Tag: strategy

ING Grants €125M Loan To Acciona Inmobiliaria’s Subsidiary

5 January 2016 – Bolsa Manía

ING Commercial Banking has granted a 7-year syndicated loan amounting to €125 million to Compañía Urbanizadora Coto, S.L., a subsidiary of Acciona Inmobiliaria, according to a statement issued by the company.

The loan will be used to finance Acciona Inmobiliaria’s property portfolio, which comprises seven residential buildings, two office buildings and a 50% stake in a shopping centre, all of which are located in the centre of Madrid.

This financing agreement forms part of the framework of the company’s new strategy, which is being led by the new management team that joined Acciona Inmobiliaria in September 2014. Currently, the company’s plans are focused on boosting the profitability of its residential business by joining forces with a leading partner, as well as the possible IPO of its real estate business through its conversion into a Socimi.

The CEO of ING Commercial Banking, Íñigo Churruca, said that with this financing agreement, ING Real Estate Finance “is consolidating its financing strategy to focus on prime assets located in the best areas in Spain and to provide support to real estate companies in the sector, just like it has being doing for the last 20 years”.

In this sense, he confirmed that ING Real Estate Finance was one of the most active financing entities in the Core Commercial Real Estate sector in 2015.

Original story: Bolsa Manía

Translation: Carmel Drake

Lar Buys 3 Stores In A Pamplonese Retail Park For €8.45M

27 July 2015 – Mis Locales

Savills, one of the leading international real estate consultancy firms has advised Värde Partners on the sale of three stores in the Parque Galaria retail park in Pamplona.

The most important operators in the province are located in this retail complex, which includes brands such as Media Markt, Leroy Merlin, Conforama and Kiaba, as well as the E.Leclerc hypermarket and the La Morea shopping centre, which is regarded as one of the 20 best shopping centres in Spain with tenants such as Primark, Zara, H&M, C&A, Cortefiel and a 12-screen cinema.

Salvador González, Head of Retail Investment at Savills, said that “this transaction forms part of Värde Partners’ strategy to divest its non-strategic assets, and also gives Grupo Lar the opportunity to increase its portfolio of retail premises, whereby raising its profil in the retail park sector”.

Original story: Mis Locales

Translation: Carmel Drake

Merlin Generates Profit Of €19.6M In Q1 2015

14 May 2015 – Expansión

The Socimi Merlin Properties, which commenced its activity on 30 June last year, generated a profit of €19.6 million during the first quarter of this year.

The company recorded a gross operating profit (EBITDA) of €29.7 million and achieved turnover of €32.5 million, according to accounts filed with Spain’s National Securities Market Commission (CNMV).

At 31 March 2015, the company’s real estate portfolio contained 902 assets, which had a combined gross leasable area of 716,826 square metres.

The average occupancy rate of these real estate assets was 96.5%, with an average return of 5.8%.

During the first three months of the year, Merlin Properties completed the purchase of an office block in Madrid and a logistics warehouse in Coslada (Madrid) for a total price of €57.9 million.

Looking ahead to the next few months, Merlin plans to intensify its strategy to acquire real estate assets in the office, retail and logistics segments, now that it has closed its capital increase, which contributed €613.8 million of own funds to the company; the new shares began trading on Wednesday.

In fact, on 17 April, the company acquired a logistics warehouse in Meco (Madrid), from the real estate management company Kefren Capital Real Estate (KCRE) for €22 million. The warehouse measures 35,285 square metres and is leased to Azkar (a subsidiary of Dachser).

The listed real estate investment company (Socimi) Merlin Properties expects to purchase assets amounting to between €50 million and €150 million during the second quarter of the year.

Original story: Expansión

Translation: Carmel Drake

Santander & BBVA Reduced Their Real Estate Stock In 2014

10 February 2015 – El Economista

In 2014, Santander’s real estate stock decreased by 1.8% and BBVA’s dropped by almost 5%.

Banco Santander and BBVA are beginning to shed some real estate weight. For the first time, the economic recovery has allowed the two large banks to reduce their portfolios of homes and land foreclosed from developers and individuals for the non-payment of debt.

The two largest financial groups in the country have managed to halt the entry of property onto their balance sheets and accelerate its exit, thanks to a boost in sales. Thus, the Cantabrian group has decreased the gross value of its real estate portfolio by 1.8% to €7,851 million. After accounting for provisions, which reflect current market prices, this value decreases to just over €3,500 million.

Meanwhile, the bank chaired by Francisco González has reduced its stock by 4.9% to €13,016 million. After applying the appropriate provisions, the value of its real estate portfolio amounts to €6,131 million.

Boost in sales

This decline in the assets of the two main entities has occurred at a time of stability in terms of prices, which seem to have bottomed out having decreased by 40% in the last seven years. This, coupled with the high provisions, which cover between 53% and 55% of the gross value of the assets, has allowed both entities to sell assets, above all, during the second half of last year, without incurring any additional losses.

The increase in the sale of properties and, even some land, also coincides with the war in the mortgage segment that was unleashed in 2014. The entities have launched campaigns to offer loans at the most attractive prices to enable borrowers to purchase homes, including from their own portfolios.

Different strategy

Santander and BBVA’s real estate strategies are different, but both are now starting to bear fruit, after years of burgeoning portfolios of foreclosed assets as developers and families found it impossible to pay their debts.

Santander, like many other Spanish banks, has transferred the management of these assets to Apollo. The Cantabrian group sold 85% of its real estate platform Altamira to the fund, and whereby achieved significant gains with which to strengthen its capital and transfer the management of the entire stock to a specialist company, which has also just been awarded the management of a portfolio by the bad bank or Sareb for the next few years.

BBVA’s plan is different. The entity, headquartered in Bilbao, has preferred to keep the management of all of its unproductive assets in-house, through its subsidiary Anida.

Although prices have now stabilised and the banks are now making some money on the majority of sales transactions after accounting for provisions, the real estate arms of both banks are still weighing down on their income statements. These divisions include not only foreclosed homes, but also loans granted to companies relating to the real estate sector. In the case of Santander, the real estate department recorded losses of almost €600 million in 2014, 8.2% less than in 2013. BBVA recorded losses of almost €800 million.

Both banks hope that these divisions will begin to generate some kind of positive yield within two years and they expect their respective stock balances to have disappeared or been reduced to an absolute minimum within five years. The decreases were more pronounced (in the double digits) in the case of loans to developers than properties due to the divestments performed in the wholesale market.

Original story: El Economista (by F. Tadeo)

Translation: Carmel Drake

Sareb’s Board To Meet Today To Review Its Annual Accounts

28 January 2015 – Expansión

The meeting of Sareb’s supervisory body will be chaired by Jaime Echegoyen for the first time today. He is expected to explain the key aspects of the company’s  strategy for the year ahead

Jaime Echegoyen will chair the meeting of Sareb’s Board of Directors today following his appointment to replace Belén Romana at the helm. The meeting has been in the diary for a while, since it is an ordinary meeting, and one of the items on the agenda is the review of last year’s annual accounts, which cannot be closed yet, in the absence of the official Accounting Circular. The Circular should establish, amongst other things, the review criteria for the valuation of the bad bank’s assets and the provision requirement for the possible impairment of the company’s balance sheet. Prior to the Board meeting, the Audit Committee and Appointments Committee will both hold meetings, as always.

The members of the Board will conduct a preliminary analysis of the year end accounts, although the company has until 31 March to approve them. Sources close to Sareb indicate that the company’s activity during the course of 2014 met with the objectives set out in its strategic plan, thanks mainly to a boost in sales to individuals, but also due to the sale of a few property portfolios to large investors, especially during the latter part of the year. As a result, the company’s gross operating profit (EBITDA) was significant. During the first half of the year, Sareb recorded EBITDA of €429 million.

The problem with finalising the accounts at the profit/loss level is that the criteria for the provisions to be applied is not yet known and since the State Council has not yet ruled on the Circular, it is not known whether the Bank of Spain will again impose the requirement to provide for a specific portfolio of assets, as a preventative measure.

In 2013, it ruled that the portfolio of participatory credits should be cleaned up, which resulted in Sareb recording a loss of €269 million.

The new Chairman is expected to share his views about certain key issues with the Board, including whether he will appoint a new CEO or return to the initial structure of an Executive Chairman and one (or more) Director Generals. It seems, at least initially, that he will opt for the former option. He is also expected to inform the Board about the progress of the transfer of information about the assets that new managers will administer going forwards. Currently, there is a transitional regime in place, whereby the ceding companies continue to manage the assets.

Furthermore, Echegoyen must decide whether Sareb will continue to focus on individual sales, as it has done to date, which generate more revenue, or whether it will focus on the sale of portfolios (something that was mainly done at the end of last year to balance the budget) in order to accelerate divestments during the course of the year. All of this will form part of the strategic plan to be developed.

Original story: Expansión (by S. Arancibia and J.Zuloaga)

Translation: Carmel Drake