The Sector Adjusts its Workforce: Construction Firms and Servicers Undertake Temporary EREs, whilst the Property Developers Make No Changes

In most cases, the large companies in the real estate sector have decided to protect jobs or make only temporary adjustments.

The main companies in the real estate sector have decided to protect jobs in most cases despite the uncertainty generated by the possible decline in revenues and activity as a result of the Covid-19 coronavirus.

For example, the American fund Blackstone, the largest landlord in Spain with 50,000 rental homes, has made its commitment official by communicating to unions and workers its decision to maintain all of the jobs in its Spanish subsidiaries Anticipa, Aliseda and Testa Home, which together employ more than 1,000 people.

Blackstone Creates ‘Testa Home’ to Manage 20,000 of its Rental Homes

10 January 2020 – El Economista

Blackstone has created a new company, Testa Home, to manage 20,000 of the rental flats owned by its Socimis and other subsidiaries.

The entity will be led by Fidere’s current president, Juan Pablo Vera, and will owned by Testa (58.12%) and Fidere (41.88%).

The aim is to make the management of the portfolio more efficient, optimise operating costs and returns, and render an improved service to tenants.

Of the 20,000 flats, 11,000 are owned by Testa, 6,500 by Fidere, 2,000 by Aliseda and 500 by Hispania.

Original story: El Economista (by Alba Brualla)

Translation/Summary: Carmel Drake

Colonial, Merlin and Lar Rotating Assets Worth €2.5 Billion

20 August 2019

Spain’s largest socimis have all been taking advantage of the benign economic climate to implement a strategy of asset rotation, selling off non-strategic assets to raise funds for further investments. Colonial, Merlin and Lar España have completed more than 2.5 billion euros in divestments over the past two years.

Of the four, Colonial has been most active in this regard. The socimi has sold assets worth approximately €1.5 billion in the last two years, more than half stemming from its acquisition of Axiare. In October 2018, Colonial sold seven office buildings to Tristan Capital Partners and Real IS, as well as a development under construction in Madrid to Grupo Catalana Occidente, for 441 million euros. Of the seven properties sold, five originated with Axiare.

Colonial also recently sold a portfolio of 18 logistics assets, covering an area of 473,000 square meters, to Prologis for an estimated €425 million. What’s more, the socimi sold an office building in Paris for €450 million in mid-2017. The firm is investing the proceeds of some of its sales, allocating €468 million in twelve projects under development in Madrid, Barcelona and Paris, the three markets where the company operates.

Merlin, for its part, sold its 17% stake in Testa to Blackstone last September for €321 million. The firm also sold its portfolio of hotels to Foncière des Regions for €535 million. Lar has also sold €425 million of assets in the last 18 months. Of that, €120 million stemmed from the sale of a logistics portfolio to Blackstone, while another €190 million resulted from the sale of four office buildings in Madrid and Barcelona and some small retail assets.

Original Story: Expansión – Rebeca Arroyo

Adaptation/Translation: Richard D. K. Turner

Blackstone Combines Testa’s and Fidere’s HQs & Prepares to Sell a Mixed-Asset Portfolio

28 May 2019 – Valencia Plaza

Blackstone has combined the headquarters of its rental housing Socimis, Testa and Fidere, in Madrid. The companies, which manage 10,770 and 6,500 rental homes, respectively, will continue to operate as separate entities but will seek to obtain synergies through the management of their portfolios.

Testa and Fidere will both now operate out of offices on Paseo de la Castellana, 257, which are already occupied by Testa. Moreover, the two Socimis have convened their respective General Shareholders Meetings for the same day, Monday 24 June.

In the meantime, Blackstone is considering putting up for a sale a portfolio of several types of real estate assets that it considers mature and non-strategic. The portfolio of potential assets to divest is worth around €400 million and could include around 1,000 homes from Fidere, although none of them will be the flats that the firm acquired from the Municipal Housing Company of Madrid.

Blackstone is currently the largest owner of real estate assets in Spain, worth around €20 billion including logistics assets, offices and commercial properties, amongst others.

Original story: Valencia Plaza 

Translation/Summary: Carmel Drake

Blackstone Puts a Portfolio of FIdere’s Homes Worth €150M-€200M Up For Sale

25 April 2019 – Expansión

The US fund Blackstone has launched the sale of a portfolio of homes belonging to its Socimi Fidere worth between €150 million and €200 million.

According to sources, several interested parties are already analysing the portfolio, whose perimeter may vary depending on the offers received. This sale forms part of a wider initiative by Blackstone to rotate some of the assets in its portfolio. The US fund has already put some of the offices owned by another Socimi Corona up for sale.

Since 2012, Blackstone has invested almost €24 billion in real estate in Spain, where it is the owner of several investment vehicles and management companies, including the Socimis Testa, Albirana and Torbal, as well as Hispania.

Original story: Expansión (by R. A.)

Translation/Summary: Carmel Drake

Testa Suspends the Rental of its Homes Following Approval of New Rental Act

24 April 2019 – El Boletín

Blackstone, the fund that has invested the most in the Spanish real estate sector over the last five years, has reportedly suspended the rental of hundreds of homes managed by its Socimi Testa following the approval of the new Rental Act by Pedro Sánchez’s government on 1 March.

The new decree lengthens rental contracts, giving tenants the right to remain in properties for seven years in those cases in which the landlord is a company, and prohibits rent increases above CPI.

Testa has more than 11,000 properties under management and Blackstone has owned a majority stake in the Socimi since last year after acquiring shares from banks and other groups.

According to professionals from intermediary companies that work for Blackstone, a decision was taken to suspend Testa’s activity following the approval of the decree, in light of the uncertainty generated. Activity is expected to resume in May, following the general election.

Blackstone already warned a couple of months ago that the new Rental Act is discriminatory and would only serve to increase rental prices.

Original story: El Boletín

Translation/Summary: Carmel Drake

Blackstone to Raise €8bn for its European Real Estate Fund

25 March 2019 – Idealista

The US fund Blackstone wants to raise funds to continue growing in Europe. The fund manager expects to secure up to €8 billion for its next European real estate fund, which is going to be called Blackstone Real Estate Partners Europe VI.

The new vehicle’s investments will have tickets starting from €75 million and will include portfolios of properties and corporate operations as the target assets.

Spain is very much on Blackstone’s radar following its purchase of 51% of Popular’s real estate business from Santander for €5.1 million, in one of the largest operations signed last year.

Moreover, the fund has purchased the property of CatalunyaCaixa, the shares of Hispania (including its large hotel portfolio) and the shares of Testa, the rental home company.

Original story: Idealista 

Translation/Summary: Carmel Drake

Blackstone will be the Landlord of 25,000 Rental Homes by the End of 2019

31 January 2019 – Voz Pópuli

Blackstone, one of the largest investment companies in the world, expects to end the year with 25,000 rental homes under management in Spain.

Eduard Mendiluce (pictured above, left), the man from Blackstone who leads the US giant’s real estate emporium in Spain, has explained that the firm believes in the Spanish market, as it has done since 2014, and will end 2019 managing 10,000 more rental homes that it currently owns (15,000).

“We continue to believe in the fundamentals of the residential sector in Spain”, said Mendiluce at a conference about the real estate sector organised by Iese in Madrid. “Spain was one of the countries that suffered the most during the real estate crisis of 2008; prices are still 30% below their maximums”, he said.

The CEO of Aliseda and Anticipa explained that the US fund’s strategy in Spain in terms of real estate involves renting or buying and selling second-hand homes worth between €120,000 and €150,000. “When you have more than 200 homes under management in a given municipality, the business becomes profitable”, he explained.

Blackstone has invested almost €26 billion in the Spanish market over the last five years. In March 2014, it purchased 40,000 problem mortgages from Catalunya Caixa for €3.6 billion.

Since then, it has purchased: Banco Popular’s toxic property, together with Santander, for more than €5 billion; the Socimi Hispania for €2 billion; and 50.01% of the rental home Socimi Testa for €947 million. Last year, it bought Cirsa, a leading company in the gaming industry in Europe in a deal worth €2 billion.

In terms of the criticisms directed at the rental policies of Blackstone and other funds from certain sectors, Mendiluce has highlighted that in Spain, the funds own just 3% of the total rental housing stock, and that the rest is in the hands of individuals.

“I think that it is difficult to manipulate prices when you only account for a small percentage (of the market)”, he said. “I firmly believe that if there has been very concentrated price inflation in a handful of towns, then that has been due to a lack of supply”, and he pointed out that Spain has the lowest percentage of social housing in Europe.

Fashionable market

Juan José Brugera, President of the real estate company Colonial, was very optimistic about the real estate sector in Spain.

“We are in an expansive phase of the cycle, we are facing lower growth, but growth is growth, and it’s strong in Spain”, he said at the conference organised by Iese. “In the rental cycle, we are still in the growth phase, we have potential for rental growth that we believe ensures a strong performance over the next two or three years” he said.

“The Spanish market is fashionable at the moment, we predict expansive behaviour”, he said. “I have a positive vision, the stock market is behaving a bit strangely, but I think that is due to certain turbulences, both external and internal, that are generating uncertainty”.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Testa’s Former CEO Buys a Plot of Land in Madrid to Build 25 Homes

23 January 2019 – Eje Prime

Testa’s former CEO is continuing to shape his new real estate project. Nidom, the property developer led by Daniel Loureda, has purchased a plot of land at number 312 Calle Embajadores in Madrid, according to Expansión. The objective is to construct a 6-story building containing 25 homes, whereby resuming the plans set out by the previous owner.

Until now, the plot was in the hands of the company Caoba Directorship, and it has been sold for above the asking price, which was set at €7.5 million. The operation has been brokered by Knight Frank.

The plot has a surface area of 1,051 m2 and is located in the Legazpi neighbourhood of the capital, in a very sought-after area, where prices are on the rise due to the shortage of land and the location. In fact, it is one of the last buildable plots inside the M-30.

Nidom is thereby continuing to increase its portfolio, after launching several developments, including at number 76 Príncipe de Vergara, 7 Duque de Pastrana and 98 Calle Ferraz.

The property developer is led by Daniel Loureda, former CEO of Vallehermoso and Testa Inmuebles.

Original story: Eje Prime 

Translation: Carmel Drake

Blackstone Launches its 6th Socimi in Spain with 1,600+ Rental Homes

27 December 2018 – El Diario

Blackstone is increasing its position as the largest landlord in Spain. On Thursday, the vulture fund received approval to list its sixth Socimi, Euripo, on the stock market, which will make its debut with an initial value of €110 million. On its balance sheet, another 1,600 homes that will join the more than 20,000 properties that the fund already owns.

Euripo will make its debut on the Alternative Investment Market (MAB), the secondary market in Spain, where it will join other Socimis owned by the US fund, including Fidere, Albirana, Corona and Torbel. Blackstone also recently took control of 80% of Testa, the largest rental home company in Spain, ownership of which it shares with Banco Santander.

In this way, almost one in ten Socimis in Spain have Blackstone as a majority shareholder. As is usual in the operation of this fund, Euripo is owned by a company belonging to Blackstone that is based in Luxembourg.

In this case, Blackstone is listing a portfolio comprising more than 2,000 real estate assets including homes, garages and commercial premises proceeding from the divestment of two financial entities, BBVA and the now extinct Banco Popular. Of the total portfolio, it has direct ownership of 1,900 assets, whilst another 400 are in the hands of a related company, which will likely end up on Euripo’s balance sheet, according to comments included in the IPO document.

There are currently more than 60 Socimis listed in Spain on the MAB, the main stock market and the Ibex 35. Blackstone has been the most active investment fund, especially in the rental home segment, where it controls almost a quarter of the companies currently listed.

The set of assets that Blackstone is debuting on the stock market with this new Socimi is worth around €215 million, of which half are located in Madrid and Barcelona. The remainder are distributed across 35 Spanish provinces, according to the aforementioned IPO document.

Currently, less than 30% of the properties of this company are occupied. For this reason, the company expects to increase its revenues by improving the occupancy ratios and by increasing the rents charged for each occupied home by between 4% and 5%. Moreover, it says that 7% of its assets are illegally occupied.

Original story: El Diario (by Diego Larrouy)

Translation: Carmel Drake