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

Blackstone Crowns its Position as the Largest Property Owner in Spain

18 September 2018 – Cinco Días

Blackstone likes Spain. And specifically, the Spanish real estate market. In recent years, the fund manager has made several large purchases linked to property in the country, displaying its enormous financial capacity to handle operations of any size.

In fact, the fund has now become the largest real estate owner in Spain, where it owns assets worth more than €20 billion, according to the figure compiled by Europa Press, placing it well ahead of the largest Socimis, such as Merlin (€11.785 billion) and Colonial (€11.19 billion).

The fund quickly saw an opportunity with the Testa operation, given that some of the shareholders wanted to exit the company, such as the clear case of Merlin, and the willingness of Santander and BBVA to sell.

The acquisition of 50.01% of Testa Residencial from Merlin, BBVA and Santander for €948 million – an operation that is still open to the other shareholders – followed the very recent purchase of the Socimi Hispania, a transaction worth more than €1.9 billion. Initially, Blackstone agreed to acquire the 16% stake owned by the investor George Soros, and then it launched a takeover bid for the rest of the company. In that case, it acquired 46 hotels, which were added to the 15 it had already acquired from Sabadell and whereby the largest owner of rooms in Spain was born.

In July, Blackstone acquired a logistics portfolio from the Socimi Lar España for €120 million. And recently, it was revealed that Blackstone and Centerbridge had teamed up to submit an offer for Santander’s headquarters in Boadilla del Monte (Madrid) amounting to €3 billion, in a bid that ended at midnight yesterday.

In Spain, Blackstone’s largest operation was undoubtedly the purchase from Santander of 51% of Popular’s real estate business for €5 billion. But that was not its only bank-related deal. It also acquired the portfolio linked to the property of the now extinct entity CatalunyaCaixa. The fund created the company Anticipa Real Estate to manage those toxic assets and it has been putting some of those foreclosed homes up for rent through its various Socimis: Albirana and Torbel (flats acquired from Sabadell), which are both listed on the Alternative Investment Market (MAB).

Moreover, one of Blackstone’s first operations was also one of the most contested politically by the leftist groups, when in 2014, it acquired 1,800 social housing properties from the Town Hall of Madrid for around €130 million – those homes currently form part of the portfolio owned by the Socimi Fidere.

Blackstone entered the property market in Spain in 2014 on the hunt for bargains following the crisis, firstly focusing on bank portfolios. But the recent acquisitions of Hispania and Testa take the US giant in another direction. There is enormous liquidity in the market, which has given a great investment capacity to these funds. Now, it is sounding out opportunities in which to invest in through its funds in real estate as an alternative to public debt with higher returns.

This New York-based firm, which is led by Stephen Schwarzman (pictured above) as its President and CEO, is the largest manager of real estate funds in the world, with $19.4 billion in assets under management, according to its results for the first half of the year.

Original story: Cinco Días

Translation: Carmel Drake

Just Four Socimis Own Almost 20,000 Rental Homes in Spain

22 July 2018 – El Diario

The debates over rental housing, rising prices and the risk of a new real estate bubble are all continuing to rage. Whilst Pedro Sánchez’s government has started to outline its new policy to avoid a hike in prices, investors are not letting up in their frenzy to take positions in the sector. Proof of that is the continuous trickle of new listed Socimis specialising in the residential rental sector.

One of the latest entities to hit the headlines in this regard is Testa Residencial, whose General Shareholders’ Meeting approved its debut on the Alternative Investment Market (MAB) this week. That secondary market, specialising in Socimis and companies with smaller market capitalisations, will have 19 companies that either specialise in housing or own a significant portfolio of rental homes. Together they own a volume of assets that now comprise almost 24,000 homes, with a combined value of just over €4.1 billion.

Specifically, Testa is going to make its debut on the MAB as the largest rental home real estate company on the secondary market. Following its most recent operations, the Socimi now has 10,573 homes. The entity is owned by BBVA, Santander and Merlin, amongst other shareholders. It is followed, in terms of the number of assets owned, by Albirana, Fidere and Torbel, the three residential Socimis owned by the vulture fund Blackstone, which together own more than 9,300 homes.

Those four companies alone own almost 20,000 rental homes, according to data registered by the companies themselves in their issue brochures or annual accounts. That figure coincides with the plan outlined by the Minister for Development, José Luis Ábalos, which includes the creation by the Government of a stock of public housing for rent over the next four to six years.

Another of the most important Socimis in this field is Témpore, a subsidiary of the bad bank, Sareb, in which the company that owns the toxic assets of the rescued savings banks has placed some of its best homes and which made its stock market debut in March. It owns almost 1,400 homes and announced recently that it will be increasing its portfolio with new assets from Sareb.

Madrid is the province that is home to the most homes owned by the almost twenty Socimis that are listed on the MAB, accounting for 47% of the total (…). It is followed by the province of Barcelona, with 22%, and to a lesser extent, Valencia, with just over 4%. Together, those three provinces account for almost three-quarters of the assets owned by those entities.

Rising yields

The real estate consultancy firm JLL justifies this interest from the Socimis in rental housing by the significant returns that they generate. According to that firm, over the last year, rental homes generated a yield of 11.4%, compared with 10-year public bonds, for example, which generated a return of 1.6%. “Our forecasts indicate that yields will grow by 6.1% over the next three years”, they add, although they highlight that there are differences by region.

JLL specifies that the market is “highly fragmented” despite the “profound transformation” that is happening in the rental housing sector due to the development of Socimis and the arrival of institutional investors. The consultancy firm points out that these types of real estate investors are faced with the limitation of a shortage of entire buildings available for rent, a model that they prefer because it allows for a more efficient management. For that reason, they say that investors such as Testa and Azora are looking to grow their portfolios by building new rental homes in collaboration with property developers and construction companies.

Another noteworthy point about this growth in the number of Socimis dedicated to rental housing is the ownership of the companies. Almost half of the real estate companies that are listed on the MAB, eight to be precise, are controlled by companies that have their headquarters in Luxembourg. Such is the case of Albirana, Elaia, Elix Vintage, Fidere, Hadley, and Torbel, a company that is also indirectly controlled from the Cayman Islands. Another of the companies is located in The Netherlands (Barcino) and two others, Galil and VBare, are linked to Israeli investors (…).

Original story: El Diario (by Diego Larrouy)

Translation: Carmel Drake

Blackstone’s Socimi Torbel Debuts on the MAB at €11.45/Share

5 July 2018 – Voz Pópuli

Torbel Investments, the new Socimi owned by the US fund Blackstone, is going to make its debut on the Alternative Investment Market (MAB) this Thursday at a price of €11.45 per share, giving the company a market value of €92.2 million.

Torbel, the second Socimi that is going to be managed by Anticipa Real Estate, owns a portfolio of 2,495 assets – 2,165 of the properties are flats and family homes, and the remainder are commercial premises, parking spaces and storerooms -, which have a combined market value of €218 million.

These assets are distributed throughout Spain, with the Community of Valencia accounting for the largest share – it is home to 36.5% of the total between the provinces of Valencia and Alicante -, followed by Cataluña, with 17.8% of the total, and Madrid with 15.9%. The remaining 30% are located in Andalucía and Castilla-La Mancha.

All of these assets, whose overall occupancy rate amounts to around 58% (tenants are being sought for the remaining 42%), proceed from the Empire portfolio that Blackstone purchased from Banco Sabadell between 2016 and 2017; they are managed by the US fund’s subsidiary Anticipa.

Anticipa Real Estate was constituted in 2014 after passing into the hands of Blackstone and has been an evolving entity ever since. It has gone from being a servicer that managed assets for third parties to being a management platform of real estate assets and mortgage loans, all with the aim of becoming the leading residential rental manager in Spain.

Torbel is the fourth residential Socimi that Blackstone has debuted on the stock market in Spain following Fidere Patrimonio, Corona Patrimonial and Albirana Properties.

Original story: Voz Pópuli 

Translation: Carmel Drake

Blackstone & Santander Will Transfer 21,000 Of Popular’s Homes To Various Socimis

30 October 2017 – Cinco Días

The sale of the real estate assets proceeding from Popular to Blackstone is not over yet, but the strategy behind the operation is already very clear and will reinforce the US fund’s position as the largest homeowner in Spain. The American firm’s plan involves replicating its previous purchase of banking portfolios linked to real estate on a grand scale. Specifically, the fund will transfer a large part of these homes to several Socimis with the aim of renting them out. A small proportion, the lowest quality properties, will be put up for sale.

In August, Santander sold 51% of Popular’s real estate to Blackstone, together with the real estate management platform Aliseda, which it had previously repurchased from Värde and Kennedy Wilson. These assets (comprising homes, land, office and doubtful debt) were worth around €10,000 million, and so Blackstone will pay almost €5,100 million when the operation is finally closed at the beginning of 2018.

Of that transaction, Blackstone and Santander will manage around 80,000 assets through Aliseda. Of those, 30,000 correspond to homes from property developer loans, according to market sources. Now, it has been revealed that the strategy of the two partners involves transferring approximately 70%, in other words, almost 21,000 homes, to several of the US fund’s Socimis with the aim of putting them up for rent, explain sources in the sector (…).

Blackstone has already followed this strategy in the past. Its first major operation in Spain was the purchase of 40,000 mortgages from the now extinct Catalunya Caixa for €4,123 million in 2015. Next, it created the platform Anticipa Real Estate to manage those assets. Prior to the purchase of Popular’s real estate, it had already acquired around €7,000 million in these types of assets, of which 12,000 were homes.

To create the residential giant, the US firm began to create Socimis to which to transfer its properties for rent. The first of these companies was Albirana Properties, which made its debut on the Alternative Investment Market in March, with a market capitalisation of €170 million and 5,000 rental homes under management.

But that was just the beginning. Since then, Blackstone has created several more Socimis, such as Tourmalet, Torbel, Albirana II and Pegarena, according to the tool Insight View from Iberinform. Now, Blackstone will identify the best homes, put them up for rent and package them into several different Socimis.

Currently, Blackstone is involved in a detailed assessment process of the properties in order to proceed with their appraisal, according to sources in the sector, which will conclude with the completion of the operation during the first quarter next year. The other homes, those that will not be transferred to the Socimis, comprise around 9,000 units. They are the worst quality properties and will likely be put up for sale on the retail market.

Blackstone first entered the rental market with the purchase of homes from Madrid’s Municipal Housing Company in 2013, which it subsequently grouped into the Socimi Fidere, whose shares are also traded on the MAB and which has a market capitalisation of €268 million.

Blackstone, which is led by Claudio Boada as the CEO in Spain, is particularly active in the real estate sector in the country. Last week, it purchased the company HI Partners, the owner of 14 holiday hotels, from Sabadell for €630 million.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake