Inveriplus Will Spend €20M On Its First Purchases As A Socimi

26 April 2017 – Eje Prime

Inveriplus is one step closer to becoming a Socimi. The company, led by Óscar Bellete, will spend €20 million on its first purchases as a Socimi, according to comments made by the company to EjePrime. Moreover, Inveriplus, which specialises in the transformation of toxic assets into liquid assets and in converting struggling real estate companies and property developers into profitable enterprises, plans to add around 450 new assets to its portfolio over the next few months.

The group has already started the countdown to become a Socimi and is waiting to debut on the Alternative Investment Market (MAB) before the first quarter 2018. “We are expecting to raise funding amounting to approximately €160 million, which will be spent on the acquisition of residential assets”, said Bellete.

Currently, the portfolio of properties that Inveriplus manages comprises approximately 5,700 assets. “In the short term, we will add 450 new assets to our management of developments that have not been marketed yet”, added the Director. In this way, Inveriplus will incorporate assets in Galicía and Andalucía, specifically on the Costa del Sol and in Sevilla.

For the time being, the group is not planning to invest outside of Spain or in any other products besides residential. (…). Inveriplus’ capital is owned by investors ranging from family offices to small and institutional investors.

The next step for Inveriplus is to carry out its first purchases as a Socimi, which will happen later this year. According to the Director, the group is already holding advanced talks to acquire “one building in Madrid, a couple of chalet developments in Valencia and a residential complex on the Costa de Almería”, although no more details can be provided about these operations at the moment.

These assets will involve an investment of between €15 million and €20 million (…).

Services to individuals

Nevertheless, Inveriplus is not only playing in the Socimi league, it is also in contact with property owners and end consumers. At the beginning of the year, the group launched a new service onto the market, known as AR36, whereby it commits to renting out a home to a tenant for 36 months and paying the owner all of the monthly payments, together and in advance.

The company has already convinced around 100 homeowners to sign up to the service, and the group forecasts that between 500 and 700 assets will have adopted this new way of leasing a home by the end of 2017. (…).

In this way, AR36 is aimed at people who own a property or who have the option of renting one out and who want to ensure the collection of the full rent. For the time being, this solution is only being offered in Madrid, Valencia, Barcelona and Málaga, although Inveriplus plans to extend the service to other cities over the next few months.

The Inveriplus group has more than fifteen years experience in the real estate sector and its team specialises in capital markets and the management and restructuring of assets. Currently, Inveriplus, which already manages more than 140 clients, has an average occupancy rate of 88%.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

‘Housers’: Spain’s First RE Crowdfunding Platform Is Launched

20 August 2015 – Cinco Días

Crowdfunding is breaking into the Spanish real estate market; and small investors seem to be thriving in a space that was, until now, controlled by large fortunes and stratospheric projects. It is now possible to make an investment with just €500 in your pocket, through Housers, which describes itself as “the first online real estate crowdfunding platform in Spain”.

With the aim of creating a property investment fund opene to everyone, and based on the success that such platforms have been having in countries such as the USA and UK, Antonio Brusola and Álvaro Luna decided to launch a project that already has 800 users and is only one month old.

The platform, which has been adapted to reflect the new Crowdfunding Law that was ratified in April 2015, is aimed primarily at the purchase of homes. With a minimum investment of €500 in four different projects or €2,000 in just one, individuals can buy a stake in a home and receive monthly rental income, plus a capital gain when the property is sold. Similarly, the funds may be used to finance short-term real estate projects, such as construction and the renovation of buildings, in order to achieve “low risk investment products that generate high returns from rental and sale”, explains the company.

Housers offers homes and retail premises on its website for the moment, but the company is also looking to acquire industrial warehouses, depending on “how each asset performs in the market”. “Homes have the most upside potential, but retail premises have lower maintenance costs. They are two quite different products”, says Brusola, one of the co-founders. That is why the company expects to generate gross returns of more than 7% p.a. and that its properties will appreciate in value by 35% by the time they are sold.

“We try to purchase between 10% and 20% below the market price, so that we can sell them for 35% more with just a small increase”, says Brusola. He also confirms that the security of the investment is “quite high because it is a physical product and the loss is very limited”. “It is always possible that prices will not increase – for example, there could be a 10% decrease in house prices over the next few years, however, the rental income from the property will offset that potential decrease”, he says.

With this initiative, Housers expects to purchase more than 1,500 homes and obtain €300 million from around 10,000 investors in three years. In addition, the company is considering a capital increase in October, a month after the final launch of the platform, in September. And even though the idea was first floated in December last year and the web went live a month ago, the new Law resulted in delays to the project, which had to be adapted to the reflect the new processes required.

The new legislation establishes investment limits of €3,000 per project and a maximum investment of €10,000 in a 12 month period for non-accredited investors. Moreover, it forces platforms to collaborate with payment entities, or with the Bank of Spain, to ensure that segregated accounts are used and investors do not deposit their money directly in the platforms. For this reason, Housers has joined forces with LemonWay, a European payment entity that operates internationally, which affords it access to overseas investors, especially in the USA, UK and Germany, countries in which this property crowdfunding formula is more developed.

Original story: Cinco Días (by Asun Infante & Alfonso Simón Ruiz)

Translation: Carmel Drake

Bank Of Spain: Residential Rental Yields Rise To 5%

18 May 2015 – Expansión

Residential market / The average annual return on rental properties is equivalent to 3.1x the return on public debt – a historical record. Demand for rental property has soared by 42.5% in three years.

After seven-years in decline, it seems that the housing sector is back. The residential market is oozing optimism once again, although it is also full of caution, learned during the post-bubble era, and  uncertainty, inherent in a recovery that is still recent.

But the data is improving and housing has become a good investment once again, above all due to the significant rental returns offered nowadays. Investors looking for yields that exceed those on deposits and public debt are on the hunt for properties in good locations, with high demand, with a view to buying them to let.

The data endorses this trend, since the rental income for a residential property offers an annual gross return of around 5%. On average, 4.7%, according to the Bank of Spain. It is the highest percentage recorded since June 2003, during the height of the housing bubble, although other reports, such as the one published by idealista, puts the figure even higher, at 5.3%.

The gross yield is a percentage of the total price of the house covered by the annual rental income. This yield, published by the Bank of Spain, also takes into account capital gains.

Taking into account the data from the body led by Luis María Linde, the average annual rental yield is no less than 3.1x the return generated by public debt on the secondary markets during the last quarter (1.5%). That is a historical record for this comparative ratio, which dates back to 1991. Meanwhile, bank deposits offer a return of 0.6% each year.

What does all this mean? Simply, that the moment is ripe for investment in buy-to-let housing, especially for small investors. The price of homes is beginning to increase and so are rentals, which means that the market is at an impasse of high returns without much risk. Moreover, the percentage of citizens who prefer to rent rather than buy has risen sharply, from 11.4% in the boom years to the current rate of 19%. In the past three years alone, the rental market has expanded to include one million more homes; it has grown by 42.5%.

On the other hand, the price of homes is starting to rise, specifically by 2.65% during the first quarter of the year, according to the registers. This trend towards stability in terms of property prices points to an easing of returns in the rental market, and so analysts believe that now is the best time to invest (rather than waiting to invest over the next few quarters).

According to the experts, the prime areas of the large cities are those that offer the safest opportunities, due to their significant demand, although without exorbitant returns. For example, the Madrid neighbourhood of Retiro, where the average price per square metre for sale is €3,289 and for rent is €11.6/m2/month, according to the index prepared by IE Business School and Fotocasa. A property measuring 100 m2 with these parameters would have an annual return of 4.2%. A second-hand home measuring 100 m2 in the Goya neighbourhood (Madrid) would have a return of around 4.7%.

“Homes in the best locations are the most attractive to rent. They will go up in price and there is no risk of default or lack of demand”, says the real estate consultant José Luis Ruiz Bartolomé. “It is possible that rental prices will also start to rise, although by less that sales prices. The rental margin will narrow, but that is because certainty will increase as well; I do not see that as a bad thing”, he adds.

And in the peripheral areas? “You have to look at where there is more demand than supply”, says Ruiz. Julio Gil, President of the Foundation for Real Estate Studies agrees: “It is the best option for small investors, due to the returns and minimal risk”.

Some properties offer higher yields than housing, such as commercial premises (7.2%) and offices (6.7%), according to Garages yield 4.5%.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Corpfin Launches A Socimi That Will Invest €100M

22 April 2015 – Expansión

New Socimi / The real estate division of the Spanish fund manager has obtained €50 million from individual investors, including one from Abu Dhabi.

A new Socimi is preparing for its stock market debut. Its name is Corpfin Capital Prime Retail Assets, a vehicle created by the real estate division of the Spanish fund manager Corpfin Capital. “Since we created a specialist fund manager for the real estate sector in September 2008, our goal has been to create a vehicle and we think that a Socimi is the perfect formula for our investors”, says Javier Basagoiti, Managing Partner at Corpfin Capital Real Estate.

The new company will, in turn, channel the investments of two other Socimis: Corpfin Capital Prime Retail II (CCPR II) and Corpfin Capital Prime Retail III (CCPR III). The first company was created in September 2013 with capital of €30 million, and CCPR III was launched in 2013 with €20 million from small investors. “We have signed a co-inversion agreement, which gives us greater purchasing power”, says Basagoiti. The €50 million obtained (to date) will be supplemented with bank financing, which has already been committed, to take the total (funds available) to €100 million. “We are not listing to obtain financing, we already have funds. But we want to ensure that our vehicle has the greatest transparency possible”.

Listing on MAB

The new Socimi will make its stock exchange debut on MAB and will be dedicated exclusively to the management of commercial property. “We will not invest more than 15% or 20% of the total in a single asset. We prefer to diversify”.

For its IPO, which is scheduled for May, the fund already has assets worth more than €50 million. “We have already invested 56% of the funds. The objective is to invest 100% before August 2016, but I think we may have completed our purchases before Christmas”. All of the assets are retail premises located on the major streets of large capital cities, such as San Sebastian. In Madrid, they own properties on streets such as Serrano (where they own number 4, which they lease to the firm Hasteens), Fuencarral (where they have numbers 37 and 74), Goya and Velázquez. “The objective is to obtain an annual return of 15%. We are a firm that adds value; we do not buy properties that are already being rented out for a return of 6%, rather we focus on off-market transactions and we (actively) manage our assets”.

Unlike the Socimis that are already listed (on the stock exchange), the share capital of Corpfin Capital Prime Retail Assets will not be owned by large international funds or a single high profile shareholder, but instead by hundreds of smaller investors. “We are not going to have an “anchor” investor. We are a boutique Socimi, which is what our investors prefer”, explains Basagoiti. The contributions to the new Socimi range between €250,000 and €500,000 from small savers and between €1.5 million and €5 million from family offices. “90% of our investors are Spanish but we also have foreigners, for example, one investor from Abu Dhabi, who is contributing just over €6 million”. Moreover, the team at Corpfin Real Estate will also participate in the share capital. “The fund manager will acquire between 2% and ·3% of the Socimi’s capital, as a means of clearly demonstrating our commitment”.

Socimis for the acquisition retail premises is not Corpfin’s only plan. “The idea is to create more specialised listed companies. I think that prime areas in the residential sector are attractive, as are medium-sized retail spaces and offices, but not entire buildings, rather mix-used properties for SMEs.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake