Tag: sell

Family Office Puts Tesla’s Store on c/Serrano Up For Sale for €7M

18 April 2018 – Eje Prime

The retail sector is hotting up in Madrid. A Spanish family office has put up for sale the store at number 3 Calle Serrano, which is occupied by Tesla, the company specialising in electric cars and led by Elon Musk. Although sources close to the operation have explained to Eje Prime that the process to receive offers has already begun, the estimated price of the asset is around €7 million.

This store has been occupied by Tesla since last September after it signed a lease contract that will continue in force following the sale. The asset has a retail surface area of 247 m2 spread over two floors. There, Tesla has a showroom, a warehouse and the group’s offices in Spain. According to real estate market sources, the consultancy firm CBRE is exclusively leading the sales process.

In recent months, the retail sector has been reactivated in the Spanish capital, with both the placing of premises on the market and the renovation of assets for their subsequent rental. The latest to be added to the portfolio of establishments for sale was the branch that Bankia owns at number 1 Calle Alcalá.

Although the bank already initiated an auction, which was attended by funds such as Arcano and real estate groups such as Renta, who were offering approximately €18 million for the premises, Bankia has decided to wipe the slate clean and launch a new auction process, through which it hopes to raise at least €20 million.

The asset, which, given its façade appeals more to restaurant operators than fashion retailers, is spread over two floors: the first floor spans 458 m2, whilst the basement measures 405 m2.

And from premises for sale to premises sold. In March, the fund manager IBA Capital, together with CBRE Global Investment, finally completed the sale of number 9 Calle Preciados, in Madrid, to the real estate investment vehicle of the insurance company Generali, Generali Real Estate. The Italian group paid €100 million for the asset, which is going to house Pull&Bear’s future flagship store on this high street, one of the most expensive in Spain for opening a store (…).

Investor appetite in 2018 

After closing 2017 with a total investment of €3.5 billion, the sector started 2018 with retail assets up for sale worth €2.5 billion. Moreover, during the course of this year, the volume of retail space on the national map is forecast to increase by 500,000 m2.

At the moment, shopping centres worth €2 billion are up for sale, along with high street products worth another €500 million. This situation guarantees a high degree of product availability for the segment, which is ideal at a time when Spain is very much in the firing line of international investors.

The influence of the retail market on the tertiary sector in 2017 is evidenced by the statistic that 38% of all transactions completed in this market involved retail assets, allowing retail assets to exceed office buildings for the first time ever.

With a volume increase of 36% over the last year, several large shopping centre openings are scheduled for 2018 including Open Sky in Madrid, which will see the arrival of Compagnie de Phalsbourg in Spain, after investing €160 million in the complex.

Similarly, in the Community of Madrid, the shutters will be lifted on X-Madrid, owned by Merlin, and in Málaga, McArthurGlen and Sonae Sierra will inaugurate a new designer outlet centre in the capital of the Costa del Sol. The stock of retail surface area in Spain amounts to 16.5 million m2, up by 1.4% YoY.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Dextra Corporate Launches Residential Fund Focusing on Galicia

2 March 2018 – Eje Prime

The Barcelona-based corporate finance firm has created a fund manager, Swan Real Estate Management, whose first vehicle aims to acquire, renovate and sell on up to ten residential buildings in Galicia.

Dextra Corporate is throwing itself into the housing market. The Barcelona-based finance firm, led by former Deloitte employees Iker Zabalza and Stephan Koen, has created Swan Real Estate Management, a fund manager to invest in the Spanish residential market. Its first investment vehicle, Seagull Real Estate, will get going shortly with €14 million to spend and will travel exclusively to Galicia where it plans to buy up to ten buildings. For this company, Dextra has been supported by Andbank: 90% of the investment is going to proceed from Galician customers of the Andorran bank.

The aim of the project, in which the manager AKM, led by Xavier González, is also involved, is to look for assets in second-tier cities in Spain, which are still in the recovery phase. The plan is to renovate the buildings and sell them on on a home by home basis.

Seagull will focus mainly on properties in central areas of A Coruña and Vigo, which may be of interest to customers with a medium-high purchasing power, according to Expansión. The manager’s forecast is to purchase between five and ten residential buildings.

Although it is going to start off with €14.4 million, Swan hopes to increase the investment figure of its Galician vehicle to €25 million. With the addition of bank financing, the spending capacity of the fund could rise to €50 million.

For Project Seagull, Dextra has teamed up with local businessman Manuel Corbal, who has extensive experience in the Galician real estate sector, in the areas of construction and promotion.

Original story: Eje Prime

Translation: Carmel Drake

# Of Estate Agents Grow With A Vengeance In The Community Of Madrid

19 September 2017 – Real Estate Press

The resurgence of real estate activity in Spain, and in particular, in the Community of Madrid, has given rise to a significant increase in the number of companies in the sector, which have grown by 18.5% since 2014. Currently, the Community of Madrid has 31,384 real estate companies and 33,616 real estate related premises. In other words, one for every 192 inhabitants.

So far this year, 41,641 homes have been sold in Madrid, up by 17% compared to a year ago, and up by 30% compared to two years ago. Moreover, prices rose by 10.9% in the second quarter of 2017 with respect to the previous year. In addition, rental prices have risen by 11% over the last year.

Jaime Cabrero, President of the Official College of Real Estate Agents in Madrid, says that “Normally, when the sales market is strong, the rental market is weaker, and vice versa, but now both sectors are booming”. He added that “Naturally, we are seeing an increase in (the number of) real estate companies (…); there are 33,616 estate agent premises”, which is a high number of establishments dedicated to real estate activity.

According to figures from the Central Directory of Companies, compiled by Spain’s National Institute of Statistics (INE), over the last three years, the number of estate agent premises has risen by 5,377. The increase in the number of companies, many of which have more than one branch, amounts to 4,912. Logically, this activity has an impact on employment. During the second half of 2017, the sector provided work to 29,300 people, according to the INE’s Active Population Survey, 8,800 more than in 2014 and the highest figure for the last decade.

In fact, the real estate activity category includes all companies dedicated to the sale, purchase or rental of all kinds of properties, including “lessors, agents and brokers”, as well as other key services, such as appraisal. The category also includes companies dedicated to construction, which then carry out the maintenance and rental of buildings, as well as managers of real estate properties. The sub-category containing the latter – “real estate activities on behalf of third parties” – grew by 1,773 companies between 2014 and 2017, to exceed 10,000 in total.

Original story: Real Estate Press

Translation: Carmel Drake

Deloitte: 29 Shopping Centres Worth €1,531M Are Up For Sale

13 December 2016 – Expansión

Between January and October, investors spent €3,028 million buying shopping centres in Spain. That is a historical figure, which pulverises the volume registered in previous years. For example: in 2015, a record year in terms of real estate investment, investors spent 60% less on shopping centres than they did during the first ten months of 2016.

And this strong performance in the retail investment market looks set to continue, given that 29 more properties, with a combined value of €1,531 million, are expected to be sold during the final stretch of the year, according to Deloitte. (…) Of those, four have already changed hands, specifically, the outlet centres located in San Sebastián de los Reyes, Las Rozas and Getafe, which the joint venture owned by Nienver and Tiaa purchased on 23 November, as part of a wider European portfolio that also included three other centres in Italy and Poland, worth €700 million in total. Moreover, the same partnership completed the acquisition of the Nassica shopping centre in Getafe on the same day.

And these are not the only shopping centres that will be changing hands over the next few months, given that other new assets are expected to come onto the market next year, including the Madrid Xanadú shopping centre in Arroyomolinos.

In total, forecasts indicate that transactions amounting to almost €2,000 million (specifically, €1,932 million) will be closed in 2017, with another €604 million worth of shopping centres expected to be sold in 2018, according to sources at the professional services firm.

Gains

Most of the shopping centres that will have new owners over the next 18 months belong to overseas funds that bought these assets before the recovery of the sector, and which now have the opportunity to unwind their investments with significant gains just a few years after they bought them. “The decrease in the risk premium and the recovery in consumption are some of the reasons behind the 16% appreciation in this type of asset over the last 12 months”, said Javier García-Mateo, Financial Advisory Partner at Deloitte.

In fact, we have already seen operations of this kind in 2016, such as the sale of the Gran Vía de Vigo shopping centre, which the fund Oaktree sold in the summer to the Socimi Lar España for €145 million. The US fund had acquired the centre two years earlier for €115 million. (…). Meanwhile, Northwood sold Diagonal Mar for €495 million after buying it two years ago for around €150 million.

“Above all, the buyers of the shopping centres that will come up for sale in the short term will be core and core plus funds, which will take over from the more opportunist (distress) investors, which made their purchases during the previous period”, said García-Mateo. In this way, transactions amounting to €4,067 million are expected to be closed over the next two years; more than €1,200 million will be invested by institutional funds, insurance companies, and more risk-averse investors, followed by core plus investors, which will account for almost 40% of the total investment volume, compared with €108 million that opportunist funds are expected to invest in shopping centres, according to Deloitte.

Financing

Along with the improvement in the Spanish economy, another question that will help this investment volume will be the better access to financing for this kind of operation.

In this sense, more than 55% of the €4,067 million that is expected to be invested in shopping centres between now and 2018 will benefit from financing, for more than 50% of the total asset value, compared with 16% that will not be financed by any kind of loan.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

British Investors Buy Up Entire Residential Buildings In Barcelona

7 December 2016 – La Vanguardia

They used to own a flat in a good location in the centre of London. They sold it and with the profits they bought an entire four-storey building in Barcelona. That is the story of a British family, which has become the new owner of number 68 on Calle Hospital in the heart of the Raval neighbourhood. The property, constructed more than a century ago, needs to be completely renovated. Once that has been done, the four floors will be put on the market for rent, whereby benefitting from the current market of rising prices and within a few years, the owners will sell the property.

That is how British families with investment potential are managing to generate guaranteed returns from real estate assets. A property like the one on Calle Hospital costs around €1 million. After the renovation, the rental income is unlikely to fall below €1,000/month. Such properties can be sold subsequently for more than €1.5 million, at least.

This real estate “play” is not a unique case. The consultancy firm Aguirre Newman has closed the sale of two buildings in Eixample to a British investor group within the last few weeks. “The property is in a bad condition, but they will take care of the renovation, and then put it up for sale straight away”, explained Anna Gener, Director General of the firm in Barcelona.

Over the last year, Brits have realised that Barcelona offers them high returns, regardless of whether they buy or rent. “Brexit has meant that there are increasingly more investors who are interested in buying assets here”, said Albert Sarrias, Commercial Director at Engel&Völkers in Barcelona, although he recognised that “we will only see the real effects in the long term, for the moment, they are browsing more than they are buying”.

By contrast, for Miquel Laborde, owner of the real estate management company Laborde Marcet, the divorce between the UK and the EU is not the driver behind the latest phenomenon. “It is a simple matter of returns. British investors can earn more money here from investing and selling than they can in London”. The reason, beyond any fluctuations in the euro-sterling exchange rate, is that prices in the residential sector in the British capital are at historical highs and they seem to be peaking. The price per square metre of a new home in the centre of the British capital ranges between €10,000/m2 and €15,000/m2. (…).

17.66% of house sales to foreigners in Spain are made to Brits, according to data from the College of Registrars. They are followed, at a considerable distance, by wealthy French, German, Swedish and Belgian investors.

These types of operations in the residential sector are mainly concentrated in the centre of Barcelona Raval, Born and Eixample are the preferred locations although the real estate agents lament the limited supply of products on the market. (…).

Small investors prefer to put their money in the residential sector. Offices and buildings, measuring more than 5,000 m2, generate more rental income but only Socimis and large investment funds can afford them. (…).

Original story: La Vanguardia

Translation: Carmel Drake

Ismael Clemente: “We Will Probably Sell Testa, Or List It”

7 July 2016 – El Economista

After spending a few hours in the company of Ismael Clemente, CEO of Merlin Properties, it is easy to understand how the Socimi that debuted on the stock exchange on 29 June 2014, has managed to become the largest real estate company in Spain in just two years. Clemente’s charisma is clear. His closeness and humility are engaging, not least because they differentiate him from the typical profile of senior managers. All of that, together with his knowledge about the sector, his professionalism and the team that surrounds him, have combined together perfectly to enable Merlin to become what it is today.

A few weeks ago, the company announced an agreement with Metrovacesa, which will see the merger of the two companies to create a giant in terms of assets, with almost €10,000 million. That announcement came just a few days after Merlin had completed the process to purchase Testa, for which it paid €1,800 million.

After those two major transactions, what is the company’s strategy now?

We are going to continue the tone we have adopted over the last year and a half. We will be very active in the logistics segment and relatively quiet elsewhere. Right now, we are not finding much value from participating in individual asset auctions, particularly when the values are small. But, we are still attentive to groups of assets whose size puts off possible competitors and where we can obtain good prices due to complexity or restructuring.

We have also been participating in the process to buy Torre Cepsa, but we are not competitive enough. Really, over the last year, we have been quiet in the market, but all the while, we have been keeping an eye on operations such as the one involving Metrovacesa, in order to create value for our shareholders. If we come across another opportunity, we may go for it, but if you look at the market, there are limited opportunities. It would be a miracle if a new portfolio were to appear that isn’t already on our radar.

What plans do you have for your subsidiary Testa Residencial?

We want to convert it into a company that has its own life and that operates independently in the market, with its own independent management team and its own independent shareholder base. Several paths would enable us to achieve this objective. On the one hand, it could be done by an indirect listing. We have the option of taking our stake in Testa Residencial, which amounts to 34%, and passing it onto Merlin’s shareholders as a kind of dividend.

In this way, the stake would be pulverized immediately. That is one option, but the standard route would be an independent IPO. We are also evaluating the option of a sale or merger transaction with one of the housing operators. The large German housing operators are not currently operating in Spain, but a company of this size would likely spark their interest. (…)

Of the 4,700 homes currently in Testa Residencial’s portfolio, between 700 and 900 are susceptible to sale.

Before this operation was announced, Merlin’s objectives included selling off the residential and hotel arms of its business.

Have those intentions changed?

Residential is still a non-strategic segment for us and the stake that we hold in Testa Residencial will not be on our balance sheet in ten years time. Hotels are not strategic for us either and we will look for an exit from them over the long term. (…)

Does Merlin plan to get rid of any other assets?

(…). Right now it is hard to quantify, but we expect to sell between €50 million and €100 million of our assets. (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Merlin, Hispania And Axia Could Raise More Than €1,340M

5 May 2015 – Expansión

The real estate investment companies are trading at record highs, and (their share prices) still have potential (to increase), say analysts.

The real estate sector is back in fashion. The current liquidity surplus, together with the scarcity of alternative investments, minimum interest rates and low financing costs have led to the resurgence of properties. In this way, the (share prices of the) 4 real estate companies (Socimis) that are listed on the stock exchange (another 5 are listed on the Alternative Investment Market or MAB) have risen by 20% on average during the year and are trading close to record highs. And yet, all of them have “buy” recommendations from the majority of the analysis firms that follow them.

Gaining in size

In this context, Merlin Properties, Hispania (which is not strictly a Socimi, but which has a similar profile) and Axia Real Estate are seeking to raise capital to fully benefit from their investment opportunities. The three entities could raise more than €1,340 million.

The first one to take the plunge was Merlin, which announced a capital increase of 64.6 million shares (50% of the volume in circulation) on 15 April amounting to a value of €613.8 million. The new shares are being issued at €9.50, which represents a discount of 27% on the trading price on the day before the announcement. The subscription period ended on 2 May. The new shares from the capital increase, which are underwritten by UBS, Credit Suisse and Goldman Sachs, amongst other entities, will begin to trade on 12 May. “The transaction makes sense because we believe that the current upwards cycle in terms of revenue and ratings may last for 2 or 3 more years”, say sources at Banco Sabadell. The analysis firm advises investors to “buy” these shares, as do the other five analysts that cover this security. “We believe in the experience and know-how of the management team at Merlin to “play” the upwards property cycle and gain a profit”, they add.

One of Merlin’s main strengths is its size. Analysts calculate that the company may have almost €1,400 million to invest. “It is able to access large transactions that other companies cannot, such as the purchase of Testa”, says Juan Moreno, analyst at Ahorro Corporación. That transaction that would have the blessing of the market if, as it being discussed, the acquisition of 30% of the company is agreed for €500 million, without the payment of a premium over the NAV (net asset value).

Meanwhile, last week Hispania increased its capital by €337 million through an accelerated placement amongst institutions, without the right to preferential subscriptions.

The company, in which George Soros holds a stake, tried to lead the purchase of Realia last March. In the end, Carlos Slim was the “cat that got the cream”, through FCC, but experts liked the design of the operation. “Hispania is innovative in the transactions it proposes. For example, it seeks to enter (companies) by purchasing debt, restructuring that debt and then buying the company at a lower price”, says Moreno. The expert also highlights the recent alliance signed between Hispania and Barceló to create a Socimi to invest in the hotel sector.

Three of the four analyst firms that follow the security advise investors to “buy”. In terms of Axia, the Socimi has announced its intention to increase its capital by 36 million shares (100% of its capital) for a value of €396 million. For the time being, the market does not know whether the current shareholders will have preferential subscription rights. But, in any case, the experts like the security, which has increased in value by 10.77% during the year. Two of the three firms that follow it advise investors to ”buy” and the third advise investors to “hold”. The share price may increase by 8.7% to €13.10.

Original story: Expansión (by C. Sekulits)

Translation: Carmel Drake