Tag: Texas Pacific Group

Spain’s Top 7 Servicers Manage 80% of the AuM

15 March 2018 – Expansión

The recovery of the Spanish economy, the reduction in unemployment, the improvement in household income and the decrease in financing costs, together with investors’ appetite for property, have contributed to the configuration of a new real estate map.

One of the distinctive features of the current scenario is the entry of new players, which are absorbing the loans and banking credits associated with real estate assets, mostly homes, and which have taken control of part or all of the servicers, created out of the banks’ former real estate subsidiaries.

These companies have gained prominence and have become a key piece of the real estate market. According to the Trends and Prospects in the Real Estate Sector report, prepared by Axis Corporate, more than 80% of the assets under management are in the hands of Altamira, Servihabitat, Haya, Anida, Aliseda, Anticipa and Solvia, which together have around €220 billion of financial assets under management. Specifically, Altamira – owned by Apollo (85%) and Santander (15%) – controls 22% of the market, with €54.1 billion in financial assets under management. It is followed by Servihabitat –owned by Texas Pacific Group (51%) and Caixa (49%)–, which has a market share of 17%, with €41.1 billion in AuM; Haya (Cerberus), with a market share of 16% and €39.4 billion in AuM; and Anticipa and Aliseda, in which Blackstone holds stakes, which manage 14% of the market between the them, or €35.1 billion.

Meanwhile, Solvia, owned by Sabadell, manages €31 billion, which represents 13%; and Anida, the real estate subsidiary of BBVA, manages around €15.3 billion.

For Luis Fernández de Nograro, Managing Director of Financial Services and Real Estate at Axis Corporate, most of these types of management companies are owned by investment funds whose plans do not involve staying put and industrialising the companies, and so, their exits will happen gradually. That is the case of Cerberus, which is exploring the possibility of debuting Haya Real Estate on the stock market.

For José Masip, Partner of Real Estate at Axis Corporate, the servicers are going to follow the path established by the financial institutions, which will involve concentration in the sector. Moreover, the future of these companies anticipates the implementation of value differentiation strategies that may range from: specialising in the management of rental properties, to the operation of an owned commercial network, to innovation over traditional channels and to their commitment to greater internationalisation in the management of assets or the development of land and promotion activity.

Similarly, the experts point to an acceleration in the sale of toxic assets by the banks to funds and Socimis. Together, the sector divested more than €50 billion in doubtful loans and foreclosed land in 2017 alone, which represents almost twice the figure (€27.4 billion) sold between 2012 and 2016.

Socimis

Another new group of players highlighted in the report are the Socimis, which have contributed to the regeneration of the real estate sector, reactivating investment through tax-optimised vehicles, according to the consultancy.

The report points out that, last year, 17 new Socimis made their debuts on the Alternative Investment Market (MAB), which now has a total of 44 vehicles of this kind. In total, the market value of the listed Socimis exceeds €19 billion.

For Axis Corporate, these types of companies will experience continuous growth until 2019 and the majority will maintain their commitment to the tertiary sector. Sources at the consultancy indicate that there are five Socimis listed on the main stock market, but that just two are in the Ibex 35: Merlin and Colonial. For that reason, they consider that it is very likely that, in the future, there will be mergers, acquisitions and new IPOs.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

International Funds Rule Spain’s Residential Sector

10 March 2017 – Expansión

The recovery in the market is fuelling investors’ interest in housing. International funds such as Lone Star, Värde and Castlelack are the new stars.

The recovery of the residential market is starting to take shape in certain autonomous regions and international investment funds are positioning themselves to benefit as the boom takes hold. According to data published on Wednesday by INE, the price of private (unsubsidised) housing rose by 4.7% on average in 2016, which represents the third consecutive annual increase following six years of decreases and the highest rise since 2007.

And as they await the reactivation of the sector, several of the funds have made in-roads. Värde, Lone Star, Castlelake, Texas Pacific Group, Apollo, Cerberus and Kennedy Wilson are just some of the stars of the new residential market.

These funds maintain their presence in the residential market in several ways: as holders of debt, as servicers and as owners of the new generation of property developers, which are much more professional than their predecessors.

Specifically, Värde has been one of the firms that has staked the most on the real estate sector in Spain in recent years. The fund recently announced the purchase of the property developer owned by Juan Antonio Gómez-Pintado. That followed its purchase two years earlier of the real estate subsidiary of Grupo SanJosé (formerly Parquesol), which it subsequently renamed Dospuntos. The fund’s plans now involve integrating those two companies into a single firm, which will have more than 1 million m2 of land and more than 10,000 homes in progress or in its portfolio. In addition, Värde plans to list this firm on the stock market in the medium term.

Moreover, in 2014, the US fund purchased 51% of Banco Popular-e’s credit card business, for which the entity generated gains of more than €400 million. And as Expanión revealed, in December 2016, the fund acquired 40% of La Finca Global Assets, a division of the group owned by the Cereceda family, which specialises in the management of premium offices in Madrid.

Another fund that has been seduced by the residential market is Lone Star, which controls the property developer Neinor. The former real estate subsidiary of Kutxabank will be the largest exclusive property developer to debut on the stock market since Realia in 2007 (the large Socimis that have also debuted since then invest in tertiary assets). The fund is looking to place up to 60% of the company’s shares on the stock market, through the issue of new shares and the placement of existing shares. Lone Star, which will see its stake diluted as a result of the operation, will use the funds raised to reduce debt and continue with its plans to reach cruising speed by 2020 with the completion of between 3,500 and 4,000 homes per year.

Another fund that has positioned itself well in this market is Castlelake with Aedas. The group specialising in the residential segment, controlled by the US fund, has a portfolio of developable land worth €1,000 million, which will allow for the construction of more than 12,000 homes. The fund decided to back the house building segment and, on the advice of Merlin Properties, has launched fourteen developments in Alicante, Barcelona, Madrid, Málaga, Sevilla and Valencia.

Similarly, the funds have known how to gain a foothold in the market through the servicers. Servihabitat, Altamira, Haya and Aliseda are all controlled, in whole or in part, by international investors. These companies, created by the banks during the crisis to accelerate the divestment of assets from their balance sheets, have evolved into multi-service platforms, with financial and real estate assets.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake