5 June 2019 – Eje Prime
The General Shareholders’ Meeting of Vitruvio has approved the company’s takeover bid for Única. The shareholders of the Socimi now have until 19 June to accept the purchase offer. The operation is expected to close for around €32 million.
Following this acquisition, Vitruvio will own 71 rental properties, comprising offices, homes and commercial premises, located mainly in Madrid, worth more than €160 million.
Original story: Eje Prime
Translation/Summary: Carmel Drake
26 February 2019 – El Confidencial
Colonial closed 2018 with revenues from rental income of €347 million, up by 23% compared to a year earlier. Nevertheless, the Socimi’s profit decreased by 23% to €525 million, given that in 2017, the firm recorded a gain from the sale of a building in Paris – In & Out – for €445 million and was converted into a Socimi. The buildings contributed by the merger with Axiare generated €56 million, equivalent to 16.1% of the total.
These are Colonial’s first results following the completion of its merger with Axiare, the Socimi over which it launched a €1.45 billion takeover in November 2017, and in a year in which it also increased its stake in the French firm Société Foncière Lyonnaise (SFL).
In a relevant fact sent to the CNMV, the Socimi also announced that it ended the year with assets worth €11.3 billion – distributed across the centres of Paris, Barcelona and Madrid – up by 22%, following the integration of Axiare onto its balance sheet. Excluding the effect of that integration, the increase would have amounted to 8% (…).
“Following an excellent year, we are confident of achieving a very satisfactory performance in the market and of generating rental income of €500 million over the next three or four years”, explained the CEO of Colonial, Pere Viñolas, who added that the company’s recurring profit, after excluding extraordinary items and asset revaluations, amounted to €101 million and represented an increase of 22%.
In operational terms, last year, Colonial signed 103 rental contracts, spanning a total surface area of 175,000 m2, which will generate rental income of €43 million p.a. (…).
In financial terms, at the end of 2018, Colonial recorded net debt of €4.7 billion at the end of 2018, up by 52% with respect to 2017 (€3.1 billion) before the purchase of Axiare. That liability accounts for 39% of the firm’s asset value (…).
Original story: El Confidencial (by E.S.)
Translation: Carmel Drake
31 January 2019 – Eje Prime
Blackstone is starting to divest the office portfolio that it acquired as a result of its purchase of Hispania. The US fund has sold the so-called Ilunion portfolio to the insurance company Zurich, according to explanations provided by the latter in a statement. The operation has amounted to €163.5 million.
The insurance company has completed the operation through its real estate subsidiary Rex Spain Zdhl. The portfolio includes five office buildings in Madrid leased to ONCE.
Before Blackstone’s takeover, Hispania was planning to divest its entire office portfolio for more than €500 million. The Socimi had made an agreement for the sale with Tristan Capital Partners, but the entry of the US fund into its share capital suspended that sale.
Original story: Eje Prime
Translation: Carmel Drake
12 October 2018 – Eje Prime
Blackstone is getting straight to work to start to generate returns from its two new investments. The US fund is in the first phase of negotiations with several financial institutions to obtain a loan amounting to €1.6 billion for Testa and Hispania.
The real estate giant has set itself the objective of closing the operation this year. Blackstone has already made contact with its most trusted banks, including Banco Santander and the French institutions with a presence in Spain, according to reports from Expansión.
The intention of the fund is to maximise the returns of its investments in a joint way and place both Testa and Hispania in a strong position to continue growing and increasing their presence in the country.
Nevertheless, the property of Banco Popular will be left outside of the transaction. The US fund and Santander already agreed a syndicated loan in March amounting to €7.3 billion for the joint company that owns the real estate assets of Popular and in which Blackstone owns a 51% stake.
The investment firm has acquired both of these Spanish Socimis this year. Before the summer, Blackstone completed the takeover of Hispania and turned it into the largest hotel owner in Spain with 46 assets and more than 13,144 rooms. After returning from vacation, the US giant set its sights on Testa Residencial, the largest rental home company in the country, in which it now controls a 70% stake.
Original story: Eje Prime
Translation: Carmel Drake
5 October 2018 – Eje Prime
Following Colonial’s takeover of Axiare, Luis López de Herrera-Oria (pictured below) is reinventing himself with Arima. The former CEO of Axiare has constituted a new Socimi that plans to raise €300 million to invest in the real estate market.
The new company will centre its efforts on the office market in Madrid, the star segment for the now extinct Axiare, which will account for 80% of its investments. Barcelona and logistics assets will also be of interest to the Socimi.
The return of López de Herrera-Oria to the real estate sector, as revealed by Eje Prime in June, is expected imminently and his new vehicle is expected to debut on the main stock market without first starting out on the Alternative Investment Market (MAB). In fact, Arima’s stock market debut could even happen before the end of October, according to Expansión.
Alongside the executive, a serial entrepreneur in the real estate business, one of his right-hand men at Axiare, Chony Martín Vicente-Mazariegos, who used to be the Socimi’s Finance Director, will be immersed in the project. Similarly, some of López de Herrera-Oria’s other trusted directors will form part of Arima’s new project, including Guillermo Fernández-Cuesta, Fernando Arenas and Stuart McDonald. Arima means soul in Basque.
Since February, when Colonial completed its successful takeover of Axiare and merged the Socimi into its group, López de Herrera-Oria has kept a low profile. The director pocketed €26.4 million from the sale of the package of shares that he owned in the manager.
Original story: Eje Prime
Translation: Carmel Drake
4 September 2018 – Expansión
In just five years, the US fund has become the largest owner of hotels and one of the biggest landlords in the country. Moreover, it manages several major mortgage portfolios.
Blackstone made its first foray into the Spanish real estate market in July 2013, with the purchase from the Municipal Housing and Land Company of Madrid (EMVS) of 18 residential developments, containing 1,860 homes in total, in the Madrilenian neighbourhoods of Carabanchel, Centro, Villa de Vallecas and Villaverde for almost €126 million.
Since then, the US fund, one of the largest investment firms in the world, has turned the Spanish real estate sector into one of its favourite destinations for investment, encouraged by the boom that the market in Spain has experienced over the last five years.
Blackstone’s dominance in the Spanish market is now unquestionable. Since 2012, the US fund has acquired property in the country worth almost €20 billion and it is now the owner of several listed vehicles, as well as of some of the main asset managers in the country.
With that figure, which accounts for 20% of the €100 billion that Blackstone Real Estate has invested around the world, the firm is the country’s largest private manager of real estate assets, including properties and portfolios of mortgages.
In Spain, the fund was one of the first to back the residential segment when the real estate market was still struggling and it has been one of the most active players in the purchase of asset portfolios containing NPLs and REOs from financial institutions.
The fund’s purchase of homes in Madrid from EMVS in 2013 was soon followed by the acquisition of another 1,000 social housing properties from Sareb and FCC. Those homes are owned by Fidere, the fund’s first Socimi, which made its debut on the Alternative Investment Market (MAB) in 2015.
In the same year, Blackstone completed its first major operation with the purchase from Catalunya Caixa of a portfolio comprising 40,000 loans in total, worth €6.4 billion. Blackstone paid €3.5 billion for that portfolio, known as Hercules.
A year later, the US fund purchased the Catalan entity’s real estate manager (without any assets), which was later renamed Anticipa.
Nowadays, that company manages the more than 12,000 rental homes which Blackstone has been purchasing from the banks in different portfolios and which it controls through the Socimi Albirana, which made its stock market debut in 2016, and Torbel Investments.
Popular’s property
Two years after purchasing the Hercules portfolio, Blackstone hit the headlines again with the purchase from Santander of 51% of Banco Popular’s real estate business, with a book value of around €10.3 billion. With that acquisition, Blackstone increased its commitment to Spain and become the most active overseas investment fund in the country. To group together those assets, months later, Blackstone and Santander created Project Quasar Investment, a company that also includes the marketing platform Aliseda (…).
In addition, (…) the US fund has launched itself into the hotel segment, to take advantage of the good times being enjoyed in the tourist sector at the moment. Blackstone’s first incursion into that market in Spain was the acquisition of HI Partners from Sabadell last summer for €630 million. Through that platform, Blackstone owns 17 hotels in Spain comprising more than 4,500 rooms.
Takeover of Hispania
A few months after that acquisition, the US investment firm made a bid for Hispania, the Spanish Socimi specialising in hotels managed by Azora, which owns 46 assets and almost 13,150 rooms in Spain (…). Following that operation, which valued the Socimi at €1.99 billion, the US fund controls almost 91% of Hispania.
As well as hotels, Hispania owns 25 office buildings, with a market value of more than €600 million and residential assets worth €230 million, which now also form part of the fund’s assets (…).
Blackstone is also a star player in the logistics sector. The fund currently controls 10% of the Pan-European platform Logicor, which manages approximately 1.2 million m2 of logistics space in Spain (…).
Also, in July, it purchased five logistics warehouses from the Socimi Lar (…) for almost €120 million.
The fund’s most recent purchase was the headquarters of Planeta, located on Avenida Diagonal in Barcelona, which it acquired from the Lara family for €210 million (…).
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake
21 July 2018 – Expansión
Minor’s takeover of the NH Hotel Group is moving forward. The Spanish National Securities and Markets Commission (CNMV) admitted the offer from the Thai company Minor on Thursday and then, yesterday (Friday), Minor obtained approval from the Spanish and Portuguese competition authorities (CNMC). In this way, the offer is conditioned “exclusively” on its approval by Minor’s General Shareholders Meeting, which has been convened for 9 August. The Thai company currently controls 29.8% of NH’s share capital and, in September, plans to complete the purchase of an additional 8.4% stake from the Chinese firm HNA, which will increase its percentage stake to more than 38%.
The company, which is offering to pay €6.40 per share (€6.30 following the payment of the dividend approved by the General Shareholders’ Meeting) has indicated that its objective involves controlling between 51% and 55% of the Spanish group and for the remaining shares to continue to be listed. If that limit is exceeded, the company will consider making way for the entry of a financial partner in the share capital. Minor has also said that its objective involves increasing NH’s dividend by 50% next year to €0.15 per share.
The Thai group recorded revenues of €1.4 billion in 2017, has a market capitalisation of €3.9 billion and employs 66,000 people. With this operation, Minor will strengthen its hotel presence in America and Europe. Minor has 161 hotels and 20,384 rooms, primarily in Asia and Africa, whilst NH has 382 establishments and 59,350 rooms. Currently, the only markets in which the two chains have a presence are Brazil, Portugal and the United Kingdom.
At the General Shareholders’ Meeting held in June, the Chairman of NH’s Board, Alfredo Fernández Agras, described the offer as insufficient. Moreover, the President of Hesperia and CEO of NH, José Antonio Castro, expressed his criticism of the operation and his dissatisfaction with the Thai group’s entry onto the Board of Directors, where it now has three representatives.
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake
13 June 2018 – El Confidencial
Following the green light granted by the CNMV – Spain’s National Securities and Exchange Commission – for Blackstone’s takeover of Hispania, the countdown has begun for the US fund to take control of the company, a milestone that is dependent upon it obtaining 50% plus one share and which, if no rival offer prevents it, could start to take shape on 13 July, when the term for the acceptance of the offer comes to an end.
From that moment on, Blackstone plans to exclude the Socimi from the stock market, which means that it will lose the benefits of the special tax regime, whereby it has been exempt from paying corporation tax in exchange for distributing at least 80% of its profits in the form of dividends, which are taxed at between 19% and 23%.
Blackstone’s decision will, therefore, have a direct impact on the public coffers, given that the conversion of Hispania into a limited company (SA) means that it will now be taxed as a company. Nevertheless, as is typical amongst these large investment vehicles, the fund has created a company structure aimed at financially optimising its tax bill for the duration of the investment period.
According to confessions made by Blackstone itself to the CNMV, the offer is being made through the company Alzette Investment Sarl, which was constituted on 2 February in Luxembourg for the purposes of this operation. Its only shareholder is Alzette Holdco Sarl, also a Luxembourg-registered company and itself wholly owned by BRE/Europe 9NQ Sarl, which is in turn controlled by BREP Investment 9NQ LP, an exempted limited partnership registered in the Cayman Islands.
As such, the ultimate parent company operates under a tax haven that ensures that it will be free from paying taxes for 50 years (…). In fact, the shareholders of BREP Investment 9NQ LP are different offshore companies owned by Blackstone, which are also covered by the exempted limited partnership structure of the Cayman Islands, with the exception of two, which are headquartered in the US tax haven of Delaware, and which are the entities that really benefit from this structure.
Flagships of opportunistic investment
Blackstone’s BREP funds are the US giant’s “flagships of the opportunistic investment funds”, according to its own definition in the takeover prospectus “with USD 75 billion of investment capital, a net return of 16% since 1991 and 1% of losses over 27 years”.
In order to raise the €1,589.6 million that Alzette will have to hand over if all of Hispania’s shareholders accept the terms of its offer (the fund already controls 16.5% of the share capital after it acquired the stake previously owned by George Soros), the different Blackstone funds have committed to contributing the money, either through capital, shareholder loans or other intra-group financing instruments.
In these types of company structures, the different loans arrangements made between the parent companies and their subsidiaries allow them to decrease the overall tax bill in the different countries in which the corporate chain operates in the form of the interest payments that the funds make to themselves and which allow them to “repatriate” the money invested to the Cayman Islands, at the same time as reducing the profit, and with it, the tax charge.
In the case of the takeover bid for Hispania, in addition, Blackstone is also planning to resort to lenders to raise financing amounting to €850 million, referenced to 3-month Euribor, plus a margin of up to 2.25% per annum, and with a maturity date of 15 May 2021, and with the option of being renewed for one more year.
Business plan
Similarly, in order to acquire the stake from Soros, Blackstone signed a financing agreement with Morgan Stanley for a maximum amount of €250 million, although in the end it only drew down €128.6 million. In terms of the financial commitments that Hispania currently has (€894.8 million), Alzette says that it is analysing different refinancing options, including both raising new debt and increasing the level of leverage.
In terms of the business, Blackstone’s plans for Hispania include completing the sale of the office portfolio, which the Socimi had to put on hold at the last minute, even though it had already reached an agreement with Tristán to sell it for more than €500 million, due to the presentation of the takeover bid.
By contrast, in terms of the hotel assets, which are the jewel in the Hispania’s crown, its intention is to hold onto the majority of them for between three and seven years, and transfer their management to the team at HI Partners, the company that the US fund acquired last year for €630 million and which it will likely end up merging with the Socimi.
Original story: El Confidencial (by Ruth Ugalde)
Translation: Carmel Drake
24 May 2018 – Eje Prime
Colonial and Axiare are on the verge of merging. Yesterday (Thursday), the General Shareholders’ Meeting of the Catalan Socimi approved the firm’s merger with Axiare, in an operation that is expected to close during the second half of the year and which will give rise to the largest office building rental company in Spain, a real estate giant with asset worth €11 billion.
The integration is a consequence of the takeover bid that Colonial launched over Axiare at the end of last year to acquire the share capital that it did not own in the Socimi, of which it was already the largest shareholder. The real estate company led by Pere Viñolas purchased 86.8% of the Socimi’s share capital in the end. To obtain the remaining 13.2%, it offered a share exchange deal at a ratio of 1.8554 own shares for each Axiare share.
Colonial also subjected the capital increase necessary to undertake this exchange to its General Shareholders’ Meeting, held on Thursday. With this merger, the real estate company chaired by Juan José Brugera seeks “to consolidate” its position in the prime office sector and “to respond to the current challenges in the real estate sector by strengthening its competitive position and achieving greater size and more efficiency in the business in Spain”.
Nevertheless, it does not rule out that the integration may also generate “duplications and incoherencies” in the resulting workforce, in which case, it plans to undertake adjustments over the coming months.
Axiare will, in turn, give its “approval” to the integration at its General Shareholders’ Meeting today, 25 May, where it will also ratify the Transition Board of Directors, comprising independent members, which Colonial appointed following the takeover.
Original story: Eje Prime
Translation: Carmel Drake
9 March 2018 – Eje Prime
Axiare has sold off Planetocio. The Socimi, which has been controlled by Colonial since February, has divested the Madrilenian shopping centre to a fund controlled by the manager AEW, which has paid €20 million for the asset.
Located in Collado Villalba, Planetocio is one of the few retail assets that Axiare, which specialises in the office sector, still holds in its portfolio. The operation is going to be closed this week and will see the buyer strengthen its presence in the Spanish real estate, after it acquired the Mercado de Fuencarral for €50 million last August.
Planetocio was constructed in 2001 and has been owned by Axiare since 2014, when it paid €99.5 million to the Dutch fund Wereldhave for a portfolio that, in addition to the shopping centre, contained several office buildings and industrial warehouses, according to Expansión.
In total, the Madrilenian shopping centre has a gross leasable area of 19,222 m2 and 797 parking spaces. Following this sale, the number of retail assets that Axiare holds in its portfolio will be reduced to La Mercedes Open Park (Madrid), Les Gavarres (Tarragona) and ViaPark (Almería).
Axiare’s divestment of this retail asset comes a few weeks after Pere Viñolas, CEO of Colonial, confirmed that the “logical” thing would be for the properties that his firm has inherited following its takeover of the Socimi to be sold gradually, although the group has the “peace of mind necessary to do so when it is most convenient”.
Original story: Eje Prime
Translation: Carmel Drake
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