Tag: sabadell

A Mexican investor acquires 253 Sabadell branches.

A group of investors led by Moisés El-Mann has acquired 253 branches which are rented to Banco Sabadell, in the first great real estate operation of that Mexican businessman in Spain. El-Mann and his partners will pay 290 million Euros for those branches, located mainly in Madrid and Barcelona to Moor Park Capital Partners.

This British fund acquired 378 branches from Banco Sabadell in 2010 for 405 million Euros, with a rental agreement for 25 years. Before the agreement with Moisés El-Mann, who inherits the rental agreement with Sabadell until 2035, the firm Moor Park Capital had already transferred 125 offices to other investors. Sources close to Moor Park Capital assure that the firm is looking for new real estate opportunities in Spain, after having emptied its portfolio of Sabadell branches.

Moisés El-Mann also intends to develop new operations in Spain and other European countries to diversify the presence in the national market. This investor participates in a real estate company in Mexico, called Fibra Uno, which has commercial, industrial and office properties with a surface of 3,2 million square meters.

Clifford Chance, Garrigues and CBRE have assessed Moor Park, while Santander and Uría Menendez have done the same with El-Mann. (…)

Sabadell is thinking of selling the real estate company Solvia

Banco Sabadell would like to contribute to the value of its real estate company Solvia. The institution has started to probe the market and is studying a possible sale of the company, as admitted by Jaume Guardiola, managing director.

In view of the interest the Spanish real estate sector is awakening among the great international funds, Banco Sabadell has decided to study the sale of Solvia, a company that has been able to commercialize 12615 properties this year. “We are considering the sale in view of the interest there is in the market”, Jaume Guardiola has declared during the presentation of the quarterly results of the bank. “It is only an analysis, we might do it or not”, he has pointed out, after stressing that Solvia is currently “a central point” within the bank. “It is the instrument we have to evacuate assets; it runs like clockwork and it has an outstanding team and productivity”, he has declared.

The managing director of Sabadell has clarified that a potential sale of Solvia would only be based on “taking advantage of a market opportunity” and not because the bank needs capital.

Catalunya Banc and Bankia have already sold their platforms for the sale and asset management this year. (…) Between January and September, Banco Sabadell has sold 63% more assets, a total of 12615 units, with earnings of 1909 million Euros, an increase of 55% over the previous year. The target for the whole year was to get rid of 16000 properties for more than 2600 million Euros.

According to Guardiola, “Sabadell is the bank with the least exposure to the real estate sector in the Spanish financial sector. (…)

Fortress acquires Lico, the ruinous company from the savings Banks, for 200 million Euros.

Fortress, one of the opportunistic funds which has hunted more preys in Spain, has closed the acquisition of Lico Corporación, the group of financial services owned by the savings banks. The operation has been closed for an operation slightly below 200 million Euros after the approval of the general shareholder´s meeting, in spite of the reservations of some partners.

As confirmed by sources close to the transaction, the shareholders of Lico Corporación approved last Wednesday the transfer of all their assets and liabilities to Fortress, which had been negotiating the acquisition since the spring. This fund has won the bid over Pepper Investment Management, another fund of Australian origin managed in Spain by Enrique Marín (ex-Lehman Brothers) and who had presented an offer of collaboration with Goldman Sachs.

As advanced by El Confidencial at the beginning of June, BBVA and Sabadell, who had become shareholders of Lico Corporación by accident after acquiring Unimm and CAM, obliged the savings banks who historically had been in the capital to sell the firm. The losses of the last years – more than 80 million Euros – had forced them to contribute with fresh funds in order to avoid a patrimonial imbalance.

In view of the pressure of Francisco González and Josep Oliu, presidents of BBVA and Banco Sabadell, respectively, the rest of shareholders – Liberbank, Caja España, Banco Mare Nostrum, Unicaja, Novagalicia, Kutxa, Mapfre, Bankia, Caja 3, Catalunya Banc and Ibercaja and the Spanish Confederation of Savings Banks- decided to empower Société Générale to look for a buyer.

The decision to sell Grupo Lico was taken only five months after the dismissal program carried out by Lico Leasing, one of the biggest subsidiaries of the holding, which affected 43% of the staff made of slightly more than 200 employees. This downsizing meant a cost of six million Euros in compensations, a sharp adjustment through which all partners of the Spanish Confederation of Savings Banks, the main shareholders, wanted to adapt “its production capacity to the current scenario of economic activity.”

Fortress will do it now, as with this acquisition it assumes a platform that will manage the 3.000 million Euros in financial assets it has been acquiring in the last few years. One of the more important operations was the agreement with the Banco Santander to assume a portfolio of default personal credits of 1.100 million Euros. A transaction for which it paid 55 million Euros, as it acquired it with a discount of 95% on its value in books.

Lico Corporation, with assets of 745 million Euros, is the mother company of Grupo Lico, which was founded in 1988, twenty-five years ago. The holding is made of 21 companies that operate in the businesses of leasing, factoring, confirming, renting, corporate financing, collection of payments, valuation of portfolios, mediation in private insurances and real estate investment. However, the origin of the institution goes back to 1966, when Mapfre created Leasing International Company, a company which was entered by the savings banks in 1977.

The arrival of Fortress means some fresh air for Lico Corporación, whose accounts had already arisen some suspicions in the auditors. Deloitte warned in its last report against some “existing uncertainties on the capacity of the group to continue its operations”. Some of the factors of this doubt were the continuous fall of the volumes of new financing awarded by its depending institution Lico Leasing, as well as the amount of very significant losses; the great cash and credit restriction problems in the whole banking system.

An environment that made it difficult to “renovate the credit lines, so that at the end of the year nearly all the financing of the Group was the one agreed with its shareholders.”(…)

Foreign funds aim to buy Spanish property managers before market awakens.

Foreign investors are preparing bids for the property management units of several Spanish banks, hoping to break decisively into a real estate market that has brought few bargain housing deals for funds even after five years of a price slump.

U.S. investment firms Cerberus Capital Management CBS.UL, Centerbridge Partners and Lone Star are among those preparing to join a preliminary round of bidding for Santander’s SAN.MC Altamira Real Estate, two sources familiar with the matter said.

The Altamira deal, which would give the successful bidder a team of managers and a contract to handle Santander’s property sales but would not include real estate assets on the bank’s books, is the latest of several similar moves by rivals.

Most Spanish banks are contracting out the units, or selling them, to raise cash without parting with foreclosed housing that they own, which foreign investors want to buy but only at very low prices.

The first bids for Altamira are due on Thursday, the two sources said. Lone Star declined to comment. Cerberus and Centerbridge did not respond to requests for comment.

Spanish lenders were hit hard by a real estate boom which turned to bust in 2008, landing the banks with soured loans to developers and forcing them to foreclose on properties.

The banks were told by the government to make steep writedowns on property exposures last year, leaving some short of capital and forcing Spain to request a 41 billion euro ($55 billion) bailout from Europe for the weakest lenders.

The writedowns had sparked hopes among international investors that banks would start offloading big bundles of properties, unfreezing Spain’s real estate market, but few deals have come yet through.

“Ask and offer prices (for property portfolios) are much closer now, …. but at the very, very cheap levels funds are interested in banks still think “I can’t, it’s a loss’,” said Manuel Anguita of Aguila Capital, which brokers deals between banks and investors.

The interest shown by foreign investors was welcomed in the Spanish real estate sector as a sign of serious commitment.

“These types of deals are a very good sign – no-one buys a platform to stay in a country for a year,” said Fernando Acuna of property management firm Taurus Iberica.

“These will give the funds a deep knowledge of what is going on…and allow them to manage other assets they might buy which don’t belong to the bank.”

PROJECT BISON

Several banks have relinquished their property management operations in recent weeks, which will let them refocus on their core business.

Cerberus picked up the contract to manage properties and developer loans for state-rescued Bankia BKIA.MC, paying between 40 million and 90 million euros to run the property business over 10 years.

The Altamira deal – dubbed ‘project bison’ by bankers after prehistoric paintings at the Altamira caves near Santander – could be worth more, one source said.

Santander declined to comment.

Mid-sized lender Sabadell SABE.MC could look to sell its real estate arm Solvia in the coming months, according to two other sources familiar with that deal.

Sabadell said there was no existing mandate to sell the unit but it did not rule out studying it in future.

International investors want to buy the businesses to reap commissions from sales and gain platforms with which to manage other assets they might pick up in Spain, bankers and real estate experts said.

Real estate prices appear closer to hitting the bottom, Acuna at Taurus Iberica said, after a slump of some 40 percent in five years. That could help funds finally buy more portfolios as buyers and sellers get a clearer idea of price prospects.

A ‘bad bank’ created to manage real estate assets of rescued lenders is also stepping up sales of bundles of properties.

“Ultimately these (property management) platforms will probably be brought together and we’ll end up with three dominating this market in a few years,” said one Madrid-based investment banker.

Javier Botin and the Elliot fund retain two thirds of the default credits from banks.

The sale of default credits is attracting the attention of many foreign funds. But, when the time comes, very few share the cake of this business. Only two firms, Savia Asset Management, from Javier Botín, son of the president of Santander and the U.S. hedge fund Elliott, have retained two thirds of the default loans auctioned by banks this year.

In total, these two firms have taken part in operations that have moved a volume of loans of 4085 million Euros, 68% of the 6000 million Euros transferred by Spanish banks since the beginning of 2013.

This percentage rises even more if we take into account the other two funds in the ranking, D.E. Shaw and Lindorff, which accumulate another 1300 million Euros in absorbed default credits. In total, the four more active funds cover 90% of the operations.

The ranking is led by Emilio Botín. The son of the president of Santander has found his place in the sector as a middleman between U.S. hedge funds and Spanish banks.  He represents these funds in their operations, investing jointly with them and receiving later the management contract of the acquired assets.

In total, he has closed four operations of this kind in 2013, acting as a matchmaker between BMN and Marathon; Popular and Perry Capital; Ibercaja and Yorvik; and BBVA and York, in an agreement advised by KPMG.

These operations have made Botin one of the key players in the management of default credits in Spain, with nearly 3000 million Euros in managed assets.

Along with the Spanish businessman, the important volume of default credits acquired by the hedge fund Elliott, founded by the controversial Paul Singer, considered the inventor of the vulture funds, stands out. Elliott is the winner of the operation Itálica, from Bankia, closed in July but his name had not been known until now.

Elliot has acquired a portfolio of around 1000 million Euros in default credits from Bankia to medium and small sized companies, which will be managed by Gesif. This hedge fund also acquired 300 million Euros from Santander.

Another fund that is back on stage is D.E. Shaw, from the multimillionaire ex advisor from Bill Clinton, David E. Shaw. This fund has closed another operation whose result was unknown until now, the Operation Ulyses, with which Cajamar has gotten rid of 700 million Euros in default credits.

Lindorff, a Nordic group, has joined the Spanish businessman and the U.S. hedge funds. This financial firm has acquired two portfolios: a consumer one from Bankia, included in Itálica and another worth 300 million Euros from Santander. Lindorff has become one of the leaders of the sector in this segment, with banking portfolios acquired for a volume of 3500 million Euros.

Cerberus also stands out among the great international funds with closed operations in Spain, as it has acquired a portfolio from Liberbank and part of one from Bankia. Meanwhile, Apollo has opted for acquiring credits (although also default ones) with the acquisitions of Evo Banco and Finanmadrid.

After these operations, the institutions prepare their machinery to sell more portfolios in the next few weeks. Meanwhile, the first ones to sound out the foreign investors are Sabadell, with a portfolio of 500 million Euros in default credits from medium and small sized companies and consumer ones from CAM; and Cajamar, that will sell more than 300 million Euros.

The sale of banking default credits, along with those of real estate assets, are awakening a great interest in foreign funds. South American, Asian and Arab investors have arrived in the last few months. An Australian one, Pepper, has joined them, announcing last week the acquisition  of the U.S. fund Oakwood, owner of the Spanish recovery platform Vesta. Pepper is one of the main competitors in this sector on an international level.

Spain: for sale.

Spain is for sale. And finally, it seems there are buyers. Dozens of investment funds from all over the world, but mostly from the United States, are buying apartment blocks, real estate firms, and even company debt. There are some vulture funds out for a quick buck, but most are looking for medium-term returns. “Two years ago, Spain was radioactive, and the property sector toxic. Suddenly it’s become our savior; it’s that stupid,” says one veteran real estate developer on condition of anonymity.

On February 7, 2012, when the future of the euro was still in the balance, Jaime Bergel, a former board member of energy giant Endesa, opened an office for 13-billion-dollar US investment fund HIG Capital in Madrid. “We had a feeling that people would come here looking for opportunities,” he says. In fact Merrill Lynch and Goldman Sachs were already here.

On August 6 of this year, HIG carried out its so-called Operation Toro, the first major sell-off of property accumulated by Sareb, the bank set up by the government to hoard unsold property and debt belonging to the country’s failed savings banks. HIG bought around 500 properties for a total of 50 million euros. Most of the properties are low-cost apartments in the outskirts of Madrid, Valencia, Seville, Málaga, Murcia and in the Canary Islands that so far nobody wants.

Investment funds have spent around two billion euros buying up property in Spain since April. Some experts are interpreting the great sell-off as good news, flushing the financial system with new money; others say that it is a de facto takeover of a significant chunk of the economy by foreign capital.

“We are looking for businesses with good assets and that are well managed but that can’t get their hands on the capital they need. We lend them the money and let them get on with running the business,” says Jesús Olmos, KKR’s representative in Madrid. In April, KKR lent 320 million euros to construction materials manufacturer Uralita over a seven-year period, and it has also taken positions in parking lot firm Saba and helicopter maker Inaer.

In 2008 Juan Vizcaíno, once of Lehman Brothers, set up Hipoges, which specializes in managing distressed assets. He now employs around 80 people in Madrid, and already manages assets valued at 2.3 billion euros, most of them in the form of property and bought at knock-down prices from the banks. “Most of the property we buy is new and hasn’t even been lived in. It was bought as an investment by people who have now gone abroad,” he says.

Vizcaíno says the toxic assets business has grown so fast that he has had to move office twice as he takes on new staff to keep up with demand. His current offices occupy more than 1,000 square meters in downtown Madrid: “We are spectacularly busy. Interest in Spain has multiplied tenfold,” he says.

In August, the owners of Mexican fund Fibra Uno bought more than 900 offices that had originally belonged to Banco Sabadell, which the bank had sold to a US fund for 300 million euros. The Catalan regional government sold 13 buildings to French company AXA for 172 million euros in a deal that sees the government pay rent on them. With a profit rate of 9.45 percent, in just under a decade AXA will have recouped its investment in rent alone.

Meanwhile, the Popular Party-controlled regional government of Madrid is busy selling off chunks of housing stock built for low-income families. On June 24, Madrid’s Municipal Housing and Property Company (EMVS) said that it had sold 1,860 low-rent apartments to Blackstone, an associate of Spanish property developer Magic Real Estate, for 128.5 million euros. Blackstone is one of the world’s largest investment funds, with assets of 60 billion dollars.

The purchase looks like a classic vulture fund move: buying where nobody else dared to strip the assets and sell as soon as possible. “Blackstone knows that 85 percent of property in Spain is privately owned, with just 15 percent rented out. The average in Europe is 70/30. Eventually Spain will get to that point. If the figure shifts from 15 percent to 25 percent, that is 2.7 million properties that will enter the rental market. In Germany, Blackstone has 50,000 properties for rent, but until now, there weren’t enough properties available for it to be worth buying in Spain,” says a source close to the operation.

Blackstone is obliged to continue the low-rental policy for a decade, during which time it will operate a zero-tolerance policy toward tenants who fall behind with payments, and after which it can rent them out at higher prices. Most of the properties are in the working-class district of Carabanchel, in the southwest of the city. Speaking to tenants in one block that has been sold off, it is clear most have no idea who the new owners of their homes are. One man says he has stopped paying his rent because he no longer knows who to make the transfer to. Average rents here are around 200 euros a month for a three-bedroom apartment. Many homes have never been occupied.

In August, the Madrid Housing Institute (Ivima), also set up to provide low-cost housing, sold 2,935 low-rent apartments in the working-class dormitory town of Parla to Goldman Sachs and Azora for 201.2 million euros. Azora already manages some 7,000 of these properties slated for social housing, along with student residences and hotels, all valued at 1.3 billion. Fernando Gumuzio, the company’s founder, says the firm charges rents of between 250 and 600 euros.

Gumuzio rejects the idea that companies like his are vultures circling the moribund carcass of the Spanish economy: “I prefer to call them opportunists. They are investing in problem companies, and helping to clean up their debts. This is the first step toward recovery. Later on, the institutional funds will move in.”

Rafael Powley of US consultancy Jones Lang LaSalle explains that investment funds are awash with cash after taking advantage of the collapse of the US property market and its subsequent recovery. “There are a lot of people who made a lot of money buying cheap, and want to repeat their success here.”

The figures suggest that property prices in Spain may well be bottoming out. The price per square meter for office space on the Paseo de la Castellana, Madrid’s upscale central thoroughfare, has been stable for a year now. At the height of the property boom, prices were 13,000 euros per square meter; the rate is around 6,500 euros. “The speculative market is always ahead of the real economy: that’s how you make money,” says Juan Manuel Ortega, who heads Jones Lang LaSalle’s operations in Spain. He says that three years ago, most of the firm’s clients were looking for advice on how to get out of Spain; “now they want us to tell them what to buy.”

Powley explains that most of those rushing to buy now are the same companies that inflated the property bubble of the late 1990s and early 2000s: “In those days, a developer would call you to say that he had sacked his sales team because they had sold his property so quickly that he hadn’t been able to put the prices up.”

Ismael Clemente hails from a tiny community in the western province of Badajoz and has many years of experience in the property business. Before setting up Magic Real Estate, he headed the property division of Deutsche Bank in Spain. In November 2005, seeing which way the wind was blowing, he advised his bosses to get out of the Spanish property market before selling the Hotel Arts in Barcelona in early 2006. The bank made 170 million euros on the deal, selling the hotel to a Dutch group and Singapore’s sovereign wealth fund. “We lost 18 months, but we made up for it with that sale,” he says. Magic is now a partner with Blackstone.

Clemente explains some of the key points of Spain’s emerging property market: “Buying a shopping center in Leipzig is barely profitable, and one setback and you are down on the deal. So the idea is to get into other markets. Prices are back up in Dublin, London is enjoying its own particular boom, while France is beginning to look weak. A shopping center in Valladolid is more risky, but twice as profitable if you handle the purchase properly. That’s why the investors are here. People see these funds as pirate ships, but they are playing with other people’s money. Vultures serve a function: they clean up corpses. It’s the same here: they pump money into a market starved of funds.”

He says that Blackstone’s entry into the Spanish market has sent out a message of confidence: “Investors are like sheep. If things go badly here, these funds can always tell their investors that everybody else was here, and nobody could see what was going to happen.”

Some funds have already set aside fixed amounts to invest in Spain. “A client called me a couple of days ago saying he had 500 million euros to spend in Spain,” says Iñigo de Luisa, a partner at law firm Cuatrecasas. “This summer we have seen a lot of activity: I haven’t seen anything like it since the boom.” De Luisa specializes in buying debt, and advised the Bermudas project that saw Sareb sell 245 million euros in loans owed by Grupo Colonial to Burlington Loan Management. The mechanics of these operations is not rocket science: if a company owes 100, the funds buy the loan for 70, or much less, dependent on the risk. If they get the money back they have won; if not, they keep the property portfolio, which is worth more than the 70 they put up.

The party has barely started. Spain’s banks have huge numbers of apartments that sooner or later they must sell. The vulture funds have taken the first step by taking over the property divisions of Bankia (bought by Catalana Bank and Cerberus, a company partly owned by the son of former Prime Minister José María Aznar, whose government in the late 1990s oversaw the property boom). Meanwhile, La Caixa is negotiating the sale of 51 percent of Servihabitat to the Texas Pacific Group.

The country’s regional administrations are also keen to sell off their property assets, often at fire-sale prices, in a bid to generate desperately needed cash. Andalusia, Catalonia, and Valencia were the first to begin offloading publicly owned property: in total some 144 buildings that they hope will raise around 2.2 billion euros.

British investment company Moor Park, which is tied to risk fund Och Ziff, offered the Catalan regional government 450 million euros for 26 buildings it would then rent out to it. The offer was tempting, but the regional government eventually decided that the conditions were not up to scratch. The buyers wanted to be paid in dollars or Swiss francs. “At the height of the euro crisis, what sort of message would that have sent out?” say sources close to the Catalan government.

Murcia has put the seat of the regional government up for sale; Extremadura is also keen to reduce the size of its property portfolio; Asturias is looking for a buyer for its offices in Madrid and Brussels; the Canary Islands has palaces for sale; and Castilla-La Mancha has so far not found a buyer for 16 government buildings. But a consultant who has acted as an intermediary in the sale of government buildings to foreign investment groups says that only Madrid and Barcelona have any appeal. The regional government of Madrid has already put 11 buildings up for auction this year with a starting price of 32 million euros. But for Madrid City Hall, it was only after dropping the price by 40 percent that it managed to sell its environment department’s offices for 21.8 million euros to the Bank of China. The Valencian regional government says that it is in advanced talks to sell three buildings.

More and more properties owned by regional and municipal governments are expected to come onto the market in the coming months. The central government has so far only raised 90 million euros since 2012 from selling off its property portfolio, but now says that it is to put more than 15,000 properties on the market, among them 61 apartment blocks, almost 7,000 houses, and 800 stores. No price has been agreed, say sources at the Economy Ministry.

This macro-sale includes some attractive assets, as well as many that will prove tricky to dispose of. For example, the former headquarters of the National Stock Exchange Commission on the Castellana, valued at 30 million euros; the building formerly occupied by the RTVE state-owned radio and television company, just round the corner, along with properties in other upscale areas of the capital. The government even wants to sell 14,000 hectares of the Alcornocales natural park in Cádiz, offering permission to the buyer to build an aerodrome, two golf courses and a luxury hotel. As Spain goes on sale, nothing is beyond the bounds of possibility.

Banco Sabadell sells a portfolio of 953 properties valued at 88,9 million Euros.

Banco Sabadell has sold 100% of the bonds of a vehicle of securitization that included 953 properties valued at 88,9 million Euros to a consortium of international institutional investors, according to the information provided by the Catalan institution in an announcement.

This portfolio is made of second hand assets, 90% of which are homes and the remaining 10%, trade premises, parking spaces and storage rooms, with a higher concentration in Valencia and Madrid.

The institution has declared that this operation, carried out through the sale of bonds, has allowed the maximization of the value of the sale and has meant the “corresponding transfer of risk of this portfolio, which originated in the acquisition of the Banco CAM.

According to the managing director of Banco Sabadell, Miguel Montes, the closure of this sale is a sign of the “high interest” of international investors in this type of operations and constitutes a good base for future transactions.

The agreement will allow the group to maintain the management of the portfolio and the commercialization of the sold properties, through Solvia, the real estate company of the institution.

The fund Fibra acquires 278 Sabadell branches from Moor Park for 300 million Euros

The British fund Moor Park Capital Partners has decided to close up its first investment in Spain. The firm, with headquarters in London, has reached an agreement to transfer 278 branches leased to Banco Sabadell.

The properties belong to a package of 378 real estate assets acquired by Moor Park in April 2010 from Banco Sabadell through an operation of sale & leaseback, that is, the institution sold the branches and, at the same time, closed a leasing deal to stay as a tenant.

At that time, the British fund paid 403 million Euros for the nearly 400 branches with an initial yield of 6,65%. Now, after two previous sale operations, Moor Park will obtain between 300 and 330 million Euros for the 278 branches, according to sources close to the operation.

A figure that would need to be added to the earnings obtained for the sale of a hundred branches transferred at the end of 2010 and 2011. Moor Park decided to split up the package and place it among small and medium sized investors. However, it also closed an operation with a great investor, Amancio Ortega, who acquired through its real estate company Pontegadea a lot of offices for 55 million Euros in December 2010.

The objective of the British fund was to sell branches in order to obtain 200 million Euros, however, according to real estate sources, up to the sale of its last package of 278 branches, it had obtained 70 million Euros.

The nearly 300 properties generate an annual rent of 25 million Euros, according to these same sources, and are scattered all throughout Spain and mainly, in Madrid and Barcelona.

As it happened with Moor Park when it acquired these branches, the new owner enters the Spanish market with this operation. It is Fibra Uno, a Mexican institutional fund that works as a Reit. That is, it is a listed company devoted to the rental of properties, whose earnings have to be divided between the shareholders.

On the 30th June, the accounting value of these properties reached 51.100 million of Mexican pesos (2945 million Euros). Its portfolio includes 316 properties, located mainly in the south and center of Mexico. The assets have an industrial, commercial and office use.

This is the first great operation carried out by a South American fund which, after years focusing its acquisitions in the United States, has started to invest in Spain. At the end of June, a group of Venezuelan investors acquired a building located at the Recoletos Street in Madrid for more than 20 million Euros from the real estate company Renta Corporación. The agreement between Moor Park and Fibra Uno has been closed a few weeks ago, after finishing the negotiations which started on the last month of May. However the acquisition will not be closed officially until the 15th September.

The operation has also been approved by Banco Sabadell. The Catalan institution has confirmed its interest to maintain the branches as they are strategic ones. The properties have a lease agreement for 35 years, with a minimum 25 years, guaranteed by Sabadell.

In this first great operation of sale & leaseback in 2013, the consulting company CBRE ad the law firm Clifford Chance have acted as consultants for Moor Park; while the acquirer has been advised by Banco Santander on the financial side, the law firm Uría y Menéndez on the legal and tax side and Deloitte on the real estate aspects.

Sabadell´s share dropped yesterday by 4,59% down to 1,848 Euros.

The Mediterranean real estate companies throw themselves into the Russian buyers.

Russian money has revitalized the luxury market, together with the Chinese and Arab money, and has revitalized the Spanish real estate market, mainly the one at the Mediterranean coast. In view of this situation, the agencies have decided to throw themselves into them to improve their sales. Last year there was a big increase in the number of Russian millionaires wishing to buy high segment houses, looking for sun and quality of life. And the descent of the Spanish housing sector due to the crisis has helped the entrance of an eager medium class this year, a tendency that should increase in the next few months.

“There are very good opportunities right now in homes at the coastline and the Russians have money that they wish to spend in order to obtain sun and beaches, this is what they are looking for”, David Scheffer, managing director of Engel & Völkers in Spain, points out. All real estate companies have seen an opportunity and have started to attend tradeshows in Moscow or St. Petersburg. They have also hired Russian staff to talk to potential customers and have started to publish their web pages and leaflets in that language. “We need to adapt”, a spokesperson for Look & Find declares. Solvia, the real estate company of Banco Sabadell, has moved in this direction, opening up its webpage in Russian in order to “take advantage of this growing tendency”.

Buyers in the luxury segment are owners of companies of a certain size, they have money and live “in an ugly and cold country”, and this is why they have found the perfect holiday destination in Spain and they want their own home, “and they can afford it”, Scheffer explains.

They buy houses with prices ranging from five to ten million Euros, although the real estate agencies specialized in these customers also point out that there are sales of properties with two digits. The foreigners dominate the luxury real estate market and the Russians represent approximately 15% of the customers received by agencies. “The Spaniard is currently the seller”. On the other hand, the entrance of Arabs has increased after the halt of the last few years. However, Chinese citizens do not have any interest in buying, as confirmed by the main international agencies with presence in the Mediterranean coast.

The rich Russians have been followed by the medium class. The fall of the housing prices in Spain since the peak in 2007 is over 37% and has speeded up this year as a consequence of the end of the tax benefits, according to the figures by Tinsa. The fall of the second quarter was of 10,5%. This situation has affected mainly metropolitan areas and the Mediterranean coast and has helped the entrance of the medium class in the Spanish real estate sector.

The Russian, Chinese and Middle East millionaires are the ones that have helped the growth of the luxury segment in general, and this has had an influence in the rental market of trade premises. A report by the real estate company Cushman & Wakefield published this week points out that the majority of the luxury groups such as Louis Vuitton (LVMH), Max Mara, Prada, Kering or Richemont have seen a great increase in sales in the last year, which has forced these brands to increase the number of square meters in their shops in those cities where they were already present and to open up stores in new cities.

The lack of space in the “luxury streets”, such as Serrano in Madrid or Passeig de Gracia in Barcelona has two consequences: the price per square meter will rise as there is more demand than offer and they are starting to look for first floors in order to extend their stores vertically.

The experts at Cushman & Wakefield point out that in the last two or three years Barcelona has seen a greater growth of investors in prime store locations, as these brands had less presence there. Nevertheless, in view of the increase in business since 2012, they expect a “greater growth of the luxury brands in Madrid in the next few months”.