Blackstone Owns c.5% Of Spain’s Logistics Assets

28 June 2016 – Expansión

Blackstone created Logicor in 2012 and since then, has grown the company by acquiring portfolios of logistics assets, to reach its current surface area coverage of 13 million sqm.

In Spain, Logicor has been purchasing assets for three years and now owns properties covering a total surface area of 1.1 million sqm, primarily in Madrid and Barcelona, making it the largest owner of logistics land in the country, with a market share of between 5% and 7%. It is followed in the ranking by Merlin Properties and Prologis, in an otherwise very fragmented sector.

Logicor’s Director General for Southern Europe, Manel Vericat, said that the company is still looking for logistics warehouses in Madrid and Barcelona, as well as in other cities, such as Valencia and Pamplona: “We are searching for products that have may potential thanks to the management of our team; and we are able to participate in operations that have higher risk because we have experience in this segment and are capable of managing these situations.

The Spanish subsidiary is led by Alejando Rumayor, who previously worked for Aguirre Newman, Iberdrola Inmobiliaria, ING Reim and CBRE, where he worked last before joining Logicor. The team in Barcelona is led by Xavier Novell, who joined the firm from Aguirre Newman, where he led the logistics and industrial department for the last decade.

In recent years, Logicor has made some major investments in Spain, such as the purchase of a portfolio of logistics assets from CBRE Global Investments, which covered a surface area of 78,000 sqm.

It also acquired a batch of logistics warehouses covering 106,000 sqm, from the French insurance company Axa.

Similarly, it purchased a batch of logistics assets from Gran Europa with a combined surface area of 319,000 sqm. And another one from SEP investments, measuring 138,000 sqm. Finally, one of its most important acquisitions at the global level involved a batch of warehouses from General Electric, of which around 348,000 sqm were located in Spain.

Rents

Vericat confirmed that, since last year, rents in the logistics sector have recovered in Barcelona. In Madrid, “we have not detected any increases yet, but certain rent incentives have disappeared, such as grace periods.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Värde Creates A New RE Company: Dospuntos

21 June 2016 – Cinco Días

One of the real estate firms that suffered during the real estate crisis has been reborn under a new name and with new owners. Värde Partners has created a new property developer, Dospuntos, out of the San José Desarrollo Imobiliarios structure, which it acquired from the San José Group last year. The US fund has an ambitious plan to turn the company into one of the major players in the sector as the incipient recovery starts to heat up.

“Värde and the rest of our shareholders believe in the recovery of Spain and in the growth of the real estate sector”, said Javier Eguidazu (pictured above), CEO of Dospuntos, who joined the firm in September from the Valdebebas urban development in Madrid. According to the Director, Värde and its partners paid more than €1,000 million to purchase the real estate company from San José, basically the amount equivalent to the value of its debt, and the debt clock was reset when the agreement was signed.

The company now owns land from the former subsidiary of San José, as well as from Várde, which was a dynamic and discrete purchaser of land during the recession in Spain. “We now have 800,000 sqm of land, on which we will build 7,000 homes”, said Eguidazu. “Värde is a very active operator in the market and is always studying deals. It is our majority shareholder, but that does not mean that it constructs all of its developments through our entity, nevertheless, it is likely that it will”, said the Director.

The major shareholder of this new real estate company is the US fund, with a stake of more than 50%; it manages assets worth more than €10,000 million all over the world. Värde has been particularly active in Spain in recent years, with the acquisition of Popular’s credit card bsiness, as well as half of the real estate firm Aliseda, from the same bank, in an operation that it entered into together with the fund Kennedy Wilson. Moreover, it is currently holding negotiations to acquire a stake in Procisa’s office business.

Värde (which means “value” in Swedish) is accompanied in its shareholder capacity in Dospuntos by the funds Marathon and Attestor, as well as banks such as Bank of America and Barclays.

The shareholders plan to invest €2,000 million between 2016 and 2012, at an average rate of €400 million per annum, of which €800 million will be allocated to continuing to acquire land on which to build homes. Over the long term, 30% or 40% of the company’s resources will come from bank financing. “Our aim is to create the best land bank in the country and to be the most profitable property developer in Spain”, said Eguidazu. The firm has already invested €100 million in land and another €55 million launching developments. (…).

The new property developer plans to put its first 1,300 homes up for sale in 2018, given that it is already starting to construct its first properties in Madrid, Málaga, Sevilla and A Coruña. Its other target locations include Pamplona, Valladolid, Zaragoza, Sevilla, Barcelona and Tenerife. From 2019, it plans to reach a cruising speed of 2,000 homes per year on average. By then, the company also expects to be generating revenues of between €500 million and €600 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Merlin Completes Purchase Of Remaining 23% Stake In Testa

9 June 2016 – Cinco Días

Merlin Properties now owns 99.9% of Testa. Within the next few days, once the finishing touches have been completed, the Socimi will pay €317 million for the 22.7% stake in Testa that Sacyr still owns. This final transaction, which forms part of the acquisition agreement governing the construction company’s real estate subsidiary, has been moved forward by several weeks, ahead of the original deadline of 30 June.

A year ago, the Socimi chaired by Ismael Clemente, announced the acquisition of Sacyr’s subsidiary for €1,793 million, and established a timetable of partial purchases spanning one year. This arrangement was reached mainly because Testa’s shares were being used as collateral to secure a loan that Sacyr had taken out to buy 20% of Repsol in 2006.

Sacyr is in the process of obtaining the necessary consent from its financing banks and has already obtained approval from 80% of them, according to reports from financial sources. On the other side, Merlin has reserved the amount in cash, pending the conclusion of this final part of the acquisition.

Merlin will obtain an ownership stake of 99.9% (the rest belongs to individuals) and will launch the merger of the two companies immediately. From an operational point of view, the integration between the two companies’ teams has been a reality now for several months; as such, this operation simply represents the completion of the acquisition process and will not result in any changes to the companies’ operations.

During the first phase of the acquisition, completed in June last year, Merlin acquired 25% of Testa’s share capital by subscribing to its €431 million capital increase. On 23 July 2015, Merlin paid €861 million for another 25.1% stake. And then, a few days later, in August, it bought an additional 26.91% stake in the real estate company. The Socimi will pay €317 million in this final transaction, according to information provided to analysts in previous presentations.

Merlin, which is listed on the Ibex 35 and focuses on the rental of properties, generated a net profit of €49.1 million in 2015, the first full year of operation for this young real estate investment company. The company recorded revenues of €214 million from the rental of its real estate portfolio, an amount that almost quadrupled the figure it had recorded in 2014, thanks to the inclusion of the assets owned by the real estate company acquired from Sacyr.

The Socimi’s real estate portfolio was valued at €6,053 million at the end of 2015, according to a report from an independent appraisal company, issued following the purchase of Testa.

In addition, last December, Merlin completed an operation with 10 banks to refinance the €1,700 million debt that it had inherited from Testa. Moreover, in April, it launched a bond issue amounting to €850 million to restructure its liabilities.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Celsa Sells Land In Santander To Ratisbona For €1.1M

3 May 2016 – Expansión

Celsa is selling land in Cantabria. The steel group owned by the Rubiralta family, which began negotiations to refinance its bank debt (€2,700 million) a few weeks ago, is finalising an agreement to sell off some land owned by its subsidiary Global Steel Wire (GSW) in Santander. The land in question is assigned for non industrial use. The plot is located on the Nueva Montaña industrial estate and has a total surface area of 3,167 m2.

According to sources close to Celsa, the sale is expected to be completed before the end of the month, for a consideration of €1.1 million. The purchaser is Ratisbona, a German company – with a subsidiary in Spain – which is dedicated to the promotion, construction and sale of warehouses assigned to supermarkets and retail parks, and which has carried out projects for chains such as Aldi, Lidl, Mercadona and Aki.

Background

This is not the first time that Celsa is selling land in Santander. In 2014, it sold another plot in Nueva Montaña, where the chain Bricomart built a centre. In 2015, the group commissioned Aguirre Newman to sell a portfolio of real estate assets owned by GSW in Santander, Castellbisbal and Sant Andreu de la Barca (Barcelona) and Toledo.

In the context of its negotiations with the banks, Celsa has submitted an industrial plan to its lender entities, which features a lamination factory in Bayone (France) as its star project, with an investment of up to €60 million.

Original story: Expansión (by J.Orihuel)

Translation: Carmel Drake

Sacyr Invites Alternative Offers For Testa

8 May 2015 – Expansión

The construction group has engaged Lazard to coordinate offers for its real estate subsidiary Testa. It was initially planning to place 30% of the shares on the stock exchange (but is now open to alternative proposals).

Sacyr was going to place 30% of Testa‘s shares on the stock exchange, but the widespread interest expressed in the market has caused the construction group to change its strategy. The company, which had proposed a public offering (IPO) of 30% of Testa’s shares to the CNMV, is currently evaluating several alternatives: to continue with the plan to place some shares in the market with qualified investors; to join forces with an institutional partner such as a Socimi or international fund; and in the meantime, it does not rule out the sale of 100% of its subsidiary. Moreover, it is also considering a fourth option, which would have a much greater strategic significance, namely the integration of Testa with a large group in the sector, in this case, Colonial, to create the largest Spanish real estate company and one of the largest in Europe.

Sacyr has engaged Lazard to carry out this process. The investment bank has instructed the various investors that are interested in Testa to make a non-binding offer for the company.

Proposals will be welcomed both for the 30% stake that Sacyr had initially planned to place on the stock exchange, as well as for the entire share capital. Lazard has given interested parties until today to present offers, say sources close to the process. One player that is interested in acquiring the real estate company is Merlin Properties. The largest Socimi by market capitalisation has acknowledged its interest in participating in Testa’s capital. Now, Merlin would be willing to acquire Testa in partnership with other investors and purchase 100% of the company, according to sources in the sector.

Corporate movement

Sacyr is also studying a possible integration of Colonial and Testa. For the time being, the conversations are very preliminary between Sacyr and the real estate company whose primary shareholder is Juan Miguel Villar Mir.

The merger of both companies would create a giant with more than two million square metres of leasable surface area in prime areas of Madrid, Barcelona and Paris and a combined turnover of €400 million. Testa’s market capitalisation amounts to €2,098 million and Colonial’s is €1,977 million.

Sources involved in the process confirm the interest shown by Colonial. The final decision will depend on the other options that Sacyr has on the table. The placement of a percentage of new shares in Testa on the stock market (a maximum of 30%) forms part of the action plan designed by Sacyr to regularise the finances of its subsidiary and provide it with greater liquidity. The shareholders of the real estate company, controlled by Sacyr (99.2%), approved an ‘accordion operation’ in February, involving a €1,197 million contribution to shareholders, comprising a €527 million ordinary dividend and a €669 million reduction in share capital.

This transaction is, in turn, subject to a simultaneous capital increase that would enable Testa to reconstruct its balance sheet through the inflow of around €500 million. It is during this phase that Colonial may enter the fray.

The real estate company chaired by Juan José Brugera is exploring growth opportunities in Spain after cleaning up its balance sheet in 2014 with a capital increase of €1,263 million, which involved the entry of Juan Miguel Villar Mir, along with Mora Banc and Qatar Investment into the share capital of the real estate company. Villar Mir is currently the owner of 24.5% of Colonial, after buying a new block of 1.46 million shares (in recent weeks).

According to experts, the potential merger of Colonial and Testa makes sense in business terms, since both companies specialise in the rental of buildings; exclusively office buildings in the case of Colonial and shopping centres and homes in the case of Testa.

Nevertheless, the change in ownership may have an impact on the financial structure of the companies, with guarantees linked to new investments and changes of control. At the end of 2014, Colonial’s net debt amounted to €2,545 million and Testa’s amounted to €1,688 million.

Original story: Expansión (by R. Ruiz and C. Morán)

Translation: Carmel Drake

CaixaBank Injects Another €1,900M Into BuildingCenter

6 April 2015 – Expansión

Over the last two years, the bank has invested €4,400 million in its subsidiary, which owns properties that have been foreclosed (by CaixaBank) following the non-payment of debt.

The property sector is still taking its toll on CaixaBank. In 2014, the entity had to inject another €1,900 million in BuildingCenter, the company in which the bank places all of the real estate assets that it forecloses in exchange for (the cancelation of) debt.

This new contribution of funds responds to the need for BuildingCenter to restore the equity balance of its balance sheet, due to the losses generated by these assets, which are managed and marketed by ServiHabitat, the real estate platform owned by TPG (51%) and CaixaBank (49%). BuildingCenter generated a loss of €1,280 million in 2014.

Typically, the bank chaired by Isidro Fainé, rebalances BuildingCenter’s (balance sheet) through capital increases. However, this time, the €1,900 million has been injected into the Catalan group’s bad bank in the form of a “non-refundable monetary contribution from the sole shareholder”. This means that the money forms part of its restricted reserve, and therefore, constitutes the own funds of the company, just like its capital. In 2013, CaixaBank also used this formula to transfer another €750 million to the real estate company.

The BuildingCenter’s last capital increase was also conducted in 2013, for €1,250 million, plus an issue premium of €500 million. Therefore, if we sum the three contributions, CaixaBank has invested €4,400 million in total in BuildingCenter in just two years.

In parallel, over the last two years, the bank has made provisions for the impairment (of its investment in) BuildingCenter amounting to €2,233 million. In 2013, it made provisions amounting to €1,101 million and last year, it made provisions for a further €1,132 million. The NPL ratio of the real estate company is 58.7%.

Financing

According to CaixaBank’s annual report, the financing granted by the bank to its subsidiary BuildingCenter, amounted to €9,268 million at 31 December 2014, i.e. 16% more (than a year earlier).

In total, the net book value of the BuildingCenter’s real estate assets amounted to €6,515 million, i.e. 8% more than in 2013. 73% of that figure related to properties that the company had foreclosed from construction companies and property developers in exchange for the non-payment of debt.

Homes resulting from the foreclosure of individual mortgages accounted for 15% of the portfolio, amounting to €1,000 million.

In 2014, CaixaBank (successfully) marketed 23,400 properties, including sales and rentals, for €2,512 million, i.e. 15% more (than a year earlier). The occupancy rate of the rental portfolio amounts to 87%.

Finally, last year, BuildingCenter took over General de Inversiones Tormes and the company VIP Gestión de Inmuebles, which it inherited from Banco de Valencia.

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake