Värde Finalises Its Purchase Of Residential Property Developer Aelca

9 May 2016 – El Confidencial

Värde Partners is getting ready to become the largest player in the property development business in Spain. After acquiring 51% of Aliseda, the real estate arm of Banco Popular; having purchased San José Desarrollas, the residential branch of the Galician construction company…and in the middle of negotiations to buy a share of La Finca, the US fund is now one step away from another big trophy.

According to three sources, Värde has made the best offer to acquire Aelca, the property developer that the Avintia Group has put on the market and in which a large group of foreign funds have expressed interest. Amongst them, Castlelake and Värde stand out, although the latter is the only one that has reached an agreement in principle.

With the caution that must be maintained until the operation is definitively closed, which could happen before the end of the month, Värde is taking another step forwards in its strategy to become one of the largest real estate groups in Spain. It has been committed to the market since the darkest days of the crisis, as it demonstrated four years ago, when it joined forces with Anchorage to purchase five premium buildings in Madrid and Barcelona, which previously belonged to Monteverde.

A year later, came the acquisition of Aliseda for €815 million, a deal that allowed it to take over the management of mortgage loans with a net value of €9,350 million and foreclosed assets worth another €6,500 million. In addition, that purchase, which it undertook together with Kennedy Wilson, helped to heal the wound opened with CX Inmobiliaria, the platform owned by Catalunya Caixa, with which it had reached an agreement for almost €30 million, but which broke down at the last minute.

The story goes on, because thanks to the acquisition of San José Desarrollos alone, Värde Partners expects to construct 1,500 homes across Spain in the short term, numbers that will increased even further if it manages to acquire Aelca, a young property developer, which has great appeal thanks to its strong presence in areas where the residential sector is recovering the most in Madrid, such as Aravaca, Boadilla del Monte and the Madrilenian neighbourhood of Las Tablas.

Värde’s commitment to the real estate business has led it to invest more than €1,000 million in the acquisition of Aliseda and San José Desarrollos alone, two sides of the same coin, given that as well as managing and selling the assets of the company that it shares with Popular, the fund is particularly interested in fully benefitting from the expected recovery in the residential market through its own property developer, as it is showing with its frenetic activity in these businesses.

By contrast, Värde is exiting its positions in the shopping centre segment, as it demonstrated in February with the sale of the Mallorcan Festival Park outlet, and in July 2015, with the sale to Lar of three large retail outlets in the Parque Comercial Galeria de Pamplona.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Värde Buys San José’s RE Arm & Will Build 1,500 Homes

7 August 2015 – El Confidencial

After months working on the sidelines, the private equity firm Värde Partners has finally taken control of San José Desarrollos Inmobiliarios, the real estate arm of the Galician group. The US fund has purchased a 25% stake in the company from Banco Popular for €90 million, in a deal signed on Wednesday, taking its ownership stake to 51%.

From this position of power, Värde expects to immediately carry out a €60 million capital increase, in a move aimed at shoring up the company and laying the necessary foundations to start developing properties. The aim of the fund, which will invest €150 million in the company in total, through its purchase from Popular and the subsequent capital injection, is to start the construction of 1,500 homes across Spain, clearly underlining its commitment to the Spanish property market.

The US firm is one of the most active foreign investors in the sector, where it has now made three major investments. It all began in the Summer of 2013, when it partnered up with Kennedy Wilson in an agreement to acquire Catalunya Banc’s real estate management platform for almost €30 million, although the two parties ended up breaking that pact a few months later.

The two firms crossed paths once again at the end of 2013, when they pipped Centerbridge at the post, to acquire Aliseda, the real estate arm of Banco Popular, for €815 million. That operation allowed them to take over the management of mortgage-backed loans with a net value of €9,350 million and foreclosed assets worth €6,500 million.

Far from being content with that transaction, Värde then began to acquire stakes in San José Desarrollos Inmobiliarios through the back door, by purchasing loans from its creditor entities. It signed those purchase agreements with discounts of around 90% and whereby became the company’s main creditor, just when the parent company of the Galician group was finalising the refinancing of its €1,600 million debt with the banks.

The final agreement was signed at the end of 2014 and involved dividing the company chaired by Jacinto Rey (pictured above) into two: on the one hand, the construction business, and on the other hand, the real estate company, which it was agreed would pass into the hands of the creditors to repay €743 million of the debt.

Sources state that Värde does not currently have any plans to integrate Aliseda with its recent purchase of San José Desarrollos Inmobiliarios…(…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake