Cerberus & Oaktree in the Final Round to Buy ‘Solvia Desarrollos Inmobiliarios’

5 April 2019 – Expansión

Banco Sabadell is on the home stretch for the sale of 100% of its property developer, Solvia Desarrollos Inmobiliarios (SDIn). The funds Cerberus, through its property developer Inmoglacier, and Oaktree have made it through to the final round of the operation, which could be closed within the next few days or weeks.

The consultancy firm Savills Aguirre Newman has estimated that SDIn’s assets are worth more than €1.3 billion and the entity chaired by Josep Oliu (pictured above) is hoping to record proceeds of around €1 billion from the sale.

The portfolio comprises 270 buildable plots for the construction of around 15,000 homes, half of which are in Cataluña, although it also contains plots in Madrid, Andalucía and Valencia.

It has been reported that two other investment funds may have also been selected for the final round (out of Apollo, Goldman Sachs and CPPIB) but Oaktree is understood to be the favourite. Rothschild is advising the divestment process.

Original story: Expansión (by R. Sampedro and S. Saborit)

Translation/Summary: Carmel Drake

Cerberus Puts Haya Real Estate up for Sale for c. €1.2bn

15 March 2019 – Eje Prime

Cerberus had been planning to list Haya Real Estate on the stock market but it suspended that operation in light of the political instability in the country, amongst other reasons. Instead, the US fund has decided to put the servicer up for sale.

The asking price is €1.2 billion and the advisor Rothschild has already made contact with possible interested parties. They include DoBank, which acquired Altamira in January for €412 million; the Swedish company Intrum, which purchased 80% of Solvia in December; and the fund manager Centricus.

Haya’s contract with Sareb is due to expire at the end of this year and the bad bank is understood to be considering not renewing the agreement as part of a wider strategic rethink.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

Savills Values Solvia’s Property Developer Land at €1.3bn

12 December 2018 – El Confidencial

The banks are starting to benefit from the recovery in the real estate sector. Such is the case of Banco Sabadell, which has seen its portfolio of prime land appreciate by €300 million, or 30%, in recent months, ahead of its firing of the starting gun for the sale of its property developer, Solvia Desarrollos Inmobiliarios.

That is the result of an appraisal of the land that the consultancy firm Savills Aguirre Newman has performed for Sabadell. Initially, the plots were valued at €1 billion. They are the best quality plots of land that Sabadell has left since the outbreak of the crisis, and many of them are in areas with high demand in Madrid and Barcelona. For Savills, the chosen plots are now worth almost €1.3 billion, according to financial sources consulted by this newspaper.

Now that the appraisal has been performed, Sabadell and its chosen advisor for this operation, Rothschild, will launch the sale of the property developer SDI and the plots worth €1.3 billion, imminently.

This operation will result in the creation of one of the largest real estate companies in Spain. It will be even larger than Neinor when it was purchased by Lone Star.

The bank does not expect to close the sale of Solvia Desarrollos Inmobiliarios before the end of the first quarter of 2019. By contrast, Sabadell has also launched the sale of Solvia Servicios Inmobiliarios (the management platform), which is on the market for €300 million and whose sale it hopes to close in 2018. According to Expansión, Haya Real Estate (Cerberus), Intrum and Centricus are participating in that process.

Candidates

There are several funds amongst the candidates to acquire the property developer SDI including: Cerberus, Oaktree, Blackstone, Apollo and Lone Star. The first features in everyone’s list of likely contenders because of its good relationship with Sabadell in recent major operations. Moreover, it owns a property developer, Inmoglacier, with which there could be synergies following the operation.

Meanwhile, Oaktree is one of the candidates that would start with an advantage, given that it is Sabadell’s partner in similar businesses, and so it knows the team at SDI: they have a platform for the joint development of land and they have purchased land from Iberdrola. Nevertheless, according to sources close to the operation, that fund still needs to confirm its presence in the process.

Other candidates that still need to define their strategies include Blackstone, which is studying all of the operations with Aliseda, but which has opted more for rental assets until now; Apollo, which has wanted to enter the development segment for years; and Lone Star, which since its exit from Neinor has purchased Servihabitat and has as much appetite for Spanish property as it did before the crisis. ‘A priori’, the operation seems large for Bain Capital, owner of Habitat.

Original story: El Confidencial (by Jorge Zuloaga)

Translation: Carmel Drake

Ibercaja Finalises the Sale of a €600M Real Estate Portfolio

8 December 2018 – El Periódico de Aragón

Ibercaja is continuing to take steps to best position itself ahead of its stock market debut, which is scheduled for next spring. The Aragon-based bank wants to divest more real estate assets before the end of the year to clean up its balance sheet and improve profitability, an objective that it expects will materialise in the coming weeks with the sale of a portfolio of problem assets worth around €600 million, according to confirmation provided by the entity yesterday to this newspaper. To carry out this operation, which is called Project Cierzo, it has engaged the investment bank Alantra, which is finalising the negotiations to find a buyer.

The move by Ibercaja follows the widespread practice across the whole Spanish financial sector and forms part of its strategic plan for 2018-2020, whose goals include the aim of reducing its toxic property assets by half (doubtful and foreclosed) with the mixed sale of around €2 billion in land and housing. That would help to improve efficiency, by bringing it below 55%, and would make the entity more attractive for future investors.

During the period 2015-2017, the bank led by Víctor Iglesias (pictured above, left) managed to clean up €1.6 billion. At the end of the third quarter of 2018, the volume of problem assets amounted to €3.9 billion, which represented a decrease of 10.1% (€437 million) with respect to the same period last year and of 7.3% (€304 million) compared to the end of 2017 (€4.2 billion), according to the figures provided by the entity at the beginning of November. Based on those numbers, Project Cierzo – which was revealed by Voz Pópuli – would represent a significant step towards the objective of cutting the entity’s real estate balance in half by 2020, as there would be around €1 billion left to achieve that goal.

A month ago, Ibercaja announced that it had engaged the bank Rothschild, as an independent advisor for its stock market debut, a step that European legislation requires it to take before the end of 2020. Currently, the Aragon-based bank is controlled by the Fundación Ibercaja, which owns 87.8% of its share capital, a stake that must be reduced to below 50% to avoid a fine. The other shareholders are the foundations of three former savings banks –CAI, 4.85%; Badajoz, 3.9%; and Círculo de Burgos, 3.45%– which it absorbed when it purchased the Caja3 group in 2013.

The entity is working to ensure that its valuation is as high as possible, and so the specific date for the IPO will depend on the evolution of the market. Nevertheless, it is most likely that it will make the leap during the second quarter of 2019.

Original story: El Periódico de Aragón (by J. H. P.)

Translation: Carmel Drake

Cerberus Postpones Haya’s IPO until its Purchase of BBVA’s RE Portfolio has been Signed

26 April 2018 – Eje Prime

Cerberus is putting the brakes on Haya Real Estate’s stock market debut. The US fund, owner of the real estate servicer, has decided to suspend the process to convert its company into a listed entity until after it has signed the agreement that it reached last year to administer €13 billion of BBVA’s toxic asset portfolio, which is expected to be signed before the end of the year. In addition, the investment firm is waiting to see what decisions its partner Sareb will take regarding a portfolio worth €10 billion that it has recently put up for sale.

The fund, a giant in the sector with almost €40 billion in real estate assets, had planned to complete Haya’s stock market debut before the summer and it had even requested permission from Spain’s National Securities and Market Commission (CNMV) to seal the admission process on the stock exchange.

A few months ago, Cerberus engaged the services of Rothschild to lead the process to convert Haya into a listed company, whilst JP Morgan and Citi were making a Public Sale Offer to the servicer, hoping to obtain a valuation of around €1.2 billion for the fund, according to El Confidencial.

The US firm did not want Haya to debut on the stock market without being sure that Sareb’s mega-operation is not going to affect the valuation of its servicer. Currently, Cerberus manages €24 billion in assets for the so-called bad bank, which accounts for 60% of Haya’s portfolio. That percentage will decrease significantly when BBVA’s €13 billion real estate portfolio enters the equation.

In light of this move, the question now arises as to whether Cerberus will choose to maintain the same strategy of debuting on the stock market with the assets of third parties or to include the properties that are going to be transferred from the bank as its own.

Original story: Eje Prime

Translation: Carmel Drake

Altamira Hires Borja Ortega from JLL to Lead its International Expansion

11 April 2018 – El Confidencial

Altamira is stepping on the accelerator to become the leading servicer in the south of Europe and, to this end, has hired a heavyweight from JLL as the Head of International Expansion and member of its Executive Committee. Borja Ortega (pictured below), Director of Capital Markets at the real estate consultancy is going to join the company controlled by Apollo in May.

The first major challenge that he will have to handle is Altamira’s entry into Italy, a market that the company led by Julián Navarro has been analysing for a while to consolidate its position in the Mediterranean region, having already made its debut in Portugal and Cyprus.

The servicer entered Portugal a year ago by purchasing Oitante, a company created to manage Banif’s assets, a move that allowed it to take over the management of more than €1.5 billion in assets.

In Cyprus, last summer, the servicer created a joint venture with Cooperative Central Bank (CCB), the second largest bank in the country with €7.6 billion in financial and real estate assets, in which Altamira holds a 51% stake and which has been operational since the beginning of this year.

Heavyweight from JLL

Until now, as Head of Capital Markets, Borja Ortega has led the firm’s direct investment activities (the traditional business), its financial advisory practice (portfolios, debt, mergers and acquisitions) and its private wealth business.

Some of the most important operations that he has managed in recent times include the process to sell the Adequa office complex to Merlin and the sale of Edificio España, operations that helped his division to record growth of around 50% in the last two years.

Moreover, Ortega launched the private wealth division, which is one of the first to channel the arrival of wealthy Latin American investors in the Spanish real estate market, and he collaborated in the sale of €30 billion in toxic assets from Santander-Popular to Blackstone, an operation in which the fund was advised by JLL.

Following the arrival of the Socimis, which have now begun to consolidate in the market with the takeovers of Axiare by Colonial and of Hispania by Blackstone, and the boom in residential property development, with the stock market debuts of Neinor, Aedas and Metrovacesa, the next major movement in the sector is expected in the field of the servicers.

As we await possible mergers, for the time being, Haya Real Estate is the first firm in the sector to set its sights on the stock market, by engaging Rothschild, JP Morgan and Citi to coordinate its debut later this year. Meanwhile, Altamira has opted to create a large international platform before taking the next step, whilst Solvia has created its own property developer.

Anticipa, the servicer of Blackstone, has swallowed up Aliseda as part of the aforementioned operation involving the purchase of toxic assets from Santander, whilst Servihabitat has appointed a new CEO and it is expected that the complex balance of powers between CaixaBank and TPG will tip in one direction or the other within the next few months, as part of the recently launched process of consolidation in the sector.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Haya Real Estate Wins Contract to Manage Assets Worth €15bn+ For Bankia-BMN

9 April 2018 – Expansión

The negotiations between Haya Real Estate, the Spanish subsidiary of the US fund Cerberus, and Bankia, regarding the management of the latter’s real estate assets, are on the verge of completion. In fact, the parties have already established the perimeter of the new agreement: Haya is going to manage real estate assets worth between €15 billion and €17 billion, in gross terms, on behalf of Bankia and BMN, according to sources in the know.

After receiving the legal approvals to merge the also public company BMN at the end of December, Bankia decided to break the agreement it had signed with Cerberus regarding its property, as well as the agreement that BMN had signed with Lindorff. To do that, it had to pay a “three-figure” indemnity. Other sources in the sector estimate that the compensation payment will have amounted to around €100 million for each fund.

These indemnities depend on who initiates the termination decision, which in this case was Bankia following its integration of BMN.

Open to third parties

The process to take on the management of the real estate assets linked to the resultant entity was subsequently opened up to third parties.

Cerberus will have paid a higher amount than the forecast estimated by Bankia, which took advantage of the merger with BMN to renegotiate upwards a new contract in light of the good times that the real estate sector in Spain is currently enjoying.

Haya Real Estate (Cerberus) took over the management of Bankia’s assets worth more than €12 billion in 2013. At that time, the fund paid between €40 million and €90 million, a range conditioned by the fulfilment of the planned property sales.

The old contract was due to expire in 2023. Now, Haya is going to be Bankia-BMN’s servicer until 2028, according to the sources. Meanwhile, sources at Bankia indicate that the parties are finalising the negotiations and that the finishing touches to the operation have not been agreed yet.

BMN teamed up with Aktua in 2014. The former real estate arm of Banesto is now controlled by the Norwegian fund Lindorff.

Haya Real Estate has become a major player in the real estate sector in Spain. In recent years, it has teamed up with Sareb, BBVA, Cajamar and Liberbank, amongst other entities.

Cerberus’s platform in Spain managed €40.2 billion in assets at the end of 2017, up by 2% compared to the previous year. Having fought off competition from Lindorff in the bid to become the only company to manage the real estate assets of Bankia and BMN, Haya has cleared the way for its stock market debut. The Spanish subsidiary of Cerberus has engaged Rothschild to prepare its IPO.

Bankia will hold its General Shareholders’ Meeting in Valencia tomorrow. The focus will focus on the ERE (collective dismissal) following the integration of BMN and the rumours of a merger with BBVA.

Original story: Expansión (by R. Sampedro)

Translation: Carmel Drake

Haya Reorganises Its Company Structure & Creates Haya Servicing

19 February 2018 – Eje Prime

Haya is reorganising its company structure. The real estate company, owned by the private equity fund Cerberus, has created a limited company, Haya Real Estate Servicing. This constitution forms part of the bond issue operation that the company carried out at the end of last year.

According to the Official Gazette of the Mercantile Registry, the corporate purpose of the new entity involves activities relating to the purchase, administration and sale of all kinds of real estate assets and securities.

Its share capital amounts to €60,000 and its headquarters are located on Calle Vía de los Poblados, the same registered address as the limited company Haya Real Estate, the group’s parent company. The sole administrator is Carlos Abad, the CEO of the real estate group and its legal representatives are Bárbara Zubíria Furest, the company’s Finance Director, and Ana Suárez Garnelo, Senior Legal Counsel and Secretary to the Board of Directors.

The move forms part of the bond issue that the group undertook in November last year. Then, the company debuted on the debt market by placing €475 million in guaranteed senior bonds.

For the debt issue, the group constituted a new limited company, Haya Finance, created solely to carry out that operation. Nevertheless, in the document sent to the Luxembourg stock exchange, where Haya asked for the bonds to be traded, the group revealed its intention to create a new limited company, arguing that this formula presented fewer restrictions.

“As at the date of issue, Haya is organised as a limited liability company”, said the group in the document. “In accordance with Spanish legislation, the capacity of a limited liability company to guarantee debt in the capital markets has not been tested in the Spanish courts” it continued. In this sense, Haya underlined that a limited liability company may only issue bonds worth up to twice its own resources, at most, unless the issue is guaranteed by a mortgage or joint guarantee from a credit institution, amongst others.

Nevertheless, the company also expressed that “the applicable Spanish statute does not expressly include any restrictions over the maximum amount that can be guaranteed by a limited liability company, and there is debate between the experts as to whether the aforementioned limited limitations should also apply to the guarantee interests provided by a limited liability company to guarantee debt on the capital market”.

Finally, Haya concluded that “in accordance with the trust agreement”, the principle guarantor “shall undertake to convert itself into a limited company that is not subject to the aforementioned restrictions”.

Last week, Cerberus engaged Rothschild to handle the IPO of Haya, currently worth €1.2 billion. The real estate company led by Carlos Abad currently manages a portfolio of assets worth almost €40 billion.

Founded in 2013, after Cerberus acquired the assets of Bankia Habitat, Haya has expanded its reach with the management of additional portfolios on behalf of other financial institutions such as Sareb, BBVA, Liberbank and Cajamar. During the 9 months to September, the servicer obtained revenues of €165.8 million and generated EBITDA of €89.8 million.

Original story: Eje Prime

Translation: Carmel Drake

Hammerson Set to Buy Intu, Owner of Xanadú & Puerto Venecia

6 December 2017 – Expansión

The Boards of Directors of Hammerson and Intu Properties, two of Great Britain’s largest property developers, have reached an agreement regarding their merger, which will result in the creation of a group with assets worth GBP 21 billion (€23.7 billion, in euros), mostly comprising shopping centres in the United Kingdom, France and Spain. The operation will be instrumented through a public takeover bid (OPA) of Hammerson’s shares for Intu’s, valuing the share capital of that company at GBP 3.4 billion (€3.85 billion). Intu’s shareholders will receive 0.475 newly issued Hammerson shares for each current share they own.

If the deal goes ahead, it will have a significant effect on the Spanish market, as it would see a change in the owner of the country’s three largest shopping centres. Intu controls 50% of Xanadú (Madrid), Puerto Venecia (Zaragoza) and Parque Principado (Asturias). Funds from Canada and the USA are the company’s partners in those centres. Moreover, Intu has plans underway to develop other leisure and shopping complexes in Málaga, Valencia and Vigo, for a combined investment of more than €1 billion.

Hammerson, meanwhile, holds stakes in Value Retail and Via Outlets, which operate luxury brand outlet centres such as Las Rozas Village (Madrid), La Roca (Barcelona), Mallorca Fashion and Sevilla Fashion.

According to a statement from Hammerson issued today when it announced the purchase “the incorporation of Intu’s portfolio in Spain fits with our strategy of placing our focus on consumer growth markets as it involves adding three of the country’s largest shopping centres. It will also allow our commercial partners to have exposure to a new European market”.

This British company is committed to developing Intu’s projects in Spain. It says that the group resulting from the merger “will be in the best position” to undertake those investments. Following the integration, the group plans to sell some of its centres in the United Kingdom for around GBP 2 billion, which will give it “the financial flexibility it needs to invest in more profitable opportunities in Spain and Ireland, as well as in the outlet centre segment”. The combined debt of the new Hammerson group will amount to GBP 8.2 billion.

The property developer hopes to generate annual savings of GBP 25 million as a result of joining forces with Intu.

Intu’s share price on the London Stock Exchange rose by 20% (after the deal was announced), taking the company’s market capitalisation to GBP 3.2 billion, whilst Hammerson’s share price fell by 2%, taking its market capitalisation to GBP 4.15 billion.

Analysts are interpreting the operation as a defensive move by the two companies to protect themselves from the possible impact of Brexit, which is slowing down consumption in the United Kingdom and which may harm the value of their shopping centres. “The merger represents a coalition of two weak businesses, which will result in an amalgam of assets without any great possibilities for generating incremental profits”, argues Mike Prew, from Jefferies. “The interesting areas of growth are Intu’s Spanish business and Hammerson’s outlet centres”.

The merger still needs to be approved by the shareholders of the two companies and by the British competition authorities, which means that it could take a year to complete. Peel Holding, the investment company owned by John Whittaker, which is Intu’s largest shareholder, has already agreed to approve the takeover. Following the operation, it will hold a 15% stake in the resulting group.

The banks Deutsche Bank, JPMorgan and Lazard have advised Hammerson. Meanwhile, Intu’s managers have engaged the services of Bank of America Merrill Lynch, Rothschild and UBS.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

ICG Buys Spanish Nursing Home Leader From PAI Partners

16 June 2017 – Expansión

Intermediate Capital Group (ICG) is holding exclusive negotiations with PAI Partners to purchase the majority of the capital in HomeVi, a company that owns more than 300 nursing homes in Spain and France.

The British investment fund ICG already holds a minority stake in HomeVi, in which the French businessman Yves Journel also owns shares. The operation, which would value the group at around €2,000 million, would see ICG buy the French private equity firm PAI Partners’ majority stake. Journel would continue as a minority shareholder.

HomeVi is the leader in the nursing home sector in Spain through Geriatros-SARquavitae, which groups together 135 centres with 20,000 beds. PAI Partners bought Geriatros from Magnum Capital through HomeVi in 2015 for around €300 million; and in February this year, it acquired SARquavitae, which was previously controlled by the British fund Palamon, for €440 million. In that transaction, Euro Lagune acquired the real estate assets of SARquavitae for €110 million.

For the overall valuation of HomeVi in the negotiations with ICG, the Spanish activity accounts for almost half of the total. In France, the group operates under the DomusVi brand, and it also has several centres in China.

Two months ago, PAI Partners engaged the investment bank Rothschild to advise it on the possible sale of HomeVi. After analysing its debut on the stock market, it seems to have opted for a rapid sale process in the end, given the interest from ICG.

This fund, with assets worth €23,800 million, has traditionally invested in debt to finance private equity firms. Now it is diversifying to buy companies directly. Last year, ICG invested around €200 million to take control of the La Rioja-based industrial company Garnica.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake