Santander & Blackstone Hold Onto the Real Estate Company GAC40

18 May 2018 – Voz Pópuli

Project Quasar Investment, the company created by Santander and Blackstone to bring together Banco Popular’s real estate assets worth €30 billion, has absorbed the company ‘Gestión de Activos Castellana 40’ (GAC40), whose debt amounting to €220 million Popular forgave on 30 December 2014, a move that caught the attention of the European Central Bank.

According to sources familiar with the operation, GAC40 filed for creditor pre-bankruptcy after it found itself in the cause of dissolution, but that measure was cancelled after the formal agreement was reached to transfer Popular’s assets to Project Quasar Investment in March. Sources consulted describe the operation as a “bargain”, given that Santander and Blackstone have effectively acquired GAC40’s assets at a discount of almost 69% and without the burdens that was weighing it down.

The Hispania Buildings in the centres of Murcia and Alicante are just two of the assets owned by GAC40. The company also owns the following shopping centres: La Fuensanta in Móstoles (Madrid); Juan de Borbón (Murcia); and Hispania, in Orihuela. Moreover, it has one supermarket in Totana (Murcia) and another one in Vinarós (Castellón), as well as a hotel in Cartagena. Although most of the properties are occupied, the mortgage charges that had been hanging over them since the real estate boom meant that their sale was unfeasible, according to the sources consulted.

The properties form part of Grupo Hispania, which the businessman Trinitario Casanova, the same person who agreed the sale of Edificio España in Madrid to the Riu group last year, sold in 2008 to José Ramón Carabante – the former shareholder of real estate companies from the boom and the founder of the only Spanish team to have operated in the Formula 1 arena, Hispania – for €650 million.

Carabante abandoned the management of Grupo Hispania in 2011 and was replaced by José Fernando Martínez Blanco, an expert in the liquidation and restructuring of companies. According to the sources consulted, Martínez Blanco was appointed by Banco Popular to acquire Carabante’s companies.

Martínez Blanco changed the registered name of the companies acquired from Carabante to ‘Gestión de Activos Castellana 40’ (GAC40) in 2012. The firm was weighed down by a debt amounting to €562.5 million, with Banco Popular as the main creditor. Until the absorption of GAC40 by Santander and Blackstone, Martínez Blanco had continued as the administrator of the company.

Forgive and refinance

GAC40 has remained active all these years thanks to financial support from Popular, which has been forgiving and refinancing the company’s debt year after year.

On 30 December 2014, Banco Popular’s Board of Directors decided to waive GAC40’s debt. That decision caught the attention of the European Central Bank, which conducted an inspection and identified “deficiencies” in the authorisation of the operation, as this newspaper reported.

The most recent refinancing of GAC40’s debt happened a month after the intervention of Banco Popular and its sale to Santander. On 6 July 2017, the company agreed “as the primary financial creditor”, to “convert the debt into a participation loan amounting to €19.4 million”.

With that debt conversion agreed just a month after Popular’s intervention, GAC40 was able to correct the critical situation that it found itself in. According to the company’s accounts for 2016, to which this newspaper has had access through Insight View, the company was in cause of dissolution with a negative goodwill balance of €221 million and financial debt of almost €250 million.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Baraka Injects €13.4M to Strengthen its Residential & Commercial Businesses

17 May 2018 – Eje Prime

Trinitario Casanova is continuing to add projects to his real estate business in Spain. The Murcian group Baraka has just injected another €13.4 million into its companies that specialise in the residential and commercial sectors. The group’s upcoming plans in Spain include initiating operations in Chamartín, where it has just acquired a plot of land measuring 1.2 million m2.

According to the Official Gazette of the Mercantile Registry (Borme), Baraka has injected another €10 million into its company Baraka Renta. That business division of the group focuses primarily on the purchase of land and the subsequent development and execution of rentals for various companies, both domestic and international, in the food sector.

Baraka has also strengthened its company Baraka House, where it has increased the share capital by €3.5 million. That branch of the group focuses on the development of high-rise homes for young people. “This new line is being carried out in the main cities in Spain thanks to the use of pre-fabricated constructions”, explain sources at Baraka.

In this way, the group is injecting new resources into its companies to undertake new real estate projects in Spain. The latest deal that Casanova has carried out focuses on Madrid, specifically the Operación Chamartín macro-project.

The Murcian businessman has paid €400 million to the original owners of some of the plots of land in Operación Chamartín for their reversion rights to develop 1.2 million m2 of land that is currently owned by Adif.

Rente expropriated these plots with the idea of building the railway station on the site, but, subsequently, the public company reached an agreement with BBVA and Grupo San José to develop the land.

Both companies created the property developer Distrito Castellana Norte (DCN), which is now leading this urban development operation that is going to build 10,500 homes on a surface area spanning 2.66 million m2.

Nevertheless, Casanova wants to take advantage of the claim being made by the reversionists, who are asking the administration to be awarded the right to acquire their former plots in the event that Renfe decided to change the use for which they were expropriated and to sell them, as has actually happened, according to these parties.

Casanova’s next steps for this project in Chamartín involve first paying a cheque for €400 million to the reversionists, who have received a small payment for now whilst they wait for the rights that they are requesting to be activated or not, and later on to pay €1 billion to Adif for the outright purchase of the plots. That is the amount that DCN has promised to pay the Spanish railway manager.

Second generation and reinforcements for the property developer 

Proof that the residential sector is firmly in Baraka’s sights came with the appointment of Fuensanta Casanova, daughter of Trinitario Casanova, as the Head of Development and Investment at Baraka, as Eje Prime revealed in Madrid (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Baraka Invests €40M in Another Logistics Asset

13 March 2018 – Expansión

Grupo Baraka, the corporate holding company chaired by the Murcian businessman Trinitario Casanova, is maintaining its commitment to the logistics sector. After purchasing a plot spanning more than 30,000 m2 in Barcelona from Consum in February for the construction of a logistics warehouse, the company has now acquired 95,600 m2 of industrial land in Alcalá de Henares (Madrid) on which it is going to construct a logistics platform.

Grupo Baraka plans to invest around €40 million in the project, including the acquisition of the plot and the commissioning of the logistics platform, which is expected to be ready within eight months and which will occupy a surface area of 45,000 m2, according to explanations provided by the company yesterday.

Specifically, the land acquired by the real estate group is located on the El Encín industrial estate, where the US multinational Owens Corning used to operate a factory, until two years ago.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Trinitario Casanova Invests €15M in a Logistics Platform in Barcelona

21 February 2017 – Expansión

Through the Baraka Group, the Murcian businessman has purchased a plot of land measuring more than 30,000 m2 from Consum, where it is going to build a logistics warehouse.

The construction group Baraka, controlled by the well-known businessman Trinitario Casanova, has completed the purchase of a plot of land dedicated to logistics-industrial use, located in the municipality of Sant Esteve Sesrovires, in Barcelona.

The land, owned until now by the Consum group, spans 30,665 m3; and Baraka is going to build a 19,213 m2 complex on the site, split into modules of around 6,000 m2, with the aim of leasing them to three operators, said the company. Currently, Baraka is negotiating with two companies interested in the project, say sources at the group, speaking to Expansión.

Sources at the company highlight the location of the future platform in the “strategic enclave of the Can Estella industrial estate, located next to the A-2 and AP-7 motorways, which connect the Mediterranean Arc with Barcelona, the main traffic route from Europe through the Mediterranean and Pyrenees, with Madrid”.

In total, Baraka is going to invest €15 million in this project.

In parallel to this industrial project, Baraka is working on the marketing of the commercial area of Edificio España, the property that it acquired last June from the Chinese Wanda Group, only to immediately sell it onto RIU Hotels.

In addition to the Edificio España operation, Casanova acquired a building on c/Preciados 13, also in Madrid, as well as the adjacent building, which houses the Carlos V Hotel. In the case of c/Preciados 13, Baraka has teamed up with the real estate group Hines, which is acting as the financial partner, whilst the Spanish firm is taking care of the building work and the search for a new tenant.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Baraka Completes €7M Capital Increase & Ends Deal With Hines

13 December 2017 – Eje Prime

Trinitario Casanova is ending the year with a low profile. After the hype of Edificio España and his various other investments in the Spanish real estate market, the Murcian businessman is preparing for next year by inflating his financial capacity by €7 million. Moreover, his company recently broke its agreement with Hines to market the asset that the former sold to the latter, specifically, number 13 Calle Preciados, according to sources close to the group speaking to Eje Prime.

The group’s most recent activity includes a €6.8 million capital increase by the company Baraka Invest Global, the investment arm of Trinitario Casanova, through which he invests in real estate and other types of business. In this way, the company’s share capital rose to €96.8 million, according to the Official Gazette of the Mercantile Registry.

Baraka Invest Global is the company through which Trinitario Casanova has carried out its most recent real estate operations. It is also the parent company of other entities such as Baraka Ventures of Florida, specialising in real estate investments; Baraka Viviendas, specialising in the development of homes and residential land; and Baraka Renta, which is responsible for promoting and operating shopping centres for rent.

Despite fortifying its investment companies, the firm has lost several businesses along the way this year. One example is the agreement that it held with Hines regarding number 13 Calle Preciados. Sources in the sector explain that, although Casanova had signed a marketing agreement with the US group, that deal is no longer valid, and Hines is now solely responsible for marketing the asset (…).

Baraka sells land

Nevertheless, Trinitario Casanova has been pushing ahead with many of the projects in his portfolio (…). In November, he sold the last three residential plots he owned in one of the development areas in the north of Madrid, Valdebebas. In fact, Grupo Baraka sold land with a total buildable surface area of 35,000 m2, after reaching an agreement with the joint venture between Gestilar and Morgan Stanley. The new owners plan to invest €100 million on the construction of around 200 homes (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Trinitario Casanova Sells Large Plot In North Madrid To Gestilar-Morgan

13 November 2017 – El Confidencial

It has taken Trinitario Casanova more than a year to make his move since he became a landowner in Valdebebas, one of the main areas of development in the north of Madrid. But in the end, he has acted and he has done so with one of the new stars in the market, the joint venture created by Gestilar and Morgan Stanley. The parties are currently finalising an agreement, which, if nothing goes wrong, will be signed this week and which will result in the sale of all Casanova’s residential plots.

It was in the spring of 2016 when the owner of the Baraka Group purchased Parque Empresarial El Olivar, a company owned by the Cort Lagos family. With it, he acquired 114,000 m2 of land, spread over eight residential plots, plus one for industrial and commercial use that by itself measured 46,000 m2.

Since then, Casanova has been focused on removing the company from the bankruptcy situation that it fell into four years ago and which had reached the liquidation phase when Baraka appeared. This objective was achieved on 27 September, when the Mercantile Court number 5 of Madrid resolved “to declare the reactivation of the dissolved company Parque Empresarial del Olivar”, according to the ruling to which El Confidencial has had access.

With this sentence in his hand, Trinitario has been able to sit down and negotiate, with ease, to sell the three residential plots that he still owns in Valdebebas, given that the other five were auctioned off before Baraka managed to purchase Parque Empresarial and were pre-awarded to Grupo Amenábar and Premier. The party chosen by the businessman as the new owner of his land is the joint venture that Gestilar and Morgan Stanley have created.

The property developer owned by the García-Valcárcel family has been analysing these plots in Valdebebas for a while, and other giants, such as Castlelake, the fund behind Aedas Homes, had also expressed their interest in the past. The negotiations accelerated following Parque Empresarial’s exit from bankruptcy and last week, they managed to reach the point of agreement, according to the sources consulted.

As El Confidencial revealed, Gestilar and Morgan Stanley have constituted a joint venture, which they plan to endow with €100 million, whose vocation is to acquire plots of land over the next four or five years. They plan to build around 1,000 new homes thereon, a figure that equals the entire portfolio that Gestilar currently has under development.

An important portion of this plan may be achieved only with the success of the operation in Valdebebas, one of the most sought-after areas in Madrid, and therefore in all of Spain, but also one of the areas most affected by legal uncertainty. For years now, the courts have been ruling against the way in which this development has been carried out, which has forced licence granting processes to be suspended on several occasions.

Trinitario Casanova, who took on the debt of Parque Empresarial when he acquired the entity, will continue to be present in the development, as he will retain control of the 46,000 m2 industrial and commercial plot, where he wants to boost the activity of his construction company Trabis, an aim that is always behind the real estate movements of the Baraka Group.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

RIU Starts Work On Edificio España To Open Hotel In 2019

24 October 2017 – Expansión

The Mallorca-based hotel chain RIU has started work to renovate Edificio España, which will house its first hotel in Madrid and which will be the company’s flagship property in the country.

The future RIU Plaza will have a four-star rating and will contain 589 rooms and 15 meeting rooms, with almost 3,000 m2 to be used for events. Moreover, the hotel will have a gastro bar in the reception, two restaurants and a sky bar located on the two upper floors, one of which will have a terrace and a swimming pool.

The hotel chain purchased Edificio España from Baraka back in June in a three-way transaction, shortly after the Murcian group owned by Trinitario Casanova had purchased the property from Wanda for €272 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Riu Gets Green Light For Its Renovation Of Edificio España

22 September 2017 – Eje Prime

After a very drawn out negotiation process and having being passed from Wanda to Grupo Baraka and then to the hotel chain Riu, Edificio España has finally received the green light for its renovation. The Town Hall of Madrid has granted the building permit to allow Riu to start to refurbish its Riu Plaza.

Sources at the Town Hall’s Sustainable Urban Development (DUS) department, explain that the Activities Agency granted the authorisation yesterday, which, given the complexity of the construction work, establishes a program of approval comprising two phases: firstly, the restoration work will be performed, and then the definitive licence will be granted for the inauguration of the hotel, according to EFE.

The first phase of the building permit covers work to conserve the façades, external work to recover recesses, the dismantling of embellishments and the replacement of windows and railings, as well as partial restructuring work, refurbishment and restoration for the adaptation of the existing structure and the dismantling of protected interior elements.

On the other hand, the second phase includes the definitive licence for the inauguration of the hotel activity and the retail space, with the performance of partial restructuring work, construction of internal partition walls and facilities, and external work to assemble the identifying elements of the hotel and the planned retail space, according to sources in the team led by José Manuel Calvo.

Located in the central Plaza de España, the property was constructed by Spanish architects Julián and José María Otamendi between the years 1948 and 1953, and it was the tallest building in Spain at the time. The Chinese multinational Wanda acquired the iconic building with the aim of opening a hotel, luxury homes and a shopping centre, but to that end, it wanted to pull down the existing structure and then reconstruct the façades at a later date, something that the municipal Government refused to allow.

In the end, Wanda sold the building to Grupo Baraka, owned by the Murcian businessman Trinitario Casanova, who visited the property together with the mayor of Madrid and who promised to build a hotel with two swimming pools and a shopping arcade, in collaboration with Riu.

The hotel chain then reached an agreement with Baraka to acquire 100% of Edificio España, and so it will be the entity responsible for undertaking the construction work, in two phases.

Original story: Eje Prime

Translation: Carmel Drake

Casanova Buys Land In Cataluña To Build 2 Logistics Warehouses

5 September 2017 – Eje Prime

Grupo Baraka is still shopping. The company, led by the Murcian businessman Trinitario Casanova (pictured above) has just closed two real estate transactions in Cataluña. The group has acquired two plots of land with a combined surface area of 72,000 m2, where it plans to build two logistics warehouses of up to 19,000 m2 each.

One of the plots is located in Sant Esteve de Sesrovires and the other is in Santa Perpètua de Mogoda, both in the province of Barcelona, according to El Economista. The company has not made any statement regarding the price it has paid for the plots.

These transactions follow the purchase of a plot measuring 600,000 m2 in Montcada i Reixac (also in the province of Barcelona) in July, for which the group paid around €300 million. On that plot, the group plans to construct a health care complex comprising at least one hospital, as well as care-in-the-home properties and garden areas.

Original story: Eje Prime

Translation: Carmel Drake

Hotel Chain Riu Ends Up Acquiring Edificio España

2 June 2017 – El Mundo

The soap opera surrounding the sale of Edificio España in Madrid reached its finale yesterday morning, with the completion of a three-way operation, which saw the Chinese Group Wanda official sell the building’s deeds to the hotel chain Riu. The hotel group reached an agreement with Grupo Baraka to acquire 100% of the property and to subsequently undertake the necessary renovation to convert it into the first hotel in Spain to operate under its Riu Plaza brand.

All of the parties met at the notary’s office yesterday morning in Madrid, and once the purchase of the property from Wanda by Grupo Baraka (which held the initial purchase rights) had been formalised, the latter sold the property to Riu Hotels & Resorts. The consideration paid amounted to €272 million, according to the consultancy firm JLL, which has advised the sale.

“Our strategic plans include opening a Riu Plaza hotel in Spain and this opportunity in Madrid, in an unbeatable location and in an iconic building, completely fulfil all of our requirements,” said Carmen and Luis Riu, CEOs of Riu Hoteles. “The operation had been on the cards for several months before the option opened up of Riu acquiring 100% of the building. After analysing that opportunity in detail, we decided that we didn’t want to waste it”, explained the directors.

Trinitario Casanova, President of Grupo Baraka, will take responsibility for leasing the retail space, measuring 15,000 m2, where several department stores will be opened.

The building work could start today

After hearing of the sale, the Councillor for Sustainable Urban Development at the Town Hall of Madrid, José Manuel Calvo, said that the new owner of Edificio España could start the building work to consolidate Edificio España right away. The licence to undertake the structural work was granted on 31 March and its terms are “not affected” by the identity of the building’s owner.

The processing of the permit to open a hotel in the skyscraper will take a bit longer. Sources at the Palacio de Cibeles (the Town Hall) predict that the green light will be given for the construction of the establishment in “the autumn”, given that the municipal technicians and Baraka’s architects have been working together on this project for several months now.

In terms of the retail surface area, which will be housed on the lower floors of the property, in Plaza de España, the presentation of an affidavit is all that is required to start the refurbishment work.

The hotel

The future Hotel Riu Plaza will occupy 24 of the 27 floors in Edificio España, whilst the remainder will be used as retail space. The establishment will have approximately 650 rooms and will be a 4-star property.

The hotel will also have a space measuring more than 1,800 m2 for events, which will include an open plan room measuring 1,500 m2, with 6 m high ceilings, which will become a unique space in the centre of Madrid.

The establishment will also have two restaurants, a rooftop swimming pool, where there will also be a Sky Bar and an additional space for events, spanning more than 900 m2.

Original story: El Mundo (by Luis M. Ciria, Marta Belver and Roberto Bécares)

Translation: Carmel Drake