FAI: More than 8,000 Mortgages Paralysed by Supreme Court Ruling

26 October 2018 – Eje Prime

Real estate companies are warning of the impact of the legal battle over mortgages. The Federation of Real Estate Associations (FAI) estimates that more than 8,000 mortgage operations have been paralysed across Spain as a result of the decision taken by the Supreme Court that it should be the banks that pay the Documentation Registration Tax (AJD).

Similarly, the body has warned of the consequences generated by the delays and has asked entities to act “responsibly” towards their clients, given that “they may incur breaches in any “contratos de arras” they have already signed because of the delays in the signing of the mortgage loans”, according to Europa Press.

In this sense, the President of the FAI, Nora García Donet, stated that in light of the “uncertainty” generated, “the banks have delayed more than one third of the signings planned for the coming days”.

The FAI, constituted in March 2013, comprises twenty regional and local real estate associations from all over Spain. Currently, the entity groups together more than 850 real estate agencies and 3,730 professionals.

Original story: Eje Prime

Translation: Carmel Drake

Registrars: Mortgage Lending Increased by 10.9% in 2017

23 April 2018 – Eje Prime

The number of mortgages signed to buy homes in Spain during 2017 rose by 10.9% with respect to 2016. According to the Real Estate Yearbook 2017 from the College of Registrars, 310,640 mortgage loans were signed, a figure that represents an increase of 56% compared to the minimum level recorded in 2013. But, despite that significant gain, the figure is still well below the 1.3 million mortgages signed in 2006.

The study reveals that the number of residential mortgages increased in every autonomous region last year, with double-digit growth rates in eight of them. The largest increases were recorded in the Community of Madrid (17.8%), La Rioja (17.8%), Asturias (16.5%), Andalucía (11.7%), Cantabria (11.5%) and the Community of Valencia (11.3%). The regions where the greatest volume of mortgages were signed included Andalucía (60,026), the Community of Madrid (56,866), Cataluña (50,848) and the Community of Valencia (32,408).

In addition to domestic buyers, international purchasers also become more active. In fact, 6.9% of the residential mortgages signed last year were formalised by foreigners, exceeding 21,000 contracts in absolute terms, although three times as many overseas buyers purchased a home in Spain without any financing at all.

The nationalities with the highest percentage weight in terms of residential mortgages signed over the total number of mortgages formalised by foreigners were Romanian (11.6%), British (9.3%), Chinese (8.4%), Italian (5.8%), French (4.6%), Moroccan (4.2%) and German (4%).

Original story: Eje Prime 

Translation: Carmel Drake

Blackstone & Santander Finalise the Transfer of Popular’s Portfolio

22 March 2018 – Eje Prime

Blackstone and Santander are signing their agreement. Sources close to the operation have explained that the two groups are on the verge of sealing the deal that will see Blackstone take control of 51% of the share capital of the new company that is going to be created with the €30 billion in real estate assets from Popular. The new entity is going to be known as Quasar.

The US fund is also going to be responsible for managing the new company and its CEO is going to be Eduard Mendiluce, who is also the most senior executive at Anticipa, the other large real estate company that the fund owns in Spain, according to Expansión. Santander will own the remaining 49% of the shares in Quasar.

The new Project Quasar Investments has agreed to take out a syndicated loan for €7.3 billion from a group led by Morgan Stanley and Deutsche Bank. Blackstone itself is participating in the loan, through one of its subsidiaries, which will see it contribute €1 billion or 14% of the financing.

In parallel, the fund and Santander are going to contribute €3 billion in share capital to the company, which will amount to more than €10 billion. It is worth remembering that Popular’s non-performing loans were appraised at €10 billion, the book value at which they have been registered on the bank’s balance sheet after the clean-up carried out by Santander.

Original story: Eje Prime

Translation: Carmel Drake

Savills & Aguirre Newman Will Sign Their Merger In November

5 September 2017 – Eje Prime

A month after closing the most important corporate transaction in the real estate sector so far this year, the details of Savills Aguirre Newman are starting to be revealed. Sources close to both companies have explained that the merger will be definitively sealed in November, which is also when the organisational chart of the newly created company will be redrawn.

Whilst to date, Savills and Aguirre Newman have continued to operate independently, “they will start to manage their businesses in Spain together from 2018 onwards”, according to both companies. “For the time being, there is a willingness on the part of Savills to buy and on the part of Aguirre Newman to sell, however, the formal signing of the sale and purchase has not been carried out yet”, explain sources at both groups. The formal agreements will be signed in November, at the latest.

Moreover, the new company’s plans include looking for new offices for its teams in Madrid and Barcelona. Whilst sources in the Catalan capital indicate that it is very likely (albeit not definitive) that the Savills employees located there will move to Aguirre Newman’s offices on La Diagonal in Barcelona; in Madrid, it is almost certain that a new office will be leased to house the employees of both companies. “All of the options are being considered, including the existing headquarters of Aguirre Newman and Savills in Madrid and Barcelona”, say sources close to the operation.

Another issue that has been left up in the air with Savills’ purchase of Aguirre Newman is the duplication of the entire workforce of both companies. For the time being, according to the same sources, “Savills’ intention is to hold onto all of the employees, although it is already clear that many of the directors will leave the company voluntarily”.

The Presidents of Aguirre Newman, Santiago Aguirre and Stephen Newman, and the President of Savills España, Rafael Merry del Val, will be appointed to the merged company’s Board of Directors, with the following roles: Santiago Aguirre, President of the Board; Stephen Newman and Rafael Merry del Val, Executive Co-Vice-presidents (…).

At the end of July, Savills and Aguirre Newman announced that the purchase would be carried out for approximately €67 million. With this acquisition, the British company will multiply its size in Spain seven-fold, increasing its workforce from 70 professionals to around 500 (…).

International plans

Another issue on the table is the internationalisation of Aguirre Newman following its purchase by Savills. Until now, the international presence of Aguirre Newman has been sustained thanks to an agreement with the network of consultancy firms GVA. However, that partnership may well be cancelled once the purchase of the Spanish real estate consultancy by the British stalwart has materialised (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Riu Rules Out Buying 25% Of Edificio España

3 April 2017 – ABC

Edificio España’s foundations are starting to wobble again. The project backed by the Murcian group Baraka, which announced its plan to buy the skyscraper in July last year, has been hit by two serious setbacks in the last few days.

The first, a problem with Wanda’s documentation, put the brakes on the completion of the sale of the building to the company chaired by Trinitario Casanova. Initially, the two parties had agreed to meet at a notary’s office in Madrid to close the operation, after months of comings and goings, but the Chinese group went to the meeting without the deeds or the annual accounts for the financial year 2016, and so the SPA could not be signed.

According to Baraka, that setback will lead to a delay of three months – at least – in the start of the construction work (which is how long it will take the Chinese group to prepare all the necessary paperwork). Nevertheless, the Murcian company has now suffered an even more important setback. According to sources in the financial and real estate sectors, the hotel chain Riu has decided against investing in the project. The Mallorca-based company was going to acquire a 25% stake in the skyscraper, for which Baraka has agreed to pay Wanda €272 million in total.

700-room hotel

In return, Riu was going to manage the five-star hotel, which would occupy the vast majority of the property. The building was going to have 700 rooms, two swimming pools (one outdoor pool on the roof and another indoor pool on the 16th floor), independent conference rooms and themed restaurants. The rest of the building – four floors – was going to be allocated to retail space and according to Casanova, firms such as El Corte Inglés, the French companies Galerías Lafayette and Printemps, amongst other international brands, had already expressed interest in occupying the space.

However, the whole project is now up in the air following the Riu chain’s decision to not contribute the €68 million that it had committed. The decision will force Baraka to look for a new partner if it is to go ahead with its plans. (…).

Sources in the real estate sector do not rule out the possibility that the “failure to sign” last week was a manoeuvre by the Chinese group to try to thwart Baraka’s purchase of Edificio España and win more time to continuing benefitting from the appreciation in value of the skyscraper. (…).

Meanwhile, the questions surrounding the operation and the project itself are the main reasons that led Riu to decide against acquiring 25% of the complex. However, the Mallorca-based company, which does not have any financing problems, has not ruled out continuing as the tenant of the building and paying a rent in exchange for managing the hotel. (…).

Original story: ABC (by Miguel Oliver and Marta R. Domingo)

Translation: Carmel Drake