Patrizia is On The Hunt for New Purchases in Bilbao, Sevilla & Valencia

10 December 2018 – Eje Prime

Patrizia Immobilien is confirming its interest in the Iberian real estate market. The German investment manager, which has been present in Spain and Portugal since 2015, has set itself the short-term objective of entering Bilbao, Sevilla, Valencia and Oporto, through the purchase of new assets, according to comments made by Borja Goday, the Director General of the company in the Iberian Peninsula, speaking to Eje Prime.

Until now, the company has invested €870 million in total in real estate in the Spanish and Portuguese markets. Madrid, Barcelona, Málaga and Lisbon are the cities in which Patrizia is already present, “with minimum investments of €15 million but where that figure could exceed €500 million if the operation is worth it”, explained the executive.

In fact, the manager participated in the process to acquire one of the office buildings that comprise the Cuatro Torres Business Area in Madrid. Moreover, the company not only invests in the office segment, it is also committed to other markets such as the residential, retail, hotel, logistics and alternative asset segments (including student halls, complexes for the elderly and parking spaces).

Currently, Patrizia’s asset portfolio in Spain includes Serrano 90, located on Madrid’s golden mile and Gran Vía 21, also in the Spanish capital, which houses a hotel and a retail premise. Nevertheless, the latest major operation by the manager on the peninsula was the purchase of an industrial plot spanning 66,424 m2 in Toledo for €37.5 million. The other three logistics platforms that the company owns in Spain are located in Madrid and Barcelona.

Patrizia and its great interest in Spanish property

With its headquarters in Madrid and a staff of eleven, Patrizia arrived in Spain just three years ago. “At the end of 2017, we purchased Triuva and Rockspring, two companies that already owned assets on the peninsula”, explained Goday, who added that “the rapid growth of the group in both the Spanish and Portuguese markets is due to those two acquisitions”.

“Spain is still an attractive market, we still have demand and that is why we are launching new operations on such a frequent basis”, said the director. Since the beginning of the year, the manager has been on the hunt for capital from Spanish institutional investors, although, as Goday explains, it is not an easy task, since “they do not invest from one day to the next”.

One of Patrizia’s other plans on the peninsula is to strengthen its presence in the rental market. “It is a segment that we like a lot and for that reason, if we find an appropriate residential or office building, then we would not rule out buying it”, explained the executive. Nor does the group rule out alliances with Socimis or the acquisition of a property developer to grow in the Spanish residential sector. In this sense, Goday says that “a good opportunity has not presented itself yet” and that “it would all depend on the quality and location of the land that they own”.

Patrizia is currently present in more than twenty European countries, including, besides Spain and Portugal, important markets such as Italy, France, the United Kingdom, Ireland, Belgium and Luxembourg. The group’s main focus of activity is Germany, where it launched its activity 32 years ago and where it is a listed company (…).

Original story: Eje Prime (by B. Seijo)

Translation: Carmel Drake

Savills & HomeAway: Spain is the Most Attractive Market for Buying a Second Home

29 September 2018 – Finanzas.com

According to an international study compiled by the real estate consultancy Savills and HomeAwayTM, a global expert platform for holiday rentals, Spain is the most attractive destination for investing in a second home, according to 19.3% of those surveyed, followed by Portugal (13.2%) and France (13.1) in third place.

Spain is attractive for overseas investors

According to the survey, 44% of owners of second residences in Spain are foreigners. The main countries of origin of those owners are the United Kingdom (19%), Germany (12%), The Netherlands (4%), France (3%) and Belgium (2%). The remaining 56% of owners are Spanish.

The main areas where second homes are located in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%).

Where are they buying homes?

People’s behaviour when it comes to acquiring a second home is different depending on where the buyers come from. The study reveals that British and Dutch owners are those who buy the most second homes outside of their own countries, nevertheless, Spaniards, Italians and Portuguese citizens tend to choose their own countries as the destination for acquiring second homes (around 95%).

Second homes: for personal use and to rent

According to the study, 28% of Spanish owners cover some of their expenses with revenues generated from the rental of their properties and 38% obtain a profit.

Summary of second homes in Spain

The average price of the second homes acquired last year by the Spanish owners surveyed amounted to €245,000, 22% lower than the average acquisition price ten years ago. Moreover, 28% of those surveyed confirmed that they personally financed the acquisition of their second home, 52% acquired it using a mortgage and 8% inherited or were gifted the property.

In the same vein, Spanish owners of second homes obtain an annual income of €12,000 (from their properties) and they rent them out for 19 weeks a year, on average. 43% of owners had the same number of reservations in recent months as they did during the same period a year ago, 41% had more reservations and 16% had fewer.

Second homes, with some specific characteristics

Two-bedroom apartments are the most popular types of second home for the Spanish owners surveyed.

Features that owners are looking for when it comes to buying a second home include: proximity to restaurants and bars (88%), a balcony or terrace (88%) and proximity to the supermarket and shops.

According to Juan Carlos Fernández, Director General for Southern Europe at HomeAway: “The fact that Spain is the most attractive destination for foreigners looking to buy a second home indicates that Spain is a robust market that is very attractive to investors and that is something that we must take care of and promote”.

Owner profile

  • Average age when they acquired the property, in 2017: 51 years old
  • Average number of weeks leased during the year: 19 weeks
  • Typical property type: 2-bedroom apartment
  • Average acquisition price in 2017: €245,000.

Original story: Finanzas.com

Translation: Carmel Drake

Savills & HomeAway: 60% of Second Homes are Bought to Let

17 September 2018 – Eje Prime

Buying a second home with the objective of putting it up for rent. Currently, that is the main reason why more than 60% of owners around the world acquire an asset of that kind, according to a study prepared by Savills and HomeAwayTM.

“In a low-interest rate environment, investors look for assets that generate income”, says Paul Tostevin, associate director at Savills and the person responsible for the report. The situation has changed in recent years, given that, for example, at the beginning of the 2000s, only 14% of second homes were purchased with the objective of letting them and not for personal use. During the credit crisis, that figure increased to 19%.

The average purchase price of a second home in the Spanish market was €245,000 in 2017. Nowadays, almost 40% of owners obtain profits from their properties and approximately 30% partially cover the expenses associated with the asset.

In terms of the location of the asset, less than 5% of the second homes owned by Spaniards are located overseas. The main regions where they do own second homes in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%). The increase in the arrival of international tourists in recent times has caused the owners of these homes to lease them more frequently to be able to obtain income.

In terms of the rest of Europe, the study reveals that Brits purchase the most second homes outside of their own country. Only 24% of their properties are located within the United Kingdom, 19% are located in France and 16% in Spain.

Original story: Eje Prime

Translation: Carmel Drake

German Fund Manager Aquila Capital Launches its own Property Developer in Spain

1 August 2018 – El Economista

The German fund manager, Aquila Capital, is demonstrating its commitment to Spanish property by launching a new property developer called AQ Acentor.

Until now, the firm has worked in Spain by delegating its development activities and in partnership with other real estate companies such as Inmoglacier, with which it has undertaken several projects. “The strategic partnership with the property developer has been positive and has resulted in the construction of three successful real estate developments, which have contributed to Aquila Capital’s expansion plans in the Spanish market under its own brand, AQ Acentor”, explains Sven Schoel, CEO of the German manager in Spain.

Aquila has been operating in Spain since 2014, focusing its business on the real estate sector, with projects worth more than €800 million. With the creation of this new brand, the firm has incorporated a management team to boost growth through in-house development.

AQ Acentor has been created with more than 3,000 new homes under construction, of which around 500 will be handed over during the course of this year. Currently, the firm is working on residential projects in metropolitan areas, primarily in Madrid, Barcelona, Málaga and Valencia.

“The company has a multidisciplinary team comprising more than 40 professionals located in offices in Madrid, Barcelona and Málaga”, explain sources at the firm.

“The creation of AQ Acentor responds to our firm commitment to the Spanish market and is backed by a pipeline amounting to €1 billion over the next five years”, specifies Schoel.

The manager is also present in the logistics market in Spain, one of the other real estate segments that is experiencing a boom, besides the residential segment. In that case, it has launched an investment plan amounting to between €350 million and €400 million for the Iberian Peninsula and Italy.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Spain’s New Gov’t to Promote Construction of 20,000 Affordable Homes for Rent

12 July 2018 – El País

The Ministry of Development is preparing an ambitious range of measures to increase the supply of rental homes, put a stop to escalating prices and facilitate access to housing for young people and low-income families. Its proposals include a plan to build 20,000 rental homes, which will be allocated at controlled prices in cities where prices have soared, according to sources speaking to El País. Moreover, the Ministry wants to extend the duration of rental contracts from three to five years, limit damage deposits and stimulate the supply of rental housing with tax incentives and the moderation of rents.

More funding, regulatory changes and a tax reform are the three components of a broad plan through which the Ministry of Development says it wants to give a social twist to the housing policies and whose main lines will be announced in Congress today by their owner, José Luis Ábalos. The objective is to avoid a new housing price bubble from destabilising the economy once again, according to government sources, and, in particular,  to help families with limited resources and young people.

The package includes urgent measures aimed at alleviating the increase in rental prices, which have soared by up to 50% in large cities over the last four years due to the emergence of tourist apartments and the reactivation of the real estate market. The Government is going to launch an inter-ministerial working group tasked with developing a set of urgent policies for housing and rent.

Amongst the initiatives that the Ministry of Development is going to implement is a plan to build 20,000 affordable rental homes over the next four to six years. The State will promote the construction of these 20,000, mostly public, homes (although this has not been finalised and all of the possible formulae are going to be considered because the most important thing is for the homes to be built quickly). The homes will be destined for rent or transfer of use, for an indefinite period, with a limited rent or price, in cities with accredited demand and where rental prices are higher.

Palma de Mallorca, Las Palmas, Barcelona, Valencia, Madrid, Málaga, San Sebastián and Sevilla are the cities that have experienced the largest increases in rental prices over the last four years, which have risen by up to 50% on the islands, according to data from Idealista.

Last year in Spain, work was completed on 48,853 private homes and 4,938 social housing properties, according to data from the Ministry of Development. At the height of the real estate bubble, in 2007, almost 650,000 homes were being constructed per year.

The plan will be carried out in collaboration with autonomous communities and town halls, which will be asked to identify and facilitate the most appropriate plots of land on which these housing developments can be built. The State will involve SEPES, the public land entity, in this program and will contribute its own momentum and financial support. The ICO will also play a role in the design of the policies (…).

Original story: El País (by Elsa García de Blas)

Translation: Carmel Drake

Eurostat: House Prices Rose by 6.2% in Spain in 2017

11 July 2018 – Eje Prime

The acceleration of the housing market has placed Spain amongst the leading countries in Europe in terms of price rises. In fact, in just one year, the country has risen from 21st position, with an average increase of 4.6% in 2016, to 12th , with an average increase of 6.2% last year.

In 2016, Spain already exceeded the average rise for the European Union as a whole, which amounted to 4.6% at the time, but in 2017, it distanced itself further from the average, moving closer to the group of countries with the highest rises in prices: whilst in Spain, the increase amounted to 6.2% in 2017, the average rise for the European Union as a whole was 4.4%.

Spain outperformed Austria, where prices rose by 8.5% in 2016 (in 2017, they only increased by 5.3%); Norway, which went from an increase of 7.9% in 2016 to 5.4% in 2017; and the United Kingdom, where house prices increased by 7% in 2016 and by 4.5% in 2017.

Iceland, the Czech Republic and Ireland were, in that order, the three markets where house prices rose by the most in 2017, with rises of 19.5%, 11.7% and 10.9%, respectively. Iceland was the only country to feature in the top 3 in both years; in 2016, it was joined by Hungary and Sweden.

Several countries from Eastern Europe, such as Lithuania, Latvia, Bulgaria, Slovenia and Hungary (with high volatilities in terms of the evolution of house prices) were amongst the most inflationary in terms of house prices in 2017, together with countries in Western Europe, such as Portugal, where prices rose by 9.2%; the Netherlands (7.5%) and Sweden (6.4%).

At the opposite end of the spectrum, the only European country where house prices decreased in 2017 was Italy, with a reduction of -0.8%. It was accompanied by moderate price increases in Finland (1.6%), Cyprus (2.2%), France (3.6%) and Croatia and Poland (both 3.8%).

The figures from Eurostat, the European Union’s statistics office, include purchase prices of new and second-hand homes. According to the EU entity, these prices “have fluctuated significantly since 2006”. “The annual growth rate in the European Union as a whole was close to 8% in 2006 and 2007, followed by decreases of 4% as a result of the financial crisis”, it continued.

Prices started to increase in 2014, with an average cumulative rise across the whole of the European Union of 11% between 2010 and 2017, and of 6% in the Eurozone during the same period, according to Eurostat. In the case of Spain, despite the increases in recent years, the country has registered a cumulative decrease of 17% since the start of the century.

Original story: Eje Prime (by Christian de Angelis)

Translation: Carmel Drake

Alantra Creates Leading European Advisor for Sale of Toxic Asset Portfolios

12 July 2018 – Expansión

Alantra has just signed a document that is going to make it the leading advisor to banks in Europe for the sale of toxic asset portfolios. The deal was signed yesterday in London and involves the purchase of KPMG’s international business specialising in those kinds of bank cleanups. The team comprises more than 35 professionals, mainly seniors, who will move across to form part of Alantra and who will take with them the sales mandates, worth €16 billion, that they are working on at the moment, according to sources at the firm.

After almost a year of negotiations with KPMG, the division is finally going to join forces with the investment banking team led by Santiago Eguidazu (pictured above) to create a new company with more than 75 professionals. The new company will be a subsidiary of Alantra and will be dedicated to advising banks regarding the best exits options for their portfolios of non-performing assets.

To date, Alantra has advised 80 operations in this business across five countries since 2014, for a total nominal value of more than €65 billion. Meanwhile, KPMG’s team has advised on more than 100 transactions worth €180 billion during the same period. The resulting company has averaged 45 transactions per year for the last four years and has advised an operation volume of more than €61 billion. The transaction will involve a cash disbursement for the Spanish firm of €2.83 million.

Banks and funds

The new division will be particularly active in the medium-sized transaction market generated by both banks and funds. The focus will be primarily on Europe, but also other countries around the world where the firm has a presence. In its activity, Alantra will compete above all with PwC, the other major player in the European portfolio business alongside KPMG, and with the US giants Morgan Stanley and Goldman Sachs for the largest contracts.

KPMG’s international team is headquartered in London, with local offices in Milan, Athens, Dublin and Lisbon. Alantra adds Madrid to that list, from where it has organised its global coverage of the portfolio business to date, which has seen it advise operations not only in Spain but also in Portugal, Italy, Greece and Eastern Europe.

The team at Alantra has been responsible for the sale of portfolios by almost all of the Spanish banks, ranging from Sabadell (with which it is working at the moment) to Santander, and including BBVA, CaixaBank, Bankia, Liberbank, Ibercaja and the domestic subsidiary of Deutsche Bank.

The current Head of Alantra’s Portfolio Business, Joel Grau, will lead the new subsidiary, together with Andrew Jenke and Nick Colman, from KPMG.

Global advice

Between the three of them, they will pursue the objective of replicating on a European scale the model that Alantra has been adopting in Spain, and which is based on providing global advise to banks from three perspectives: corporate operations, real estate (large properties and loans from financial entities, as well as those relating to shopping centres and hotels) and portfolios of toxic assets, according to sources at Alantra.

They will operate from two main centres: Madrid and London, where many of the funds that buy the banks’ portfolios are located and thanks to which the business is expected to soar, by reselling financial assets acquired or securitising them to put them on the market.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

CBRE: Hotel Investment Plummets by 55% in H1 2018 to €960M

6 July 2018 – Eje Prime

Investment in the hotel sector is dropping down a gear in Spain. Despite the significant growth in tourist rates, investment in the Spanish hotel sector fell by 55% during the first half of 2018 with respect to the same period last year, down to €960 million.

Assets for vacation use accounted for 78% of the total amount disbursed in the sector, which continues to be one of the most sought-after in the world, according to a report from CBRE.

Data from the consultancy firm also highlight that institutional investors are responsible for the majority of the market, accounting for 43% of the spending in Spain between January and June, followed very closely by the hotel groups themselves, with 40% of the market. Family offices only accounted for 12% of operations.

With respect to the first half of 2017, the main changes that CBRE has noted in its report about hotels is the decrease, of up to 90%, in terms of investment undertaken in Barcelona and Madrid. This fact has resulted from a significant decrease in capital investment in urban assets, which decreased from 54% last year to 22% during the first half of this year.

Moreover, three-quarters of the transactions that were undertaken during the first half of 2018 corresponded to the sale and purchase of individual assets, compared with 25% of operations that involved portfolios.

The main investments signed in the Spanish hotel market were Portfolio Alua, for an approximate sum of €165 million; the Ritz Carlton Abama and the Costa del Sol Princess, whose amount was not disclosed; and the €63 million that was disbursed for IFA Interclub Atlantic.

“Interest in the Spanish hotel market has not diminished but it is true that the increase in asset prices and the shortage of opportunities is shifting the focus of investors to secondary destinations, which, also, have performed extremely well in recent months”, explains Jorge Ruiz, National Director of Hotels at CBRE in Spain.

Original story: Eje Prime

Translation: Carmel Drake

Corestate Finalises More Land Purchases in Spain

25 June 2018 – Eje Prime

Corestate wants its share of the student resident cake in Spain. The Luxembourg-based fund manager is finalising the purchase of new plots of land in the country, at the same time as it is starting to search for new opportunities in Portugal, according to explanations provided by the company’s most senior executive in Spain, Christopher Hütwohl. Corestate’s objective is to be ranked as one of the Top 3 operators in the sector by 2020.

The group is whereby seeking to fight off competition from companies such as Greystar, currently number one in the sector by number of beds following its acquisition together with Axa Real Assets and CBRE Global Investment Partners of Resa’s portfolio (formed by 37 assets) for €500 million. Another prominent operator is GSA, which acquired RIO’s portfolio for €180 million.

Corestate, which managed assets worth €22 billion at the end of the first quarter, is now launching new land acquisitions to build halls of residence for students, which will be added to the 206 beds that it is going to open in the Madrilenian district of Moncloa in September and the more than 300 that it will incorporate in Sevilla following the purchase of a plot of land in May.

According to Hütwohl, the company is currently finalising the acquisition of another plot on which it will build 400 beds and is “analysing four more plots” for 700 beds. Thus, Corestate’s plans include closing 2018 with more than 200 beds in Madrid and reaching 1,000 beds by 2020, which, according to Hütwohl “would place us as one off the Top three players in Spain”.

In parallel, the company has started to analyse its entry into Portugal with its business model. According to the head of Corestate, the fund is looking for opportunities in cities such as Lisbon, Porto and Aveiro.

The company is looking for plots on which to build with sizes that depend on the sizes of the halls of residence that they want to build, provided they are located in university cities. Nevertheless, Hütwohl warns that the “minimum size to achieve efficient management is 200 beds”.

“The student residence sector is becoming increasingly more competitive in Spain and we do not want to miss out on the opportunity and the advantage that our international knowledge affords us”, says the group’s executive in Spain (…).

Original story: Eje Prime (by P. Riaño)

Translation: Carmel Drake

Savills IM: Inv’t of €500M per Year Until 2022 Following Purchase of Aguirre Newman

26 June 2018 – Eje Prime

Savills Investment Management (Savills IM) is getting its chequebook out in Spain. The fund manager of the real estate consultancy firm is looking for new investments in the country six months after integrating Zaphir Asset Management into its structure under the framework of the acquisition of Aguirre Newman by Savills. Savills IM’s plans involve investing €500 million per year in Spain until 2022.

According to explanations provided by Fernando Ramírez de Haro, Director of the Savills IM office in Spain, speaking to Eje Prime, the fund manager forecasts building an asset portfolio on the Iberian Peninsula worth €2 billion, up from its current value of €480 million.

The company is now starting an ambitious positioning strategy in Spain, “having completed the integration of Zaphir”. Ramírez de Haro, who leads Savills IM’s office following the corporate operation, served as the Director General of Zaphir since 2007. Savills announced the acquisition of Aguirre Newman in July last year, but the operation was not completed until December when Savills IM integrated Zaphir.

The company is currently analysing investments worth €750 million in Spain, although the group is also considering entering the Portuguese market. Even though in 2017, the company’s most active markets were the United Kingdom, Italy and Japan, the forecasts of Ramírez de Haro indicate that Spain will become the fourth most important European market for the group, behind the United Kingdom, Italy and Germany.

Savills IM’s current portfolio in Spain comprises thirteen assets or projects. Half of them correspond to investments in offices, 25% to retail, 17% to residential and 7% to logistics, according to Ramírez de Haro. One of the most recent operations signed by the group was the purchase, in May, of a hypermarket operated by Eroski in San Sebastián for €48 million.

The executive maintains that the company is looking for opportunities across the four segments, especially in retail and offices. “I do not want to say that logistics is not important, it is and very much so, but it is the segment that is suffering from the most acute shortage in terms of supply”, he said. “In terms of retail, a negative vision is coming from the USA, but for us, that is not the case, provided you look for assets that are not so dependent on online sales, such as retail parks, high street stores, outlets and shopping centres linked to food”, he maintains.

Savills IM combines three types of operations: the first is the management of funds raised in Europe (especially in Germany): the second involves the mandates of global investors; and the third is to support value-added funds in their investments in Europe. Whilst in the first case, the average investment in terms of own funds is between €20 million and €80 million, international mandates tend to be upwards of €100 million and value-added operations typically range between €15 million and €100 million.

The fund manager has a workforce of sixteen people in Spain, fifteen of whom come from the former Zaphir structure and one from Savills IM. The group expects to have 22 employees in five years time.

On the global stage, Savills IM has a workforce of 300 employees and eighteen offices. In 2017, the group recorded transactions worth €5.5 billion: €4.5 billion in Europe and €1 billion in Asia. The company plans to spend €1 billion in own funds in 2018 for the acquisition of new assets in Europe and Asia.

Original story: Eje Prime (by J. Izquierdo & P. Riaño)

Translation: Carmel Drake