Tag: structure

The Venezuelan Capriles Family Creates a Socimi: Kowo Real Estate

26 October 2018 – Idealista

Increasingly more families are deciding to channel their investments in property through Socimis. Whilst in August, it was the Koplowitzs who decided to create their own investment vehicle using that structure, now, it is the Venezuelan Capriles family that is throwing itself into the real estate market with its first Socimi, Kowo Real Estate, according to explanations provided by sources in the sector speaking to Idealista News.

In recent years, the Capriles family has become one of the most active in terms of investment in luxury housing through the company Gran Roque Capital. On its shoulders stand the recovery of three developments in Madrid, in the Chueca area (two on Calle Fernando VI and the other on Calle Barquillo). At the end of last year, the company started to market homes on Calle Pablo de Aranda in the El Viso area with the aim of reaching €11,000/m2.

Now, the company is pushing ahead with one of the vehicles of the moment in the real estate sector. The businessman Miguel Ángel Capriles has launched Kowo Real Estate Socimi, with the aim of buying and developing real estate assets of an urban nature for their subsequent rental.

But this is not the first time that the company has considered launching a Socimi. At the beginning of this year, the family announced that it was finalising the constitution of a Socimi to position itself as a leader in the tourist accommodation segment The initial investment in that project amounted to €40 million, according to the business plan provided by Edric Capriles.

The Bluemoon apartments are owned by that Socimi, according to reports from La Celosía. They are located in the El Carmen neighbourhood of Valencia, a stone’s throw from the cathedral and its first commitment in Spain. The company invested €5 million in that aparthotel, comprising homes for tourist use of a residential nature. In addition to Valencia, Málaga and Sevilla are also in the spotlight of the Venezuelan investors.

The real estate business of the Capriles family in Spain comprises luxury housing development and renovation projects. Its corporate network in Spain contains more than twenty companies dedicated to real estate development (Craski Inversiones, Madriski Inversiones…), the sale and purchase of real estate assets on their own behalf (Gran Roque Capital and Invecap Inversiones Inmobiliaria) and the rental of real estate assets (MACL Castellana 56).

Between them, all of those entities own total assets worth €125 million. Invecap Inversiones Inmobiliarias is the most important entity, with total assets of €53.3 million and from which almost all of the other entities depend. The latter, moreover, is the sole shareholder of the recently created Socimi.

Original story: Idealista (by Custodio Pareja)

Translation: Carmel Drake

CV Grupo Debuts First Spanish Socimi on Euronext

17 September 2018 – Expansión

Salvador Vila Arcos and the Copoví Ridaura brothers have created Logis Confort, which owns seven industrial buildings in Valencia and Madrid, and they have opted to debut the entity on a secondary French market in light of the more onerous demands of the MAB.

One of the main developers of industrial warehouses in Valencia, CV Grupo, has converted its firm Logic Confort into the first Spanish Socimi to list on the Euronext Access market in Paris. The firm has opted for that secondary French market due to its less onerous requirements and its greater flexibility with respect to the Spanish Alternative Investment Market (MAB).

Logis Confort groups together seven industrial properties that the company leases, mainly in Valencia plus one in Madrid. The assets are worth €15 million. The firm started to trade in July with a benchmark price for its shares of €2.20, which represents a company valuation of €11 million. Although its corporate headquarters are located in Madrid, its three shareholders are from Valencia. The main shareholder is Salvador Vila Arcos, who owns 50% of the firm and is the owner of several firms that operate under the CV Grupo brand, with which it has developed and constructed some of the Ford suppliers’ park in Almussafes. His partners are two builders from that town, Edelmiro and José Manuel Copoví Ridaura, each of whom own 25%.

According to sources at the firm, the decision to opt for the Euronext exchange over the MAB fundamentally due to the conditions regarding the number of shareholders, the diffusion of the shareholding and of the free-floating shares – the percentage of total share capital trading freely on the stock market – demanded by the Spanish market and which did not fit with the company’s plans. Last year, the MAB tightened up its requirements in light of the Socimi boom to take advantage of tax benefits.

In fact, Logis Confort, which has relied on Armanext as an advisor, does not initially expect to open its share capital up to investors in general. Its strategy is to expand the Socimi’s capital by contributing more assets, some of which involve other partners who may join the shareholding of the company.

With this formula, the group also wants to take advantage of the creation of Logis Confort to reorganised its corporate structure and to be able to have an instrument for future operations and alliances.

As Expansión published, CV Grupo participates in companies with the investment firm Atitlán for the management of industrial warehouses.

Original story: Expansión (by A. C. A.)

Translation: Carmel Drake

Colliers International Acquires Spanish RE Consultancy Irea

27 February 2018 – El Confidencial

There’s a new marriage in the market for real estate consultancy firms. Colliers International Group has acquired the independent Spanish firm Irea. This move comes just a few months after Savills purchased Aguirre Newman, a firm that Colliers also expressed its interest in.

Following this integration, the new company will have a team comprising more than 100 professionals, with offices in Madrid and Barcelona, a turnover of €25 million, and will provide services in the following fields: advisory, capital markets, consulting, valuation, workplace solutions and project management. The objective of the new group is to be one of the top three firms in the sector within five years.

The operation has been structured through the purchase of the majority of Irea’s share capital by Colliers International, a listed company with a global turnover volume of €27 billion, a move that has been followed by a merger, whereby Irea has acquired the Spanish subsidiary of Colliers.

Mikel Echavarren, Founding Partner at Irea, is going to be the CEO of Colliers in Spain. Meanwhile, the rest of the management team is going to comprise: Ignacio M. Iturriaga, Joan García and Álvaro Alonso as the Heads of Corporate Finance; Neil Livingstone and Antonio Pan de Soraluce as the Heads of Capital Markets; and Miguel Vázquez and Laura Hernando, as the Heads of the specialist hotel services division.

In addition, in accordance with the model that characterises Colliers, which teams up with local partners, Echavarren, Livingstone and Pan de Soraluce will hold onto 20% of the share capital of the Spanish subsidiary.

“The Spanish real estate and hotel markets have experienced significant growth in recent years, and having the opportunity to expand our business with Irea’s excellent team of professionals is going to allow us to offer high added value services for our clients”, said Chris McLernon, CEO at Colliers International for the EMEA region.

“Our integration into Colliers represents a natural evolution for Irea, given that both companies share the same business culture and a strong commitment to excellence”, said Echavarren. “We consider that integrating ourselves into a global brand that has an unparalleled international platform is the key for strengthening our growth strategy and continuing to offer the best service possible to our clients, wherever they are in the world”, he added.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Blackstone & Santander’s RE Company Hires Liberbank Director

14 February 2018 – Voz Pópuli

Banco Santander and Blackstone are appointing the management team of what is going to be one of the largest real estate real estate companies in Spain. Aliseda, the platform in which the fund owns a 51% stake and the bank holds a 49% share, has hired José Luis Bellosta, a Director of Liberbank until now, as Director General, according to confirmation provided by sources to this newspaper.

Bellosta completes Aliseda’s management team, which is led by Eduard Mendiluce as the CEO. Mendiluce is a former director of Catalunya Caixa and is one of Blackstone’s key people in Spain.

Two General Directorates report into Mendiluce: the one run by Bellosta, which will be responsible for managing the more than €4 billion in real estate assets that Popular (in other words, the Santander Group) still holds on its balance sheet; and the other, led by Enrique Used, whose appointment was revealed by Vóz Populi, which will manage the divestment of the €30 billion transferred to Blackstone – Project Quasar.

It is not the first time that Bellosta has worked under the Santander umbrella. He previously served as Director of the Asset Custody and Back Office Subsidiary of the group chaired by Ana Botín between 2003 and 2009. Subsequently, he worked for six years at Agrupalia before being hired as the CEO of FK2, the operations subsidiary of Liberbank.

In this way, Aliseda’s structure is now ready for the launch of the new divestment plan designed by Mendiluce, whilst it awaits the authorisations that should arrive within the next few weeks.

Blackstone also manages Anticipa, the platform inherited from Catalunya Caixa Inmobiliaria. The fund has decided to not merge the two companies – Aliseda and Anticipa – and so each one will follow its own path.

Meanwhile, Santander also owns 15% of Altamira, the real estate company in which Apollo holds the remaining 85% stake. The bank and the fund held negotiations over a year ago regarding Apollo’s exit, but without success. The new situation could revive that operation.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Colonial’s Board Approves Conversion Of Company Into A Socimi

25 May 2017 – Expansión

Colonial is going to propose to its shareholders that the firm turn itself into a listed real estate investment company (Socimi), according to a statement issued on Tuesday by the group to Spain’s National Securities and Exchange Commission (CNMV).

The company has explained that the measure, which has already been adopted by the Board of Directors, will be subjected to a vote at the next General Shareholders’ Meeting, scheduled to be held on 29 June.

The real estate company explained that becoming a Socimi “would not involve any change in the group’s corporate strategy or in its business plan” and that, by contrast, it would mean that the profits and cash flow would increase “significantly”.

Specifically, Colonial wants to adopt this structure retrospectively, with effect from 1 January 2017.

In addition, the company states that becoming a Socimi would have a positive impact of €72 million on its own funds, as it would allow it to pull back some of the provisions accounted for in 2016.

Colonial also highlights that with this step, the effective tax rate would be reduced to 0% and also, that the group would be able to continue using a “tax shield”, amounting to more than €1,300 million to structure investment or divestment operations.

Moody’s assigns a Baa2 rating to Colonial

On the other hand, on Tuesday, the agency Moody’s assigned a credit rating of Baa2 (investment grade) to Colonial, with a stable outlook.

In this sense, it is worth noting that the company already saw its rating improve on 19 April this year, when S&P increased its debt rating to BBB (investment grade) from BBB- (low investment grade), also with a stable outlook, to become the Spanish real estate company with the highest credit rating in the sector.

Original story: Expansión

Translation: Carmel Drake

Deutsche Bank Lost €68M On Operation Tag

8 May 2017 – Voz Pópuli

Deutsche Bank España recorded losses of €68 million on so-called Operation Tag, which was agreed last October, and which involved the sale of a portfolio of non-performing loans and real estate assets to the fund Oaktree for €430 million. And, the negative result from that operation drastically reduced the entity’s profit last year, which fell from €91.4 million in 2015 to €5.7 million in 2016.

The operation involved the sale of a loan portfolio that contained “a series of loans that had already been recognised as non-performing”, as well as foreclosed assets. The bank acknowledges in its most recent annual financial report that the sale “had a negative impact of €68.1 million on the entity’s income statement”. Of that amount, €40.4 million corresponded to the sale of the loan portfolio and €4.7 million to the sale of the foreclosed properties.

Part of the agreed sale of the properties was signed during the first quarter of 2017. They included assets located in Cataluña, which had a gross value on the group’s books of €7 million and which ended up being sold for €4.4 million. The other real estate assets had a book value of €29 million but their sales price was much lower, €8.1 million.

Operation Tag also had an additional cost of €23 million for Deutsche Bank España. The costs arising from the sale amounted to €8.1 million and those relating to adapting the workforce to the new structure amounted to €14.9 million.

Early retirement

In 2016, Deutsche Bank España processed the early retirement of 108 employees, compared with 24 early retirees in 2015. The entity explains in its latest accounts that the amount of pensions caused, €155 million, corresponds to commitments for pensions caused with the retiring and early-retiring employees and that those commitments are “insured or provisioned by an internal fund”. Last year, the bank recognised a provision of €13.9 million for early retirees.

In March, Deutsche Bank announced its plans to sell its retail business in Spain. The entity currently serves more than 700,00 clients in the country and employs almost 2,600 people in its retail division.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Altamira Buys Oitante’s Servicer In Portugal

5 April 2017 – La Vanguardia

Altamira Asset Management and Oitante, the company created to manage Banif’s assets, have agreed to purchase the business unit responsible for managing the latter’s real estate assets and loans (the servicer) in Portugal.

The new servicer will initially manage real estate and financial assets worth more than €1,500 million, according to a statement issued by the manager, which currently has assets under management worth more than €50,000 million.

The manager indicated that the operation has been structured in such a way that ensures “significant” financial support, but it did not reveal any more details.

Alantra acted as the financial advisor to the operation, whilst Linklaters advised Oitante on the legal side and Uría Menéndez-Proença de Carvalho advised Altamira

Original story: La Vanguardia

Translation: Carmel Drake

Socimi VBare Will Debut On MAB In Dec With 166 Mid-Range City Flats

14 November 2016 – El Mundo

The rise of the residential rental business in this new real estate cycle seems to be undeniable. And this is evidenced by the fact that increasingly more companies are committing themselves to the professionalization of the market, which has, in Spain at least, traditionally been handled by individuals and small and medium-sized investors. The emergence of the Socimi structure has played a key role in enabling large investors to place their focus on the segment.

First came the shopping centres, then the offices and then the industrial and logistical warehouses. Over the last few years, the Socimis have placed their focus on all of these assets. But now, it seems that homes are attracting the most attention. And, following in the footsteps of the large Socimis, such as Merlin, Hispania, Lar and Axiare, we are now seeing smaller entities, focusing on the management and operation of residential rental businesses, and many are about to debut on the Alternative Investment Market (MAB).

This group of new players includes VBare, a company constituted in March 2015, from an initiative created by Aura Real Estate, a company that specialises in the valuation of large real estate portfolios and which has vast knowledge of the market, and the Israeli investment bank, Value Base.

In addition to the real estate knowledge and financial muscle of its founding companies, the Socimi’s offering is enhanced even further by the extensive experience of David Calzada (pictured above). Calzada is the CEO of Vbare, having previously worked as a Partner at the international consultancy firm PwC for four years, where he led the team responsible for Socimi research.

Since its constitution as a Socimi, VBare has raised €16.2 million in financing. Those funds have been contributed by 35 qualifying investors, of which only the Israeli bank can be considered as an institutional investor (the bank holds a 15% stake). Of that volume, €14.5 million has already been spent on the acquisition of 166 homes, 61 storerooms, 28 parking spaces and three retail premises.

Real estate portfolio

According to Calzada, the company’s strategy is to buy residential assets in the metropolitan areas of major cities with an average discount of 10% compared to market price. The firm then undertakes capex investment of around €2,700 per flat to ensure that each one fulfils certain aesthetic and quality criteria, with a view to obtaining initial net returns of 4%. According to the company’s CEO, the portfolio is currently generating a yield of 6.1% and its asset value has already increased to €20.8 million.

In terms of its core product, the Socimi mainly focuses on properties with “affordable, middle-class” rents of between €550 and €600 per month. Its portfolio is characterised by one-bedroom homes, measuring around 40 m2.

Calzada interprets the current period in the housing market as “the end of the decrease in prices”, which means that from now on he expects prices to rise and for there to be “more competition in the residential market”. In terms of rental prices, Calzada estimates that they may rise by 6% between 2017 and 2018 and by 5% in 2019.

VBare’s plans to debut on the MAB in the middle of December, and it hopes to raise between €5 million and €10 million. Ultimately, according to Calzada, our objective “is to move onto the main stock market, as soon as we are the right size”.

Original story: El Mundo (by Luis M. De Ciria)

Translation: Carmel Drake

CNMC Approves Merger Between Merlin & Metrovacesa

30 August 2016 – Expansión

Authorisation from the CNMC / The merger will result in the creation of the largest real estate company in Spain, with assets worth almost €10,300 million. The group will compete with the large European Socimis.

On Friday, Spain’s National Commission for Markets and Competition (CNMC) approved the merger between the Socimi Merlin Properties (owner of Torre PwC in Madrid, pictured above, amongst other assets) and Metrovacesa, the real estate company controlled by Banco Santander, in an operation announced on 21 June. With the green light from the supervisory body, the door has been opened for the creation of a giant that will become the largest real estate company in Spain and one of the largest in Europe. The group will own assets worth €10,297 million in total.

The CNMC approved the deal on the basis that the barriers to entry into the tertiary real estate business (shopping centres, offices, logistics warehouses, retail premises and hotels) are not instrumental. And on the basis that this business, which comprises domestic and international companies, is quite fragmented in Spain, according to the body.

The analysis performed by the Commission focused on the relationship of control between Merlin, Testa – the real estate company that the Socimi purchased from Sacyr and in which it owns a 99.93% stake, and for which it plans to complete the integration of the remaining 0.07% within the next few months – and Testa Residencial, which is fully owned by Testa and therefore controlled indirectly by Merlin.

Three carve-outs

The operation will involve the carve-out of Metrovacesa into three lines of business, as revealed by Expansión on 22 June. One real estate line, one residential line and one line for assets under development and land.

The new Merlin will group together all of the real estate business and will acquire Metrovacesa’s tertiary assets, worth €1,672 million. To execute the operation, the Socimi will increase its share capital by 146.7 million shares, at a price of €11.40 per share.

The residential arm of Metrovacesa will carve out its assets from its rental housing business and move them into the newly created company Testa Residencial. The gross value of that company’s assets will amount to €980 million and it will also take over debt amounting to €250 million not transferred to Merlin as part of the tertiary business.

In terms of the third line of business, a newly created public company will take ownership of Metrovacesa’s remaining assets, in other words, the set of land and work in progress in the tertiary sector whose characteristics “do not fit with the profile defined by Merlin for its investments”. The total value of the assets of this third company will amount to €326.49 million.

The Boards of Directors of both companies will meet on 15 September to give their final approval of the operation.

In terms of the shareholder structure of the new Merlin and Testa Residencial companies, Banco Santander will be the largest individual shareholder of both, with stakes of 21.95% and 46.21%, respectively. Merlin will be left with a 68.76% stake in the tertiary business and Metrovacesa will have a 31.24% stake.

In the case of Testa Residencial, Metrovacesa’s shareholders will acquire 65.76% of the share capital.

Original story: Expansión (by María Sánchez)

Translation: Carmel Drake