Centricus Still Leads Race to Acquire Haya Real Estate

10 December 2019 – The potential sale of the real estate asset manager Haya Real Estate is firming up as the new Spanish government coalition has made reassuring statements regarding the sale and the sector. After the elections on November 10, the left-leaning political parties PSOE and Unidos Podemos signed a pre-agreement to form a government. Market watchers feared that the new government would look unkindly at the sale.

Centricus is currently leading the race to acquire Haya, though DoBank, Intrum and Centerbridge are still seen to be in contention. Cerberus, which owns Haya Real Estate, is looking to finalise the deal by the end of the year.

The US firm’s sale of the servicer has suffered a serious of reversals.  Cerberus initially looked to list the firm on the Spanish stock market with a preliminary valuation of €1.3 billion. In March, the listing was cancelled due to doubts regarding Haya’s asset management contract with Sareb, and the price lowered to €1,2 billion.

Bids for Haya’s €42.431-billion portfolio are currently said to range between 600 and 700 million euros.

Original Story: Cinco Diás

Adaptation/Translation: Richard D. K. Turner

 

New Legislation Stipulates that Residential Rental Contracts will Last for 5 or 7 Years

15 December 2018 – Expansión

On Friday, the Council of Ministers gave the green light to a royal decree of urgent measures relating to housing and the rental sector. The Minister for Development, José Luis Ábalos, highlighted that the majority of evictions occur due to a failure to pay the rent, whilst the number of mortgage foreclosures has decreased.

The main measures with respect to rental are: extending the term for the extension of leases, from three to five years – or up to seven years if the lessor is a legal entity – and increasing the term for tacit renewals from one to three years. Also, limiting the deposit to two months as a guarantee, facilitating agreements between tenants and owners to improve housing, management expenses shall be borne by the lessor when that is a legal entity, improving the remission of tourist rental contracts and horizontal ownership so that three fifths of the residents can limit tourist apartments, amongst other measures.

Nevertheless, the minister highlighted that this decree does not include measures aimed at intervening in rental prices, as had been agreed with Unidos Podemos in the budget agreement. However, he did not rule out that they may be included within the framework of the budget negotiations for next year.

For the time being, and precisely due to the absence of these measures in terms of prices, Pablo Iglesias has warned that the vote of his party to approve this decree-law will be “unfavourable”.

“We had agreed something else with them in the budgets, that the housing measures had to include controls over rental prices to decrease rental prices”, he said when the measures in the decree were made public.

“We hope that they are rectified so that we can go ahead with this decree, provided that it has the same content that we agreed”, added Iglesias, who also declared in a tweet that “the Government’s decree does not contain the most important measure from the agreement: that of prohibiting abusive increases in rental prices”.

Original story: Expansión

Translation: Carmel Drake

Socimis Fear Rise Of Left-Wing Coalition, Unidos Podemos

26 May 2016 – El Economista

Since 9 May 2016, when the political leaders of Podemos, Pablo Iglesias (pictured above, right), and Izquierda Unida, Alberto Garzón (pictured above, left), announced their intention to stand together in the upcoming General Election on 26 June, the possibilities of them beating the Socialist Party and, even, forming a Government, have increased considerably (the D’Hondt electoral law penalises minority groups).

The fact that Unidos Podemos has become a real option, according to the latest polls, is being felt on the stock exchange in sectors such as real estate. The Socimis have seen an average decrease in their share prices of 1.5% since 10 May, which represents a difference of 3.6 percentage points with respect to the Ibex 35, which has risen by 1.6% during the same period.

In its election manifesto, the purple party – which now has the support of IU – proposes reforming the tax regime for Socimis (as well as for the Sicavs). The real estate vehicles are currently exempt from paying Corporation Tax, provided they fulfil certain requirements, such as distributing 80% of their net profits as dividends.

“What it (the regime) does is raise the taxation (liability) up to the shareholders. They bear the taxation through their remuneration in the form of capital income (provided their share stakes exceed 5%), says Ana Hernández, an expert in Socimis.

Merlin Properties, the largest Socimi in the market, with a market capitalisation of €3,100 million (more than twice the size of the second largest firm, Hispania), is suffering more than most from the downward trend. Within the last month, short positions of the company’s shares have almost tripled, from representing 0.4% to 1.15% on 13 May, according to data prepared by the CNMV. Meanwhile, its share value had decreased by 20% since the last General Election was held on 20 December, more than double the 8% drop that the Ibex 35 has seen during the same period.

Concern amongst investors

“There is noise (in the market)”, acknowledged sources in the sector, although “maybe it is excessive”. (…).

“Spain is an attractive country for real estate investment” said Jesús Amador, analyst at Bankinter, who recognises, nevertheless, that the latest “initiatives” motivated by Town Halls close to Podemos “may influence” the investments made by the Public Administration, following “the cuts to investment for Operación Chamartín, the controversy with Plaza de España and the problems in Barcelona”. (…).

The left-wing coalition proposes a minimum tax rate for Companies of 15%, which, in the absence of more data, would also become the future tax rate for the Socimis. “If they make the work more complicated”, said the President of one Spanish firm, “they will kill many of them off”.

Original story: El Economista (by Laura de la Quintana)

Translation: Carmel Drake