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 Sells an Office Portfolio to Zurich for €163.5M

31 January 2019 – Eje Prime

Blackstone is starting to divest the office portfolio that it acquired as a result of its purchase of Hispania. The US fund has sold the so-called Ilunion portfolio to the insurance company Zurich, according to explanations provided by the latter in a statement. The operation has amounted to €163.5 million.

The insurance company has completed the operation through its real estate subsidiary Rex Spain Zdhl. The portfolio includes five office buildings in Madrid leased to ONCE.

Before Blackstone’s takeover, Hispania was planning to divest its entire office portfolio for more than €500 million. The Socimi had made an agreement for the sale with Tristan Capital Partners, but the entry of the US fund into its share capital suspended that sale.

Original story: Eje Prime 

Translation: Carmel Drake

Blackstone Negotiates Sale of the Ilunion Portfolio with Zurich for c. €100M

13 November 2018 – Cinco Días

The real estate giant Blackstone is pushing ahead with several divestments from its recently acquired Socimi Hispania. The US fund is negotiating with the insurance company Zurich regarding the sale of a portfolio of office buildings, which are occupied by Ilunion as a tenant, according to confirmation from sources in the real estate sector. The price of the operation will exceed €100 million.

Blackstone acquired Hispania through a takeover launched in the spring, which valued the Socimi at almost €2 billion. The US fund completed the operation because it was primarily interested in the company’s hotel assets, given that it owned 13,100 rooms across 46 hotels, the largest owner in the country in that segment. The US giant wants to create a hotel platform in Spain and, in fact, has already ceded the management of those establishments to its company HI Partners, the manager of other hotels purchased from Sabadell.

In total, Hispania’s portfolio has a gross asset value (GAV) of €2.811 billion. The most residual part, Hispania’s housing, is already being managed by another company owned by the fund, Fidere. And for the office component, the strategy is to divest the assets.

When Blackstone acquired Hispania, it broke off an agreement that the Socimi had with the British fund Tristan Capital Partners to divest the entire office portfolio for more than €500 million. That was the second time that the sale had been thwarted, previously Swiss Life was the buyer, in that case at the end of the summer in 2017, when the uncertainty surrounding the Catalan sovereignty process meant that the conditions of the insurance company were more demanding.

By contrast, the strategy now is to put this portfolio up for sale in a piecemeal fashion. The most advanced process relates to four properties in Madrid, which are all occupied by Ilunion, the holding company of the ONCE, as the tenant.

The largest property is the Torre 30 Building, appraised at €50 million at the end of 2017. Located next to the M-30 by the junction with the A-2, it was constructed in 1968, renovated in 2006 and has a surface area of 11,417 m2.

The sale also includes the Mizar Building, a property next to Torre 30, where in addition to Ilunion, Eysa and Paramount also have their headquarters, according to Hispania’s public documents, and which is worth €27.4 million. They are joined by the Pechuán building in Plaza Sagrado Corazón de Jesús next to Príncipe de Vergara, worth €19 million. Finally, the portfolio contains a property on Calle Comandante Azcárraga in the Pio XII area, worth €10.1 million.

Those four buildings had a combined appraisal value of €106.5 million as at 31 December 2017. Their current value is unknown but it is expected to be higher given that in May, Hispania revalued its assets upwards by 5.7% on average.

The rest of the office portfolio is not officially up for sale, but given that they are not strategic assets for Blackstone, the expectation is that it will receive offers for them, as a group or in different sub-portfolios.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Tristan Capital & Savills IM Buy 6 Office Buildings in Madrid

6 October 2018 – Real Estate Press

Tristan Capital Partners, together with its local operating partner Savills Investment Management, has acquired a portfolio of offices spanning 78,000 m2 in Madrid from the Socimi Inmobiliaria Colonial for the added value fund Episo4.

The portfolio comprises six Grade A office buildings located in established sub-markets outside of the Spanish capital’s business district: Campo de las Naciones, Josefa Valcárcel (A2) and Arroyo de la Vega (A1), as well as Agustín de Foxá, in the district of Chamartín. The portfolio offers immediate and large-scale exposure to the office market in Madrid, as well as a well-diversified tenant mix, and has the capacity of capturing an expected increase in rents.

Nikolay Velev, CEO of Tristan Capital Partners, said: “After several years of solid economic growth, job creation and a shortage of new developments, an imbalance has been generated between supply and demand in the office market in Madrid, which has resulted in a high net absorption of space and a considerable growth in rents. This trend has been particularly strong inside the M-30 and the differential in rents between offices located inside and outside the central district is now at a historical high. We hope that this gap will be reduced over time”.

The local operating partner will be Savills Investment Management with which CCP 5 LL (Tristan’s core-plus fund over the long term) successfully completed the acquisition of the Manoteras business park (Madrid) in 2017 for €103 million.

Fernando Ramírez de Haro, Head of Savills Investment Management in Spain, stated: “We are delighted to expand our relationship with Tristan through this portfolio. The buildings are of an excellent quality and are highly energy efficient. Moreover, they offer modern and flexible spaces, making them ideally positioned to capture the increase in rents and the growth that is expected to take place outside the M-30”.

Tristan Capital and Savills Investment Management have been advised by Savills Aguirre Newman, Uría Menéndez, Currie & Brown and PwC.

Original story: Real Estate Press

Translation: Carmel Drake

Colonial Divests 7 Office Buildings & 1 Turnkey Project in Madrid for €441M

6 October 2018 – Real Estate Press

Colonial has announced the sale of seven office buildings and a turnkey project in Madrid for a total price of €441 million. The sales have been made under very favourable conditions for the company for a premium of 12% above the most recent valuation.

The assets transacted have a gross leasable area of 106,574 m2 and are located, for the most part (91%) outside of the city’s central business district. They are non-strategic buildings for the company outside of the M-30, mature assets and a project in Castellana Sur / Mendez Álvaro.

Colonial has divested assets, which after a recent real estate transformation have reached high occupancy levels and the maximum point in the cycle for the creation of real estate value. For example, in the case of Alcalá 30-32, the rental contract was recently renegotiated with a +21% increase in the rental price and which is currently 100% occupied by the Public Administration with a long-term contract.

Office project

Colonial has reached an agreement with Grupo Catalana Occidente to sell it a turnkey project spanning more than 20,000 m2 on a plot that it acquired under the framework of the Alpha-III project in January. The project is located in the Méndez Álvaro office market and will allow the consolidation of the Castellana Sur area with the occupancy of the building by a large corporation.

Similarly, Colonial will begin construction of another major project “Méndez Álvaro Campus” over the next few months. That project has an above ground surface area of 90,000 m2 and will house the largest office complex inside the M-30.

Optimal conditions at the right time

This operation has been carried out taking advantage of the good momentum in the office investment market in Spain, which is continuing to generate strong interest amongst institutional and private investors.

Only 4 months have passed since the company identified these assets for sale along with the potential investors, demonstrating the Colonial Group’s capacity to execute this type of transaction under optimal conditions.

The buyers include institutional investors of recognised prestige such as Tristan Capital Partners, Real I.S. and Grupo Catalana Occidente. In the different operations, Colonial has received legal advice from Ramón y Cajal Abogados and Roca Junyent

Reinvestment of capital focused on Prime

The funds received from the divestments will be used primarily to finance the portfolio of high-quality office projects spanning a surface area of 320,000 m2, as well as the company’s acquisition program. The Group’s net indebtedness (LTV) following the divestment of these assets will clearly fall below 40%.

“The company frames these divestments within its strategy to focus on prime assets with maximum added value, where demand and value growth are most notable. With this operation, Colonial increases its flexibility and capacity to continue developing its growth strategy, focused on projects with maximum values and returns”, explained Pere Viñolas, CEO of Colonial.

Original story: Real Estate Press

Translation: Carmel Drake

Tristan Capital Buys Manoteras Business Park For €103M

14 June 2017 – El Periódico

Tristan Capital Partners’ real estate fund, which recently launched the CCP 5 ‘Long-Life’ fund, has completed its first transaction with the acquisition of the Manoteras business complex for €103 million.

The business park is located on Avenida de Manoteras, in the A-1 corridor of Madrid, according to details provided by the company in a statement.

The Director of Investments at Tristan Capital Partners, Nikolay Velev, confirmed that “the first investment for the CCP 5 fund is a milestone for Tristan in Spain”. “It allows the core-plus fund to enter the dynamic office market in Madrid, where there is a significant imbalance between supply and demand, after six years of record lows”, he said.

The Manoteras business park comprises four buildings, which offer 38,200 m2 of Grade-A office space and 995 parking spaces.

Tristan’s fund has teamed up with Zaphir Asset Management, a subsidiary of Aguirre Newman, which has co-invested in the transaction.

Fernando Ramírez de Haro, Partner and Executive Director at Zaphir Asset Management, said that they are “very happy to have been appointed by CCP5 as the local operating partner responsible for managing the assets”.

“We are very active in this market and we are confident that the A-1 corridor offers a very good opportunity for sustainable rental growth, given that it is one of the most established CBD office markets in Madrid”, he said.

CCP5’s advisors in the transaction have been Aguirre Newman, JLL and Freshfields Bruckhaus Deringer. CBRE, Knight Frank and Uria Menéndez advised Lone Star.

Original story: El Periódico

Translation: Carmel Drake