Baupost, GreenOak & Grupo Lar Buy 8 Shopping Centers in Spain

13/02/2014 – Cinco Días

Dutch real estate company, Vastned, announced yesterday putting on sale eight shopping malls in Spain at price of €160 million. The amount was paid by Baupost, GreenOak Real Estate and the Spanish developer Grupo Lar. According to a person with knowledge of the operation, the hedge fund Baupost led at the sales. The U.S. company bought 1.000 properties from BBVA in September last year.

The acquired shopping centers are found in Madrid Sur, Madrid Las Rosas, La Rosaleda in Málaga or Vistahermosa in Alicante. The lot is worth €160 million, however a discount has been applied at the moment of purchase. Specifically, in 2012, Madrid Sur was valued at €55.4 million, Las Rosas one, also in Madrid, at €42.8 million and the one in Málaga, La Rosaleda, at €40.2 million. In total, the shopping malls cover 133.500 square meter space with mean occupancy rate of 84.5%. (…).

The Dutch group admitted having put the lot on sale in attempt to reduce its €130 million debt. (…) What is more, Vastned claims that shopping centers are in excess in Spain.

Original article: Cinco Días (Alberto Ortín Ramón)

Translation: AURA REE

Media Markt to Invest in Spain & Open More Shops

28/01/2014 – Expansion / Cinco Días

After two lean years, German chain Media Markt managed to close 2013 fiscal year with gains. (…) “We have been growing since summer and some months were even marked by double-digits” – assures Ferran Reverter, the CEO of Media Markt in Spain.

By September, the company earned 1.541 million Euros from sales, 1.5% more. (…) Reverter believes that 2013 will be a turning point in the public consumption sector but it will not return to the golden times from before the crisis. “We are very cautious and for the next few years we predict a 3-4% recovery”.

Media Markt will advance in the new openings plan, from the 72 shops prospering now, up to 100-120 popped within seven years. Most of them will be situated in the centers of cities like Madrid (already existing shop at 200 Castellana Street), Barcelona and Bilbao. “In 2014, we will open two shops in the downtown and other in a shopping mall. Moreover, the shop in La Coruña, closed together with the Dolce Vita shopping center shutdown, will operate again”. The mean size of one shop will be of 2.000-2.500 square meters.

The CEO reminded about Media Markt´s 15th anniversary on the Spanish market celebrated this year. Firstly, the company´s top pick will be Barcelona, Valencia, Bilbao and Madrid.

Additionally, the chain is going to invest in online sales. (…).

Original articles: ExpansionPro, Cinco Días

Translation: AURA REE

IBA Capital Relaunches ABC Serrano Shopping Center

Target: make ABC Serrano, one of the best situated commercial complexes of Madrid, up. This is what IBA Capital is planning for the following year to include in its to accomplish list. The great patrimonies´manager closed the purchase of one of the few shopping centers existing in the Milla de Oro of Madrid.

The company, founded by Jesús Valderrama, Sergio García and Thierry Julienne, acquired the center after disbursment of 60 million Euros and negotiations with its owner, Reyal Urbis real estate firm (in the arrangement started in February) and with the entity owning the property, Hypothe-kenbank (formerly known as Eurohypo). At the same transaction, IBA also bought an office building located at number 25 of Avenida de San Luis in Madrid (premises of Unidad Editorial, Expansión´s publishing company).

In summer, IBA acquired a building on the Plaza Catalunya Square in Barcelona from El Corte Inglés. “We are looking for property in prime zones so that it would not be difficult to find another tenant in case the previous one moves out. We don´t want logistical warehouses giving profiltability of 20%; we choose security” –  Thierry Julienne points out. (…)

The Tender

Once the shopping center was acquired, IBA Capital called up a tender for architect offices to relaunch it. At the final stage in which such offices as Herzog & de Meuron and International Architecture Development (IAD) participated, the renovation was granted to L35, an office chaired by Tristán López Chicheri and specialised in the shopping center design. “The idea is to add to verticality of the bulding, joining the elevators and stairs and creating the heart in the atrium zone” – says Julienne.

Awaiting the licences and procedures to be brought to an end, IBA pursues at starting the works in the second quarter of 2014.

The project will involve renovation of the shopping center, improving its accesibility, amenities and its general image and raising the number of shops with taller window displays. “There is an unused space of almost 2.000 square meters situated between the entrance from the Serrano Street and the upper floor destined for catering.”

The center covers more than 14.000 square meters of a Gross Lettable Area (SBA) about 93% of which is occupied. (…)

The Tenants

In order to fill the new space in, IBA has signed contracts with fashion brands interested in entering into the Spanish market. “(…) The demand is huge because paying 180 Euros per square meter for a local on the street and paying 80 Euros in a shopping center is uncomparable” – explain the partners from IBA Capital.

(…) Also, new tenants from the catering field are wanted. (…)

(…) The remodelling works will be carried out at night in order not to disturb the other tenants, including Mercadona. (…)

Moreover, the parking zone will be rearranged to improve accesibility to the center by creating more spaces, raising their number from present 287 to more than 300.

Source: Expansión

Carrefour – Real Estate Mega Transaction

(…) Carrefour Property has finalized sales of about a hundred of business premises, practically half of which is situated in Spain. The rest is divided between France and Italy. Carrefour´s real estate branch will pay the French group Klépierre (the Europe´s second shopping center operator) between 1.700 and 2.000 million Euros for the assets, according to the sources close to the operation.

The purchase will make Carrefour Property the second greatest owner of shopping centers in Europe, giving way only to the French-Dutch giant, Unibail Rodamco.

New Owner

The decision to sell the 127 properties was made in less than a year after Klépierre had bought them from a Northern American giant Simon Property. In 2012, French bank BNP Paribas transferred 28.7% of the shopping center company for 1.524 million Euros. The new owner is specialised in development and management of shopping malls. (…)

The operation will entirely affect Klépierre´s Spanish portfolio. Before the agreement, the French group owned 76 assets, scattered in all provinces of Spain. Most of them are shopping arcades (areas of smaller space than a shooping center, where the majority of space is occupied by super- or hipermarket) with average of 20.000 square meters.

Klépierre has got centers of this type in Las Rozas, Alcobendas, San Sebastián de los Reyes (Madrid) and in La Coruña. Among those of larger size, Los Prados in Oviedo and Augusta in Zaragoza are to highlight. Moreover, the French giant owns shopping centers like La Gavia in Madrid or Meridiano on Gran Canaria.

40 Shopping Arcades

(…) In the startup package offered to Carrefour, Klépierre included 40 shopping arcades and 5 large shopping centers, like Augusta. The company´s aim is to focus on big complexes, however it has decided to attach some of its real estate jewels in the country to make the package offer more attractive and earn better assessment on Carrefour´s side.

(…) During the first 9 months of 2013, Klépierre invested 53.5 million Euros in rent of its property, 4.3% less on like-on-like basis than last year. The occupancy rates of its centers and arcades overcome 90%. On the global level, its sales figure was equal to 813.8 millions, 13.8% more than 749.1 millions flowing from the rents.

Klépierre´s patrimony scattered in 13 European countries has been estimated at 16.200 million Euros on June 30th.

European Giant

Carrefour Property was set up in 2008. (…) It is present in France, Spain and Italy (…). Totally, its assets are valued at 10.200 million Euros. In Spain it appeared in 2009, owning about 100 centers valued at 3.000 millions. Its last 2 projects are Holea shopping center in Huelva and As Cancelas in Santiago.

This is not the first business that Carrfour and Klépierre did together. In September 2011, they exchanged 6 properties in Spain. Precisely, Carrefour Property bought a shopping arcade of Carrefour hipermarket of Huelva while Klépierre acquired various comercial areas and construction rights in La Gavia (Vallecas-Madrid), San Juan de Aznalfarache (Seville) and in Elche, where it bought 3 medium size areas.

Source: Expansión

Unibail-Rodamco España Becomes a Socimi

Unibail-Rodamco España has turned into a Socimi, a Spanish counterpart of a REIT company.

The European company offers a portfolio of 16 large shopping centers in Spain, La Vaguada and Parquesur in Madrid, La Maquinista, Glories and Splau in Barcelona and Bonaire in Valencia among others, located in 10 biggest cities of the country.

The greatest European real estate investment company decided to convert its Spanish branch into a Socimi. The main role of such companies is the acquisition, managament, development and reforms of the real estate property of the urban land for rent with an obligation of distributing great part of their profits as dividends.

The CEO of Unibal-Rodamco España, Simon Orchard, believes that the changes in Spanish legislation “will inevitably attract a long-term attention of investors on the Spanish market, improving the liquidity and solvency.” (…)

Source: Expansión

El Corte Inglés Sells a Building on Preciados Street in Madrid to IBA

El Corte Ingles finalized the sale of one of its buildings at 9 Preciados Street in Madrid. The property, situated on the most expensive commercial street in Madrid and one of the most important in Europe, consists of 1.375  sqare meters´ shopping area. The rest are offices. In total, there are 2.500 square meters of space.

The chain owned by Isidoro Álvarez, possessing more buildings on the same street, used 3 floors of the sold building as a shopping area with sports equipment and 3 more as offices.

The new property owner is a real estate company IBA Capital, a French fund manager which brings together European, American and Asian fortunes. (…) First time the companies did business together when El Corte Ingles sold to IBA a building close to Plaza de Cataluña in Barcelona for 100 million Euros. This time the Gaul fund paid about 50 millions, according to the real estate sector sources. Thus, a square meter has been valued at 20.000 Euros.

The two sold buildings are adjacent with two big shopping centers of the group. Before February 28th, El Corte  Ingles owned 86 department stores, out of which 84 were situated in Spain. According to the valuation conducted by Tinsa consulting company, the firm´s assets on the market exceed 18.000 million Euros.

The decision to shed the property was made after the conclusion of refinance agreement of its 5.000 million Euros debt.  (…) In the last exercise, closed on February 28th, El Corte Ingles earned 171.5 millions, about 18% less, and charged 14.552 millions. (…).

The New Operator

The sale of 9 Preciados was one of the scarce transactions carried out in the so-called ´Golden Triangle´of the capital, which embraces districts of Sol, Gran Vía and Preciados. (…) Rental cost on the last reaches 245 €/m2.

The new owner´s target is to rehabilitate the entire building and convert it into a flagship establishment for an international chain company. That is why, the leaders have already started negotiations on the rental price with various international companies. (…).

There are several Northern American great companies among the potential tenants, who wish to open their branches in Spain. Other important firms interested in the deal are: Japanese Uniqlo, Inditex and H&M.

Source: Expansión

The fund Baupost is finalizing the acquisition of several malls for 180 million Euros.

The U.S. fund Baupost is finalizing the acquisition of a package of malls scattered around Spain. It includes Parque Vistahermosa, in Alicante, Mirador in Burgos, Atalaya, in Murcia, Montigola, in Barcelona, Las Rosas, Madrid Sur and Getafe III, all three in Madrid and the most important one, Rosaleda in Málaga.

The properties are included in the Spanish portfolio of the Dutch group VastNed Retail. Apart from the transferred malls, this real estate company specialized in retail owns several trade premises in Madrid, Barcelona and Castellón.

In its last presentation to analysts, VastNed admitted that the bad economic situation had affected the behavior of its malls, with a descent of rents. The Dutch group values at 13,7 million Euros the earnings it received from its commercial assets in Spain and Portugal.

Five years ago, the value of the portfolio of VastNed in Spain reached 409 million Euros. In 2011, the group put 50% of their national assets on sale, valuing them in 280 million Euros. After an unsuccessful offer last year, Baupost will now pay around 180 million Euros for the properties.

The operation is in its final stage awaiting a few details that could modify part of the transaction. Baupost could exclude two of the eight malls: Vistahermosa and Getafe III. “The operation will  probably be  closed before the  end  of  the  year  but,  as  these are secondary malls, that need an investment to update them, it is probable that they will exclude some properties”, a source close to the operation admits. (…)

Source: Expansión

Morgan Stanley gets rid of its shopping malls.

The market starts to brighten up. Last week, Morgan Stanley closed the sale of its three shopping malls in Spain, christened in the market as the good, the ugly and the bad. The operation, which had been looking for a buyer for a long time, has ended in the hands of Incus Capital, a newly created investment fund that has taken the opportunity of acquiring the first portfolio of assets in the Spanish market, as confirmed by official sources.

The decision taken by Morgan Stanley Real Estate Investment (MSREI) of liquidating its European real estate fund has favored the sale of El Mirador de Cuenca (Cuenca), Los Alcores (Alcalá de Guadaira-Sevilla) and Alzamora (Alcoy-Alicante) for nearly 30 million Euros. This price represents a discount of 75% on the 116 million Euros paid by Morgan Stanley and Grupo Lar in May 2007, just before the real estate bubble burst, in order to acquire the malls owned by the German fund SEB Immobilien Investment.

That operation was part of the investing alliance agreed by Grupo Lar and Morgan Stanley to position themselves in the booming sector of shopping malls, where one of the parts acted as a developer and the other one as a financer. The union of interests went even further, as the investment bank, through its funds, acquired 16,8% of the real estate company for 124 million Euros, as also done with Fadesa, expecting to participate in its initial public offering.

Before the collapse of the market, Grupo Lar had 15 medium-sized (with a maximum 20.000 square meters) shopping malls, most of them located in secondary cities and most of them in a joint investment with the funds of Morgan Stanley (Puente Genil-Córdoba, Navalmoral de la Mata-Cáceres, Puertollano-Ciudad Real, Los Palacios-Cádiz and Arcos de la Frontera-Cádiz). The commercialization of these assets is managed by Gentalia, the consulting and patrimony management firm developed as a line of business by Grupo Lar.

In order to carry out the sale of these three shopping malls, Morgan Stanley has carried out a restricted process, with the participation of funds such as Drago Capital or Baupost, investors with an opportunistic profile attracted by the existing price discount. According to sources in the market, the transaction was finished last week and the final buyer has been the unknown firm Incus Capital Advisors.

In spite of its recent constitution, there are veterans in the financial sector behind Incus Capital, specialists in managing credit and real estate investment portfolios. The drivers of this vehicle are Andrew Newton (ex Lehman Brothers) and Alejandro Moya (ex Morgan Stanley), who have developed the fund as a project parallel to Hipoges, a independent platform for the management and recovery of complicated credits with presence in Spain, Portugal and Brasil.

Source: El Confidencial