Centricus Rethinks its Potential Acquisition of Haya Real Estate

2 December 2019 – Softbank’s Centricus investment fund is rethinking its expected acquisition of Haya Real Estate from Cerberus. The US firm originally valued Haya at one billion euros, though it dropped its asking price due to doubts regarding Haya’s contract with Sareb.

Despite Haya’s success in renewing its management contract with the bad bank, Haya’s revenues could still be reduced by 50%. Sareb also reduced the agreed-upon fixed fees and payments in return for variable payments. At the same time, Softbank as recently needed to inject large amounts of funds to save its investment in the troubled WeWork.

Original Story: Eje Prime

Adaptation/Translation: Richard D. K. Turner

The Fund Centricus Enters the Bid to Buy Solvia

28 November 2018 – Expansión

A candidate with an exotic air about it has entered the auction for Solvia, the real estate subsidiary controlled in its entirety by Sabadell. The fund Centricus, which is headquartered in London but which has several Chinese and Japanese shareholders, has submitted a binding offer to acquire Sabadell’s asset management platform, according to sources familiar with the process.

Official sources at the bank preferred not to comment in this regard. Centricus wants to enter the Spanish market to compete with the large investment funds specialising in asset management, such as two of the other players interested in Solvia: Cerberus and Intrum, formerly Lindorff.

Centricus manages assets worth more than USD 20 billion and has worked together with the Japanese giant SoftBank to raise funds amounting to USD 100 billion at the international level.

Asian alliances

The British fund also recently joined forces with the Chinese companies China Merchants Group and SPF Group to launch a USD 15 billion fund to invest in technology companies.

Centricus, Cerberus and Intrum have all submitted binding offers for Solvia amounting to more than €300 million. According to sources close to the operation, one of the funds has even offered an amount close to the €400 million that Sabadell aspires to receive. The bank has awarded the mandate to divest Solvia to Alantra.

Sabadell activated the sale of its real estate platform after cleaning up €11.5 billion in toxic assets from its balance sheet. At that time, it preferred to not sell Solvia, like the majority of its competitors did, to try to maximise its revenues. The bank considers that the real estate platform has significant latent profits. Cerberus could be the favourite in the contest since it is now holding advanced conversations with the entity.

Natural buyer

The US fund is the “natural” buyer for Solvia, say financial sources. In fact, during the summer, Cerberus acquired two large portfolios of foreclosed properties from Sabadell (Challenger and Coliseum), with a combined gross value of €9.1 billion.

Sabadell wants to sign the sale of the real estate platform before the end of this year to have its balance sheet free of property remnants. Solvia manages 148,000 assets, with a value of more than €30 billion. In parallel, the bank has also placed up for sale its property developer subsidiary, Solvia Desarrollos Inmobiliarios. The completion of that operation has been delayed until the beginning of 2019.

Original story: Expansión (by R. Sampedro)

Translation: Carmel Drake

WeWork, The Co-Working Giant, Arrives In Spain

13 September 2017 – El Español

The co-working space giant WeWork, which is worth around $22,000 million, has finally arrived in Spain. And it already controls two offices in Barcelona and Madrid. The latter is going to open first, with a hosting service for small companies and independent professionals.

The offices in Madrid are located on Paseo de la Castellana, 43. This 9-storey newly-renovated office building, with a surface area of 6,000 m2, is owned by Colonial and used to house the headquarters of the consultancy firm PwC and also of Abengoa (which moved out in July 2016 to cut costs).

WeWork is not yet offering on its website the space that it has available in Barcelona. According to Ejeprime, it signed an agreement with the Catalan group Castellví in July to occupy a building in the 22@ district, where many of the main technological companies are concentrated.

The strategy that WeWork has adopted for its arrival in Spain is similar to the one that it has implemented in other markets: it does not own any real estate properties outright but rather reaches long-term agreements to lease them. Nevertheless, in May, it signed an alliance with an investment firm with the aim of acquiring real estate assets.

Who is WeWork?

WeWork is a project born in 2010 that offices flexible work spaces for workers. In Madrid, its launch prices start at €250 per month (in the case of individual desks for workers) and range up to €14,500 for private offices with up to 50 desks.

The company, which has a presence in another 17 countries, has raised more than $4,400 million, with investors ranging from fund managers, such as Fidelity and T Rowe Price, to banks such as Goldman Sachs and JP Morgan.

The most recent capital injection was received in August. In total, $4,400 million was contributed by the Japanese technological and telecommunications giant Softbank.

There has been debate over the valuation of the company in recent months. The $20,000 million figure represents 20 times its forecast revenues for 2017. That is much higher than those of its competitors such as Regus. The reason? It is not only a business that is growing quickly (by more than 80% if the forecasts for 2017 are fulfilled, according to CBInsight, with $1,000 million of revenues), but also because of its projection as a expert in how companies work with access to a vast quantity of data, as the magazine Wired pointed out in a recent report.

How does WeWork work?

The company has already created a Spanish company: WeWork Community Workspace SL. It was constituted at the end of June and its administrators include Mike Nolan, the company’s Head of Global Business Planning and Abraham Safdie, Vice-President of the International Business.

Its tax structure is very similar to that of other companies in the sector, such as Uber and Yahoo: the parent company that controls the subsidiary, WeWork Companies International BV, has its centre of operations in the Netherlands, a country with a very favourable tax regime and used by multinationals to reduce their tax bill.

Original story: El Español (by J.M.G)

Translation: Carmel Drake