Tag: tertiary assets

Stoneweg Buys Plot to Build Luxury Apartments for €130M

13 December 2018 – Idealista

The real estate market has broken a new record in Madrid: the Spanish-Swiss fund Stoneweg has purchased a residential plot from Dragados for €130 million, the most expensive operation in the history of the capital, according to Idealista News. The plot, located on Paseo de la Dirección, 246, spans 40,000 m2 and two luxury residential towers are going to be built on the site, which will be sold for €6,000/m2.

The project, which is going to be constructed by Dragados, comprises two towers that will have 700 homes in total, and which will go on sale for around €6,000/m2. The land will also be home to two tertiary-use towers, destined for offices, which do not have an operator yet. The operation has been advised by the firm Colliers.

According to sources consulted by Idealista News, these two towers will change the skyline of Madrid and will open the door to a change in the physiognomy of the Tetuán district. The property developer is whereby continuing to take advantage of the real estate cycle and, specifically, of the good times that the luxury residential business is experiencing, which is attracting attention from local and international buyers alike.

Over the coming weeks, Stoneweg is going to open a selection process to choose a company to take care of the sale of the 700 luxury homes. Candidates are expected to include CBRE, Savills-Aguirre Newman, BNP and Colliers (…).

Original story: Idealista (by Custodio Pareja, P. Martínez-Almeida & Ana P. Alarcos)

Translation: Carmel Drake

Grupo Baraka Sells a Logistics Warehouse in Murcia to Corum for €14M

11 June 2018 – Expansión

The Baraka Group, controlled by the businessman Trinitario Casanova, has closed an agreement to sell one of the logistics assets owned by its construction company Trabis.

Specifically, Baraka has sold a logistics warehouse, called Trabis II, located in the Murcian town of Yecla, the region where Casanova’s companies are headquartered. The property, which has a constructed surface area of 14,000 m2, has been sold for €14 million through a sale and leaseback contract.

“The advantage is that the buyer is guaranteed an asset in which the tenant will continue to undertake its activity”, explained Pablo Carvajal, Director of Capital Markets at Catella, the consultancy firm that has advised the new owner in the transaction.

The buyer is the French fund manager Corum Asset Management. Created in 2011 and with offices in Paris and Amsterdam, the firm set itself the objective last year of investing €500 million in real estate assets across Europe, with a special focus on Spain. For its investments, whose yields exceed 6%, Corum works with two funds Corum Origin and Corum XL, the latter was launched last year.

This is not the first time that Baraka and Corum have closed an operation together. In July 2016, the French firm paid more than €24.8 million for another logistics building also leased to Trabis.

Corum is one of the international investors that has opted to purchase logistics assets in Spain, a booming market due to its high returns and the increase in the e-commerce business. “The logistics investment market is proving attractive for domestic and international investors alike and increasingly more are investing in this type of asset. Between January and May, €250 million has been invested in these types of properties”, say sources at Catella.

At the overall level, investment during the first half of the year is expected to reach €5 billion. “During 2018, €3 billion has been invested in tertiary (non-residential) assets. Taking into account certain transactions pending completion, we expect to see investment of close to €5 billion during the first half of the year, around €1 billion less than during the same period in 2017”, he predicts.

Casanova

The divestment of this logistics warehouse comes just weeks after Trinitario Casanova entered the Madrid Nuevo Norte real estate project (known as Operación Chamartín). The businessman has committed to pay €400 million to the initial owners for the rights to 1.2 million m2 of land (now in the hands of the Ministry of Development) where the company DCN, controlled by BBVA and SanJosé, is planning to build an urban development with more than 10,500 homes.

In addition, Casanova is working on the marketing of the future shopping arcade in Edificio España, the property that he purchased from Wanda for €172 million to immediately sell it on to the RIU hotel group.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Deka Finalises Sale of Part of Inditex’s Portfolio to IBA Capital for €100M

25 May 2018 – Eje Prime

Deka may have found a buyer for a portion of the portfolio that it purchased from the Galician giant Inditex. The German fund manager is currently holding negotiations with the Spanish fund IBA Capital regarding the sale of most of the premises that it bought from the fashion retailer at the beginning of the year for around €100 million, according to sources close to the operation, speaking to Eje Prime.

IBA Capital, which has declined to comment, looks set to buy more than ten assets located in secondary cities, given that Deka is planning to hold onto number 16 Calle Preciados, in Madrid (2,725 m2 of retail space) and number 58 Calle Pelayo, in Barcelona (5,134 m2 of retail space), as well as the properties it acquired in Portugal.

Thus, IBA Capital would purchase assets located in secondary cities (such as those located in  Zamora, Albacete and Ciudad Real) through the fund that it has just launched onto the market specialising in the high street segment. Deka acquired the 16 assets in January for approximately €400 million, with chains from the Inditex group continuing as tenants in all of the establishments.

These two moves, the purchase and the sale, demonstrate Deka’s interest in the Spanish market. According to Eje Prime, Deka’s roadmap involves doubling the investment volume that it has in the country from €1 billion to €2 billion over the next five years.

Currently, the fund manager owns a portfolio of tertiary assets in Spain, highlights of which include the office buildings at Avenida Diagonal 640 and Sarrià Forum in Barcelona and the mixed-use (offices and retail) El Triangle building, also in the Catalan capital (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Deka Puts Most of its Recently Acquired Inditex Stores Up for Sale

23 April 2018 – Eje Prime

After closing one of the most important real estate operations of the year, Deka is looking to capitalise on its investment with a new knock-on effect. The German fund manager has just put back on the market the majority of the stores that it purchased at the beginning of the year from the Galician giant Inditex, in an operation worth around €400 million, according to sources close to the sales process, speaking to Eje Prime.

According to the same sources, Deka has divided the portfolio into three. The first part comprises two properties, which the fund is going to hold onto, those at number 16 Calle Preciados, in Madrid (with 2,725 m2 of retail space) and number 58 Calle Pelayo, in Barcelona (with 5,134 m2 of retail space).

The second and third parts of the portfolio are already up for sale. The aim of Deka is to divest the assets located in secondary cities (such as those located in Zamora, Albacete and Ciudad Real) by placing them on the market and also to listen to offers for the assets located in cities such as Valencia and Madrid, which, although they are not strategic for the fund, it is not in a rush to sell.

Deka, which will also hold onto one of the two properties that it purchased in Lisbon (located on Calle Augusta), acquired the 16 assets in January for approximately €400 million, and chains belonging to the Inditex group continue as the tenants of those establishments.

These two moves, both the purchase and the sale, demonstrate Deka’s interest in the Spanish market. As Eje Prime revealed, Deka’s route map involves doubling its investment volume in the country from €1 billion to €2 billion over the next five years.

Currently, the fund manager owns a portfolio of tertiary assets in Spain including the office buildings on Avenida Diagonal 640 and Sarrià Forum in Barcelona and the mixed-used (office and retail) property El Triangle, also in the Catalan capital. Moreover, the group owns the Ballonti shopping centre in Bizkaia, which it recently put on the market for around €150 million, and the Espacio Mediterráneo shopping centre in Cartagena, as well as the Hotel Meridien de Las Ramblas in Barcelona and another vacation hotel in Mallorca.

The company’s presence in the Spanish real estate sector dates back to the 1990s when it had a portfolio of assets with a very similar volume to its current size. At that time, Deka owned large spaces such as the Diagonal Mar shopping centre in Barcelona and the Castellana 35 and Castellana 79 buildings in Madrid. But, in around 2006, according to Esteban de Lope, Director of the Retail Property Fund Management Department at Deka, “an opportunity arose and we sold almost all of our portfolio at a significant profit”.

After hiding in the shadows for five years, competing in other European markets such as the French, British, Belgian and Dutch, as well as its own German real estate market, Deka returned to Spain in 2010 with the acquisition of the Avenida Diagonal 640 building.

The sale of the batch of assets acquired from Inditex coincides with the group’s desire to divest some of its businesses in Spain. Lope said that “given the nature of the market, it is easier for Deka to divest than to purchase”. “The Inditex portfolio was an exception” – says the director – “they wanted to sell quickly, but they needed to be certain that the buyer had money to invest; thus an opportunity arose, with the condition of us having to move very fast”.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Sareb Seeks Partner(s) to Create Joint Venture With NPLs Worth €10bn

20 March 2018 – Expansión

Sareb has decided to emulate the large financial institutions and find a partner to help it digest its portfolio of foreclosed assets. The entity chaired by Jaime Echegoyen (pictured below) has decided to create a vehicle into which it will place loans with real estate guarantees (known as NPLs) and in which it will retain a minority stake.

Into this joint company, Sareb will place loans with a gross value of €10 billion, although the definitive figure has not been finalised yet, explain sources in the sector. It would be the largest sale ever made by the company that was itself created with assets proceeding from the intervened banks, and loans with all different kinds of real estate guarantees would be included: from land to tertiary assets. Sareb’s objective is to open up this new company to one or more financial partners and it has engaged the firms EY and CBRE to lead the negotiations. The process is still in a preliminary analysis phase, but the aim is to close it during the second half of the year or at the beginning of 2019.

Contacts

In making their preliminary contacts, the consultancy firms have approached the main international funds and managers with investments in the Spanish real estate sector to gauge their possible interest in this portfolio, which will initially be called Project Ebro. Once investors have confirmed their interest in the vehicle, thought will be given to defining how the alliance will be forged, say sources in the sector. Possible interested parties include investment giants such as Cerberus, Bain Capital, Blackstone, Apollo, Kennedy Wilson and Goldman Sachs. With Project Ebro, Sareb would be following in the footsteps of entities like Santander, which has reached an agreement with Blackstone to create the company Quasar, with real estate assets proceeding from its purchase of Popular.

In that case, the US fund owns a 51% stake, whilst Santander retains 49% of the shares.

This is not the only loan portfolio that Sareb currently has up for sale. The company has three other processes underway, although Ebro, given its size, is the star project. In this regard, it has engaged Arcano to sell the Nora portfolio, comprising non-performing loans (NPL) backed by residential collateral worth around €400 million; the Vilasoa portfolio, which includes €300 million in loans secured by land; and project Dune, a portfolio that has been relaunched in 2018 comprising €2.6 billion in unsecured loans. In that case, Sareb has engaged PwC to coordinate the sale.

These processes are happening in parallel to the search for a partner to strengthen its property development business. In that case, Sareb is holding talks with large real estate companies and funds with activity in the residential sector with the aim of working together on the development of buildable land and construction projects in progress.

In total, that portfolio is worth around €800 million and Sareb would contribute those assets to a company in which its partner would hold a majority stake.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Experts: Foreign Investors will Continue to Back the Spanish RE Sector in 2018

11 January 2018 – Expansión

The experts believe that the residential sector is going to be the main protagonist of 2018, in terms of both development and investment. The banks are expected to continue their balance sheet clean-ups with more portfolio sales.

The real estate sector is expected to continue to constitute a mainstay of the Spanish economy in 2018 thanks to the growth of residential property development and the commitment from international investors to Spanish property as a safe haven for their investments, according to the experts consulted by Expansión.

For Adolfo Ramírez-Escudero, President of CBRE España, property developers will be some of the most dynamic investors in 2018. “Last year, they underwent an expansionary cycle and, through specialisation and the sophistication of their product, they will continue to increase their prominence in the sector”, he explains.

The CEO of JLL España, Enrique Losantos, forecasts that 2018 will maintain the positive rhythm of recent years and that figures will remain in line with 2017, with a total investment volume of around €13 billion. Losantos also expects that portfolio operations, which were the major stars of 2017, thanks to the sale of assets by Banco Popular and BBVA, will continue to strengthen their position in 2018 (…).

Rents

For Santiago Aguirre, President of the Board of Directors of Savills Aguirre Newman, “we are entering a year of consolidation in terms of the upward cycle that we have been immersed in since 2014. Several segments, such as offices and logistics, have reached maximum leasing levels, nevertheless, we still see potential for rents to reach the maximum levels seen in the previous cycle”.

In terms of investment in tertiary assets, Oriol Barrachina, CEO at Cushman & Wakefield, explains that there is a perception that there will be more liquidity than product, despite caution being erred in light of the local and international uncertainty. “The main difference with respect to the last two years is that one group of buyers, the Socimis, are now also going to be selling assets. For years, they have purchased lots of assets and after generating value from them, they are going to put them up for sale, a fact that will also help to bridge the gap between supply and demand”, adds Barrachina.

Sandra Daza, Director General at Gesvalt, thinks that this year those investors who entered the cycle during the opportunistic period, between 2013 and 2015, will be replaced by long-term investors, such as insurance companies and pension funds.

In terms of trends, Mikel Echavarren, CEO at Irea, considers that residential development will continue to generate news this year, both in terms of land transactions, as well as price rises and the recovery of secondary markets (…).

Humphrey White, Director General at Knight Frank, highlights that Spain is currently at the beginning of an expansion period, with forecast demand of between 120,000 and 150,000 new homes per year, even though it closed 2017 with just 47,500 new home transactions (…).

No sign of a bubble

White considers that the growth in the sector in Spain rests on “some very firm foundations in terms of the law of supply and demand, whereby moving firmly away from a possible real estate bubble”.

For Gonzalo Gallego, Partner in Financial Advisory at Deloitte, buildable land will be one of the major challenges in the property development sector.

In terms of the rental market, Ramírez-Escudero explains that in 2018, we will see “quite a lot” of activity in the market from institutional investors backing rental homes. Over the last decade, the number of rental homes has increased significantly to reach 22.5%. Nevertheless, Spain still has major potential given that the average in the EU is 33% (…).

Javier López-Torres, Partner in Real Estate at KPMG, agrees. He considers that the rental segment will continue to gain weight due to the difficulties involved in accessing credit, mobility and cultural change (…).

Asset types

By sector, Thierry Bougeard, Director General at BNP Paribas Real Estate, says that demand for office space will continue its strong performance (seen in 2017), above all in Madrid, where leasing volumes are expected to increase to around 600,000 m2.

Meanwhile, in the logistics market, e-commerce will continue to be the main motor of demand, whilst in retail, many owners are betting on improving the quality of their centres, boosting leisure areas and the quality of them, with the aim of encouraging customers to stay longer, he explains.

The experts also agree in highlighting the high level of interest expected in alternative real estate assets, such as student halls and nursing homes.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

French Construction Giant Bouygues Returns To Spain

10 July 2017 – Cinco Días

Bouygues is returning to Spain with its real estate business after years during which the company has stayed away from this activity due to the property crisis. The French construction giant has already disembarked with a team for its property developer subsidiary focused on both Spain and Portugal. And it has already been commissioned to build an office building in Madrid, where it is due to start work at the beginning of 2018.

The French company has decided to look for opportunities in Spain in light of the recovery in the property sector and the improvement in the economy. “We have waited for the macroeconomic indicators to improve and we are looking again at the development of tertiary assets, such as offices and hotels”, revealed Ana Vidal, Director General at Bouygues Inmobiliaria.

The director previously led the company’s real estate project in Spain – where it has been present since 1989 – during the previous boom at the beginning of the century, but after the crisis, Bouygues hauled in the sails and Vidal moved to Paris. She returned to Madrid at the end of 2016 to identify opportunities. “We are going to work in three main businesses: the promotion of offices, residences for students and elderly people, and hotels”, said the Director General.

The whole time, the company has held onto three plots of land that it owns, two in Madrid and one in the 22@ district in Barcelona.

The first project, which is now in its design phase, is being developed in the Julián Camarillo area of Madrid, an industrial district that is home to offices and residential properties in the east of the capital, outside of the M-30. On this plot, Bouygues Inmobiliaria plans to build an 18,000 m2 office building.

Luis Vidal + Architects has been engaged to design the property. The Spanish firm is known for the design of Terminal 2 at Heathrow airport, amongst others major works. It also just led a renovation project for the Socimi GMP of Saint-Gobain’s former headquarters, now known as Castellana 77. Moreover, the firm has collaborated with the architect Renzo Piano in the recently inaugurated Centro Botín in Santander.

The company plans to invest €50 million on the construction of the building from 2018 onwards, over a period of approximately two years.

The other plot of land in Madrid – which it owns jointly with Vía Célere (owned by Värde Partners) is also located in Julián Camarillo. “We think that it is a good office area as an alternative to the centre, where buildings of the highest quality are being constructed. It is a neighbourhood with a lot of potential, like the 22@ district in Barcelona, although it lacks planning”, says Vidal. Finally, it is precisely in that new district of the Catalan capital where Bouygues plans to construct a tertiary use building in the future.

Bouygues Inmobiliaria is planning an annual investment of between €30 million and €50 million in Spain over the next few years, specialising in turn-key buildings. For the time being, the first project being managed by the team of professionals that has recently started work in Madrid does not have a tenant, but Vidal is convinced that it is not a problem, because the firm already has sufficient own funds to start work.

Original story: Cinco Días (by Alfonso Simón Ruiz)

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

Laborde Marcet: RE Inv’t Amounted To €3,520M In Q1

19 April 2017 – Eje Prime

The retail and office segments are driving investment in the real estate sector in Spain. Real estate investment amounted to €3,520 million during the first quarter of the year, in terms of non-residential real estate assets, of which more than half were located in Madrid and Barcelona, according to the real estate consultancy firm Laborde Marcet.

By sector, retail accounted for 42.5% of investments, amounting to €1,495 million, whereby recovering the starring role that it had ceded to the office segment in recent months. Offices accounted for 24.7% of total investment (€868 million). Meanwhile, the hotel sector accounted for 22.2% of the market (€783 million) and logistics the remaining 10.6% (€374 million).

“The real estate sector is reaching exorbitant levels in terms of the final prices of operations because there is a clear mismatch between the demand that exists and the available supply” – said Miquel Laborde, Managing Partner at Laborde Marcet -; “cities such as Barcelona and Madrid have very attractive real estate assets for both real estate investment purposes, as well as for commercial objectives, but there are only a handful of assets available for the large number of domestic and overseas investors interested in acquiring them, which means that rental and purchase prices are rising and asset yields are reducing”.

In this sense, domestic investors closed four out of every ten transactions completed during the first three months of the year, which represented an increase in Spain’s weight in the non-residential real estate market with respect to 2016.

By nationality, British, US, French and German investors were the main representatives from overseas, and they were particularly active in large operations in the offices and shopping centre segments.

If investment continues in this vein for the rest of the year, the tertiary real estate sector will register a record real estate investment figure of €14,000 million, which would represent an increase of 21.7% with respect to the data obtained in 2015 and of 25.8% with respect to 2016.

Original story: Eje Prime

Translation: Carmel Drake

Aragón Creates Logistics Group To Unify Sale Of 240 Ha

6 April 2017 – El Periódico de Aragón

Land covering 2,400,000 m2 (240 hectares) in total, a surface area that resembles the Zaragoza neighbourhood of Delicias. That is the volume of land that Aragón Plataforma Logística (APL), the new public company being created by the regional government, is going to sell. The objectives of the future company APL will be to unify the management, promotion and sale of assets that are currently owned by a variety of regional companies.

Specifically, it will group together three large industrial estates in Zaragoza (Plaza), Huesca (Plhus) and Teruel (Platea), as well as Zaragoza Expo Empresarial, la Sociedad para el Desarrollo de Calamocha (Sodecasa) and Plaza Desarrollos Logísticos (PDL, the property developer behind Caladero). With this supply of spaces, to which the Fraga platform (Plfraga) will likely be added soon, the region is looking to strengthen its position as the largest logistics market in the south of Europe.

APL, which should be constituted within the next few weeks through a decree, will be entirely owned by the regional government, specifically, the Corporación Empresarial Pública de Aragón, which will own 100%. The new management team at the Government of Aragón is seeking to optimise and streamline the operation of logistics, industrial and tertiary assets at all levels. (…).

The logistics sector accounts for 5.5% of the region’s GDP and has secured private investment amounting to more than €3,000 million since 2005 when the first phase of Plaza was launched. (…).

Original story: El Periódico de Aragón (by Jorge Heras Pastor)

Translation: Carmel Drake