El Corte Inglés Plans to Open 1,000 Gas Station Stores in Conjunction with Repsol

15 October 2018 – Real Estate Press

There are almost 11,500 gas stations in Spain, of which more than 8,500 have shops. El Corte Inglés was one of the first groups to operate in conjunction with oil companies and that group is now planning to open 1,000 new gas station stores together with Repsol.

Gas station stores typically have a wide range of opening hours, span an extensive network and are easy to stop at to make quick purchases. It was only a matter of time before distribution groups decided to team up with oil companies to manage their service station stores. Now the time has come for those formats to flourish.

The formula allows supermarket chains to grow rapidly without having to recruit staff or undertake significant investments. Meanwhile, the petrol companies benefit from offering more attractive service stations, with a more extensive range of products and a lower cost base by entrusting the management of their stores to specialists with a volume of purchases that generates significant savings.

Sales at gas station stores amounted to €580 million in 2017, although the potential of this format is much greater.

Forecast growth

El Corte Inglés was one of the first groups to operate agreements with petrol companies. Initially, it constituted the company Gespevesa together with Repsol in 1998, which they control (50%) and which owns 39 service stations. Last year, that entity recorded revenues of €39.2 million, down by 26% and earned profits of €3.8 million, up by 28%. Next, it joined forces with Cepsa to develop a refuelling discount strategy. And, now, it has committed to a major agreement with Repsol to create “the largest network of convenience stores in Spain” under the brand Supercor Stop & Go.

Carrefour has also changed its petrol partner over the years: it started working on this type of alliance with BP, but in 2013, it opted to join Cepsa to grow a new format, Carrefour Express Cepsa, which currently comprises 333 stores. One fact serves to explain the importance of this agreement for the French group, namely, that it is the format with the most stores in around twenty Spanish provinces, including Asturias, Murcia, the Balearic Islands, Castellón, Lleida, Toledo, Valladolid and Zaragoza, amongst others.

Día is the other group that has heavily backed the format, with the launch of a pilot project together with BP in four of its gas stations in Madrid under the Shop brand. Previously, in 2015, Dia signed an agreement in collaboration with Disa (Shell) to supply the counters in five of its stores. BP has also worked with other partners. Between 2013 and 2016, Alcampo supplied products, including its own brand range, to stores in its gas stations. Moreover, BP has operated some regional alliances for years with other smaller supermarket chains to generate benefits through their loyalty cards (…).

Finally, Galp, the fifth largest petrol company in Spain, has not been averse to these agreements either; it has worked with GM Food, the former Miquel Group. Their partnership began in 2013, with 12 pilot stores operating under the Sar brand; it continued the alliance once that project had finished, with the Catalan group as the supplier of its stores; and now, the two firms have started another trial in eight locations under the format Suma Exprés.

Original story: Real Estate Press

Translation: Carmel Drake

BP Acquires 65 Gas Stations in Spain from Avenue Capital and JZ International

2 October 2018

The British oil company has reached an agreement to take over 100% of Kingbook Inversiones Socimi and Petrocorner Retail, the owner and manager of gas stations in 21 provinces of Spain.

The oil company BP has reached an agreement with the venture capital funds Avenue Capital and JZ International for the acquisition of the Kingbook socimi and Petrocorner Retail, a company that owns and operates 65 gas stations spread across 21 provinces in Spain.

The operation has already been finalised, pending the corresponding regulatory approvals, as confirmed by official sources at BP.

Kingbook Inversiones, 60% owned by GL Europe REIT (Avenue), with the remaining 40% held by JZ Real Estate (JZI), both vehicles domiciled in the Cayman Islands, was delisted from the Alternative Stock Market (MAB) on July 20, just one year after its debut.

Kingbook had already warned in June that it was conducting “very advanced” negotiations for the sale of 100% of the company. The firm had been building its portfolio since 2014.

Another source close to the operation said that DISA (Shell in the Peninsula), the Canary Islands oil company chaired by Demetrio Carceller (Damm), also considered acquiring the asset.

The service stations that will become the property of the company formerly known as British Petroleum are distributed between the north, the centre and the southeast of Spain. Specifically, the oil company chaired by Luis Aires in Spain will increase its presence in Asturias, Cantabria, Vizcaya, Guipúzcoa, Navarra, León, Burgos, Zamora, Valladolid, Ávila, Madrid, Valencia, Albacete, Alicante, Murcia, Jaén, Huelva, Málaga, Granada, Almería and the Balearic Islands.

BP is thus consolidating its position as the third largest fuel distributor in Spain, behind Repsol and Cepsa and ahead of Galp and Shell. With this agreement, BP will control around 700 service stations in Spain. In 2017, the company stated, within its expansion strategy, that it owned 648 total stations.

Until now, these gas stations were operated by Petrocorner, which has also acquired BP. According to Petrocorner’s website, the service stations are branded by Repsol, Cepsa, BP, Shell, Galp, Avia, while some are independent.

According to the latest accounts sent to the Mercantile Registry, Kingbook lost more than €1.5 million in 2017, compared to a loss of €1,733,446 in 2016.

Although the price of the transaction was not disclosed, the statement company submitted to MAB said that its assets were valued, according to the consultancy CBRE, at approximately 70 million euros (€40 million book value).

Avenue Capital has participated in several important operations in Spain. The US fund gave financial support to Quabit and is participating in the purchase of debt from Banco Santander’s Ciudad Financeira. In June, the fund acquired tile company Roig Cerámica (Rocersa).

Original Story: El Confidencial – Juan Cruz Peña

Photo: Reuters

Translation: Richard Turner

Kingbook: A New Socimi Enters The Petrol Station Segment

22 April 2016 – El Confidencial

It may become the twentieth listed Socimi, but it will also be the first to bring some very particular assets onto the stock exchange: petrol stations. According to reports, the company in question is called Kingbook and it was constituted as a Socimi in October 2015 – previously it was registered as a limited company – although it has not debuted on the Alternative Investment Market (MAB) yet, since the Law allows it two years to list and be able to benefit from the tax advantages of its structure.

Currently, fifteen Socimis are listed on the MAB, with a range of different profiles: property owners, companies that own residential assets, offices, hotels, hospitals, car parks and even homes for senior citizens, but none of them have any petrol stations in their portfolios. Three other Socimis also list on the main stock market (Axia Real Estate, Lar España and Hispania) and one lists on the Ibex 35, Merlin Properties.

Kingbook is fully owned by Allocate Inversiones, which also owns 100% of Petrocorner, a joint venture created at the end of 2014 by the US private equity firm Avenue Capital and the British firm JZ Capital, and chaired by an expert in the sector, Juan Manuel Ayuso Torres. Its objective it to invest €300 million in the acquisition of around 100 service stations in Spain, which, in practice, would mean it taking control of 3% of the assets in the sector.

Two private equity houses are backing the new Socimi

According to Expansión, the two private equity firms are looking for independently-owned service stations that have annual sales of more than 4 million litres of fuel. Currently, Petrocorner’s strategy is “multibrand” and it has contracts with the main companies in the sector, including Repsol, Cepsa, Shell, BP and Galp.

“We are investing in the acquisition of service stations in Spain because that is where we are finding assets with attractive prices, with potential to benefit from the recovery in demand for petrol-related products as the economy improves. Moreover, we expect to see an increase in sales of other products in service station stores and we should be able to improve the profitability of those stores by centralising purchasing and other functions”, said Miguel Rueda, Partner at JZ Capital a few months ago.

Although Kingbook focuses on the acquisition and development of urban real estate for lease, it will definitely be the first Socimi to specialise in the management and lease of petrol stations, a booming sector in recent years thanks to operations such as the ones completed by these two private equity firms and those involving the Eroski group.

In February, the supermarket chain sold a batch of 36 hypermarkets to Carrefour for €205 million, in an operation that also involved the transfer of 22 petrol stations. Five years ago, in May 2011, Eroski also completed a high-profile operation, on that occasion involving the sale & leaseback of 28 petrol stations to Axa Real Estate for an approximate value of €55 million. Two operations that revealed the appetite of international investors for this kind of asset. (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake