Qatari Sovereign Fund Becomes Colonial’s Largest Shareholder

8 November 2018 – Europa Press

Colonial has approved a capital increase at an extraordinary shareholders’ meeting, whereby enabling the Qatari Sovereign Fund to become the Socimi’s largest shareholder since it will see its stake in the company double to 20%.

Qatar is becoming the largest shareholder of the second largest Socimi in Spain, a firm that owns office buildings in Madrid, Barcelona and Paris worth €11 billion, through an agreement reached with Colonial to exchange the shares of its French subsidiary Société Foncière Lyonnaise (SFL).

Specifically, Colonial is going to give Qatar the own shares that it issues during the capital increase and, in exchange, the fund is going to hand over the 22% stake that it holds in SFL.

In this way, Qatar will double its presence in Colonial from its current position of 10% to the aforementioned figure of 20% and will become its largest shareholder. Meanwhile, the real estate firm will increase the controlling stake that it holds in SFL from 59% to 80.74%.

It is an operation worth €718 million, which Colonial is framing in the context of simplifying the group’s shareholder structure and of strengthening its position in SFL and in France, a company and market that it considers to be “strategic”.

The real estate company is tackling this transaction after completing the merger of the Socimi Axiare and at a time when it is immersed in a full growth strategy through investments in purchases and the new build developments.

In the case of Qatar, it is strengthening its position as the largest shareholder of the second largest listed real estate firm in the country, in line with the commitment that many large international funds are making to the Spanish real estate sector. Moreover, it will retain an indirect stake in SFL.

No changes on the board

These shareholder exchanges will not have any impact on the Board of Directors of Colonial, given that the Qatari fund will retain the two seats that it has had on the management board for a while, when it had a larger stake, according to a statement made by the President of the Socimi, Juan José Brugera, after the meeting.

Brugera said that the operation was approved unanimously by all of the shareholders, whereby ruling out any bad feeling on the part of Colonial’s largest shareholder until now, the Mexican group Finaccess, not only for losing its status (as the largest shareholder), but also for seeing its stake diluted from 18% to 16% as a result of the capital increase.

Original story: Europa Press

Translation: Carmel Drake

Grupo Villar Mir Sells Final 1.51% Stake In Colonial

10 July 2017 – El Mundo

Grupo Villar Mir has definitively exited the share capital of the real estate company Colonial by selling the 1.51% stake that it still owned in the Socimi. The shareholding that has been sold is worth around €40 million on the basis of current market prices.

The corporation owned by Juan Miguel Villar Mir has thereby brought to an end its phase as a shareholder of the real estate company, which began in January 2014 – at its height, the Group was the largest shareholder, with a 24% stake. Villar Mir first invested in the real estate company Colonial when that firm was in the middle of its restructuring and clean up process, and it has exited it days after the firm returned to the Ibex 35 and became a Socimi.

Specifically, the corporation has sold the 5.42 million shares that it still owned directly in the real estate firm, through Espacio Activos Financieros, a package equivalent to a 1.51% stake of its share capital, according to the registers of Spain’s National Securities and Exchange Commission (CNMV).

Grupo Villar Mir also owned another 3.21% of Colonial indirectly, through various financial instruments. Those shares have been “loaned to hedge a financial operation”, according to the supervisor’s register.

In this way, the corporation concludes just over three years as a shareholder of Colonial, after leaving the Board of Directors in December 2016, when it decreased its stake in the company to just 3.3%.

Subsequently, in January 2017, it decreased its percentage to 1.5%, which is the stake that it is now selling.

Finaccess, current largest shareholder

Currently, the Mexican group Finaccess is the largest shareholder of Colonial; following its recent share purchase, it now owns 13.76% of the share capital. The Qatar sovereign fund is the second largest shareholder of the company chaired by Juan José Brugera, with a stake of 11.7%. The next largest shareholders are the Colombian firm Santo Domingo (6.1%) and the Puig family, which recently acquired a 5.10% stake.

On 19 June 2017, Colonial returned to the Madrid Stock Exchange’s Ibex 35, nine years after leaving the exclusive group. The firm owns a portfolio of office buildings for rent in the centre of Madrid, Barcelona and Paris, with a combined surface area of 866,000 m2 and a value of around €8,000 million.

With its return to the Ibex, Colonial completed the restructuring and clean-up process that it began in 2015. After that, it undertook a growth strategy through which it has now made investments amounting to €1,760 million through various operations, ranging from the purchase of assets to increasing its stake in its French subsidiary Société Foncière Lyonnaise (SFL), and acquiring capital in another Socimi, Axiare.

Original story: El Mundo

Translation: Carmel Drake

Deloitte: Hispania & Lar Are The Most Profitable Socimis

7 June 2016 – El Confidencial

They have been accused of: buying up assets expensively, skewing the market by paying stratospheric prices, heating up the market on its way to recovery, when it still needs time for supply and demand to adjust…the Socimis have been accused of many things, but for all their successes and failures, the reality is that they are all managing to generate more profitability than other types of investments, such as fixed and variable income, with average operating yields (net gain over initial investment) of between around 4% and 6%.

And the story goes on and on, because if we add to those figures the fact that Socimis have an easier time when it comes to obtaining financing from financial institutions – they are being offered spreads of just 1.5% – such as in the bond market – an area that several Socimis (Colonial, Merlin and Lar) have already ventured into and which Hispania hopes to explore soon, – the final yield on their investments will amount to 10%-11%.

A recent study by Deloitte, which was published last Wednesday in the Foro MedCap organised by the Spanish Stock Exchange and Markets (BME), highlights the success that these investment vehicles are enjoying, after it has analysed the gains that they are making on their investments from several perspectives. As the table in the article shows, Hispania and Lar España are, in that order, the two companies that are achieving the highest operating returns in the sector with respect to their initial investments.

Colonial, the only large listed Spanish real estate company that has not adopted the Socimi structure yet because it has tax credits from prior year losses, appears slightly behind, with an operating yield of 3%. But as Alberto Valls, Partner of Financial Advisory at Deloitte, explained, this figure is distorted by the high weight that Colonial’s French subsidiary SFL has in its portfolio. SFL is an authentic jewel in the crown of this group but because it focuses on the high-end office market in Paris, it offers lower yields in exchange for holding better assets and it does not include the exchange operation with Finaccess, which the Group will approve on 28 June.

The other side of the coin: the stock market.

Merlin, Colonial, Hispania, Axiare and Lar have an aggregate net asset value (gross value less debt) of €7,576 million, in line with the combined market value of these companies, which stands at €7,655 million. Nevertheless, if we look at each company in detail, we see that Axiare is the Socimi that has managed to best to gain the trust of investors, listing as it does with a discount premium on its NAV of 11.5%, followed by Colonial, with a discount premium of 8%. In exchange, the stock market value of Lar is 8% lower than its asset value, a difference which amounts to -3.5% and -1.5% in the cases of Merlin and Hispania, respectively, figures that indicate that those companies still have some way to go on the stock market.

Despite that punishment, if we compare the evolution of these companies on the stock market over the last two years (all of these Socimis debuted on the stock exchange in 2014) with the performance of the Ibex, we see that, according to Deloitte’s report, whilst the sample of companies increased their values by 18%, Axiare’s share value rose by 34%, Hispania’s by 22%, Merlin and Colonial by 18%, and Lar by 6%. Despite this improved behaviour, the Spanish companies in the sector are lagging behind their European counterparts, given that the EPRA index, which groups together the main real estate companies in Europe, reported an (average) increase of 23%, exceeded only by Axiare.

From this international perspective, the experts agree that, far from heading for another (real estate) bubble, there is still a long way to go in our country and that the phenomenon unleashed in the last two years with the eruption of Socimis in the stock market, is also being experienced in other countries, encouraged by the real estate recovery, surplus liquidity and the need to find returns of around 4% with controlled risks in a zero and negative interest rate environment. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Colonial Plans To Increase Its Share Capital By €265M

26 May 2016 – Expansión

Colonial will undertake a capital increase amounting to €265 million to allow it to continue adding office buildings to its portfolio. In parallel, the Group is preparing to make investments amounting to €400 million, including the purchase of a 4.4% stake in its French subsidiary SFL (Société Fonciere Lyonnaise) and several buildings in Madrid and Barcelona.

The capital increase should be approved at the General Shareholders’ Meeting on 28 June and will serve to finance some of the asset acquisitions by allowing Colonial to make some payments in shares. Following this operation, the Group’s market capitalisation will exceed €2,300 million.

The expansion of its stake in SFL, where it will end up controlling 57.5% of the share capital, will be performed through the acquisition of a share package from the Reig Capital Group. Part of the payment will be realised in cash (€51 million) and the remainder, through the delivery of 90.8 million new shares in the real estate company. The Holding company owned by the Andorran businesswoman María Reig will thereby control 2.5% of Colonial’s share capital.

The share capital will also serve to pay for the purchase of two office buildings in Madrid, currently owned by the Mexican group Finaccess and valued at €202 million. The buildings in question are IBM’s headquarters in Madrid, located on Calle Santa Hortensia and the building located at number 73 on Calle Serrano. The former has a total surface area covering 47,000 sqm and is one of the seven largest office buildings in the capital, whilst the second, with a surface area of 4,200 sqm, has been highly valued due to its location and the quality of its facilities.

In return for integrating these two properties into its portfolio, Colonial will grant Finaccess 288.6 million new shares in the real estate company, which means that the group will control an 8% stake in Colonial.

In parallel to these operations, the real estate group chaired by Juan José Brugera (pictured above, centre) has completed the purchase of another office building in Madrid. It is located on José Abascal, 45 and has a surface area of 5,300 sqm. In this case, the consideration paid was €35 million.

The group has also purchased land in the 22@ district in Barcelona from the British fund Benson Elliott for more than €40 million. Colonial plans to construct a 17-storey office building with a surface area of 24,000 sqm on this land, which has not started to be marketed yet. The total investment of this project is budgeted to amount to €77 million.

The CEO of Colonial, Pere Viñolas, said yesterday that with this operation, the group will incorporate a surface area of 80,000 sqm and will be “20% larger than it is today”. The company expects that its revenues from rental income will also increase by 20% as a result.

Colonial’s indebtedness will increase by €111 million to €1,300 million. The Group’s consolidated debt, including SFL, amounts to €3,000 million and the company’s indebtedness ratio over asset value will amount to 41%.

Its market capitalisation increased by 1.5% yesterday to €0.677 per share.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Qatari Sovereign Fund To Double Its Stake In Colonial

2 March 2016 – Expansión

Under the agreement between Colonial and the Qatari sovereign fund, the Spanish real estate company will take ownership of the majority of the 22.2% stake that Qatar Investment holds in its French subsidiary SFL (Société Foncière Lyonnaise) and in exchange the Qatari fund will increase its stake in Colonial, as much as possible (without exceeding the 30% threshold), from its current shareholding of 13%, to become the largest shareholder.

As a result of this operation, Colonial will increase its market capitalisation from €1,993 million to around €2,500 million and will grow in size as a boost to its bid to compete against the large European real estate groups. Its share price rose by 4.17% on the stock exchange yesterday to €0.625.

Sources close to the company said yesterday that the main aim of this move by the group led by Juan José Brugera (pictured above) is to increase its volume. (…).

Meanwhile, the aim of Qatar Investment is also clear: the sovereign fund is looking for liquidity in its European investments so that it can sell whenever it needs to. Its 22% stake in SFL (held through Qatar Holding and Dic Holding) is much more difficult to transfer than the stake that it will hold in Colonial, given that only 6.3% of the French company’s shares are free float compared with 59% of Colonial’s. (…).

The share exchange agreed between Colonial and the Qatari sovereign fund now depends on approval from the real estate company’s shareholders and also on the French tax authorities looking favourably on Colonial controlling between 70% and 75% of SFL (which will vary depending on the stake that Qatar ends up acquiring in Colonial, without exceeding the 30% threshold). The French company operates under a SIIC structure, equivalent to the Spanish Socimi, and it is critical that it continues to do so.

As a result of this operation, Qatar, which now holds a 13% stake, will become the largest shareholder in Colonial, a position held until now by Villar Mir, with his 14.5% stake. That group sold some of its shares in 2015 to finance the expansion of OHL. The businessman and the other shareholders will see their shareholdings diluted.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

The Major Players In The New RE Sector

11 June 2015 – Expansión

Since Colonial’s exit from the Ibex 35 in March 2008, none of the major players in the Spanish real estate sector have been listed on the stock exchange. However, in parallel to the return of large international investors, some real estate companies are starting to emerge, and are knocking on the door of the selective Madrid index. They are the new giants in a sector, which is gaining strength and becoming fashionable again.

These companies include several newcomers, such as Merlin Properties. The Socimi, which went public on 30 June, has managed to create a portfolio of properties worth €2,322 million and has just purchased Testa, the real estate subsidiary of Sacyr, for almost €1,800 million. The operation will create a group with assets worth €5,500 million and a market capitalisation of €4,000 million. Another example of a new company success is Hispania.

The real estate company, which has a Socimi subsidiary, has a market capitalisation of €1,120 million. After purchasing assets worth €422 million and creating a hotel Socimi with the hotel chain Barceló containing 16 properties, it has launched a takeover bid over another listed company in the sector, Realia.

Lar España and Axiare are the other two large Socimis, with portfolios worth around €500 million each.

Traditional giants

Some of the traditional real estate companies are looking to regain the status they lost when the real estate bubble burst. The survivors include only companies whose main activity is the rental of buildings and not property development. This is the case of Testa (which will soon be integrated into Merlin), Realia, Colonial and Metrovacesa.

In the case of the latter, its main shareholders (Santander, Sabadell, BBVA and Popular) excluded it from the stock exchange in May 2013 in order to clean up the (balance sheet of the) company, which had debt of almost €6,000 million. At the end of 2014, Metrovacesa had reduced its net financial debt to €3,285 million and cut its losses by half.

Realia should undertake a similar exercise when the takeover war between Hispania and Carlos Slim for control over the entity has been resolved. The Mexican businessman is already a shareholder in the real estate company, after he purchased the 24.5% stake that Bankia held and he is also a major shareholder in FCC, which owns another 36.9% stake in Realia. In both purchase proposals, the objective is to get rid of the housing and residential land stock held by Realia to focus on the management of office buildings and shopping centres.

In the case of Colonial, the restructuring is much more on track, after the Villar Mar Group became its major shareholder. The real estate company owns office buildings across Madrid and Barcelona worth more than €1,290 million, and also holds a majority stake in the French real estate company SFL.

Original story: Expansión

Translation: Carmel Drake

Colonial Leaves the Red Behind & Gains €559 Mn in H1 2014

30/07/2014 – Expansion

In the first half of the year, the real estate firm earned €559 million. To contrast, in the first half of 2013, Colonial saw only debt. The 180-degree turn took place thanks to separation and deconsolidation of its non-core business, namely the house and land development.

In the first half of 2014, the property manager registered a turnover by 2% smaller reaching to €105 million.

At the end of June, real estate portfolio of Colonial represented a €5.58 billion worth, by 4.4% larger than in January.

Its office buildings located in Spain appreciated in value by 3.6%, a phenomenon observed for the first time since the recession hit.

Colonial submitted an offer for Realia´s property branch, claiming it disposes of €790 million. The amount rises to €1 billion if the proceeds from its French arm SFL and the sale of a stake in SIIC de Paris taken into account.

 

Original article: Expansión

Translation: AURA REE

Qatar Invests €150 Mn in Colonial´s French Affiliate

16/04/2014 – Expansion

Qatar sovereign wealth fund has disbursed another €175 million in Colonial. Last week, the fund bought a 3.8% stake in the Spanish real estate firm for €20 million from Goldman Sachs. Now, it decided to expand the holding to 7.8% by paying additional €25 million. The seller is still unknown but the chances are that Credit Agricole finally conducted its long-billed divestment.

In parallel, Qatar invested €150 million in SFL (Société Foncière Lyonnaise), Paris-based company possessing 18 buildings in the French capital and held by Colonial in 53 percent.

According to sources with knowledge of the operation, it was also Crédit Agricole who sold 8.55% of SFL to Qatar. Apart from the French bank, SFL is held by Royal Bank of Scotland (RBS) (7.5%), Unibail Rodamco (7.2%), Orion III (6.4%) and Reig Capital (4.4%).

Last week, Colonial started the €1.266 million capital enlargement process and for that reason its shares´ price fell yesterday by 12.91% to 0.607 euros a share.

 

 

Original article: Expansión (by Marisa Anglés)

Translation: AURA REE

Villar Mir Attracted by Jewels of Colonial

Focus on the patrimonial business, mainly on the offices, and not to get involved into the real estate development. This is the business plan of Juan José Brugera, the chairman of Colonial. His strategy had called attention of Juan Miguel Villar Mir, who has declared willingness to invest 300 million Euros and thus become the main shareholder in the quoted real estate company.

Colonial is already working on retaking strategy of asset rotation once it finalizes the capital enlargement. The management board of the firm has been considering various solutions for repairing its balance for last 2 years. Last week it announced fresh capital injection of 1.000 million Euros, out of which half is already assigned to Villar Mir group, to a SICAV of Mora Banc and the Colombian group Santo Domingo.

(…) Colonial possesses 49 office buildings split among Paris (managed by its subsidiary SFL), Madrid and Barcelona, amounting to 1.1 million square meters and valued at 5.222 million Euros.

At present the French portfolio (precisely the Parisian one) is the most important, both for surface (equal to 44%, compared to 29% of Madrid and 29% of Barcelona) and the revenues it brings (70% of total rents procedes from France (…)). Colonial is now considering selling a part of SFL in order to pay off the debt but the new investors set the sale maximum level at 20%.

Some of the assets have been released by now, like Casa de les Punxes in Barcelona for 25 millon Euros and the Ágora Towers in Madrid sold recently for 73 millones.

Apart from the strong portfolio of buildings situated in the big national market places and one of the most significant at the European level, Colonial´s power lies in its tenants as well. Companies like Aben-goa, Banca Cívica and Iberia in Madrid; Natixis and Hugo Boss in Paris; and Gas Natural, La Caixa and Accenture in Barcelona are only an example of the relevant occupiers of Colonial´s buildings.

Source: Expansión