Tag: UBS

Asian Funds Seek Local Allies to Enter Spanish Real Estate Sector

19 January 2019 – Expansión

Asian investors are joining forces with firms such as UBS, AXA and Savills IM to gain weight in the office, logistics and retail segments, where they still have a limited presence.

Spain has become a key destination for international investors interested in real estate assets, and Asian capital is no stranger to this buying fever that has boosted the sector in the country over the last five years. These investors, who are used to large volume operations, are now trying to gain a foothold in Spain through alliances with large European managers, such as UBS, Rockspring, AXA and Savills Investment Management, which will allow them to participate in smaller-sized operations and enter other sectors such as the office, logistics and retail segments.

The incorporation of new investors, capital funds and Chinese, Japanese and Korean family offices, amongst others, at the hand of the large European managers that are already present in Spain and know the local market well, offers them the possibility of arriving in the country by assuming less risk.

One of the most recent examples is that of the Korean fund manager Igis Asset Management, which, through Savills Investment Management, closed the purchase of Nestlé’s headquarters in Esplugues de Llobregat (Barcelona) last October for €87 million. That operation followed others such as the purchase of the Madrilenian Zielo Shopping Pozuelo and that of the office building located at number 2 Calle Santa Bárbara, both through funds managed by UBS, in turn, financed by Asian capital, amongst others.

Indirect investment

(…). These alliances followed the trickle of mega-operations undertaken in Spain in recent years. The most significant include the deal involving the Philippine group Emperador, which purchased the Torre Espacio building in Madrid, one of the skyscrapers that forms part of the Cuatro Torres complex, from Villar Mir, for €558 million.

Another operation that revolutionised the market involved the Chinese holding company Wanda, albeit ephemerally, as it had to abandon the project just three years later. The group purchased Edificio España (Madrid) from Banco Santander in 2014 for €265 million and sold it in the summer of 2017 to RIU, its current owner (…).

Those two Asian investors were joined by the sovereign fund of Singapore GIC, which, through the Socimi P3 Logistics Parks, acquired a foothold in the logistics market in Spain, one of the segments with the most potential.

Investors from Asia are therefore one group of overseas players who are committed to the country, but they are not the only ones. According to a report compiled by Savills Aguirre Newman, international capital was the major star in 2018, accounting for 70% of the €10.8 billion transacted, the largest percentage since the start of the market recovery five years ago (…).

By origin, investors from Europe and the USA account for almost 57% of the domestic and international investment total and 85% of the volume of operations from overseas. Asia is ranked in third place (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Several Funds Acquire/Increase their Stakes in Hispania in the Midst of Blackstone’s Takeover Bid

11 June 2018 – Expansión

Blackstone’s takeover bid for Hispania has placed the Socimi firmly on the radar of investment funds. Since April when Blackstone announced its intention to launch a public share acquisition offer (OPA) for the Spanish Socimi, there have been continuous changes in the shareholding structure.

In terms of the funds who have been active, Fidelity has continued to back the company and has strengthened its stake to 9.64%. Prior to the takeover bid, the company’s stake remained at just over 7%.

Fidelity is the second largest shareholder of Hispania, behind Blackstone, which, after purchasing the stake owned by the Hungarian-born magnate George Soros, leads Hispania’s shareholder ranking, with a 16.56% stake.

Another one of the Socimi’s shareholders that has strengthened its weight since the takeover is Axa Investment Group, which now controls 4.14% compared to 3% before the takeover bid, and Bank of Montreal and BlackRock, which currently hold stakes of around 4.1% each, compared with 3.01% and 3.3%, respectively, that they used to control.

These shareholders constitute the hardcore nucleus of the company’s owners, together with the Mexican firm Canepa, which holds almost 6% through Tamerlane, and the Brazilian family office BW Gestao de Investimentos (BWG) with 3.7%.

New shareholders

In addition to the reference shareholders who have taken positions, Blackstone’s interest in Hispania has led to new interest from other shareholders.

The Norwegian fund, through its manager Norges Bank, has appeared to acquire 1.09% of the Socimi; Man Group, one of the largest hedge funds in the world, has bought 1.27%; and Kite Lake Capital Management has purchased 1.56%.

Blackstone’s takeover bid for 100% of Hispania at a price of €17.54 per share means that it is valuing the Socimi at €1,905 million. Hispania used to have a market capitalisation of €1,903 million and its shares closed trading on Friday at a price of €17.68 per share, slightly above the takeover price.

After Blackstone launched its takeover, Hispania’s Board of Directors engaged Goldman Sachs, UBS and JPMorgan as financial advisors and Freshfields and Uría Menéndez, as legal advisors, to analyse the terms of the offer and look for alternatives.

Expressions of interest

In a conversation with analysts in May, during the presentation of the group’s results, Cristina García-Peri, Director-General of Hispania, classified Blackstone as a “plausible” buyer, but she emphasised that other investors have been “very interested” in the Socimi and its hotel portfolio.

The American investment fund’s offer, whose brochure is pending approval by Spain’s National Securities and Markets Commission (CNMV) is conditional upon obtaining at least 50% plus one of the shares in Hispania. Moreover, the takeover is subject to a clause that prevents the sale of assets for an aggregated transaction value of more than 5% of the NAV (net asset value) (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

UBS Buys Prime Office Building in Madrid for €120M

17 April 2018 – Iberian Property

The Swiss bank UBS’s real estate subsidiary has acquired a prime office building in the centre of Madrid, which is occupied by BBVA, for around €120 million.

Located at numbers 1 and 2 on Plaza de Santa Bárbara, in the Palace of the Condes de Guevara, the building spans a total surface area of 11,549 m2 and dates from 1920, according to Eje Prime. It also has 300 parking spaces.

Formerly owned by BBVA, which sold the property to a private investor several years ago, the bank continues to use the building to house its innovation centre and other offices.

This transaction was intermediated by Savills Aguirre Newman. It represents UBS’s fifth acquisition in Spain in the last year. Around a month ago, the bank purchased the EspañaDuero office tower, also in Madrid, in the Méndez Álvaro district, through UBS Euroinvest Inmobilien, for €55 million.

Original story: Iberian Property (by Ana Tavares)

Edited by: Carmel Drake

Azora Will Make its Stock Market Debut in May With a €700M Capital Increase

5 April 2018 – Eje Prime

Azora has come back from the Easter holidays with lots of issues to resolve. The company founded by Concha Osácar and Fernando Gumuzio is accumulating work: following the takeover bid launched by Blackstone for Hispania, one of the Socimis that the firm manages, and which yesterday approved the sale of its office portfolio for €600 million, the company owned by Osácar and Gumuzio is now planning a €700 million capital increase to list the company on the stock market in May.

The conversion of the firm into a listed company will be carried out by the manager through a public offering of its securities (OPS). The announcement was made on Wednesday by the President of Hispania, Rafael Miranda, who underlined the confidence that his Socimi has in Azora. “The Management team’s commitment to leadership and dedication remains intact”, said Miranda, whose General Shareholders’ Meeting met yesterday to approve that Osácar and Gumuzio’s company should continue as its manager.

Azora has two lines of business: its own portfolio of rental homes and the management of portfolios for other companies, like in the case of Hispania and Témpore (Sareb’s Socimi). The company is working with the banks Goldman Sachs and UBS to assess the feasibility of the company ringing the bell (making its stock market debut) before the summer.

Azora’s stock market debut would follow those carried out recently by other real estate players such as Neinor Homes, Aedas Homes, and the return of Metrovacesa, as well as the debut on the stock market this week of Témpore on the Alternative Investment Market (MAB). Similarly, other companies in the Spanish real estate sector are expected to make their debuts this year including Testa Residencial, Vía Célere and the Cerberus’s servicer, Haya Real Estate.

Original story: Eje Prime 

Translation: Carmel Drake

UBS Reveals Aena’s Plans for the Future

12 March 2018 – Cinco Días

The major privatisation of recent times – albeit partial, given that the State still owns a 51% stake – has been an undisputed success. The Spanish airport manager Aena made its debut on the Spanish stock market on 11 February 2015 at €58 per share with a market capitalisation of €5.8 billion. Since then, its share price has soared by almost 200% and the firm is now worth more than €25 billion (around €170 per share).

In Spain, the group manages 46 airports and 2 heliports; it also participates in the management of 12 airports in Mexico, two in Colombia and one in Jamaica, and it controls 51% of London’s Luton airport. It is the number 1 airport manager in the world handling more than 265 million passengers in 2017.

But Aena considers that there are opportunities that it must take advantage of and to this end, it is analysing the creation of a new company to undertake its mergers and acquisitions. Aena would control the new company, but it would not be the majority shareholder. That has been revealed by UBS in a report following meetings with the directors of Aena.

An analyst from the Swiss bank Cristian Nedelcu said that “the new company will probably be consolidated in the capital”. “We consider this as something positive, given that it limits the cash flow and commitments from Aena [allocated to those purposes]”, he added.

UBS revealed another one of Aena’s plans for the medium term. The constitution of a “similar company to manage the real estate business, with the incorporation of specialist managers”, which would also limit the resources that the company chaired by Jaime García Legaz (pictured above) would have to allocate to the segment.

Both initiatives open the door to an increase in Aena’s dividend. UBS considers that with the real estate company and the subsidiary to undertake corporate operations, the company would have scope to increase the percentage of profit that it allocates to remunerating shareholders (also known as the ‘payout’).

Whilst €1 billion in free cash flow is equivalent to €6.5 per share, which is what it will pay out of the profits for 2017, it remains to be seen what the company will do with the €1.6 billion that UBS expects it to make in 2021. “The decisions will be known in the coming months”, said the financial institution.

Aena is planning to market 2.7 million m2 of land in Madrid and 1.8 million m2 of land in Barcelona, as revealed at the presentation of its results on 28 February. In Madrid, of the 921 hectares analysed, 526 hectares are developable and 369 are marketable, whilst in Barcelona, of the 328 hectares analysed, 226 are developable and 180 are marketable.

The company recorded revenues from the real estate arm of €61.1 million last year, which represented 1.2% of its total turnover of €4.0 billion. The aeronautical business accounted for 61.5%; the commercial business, 34.7%; and the international business, the remaining 2.6%.

The group earned €1.2 billion last year, 5.8% more than in 2016, with an EBITDA of €2.5 billion, up by 9.8%, and a margin of 62.5%, compared with 60.8% in 2016, “due to the maintenance of the efficiency achieved despite the operational tension resulting from the increase in traffic”, explained the firm.

Original story: Cinco Días (by Pablo M. Simón)

Translation: Carmel Drake

UBS Euroinvest Fund Acquires Core Madrid Office Asset

6 March 2018 – Property Funds World

UBS Real Estate has acquired the Titán 8 office asset in Madrid on behalf of the UBS (D) Euroinvest Immobilien fund. This transaction represents Euroinvest’s debut investment since the fund’s recent strategic relaunch.

Titán 8 is a prominent office asset in the south of Madrid comprising 18 storeys spread across 10,633 sqm and including 228 underground car parking spaces. The imposing tower has been acquired in Grade A condition having been completed according to the highest quality, efficiency and design standards in 2008 and well-maintained since. It features a glass curtain wall façade that offers impressive views from upper levels. Main tenants are from the financial business, the energy and service provider industry.

The asset is strategically located in Madrid’s business district of Méndez Álvaro, in the south of the city centre, and benefits from strong transport links, positioned adjacent to the M30 ring-road, providing access to Madrid’s international airport in just 15 minutes and with the capital’s main train station, Atocha, nearby. With highly constrained supply in the area and resilient occupier demand, Méndez Álvaro office rents have demonstrated buoyant performance over recent years.

Euroinvest comprises an EUR820 million portfolio of predominantly core office assets located across key European cities. Following a strategic review of the Fund, Euroinvest has strengthened its core-profile through the disposal of non-strategic assets and delivered a strong performance of 4.4 percent for its investors (as of 31 December 2017), outperforming its benchmark (MSCI OFIX Europe) by 260 basis points. The Fund’s management team is actively seeking further attractive investment opportunities that are in line with its strategy across top performing European markets.

Alexander Isak, Fund Manager of Euroinvest, says: “As the fund’s maiden investment since relaunching, Titán 8 is a perfect illustration of the high quality and resilient assets that we are targeting, benefitting from an excellent location which is proven to generate robust occupier demand and offering further upside as the Spanish economy strengthens.”

“We are pleased to be in a position to prudently invest in new attractive opportunities that we are identifying in the market, following a disciplined programme of non-strategic disposals and the extensive management of the Fund’s assets that has delivered a viable core European real estate portfolio for our investors.”

Euroinvest was established in 1999 as the first open-ended public fund focusing primarily on institutional investors, with this category of investors currently holding more than 95 percent of the Fund’s units. Its investment strategy is focused on core office properties located in the strongest European cities, demonstrating resilient occupational demand.

Original story: Property Funds World

Edited by: Carmel Drake

Azora Engages UBS to Prepare Its IPO

13 March 2018 – Expansión

Azora wants to take advantage of the investor appetite in the real estate sector and the euphoria on the stock market to make its public debut. The manager, led by Concha Osácar and Fernando Gumuzio, has engaged UBS to prepare its IPO, in an operation that will allow it to raise capital to invest in new assets.

With this move, the company seeks to create a portfolio, primarily, comprising hotels with properties both in Spain, as well as overseas, and to generate returns on the capital invested, taking advantage of opportunities in a bullish market, explain market sources speaking to Expansión.

As a next step, Azora will meet with analysts this week to explain its plans to them. Sources consulted at the manager limited themselves to indicating that the Board of Directors is considering different strategic alternatives, in addition to the creation of new private investment vehicles to accelerate its growth. “In this context, all of the options that would allow us to achieve the company’s objectives are being evaluated. Nevertheless, no specific decisions have been taken yet in this respect”, they add.

Azora has a long track record in the sector and experience in the stock market, given that it manages Hispania, the Socimi in which George Soros holds a stake, which made its stock market debut in March 2014. With more than 200 professionals, it has raised more than €2.2 billion in own funds and has €4.4 billion in assets under management. Specifically, in 2004, it launched its first investment vehicle, Lazora, to invest in homes and student halls in Spain.

Portfolio

The manager used to control, together with Corporación Financiera Alba, the leading operator in the student hall of residence market, Resa, before it sold it in September to a joint venture formed by AXA Investment Managers, CBRE GI and Greystar.

Lazora has become one of the leading specialists in rental housing in Spain with €1.6 billion in assets under management. In the office segment, Azora has invested in buildings in Spain, Poland and the Czech Republic, whilst in hotels, it manages €2.2 billion in assets.

With this move, Azora is set to join other groups that have made their stock market debuts in recent months, such as the property developers Neinor, Aedas and Metrovacesa, as well as those that are planning to do so in the near future, such as the property developer Vía Célere and the financial asset management firm Haya Real Estate.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

UBS Finalises Purchase of Torre Titán from España-Duero for €50M

29 December 2017 – Voz Pópuli

UBS is on the verge of closing one of the largest real estate operations of this year-end. The Swiss entity is negotiating the purchase of one of the two Titán towers, owned by Banco Ceiss (España-Duero), a subsidiary of Unicaja. The sale is in its final phase and could be closed within the next few days, for more than €50 million, according to financial sources consulted by Vozpópuli.

The final consideration may even reach €55 million, which is exactly the price that España-Duero paid Nozar for the tower in 2008. That acquisition caused a great deal of controversy at the time to the point that some of the former directors of Caja Duero were subjected to investigations, but the case was archived in the end.

The Titán towers are two 13-storey buildings constructed by Nozar in 2008. One of them is owned by Invesco (which acquired it in 2011 for €40 million) and leased to the state-owned firm Adif. The other one is owned by España-Duero and it not only houses the headquarters of Unicaja’s subsidiary but is also home to Nozar and Enagás.

Ceiss continues

This process has been led by Irea, according to El Economista, and two other consultancy firms, Knight Frank and Aguirre Newman, have also been involved, in the search for tenants for the 30,000 m2 of available space. The useful surface area for offices is 10,722 m2.

According to sources close to the operation, España-Duero is expected to commit to continue to occupy the offices. The entity is in the middle of a merger with Unicaja, after the Malagan entity acquired the 12.5% stake that it did not own in the subsidiary from the Frob.

During the IPO in the middle of this year, the heads of Unicaja expressed their intention to merge the two companies (Unicaja and Banco Ceiss). As such, observers in the market speculate that Torre Titán will serve as the new headquarters for the central services team in Madrid.

The sale of Torre Titán will be added to the list of divestments that the Unicaja Banco group has been carrying out in recent weeks. Earlier this month, it sold a portfolio of foreclosed assets to the fund Axactor, as this newspaper revealed.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Hammerson Set to Buy Intu, Owner of Xanadú & Puerto Venecia

6 December 2017 – Expansión

The Boards of Directors of Hammerson and Intu Properties, two of Great Britain’s largest property developers, have reached an agreement regarding their merger, which will result in the creation of a group with assets worth GBP 21 billion (€23.7 billion, in euros), mostly comprising shopping centres in the United Kingdom, France and Spain. The operation will be instrumented through a public takeover bid (OPA) of Hammerson’s shares for Intu’s, valuing the share capital of that company at GBP 3.4 billion (€3.85 billion). Intu’s shareholders will receive 0.475 newly issued Hammerson shares for each current share they own.

If the deal goes ahead, it will have a significant effect on the Spanish market, as it would see a change in the owner of the country’s three largest shopping centres. Intu controls 50% of Xanadú (Madrid), Puerto Venecia (Zaragoza) and Parque Principado (Asturias). Funds from Canada and the USA are the company’s partners in those centres. Moreover, Intu has plans underway to develop other leisure and shopping complexes in Málaga, Valencia and Vigo, for a combined investment of more than €1 billion.

Hammerson, meanwhile, holds stakes in Value Retail and Via Outlets, which operate luxury brand outlet centres such as Las Rozas Village (Madrid), La Roca (Barcelona), Mallorca Fashion and Sevilla Fashion.

According to a statement from Hammerson issued today when it announced the purchase “the incorporation of Intu’s portfolio in Spain fits with our strategy of placing our focus on consumer growth markets as it involves adding three of the country’s largest shopping centres. It will also allow our commercial partners to have exposure to a new European market”.

This British company is committed to developing Intu’s projects in Spain. It says that the group resulting from the merger “will be in the best position” to undertake those investments. Following the integration, the group plans to sell some of its centres in the United Kingdom for around GBP 2 billion, which will give it “the financial flexibility it needs to invest in more profitable opportunities in Spain and Ireland, as well as in the outlet centre segment”. The combined debt of the new Hammerson group will amount to GBP 8.2 billion.

The property developer hopes to generate annual savings of GBP 25 million as a result of joining forces with Intu.

Intu’s share price on the London Stock Exchange rose by 20% (after the deal was announced), taking the company’s market capitalisation to GBP 3.2 billion, whilst Hammerson’s share price fell by 2%, taking its market capitalisation to GBP 4.15 billion.

Analysts are interpreting the operation as a defensive move by the two companies to protect themselves from the possible impact of Brexit, which is slowing down consumption in the United Kingdom and which may harm the value of their shopping centres. “The merger represents a coalition of two weak businesses, which will result in an amalgam of assets without any great possibilities for generating incremental profits”, argues Mike Prew, from Jefferies. “The interesting areas of growth are Intu’s Spanish business and Hammerson’s outlet centres”.

The merger still needs to be approved by the shareholders of the two companies and by the British competition authorities, which means that it could take a year to complete. Peel Holding, the investment company owned by John Whittaker, which is Intu’s largest shareholder, has already agreed to approve the takeover. Following the operation, it will hold a 15% stake in the resulting group.

The banks Deutsche Bank, JPMorgan and Lazard have advised Hammerson. Meanwhile, Intu’s managers have engaged the services of Bank of America Merrill Lynch, Rothschild and UBS.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Aedas Homes Will Make Its Stock Market Debut Before Year End

25 September 2017 – Expansión

A new real estate company will debut on the stock market before the end of the year. On Friday, the property developer Aedas Homes confirmed its intention to debut on the stock market during the fourth quarter of the year.

The company, which specialises in the construction of homes, has not revealed the price at which the placement of its shares will take place. Nevertheless, market sources forecast that its market capitalisation will be higher than its Gross Asset Value, estimated at €1,345.8 million.

Aedas Homes was created by the US fund Castlelake, after that firm invested several hundreds of millions of euros in buildable residential land in Spain. After creating a portfolio containing 1.3 million m2 of buildable land, worth €1,000 million, Castlelake turned to the team at the Socimi Merlin Properties to design a business plan that would allow it to maximise the returns on its investments. For this project, the fund recruited David Martínez, a director with experience in real estate developments, such as Valdebebas and Castellana Norte, both in Madrid.

Castlelake’s intention is to place between 40% and 60% of the company’s shares on the stock market, through a primary offer and then a secondary offer amongst qualifying investors. The primary offer is expected to raise funds amounting to approximately €100 million.

Investors

“The stock market debut of Aedas Homes will allow us to access funds from a diversified base of investors, which will be used to finance the company’s expansion and development plans”, explains David Martínez, CEO of the property developer. Citigroup and Goldman Sachs are acting as the global coordinating entities of the placement; Banco Santander and UBS as the joint bookrunners; BBVA, CaixaBank and Sabadell are the co-lead managers; and Deloitte is the financial advisor.

Currently, Aedas owns a portfolio of land worth €1,370.5 million, distributed across sight Spanish provinces – including Madrid, Barcelona, Málaga and Valencia–, which will allow it to build more than 13,000 homes. These magnitudes place it amongst the top four property developers in Spain. The company is currently working on 11 projects, involving 576 homes. Its business plan forecasts the investment of between €200 million and €250 million on new acquisitions over the next 2.5 years to deliver 3,000 homes per year from 2022 onwards.

With this move, Castlelake is following in the footsteps of Lone Star, which was the first international fund to list its company, Neinor Homes, on the stock market, after investing in assets in the Spanish market.

The debut of Lone Star’s real estate company took place in March, with a valuation of €1,340 million. Since then, the company has appreciated in value and its market capitalisation now exceeds €1,420 million. Lone Star placed 60% of its company’s share capital in the stock market debut. Last week, it divested another 27%, to raise €394 million. On Monday, the fund Wellington acquired an 8.5% stake.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake