Tag: right of first refusal

CPPIB Wants to Acquire 100% of Puerto Venecia & Parque Principado

19 March 2019 – Expansión

Canadian Pension Plan Investment Board (CPPIB) has emerged as the favourite to acquire the stakes owned by Intu Properties in the Spanish shopping centres Puerto Venecia (Zaragoza) and Parque Principado (Asturias) after the British group announced its plans to sell up in the country.

Intu is contemplating the sale of its 50% stakes in the two complexes, in a deal that could be worth €450 million, with the British group valuing its investments in Puerto Venecia and Parque Principado at €268 million and €161 million, respectively.

CPPIB owns the remaining 50% in both shopping centres and has the right of first refusal if Intu does decide to divest. Preliminary discussions are already underway between the two parties.

Meanwhile, in Madrid, Nuveen could be interested in taking control of the Xanadú shopping centre, which it owns jointly with Intu (50% each).

Original story: Expansión (by R. Casado)

Translation/Summary: Carmel Drake

Intu Considers Selling its 4 Shopping Centres in Spain to Pay Off Debt

6 March 2019 – Expansión

The British retail giant, Intu Properties, is considering putting up for sale its real estate assets in Spain in order to pay off some of its debt. The company’s stock market value has plummeted to €2 billion in recent months, and its debt amounts to more than €5 billion, following two unsuccessful takeover bids for the company last year.

The firm has reportedly received expressions of interest for its Spanish portfolio, which is worth €1 billion in total, from several large international investors. The assets in question are Xanadú (Madrid), Puerto Venecia (Zaragoza), Parque Principado (Asturias) and a mega-project currently under construction in Málaga.

No formal sales process has been initiated yet but a number of unsolicited offers have been received. Nevertheless, legal sources state that the firm would have to offer the right of first refusal to its shareholder partners in each case, namely CPPIB in the case of Puerto Venecia and Parque Principado, and Nuveen (previously TH Real Estate) in the case of Xanadú, before opening any sales process to the wider market.

Other potential suitors include Castellana Properties (the firm backed by the South African investor Vukile) and the Slovenian group J&T.

Original story: Expansión (by Roberto Casado & Rebeca Arroyo)

Translation: Carmel Drake

The Reuben Brothers Win the Bid for Santander’s Ciudad Financiera

12 November 2018 – El Confidencial

Banco Santander’s Ciudad Financiera has a new owner. The Reuben brothers have won the bid to acquire the headquarters of the Spanish bank, whose former owner, Marme Inversiones, filed for creditors’ bankruptcy. The Asian investors, who are residents in London and lovers of Ibiza, submitted the highest bid for the land in Boadilla del Monte (Madrid), fighting off competition from the bank itself chaired by Ana Botín and from the Arab fund AGC Equity Partners.

That is the result of the bid after the envelopes containing the final offers from the three candidates were opened by the bankruptcy administrator. Although the final price is not known, the offers amounted to around €3 billion, according to sources close to the operation, one of the largest operations ever in the real estate market in Spain involving a single asset.

From now on, to validate the purchase by the Reuben brothers, the judge from the mercantile court who is conducting the sale will have to certify that the offer from the London-based millionaires is correct, fulfils all of the requirements and complies with all of the analysis regarding transparency and money laundering. Nevertheless, and even if the judge gives his blessing, Banco Santander may exercise its right of first refusal, which gives it the last word for recovering the headquarters, which it sold in 2008 to a group of investors, who were also British, and with whom it agreed to remain as the tenant for forty years.

For that, the €500 million that Santander has paid Marme by way of rental over the last ten years has to be deducted from the final price, as does the €300 million of intra-group debt that is no longer taken into consideration following the entry into bankruptcy of the company.

Movements in the courts

Because what the Reuben brothers are now buying is the asset of a company that, after borrowing funds to pay even the tax on the original acquisition in 2008, can no longer keep up repayments on the loan it requested to acquire Ciudad Financiera and so filed for bankruptcy. After a long bankruptcy administration process, numerous claims by the creditors in the courts and offers from several international sovereign funds, the Spanish entity wanted to acquire the land of its headquarters in Boadilla del Monte (Madrid), where almost 7,000 people work.

The creditors of Marme Inversiones 2007 include ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank, which granted a loan amounting to €1.575 billion to Propinvest ten years ago in the form of a leaseback arrangement with Santander’s largest real estate asset. Other entities also participated in that loan, including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which started to sell their stakes in the loan to vulture funds in 2011, with significant discounts on the nominal values, when the owner started to acknowledge that it was unable to make the debt repayments.

One of those who purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. The first two submitted an offer to acquire Ciudad Financiera on 17 September, but their proposal was lower than those offers by Santander (…).

The Reuben brothers, which have purchased almost 168 hectares of land in Ibiza over the last two years, have submitted their bid for the Ciudad Financiera through Ibiza Properties LTD. That company was constituted on 1 August, with a nominal value of just GBP 100, money that it will now have to increase to cover the payment to the bankruptcy administrator.

Original story: El Confidencial (by Agustín Marcos)

Translation: Carmel Drake

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

31 October 2018 – Eje Prime

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

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

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

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

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

Original story: Eje Prime

Translation: Carmel Drake

The Reuben Brothers Edge Ahead in the Bid for Santander’s Ciudad Financiera

22 October 2018 – Eje Prime

The Reuben brothers are in pole position in the race for Santander’s Ciudad Financiera. Their company, Reuben Brothers, has submitted the best offer for the headquarters that the Botín family’s bank owns in Boadilla del Monte (Madrid).

The other two companies bidding in the operation, which is reportedly worth around €3 billion, are AGC and Banco Santander itself. Those three players are the only ones that submitted bids for the Ciudad Financiera on Friday, the deadline for the submission of final offers.

The sale of Santander’s headquarters is part of the insolvency proceedings in which the former owner of the asset, Marme Inversiones, is immersed. The brothers Simon and David Reuben, with the support of JP Morgan, have sent the highest bid to the court, followed by AGC and Santander, according to Vozpópuli.

The envelopes are going to be opened between Wednesday and Thursday of this week, nevertheless, the sale could still be postponed for a little longer by the courts. Not in vain, the Santander Group claims that it has the right of first refusal in the operation, which means that it could improve on the offer that emerges victorious from the bid this week. Neither the Reuben Brothers nor AGC consider that the bank holds this option; they argue that this matter was already resolved during the bankruptcy proceedings.

Original story: Eje Prime

Translation: Carmel Drake

Barcelona’s Town Hall Declares the Whole City an Area of First Refusal for Land & Property Purchases

2 October 2018 – Inmodiario

The plenary session of the Town Hall of Barcelona has approved two pioneering measures to defend its citizens’ right to housing: firstly, it will apply protected status to 30% of new developments and major renovations; and secondly, it will declare the whole city as an area of first refusal, with the objective of ensuring that the Town Hall will be able to acquire buildings and plots of land on a preferential basis.

Both measures have received support from Barcelona’s municipal groups En Comú, El Grup Municipal Demòcrata, Esquerra Republicana de Catalunya, El Partido de los Socialistas de Cataluña, La CIP – Capgirem Barcelona and the two councillors not assigned to a party, Gerard Ardanuy and Juanjo Puigcorbé, who have voted in favour of the measure. The Partido Popular de Cataluña voted against it. Ciudadanos voted in favour of declaring the entire municipality an area of first refusal but abstained from the vote to apply protected status to 30% of new projects.

The 30% reservation will represent an expansion of the public housing stock, especially in central neighbourhoods that suffer the most from real estate speculation and gentrification, and where the lack of available plots makes the construction of social housing extremely difficult. It is estimated that with the new regulation more than 50% of the new affordable homes will be located in those neighbourhoods.

Right of first refusal

That measure is accompanied by the declaration of the entire city as an area of first refusal, to enable the Town Hall to acquire plots and buildings on a preferential basis – which would include those 30% of protected homes – to expand the stock of public housing distributed across all districts.

The initiative, which involves the private sector, will affect both new buildings and major renovation projects exceeding 600 m2. Therefore, private property developers will be co-responsible when it comes to ensuring the right to citizens of a decent and adequate home.

It is expected that with the 30% reservation, around 330 homes will be incorporated into the stock of affordable housing each year, a figure that will help counter the abusive increases in rental prices (…).

The protected homes will operate under a general framework and it is calculated that 75% of Barcelona’s citizens will be able to access them. The affordable price of homes, which La Generalitat would determine, would currently be €512/month for an 80 m2 rental home and €136,400 in the case of a home purchase.

Social claim

These new regulations have been born out of the claim from entities that defend the right to a decent home and which have given a voice to the demand from citizens to put a stop to the real estate speculation that is forcing residents out of their neighbourhoods (…).

Original story: Inmodiario 

Translation: Carmel Drake

Centerbridge & Blackstone Join Forces to Bid for Santander’s Ciudad Financiera

13 September 2018 – Expansión

A consortium led by the US funds Blackstone and Centerbridge is emerging as the main favourite to buy Banco Santander’s headquarters in Boadilla del Monte (Madrid), in one of the largest real estate operations of the year in Spain, which is set to exceed €3 billion.

The court that is overseeing the creditors’ bankruptcy of Marme Inversiones, the company that has owned the so-called Ciudad Financiera Santander since 2008, has asked the parties interested in purchasing this asset to submit their binding offers by Monday 17 September at the latest. The objective of the bankruptcy administrator is to use the funds raised to repay Marme’s debt in full.

According to market sources, the funds GSO (a subsidiary of Blackstone specialising in restructured debt) and Centerbridge are preparing a joint offer that could amount to €3.1 billion. These investors are negotiating to finance their proposal with a loan that could be led by Deutsche Bank.

Second attempt

Both GSO and Centerbridge are now creditors of Marme, given that they purchased some of the debt from the banks that loaned money to the company back in the day. Their bid could be pitted against others from creditor funds such as Avenue Capital, according to sources close to the process.

During the creditors’ bankruptcy, which began in 2014, GSO and Centerbridge already tried to take control of the company, with a proposal to buy Marme’s share capital and retain the current debt. It was a similar strategy to the one pursued for several years by Aabar (an Abu Dhabi fund) together with the British-Iranian investor Robert Tchenguiz, after buying some of the debt granted to Marme by the bank RBS.

But the administrator has decided to conduct a formal auction so that the interested parties can bid together for the Ciudad Financiera and whereby allow all of the liabilities to be repaid. The creditors believe that offers above €3 billion will be necessary to recover all of the principal and interest.

Just as Blackstone and Centerbridge seem willing to formalise an offer in compliance with the conditions established by the judge, it is not clear whether Aabar is going to participate in the auction. In recent months, the fund has been caught up in a legal dispute with Tchenguiz regarding their joint investment in the company that currently owns the Boadilla campus.

The Kuwaiti fund AGC Equity Partners is also analysing the possibility of submitting an offer for the Ciudad Financiera. Almost two years ago, that firm submitted an offer for €2.7 billion to acquire the headquarters of the Spanish bank, but it did not get the go-ahead because the creditors’ bankruptcy was in an incipient phase and because Santander threatened to exercise its right of first refusal to buy back its offices.

Long-term rental

The investors Glenn Maud and Derek Quinlan, who already owned the Citi skyscraper in London, purchased the headquarters of the Spanish bank in 2008 for €1.9 billion, for which they used a loan from a group of banks led by RBS. Shortly after the acquisition, problems started with meeting the conditions of the loan, which ultimately led to the creditors’ bankruptcy of Marme Inversores, one of the instrumental companies created by Maud and Quinlan to carry out the transaction (…).

The main appeal of the Ciudad Financiera is the fact that the bank chaired by Ana Botín has committed to remain as the tenant for 40 years, until 2048. On that date, the Spanish entity may negotiate an extension to the lease contract or repurchase the property.

Three options

Once the offers have been presented next Monday before the Mercantile Court number 9 of Madrid, which is leading the bankruptcy, three possible alternatives may ensue.

If there are several attractive bids, the judge may open a process to competitively improve the prices proposed. If there is only one offer, of an appropriate value to pay the creditors, then it may be accepted immediately (…).

The last possibility is that the offers do not reach the estimated valuation. In that case, the judge may change the strategy and allow the piecemeal sale or liquidation of the different liabilities of Marme Inversiones (…).

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Barcelona Activates 72 Public Plots for the Construction of 4,644 Affordable Rental Homes

11 September 2018 – Inmodiario

The activation of new public developments forms part of the Plan for the Right to Housing 2016-2025, and the current data indicates a level of output never seen before in terms of the construction of new homes for public rental in the city (of Barcelona).

On the basis of all the actions planned, the municipal Government will increase the public stock of affordable rental homes in the city by 50% in six years.

72 projects

The 72 projects underway have been accelerated in recent years, and 80% of the public housing that is going to be constructed will constitute affordable rental properties.

Construction of 11 of the developments has now been completed, comprising 648 homes, some of which have already been handed over. In other cases, the final procedures are being completed so that they can be handed over to the families soon.

On thirteen public plots, construction work has begun or permission has been granted for the construction of 574 homes. The package of projects includes both those developments that are in the process of being awarded to construction companies and those that have already been built.

On 29 of the plots, public tenders to select the companies to carry out the projects have already started; the work on those sites will generate 2,331 homes. Finally, 19 other developments are in the preparation phase, and the procedures to carry out their public tenders have been started with a view to building 1,091 new homes.

More affordable homes in the medium term

In addition to the 72 plots mentioned above, work is being performed on 52 other sites to activate the construction of homes over the medium term; they are in different phases of the urban planning process to ensure that they are dedicated to the right to housing service (…).

With the objective of growing the stock of public housing still further and bringing it in line with those of other European cities, it is hoped that a group of sites pending planning permission will be granted the condition of plots so that they can also be dedicated to the construction of public housing. Most of those sites are located in areas of the city that are already undergoing transformation, such as La Marina, 22@ and La Sagrera.

Municipal resources for rental housing

In just 8 years, the growth in the stock of rental housing is going to add as many new homes for public rental as have been created over the last 80 years. Moreover, the process is mainly being carried out (95%) using municipal resources, and with support from the European public bank, given that the participation of the Generalitat de Catalunya and of the State is at its lowest level since 1981.

Besides the construction of public housing and management of land permits, the Town Hall has boosted the acquisition of homes through various instruments established to that end in the governing legislation, such as the right of first refusal, direct purchase and assignment of usufruct.

In this context, 531 homes have been purchased and another 251 are in the process of being acquired. By the end of the current mandate, more than 750 homes are expected to have been purchased and €70 million will have been invested using municipal resources only (…).

Original story: Inmodiario

Translation: Carmel Drake

Blackstone Offers €3bn+ for Santander’s Ciudad Financiera HQ

10 September 2018 – El Confidencial

Santander’s Ciudad Financiera, the operating headquarters of the bank chaired by Ana Botín in Boadilla del Monte (Madrid), is being put up for auction five years after its owner, the company Marme Inversiones 2007, owned by several investment funds, filed for bankruptcy. After an arduous legal process whereby the bankruptcy administrator and the court managing the liquidation has released the asset, the central offices of Spain’s largest financial institution have been put on the market in search of a buyer.

According to financial sources close to the process, one of the most interested parties is Blackstone, the US hedge fund that has become Santander’s largest real estate partner after it purchased half of its portfolio of toxic assets last year. The US fund is negotiating the finishing touches for the presentation of its offer for the building where the bank employs almost 7,000 employees, including the office of the President, Ana Botín. According to the same sources, Blackstone is debating whether to participate in the auction by itself or to team up with the other creditors that supported the purchase of the Ciudad Financiera in 2008.

Of those, the presence of ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank stand out, which 10 years ago granted a €1.575 billion loan to Propinvest to acquire Santander’s largest real estate asset on a “leaseback” basis. Other entities also participated in that loan including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which in 2011 started to sell its stake in the loan to vulture funds at significant discounts on the nominal value, when the owner started to realise that it could not afford to pay the debt.

One of the players that purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. According to other sources, those investors are seriously considering submitting a joint offer on 17 September, the date on which the interested parties have to appear before the judge. That date is the one that has been set for the binding offers for all of the assets to be processed. If none are received, which is unlikely, then the Ciudad Financiera will have to be split up and sold off piecemeal.

According to these sources, Blackstone is now the main candidate, after two Arab groups placed tentative offers on the table that never proved successful due to legal wrangling and the lawsuits filed by some of the creditors, such as the Iranian Robert Tchenguiz. The investor, who owns several properties in London and is known for his idle lifestyle, was another person to take advantage of Propinvest’s bankruptcy to acquire debt at low prices and whereby become a significant creditor. Nevertheless, his problems with the Law – he ended up being arrested – have ruled him out of the process to take ownership of all of the Ciudad Financiera.

Arab interest

The player that came very close to acquiring Santander’s headquarters was AGC Equity Partners, a Kuwaiti fund with €3 billion under management, which received approval from Mercantile Court number 9, which was leading the bankruptcy of Marme. But its bid, which amounted to €2.5 billion, now needs to be updated, given that, according to various sources, the debt alone of the special purpose vehicle reached €2.8 billion, including senior and mezzanine. Therefore, the offers must exceed at least €3 billion, which means that this auction is going to turn into one of the largest real estate operations of the year.

The attempt by AEG, which was suspended when Ana Botín exercised the right of first refusal over Ciudad Financiera, came at the same time as the bid from Aabar, a company from Abu Dhabi, owned by IPIC, the owner of Cepsa, now renamed Mubadala. According to those sources, that fund is no longer interested in the auction and Santander has no intention of exercising its preferential right, as acknowledged by official sources at the Spanish entity.

The main attraction of Ciudad Financiera is that Santander, which financed the first operation with a loan amounting to €304.6 million to pay the VAT on the purchase, has committed to remain as the tenant of the property for the next 40 years, which means that the rental income is guaranteed.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

RIU Submits Bid to Acquire Buena Vista Hotel in Tenerife for €71M

26 July 2018 – Preferente

The hotel chain RIU has submitted an offer to purchase a hotel in Tenerife that has been put up for auction following the bankruptcy of its owner and which the hotel chain has been managing for the last 10 years on a rental basis, according to El Confidencial.

The hotel company headquartered in Mallorca has offered €71 million for the Hotel Riu Buena Vista, located on Playa Paraíso in Adeja, which has just been put up for auction as part of the bankruptcy process that its owner has been immersed in for the last five years.

RIU has been renting the hotel for ten years and is now trying to take ownership of it, pending the outcome of the auction, which is expected to happen within a period of fifteen days. The chain claims that, given its status as the tenant, it has the right of first refusal over the property.

The chain led by Carmen and Luis Riu has four hotels in Tenerife and 7,000 rooms in total across the Canary Islands as a whole.

Original story: Preferente (by R.P.)

Translation: Carmel Drake