Neinor Withdraws from the Purchase Process of ‘Solvia Desarrollos Inmobiliarios’

28 February 2019 – El Español

Neinor Homes is not going to be one of the candidates that submits an offer to acquire Solvia Desarrollos Inmobiliarios (SDI), the subsidiary of Banco Sabadell. The real estate company has been studying the operation for a while but has concluded, following its initial analysis, that the numbers do not fit with its investment philosophy.

That is according to explanations provided by Neinor’s CEO, Juan Velayos, who acknowledged that he has the sales prospectus on his desk but that at the moment, “it is not a priority” for him. We are talking about a company that has a portfolio of 300 buildable plots and which the bank led by Jaime Guardiola put up for sale in January.

Velayos himself acknowledges that he “loves the portfolio”, but he’s not so convinced by the numbers being seen in the market”. (…). “I’m afraid that it is not going to be for us from the perspective of a disciplined investor”, he said. The first valuations of SDI’s land are in the region of €1.3 billion, given that the portfolio also includes 130 real estate developments in different areas with 5,000 homes under construction.

Indeed, the price of land is one of Neinor’s obsessions. Over the last year, it has purchased 2,400 plots in which it has invested €95 million. Neinor’s CEO believes that his firm has adopted a prudent policy in this regard (…).

As a result, it looks like Neinor will not be one of the candidates to bid for Sabadell’s subsidiary in the end. The bank is awaiting possible expressions of interest for its land company. The intention is to receive binding offers before the end of this quarter and to settle the sale during the month of April.

Interested parties

In terms of the parties that are interested in SDI, they include some of the main international funds such as Cerberus, Värde, Oaktree and Blackstone (…).

The sale of SDI comes after Banco Sabadell sold Solvia, its real estate servicer for €300 million, for which it obtained capital gains of €185 million (…).

Original story: El Español (by Arturo Criado)

Translation: Carmel Drake

Savills Values Solvia’s Property Developer Land at €1.3bn

12 December 2018 – El Confidencial

The banks are starting to benefit from the recovery in the real estate sector. Such is the case of Banco Sabadell, which has seen its portfolio of prime land appreciate by €300 million, or 30%, in recent months, ahead of its firing of the starting gun for the sale of its property developer, Solvia Desarrollos Inmobiliarios.

That is the result of an appraisal of the land that the consultancy firm Savills Aguirre Newman has performed for Sabadell. Initially, the plots were valued at €1 billion. They are the best quality plots of land that Sabadell has left since the outbreak of the crisis, and many of them are in areas with high demand in Madrid and Barcelona. For Savills, the chosen plots are now worth almost €1.3 billion, according to financial sources consulted by this newspaper.

Now that the appraisal has been performed, Sabadell and its chosen advisor for this operation, Rothschild, will launch the sale of the property developer SDI and the plots worth €1.3 billion, imminently.

This operation will result in the creation of one of the largest real estate companies in Spain. It will be even larger than Neinor when it was purchased by Lone Star.

The bank does not expect to close the sale of Solvia Desarrollos Inmobiliarios before the end of the first quarter of 2019. By contrast, Sabadell has also launched the sale of Solvia Servicios Inmobiliarios (the management platform), which is on the market for €300 million and whose sale it hopes to close in 2018. According to Expansión, Haya Real Estate (Cerberus), Intrum and Centricus are participating in that process.

Candidates

There are several funds amongst the candidates to acquire the property developer SDI including: Cerberus, Oaktree, Blackstone, Apollo and Lone Star. The first features in everyone’s list of likely contenders because of its good relationship with Sabadell in recent major operations. Moreover, it owns a property developer, Inmoglacier, with which there could be synergies following the operation.

Meanwhile, Oaktree is one of the candidates that would start with an advantage, given that it is Sabadell’s partner in similar businesses, and so it knows the team at SDI: they have a platform for the joint development of land and they have purchased land from Iberdrola. Nevertheless, according to sources close to the operation, that fund still needs to confirm its presence in the process.

Other candidates that still need to define their strategies include Blackstone, which is studying all of the operations with Aliseda, but which has opted more for rental assets until now; Apollo, which has wanted to enter the development segment for years; and Lone Star, which since its exit from Neinor has purchased Servihabitat and has as much appetite for Spanish property as it did before the crisis. ‘A priori’, the operation seems large for Bain Capital, owner of Habitat.

Original story: El Confidencial (by Jorge Zuloaga)

Translation: Carmel Drake