Tag: sale and leaseback

Grupo Baraka Sells a Logistics Warehouse in Murcia to Corum for €14M

11 June 2018 – Expansión

The Baraka Group, controlled by the businessman Trinitario Casanova, has closed an agreement to sell one of the logistics assets owned by its construction company Trabis.

Specifically, Baraka has sold a logistics warehouse, called Trabis II, located in the Murcian town of Yecla, the region where Casanova’s companies are headquartered. The property, which has a constructed surface area of 14,000 m2, has been sold for €14 million through a sale and leaseback contract.

“The advantage is that the buyer is guaranteed an asset in which the tenant will continue to undertake its activity”, explained Pablo Carvajal, Director of Capital Markets at Catella, the consultancy firm that has advised the new owner in the transaction.

The buyer is the French fund manager Corum Asset Management. Created in 2011 and with offices in Paris and Amsterdam, the firm set itself the objective last year of investing €500 million in real estate assets across Europe, with a special focus on Spain. For its investments, whose yields exceed 6%, Corum works with two funds Corum Origin and Corum XL, the latter was launched last year.

This is not the first time that Baraka and Corum have closed an operation together. In July 2016, the French firm paid more than €24.8 million for another logistics building also leased to Trabis.

Corum is one of the international investors that has opted to purchase logistics assets in Spain, a booming market due to its high returns and the increase in the e-commerce business. “The logistics investment market is proving attractive for domestic and international investors alike and increasingly more are investing in this type of asset. Between January and May, €250 million has been invested in these types of properties”, say sources at Catella.

At the overall level, investment during the first half of the year is expected to reach €5 billion. “During 2018, €3 billion has been invested in tertiary (non-residential) assets. Taking into account certain transactions pending completion, we expect to see investment of close to €5 billion during the first half of the year, around €1 billion less than during the same period in 2017”, he predicts.

Casanova

The divestment of this logistics warehouse comes just weeks after Trinitario Casanova entered the Madrid Nuevo Norte real estate project (known as Operación Chamartín). The businessman has committed to pay €400 million to the initial owners for the rights to 1.2 million m2 of land (now in the hands of the Ministry of Development) where the company DCN, controlled by BBVA and SanJosé, is planning to build an urban development with more than 10,500 homes.

In addition, Casanova is working on the marketing of the future shopping arcade in Edificio España, the property that he purchased from Wanda for €172 million to immediately sell it on to the RIU hotel group.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

ICG Makes €105M Investment in Eroski Spanish Hypermarkets

31 May 2018 – Property Magazine

Intermediate Capital Group (ICG) will invest €105 million in six Spanish hypermarkets. ICG has partnered with Inmobiliaria Armuco S.L., a real estate company 45% owned by Eroski, a food retailer in Northern Spain, to acquire five of its hypermarkets and one more completely owned by Eroski in a primary sale and leaseback transaction underpinned by 21-year, CPI-linked, triple-net leases.

The assets are located in the Basque region of Spain and each rank in the top quartile in terms of Eroski’s trading performance. According to Savills, Spain has enjoyed a return to growth in excess of 3% for the last three consecutive years and is predicted to outperform the Eurozone, in terms of GDP, for the next three years.

Chris Nichols, Managing Director of ICG Sale and Leaseback, commented: “We are pleased to have partnered with Eroski on this transaction and to have acquired six assets in strategic priority locations for Eroski. We have a pipeline of deals, and are actively looking for further opportunities in this space, both in Spain and across the wider European market”.

ICG was advised by Savills and Eversheds.

Original story: Property Magazine

Edited by: Carmel Drake

El Corte Inglés Should Receive Approval for Madrid Mega-Centre in March

23 December 2017 – Expansión

Three years have passed since El Corte Inglés acquired the most sought-after plot of land in Madrid, a space measuring 13,000 m2, located on Paseo de la Castellana. The group paid €136 million to be awarded the land, previously owned by Adif, in a deal that involved an initial payment of €68 million, followed by the disbursement of the remaining amount three years later. And that is also how long it has taken for El Corte Inglés to process the paperwork to allow it to expand the jewel in its crown, its Castellana shopping centre. According to sources familiar with the process, in January, the Town Hall of Madrid will submit its approval of the definitive plan to the central Spanish Government (…). According to the same sources, if all goes according to plan, El Corte Inglés will receive the green light to expand its Castellana megacentre in March, or, in any case, before the summer.

A complex project

The wait of more than three years to unblock the project has been due to a mix of complexity and bad luck. The urban planning proposal for the land established a total buildable surface area of 35,192 m2, of which 10,176 m2 corresponded to three above-ground storeys for tertiary use and 25,000 m2 to four underground basement floors for parking.

This proposal was very complex given the location of the land, located as it is, right on top of the Nuevos Ministerios Metro and Renfe stations (…).

Once it has been given the green light, it is likely that El Corte Inglés, which declined to comment, will not take long to start the building work to expand its Castellana centre. Its flagship store in the Spanish capital spans a surface area of more than 170,000 m2, with 70,000 m2 of retail space spread over seven floors and 1,600 underground parking spaces. More than 3,000 people work there.

According to sources in the sector, El Corte Inglés will also take the opportunity (of the construction of the new building) to reorganise the retail space that it owns in Nuevos Ministerios, and which includes its stores located between number 83 and 85 Paseo de la Castellana, which it sold to the real estate firm Monthisa in September 2016 through a sale and leaseback agreement (…).

Premium fashion and gastronomy

The marketing and design of the new retail space that El Corte Inglés is preparing to build on the land acquired from Adif is being carried out with the utmost secrecy by the retailer, which has refused to hire real estate agents like normally happens in these types of projects (…).

The most likely course of action is that it will create a premium space to house luxury brands and the highest-level gastronomy – although that is not the only possibility that the retail chain is currently contemplating -. That would strengthen one of the main objectives of its star centre: to attract tourist shoppers in the capital (…).

Original story: Expansión (by V. Osorio and R. Ruiz)

Translation: Carmel Drake

ECI Puts Colón Building In Valencia Up For Sale

21 September 2017 – Levante EMV

El Corte Inglés has put the building located on Colón, 1 (in Valencia) up for sale for €90 million, according to sources close to the operation. The building, which used to house a Marks & Spencers store, is currently home to a Sfera shop and youth clothing departments. The company has put three floors and the basement up for sale. The upper floors are offices and do not form part of the operation.

The objective of the company is for an investor to buy the building and then lease back the space. This type of operation is known in the real estate sector as a sale and leaseback arrangement and in recent years, banks such as Santander have adopted the same formula. Some interested parties have already visited the property.

The sale of Colón, 1 forms part of El Corte Inglés’ divestment process, which it initiated a few months ago. The same sources cited above highlight that it is the only property that the department store has put up for sale in the Community of Valencia. The company did also consider the option of putting the building at Colón, 25 up for sale, but ruled that out in the end because the land rights belong to the Colegio Imperial de Los Niños de San Vicente.

The idea of the distribution group chaired by Dimas Gimeno is to get rid of its “non-strategic” real estate assets all over Spain, in order to reduce its debt. The total (asset) sales volume is expected to amount to around €1,000 million; to put that figure in context, the group owns assets worth around €18,000 million.

The building that has gone on the market now has a surface area of 7,343 m2. Another property, in Bilbao, worth around €70 million and measuring 5,487 m2, will also be put up for sale. The other properties are located in Albacete, Burgos, Jaén, Madrid, Murcia, Oviedo and Sevilla.

El Corte Inglés acquired the property on Colón, 1 from the British retail giant Marks and Spencers 16 years ago, together with 8 other department stores, located all over Spain, for around €150 million.

El Corte Inglés recorded profits of €160.63 million in its most recent financial year, which ended in February, up by 3% compared to a year earlier; and it increased its sales by 2% to €15,504 million, whereby recording its third consecutive years of sales growth, according to the group’s annual accounts. ECI is now backing the internet to continue its path of growth.

Original story: Levante EMV (by Ramón Ferrando)

Translation: Carmel Drake

ECI Prepares To Sell Its 2 Stores In Parquesur (Madrid)

13 July 2017 – Voz Pópuli

El Corte Inglés is preparing to sell its stores in the Parquesur shopping centre, in Leganés (Madrid), according to financial sources consulted by this newspaper, under the framework of its asset sale policy to reduce debt. The group chaired by Dimas Gimeno occupies two spaces in Parquesur – which is owned by Unibail Rodamco – one for fashion and accessories, and the other for sports and leisure goods and the supermarket. El Corte Inglés assured this newspaper that no operations are currently active and that, in any case, it has remained as the tenant of other real estate assets despite divesting them.

According to real estate sources, the retail leader in Spain plans to sell various assets worth up to €150 million. Its portfolio of assets for sale includes not only the stores in Parquesur, but also others located in Burgos, Valencia and Madrid.

Leading this process is a stalwart of the Spanish company, Carlos Muñóz Gordobil, whom the sources consulted define as “a tough nut” and “old school operator”. The real estate sources argue that the prices that El Corte Inglés is asking for these buildings, which it considers to be non-essential, are too high.

The same sources indicate that El Corte Inglés’ real estate business is still weighed down by the purchase it agreed in 2014 to buy a plot on Paseo de la Castellana, adjacent to the centre that the group has in the area, which Adif sold through an auction. According to these sources, who are experts in the real estate sector, the figure paid by El Corte Inglés, €136 million, was “over the top”, as it exceeded the second highest offer submitted by more than €40 million. According to El Corte Inglés, the purpose of that purchase was to create its largest shopping centre in Spain, exceeding the one located in El Bercial (Getafe), which has a surface area of 180,000 m2.

In 2015, El Corte Inglés recorded profits of €158.13 million, up by 33.9% compared to the previous year and its turnover grew by 4.3%, to reach €15,219.84 million. Although the company has improved its revenues and has significantly decreased its debt, it still has to make some changes to facilitate negotiations with its creditor banks and secure better financing conditions, explained the financial sources consulted.

Four years ago, the retail group held debt amounting to €5,000 million, which put its business model in danger, and which essentially force it into a restructuring process in 2013. The sale of 10% of its capital to a sheik in Qatar, agreed in 2015, for €1,000 million; the sale of 51% of its financing arm to Santander in 2013; and the issue of promissory notes amounting to €300 million at the end of 2015, and of bonds through Hipercor, are just some of the measures taken by El Corte Inglés to reduce its debt to below €4,000 million.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Uro Engages BNP To Sell 40 Santander Branches

16 November 2015 – Expansión

Mandate / The Socimi owns 775 branches that it acquired from the bank chaired by Ana Botín under a ‘sale and leaseback’ agreement.

Uro Property, the Socimi that owns one third of Santander’s branch network, is looking for new tenants. The company has engaged BNP Paribas Real Estate to sell or re-let 40 branches released by the entity chaired by Ana Botín.

The bank’s exit from these branches is a reflection of its strategy to gradually reduce its installed capacity – a strategy that the whole sector is undertaking – and forms part of the contract between the entity and Uro Property. Under this agreement, Santander may exit between 4 and 5 branches per year. That figure has been increased for 2015 following the refinancing carried out by the Socimi during the summer.

Uro is the successor company of Samos, which purchased 1,152 offices from Santander in 2007 under a sale & lease back arrangement for €2,040 million. The entity’s high debt level caused the creditor bank to capitalise come of its bonds in 2014, with Santander, Atisha (the former Sun Group), CaixaBank, Phoenix Life (formerly Pearl) and BNP taking over control.

Stock market

At the time, the entity made a commitment to list on the stock exchange, which it did last March, debuting on the Alternative Investment Market (‘Mercado Alternativo Bursátil’ or MAB). It began life by listing at €100/per share and after distributing a dividend of €59/per share, closed trading on Friday at €57/share. Excluding the payment to its shareholders, the company’s share price has increased by 13% since its debut.

Uro sold 381 of the 1,152 branches it acquired initially to Axa Real Estate for around €300 million. They had a gross leasable surface area of 90,000 m2.

Following that operation, Uro now owns around 775 branches, for which it receives annual rental income of just over €100 million.

Now that 40 branches have been released by Santander, Uro Property faces the challenge of looking for new business solutions for the first time. Its priority is to sell the branches one by one, maximising the price. Although by quantity, these branches represent 5% of the total portfolio, they are worth just €20 million, which represents just 1% of the €1,800 million appraisal value of the Socimi’s properties.

These 40 branches have a combined surface area of 9,500 m2 and 50% of them (by surface area) are located in Madrid and Barcelona, whilst the remaining 50% are distributed across the rest of Spain. The properties will be sold empty and may be converted into shops, service outlets or used for other commercial purposes.

Shareholder structure

In addition to the management of these properties, the other major challenge that Uro Property will face in the coming months is the possible renewal of its shareholder structure. The Socimi’s investors have pledged to continue as shareholders for one year after the company’s debut on the stock exchange; that period will expire in March. Subsequently, one or more of the original investors may exit the company, such as Atisha and Phoenix Life, or other entities. In addition to Santander, CaixaBank and BNP Paribas, other shareholders include Burlington, Société Générale and Stichting Z+S.

Another key milestone for the company in recent months was the refinancing of its debt, which it achieved through an income securitisation amounting to €1,345 million, with a term of between 22 and 24 years. Uro Property agreed a fixed interest rate of 3.348% with investors, whereby reducing its financing cost from 6%, including interest rate derivatives.

The company is led by Simon Blaxland as the CEO and is chaired by Carlos Martínez Campos, the former number one at Barclays in Spain.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Ahorro Corporación Puts Its Azca Headquarters Up For Sale

13 February 2015 – Cinco Días

The sought after area of Azca in Madrid is preparing itself for the largest real estate transaction since 2011, when FCC sold Torre Picasso to the real estate company owned by Amancio Ortega.

The protagonist of this new activity is Ahorro Corporación, which has decided to put its headquarters, at number 89 Paseo de la Castellana, up for sale, which is located just fifty metres away from the Picasso building.

“Rising prices in the sector in recent months makes selling the building a more attractive prospect now”, said Enrique Sánchez del Villar in a press release. Sánchez recently joined Ahorro Corporación as CEO.

The building measures 20,000 square metres in total; 12 of its floors are let out as offices, another floor houses retail stores and there are also 530 parking spaces.

“Currently the building has an optimal occupancy level and high grade tenants, with Sareb, Deloitte and Alain Afflelou in the offices and Lateral, Maki, New York Burger, Via Birra and Dionisos in the retail and restaurant area”, said Ahorro Corporación.

The company acquired the building from Barclays in 2003 and plans to retain its corporate headquarters in the building once the sale has been completed. The real estate consultancy Aguirre Newman has been appointed as the sole advisor for the transaction.

“Castellana 89 represents an outstanding opportunity to invest in a prime real estate asset, with the potential to create significant value over the medium and long term given the building’s rental yields”, said Alejandro Campoy, Investment Director at Aguirre Newman.

Original story: Cinco Días

Translation: Carmel Drake

Santander To List 2% Of Its Socimi And Whereby Avoid CIT

6 February 2015 – El Confidencial

Desperate times call for desperate measures. That is the proverb that Banco Santander is going to apply to a problem that has arisen after it sold a network of 1,152 bank branches bearing the red flame to a group of investment funds in 2007. The entity, which had to take the branches back when the investment company that had taken ownership of them filed for bankruptcy, is going to float that company on the stock exchange as a Socimi, and whereby avoid paying Corporation Tax. Oleguer Pujol, amongst others, was involved with the original investment company.

The main objective of the transaction that Santander and the other creditors that seized control of Samos Servicios for the non-payment of a €2,000 million loan is to float the newly named Uro Properties on the Alternative Investment Market (Mercado Alternativo Bursátil or MAB). In fact, none of the current shareholders, which includes Santander itself – the largest, with a stake of almost 25% – as well as Caixabank, which entered through the back door and BNP Paribas, all primary lenders, are planning to sell or reduce their stakes in the Socimi.

The transaction will involve listing the company with the placement of a maximum of 2% of its capital, the minimum requirement. With such a small amount of floating capital or free floating capital, Uro Properties is only allowed to list on the MAB, even though its total assets are worth €1,600 million. As such, it will become the largest real estate company on the Spanish stock market. None of the other Socimis that followed the same path in 2013, such as Hispania, Lar, Axia or Merlin Properties, are equal in size.

Since the shareholders are not going to sell their old shares or proceed to offer new ones, like the other Socimis mentioned above have done, the only apparent purpose for listing Uro Properties is to benefit from the tax regimes offered to these kinds of companies. According to Law 11/2009, dated 29 October 2009, these real estate companies pay Corporation Tax at a rate of 0%.

To maximise the tax savings even further, the shareholders of Uro Properties Holding SA have created a parent company in Luxembourg, under the name Ziloti Holding SARL. The shareholders have already asked the MAB for permission to list their shares, as soon as possible, specifically, before the end of February.

From success to failure

The background to Uro Properties dates back to 2007, when Emilio Botín invented a transaction, which other large multinationals later went onto to make fashionable in Spain: the sale of properties to investment funds to obtain sizeable gains in exchange for staying as tenants and paying rent. It is what is called sale and leaseback. The purchasers of Santander’s 1,152 branches were Pearl Insurance, Sun Capital and Drago Real Estate, which were advised by Oleguer Pujol, now accused of crimes against the Treasury, and Luis Iglesias, who was arrested after his home was search, but not charged, according to an official spokesman.

The three funds paid €2,040 million and Santander generated profits of €850 million. But the collapse in the valuation of the real estate assets themselves and the loss of the bank’s credit rating led to an adjustment in the appraisal value of the branches – which were guaranteeing the loan – of more than €400 million. This meant that the purchasers were no longer able to service the loans they had taken out to finance the purchase.

Following the bankruptcy of Samos Servicers, Santander, which had borne most of the financing risk by granting mezzanine debt, had to convert that loan into capital. This meant that it went from being a creditor of the company to a shareholder in the renamed Uro Properties. BNP Paribas, Caixabank, Société General, Royal Bank of Scotland, Barclays and a group of German and Austrian banks, including Bayerische and Raiffessen, did the same thing.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake