Tag: sales process

Moody’s: Popular Cannot Afford To Wait To Clean Up Its BS

29 May 2017 – Expansión

The credit rating agency Moody’s considers that Banco Popular does not have time to wait for the recovery in the real estate sector in Spain to have a positive impact on the quality of the real estate assets in its portfolio.

In fact, the rating agency considers that Popular’s solvency problems mean that it must reduce the non-performing assets that are weighing down on its balance sheet in an “accelerated” way, without allowing the entity to fully benefit from the reactivation of the real estate market.

“The recovery in the real estate market is a positive factor for the banks that are most exposed to the real estate sector”, said María Viñuela, Deputy Vice-President and analyst at Moody’s.

Nevertheless, Viñuela understands that the recovery in the housing market will materialise “over time”, which is why she reiterates that Popular is “under pressure” to improve its solvency and accelerate the reduction of its non-performing assets within a “shorter” time frame.

The entity chaired by Emilio Saracho (pictured above), whose rating Moody’s downgraded to B1 in April, has non-performing assets amounting to €37,000 million – 25% of the total – on its balance sheet, most of which are related to the real estate sector, which is one of the major factors that impinges on its value in a possible corporate operation.

The bank, which is currently analysing all of the strategic options open to it, still has more than two weeks to decide whether to go ahead with the sales process in which it has been immersed since 16 May, given that a deadline of 10 June has been set for taking a decision.

For the time being, Popular has not received any specific firm offers, nor has it assumed any commitments, which means that it has not completely ruled out a capital increase, as Saracho stated during the most recent General Shareholders’ Meeting.

Amongst Popular’s strengths that may attract its buyers include its franchise and its SME business, where the entity is the leader of the sector, with a market share of almost 18%.

Original story: Expansión

Translation: Carmel Drake

Merlin Sells Endesa’s HQ In Málaga To Family Investor

17 May 2017 – 20 Minutos

The consultancy firm Aguirre Newman has led the sales operation of Endesa’s headquarters in Málaga, a property owned by Merlin Properties and located on Calle Maestranza, number six, in the La Malagueta neighbourhood.

The building, which is leased to the electricity company, has a gross leasable area of 2,046 m2 and was constructed between 1930 and 1940. The asset may be used for compatible purposes in additional to its existing use as offices and it will continue to serve as the headquarters of the energy company in Málaga.

Merlin Properties, the leading listed real estate investment company (Socimi) in the acquisition and management of tertiary real estate assets on the Iberian Peninsula, entrusted the sales process of the real estate asset to Aguirre Newman, according to a statement from the consultancy firm. (…).

According to several sources in the sector, the buyer is a family investor.

Original story: 20 Minutos 

Translation: Carmel Drake

C&W, Savills & Colliers Compete To Buy Aguirre Newman

20 April 2017 – El Confidencial

The final round of the sales process for Aguirre Newman has started and three firms are fighting to take home the trophy. The suitors in question are Cushman & Wakefield, Savills and Colliers, the only three players that have submitted bids for the real estate consultancy firm, according to sources in the market.

The winner is expected to be announced in less than a month. Following the first analysis of the proposals submitted, C&W and Savills are the favourites to reach an agreement with Aguirre Newman, to the detriment of Colliers.

As El Confidencial revealed, Aguirre Newman engaged Atlas Capital in February to organise a sales process that could result in a valuation for the company of between €80 million and €100 million, given that the consultancy firm’s turnover amounts to €80 million and its operating profit (EBITDA) stands at €12 million.

Although there was speculation that venture capital funds, such as Cinven and Apax Partners, may be interested in acquiring the real estate consultancy firm, to take advantage of the recovery in the sector, the underlying reasons that caused the company to organise the sales process in the first place rule out a movement of this kind, a priori.

According to the explanation provided by the head of the group to the workforce, the engagement of Atlas forms part of Aguirre Newman’s new Strategic Plan, which seeks to grow in size and importance, at both the domestic and international levels. The idea is that it may be able to handle that leap in magnitude more quickly if it is able to reach some kind of agreement with another firm in the sector.

Aguirre Newman is the only domestic brand of the large companies that operate in the world of real estate consultancy – the market is dominated by multinationals such as CBRE, JLL, Knight Frank, BNP Paribas Real Estate, C&W, Colliers and Savills. The largest eight players account for more than 90% of the turnover in this market in Spain.

With almost 400 professionals, Aguirre Newman stands out due to its good position in the Spanish capital and due to its architecture division, a “rare species” in the sector, which some of the firms that have expressed interest in the sales process have valued as a differential sign when considering the operation,

In addition to the usual work undertaken by these types of firms – advisory, valuations, appraisals, management… – the Spanish firm has tried to pursue new avenues of growth and expansion, like it did in the past with the fund Zaphir and, more recently, with the creation of a specific business unit for the ‘fintech’ world.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Sareb Will Take Ownership Of The ‘In Tempo’ Skyscraper In Benidorm

25 August 2016 – El Economista

The In Tempo skyscraper in Benidorm is the tallest residential tower in Spain and the second tallest in Europe, however, it is proving difficult to find an investor willing to pay the asking price. The property is weighed down by debt amounting to €100 million, which is in the hands of Sareb, but is reportedly worth around €90 million.

According to the newspaper El Confidencial, none of the offers for the skyscraper, which has been on the market since the end of last year, have exceeded €60 million. For this reason, Sareb has not waived its right to submit a higher offer to take over the asset, in an operation that would form part of the liquidation process of its current owner and developer, the company Olga Urbana.

According to online media, the bad bank has confirmed this information, however, “they assure that they have not yet received the asset foreclosure notice from the judge”.

The 52-floor building, which is 189m tall and contains 300 apartments is a symbol of the real estate bubble. Once the judge has authorised the award of the asset to Sareb, the bad bank could begin a new sales process involving negotiations with the two funds that have already expressed interest in the property.

Although construction work is still underway and the degree of completion ranges between 83% and 97%, apartments in the skyscraper are being sold for between €190,990.80 and €1.6 million, according to the online portal Idealista.

Original story: El Economista

Translation: Carmel Drake