Neinor Reports Profits of €90M, Exceeding its Own Forecast by 30%

9 January 2020 – El Confidencial

Nine months after issuing a profit warning, announcing a new roadmap and appointing a new CEO (Borja García-Egotxeaga (pictured below)), Neinor has reported profits of €90 million, up by 30% compared to the revised forecasts of €70 million.

The property developer handed over 1,269 finished homes last year, within its forecast range of between 1,200 and 1,700, and has another 200 ready to hand over this year. It plans to hand over half of those this month (January) and the rest during the course of the year, depending on its margins.

2020 is going to be a critical year given the looming change in the economic cycle, with stabilisation expected in terms of sales and prices. In 2018, prices rose by 8%; in 2019, they increased by 6-7%; and in 2020, the firm’s objective is to sell 1,700 homes and achieve a price increase of 3.5-4%. Thanks to these rises, the group’s margin amounted to 30% at the end of 2019.

By contrast, Neinor has not managed to fulfil its land purchase plan to date, although it expects to achieve its ambitious forecasts for 2020 when it aims to invest €110 million in total.

The property developer’s two largest shareholders, Orion (28%) and Adar are both keen to support the growth of the company and benefit from the consequent recovery of its share price.

Original story: El Confidencial (by Ruth Ugalde)

Translation/Summary: Carmel Drake

Slim Acquires 3% of Quabit for €4.8M

7 January 2020 – El Confidencial

The Mexican businessman Carlos Slim has acquired 3% of the share capital of Quabit for €4.8 million through his investment company Inversora Carso to become the property developer’s sixth-largest shareholder.

Quabit’s share price rose by 5.15% to €1.14 following the announcement of the purchase. The property developer’s president Félix Abánades is the largest investor with a 20% stake, followed by the Swiss manager Julius Baer (8.7%), the investor Francisco García Paramés (5%), the fund Gescooperativo (3.5%) and the Malagan property developer Sankar Real Estate (3.3%).

Slim appears to be redoubling his commitment to the Spanish real estate market, given that he already holds stakes in FCC and Realia, which currently have 800 and 750 homes under construction, respectively, along with 4.4 million m2 and 5.8 million m2 of land ripe for development, respectively.

Original story: El Confidencial (by Ruth Ugalde)

Translation/Summary: Carmel Drake

Julius Baer Acquires 3% of Metrovacesa and 8.14% of Neinor

17 April 2019 – Voz Pópuli

The Swiss bank Julius Baer has been increasing its stakes in the main Spanish property developers. The company now owns 3% of Metrovacesa through its Sicav Kairos and 8.14% of Neinor Homes, of which 6.55% is held indirectly.

As such, the Swiss bank is the second largest shareholder of the property developer created by Lone Star, behind the Israeli firm Adar Capital, which controls 28.6%.

The share purchase by Julius Baer comes a week after Neinor’s board approved the replacement of Juan Velayos as its CEO, in an environment of maximum uncertainty in terms of the achievability of the objectives set by the Spanish property developer.

Neinor’s share price has fallen by 17% so far this year, and as such, each share is worth around €10, well below its stock market debut price of €16.98.

Nevertheless, the group’s results for 2018 were strong, with revenues of €382 million, up by 70% YoY and an EBITDA of €56 million, which was almost seven times higher than in the previous year. Moreover, the property developer has already pre-sold 80% of the units it plans to deliver in 2019 and 30% of those due in 2020.

Original story: Voz Pópuli (by David Cabrera)

Translation/Summary: Carmel Drake

Antonio Catalán Sells the Rest of AC Hoteles to Marriott

31 March 2019 – El País 

Marriott, the largest hotel conglomerate in the world with 7,300 establishments in its portfolio, has today acquired the remaining 40% of the share capital in AC Hoteles for €140 million. The two brands first joined forces back in 2011 when the US group entered a joint venture with the Spanish firm at height of the economic crisis.

The new operation will involve the dissolution of the joint companies and the creation of a new one, which will allow Antonio Catalán (Navarra, 1948), in his capacity as President of AC by Marriott, to use any of the hotel giant’s brands, not only AC and Autograph. In this way, he is thinking of entering the tourist segment on the Costa del Sol and the tourist apartment business in Sevilla.

The businessman manages 76 hotels (65 in Spain, 10 in Italy and 1 in Portugal) through the company Belagua 2013. In 2017, the latest year for which accounts are available, that company recorded revenues of €188 million and generated a net profit of €71 million, which is expected to grow by 8% in 2018. Catalán also owns other companies with individual hotels, bringing his total revenues to €260 million.

In Spain, AC Hoteles is working on several hotel openings in Santa Cruz de Tenerife, Madrid, Cartagena and Andorra, assets that will operate under the AC by Marriott brand. It is also working on openings in Sevilla, Valencia and Bilbao, which will operate under the Autograph Collection brand.

Original story: El País (by Carmen Sánchez-Silva)

Translation/Summary: Carmel Drake

Apple Leisure Group Debuts in Spain with its Purchase of a Majority Stake in Alua Hotels

23 January 2019 – Revista 80 Días

The US group is one of the largest managers of accommodation in the Caribbean. This purchase allows it to enter the vacation segment and the European market.

Apple Leisure Group (ALG), one of the largest hotel investors in the USA, has acquired a majority stake in the share capital of Alua Hotels and Resorts, the hotel group founded in 2015 by its main executives and the private equity fund Alchemy Partners. The amount of the purchase has not been revealed, although the joint operating result of the chain’s main hotels amounted to €6 million in 2017. Given that the properties are located in areas with high tourist demand and good forecasts, the amount of the operation could have exceeded €40 million, based on the multiples that are typically used for this type of transaction.

With this acquisition, ALG is entering the European market through the sun and beach holiday segment. And it is doing so in a country such as Spain, which receives more than 80 million tourists per year in search of that kind of offer. Alua Hotels has 11 hotels located in Mallorca, Ibiza, Fuerteventura and Tenerife, together with an apartment building in Ibiza.

In total, ALG will manage more than 3,000 4-star hotel rooms, focused on the type of tourist who wants a superior service to that usually found in the average accommodation establishments in beach areas. The US company is planning to undertake more acquisitions in the European market and has announced that it wants to become a reference player in the main destinations in the Mediterranean (…).

Apple Leisure Group is one of the most important investment conglomerates in tourism in the USA. It used to be owned by the investment fund Bain Capital (…), which sold it in 2017 to the funds KSL Capital Partners and KKR for an undisclosed sum. (…). According to data from the conglomerate, it manages 14 brands and handles more than 3.2 million passengers per year (…). Its turnover exceeds USD 3 billion per year (…).

Original story: Revista 80 Días 

Translation: Carmel Drake

Urbas will Receive up to €6M from its Major Shareholders

22 January 2019 – Expansión

Urbas, a company specialising in the promotion and management of land, has signed an agreement with its reference shareholders Robisco Capital Markets and Quamtium to push ahead with the repayment of its debts. By virtue of this agreement, its shareholders are guaranteeing its financial stability and allowing it to obtain liquidity in exchange for shares in the company. In this way, the shareholders are going to inject up to €6 million into the company in exchange for up to 1.75% of the share capital.

These shareholders own almost 28% of the company each, according to the latest registers from the CNMV.

Specifically, Robisco and Quamtium are going to sign a line of credit for a maximum of €2 million to equip the company with the liquidity it needs to make its current payments, at least, until the end of 2019. Moreover, the shareholders have committed to acquire debt from Urbas’s suppliers and creditors up to a maximum of €4 million.

In exchange, Robisco and Quamtium are reserving the right to acquire part of the share capital through the share subscription, said the company to the CNMV. The increases will be undertaken at a maximum nominal value of €6 million, equivalent to 1.75% of the share capital. “The agreement allows us to consolidate the structure of the balance sheet and improve the financial ratios, at the same time as strengthening the activity, developing the businesses and ratifying the trust and commitment of the main shareholders”, said Juan Antonio Acedo Fernández, who was recently appointed as the President of the Group.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Realia Completes its €149M Capital Increase

2 January 2019 – Eje Prime

Realia has completed its capital increase. The real estate firm owned by the Mexican magnate Carlos Slim has completed its €149 million capital increase with a final injection of €42.1 million, according to a statement filed by the company with Spain’s National Securities and Market Commission (CNMV).

In its latest expansion phase, the company has issued 175.4 million new shares in total, for a nominal value of €0.24 and an issue premium of €0.61 per share. The company’s share capital has thereby been consolidated at €197 million, divided into 820 million shares.

Since Slim took control in 2015, Realia has undertaken three capital increases in total. The latest is the operation closed today, which was approved in November to try to decrease the company’s debt, which amounts to €672 million, and to provide a financial boost to its real estate businesses.

Slim controls 70.76% of Realia’s capital, 33% in a direct way and 36.98% through the construction group FCC, which is also led by the Mexican businessman. The real estate company also has an asset portfolio spanning approximately half a million square metres, which includes one of the Kio Towers in Madrid.

Original story: Eje Prime

Translation: Carmel Drake

Socimi Árima Buys 4 Office Buildings in Madrid for €110M

27 December 2018 – La Vanguardia

The Socimi Árima has purchased its first four office buildings in Madrid for €110 million, operations that it has carried out just two months after making its stock market debut in October without any real estate assets in its portfolio.

In this operation, the firm promoted by the former CEO of Axiare, Luis López de Herrera-Oria, has invested the c. €100 million that it raised from its stock market debut and “is whereby starting its journey”.

The four assets purchased comprise a combined surface area of around 27,000 m2, as well as 460 parking spaces, and are located in the business centre district and northeast of the capital.

The firm, which is going to invest €16.7 million to improve the properties, is convinced that they have “great potential for appreciation”.

Specifically, Árima has purchased one building on Calle María de Molina on the corner with Príncipe de Vergara, and another one on the intersection of Paseo de la Habana with Avenida de Alfonso XIII, for €31 million in total.

Moreover, the Socimi has signed a commitment to acquire another two office buildings, located in the northeast of Madrid, for €63 million, which will materialise in January 2019.

With these two operations, Árima is purchasing its first buildings after it made its stock market debut without any assets in October and through which it raised €100 million, a third of the €300 million initially planned.

“With the purchase of these assets, Árima is reaffirming its business plan presented during its IPO and the good investment opportunities that the Spanish real estate market offers”, said the CEO of the firm, Luis López de Herrera-Oria, in a statement.

Original story: La Vanguardia 

Translation: Carmel Drake

Approval Granted for Socimi Arrienda Rental’s Debut on the MAB

21 December 2018 – La Vanguardia

The Coordination and Incorporations Committee of the Alternative Investment Market (MAB) has issued a favourable report ahead of the stock market debut of Arrienda Rental Properties Socimi, with a reference value of €2.74 per share, after the company was valued at €56.4 million.

The MAB has reported that the stock trading code for Arrienda Rental will be YARP and that it will be governed by the fixing system, with prices being fixed twice in each session, at 12 noon and 16h.

Arrienda Rental is a real estate company that has adopted the Socimi framework and which is dedicated to the acquisition and development of urban properties for their rental.

The Socimi owns 239 assets, all of which are located in the Community of Madrid: 2 hotels (Clement Barajas and Täch), 3 plots of land, 4 offices, 18 retail premises, 40 homes and 172 garages.

Before its stock market debut, the Socimi had 51 shareholders, including Francisco García Rubio, who owns 21% of the capital.

Arrienda Rental has 4 managing directors who are also owners, namely: José García Sánchez, Luis Miguel Gutiérrez Abella, Víctor García Rodríguez and Juan Francisco García Muñoz.

Arrienda’s valuation has been performed by the appraisal company Gesvalt.

Original story: La Vanguardia

Translation: Carmel Drake

Blackstone Obtains a c. €2bn Mega-Loan for Testa

19 December 2018 – Expansión

The Socimi Testa held an extraordinary General Shareholders’ Meeting on Tuesday, where it reduced the number of members of its Board of Directors from 11 to 5. The new governing body includes three people proceeding from the new majority shareholder, the investor group Blackstone.

Testa Residencial is going to sign a mega-loan amounting to €1.943 billion, which it had already agreed in principle after the US fund Blackstone takes control of the rental home Socimi with the purchase of 80.6% of its share capital within the next few days.

The loan, equivalent to the amount that the purchase of the firm has cost the fund (around €1.52 billion) along with the debt held by the Socimi, has been agreed with Bank of America Merrill Lynch, Société Générale and Santander itself, Blackstone’s partner in Testa with 18% of its share capital.

This bank financing was agreed during the first meeting of Testa’s new Board of Directors following the restructuring of the management body conducted hours before, at the General Shareholders’ Meeting, when entry was granted to Blackstone.

By virtue of this restructuring, Testa’s Board has been reduced to five members, from the previous number of eleven. The fund has appointed three representatives to the Board, one of which, Diego San José, will also be the President of the Socimi, a role held until now by Ignacio Moreno.

The other two chairs at the table will continue to be occupied by the current CEO, Wolfgang Beck, and the director Miguel Oñate. In this way, the Board seeks to ensure continuity in the management of the real estate firm and to continue benefitting from Oñate’s experience and knowledge.

New strategy

Despite this continuity in management, at the first meeting of Testa’s Board, with Blackstone in the driving seat, a resolution was taken to approve a new strategy for the company, which had been planning to invest €550 million in the purchase of new rental homes to add to its existing portfolio of 10,700 flats.

The new strategy involves “analysing the eventual purchase of new homes depending on the circumstances at play in each case”. Moreover, Blackstone has raised Testa’s current leverage limit, situated at 35% of its asset value, and has reduced the dividend payment to the “legal minimum”.

In terms of the super-loan, it is being guaranteed by the assets of the Socimi itself, worth €2.3 billion in May when it was considering making its debut on the main stock market, and which will be signed with a two-year term, with the possibility of three annual extensions.

Dividend

Before changing the dividend policy, the Board also agreed to distribute a payment to the shareholders leaving the Socimi as well as to the new shareholders.

Specifically, it is going to pay €7.612 per share to the shareholders that leave the company after selling their stakes to Blackstone, in other words, to BBVA, Acciona and Merlin and to Santander for the proportion of shares that it has also sold.

Moreover, Testa will pay €0.035 per share to those players that will be its shareholders once the sale and purchase agreement has been signed within the next few days, in other words, to Blackstone and Santander, as well as to a group of minority shareholders who own 0.5%.

With the acquisition of this Socimi, Blackstone is strengthening its position as the largest owner of rental homes in Spain, with around 24,000 homes through its various firms and Socimis. Moreover, it is consolidating its position as one of the largest real estate owners in the country, with an asset portfolio worth more than €20 billion.

Original story: Expansión

Translation: Carmel Drake