WeWork Doubled its Losses in 2018 Due to Global Property Purchases

27 March 2019 – Eje Prime

The US co-working company WeWork doubled its losses in 2018 to USD 1.9 billion (€1.7 billion), due to the huge outlay it made expanding its business around the world. Nevertheless, it did also double its revenues to USD 1.8 billion (€1.6 billion).

The company founded by Adam Neumann in 2010 closed 2018 with shared offices in more than 100 countries as well as rental contracts with several major corporates, such as Microsoft, Adidas and Citigroup, which account for one third of its tenants.

The valuation of the company, which leases space to 401,000 people globally, amounts to USD 47 billion. In Spain, the company has five spaces in Barcelona and four in Madrid, with new openings imminent.

Original story: Eje Prime

Translation/Summary: Carmel Drake

VBare Earned €4.8M in 2018 & Plans to Raise More Financing in 2019

5 March 2019 – Eje Prime

The Socimi VBare, which specialises in the management of residential assets, generated a profit of €4.8 million in 2018, up by 100% compared to the previous year. That increase was driven by the strong performance of its rental income and an appreciation in the value of its portfolio.

In this context, the company is going to carry out another capital increase within the coming months to finance the acquisition of more properties and further fatten up its portfolio.

The company’s revenue also increased in 2018 to €1.4 million, up by 33% compared to 2017, when the Socimi generated sales from gross rental income of €1.07 million.

At the end of 2018, VBare’s assets were worth €50 million, up by 76% YoY and the occupancy rate of its portfolio amounted to 90% at year end (vs. 83% at the end of 2017).

Looking ahead, the Socimi plans to continue focusing its investments in Madrid. Already this year, it has purchased a building containing 27 homes and two premises on Calle Vallehermoso in the Spanish capital for €5.2 million. Following that operation, the company’s portfolio contains 301 units.

Original story: Eje Prime (by Roger Arnau)

Summary/Translation: Carmel Drake

Quabit’s Revenues Soared in 2018, but its Profits Fell by 53%

28 February 2019 – Eje Prime

Quabit’s revenues soared but its profits decreased. The real estate company closed 2018 with a net profit of €6.7 million, down by 53% compared to the previous year, when it reached €14.3 million. The company attributes that reduction to the “activation of tax credits in 2017, amounting to €26 million”, according to reports in a relevant fact submitted to Spain’s National Securities and Exchange Commission (CNMV).

The firm’s EBITDA also deteriorated, with losses of €25.3 million, a figure that quadruples the loss recorded a year earlier when it amounted to €7.3 million. “The negative impact in terms of EBITDA is due to the extraordinary effect of the valuation corrections on the land and the lower discounts on the debt”, said the company in a statement about its results.

In terms of revenues, they soared last year to reach €39.6 million, whereby multiplying the figure from the previous year (€5.7 million) eight-fold. At the end of the year, the gross value of its assets amounted to €506 million, 27% higher than at the end of the previous year. That growth was attributable to the company’s new investments and the revaluation of its portfolio.

In terms of its portfolio, Quabit handed over 190 homes in 2018 and also invested in its land bank, increasing it by around €180 million since 2017. It currently has around 4,000 homes in different phases of development and is working on the launch of new projects included in its business plan for 2018-2022.

Original story: Eje Prime

Translation: Carmel Drake

Renta’s Revenues Soared by 102% to €92.4M in 2018

1 March 2019 – Expansión

Renta Corporación closed 2018 with revenues of €92.4 million, up by 102% compared to a year earlier and a net profit of €16.6 million, up by 33% (…).

The real estate company’s business portfolio amounted to €133.9 million at the end of 2018, plus the assets managed for sale in conjunction with real estate funds for an estimated investment of €35 million.

Dividends

Last October, the Board of Directors agreed the distribution of a dividend amounting to €1.1 million to be charged against the income statement for 2018. At the next General Shareholders’ Meeting, which is going to be held on 11 April, the company is expected to approve the distribution of €1.9 million as a complementary dividend.

In terms of Vivenio, the Socimi that Renta Corporación launched in the middle of 2017 together with the Dutch pension fund APG, it closed 2018 with 18 residential properties in its portfolio containing 2,000 homes under management, which have a gross value of €524 million (…).

Original story: Expansión (by M. Anglés)

Translation: Carmel Drake

Merlin’s Revenues Rose by 5.2% to €509M in 2018

1 March 2019 – Expansión

The Socimi Merlin Properties closed 2018 with an increase in revenues thanks to the strong performance of its rental properties. Its total turnover amounted to €509 million, up by 5.2%, boosted by a 6.5% improvement in gross sales to €500 million. The real estate company’s EBITDA reached €403 million, up by 2.8%. The operating result fell by 22% to €855 million.

The company’s main source of income is the rental from its office buildings, followed by its shopping centres. The value of the Socimi’s assets amounted to €12.0 billion at the end of December 2018, which represented a YoY increase of 6.1%. The occupancy rate of its property portfolio rose to 93.4%.

Yesterday, the company highlighted the cost control of its financial debt, which amounted to €4.9 billion with an indebtedness ratio of just over 40% and financial costs that have reduced to 2.13% following the most recent refinancings.

The company has a cash balance of €350 million (…). In 2018, Merlin undertook investments amounting to €569 million and property sales amounting to €594 million, with a premium for its divestments of 3.1% (…).

Merlin’s share price closed trading at €11.10 per share yesterday, down by 1.2%.

Original story: Expansión

Translation: Carmel Drake

Meliá Earned 13% More in 2018 but its Revenues Fell by 1.5%

1 March 2019 – Expansión

Meliá ended the year with a slight decrease in revenues (1.5%) to €1.83 billion, which it blamed on a deceleration in the tourism sector. Nevertheless, its net profits rose by 13% to €140 million.

The decrease in revenues was due above all to the impact of the devaluation of the US dollar in the America region during the first quarter of the year – one of the most important for the company in the region – and the closure of several hotels for renovation in Puerto Rico and the Caribbean. There was also a slow down in the Mediterranean and Cuba.

Despite the slow down in turnover, the company’s EBITDA increased by 7% to €326 million, following the sale of three hotels to the Socimi Atom in the summer and due to an appreciation in the value of its assets. Excluding those gains, Meliá’s EBITDA in the period increased by 0.9% to €307 million (…).

Looking ahead to 2019, Meliá is cautious regarding the evolution of the markets in America and the Canary Islands, but, by contrast, is optimistic about the markets in Europe, the Middle East and Africa (EMEA), where it expects RevPAR growth of low to average digits, primarily due to the strong outlook in Continental Europe, as well as in Spain. Specifically, it forecasts a recovery in Barcelona, Madrid and Sevilla.

Original story: Expansión (by R.A)

Translation: Carmel Drake

17 New Shopping Centres will Open in Spain over the Next 3 Years

22 February 2019 – Expansión

Shopping centres and retail parks are still fashionable despite the boom in online commerce. In this context, Spain is going to increase its retail surface area by 650,000 m2 over the next three years with the opening of 17 new centres by 2021. In addition, eight of the existing centres are going to be expanded to 267,250m2, according to data from the Spanish Association of Shopping Centres and Retail Parks (AECC).

These openings follow those completed in 2018 when 8 centres were opened spanning 233,700 m2 in total (…).

Spain currently has a gross leasable surface area of 16 million m2, spread over 563 shopping centres and retail parks, which generate 720,000 jobs, 46% of which are direct.

This growth in space is being accompanied by rising interest from investors in these types of assets.

Last year, transactions amounting to €2.2 billion were closed, just below the record of €2.7 billion recorded in 2017 (…).

In operational terms, sales at shopping centres and retail parks rose by 2.7% last year to €45.5 billion, whilst visitor numbers increased by 3.1% to 1.97 million. Sources at AECC forecast continued sales growth, albeit at a slower rate than in previous years due to a deceleration in domestic consumption (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Coworkings: the New King of the Real Estate Sector

15 February 2019 – Eje Prime

Millennials, flexibility, start ups…All of the socio-demographic trends are inevitably leading to one common place: coworking offices. Flexible workspaces have become the great promise of the real estate sector but their largest operator, IWG, generates just 15% of its revenues from them and WeWork is multiplying its losses year after year. What risks does the model have? Can it withstand a recession without the guarantee of the traditional five years of mandatory occupancy? And what if Amazon and Facebook, its tenants of today, end up becoming its main competition?

In 2017 alone, the total volume of flexible workspace in the twenty largest markets around the world grew by 30%, equivalent to 1 million m2. Since 2014, the sector has doubled, and in cities such as London, they account for 20% of the office space leased, according to a report from JLL. In Barcelona, that figure already amounts to 12%.

The consultancy firm forecasts that the European stock will grow by between 25% and 30% per annum on average over the next five years and will account for 30% of some corporate real estate portfolios by 2030. But those predictions hide the major challenges that are threatening the great promise of the sector.

One of the main challenges facing the model is that the operator is tied to a given property for at least five years, like in the case of a traditional office, but its tenants have contracts that last for months or even hours. When the next crisis hits, what guarantees does the owner have that the operator will be able to continue paying the rent?

“On paper, that does seem like a risk, but the reality is that the coworking phenomenon was launched during the crisis”, explain sources at Savills Aguirre Newman. All sectors suffer when there is a recession, but traditional offices are hit harder because whoever cannot bear those costs can afford a coworking space”, argue the sources at the consultancy firm.

Another of the risk factors is that coworking offices have capitalised on the lack of available office space in the centre of cities and also, on the shortage of appropriate spaces for the new ways of working within traditional companies (…).

“The players driving the sector are multi-nationals that are looking for appropriate spaces for their innovation teams or for project-based work”, says Manel de Bes, Director of the Office department at Forcadell.

But, what will happen when the offices of these large companies have adapted to the new scenario? “At the moment, most companies are in the experimental phase; if they consider that the trials do not meet their needs, they will be able to return to more conventional models”, explains JLL’s report (…).

From rock star to conservative player

Within the coworking phenomenon, the rock star is WeWork. The New York-based company, which became the largest lessee of offices in its home city last year, is worth USD 20 billion, but it recorded losses of USD 723 million in the first half of last year.

“Its model is based on taking over the best buildings, in the most prime areas and then competing with other operators on price: it is not sustainable”, argues a competitor in the sector. “Sooner or later, they will have to raise their prices”, he assures.

IWG’s model is more conservative. That firm has an umbrella of five brands and thirty years of history. “We have gone through three or four cycles and we cover our backs: first, by diversifying in terms of the type of tenant to minimise risk. We also ask the owners to invest and we do not select the best buildings or at any price”, said Philippe Jiménez, head of the group in the Spanish market (…).

De Bes from Forcadell forecasts that “Over the medium term, just four or five operators will remain: those that lease 200 m2 or 400 m2 in secondary areas will exit the market”. In fact, the market is already becoming more concentrated: since 2015, the five most important operators have accounted for 50% of all of the new flexible workspace in Europe (…).

Original story: Eje Prime (by Iria P. Gestal)

Translation: Carmel Drake

Vitruvio to Complete a €14.5M Capital Increase Ahead of its Takeover of Única

5 February 2019 – Eje Prime

Vitruvio is preparing to launch its takeover bid for Única. The Socimi is planning to complete a €14.5 million capital increase to finance the operation, which will be complemented by the exchange of shares plus available cash from the company.

In addition, the company has now completed the two due diligence processes on the Madrilenian Socimi – specifically, the technical and legal due diligences, and both of them have proved positive. “That was the last step that needed to be completed before submitting the offer to the reference shareholders of Única, which is extendable to all of the shareholders”, explained sources at Vitruvio speaking to Eje Prime.

Vitruvio is planning to close the operation for around €32 million. After adding €45 million in properties from Única, the group will be managing a portfolio of rental assets worth €160 million.

According to explanations provided by the Socimi in a statement sent to the Alternative Investment Market (MAB), the capital increase will finance part of the acquisition, fulfil the maximum indebtedness limit of 33% and make way for the entry of new investors.

The rest of the operation will be paid for with €8.1 million of available cash as well as financing available to Vitruvio for the purchase, and another €9.7 million, which will be paid for with shares representing 30% of Única.

The capital increase will be proposed at the next shareholders meeting in March at a price of €14.50 per share. “Vitruvio will propose the capital increase at the latest NAV per share, whereby avoiding any dilution of the shareholders”, explained the company.

Única Real Estate was founded in 2015 by the former CEO of Metrovacesa, Eduardo Paraja, and specialises in the acquisition and leasing of commercial premises in the Community of Madrid.

Vitruvio, meanwhile, has a diversified portfolio comprising offices, homes and commercial premises. Together, the two companies own 71 properties, and generate revenues and EBITDA of €9.3 million and €6.3 million, respectively.

Original story: Eje Prime (by I. P. Gestal)

Translation: Carmel Drake

Iberostar will Add 1,500 Rooms to its Portfolio in 2019

24 January 2019 – Expansión

Grupo Iberostar is continuing with its expansion plans and intends to add seven new hotels to its portfolio this year, containing 1,500 rooms in five countries. The new establishments will open in Palma de Mallorca and Madrid, in Spain; in Monastir and Sousse, in Tunisia, where the Spanish hotel chain already has a presence; as well as in Istanbul (Turkey), Rome (Italy) and Lagos (Portugal), where the group will make its debut.

The company, which opened 13 establishments last year, explained that 2019 is going to be “key” for the consolidation of the projects it has underway in Los Cabos and Litibú (Mexico) and for others, which are more advanced, in destinations such as Montenegro, Aruba, Albania and Cuba.

The chain, which is owned by the Fluxá family, owned 96 hotels around the world containing 31,720 rooms at the end of 2018. In Spain, the company owned 35 hotels and 9,888 rooms at the end of last year.

In terms of operational data, Iberostar closed 2018 with revenues of €2.659 billion, which represented an increase of 9% YoY, and it created around 4,000 jobs (…).

Original story: Expansión (by R.A.)

Translation: Carmel Drake