Tag: TPG

Sareb Sells its Socimi & its 3,300-Asset Portfolio to TPG

4 December 2018 – El Independiente

Sareb, the Company for the Management of Assets proceeding from the Restructuring of the Banking System, is closing the final details of the sale of its Socimi Tempore Properties to the private equity fund TPG.

The company, which is in the middle of a non-monetary capital increase amounting to €150 million and which will soon manage 3,300 real estate assets worth €325 million, received several offers at the end of November, including from the fund Apollo. In the end, the proposal from TPG has proved victorious, according to sources speaking to El Independiente.

The US group TPG, which has USD 94 billion in assets under management, is the shareholder of companies such as Spotify, Airbnb, Burger King, Lenovo, Ducati, Saxo Bank and Grohe, amongst others.

The so-called bad bank, in which the State holds a 45% stake, hopes to close this operation before the end of the year, in order to improve the appearance of its accounts, which will again feature losses.

The Tempore portfolio sold by Sareb is concentrated (80%) in the metropolitan areas of the major capitals, with the remainder located in regions with significant demand in the rental market, such as Valencia, Sevilla, Zaragoza, Málaga and Almería.

Azora is responsible for the management of the portfolio – it performs the administration and marketing activities for the assets directly. The company is led by the Director of Rentals at Sareb, Nicolás Díaz Saldaña. Before his arrival at Sareb, Saldaña was at the helm of the international department at Metrovacesa during the most complicated period of the real estate crisis.

Sareb is selling its Socimi at a time when these types of companies are in the Government’s spotlight, in light of the insistence of Podemos to toughen up the beneficial tax regime that has facilitated the expansion of the vehicles in recent years.

The Bank of Spain has also started to monitor the Socimis as a potential focus of instability for the financial sector and links the rise of these vehicles to the sharp increases in the prices of offices and commercial premises.

Original story: El Independiente (by Ana Antón)

Translation: Carmel Drake

Sareb to Sell its Rental Home Socimi Témpore to TPG & Ares

2 December 2018 – Tercera Información

Sareb, the financial institution that has a large volume of public capital is going to sell one of its Listed Real Estate Investment Companies (Socimis), Témpore, which manages a stock of thousands of rental homes, to the US vulture funds TPG and Ares. The operation comes at a time when the experts are warning about the emergence of a new speculative bubble in the real estate sector.

The Company for the Management of Assets proceeding from the Restructuring of the Banking System (Sareb), known as the “bad bank”, an entity financed using public capital, which is responsible for managing the toxic assets of the financial entities created during the bubble, has announced the imminent sale of the Socimi Témpore. That corporation was created just a year ago and owns thousands of rental homes.

The Socimis, Listed Real Estate Investment Companies, are a resource created to manage enormous batches of housing in the hands of private investors. Témpore is one of the large companies created by Sareb to manage the rental properties it inherited during the so-called bank restructuring process. Created just a year ago, Sareb has always announced its intention to resell the properties in the private market.

The buyers are the private equity firms TPG and Area, according to reports from financial newspapers yesterday. The agreement at a time when Témpore is on the verge of incorporating a large batch of homes, which means that it will have 3,357 flats in total, making it the third largest company with most properties in the market.

Similarly, according to the information published about the agreement, Sareb is going to continue to transfer homes to the Socimi until November 2020.

The sales process is particularly significant at a time when the real estate market seems to occupy the centre of attention of the large investment volumes in the country’s economy. Far from the fear of a repeat of the collapse of the market similar to that experienced at the start of the economic crisis and becoming immersed again in a dynamic of using land and properties as main investment assets, the financial institutions of private equity firms, such as the US player Blackstone, are acquiring large volumes of homes through the purchase of these Socimis (…).

Original story: Tercera Información (by Christian Zampini)

Translation: Carmel Drake

CaixaBank Transfers Servihabitat & €6.7bn in Toxic Assets to New JV with Lone Star

28 June 2018 – El Confidencial

Caixabank has followed in the footsteps of Santander and BBVA, as expected, to create a joint venture company with a large international fund to which it is going to transfer a large proportion of its toxic real estate assets.

Specifically, the entity has reached an agreement with Lone Star to transfer to this new jointly-owned vehicle its entire portfolio of foreclosed assets, whose gross value amounts to €12.8 billion, and which in net terms is worth €6.7 billion, as well as the servicer Servihabitat, whose ownership it recovered on 8 June, when it acquired the 51% stake that it had sold to TPG five years ago, and which takes the final amount of the agreement to €7 billion.

Lone Star will own 80% of the share capital of the new company, whilst the financial institution will control the remaining 20%, a structure that will allow CaixaBank to deconsolidate the assets. The deal is expected to have a neutral impact on the bank’s income statement, but will allow it to improve its capital ratio, the ultimate motivation behind these kinds of operations.

Specifically, the agreement with Lone Star will allow the bank to increase its fully loaded CET 1 ratio by 30 basis points, but, given that the purchase of Servihabitat resulted in a hit of 15 points, the net outcome of these two operations will have a final impact of a 15-point improvement.

Pressure from the European Central Bank on Spanish entities to accelerate the real estate clean up have been the trigger for these kinds of operations, since they allow the immediate deconsolidation of million-euro batches of toxic assets, which will be sold gradually through the joint ventures that are being created with the funds, whereby avoiding the need for the entities to recognise greater losses now.

Gonzalo Gortázar (pictured above), CEO of CaixaBank, highlighted that this “operation allows us to fast forward by a couple of years with our strategic objectives of reducing non-performing assets, allowing CaixaBank to position itself as one of the banks with the most healthy balance sheets in the Spanish market”.

The agreement also stipulates that Servihabitat will continue to render services to the bank for five years and the final signing of the agreement with Lone Star still depends on approval from the CNMC – Spain’s National Competition and Markets Commission – for the repurchase of 51% of the servicer, at which point the financial institution will be able to sell the assets onto the new joint company.

For its 80% stake (equivalent to around €5.6 billion based on current numbers), the fund will pay the valuation that the assets have at the time the transfer is definitively closed, which is still pending the corresponding authorisations, in both Spain and Europe, which means that the parties will have to wait until the end of this year or the first quarter of 2019.

CaixaBank expects to achieve cost savings of €550 million before taxes over the next three years, an improvement that also includes the new servicing contract that will be signed with Servihabitat.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

CaixaBank Repurchases 51% of Servihabitat from TPG for €176M

8 June 2018 – Expansión

The financial institution, which until now owned 49% of the real estate firm, is going to restore control of 100% of the firm four years after it sold the majority stake to TPG.

CaixaBank has announced an agreement with the fund TPG to repurchase 51% of the real estate manager Servihabitat for €176.5 million. With this operation, which will return full control over the real estate subsidiary to the financial institution, CaixaBank wants to enjoy “greater flexibility and efficiency in the management and marketing” of its real estate assets “as well as a reduction in its costs”.

The operation, which still needs to be approved by the competition authorities, will have a negative impact of around 15 basis points on CaixaBank’s first level capital ratio (CET1 fully loaded) and of around €200 million on the bank’s income statement this year.

Nevertheless, the entity chaired by Jordi Gual expects the impact to be positive over the next few years, amounting to around €45 million per year.

The financial institution sold 51% of Servihabitat to TPG in 2013, in an operation that valued the real estate subsidiary at €370 million and which generated a gross gain of €255 million for CaixaBank, which retained control of the remaining 49%.

The agreement between CaixaBank and TPG included a clause whereby Servihabitat would manage La Caixa’s real estate assets for a decade. Less than five years after that agreement was announced, CaixaBank has decided to recover 100% of the share capital of its real estate servicer.

In January, Iheb Nafaa was appointed as the CEO of Servihabitat to replace Julián Cabanillas, who had been linked to the firm for two decades, and who had served as the most senior executive for the last twelve years.

Nafaa is an Engineer in Statistics, Econometrics and Finance from the École Nationale de la Statistique et de l’Administration Économique in París (France) and has extensive experience as a director of companies such as BNP Paribas, GE Capital and Gescobro.

Original story: Expansión (by J. Díaz)

Translation: Carmel Drake

Altamira Hires Borja Ortega from JLL to Lead its International Expansion

11 April 2018 – El Confidencial

Altamira is stepping on the accelerator to become the leading servicer in the south of Europe and, to this end, has hired a heavyweight from JLL as the Head of International Expansion and member of its Executive Committee. Borja Ortega (pictured below), Director of Capital Markets at the real estate consultancy is going to join the company controlled by Apollo in May.

The first major challenge that he will have to handle is Altamira’s entry into Italy, a market that the company led by Julián Navarro has been analysing for a while to consolidate its position in the Mediterranean region, having already made its debut in Portugal and Cyprus.

The servicer entered Portugal a year ago by purchasing Oitante, a company created to manage Banif’s assets, a move that allowed it to take over the management of more than €1.5 billion in assets.

In Cyprus, last summer, the servicer created a joint venture with Cooperative Central Bank (CCB), the second largest bank in the country with €7.6 billion in financial and real estate assets, in which Altamira holds a 51% stake and which has been operational since the beginning of this year.

Heavyweight from JLL

Until now, as Head of Capital Markets, Borja Ortega has led the firm’s direct investment activities (the traditional business), its financial advisory practice (portfolios, debt, mergers and acquisitions) and its private wealth business.

Some of the most important operations that he has managed in recent times include the process to sell the Adequa office complex to Merlin and the sale of Edificio España, operations that helped his division to record growth of around 50% in the last two years.

Moreover, Ortega launched the private wealth division, which is one of the first to channel the arrival of wealthy Latin American investors in the Spanish real estate market, and he collaborated in the sale of €30 billion in toxic assets from Santander-Popular to Blackstone, an operation in which the fund was advised by JLL.

Following the arrival of the Socimis, which have now begun to consolidate in the market with the takeovers of Axiare by Colonial and of Hispania by Blackstone, and the boom in residential property development, with the stock market debuts of Neinor, Aedas and Metrovacesa, the next major movement in the sector is expected in the field of the servicers.

As we await possible mergers, for the time being, Haya Real Estate is the first firm in the sector to set its sights on the stock market, by engaging Rothschild, JP Morgan and Citi to coordinate its debut later this year. Meanwhile, Altamira has opted to create a large international platform before taking the next step, whilst Solvia has created its own property developer.

Anticipa, the servicer of Blackstone, has swallowed up Aliseda as part of the aforementioned operation involving the purchase of toxic assets from Santander, whilst Servihabitat has appointed a new CEO and it is expected that the complex balance of powers between CaixaBank and TPG will tip in one direction or the other within the next few months, as part of the recently launched process of consolidation in the sector.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Cerberus Prepares for Haya’s Stock Market Debut After the Summer

9 February 2018 – Cinco Días

Metrovacesa achieved it on Tuesday, despite problems to cover supply and the nefarious stock market session that it suffered. The large Spanish property developer, which abandoned the equity market in May 2013, made its return last week. It hasn’t exactly eased the way for the upcoming debuts of Vía Célere, owned by the fund Värde, or the Socimi Testa. But it hasn’t made a total hash of it either.

In this way, the US fund Cerberus is in the process of contracting the banks that will handle the debut its Spanish real estate servicer subsidiary on the stock market. The aim is for that firm to be listed from September. The entities that are on the list of candidates have already done their calculations and are citing a valuation for the company, albeit preliminary, of around €1.2 billion. The aim is to place between 35% and 50% of Haya Real Estate’s capital at this stage. A spokesman for the company declined to comment on this information.

The company, which was created in October 2013, manages property developer loans and foreclosed real estate assets from Bankia, Sareb, Cajamar, Liberbank, BBVA and other financial institutions, worth €39.88 billion at the end of September 2017.

The process of going public is the logical next step, after Haya placed €475 million in high yield bonds in November, with ratings of B3 (Moody’s) and B- (S&P). In other words, in the junk bond range, six levels below investment grade.

The underwriters of that debt, which matures in 2022, were Santander, Bankia, JP Morgan and Morgan Stanley. And they sold it with considerable success. Despite its credit rating, the firm pays an annual return of just over 5% for that liability.

Haya, led by Carlos Abad Rico (formerly of Canal + and Sogecable) offers services across the whole real estate value chain, but it is not a property developer. Rather, it manages, administers, securitises (…) and sells real estate assets such as homes and offices, but it does not own any of the properties.

Bankia Habitat was the seedling of Haya, and it has grown in line with the need by the financial sector to get rid of assets linked to property. One of Haya’s key businesses is the management of loans linked to the real estate sector. It advises on loans and guarantees, recovers debt and converts loans into foreclosed real estate assets.

The other major part of its revenues stems from the recovery and management of properties through their sale or rental. Haya employs 680 professionals and has a sales network of 2,400 brokers. The value of its property developer debt portfolio amounts to €28.7 billion and its real estate asset portfolio amounts to €11.2 billion. Moreover, Haya is going to bid to manage the assets sold by BBVA to Cerberus in November. Haya’s current shareholder acquired 80% of the BBVA’s portfolio of real estate assets, amounting to around €13 billion, for €4 billion (…)

Consolidation

The Spanish banks’ other real estate management companies are waiting for Cerberus to make the first move, according to financial sources. Haya will open the door to the stock market for them if everything goes well or it will serve to consolidate the sector, both here and in Europe.

There are three high profile players on the list. Servihabitat, which manages assets amounting to around €50 billion and which belongs to the fund Texas Pacific Group (TPG), which has held a 51% stake since September 2013, when CaixaBank sold it that percentage; the bank still holds onto the remaining 49%. Altamira, owned by Santander (15%) and the fund Apollo (85%), which also handles assets worth around €50 million in Spain. The volume managed by Solvia, owned by Sabadell, amounts to around €31 billion.

Moody’s warns that the business of Haya Real Estate, the largest company in the sector in Spain, depends on the economic performance of the company and the renewal of its current management contracts. Specifically, one of the most important, with Sareb (…), signed in 2013, is due to expire in December next year.

In terms of its strengths, the ratings agency indicates Haya’s extensive knowledge of the market and its high margins. The firm’s gross operating profit (EBITDA) during the first nine months of last year amounted to €89.8 million, with net income (the amount really invoiced by the company) of €165.8 million.

Original story: Cinco Días (by Pablo Martín Simón and Laura Salces)

Translation: Carmel Drake

Haya Real Estate Prepares for its Stock Market Debut

23 January 2018 – Cinco Días

Haya Real Estate is another player in the real estate sector that is heading towards the stock market. The firm manages property developer loans and foreclosed real estate assets on behalf of Bankia, Sareb, Cajamar, Liberbank, BBVA and other financial institutions, worth €39.884 billion.

The company is owned by the private equity fund Cerberus, which created it back in October 2013 after acquiring a firm dedicated to real estate management from Bankia, called Bankia Habitat, in light of the need for the Spanish financial sector to get rid of its property-related toxic assets in a professional way.

Sources at the investment bank indicate that Haya’s debut on the Spanish stock market has been sketched out and will follow the format of the debuts of the property developers Neinor and Aedas, in 2017, and the upcoming debuts of Metrovacesa and Vía Célere. No decision has yet been taken regarding the valuation or percentage of the stake that Cerberus will sell. The news of Haya’s possible stock market debut was published by Bloomberg on Monday night. A spokesperson for Haya declined to comment on the news.

Haya, led by Carlos Abad Rico (formerly of Canal + and Sogecable) offers services throughout the entire chain of the real estate sector, but it is not a property developer: it manages, administers, securitises and sells assets but does not own them. The company mainly focuses on two businesses. Firstly, the advice and subscription of loans and guarantees, the management and recovery of debt and the conversion of the obligations on property developer loans into foreclosed real estate assets. And, secondly, the recovery and management of property through its sale or rental. The firm employs 680 professionals and has a sales network comprising 2,400 brokers. The value of the firm’s property developer debt portfolio amounts to €28.719 billion and of its real estate assets is €11.165 billion.

Haya recorded EBITDA of €89.9 million during the first nine months of 2017, up by 54% compared to the same period a year earlier, with sales of assets worth around €2.5 billion and an effective turnover (essentially commissions) of €165.8 million. The average management fee during the first nine months of last year was 4.25%.

Competitors

Haya has been growing with aplomb since 2013, but it has several major rivals. Blackstone, which purchased 51% of Popular’s real estate assets from Santander last summer for more than €5 billion, created Anticipa Real Estate, under the structure of the former Cataluña Caixa Inmobiliaria. That platform acquired 40,000 mortgages from the extinct Catalan entity for €4.123 billion in 2015. Since then, it has acquired those types of mortgage debt portfolios, with an investment that amounts to around €7 billion.

Meanwhile, Servihabitat belongs to the fund Texas Pacific Group, (TPG), which has held a 51% stake in the servicer since September 2013, when CaixaBank sold it that percentage, holding onto the remaining 49%. It manages assets worth around €50 billion. Altamira is owned by Santander (15%) and the fund Apollo (85%), which acquired its stake in November 2013. Its assets in Spain are also worth around €50 billion. Solvia, owned by Sabadell, manages assets linked to real estate worth more than €31 billion.

Original story: Cinco Días (by Pablo Martín Simón, Laura Salces Acebes & Alfonso Simón Ruiz)

Translation: Carmel Drake

Haya Signs Agreement with ING to Manage its Foreclosed RE Assets

28 December 2017 – Voz Pópuli

Haya Real Estate is continuing to expand its real estate network in Spain. In just two months, Cerberus, the owner of the platform, has purchased 80% of BBVA’s real estate, acquired the property developer Inmoglacier and signed a new alliance with a bank: ING.

This latest agreement was signed in November and establishes that, from now on, Haya RE will be responsible for the management and sale of ING’s foreclosed assets, including not only those properties the bank already controls but also those that it inherits in the future due to defaulted loans. Although the real estate exposure of the Dutch institution in Spain is low (no figures were revealed), the deal shows that Haya Real Estate is continuing to win clients in a highly competitive market.

Cerberus España already controls the assets of BBVA (once Project Marina is approved in the middle of the year), Sareb, Bankia, Liberbank, Cajamar and those of other funds such as Waterfall. In total, it has property worth more than €50 billion under its management.

Another contract won by Haya recently was Waterfall’s, comprising 400 assets worth €57 million, purchased from Cajamar. That agreement made amends for the fact that Altamira won the contract to manage the assets of Liberbank that were acquired by Bain Capital.

Mergers

All of the real estate platforms (also known as servicers) are trying to win business ahead of a possible consolidation in their market in 2018. Haya Real Estate, Servihabitat (in which TPG and CaixaBank hold 51% and 49% stakes, respectively), Altamira (owned by Apollo 85% and Santander 15%), Aktua (Lindorff) and Anticipa-Aliseda (Blackstone) are the largest.

Another recent move in the sector saw the entry of Axactor, with the acquisition of Unicaja’s assets.

Solvia, the real estate arm of Sabadell, is one of the major unknowns in the sector. Two years ago, it negotiated a possible merger with Haya Real Estate, which has still not been ruled out as we head into 2018.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

 

Cerberus Gets its Cheque Book out again to Buy NPLs from CaixaBank

4 December 2017 – Voz Pópuli

Cerberus is stepping on the accelerator in Spain. The US fund has starred in another major operation just days after acquiring a real estate portfolio from BBVA. One of Cerberus’s subsidiaries, Gescobro, has won an auction for €0.8 billion in non-performing loans and real estate from CaixaBank.

The fund has purchased part of that portfolio, known as Project Egeo, whilst the Norwegian group Lindorff has bought the rest, according to financial sources consulted by this newspaper.

Part (€0.5 billion – €0.6 billion) of this €0.8 billion portfolio comprises unsecured loans (credit cards, personal loans and others without any guarantee) and just over €0.2 billion relates to loans to SMEs secured by real estate.

This is Cerberus’s fourth operation in the Spanish financial and real estate sector in 2017 following the acquisition of Project Jaipur from BBVA (€0.6 billion in non-performing property developer loans; the purchase of the real estate arm of Liberbank, Mihabitans, for €85 million; and the acquisition of €13 billion in property from BBVA for €4 billion.

Strategic fit

The sale of Project Egeo, which is still pending the completion of the necessary paperwork, forms part of the routine divestment plans of the Catalan group. In this way, it is managing and controlling its default rate and complying with the regulatory requirements of the European Central Bank (ECB).

Currently, the group’s default rate stands at 6.4%, after falling by seven tenths in the last year. In total, its doubtful loans amount to €15.3 billion, of which €13.9 billion are in Spain. It has another €7.2 billion in foreclosed assets.

The firm that has won the auction, Gescobro, has been led by Iheb Nafaa until now, but he was recently poached by Servihabitat, the real estate company owned by TPG (51%) and CaixaBank (49%).

Meanwhile, Lindorff has been one of the main competitors in the bank debt market since 2012. More than a year ago, it expanded its real estate business with the purchase of Aktua, the former real estate arm of Banesto; and it strengthened its business through a merger with Intrum Justicia.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

CaixaBank Hires KPMG to Accelerate Sale of Rental Homes Worth €3bn

29 November 2017 – El Confidencial

Spanish financial entities have put their foot down on the accelerator to remove a decade’s worth of real estate crises from their balance sheets. The starting gun was fired by Banco Santander in the summer, when it transferred 51% of the €30 billion in toxic assets that it had inherited from Popular to Blackstone; and yesterday, another milestone was marked by the agreement announced between BBVA and Cerberus, which will allow the bank to deconsolidate more than €12 billion in foreclosed assets.

The next major step may involve CaixaBank after the entity engaged KPMG to try to accelerate the sale of a significant batch of real estate assets, with a net value of €12.1 billion. Specifically, the professional services firm is already working on organising one or more processes to allow the sale of some of the €3 billion that the bank owns in rental assets, according to sources familiar with the process.

That portfolio contains almost 40,000 units and, if it ends up being sold, will represent one of the most significant divestments made by the entity to date. Sources at CaixaBank acknowledge that they are working with KPMG and admit that one of the services that the firm is rendering “may include the sale of certain foreclosed rental assets” but they point out that it would only for a portion of the aforementioned €3 billion.

The sale to Testa of 135 homes, announced in September, fits within this strategy – a small appetiser ahead of the main course that the bank led by Gonzalo Gortázar really wants to serve. Its efforts are aimed at trying to taking advantage of the excess liquidity held by the large funds and the current attractiveness of Socimis to find an exit for its foreclosed rental assets.

Despite CaixaBank’s interest in reducing its real estate exposure, something that both the Bank of Spain and the European Central Bank are asking the entire sector to do, the entity is choosing to be cautious. It is pushing ahead one step at a time, according to market sources, who say that the bank is working to redefine the future of its whole real estate division.

New route map

CaixaBank’s real estate activity is currently divided into two large subsidiaries, Building Center, the real estate company that owns the bulk of the entity’s foreclosed assets; and Servihabitat, a platform (servicer), in which the bank holds a 49% stake, whilst the other 51% is owned by the fund TPG.

The second company, which has been given the mandate to manage the bank’s properties, but not ownership of them, has just hired Iheb Nafa as its new CEO, to replace Julián Cabanillas. It has also engaged McKinsey and Oliver Wyman to analyse all of its future options; any change would require the firm to reach an agreement with TPG; moreover, that giant may be interested in increasing its stake in Servihabitat.

CaixaBank has net real estate assets amounting to €12.1 billion according to its most recent quarterly report as at 30 September. All of this “property” is included in the area known as Non-Core Real Estate, which generated losses of €330 million during the first nine months of the year. The jewel in that crown is the real estate company Building Center, owner of the majority of the foreclosed assets, whose accounting coverage ratio stands at 49%.

Sources in the sector expect the bank to make its big move within the next year, and for it to be in line with those already made by BBVA and Santander. For the time being, the entity is limiting its expectations to the field of research, by indicating that “KPMG, Oliver Wyman and McKinsey are redefining operating processes to improve logistics and efficiency”.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake