Tag: stock markets

Neinor Plans To Build 400+ Homes/Year In Cataluña

30 April 2017 – El Confidencial

Neinor is the new kid on the block. Cataluña has traditionally been a territory reserved for local, family-owned property developers. However, the crisis of 2009 left a large gap in the market: it swept aside groups such as Promociones Habitat (Figueras) and Espais. And it reduced companies such as Vertix to their knees. Only Núñez i Navarro and, to a lesser extent, La Llave de Oró (Marsá) were able to resist the onslaught. But now, Neinor has arrived. And it not only occupies the podium, its property developments and investments to date already make it the largest property developer in Cataluña. (…).

Neinor has 28 plots of land in Cataluña and has already started construction work on 17 of them, with a corresponding investment of €400 million. These figures place it way ahead of all of the local developers. Sources in the real estate sector indicate that Neinor plans to construct more than 400 homes per year in Cataluña. No other developer will even come close to that pace. Nor did Núñez i Navarro, ever, even at the height of its reign.

Neinor Homes debuted on the stock market in March, with plans to grow a purely residential property development business – a very different initiative from the proposals made by the Socimis. The stock market listing has created a group worth more than €1,300 million, in which the major shareholder is the fund Lone Star, with a 39.5% stake. Moreover, other international funds such as Fidelity, FMR and Invesco have stakes ranging between 3% and 5%. Anglo-Saxon capitalism pure and simple, the complete opposite of the approach adopted by the traditional Catalan property developers, which were always wary of the stock market and its pitfalls.

Now, Neinor forecasts that Cataluña will account for a quarter of its property development activity in Spain. When the 28 developments are underway, Neinor will be building 1,951 units in total in the Catalan market alone.

Of the 880 units up for sale, 668 homes have already been purchased off-plan. In practice, that represents 76% of the total, a very high percentage for the sector, which demonstrates the buyer pressure at a time when demand is a lot higher than supply in Cataluña. According to Tinsa, new house prices rose by 8.2% in the Catalan market during 2016.

Barcelona – unfinished business

Despite this start, the city of Barcelona, with its endemic shortage of land, represents Neinor’s unfinished business. The firm has just one development in the Catalan capital, almost all of which has been sold and completed. (…).

Nevertheless, Neinor is trying to consolidate its position in the city and is currently evaluating several purchases, according to sources at the company.

Given its lack of presence in Barcelona, Neinor is pushing ahead with projects in nearby cities such as Sitges and Sant Cugat. Its most important project is in Plaza Europa, in L’Hospitalet de Llobregat (Cataluña’s second largest city), where it is planning to build two blocks of flats. Like in the case of its other developments, one of those towers has already been sold off-plan.

Second homes

Neinor is also planning to build second homes in Cataluña, like it is already doing in other markets, such as in Málaga. Nevertheless, it wants to limit those projects to 20% of the total volume that it builds in the Catalan market. (…).

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

AC, Hesperia, Piñero And BlueBay All Plan To Launch Socimis

9 February 2016 – Expansion

Following the success of Barcelo and Bay, more and more chains are in the study of creating a listed vehicle and separate property assets from hotel management to reduce risk and free up resources.

Despite the negative start in the stock markets, 2016 could be the year of hotel Socimis. The alliance between Barceló and Hispania to create the listed investment vehicle “Bay”, together with the interest of investors in the hotel sector in the heat of the tourist boom and the recovery of the Spanish demand, have encouraged BlueBay, AC, Hesperia and Grupo Piñero to launch their own Socimis.

In the case of Blue Bay, the plan is well underway and its Socimi could debut on the floor in the first half with four hotels in the Balearic Islands and one in “Costa del Sol“, and a value of between EUR 150 and 250 million. As Antonio Fernandez, Chairman of Armabex and registered adviser in the operation, “the operation of Barceló and Hispania has made both large chains and small and medium-sized family companies reflect.” 
According to Fernandez, “This is the time of hotels, due to real estate valuations, the liquidity in the market and the type of asset. Since they operate with a lease contract, you can capture some of that value as investment. And he adds: “In the coming years, no properties will be sold, but the SOCIMIs themselves”.

So far, the focus of hotel SOCIMIs has been the holiday segment, taking advantage of the excellent moment in tourism – Spain received more than 68 million foreign visitors in 2015 – and visibility, as the resort hotels have signed contracts of several years with tour operators. Thus, all hotels that Barceló transfered to Bay and with which Bluebay will create its Socimi are spread between the Balearic Islands and Andalusia. 
However, this trend might change in the medium term, with the first purely urban hotel Socimis. Meridia Capital works in this line, which could give the shape of Socimi to its fourth fund. The new vehicle specializes in city hotels, located in Madrid and Barcelona and will combine establishments of several chains. The project of Meridia Capital could open a window of opportunity to Hesperia Investment Group and AC, which are also analyzing the creation of their listed vehicle.

Hesperia, an NH shareholder, tried to sell a batch of six hotels during the crisis and transferring the property it would obtain funds to reduce its debt while maintaining the management of the establishments.

This is one of the great advantages for hotel companies. However, in the case of Meliá, the formula has been discarded because the Socimi forces to sign a lease contract and the Escarrer family´s chain guides its growth strategy via management. Nor is it in NH´s radar, since after progressive output deals in recent years, IT only has 13 owned hotels in Spain – out of a total of 79 – including Eurobuilding Madrid or Calderón Barcelona.

By contrast, it does have the door open to replicate the formula in other countries like Mexico – where the equivalent are the fibers, and Greece, but so far these projects have slowed. Likewise, Room Mate chain led by Enrique Sarasola, is planning to ally with a Socimi – in this case, it does not have owned hotels, but simply manage them, or a Reit – as these types of vehicles are known in the US, to boost their growth. In addition to the tax advantages and the distribution of at least 90% of income in dividends for investors, Socimis are a funding formula and make expansion – Barceló used the funds raised with Bay to purchase “Occidental” – and succession in family businesses easier.

Original story: Expansion (by Yovanna Blanco)

Translation: Aura Ree