Tag: subsidiaries

Catalan Occidente Merges its RE Subsidiaries to Cut Costs

7 March 2019 – Expansión

Catalana Occidente is looking to cut costs by merging some of its recent real estate purchases, without impacting the entity’s business model.

Last year, the insurance company acquired Chezsuccess, owner of the Luxa Business Park in Barcelona, home to the headquarters of Amazon and WeWork, for €90 million. That firm has subsequently been renamed GCO Activos Inmobiliarios.

Catalana Occidente also bought Legión Empresarial, owner of the WIP office building in Barcelona’s 22@ district, for €20 million.

Now it is merging its two subsidiaries, which means that all of the acquired assets will be grouped together in GCO Activos Inmobiliarios.

In total, the insurance group’s real estate assets were worth €1.4 billion at the end of 2018, accounting for 12% of its investment portfolio. Fixed income securities represented 59% (€6.6 billion) of the total and equities 11% (€1.3 billion).

Original story: Expansión (by E.d.P)

Translation: Carmel Drake

Insur Carves Out its Property Development & Rental Businesses

29 January 2018 – El Confidencial

In order to adapt itself to the preferences of investors, Grupo Insur is carrying out the separation of its two main branches of activity: property development and real estate management – the latter arm will hold onto the rental properties. This carve-out could be described as historical given that the firm, which is listed on the main stock market and led by Ricardo Pumar, has used the combination of both businesses as its best antidote against the cyclical crises of the real estate sector. But now, although the two activities will continue to be owned by the parent company and consolidated for reporting purposes, they will generate independent income statements, belonging to the two subsidiaries.

According to sources close to the Sevillan company, the first step in this sense has been to increase the share capital of Insur Promoción Integral, the real estate parent company, to reach assets worth €80 million. The firm had a frantic 2017 in terms of house sales, with activity soaring by 41% in the last two quarters to reach €37.4 million between June and September (including the sale of properties jointly owned with third-party partners, whose amounts are not recorded by Insur).

In total, the group’s development activity generated sales of €60 million between January and September – up by 82% YoY – of which €28 million proceeded from revenues for the construction of housing developments, both in-house, as well as for initiatives with partners such as BBVA, Santander and the bad bank (Sareb). Insur planned to have 1,000 homes under construction distributed across 18 developments in Andalucía and Madrid by the end of last year.

By contrast, the real estate management activity is continuing to see a decline in its contribution, in line with previous years. Insur owns rental buildings spanning around 116,000 m2, almost all of which are located in Andalucía, although it is currently building a business park in Madrid. Its vacancy rate has fallen by 10 points in recent months, to 23% in September, and the rental income generated during the first three quarters of last year amounted to €7.5 million compared with €8 million during the same period in 2016.

The Junta de Andalucía, to which Insur has traditionally leased space, especially in Sevilla, vacated 12,000 m2 in May 2016 and whereby increased the total amount of space that it has stopped leasing during the final years of the crisis to 33,000 m2. Insur details in its accounts to September that the annualised rental income from tenants that have already signed contracts (not all of them have moved in yet as the offices are being refurbished) is €12.7 million. The picture of this business area is completed if we look at the request for additional information about the accounts for 2016 that Insur sent to the CNMV in October, which shows that each year it spends €6.8 million on these rental properties (…).

Coverage from Sabadell

For all these reasons, and according to the same sources, the managers of Insur rule out the creation of a Socimi to group together the real estate management activity, for the time being, given the need to improve its results and have better visibility over its evolution in the future. Moreover, there is no need for it to provide liquidity to its shareholders, given that 43% of Insur’s share capital is free-float. The company’s 15 directors control 37.5% of the share capital.

Insur’s share price has increased by more than 50% over the last 12 months, to reach €12.50. Its shares are soon going to be covered by analysts at Banco Sabadell, who will join the more specialist firms that have been following the stock until now: Arcano, Kepler and Fidentiis.

Original story: El Confidencial (by Carlos Pizá de Silva)

Translation: Carmel Drake

Cerberus In Exclusive Negotiations With BBVA To Acquire €2,000M Portfolio

22 September 2017 – El Confidencial

The operation in question is called Project Sena and it is the most important portfolio that BBVA has put on the market to date. With a volume of toxic real estate assets worth €2,000 million, primarily comprising NPLs backed by residential collateral, the entity chaired by Francisco González is holding exclusive conversations with Cerberus, according to several sources in the know. Both the bank and the fund have declined to comment.

Nevertheless, the US fund’s appetite goes much further and extends to include the real estate company Anida, which could end up forming part of the transaction as well. That would result in the second largest real estate divestment to be undertaken by a Spanish entity this year, following the sale of €30,000 million in toxic assets agreed between the new Santander-Popular and Blackstone.

The negotiations between Cerberus and BBVA date back to last summer and are currently at a critical point, in terms of tilting the balance one way or the other. Options on the table include Cerberus acquiring Sena on its own, adding Anida into the mix, or acquiring the former and entering the process to compete for the latter, a decision that could be taken at the next meeting between the entity’s Board of Directors.

As El Confidencial revealed, the idea has been floated at La Vela (BBVA’s headquarters in Madrid) of selling Anida to accelerate the real estate unblocking that the Bank of Spain itself is encouraging all the entities to undertake. In fact, BBVA has engaged PwC to advise it on the operation, and it is open to receiving different offers.

In its favour, Cerberus has the advantage of being in pole position to acquire Sena, a card that it wants to play in its favour to also bid for Anida. Nevertheless, other investment giants, such as Lone Star and Apollo, may also be interested in acquiring the real estate firm, a giant with gross assets of more than €5,000 million and the heir, along with others, of the former fund BBVA Propiedad, which the bank practically rescued at the end of 2008, when the first signs of the crisis emerged.

The net real estate exposure on BBVA’s balance sheet amounts to €8,750 million, according to the bank’s most recent half-yearly accounts, thanks to high coverage levels, which amount to 57% on average, one of the most conservative figures in the sector.

With a strategy clearly aimed at divesting real estate, in the last year, BBVA has undertaken several major operations, such as the sale of its Boston and Buffalo portfolios, the transfer of 1,500 homes to Testa, whose gross value amounts to €485 million and the transfer of land worth €431 million to Metrovacesa. Moreover, alongside Santander, BBVA is a shareholder of Merlin Properties, the largest Socimi in Spain.

After all these movements, the largest pawn currently in play is Anida, which also includes a property developer division, Anida Desarrollos Inmobiliarios, and several subsidiaries that the bank has been gathering up under the same umbrella, such as Anida Operaciones Singulares and subsidiaries in Mexico and Portugal.

In theory, the overseas units would be left outside of the real estate company sales process that is currently on the table, an operation whose final outcome is regarded in the market with as much expectation as concern, given that in the past, the entity has received several expressions of interest for Anida that have never ended up materialising.

But now the panorama has changed, given that the operation between Santander and Blackstone has put pressure on the rest of the sector to make similar moves, and the entities are increasingly more inclined to accelerate the divestment of their real estate.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

BBVA Puts Its RE Arm Anida Up For Sale

6 September 2017 – El Confidencial

A new major real estate transaction is on the horizon: BBVA has announced that it is analysing the sale of its servicer Grupo Anida. The real estate specialist is a giant in its own right, with gross assets of more than €5,000 million. BBVA is looking to take advantage of the appetite from large international funds to acquire a ring-side seat in the recovery of the Spanish market.

According to four sources in the know, the plans of the entity chaired by Francisco González are to focus on completely divesting this subsidiary, which accounts for just a proportion of the €8,750 million of net real estate exposure on its balance sheet. BBVA has declined to make any comments.

Nevertheless, last Thursday, the bank itself acknowledged in its results for the first half of the year, that its objective for the whole area known as Non Core Real Estate, which includes Anida, is “to accelerate sales and reduce stock, with specific actions for those products that have been on the balance sheet for the longest”.

Grupo Anida is the heir of the former fund BBVA Propiedad, which the bank practically rescued at the end of 2008, when the first effects of the crisis swept away these types of vehicles, a crisis that the entity averted by investing €1,600 million to continue as the sole shareholder and provide an exit for its other investors.

The bank also owns a property developer division, Anida Desarrollos Inmobiliarios and various subsidiaries that it has been accumulating under the same umbrella, such as Anida Operaciones Singulares, and subsidiaries in Mexico and Portugal.

According to the latest audit report, corresponding to the year 2015, the real estate company has managed to reduce its losses by 36%, to €311.4 million. But, since the publication of those accounts, BBVA has completed some major transactions, such as the sale of the Boston and Buffalo portfolios, and the transfer of 1,500 homes to Testa, whose gross value amounts to €485 million; and the transfer of land worth €431 million to Metrovacesa.

But, even after all of these moves, the entity is now willing to serve the main dish in the form of the sale of Anida, whose potential purchasers include some of the funds who expressed their interest in the sale of Popular’s toxic assets, such as Apollo and Cerberus, not to mention firms such as Bain, which expressed its interest in Vía Célere in the past, according to the sources.

For BBVA, closing an operation of this kind would represent the cherry on the top of almost ten years of hard work, a period during which the entity decided to follow its own strategic approach, setting itself apart from the market trend, by opting to retain the bulk of its property on the balance sheet rather than sell it badly.

The entity has been able to maintain this policy thanks to it high provisioning levels, one of the most generous in the finance sector, given that the average coverage rate of its entire real estate exposure, including live and foreclosed property developer loans, amounted to 57% at the end of the first half of this year.

The sale of Anida will, therefore, allow it to release the bulk of the provisions linked to those assets and take advantage of the soaring appetite from the large international funds to own a large real estate platform through which to try to benefit from the recovery in the market.

Nevertheless, any happy ending in this regard will always be dependent upon the thorny matter of price, a stumbling block that has caused the entity to reject several offers for Anida in the past.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Centurion Real Estate Will Debut On The MAB In July

27 June 2017 – Expansión

Shareholders of the blood products manufacturer Grifols are finalising the debut on the stock market of Centurion Real Estate, a Socimi that is owned in its entirety by Scranton Enterprises. Scranton is a holding company headquartered in The Netherlands, which owns 8.67% of the Catalan company Grifols. The real estate company will start to trade on the Alternative Investment Market (MAB) in July, according to financial sources.

Centurion was founded in 2014 in Barcelona – where its headquarters are located – with the aim of “identifying acquisition opportunities in the real estate market for their subsequent management and operation under lease contracts”, according to Scranton.

Scranton

Grifols sources admitted yesterday that members of the family that controls the pharmaceutical group are some of the around twenty shareholders of the Dutch holding company and they said that board members, former board members, directors and former directors of the Spanish company participate in the business – which has its registered office in Amsterdam – although they did not reveal the composition of the shareholders.

Centurion is chaired by Juan Javier Roura, who used to be responsible for Treasury and Risk Control at Grifols until 2015, where he previously served as Finance Director. Other members of the board of directors include Jordi Fabregas, Núria Martín and Tomás Dagá, founding partners of the law firm Osborne Clarke in Spain; Dagá is also a director of Grifols and of some of the group’s subsidiaries.

The Socimi closed last year with own funds of €61.33 million, up by more than ten times compared to 2105. Its turnover amounted to €5.28 million, almost 5% higher than last year. Its profit reached €2.27 million and the company distributed €1.82 million in dividends.

In light of its imminent debut on the MAB, the company has prepared an audited report of its activity during the first four months of 2017, a period in which its turnover amounted to €1.71 million and its profit reached €421,591.

Grifols’ buildings

According to the same document, Centurion Real Estate is the owner of four buildings, currently occupied by Grifols in the city of Barcelona (Calle Jesús y María) and in the Barcelonan suburb of Sant Cugat del Vallès (Avenida de la Generalitat), where the group has its headquarters. In March, the Socimi formalised the acquisition of retail premises in Plaza Francesc Macià, 10, in Barcelona, on the ground floor of Winterthur’s former headquarters for €50 million.

To undertake its business, Centurion signed a €40 million mortgage loan with BBVA in October 2016 and a €10 million loan with Santander in February 2017.

Original story: Expansión (by J. Orihuel and M. Anglés)

Translation: Carmel Drake

Santander Is Ready To Divest €7,500M Of Popular’s Problem RE

21 June 2017 – Cinco Días

Banco Santander acquired Popular last week, including its €30,000 million real estate exposure (comprising properties and problem loans), which the entity dragged into the new model of European resolution. That slab ended up taking out Popular’s new President, Emilio Saracho, after he proved himself incapable of finding a credible solution for unblocking the property on the entity’s balance sheet, despite taking over the reins in February.

By contrast, the President of Banco Santander, Ana Botín, needed just a few hours to appear publicly with a strong message to calm the market. “We are going to divest half of the real estate assets in 18 months”, she said. A challenge into which her entity will invest €7,200 million to clean up the bank that it purchased for €1. But that is just the first step.

The signal that Santander is going to give the market is one of an agile response to digest the real estate assets. Whilst it has already taken a decision to increase the coverage of those assets, which guarantees that it will be able to sell them with large discounts without having to record large losses, the bank is now in a position to sell both the secured debt portfolio and the real estate assets in an accelerated manner. In total, it has identified €7,500 million in assets that it could divest in a matter of months if it so decides.

Doubtful debt

Of the €12,100 million in doubtful loans inherited from Popular, the company presided over by Botín has a battery of up to €5,000 million that it has already identified that it could package up and sell as quickly as it wants, according to financial sources familiar with the portfolio.

These sources indicate that Santander will likely slice up the €5,000 million into several portfolios and put them up for sale. Although this is a significant amount, the financial sector considers that if the bank puts the packages on the market at a good price, it will receive quite a favourable response from the typical opportunistic funds that participate in these types of processes.

Strategy with subsidiaries

Moreover, it has been revealed that the entity presided over by Botín will likely use its real estate subsidiaries to digest the assets. That is the first scenario being considered by the team from Santander that is intervening in Popular. In fact, it has already come up with some provisional figures regarding how much could be transferred to the different companies: between €2,100 million and €2,500 million.

A large part of that amount, around €1,200 million, corresponds to land that can be transferred to Metrovacesa, according to the same sources. Santander owns a 70% stake in that company, in addition to the c.9% stake held by Popular. (…).

Santander is also currently evaluating the contribution of between €500 million and €800 million in high-quality tertiary assets (primarily offices) to the Socimi Merlin Properties, which is listed on the Ibex 35. That process – which could be approved before the end of the year – would be completed only after analysing the assets and evaluating whether they fit with the company’s current portfolio, which contains properties worth more than €10,000 million. (…).

Finally, the entity may also transfer rental homes worth between €400 million and €500 million to the Socimi Testa, which it plans to debut on the stock market in 2018 and which is currently negotiating the incorporation of Acciona’s buildings into its portfolio (…).

Sources at the bank warn that it is still too early to quantify the assets that it wants to put up for sale first, given that any sale would have to be preceded by a new valuation process. (…).

The team that is going to lead this process on Banco Santander’s side is being led by José Antonio García Cantera, the man that Botín has put at the head of Popular for this transition period until the full integration has been completed, and by Francisco Javier García-Carranza, the entity’s new CEO. (…).

Original story: Cinco Días

Translation: Carmel Drake

GreenOak’s Socimi, Gore Spain Holdings, Debuts On The MAB

18 January 2017 – Expansión

The company Gore Spain Holdings Socimi will debut on the Alternative Investment Market (MAB) on Thursday (19 January), after the MAB’s Board of Directors approved its incorporation into the Socimi segment, having analysed the information presented by the company and after the Coordination and Incorporation Committee issued a favourable assessment report.

On the basis of the share valuation report prepared by the independent expert CBRE Valuation Advisory, the company’s Board of Directors has set a reference value of €14.58 for its shares, which represents a total market capitalisation of €144 million.

Gore Spain Holdings Socimi will be the twenty-ninth Socimi to join the MAB. The company’s trading code will be “YGRE” and its shares will be traded through a price fixing system.

According to a statement by the Spanish Stock Exchange (BME), Renta 4 Corporate is the Registered Advisor for the operation and Renta 4 Banco is the Liquidity Provider.

Gore Spain Holdings Socimi is the parent company of a group that comprises 18 fully owned subsidiaries, of which 17 have opted to operate under the Socimi structure, designed for the acquisition and rental of properties in Spain. The group currently owns 20 assets and has a single shareholder, GreenOak Spain Investment.

Original story: Expansión

Translation: Carmel Drake

Allianz Real Estate Opens Branch In Spain

22 September 2016 – El Economista

The real estate arm of Allianz has arrived in Spain, attracted by the investment opportunities on offer here. Allianz Real Estate has just opened a branch in Madrid to track its operations in the Iberian Peninsula and take responsibility for the management of the properties owned by the group.

To lead the project, the firm has hired Miguel Torres, ex-Arthur Andersen, who has been linked with GE Capital Real Estate since 1995, according to the Commercial Registry. “After the recovery of the real estate markets, Spain and Portgual are once again in the focus of international real estate investors”, explained the CEO of Allianz Real Estate, François Traush, who highlighted that the incorporation of Torres into the team aimed “to identify attractive investment opportunities to allow us to continue constructing a diversified portfolio”, for our shareholders.

With more than 20 years of experience in the real estate and structured financing sectors, Torres joins the company from GE Capital in Mexico, where he served as Director General, leading a team of 50 specialists and an unit with almost €3,500 million in real estate financing. Prior to that, he held various management positions at GE entities in Madrid, New York and Stamford.

Allianz Real Estate’s portfolio contains €41,700 million in assets under management: €29,300 million in direct and indirect investments, plus loans amounting to €12,400 million, based on figures at 2015 year end, when it closed operations amounting to €7,400 million. Its goal is to reach the €60,000 million threshold “within the next few years”.

The company, which has subsidiaries in Germany, France, Italy – into which the operations in Spain will report -, Switzerland and the USA, includes the office in Madrid as part of its regional expansion.

Its investment aspirations cover almost the entire sector: from taking stakes in debt, to investing in listed companies, direct and indirect positions in financing and building a significant property portfolio.

It debuted as a lender in Spain a year and a half ago, with a loan for €133 million that allowed the Socimi Merlin to acquire the Marineda Shopping Centre, which, at the time, was the largest investment in this type of complex since 2008.

The strategic logic is two-fold. The low interest rate environment is causing insurance companies to dust off old commitments to property in light of the meagre returns being offered by public debt and the high capital consumption involved with other investments. Companies such as Mapfre, Mutua Madrileña, Santalucía, Reale and Línea Directa have acquired properties recently and are looking for opportunities, although their involvement as financiers is residual or non-existent, unlike the role performed by multi-national firms such as Axa and Allianz.

The sector hopes that Brussels will smooth the path, easing the burden of callable capital, given that the Juncker Plan itself wants to involve infrastructure projects that Europe needs.

In addition, the real estate sector is presenting itself as an alternative that offers higher returns, especially given the security of their operations. The high expectations of growth in terms of office rents and a notable increase in the number of small operations, is converting this segment of the market into one of the most attractive options. In the case of the most cutting-edge buildings and those located in prime areas, rents may increase by up to 22% over the next three years. For the other more modest assets, the annual yield amounts to around 7%. Similarly, yields of commercial premises amount to around 7.5%,and rents are expected to increase by an average of 2.4% p.a. in Madrid over the next two years.

Original story: El Economista (by Eva Contrerar and Alba Brualla)

Translation: Carmel Drake