Villar Mir Group Puts Inmobiliaria Espacio Up For Sale

18 September 2019 – El Confidencial

According to financial sources, the Villar Mir Group has put its land and property developer subsidiary Inmobiliaria Espacio up for sale. The objective is to raise funds to repay the group’s creditor, the Monaco-based fund Tyrus Capital, and it follows the divestment of two other non-real estate entities, Fertiberia and Ferratlántica, in August.

Savills Aguirre Newman has been engaged to coordinate the sale after valuing the entity’s land and plots at €256.88 million as at 31 December 2017. The assets may be sold as a set or piecemeal. Moreover, the company has tax credits worth between €100 million and €200 million, which is where the real value of Inmobiliaria Espacio lies.

According to the latest available data, the company reported an EBITDA of €1.61 million in 2017 and sales of €46.77 million, up by 23.2% YoY. Moreover, it has an excellent and sizeable portfolio of land for development in good locations, for which planning permission has been granted, and therefore an improvement in sales is forecast over the next few years.

Last year, Tyrus Capital lent the Villar Mir Group €360 million to refinance the debt that the traditional banks did not want to extend. The conditions of that loan are onerous – it has a two-year term (of which one year has already passed) and it carries an interest rate of between 10% and 12%. As such, the group wants to sell off its assets in an orderly fashion to repay and reduce its financing, and so time is of the essence.

Original story: El Confidencial (by Agustín Marco)

Translated by: Aura Ree

Sareb’s Losses Plummeted by 55% in 2018 to -€878M

28 March 2019 – Cinco Días

Sareb recorded losses of €878 million in 2018, which were 55% greater than those registered in the previous year. Moreover, the bad bank forecasts a similar result for this year.

Despite the disappointing results, Sareb ended 2018 with own funds of €2.6 billion, which represents a sufficient volume to not have to request any capital increase from its shareholders, which include most of Spain’s major banks and the FROB.

The President of the bad bank, Jaime Echegoyen, observed that his company is committed to the divestment of the problem assets that it acquired from the struggling banks during the crisis, and to maximise its returns. Sareb is competing against many of the banks, which are now selling large portfolios of real estate assets at significant discounts. Nevertheless, it is reluctant to match those discounts given that its cost of managing the assets is lower than the discounts being asked for.

Instead, Sareb has opted to transform the assets it owns by finishing suspended developments and building new homes on the land that it owns. Within the coming days, the company is expected to close an agreement with a property developer, which will build new assets on some of its land.

At the end of 2018, the bad bank recorded total revenues of €3.65 billion, down by 5% YoY. It sold 21,152 units during the year, up by 12% YoY. But, it continued to incur significant expenses – its financial costs alone amounted to €658 million, whilst its operating expenses amounted to €697 million, resulting in the aforementioned losses.

Since its creation in 2012, Sareb has now reduced its global portfolio by one third (€16.5 billion) and repaid 30% of the debt that it issued to pay for the assets in the first place (€15 billion).

Original story: Cinco Días (by Ángeles Gonzalo Alconada)

Translation/Summary: Carmel Drake

Montebalito’s Turnover Fell by 52% in 2018 & its Losses Amounted to -€2M

28 February 2019 – Eje Prime

Montebalito suffered in 2018. The group recorded losses amounting to €2 million last year, compared with the profit of €948,000 that it obtained in 2017. In parallel, the company’s turnover dropped by 52% to €7 million, according to reports filed by the company with Spain’s National Securities and Market Commission (CNMV).

The decrease in turnover occurred because there were no sales of singular assets in 2018 like there were in 2017, according to Montebalito. “If we strip out the effect of those sales, the group’s turnover rose by 32% YoY, driven primarily by an increase in the sales of developments located in Brazil and Chile”, he said.

Montebalito’s gross asset value (GAV) amounted to €135.7 million at the end of 2018, compared with €144.2 million last year. Similarly, the company has said that the total investment that it has to make for all of its projects in progress amounts to €32 million.

The firm’s investment volume in 2018 was €5.8 million, which represents a 51% increase compared to the previous year. That figure was justified by the acquisition of three plots: one in Madrid, one in Collado Villalba and one in Sevilla, in Isla de la Cartuja, for the construction of a hotel with 92 rooms.

Original story: Eje Prime 

Translation: Carmel Drake

Retail Socimi Única’s Profit Soared by 42% in 2018

26 February 2019 – Eje Prime

Única Real Estate is on a roll. The Socimi, which specialises in retail premises, has presented its results for 2018, revealing 42% higher earnings than a year earlier. Specifically, the company recorded a profit of €495,498, compared to €348,060 in 2017.

In parallel, Única generated revenues of €19.7 million, which translates into growth of 49% compared to its turnover a year earlier. The company’s operating result amounted to €858,105 in 2018, up by 45.6% compared to a year earlier.

The Socimi also reported that its real estate portfolio ended the year with a market value of €44.8 million, according to a valuation carried out by Savills Consultores Inmobiliarios. In total, Única has 36 commercial premises, spanning 8,655 m2 (…).

Looking ahead, Única’s forecasts involve executing the corporate operation in which it has been immersed since the end of 2018, and which involves the purchase of 100% of the company’s shares by Vitruvio Real Estate Socimi (…).

Única completed its stock market debut in 2018, and started trading on the Alternative Investment Market (MAB) on 27 June. The Socimi ended the year with a market capitalisation of €30.5 million and a share price of €26.60, up by 1.6% compared to its debut.

Original story: Eje Prime 

Translation: Carmel Drake

Project Ánfora: BBVA Studies €1bn+ Offers from Cerberus, CPPIB & Lone Star

19 November 2018 – Voz Pópuli

BBVA has chosen the three finalists who are going to compete for the largest portfolio of assets currently on the market, Project Ánfora. The entity is holding negotiations with three major North American funds, Cerberus, CPPIB and Lone Star, according to financial sources consulted by Voz Pópuli.

Up for grabs: a portfolio a real estate loans worth €2.5 billion. Some of the offers exceed €1 billion, according to the same sources.

BBVA expects to conclude the process before the end of the year to whereby end 2018 in the best way possible. It will be the last set of annual accounts with Francisco González as President, and at the current pace, they could be closed with one of the largest profits in the group’s history. The entity earned €4.3 billion to September; its record annual profit to date is €6.1 billion, which is registered in 2007.

In addition to Project Ánfora, BBVA has just closed Project Marina: the sale of its real estate arm Anida and of assets worth €13 billion to Cerberus. Nevertheless, the transfer of a large part of those assets, which proceeded from Unnim, is pending authorisation by the Deposit Guarantee Fund (FGD).

Property to zero

Following those two operations, and others in the past – such as the sale of its stake in Testa – the property left on BBVA’s balance sheet is going to almost immaterial. With that, the CEO, Carlos Torres, hopes that the real estate unit will stop weighing down on the group’s income statement from 2019 onwards.

The favourite of the candidates to purchase the €2.5 billion portfolio is Cerberus. Not only because of the appetite that the US fund has been showing regarding the purchase of real estate assets in Spain, but also because of the interest that it will have in Divarian, the new Anida, continuing to manage the assets.

CPPIB (Canada Pension Plan Investment Board) is the other entity that is backing the Spanish market most heavily, through its stake in Altamira and the acquisition of portfolios from Sabadell and BBVA.

Meanwhile, Lone Star has started investing more money in Spain following the changes in its management team and because it wants to gain volume to make its acquisition of CaixaBank’s property profitable.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Urban Outfitters to Open Spain’s First Anthropologie Store in Barcelona

25 October  2018 – Eje Prime

The Spanish retail sector is welcoming a new international operator. After an arduous two-year search for premises on the prime high streets of Madrid and Barcelona, Urban Outfitters has found a space to launch its first Anthropologie store in the country. This debut comes four years after the US fashion group first opened its doors in the heart of the Catalan capital.

Anthropologie is soon going to open at number 27 Paseo de Gracia, in a store measuring almost 780 m2, distributed over two floors and owned by a family office. The chain is going to take over from the Italian firm Twinset Milano, which will shut down in the next few days. The rental operation has been brokered by the real estate consultancy firm Aretail.

Specifically, the ground floor of the future Anthropologie establishment has a surface area 365 m2, whilst the basement spans 414 m2. The company will share the street with luxury operators such as Fendi, Céline and Kenzo, as well as with major distribution groups such as Inditex, Fast Retailing, H&M and Mango, amongst others.

Urban Outfitters arrived in the Spanish market in May 2014, when it launched a subsidiary to manage its business in the country. That same year, the group opened the first store of its homonymous chain in the El Triangle shopping centre in Barcelona, where it replaced the home décor firm Habitat.

Two years after its first opening, the US company started to search for new locations both in the Catalan capital and in Madrid to open its first points of sale for Anthropologie and Free People, the other chain owned by Urban Outfitters. In the spring, rumours of the imminent closure of an operation were revived.

Anthropologie is the group’s largest division by turnover, ahead of Urban Outfitters itself. The female fashion chain closed 2017 with sales of $1.4 billion (€1.2 billion), up by 1.9%. That figure accounted for 39.4% of the group’s total revenues.

At the end of its last financial year (31 January 2018), the chain operated 226 stores in the USA, Canada and Europe. The company is immersed in an international expansion process, which includes an overseas growth strategy. For that reason, Anthropologie appointed Peter Ruis, the former director of Levi Strauss, as the senior director of the international business in July.

Original story: Eje Prime (by L. Molina and P. Riaño)

Translation: Carmel Drake

Mazabi Launches a New Retail Park Project with €30M of Own Funds

16 October 2018 – Eje Prime

Mazabi is committed to retail parks. The Spanish property manager has launched Atalaya Superficies Comerciales onto the market, a project that has been created to develop retail parks and premises, which is going to be led by Sebastián Ojeda, according to a statement issued by the group.

Ojeda, who comes from Bankinter, is joining Mazabi with the purpose of leading the retail park sector in Spain. The new management vehicle is being created with €30 million of own funds contributed by various domestic and Latin American family offices. Atalaya has set itself the objective of achieving sales of more than €180 million over the next six years.

In addition to Ojeda, who has more than twenty years of experience in the banking sector, Mazabi is going to recruit other professionals and it will also engage specialist external advisors. The commitment of the real estate company to retail parks responds, according to the company, to the fact that it is “a sector with a high demand for professionalization and with high growth expectations over the medium term”.

“With the platform and experience offered by our multi-family office, the incorporation of Sebastián (Ojeda) into the project allows us to professionalise this area of the business, which has always been strategic for our group”, says Juan Antonio Gutiérrez, the CEO of the company.

Currently, Mazabi manages properties worth more than €1.3 billion, has investments in fourteen countries with fifty funds and has a specialist team of 25 professionals located in Madrid, Bilbao, Santander, Málaga and Luxembourg. The manager has the objective of growing its portfolio to reach €2 billion and, to that end, has engaged KPMG Real Estate to look for a long-term partner, to contribute equity of €200 million to acquire a “pipeline” of around €500 million.

Original story: Eje Prime

Translation: Carmel Drake

Fadesa’s Former Owner Returns to Real Estate

24 August 2018 – Eje Prime

Manuel Jove has returned to the Spanish real estate sector. The Spanish businessman, once the owner of the ill-fated real estate giant Fadesa, is determined to generate a profit from the land worth €540 million that he owns through his holding company Inveravante.

The executive from A Coruña, one of the 15 wealthiest people in Spain, is starting to move away from his businesses relating to renewable energy to return to the fold of real estate development, according to reports in El País.

Jove has worked in this vein for the last five years and in 2017, he managed to sell the vast majority of the 264 homes that he brought onto the market. So far in 2018, the businessman has already started work on new urbanisations in Madrid, Andalucía, the Canary Islands and his native Galicia. Jove still has a lot of work to do, thanks to the plots of land that he owns all over the country.

In addition to the residential market, the executive has a considerable presence in the hotel sector. His chain, Attica 21, improved its turnover last year, whilst the residential complex that Jove owns in Tánger (Morocco) comprising 800 homes has recently incorporated the operation of a five star Hilton hotel. As a result, the real estate arm of Inveravante is growing at a rate of 35% and now accounts for 34% of sales.

In 2017, boosted by the wind farms, which accounted for 57% of turnover, as well as a small wine and food products division, Inveravante recorded revenues of €184 million, up by 22% compared to the previous year.

Original story: Eje Prime

Translation: Carmel Drake

Hayfin & Atitlán Buy Land from Sareb to Lock Down Plan for Valencia’s Former Formula 1 Circuit

21 August 2018 – El Confidencial

The British fund Hayfin Capital and the Valencian investor Atitlán Grupo Empresarial are continuing to take steps to launch the most iconic urban development project and the one still pending execution in the city of Valencia with the greatest chances of generating gains.

At the end of July, a joint venture held by the two investment specialists completed the purchase of plots still owned by Sareb in the so-called PAI del Grao, a developable sector that occupies land on the former Formula 1 urban circuit in the regional capital. Hayfin and Atitlán acquired 14,000 m2 of land in total, with 8,100 m2 corresponding to residential use and 2,700 m2 to commercial use, according to market sources speaking to El Confidencial. The buildability is defined by the current urban plan of the Town Hall of Valencia, although it is finalising a new plan that will modify the distribution of that buildability. The expectation is that the final use of this land will amount to around 16,000 m2.

The investors paid €4 million in an operation that appears to have a low economic value but significant strategic potential. The sale of the assets by the bad bank chaired by Jaime Echegoyen (…) will allow the Spanish-British consortium to increase its percentage stake in the plan as a whole, which occupies a surface area of more than 300,000 m2 and will involve the construction of a new neighbourhood that will connect the Ciudad de las Ciencias and Avenida de Francia with Valencia’s maritime seafront. The area is set to become one of the most sought-after parts of the city if its developers decide to build high-quality residential properties (…).

Nevertheless, it will be a while before the new Valencian neighbourhood takes shape. As a result of the administrative and bureaucratic processes still pending, the real estate sector estimates that it will take between three and five years before developments in the PAI del Grao can start to be marketed. Nevertheless, if Hayfin and Atitlán are patient and manage to overcome the pitfalls, they may obtain juicy profits from an urban planning operation in which they have already invested more than €30 million but which could generate up to €300 million in property sales, according to the most optimistic estimates.

The plan for the former Valencia Street Circuit is the most ambitious project to be launched by the Atitlan Grupo Empresarial’s real estate division, which according to its own official data already has 100 homes under development, 200,000 m2 of surface area for rent and 1.5 million m2 of land under management, including its operations in Portugal.

With its olive-growing subsidiary Elaia the largest generator of current income, an aquaculture division (Sea8) and the service and construction company Mosaiq (formerly Obinesa-Lubasa), Atitlán generated sales amounting to €437 million last year and an EBITDA of €92 million. According to official figures, it employs 2,500 people across the group (…).

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

The Bank of Spain Detects Anomalies in Sale of Sareb’s Assets in 2015

24 August 2018

A report from the Bank of Spain criticised Sareb regarding its conduct in the 2015 asset sales. The banking supervisor questioned the processes behind the purchases, approvals, executions, donations and sales of real estate assets. One report highlighted that the semi-public entity failed to analyse the operations adequately, nor did it undertake any serious assessment of the negotiation and the results.

According to El Independiente, the Bank of Spain’s report criticised Sareb’s conduct at a number of levels:

Expenses: the supervisor criticised the mechanisms Sareb had in place to approve expenses. For example, the regulator stated that when there were contract extensions, if they were to occur in the next tax year and were not budgeted in advance, they did not consider the initial expense, so the approval was determined regardless of any previous expenditures.

Write-offs: the agency shows that Sareb had no control over the approval of debt write-offs benefitting buyers (Sareb received less money when disposing of assets).

Questions about internal organisation: the BdE criticised Sareb’s organisational structure and highlighted failures in communications between departments, diminishing efficacy.

Unreliable solvency analysis: Sareb’s valuations of risk positions were unreliable. The BdE also noted that the entity did not periodically review the assets it allocated to its direct management department.

Original Story: Idealista

Translation: Richard Turner