand, the good performance of the housing sector also allowed an upturn in the residential sector, which saw investment of €3 billion in 2017, a level of activity not seen in that market since 2008, according to the consultancy firm. Besides the two major capitals, Valencia, Sevilla and Bilbao were the three cities that saw a significant increase in the field of residential development.

The logistics sector was the most profitable

One of the areas that is growing by the most at the moment in the Spanish real estate market is the logistics sector. Despite having the lowest rents per m2, the segment offers great returns from the point of view of real estate investment. The strong leasing figures and scarce supply close to large cities are generating interest from funds, primarily international players, who want to build new large industrial spaces measuring between 3,000 m2 and 50,000 m2, to rent them out.

Retail, on the other hand, continued its record figures from 2016 throughout last year with an investment volume that reached €4 billion. Moreover, land became very sought-after once again in the real estate sector, which had great demand, above all, in the residential market.

Looking ahead to 2018, Spain is expected to continue to represent a country of great interest for real estate investors, both domestic and international. Moreover, Forcadell forecasts that fundraising will increase significantly, both in terms of the number of players involved and the volume disbursed.

Original story: Eje Prime

Translation: Carmel Drake

Junta de Andalucía Puts 33,000 m2 of Land Up For Sale in Córdoba

4 February 2018 – La Vanguardia

The Junta de Andalucía’s Ministry of Development and Housing has launched its first regional land sale of the year in the province of Córdoba, comprising 15 residential and industrial plots, which span 32,989 m2 in total and with an asking price of €5.8 million.

In this regard and in statements to Europa Press, the delegate for Housing and Development at the Junta in Córdoba, Josefina Vioque, said that “with this initiative, we are continuing our strategy of selling some of the land owned by the Agency for Housing and Rehabilitation in Andalucía (AVRA), which obtained such good results in 2017, with the award of almost 22,000 m2”.

The objective, according to Vioque, is “to generate revenues that allow us to strengthen the promotion of our activities of a social nature in terms of housing, especially the promotion of subsidised housing”.

This new tender for the sale of regional land includes seven plots classified as industrial and tertiary, measuring 10,871 m2, and eight units classified as residential, with capacity for 238 homes.

Of the latter, four are reserved for the construction of 188 social housing properties, on a surface area of 17,374 m2, whilst the other four, spanning 4,743 m2, have capacity for 50 private homes.

According to the delegate, the industrial plots are located in the municipalities of Adamuz, Cabra, El Carpio and Córdoba, whilst the social housing plots are located in the provincial capital and in Rute, and the private housing plots are also located in the capital and in the municipality of Obejo.

The tender, which will be open for the presentation of proposals until 1 March, and which will be resolved after the envelopes are opened, scheduled for 12 March, at AVRA’s central headquarters in Sevilla, also includes nine retail premises and 19 parking spaces in Córdoba, Lucena and Rute.

According to Vioque, “the drive to manage AVRA’s owned properties has become a priority since the start of this legislature, give our aim to put these assets on the market at the service of business initiatives, to promote economic development and the generation of employment in the construction sector, one of the hardest hit during the crisis”.

Josefina Vioque said that “with this initiative, the Junta also seeks to reactivate the construction of VPO homes, to facilitate access to housing for families in most need, since these operations are going to allow us to resume, once again, the promotion of these types of subsidised homes, which are more affordable for people with fewer resources”.

Land sold in 2017

This tender follows others carried out during 2017, which saw the award of a total surface area of 21,946 m2  and the generation of revenues amounting to €6 million (…).

Original story: La Vanguardia

Translation: Carmel Drake

Santander & Blackstone Launch Spain’s Largest Financing Deal Since the Crisis: €7bn

2 January 2018 – El Confidencial

The largest real estate operation in Europe is going to also bring with it the largest financing deal the sector has seen in recent times. The sale of €30 billion in Banco Popular assets that Banco Santander agreed with Blackstone last summer is going to mark another milestone in January when the two partners plan to close a mega-loan amounting to €7 billion.

This debt will be assumed by the joint venture created ad hoc to buy the portfolio of assets. It promises to be backed not only by Spanish entities but also by large international investment banks and funds that invest in debt, some of which may include entities owned by Blackstone. According to sources familiar with the operation, the net value of the assets amounts to around €10 billion.

To finance that property portfolio, the liability structure of the new company (the assets and liabilities of which will be equal by definition) will consist of 30% capital and 70% debt. Given that Blackstone is going to control 51% of the share capital and Santander 49%, each shareholder will have to contribute around €1.5 billion to the vehicle (the former will have to contribute slightly more given its slightly larger stake), whilst the remainder of the joint venture’s balance sheet will comprise the aforementioned €7 billion in debt that is expected to be signed this month.

The fact that the joint venture is going to have such a high percentage of debt allows the return on capital to increase: the lower that is, the greater the return with the same profits. That is what is called leverage and it is normal for it to be even higher in vehicles of this kind. By way of example, Sareb (the semi-public bad bank that absorbed the properties of the rescued savings banks) comprises 90% debt and just 10% capital.

Santander deconsolidates Popular’s real estate

After increasing the provisions against this portfolio to 63% in the case of foreclosed assets and to 75% in the case of the loans, the net valuation of all of the toxic real estate that the new company will own amounts to €9.7 billion. To that figure, we have to add the final valuation of Aliseda, the former real estate manager of Banco Popular, which also formed part of the operation. Almost half of the assets sold are land (€12.6 billion gross), followed by residential (€8 billion), retail (€2.1 billion), industrial warehouses (€1.5 billion) and hotels (€0.8 billion), as well as €4.9 billion split between offices, garages and other types of real estate assets.

This company was created because Santander wanted to remove (deconsolidate) Popular’s real estate from its balance sheet after it purchased the entity in June. It could have sold it in its entirety, but it chose to create a vehicle in which the majority was held by another shareholder – Blackstone, which fought off Lone Star and Apollo to win the auction and pay €5.1 billion – and retain a 49% stake. In this way, it will be able to obtain additional profits if the recovery continues in the real estate market and the company sells the assets for more than their current value. For the time being, it will have to inject the aforementioned share capital, amounting to €1.5 billion.

Although the small print of the conditions associated with this financing still needs to be confirmed, the deal underlines the growing business that is currently being seen in terms of real estate loans and debt funds. In the last month alone, Metrovacesa has closed a loan for €275 million and Testa has raised €800 million with the bonus of not having to mortgage any of its buildings.

Original story: El Confidencial (by E. Segovia & R. Ugalde)

Translation: Carmel Drake

Meridia Capital Will Debut its Socimi on the MAB in 2018

13 December 2017 – Eje Prime

The Socimi fever is never ending in the real estate sector. In fact, it is growing. The latest company to bet on the Alternative Investment Market (MAB) is Meridia Capital Partners, a Barcelona-based fund led by the veteran businessman Javier Faus, which has announced it is going to debut its Socimi on the stock market, most likely at the beginning of 2018. This incorporation will come after today’s debut on the stock market of the logistics firm P3 Logistics Parks, and after Student Properties, which will soon become the first listed real estate investment company specialising in student halls.

Meridia III, which is what the Socimi is called, owns assets worth more than €100 million, according to Cinco Días. The future listed company owns a diversified portfolio with investments in every sector, from offices and logistics to residential, retail and hotels, but focused, for the time being, in Spain’s two largest cities, Madrid and Barcelona.

Constituted last year, Meridia III was created as the third investment vehicle of the fund, created by Faus in 2001. Its most recent acquisitions include the Barnasud shopping centre, for which it paid €35 million to Unibail-Rodamco.

Moreover, the company has carried out seven capital increases in the last year and a half, amounting to €50 million in total, with the aim of financing its future plans.

In total, Meridia III has an investment capacity of €500 million, of which it has already spent more than 50%.

Original story: Eje Prime

Translation: Carmel Drake

Armabex: The MAB’s 44 Socimis Have a Combined Asset Value of €12.2bn

12 December 2017 – Eje Prime

The Socimis are still a major talking point in the Spanish real estate sector. Together, the more than forty Socimis that are listed on the Alternative Investment Market (MAB) own assets with a combined market value of €12.221 billion, according to the report Armabex Analysis II. This year alone, seventeen new Socimis have been incorporated onto the MAB.

According to the findings of the report, the average market capitalisation of all of the Socimis currently listed on the MAB amounts to more than €155 million and their average own funds represent 62%. “The Socimi has become a fundamental element in the growth of the real estate market”, explains Antonio Fernández, President of Armabex.

Of the Socimis currently listed on the MAB, 31 have offices and homes amongst their properties available for rent and their market value represents 42% of the total. In 2017, nine of the seventeen new Socimis that debuted on the MAB held both types of assets in their portfolios.

Nevertheless, shopping centres, gas stations, hotels and industrial warehouses have also found the perfect vehicle to list on the MAB in the form of Socimis. In fact, in 2017, there was an increase in the number of shopping centre Socimis (five more in 2017); the first Socimis to include warehouses made their debut (also five in 2017); and the first gas station Socimi made its debut on the MAB along with three new hotel Socimis, amongst others.

By investment destination, Madrid has consolidated its position as the Spanish province in which Socimis invest the most in 2017. In this sense, thirteen of the seventeen new Socimis that started to trade in 2017 own real estate assets in Madrid. In this way, the 32 Socimis listed on the MAB that own assets located in the capital, have real estate assets worth €5.684 billion, which account for 46% of the total asset valuation.

Meanwhile, the evolution in Barcelona has been less satisfactory than expected; the portfolio of assets located in that province owned by the Socimis account for 11% of the total asset valuation, or €1.364 billion. Only five of the seventeen new Socimis that joined the MAB in 2017 own real estate assets in the Catalan capital.

Original story: Eje Prime

Translation: Carmel Drake

Metrovacesa Prepares Stock Market Debut for February 2018

23 November 2017 – Eje Prime

The stock market is getting ready to welcome yet another real estate group. Metrovacesa, the property developer controlled by Santander and BBVA, will make its debut on the stock market in February 2018. The company has convened an Extraordinary Shareholders’ Meeting for 19 December to approve its return to the trading floor. Moreover, the company is currently negotiating a syndicated loan amounting to €250 million to finance future operations.

According to the information included in the meeting invite, the shareholders will also have to approve a ‘contra-split’ of their shares, equivalent to one new share for every 45 existing shares. They will also be asked to approve some new corporate by-laws for the company and to fix the number of directors along with their policies and remuneration plans.

Metrovacesa stopped trading in 2013 after an exclusion bid was presented by the financial institutions that ended up controlling the real estate company following the process to refinance its debt.

Currently, its capital is shared between Banco Santander (61.1%), BBVA (29.64%) and Banco Popular (9.21%), which will divest their shares with the stock market debut.

Following a capital increase amounting to €1.108 billion, which was completed by the contribution of assets from the three banks, Metrovacesa has assets worth more than €2.6 billion and a land portfolio that exceeds 6 million m2, on which 40,000 homes may be built.

Before the stock market debut, the shareholders are going to undertake another non-monetary capital increase amounting to €316.7 million, which will be submitted for approval at another shareholders’ meeting, to be held this Friday, on the first call, or this Saturday, on the second.

Loan for €250 million  

In addition, Metrovacesa is negotiating a syndicated loan with various banks. The initial idea was to structure it into two tranches: one amounting to €220 million, to be used to fund the distribution of a dividend before the company’s debut on the stock market; and another for €180 million, aimed at financing the property developer’s future operations.

According to sources familiar with the process, this first proposal has been rejected by the main entities invited to form part of the syndicate, which have asked Santander and BBVA to lower their dividend expectations. Meanwhile, Metrovacesa is preparing a new proposal that will likely decrease its debt balance by between €250 million and €400 million and eliminate the amount allocated to remunerate the shareholders.

Original story: Eje Prime

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