Sareb Negotiates the Sale of Part of its Stake in Témpore with TPG

30 April 2019 – La Vanguardia

Sareb is holding formal negotiations with the US fund TPG Real Estate Partners III regarding the sale of part of its stake in the rental home Socimi Témpore Properties, of which it controls 98.38%.

Témpore owns 2,268 rental homes, making it the third largest operator in the Spanish rental home market. It closed last year with a loss of €384,394, but is expected to generate profits from 2020.

Sareb opened a process on 7 March to receive binding offers for Témpore. At least four funds expressed their interest, but it is understood that TPG is the only candidate left in the running.

The operation is expected to close during the month of May.

Original story: La Vanguardia

Translation: Carmel Drake

A US Fund Wants to Invest €100M to Build 3,000 Homes for Young People

26 March 2019 – Idealista

An American fund is looking to buy public land in Spain on which to build homes in line with the salaries of young people. The under 35s are the forgotten cohort, with low salaries making it impossible for them to afford current house prices. As a result, 14 million young people still live with their parents.

The real estate firm Centro Comercial Inmobiliario (CCI) is holding negotiations with the fund to create a property developer that will build homes for young people. They are particularly interested in areas on the outskirts of major cities, such as Madrid, Barcelona, Málaga and Valencia, where young people are typically priced out of the local property market.

The aim of the fund and CCI is to invest around €100 million to build 3,000 social housing properties both for sale and rent over three years.

Original story: Idealista

Translation/Summary: Carmel Drake

Cerberus Puts Haya Real Estate up for Sale for c. €1.2bn

15 March 2019 – Eje Prime

Cerberus had been planning to list Haya Real Estate on the stock market but it suspended that operation in light of the political instability in the country, amongst other reasons. Instead, the US fund has decided to put the servicer up for sale.

The asking price is €1.2 billion and the advisor Rothschild has already made contact with possible interested parties. They include DoBank, which acquired Altamira in January for €412 million; the Swedish company Intrum, which purchased 80% of Solvia in December; and the fund manager Centricus.

Haya’s contract with Sareb is due to expire at the end of this year and the bad bank is understood to be considering not renewing the agreement as part of a wider strategic rethink.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

Blackstone Offers €90M+ for Lar España’s Logistics Portfolio

14 June 2018 – Eje Prime

Blackstone is expanding its appetite for Spanish real estate. The US fund, which is in the middle of a takeover bid for Hispania’s hotels, is now attacking the industrial real estate market and is finalising the purchase of Lar’s logistics portfolio. The firm could pay more than €90 million for the six assets owned by the listed Socimi.

Lar’s portfolio, which includes one plot of land, a precious commodity in the sector’s current climate, is worth €92 million, according to the most recent appraisal, performed at the end of 2017. The capital appreciation that the Socimi has managed to generate amounts to 40%, according to Expansión.

The operation, in which Blackstone has emerged as the only finalist and which, therefore, is holding exclusive negotiations with the Spanish group, forms part of Lar España’s new strategic plan to divest its position in the logistics market. It is the intention of both parties to sign the sale and purchase contract before the summer.

Lar’s six assets span a combined gross leasable area (GLA) of 169,800 m2 and, since they came onto the market, have attracted interest from large investment funds and international logistics operators. The list of potential suitors has included, in addition to Blackstone, CBRE Global Investors, P3 and Ares Management.

Through this purchase, the US fund is seeking to strengthen its logistics portfolio in Spain. In January, the company paid €90 million for four complexes leased to the supermarket chain Dia. In 2017, the sector set a new historical record with total investment in Spain of €1.5 billion, up by 85% compared to the previous year, according to data from the consultancy firm Savills Aguirre Newman.

Original story: Eje Prime 

Translation: Carmel Drake

Lone Star Appoints Donald Quintin to Lead its European Business

27 February 2018 – Eje Prime

Lone Star is reordering its management team across Europe, including in Spain. Following the departure from the fund of one of its strong men, Juan Pepa, the company has appointed Donald Quintin to lead its business in the old continent (Europe). Mr Quintin, a former director of Hudson Advisors and Vinson and Elkins, is now going to take over the role of CEO for Lone Star in Europe.

Despite this change in its leadership, Lone Star is nevertheless pushing ahead to close operations that it had open in the Spanish market, and is also undoing positions in the real estate business in the country. Those include the sale of the last major asset of Project Octopus, a portfolio comprising more than €4 billion in real estate loans from Eurohypo in Spain and Portugal, which the US fund acquired together with JP Morgan three years ago.

Also, at the end of last year, the fund sold the former headquarters of Fecsa-Endesa in Cataluña, a building measuring 35,000 m2, whose three chimneys form part of Barcelona’s skyline and regarding which it is negotiating exclusively with the Tramway group and the German vehicle Indigo Capital.

That property has been empty for five years and has both environmental and change of use problems, which have conditioned its sale. Constructed on the site of a former coal generation plant dating back to the beginning of the twentieth century, it may be converted into an office building in the short term and could attract attention from coworking giants or large groups looking to set up their headquarters in Barcelona, according to sources in the sector.

But the move that caught the most attention in the real estate sector was Lone Star’s exit from the share capital of Neinor Homes following that firm’s debut on the stock market. The US fund completed the accelerated placement amongst institutional investors of 9.85 million shares in Neinor Homes in January, representing 12.5% of its share capital and worth €174 million.

After concluding that operation, Lone Star’s presence in Neinor Homes, a company that it had controlled in its entirety prior to its stock market debut, was reduced to a token 0.4% or 350,918 shares in total, which it held onto in order to agree the terms and conditions of the incentive plan for “certain directors and key employees”.

In practice, this sale represented the exit of Lone Star from the real estate developer that it had constituted just three years ago, in 2015, with assets purchased from Kutxabank. The divestment was completed before Neinor had the chance to celebrate its one year anniversary as a listed company, after it made its stock market debut at the end of March 2017.

Original story: Eje Prime

Translation: Carmel Drake

Aelca to Invest €200M Per Year in Land Purchases

28 February 2018 – Expansión

Aelca is moving forward with firm steps and already forms part of the new generation of listed property developers controlled by funds or, in its case, is on the verge of making its stock market debut. The firm constituted in 2012 by Javier Gómez and José Juan Martín, now the joint CEOs of the group, closed last year with a profit before tax (PAT) of €25.5 million, up by 154% YoY, and revenues of €132.2 million, up by 27%. And, it is preparing to continue growing through purchases.

“In 2018, we are going to have a production capacity, both in terms of construction work as well as pre-sales, of around 6,300 homes and, in 2019, we should reach cruising speed, with the delivery of around 2,000 or 2,500 homes. We have been working on and handing over developments since 2014, and growing at sustainable rates”, explains Javier Gómez to Expansión.

Specifically, the company sold 1,118 units in 2017 and handed over almost 500 homes. This year, pre-sales are expected to exceed 1,600 homes and revenues are expected to amount to around €160 million or €170 million.

Aelca wrote a new chapter in its history in the middle of 2016 when the US fund Värde purchased a 75% stake in the property developer from Avintia for €50 million and gave a boost to the business. “Investment in the company over the last 18 months since then has been significant, with more than €400 million spent on land purchases. Over the next few years, we plan to invest between €150 million and €200 million per year in land”, explains the director.

After several capital increases, Värde currently controls 80% of Aelca, whilst the remaining 20% remains in the hands of the founders.

In terms of the stock market debut, Gómez acknowledges that going public is a natural exit for the funds and expects that it could be an option in 2019. For the director, although Aelca is already the right size to list, the group’s plans involve continuing to grow and taking advantage of opportunities.

Gómez acknowledges that to debut on the stock market after its competitors may be a risk, but adds “we have a history of deliveries, a strong track record and a set of results that support us”.

Madrid and Andalucía

Specifically, the group has purchased land in Dos Hermanas (Sevilla), mostly from CaixaBank, for a mega-project involving 2,100 homes.

Moreover, like its rivals such as Neinor, Aelca is looking at the possibility of buying up non-finalist land and is analysing operations worth between €50 million and €70 million. “We are analysing the option of acquiring land under development, at the most advanced stage possible, in Madrid and Andalucía”, he explains.

Currently, Aelca has a land portfolio spanning 1.3 million m2, worth more than €1 billion and with capacity to launch around 13,000 homes.

The company has six regional offices in País Vasco, Cataluña, Madrid, Málaga and the Comunidad Valenciana and is not planning to expand its footprint at this stage. “There are still great opportunities in those locations”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Santander Will Sell 4% of Metrovacesa to Blackstone

11 December 2017 – Eje Prime

The real estate sector promises to end the year in style. As part of the sale of the €30 billion in toxic assets to the US fund Blackstone, Santander is also going to sell a 4% stake in Metrovacesa, the property developer set that is set to star in the major IPO of 2018, according to sources close to the operation.

Specifically, the US fund has acquired 51% of the share capital of the new company to which Santander is going to transfer all of those toxic assets, whilst the entity chaired by Ana Botín will retain control over the remaining 49%, according to El Confidencial. The agreements signed to this effect include one to transfer a stake in Metrovacesa to the new vehicle.

The property developer led by Jorge Pérez de Leza plans to make its debut on the stock market in February, with assets worth around €2.6 billion. This move will be subjected to a vote at the General Shareholders’ Meeting on 19 December.

Moreover, the company has just signed a €275 million loan to boost its property development plan. With this financing, the property developer is seeking to optimise its capital structure and give viability to its business plan for the next few years, which forecasts the delivery of around 5,000 homes per year from 2020 onwards. Moreover, the plan aims to position Metrovacesa with a land portfolio worth €2.6 billion.

This new financing arrangement has a five-year term, according to the company, which plans to launch around 4,000 housing units in 2018. Metrovacesa will primarily use the loan to ensure the urban development of some of its land portfolio and the launch of certain residential projects.

Original story: Eje Prime

Translation: Carmel Drake

BBVA Sells Most of Real Estate Business to Cerberus for €4bn

29 November 2017 – Reuters

Spain’s BBVA said on Wednesday that it had agreed to sell 80% of its real estate business to US fund Cerberus for €4 billion ($5 billion), showing how investor enthusiasm for Spanish property is reviving.

A burst property bubble in 2008 sent Spain into a downturn that lasted for nearly five years, causing mass unemployment and prompting a more than €40 billion bailout for the country’s banks.

The economy returned to growth in 2013 and has outperformed the rest of Europe since then, helping to revive residential construction as house prices pick up, which has started to attract foreign investors back into the market.

The BBVA real estate assets included in the deal have a gross book value of some €13 billion, Spain’s second-largest bank said in a statement.

BBVA said the whole portfolio was valued at €5 billion, with the price involving a discount of 61.5%, in line with the coverage ratio for its foreclosed assets.

As at the end of September, BBVA had a non-core real estate property portfolio with a gross value of around €17.8 billion, of which the bulk were foreclosed assets worth around €11.9 billion.

The deal is the largest since Santander sold control of property worth €30 billion to the US investor Blackstone Group in August.

Santander sold its portfolio at a net value of €10 billion after a discount of around 66%.

The rebound in the property market has also allowed Spanish banks to tackle toxic balance sheets faster than rivals in Italy. Banks in Europe are under pressure to reduce soured loans after new guidelines on this from the European Central Bank announced last month.

Analysts at broker Keefe, Bruyette & Woods viewed the transaction as a positive step towards reducing BBVA’s non-performing assets ratio (non-performing loans and foreclosed assets) from 7.2% to 4.5%.

BBVA’s shares were up 1.94% at 1150 GMT, compared with a rise of 1.6% on the European STOXX banking index SX7P.

At a group level, BBVA has non-performing assets worth around €33 billion on its balance sheet – of which around €25 billion are in Spain.

Since 2015, BBVA’s real estate business has generated losses of €1.37 billion.

BBVA said it would retain control of 20% of the real estate portfolio, which it said would be exclusively managed by Cerberus’s Haya Real Estate.

The bank said the deal was not expected to have a significant impact on profits and would have a slightly positive impact on the fully loaded core tier 1 capital ratio (CET1), a measure of financial strength.

It also said that once the transaction was completed in the second half of 2018, BBVA would have the lowest relative real estate exposure among the main Spanish financial institutions.

Original story: Reuters

Translation: Carmel Drake

 

Värde Invests €50M In Barcelona Despite Tension Over Independence

24 October 2017 – El Confidencial

One of the largest real estate investment funds in the Värde Partner group has purchased 52,000 m2 of space for offices in Barcelona. It has closed the operation this week, less than a month after the referendum that was held on 1 October. The real estate sector has been surprised that buyers have not scaled back their efforts during such a controversial week from a political point of view. Värde is spending more than €50 million on this purchase, according to sources in the real estate sector.

It is one of the largest commitments to Barcelona in the real estate market in recent times, not least because it is associated with a development project that will require a further investment of €70 million. Moreover, the new space will then have to be leased to tenants. If Barcelona has a future, Värde believes in it, beyond the political problems.

The operation has involved an auction for the assets, carried out by CB Richard Ellis, which has gone on for months. The key name for these assets was “Project Helix”. And bidders have been competing to buy land, with a surface area of almost 13,000 m2 in the Poblenou neighbourhood, in the business district known as 22@.

Värde is already developing other projects in Barcelona, given that it purchased Vía Célere and since that property developer already had housing projects in several parts of the Catalan capital, such as La Magoria –Gran Vía– and on Calle Aragón.

Värde Partners is a US fund that has acquired some significant positions in Spain in recent years. Its speciality is not only real estate and it moves assets under management amounting to more than $10,000 million.

In Spain, the firm’s activity is not limited to Cataluña, by any means; it has a strong presence right across Spain. In 2018, it plans to list Vía Célere on the stock market, once it has merged it with the real estate company DosPuntos.

Sources in the sector did not expect Operation Helix to be signed, after the events of 1 October and the political uncertainty surrounding the sovereign tension. Much smaller transactions have failed to cross the final hurdle for much less significant reasons. But to everyone’s surprise, failure was not an option this time and the Catalan families that owned the land took home their juicy cheques.

Very diversified in Spain

In addition to its assets in Barcelona, Värde Partners controls the Socimi La Finca Global Assets, which comprises the non-residential assets from the García Cereceda family worth €260 million. It also owns a complex on Calle Marcelo Spínola in Madrid, as well as Torre Suecia in Méndez Álvaro and several buildings in the centre of the capital.

In Barcelona, assets are much more scarce and so many real estate companies are entering the property development market, which has driven up the price of land, due to the scarcity caused by the lack of urban planning by the mayor Ada Colau. In this context, having land ready to build on its very valuable in the Catalan capital.

Project Helix may be even more valuable if an urban planning amendment that has been submitted is approved. That would allow Värde to allocate some of the buildable roof surface area (m2) to homes, in light of the current shortage of new homes in Barcelona.

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

Fortress Unwinds Its Final Positions In Spain

7 September 2017 – Voz Pópuli

Fortress has definitively closed a chapter in its history in Spain. The US vulture fund, regarded as one of the most aggressive in the world, has launched two operations in the market through which it is looking to offload its final positions in the Spanish financial sector.

The two deals in question are Project San Siro and Project Baresi. In total, they comprise paid and unpaid loans worth around €300 million, according to financial sources consulted by Vozpópuli. The candidates to buy these loan packages include other opportunistic funds.

The two projects essentially comprise the final dregs of the portfolio that Fortress holds in the Spanish banking sector: loans from Santander, Barclays España (now part of CaixaBank) and Lico Leasing, the former finance company of the savings banks that Fortress purchased at the height of the crisis.

The US fund, led in Spain by the banker José María Cava, was one of the first to enter the financial sector at a time when the lack of trust at the international level was at its peak. It was between 2010 and 2011, when the first interventions of the savings banks began and several cold mergers were carried out, which gave rise to groups such as Bankia.

Critical time

Fortress completed its acquisition of a portfolio from Santander in 2012, just before the rescue of the finance sector. In that deal, Fortress purchased €1,000 million in consumer credits from the group chaired by Ana Botín.

A year later, the US fund announced the purchase of Lico Leasing. That was Fortress’ last major operation in Spain, which broke down just two years later. The fund took a long time to obtain authorisation from the Bank of Spain to approve that acquisition, and so by the time it did receive it, the credit tap had been reopened and so Lico arrived late to the recoveries sector.

For that reason, Fortress decided to close this business and its other financial commitments in Spain. First, it sold one of its recoveries platforms (Paratus) to Elliott and Cabot. Next, it sold Geslico to Axactor. And in terms of the other portfolios (Lico, Santander, and Barclays), it let some of them mature and the remainder is what is now being put up for sale.

It also leaves behind other possible opportunities that the fund considered, such as its failed entry into the share capital of Sareb and of other savings banks, with which it was unable to reach an agreement due to the significant price differences. Fortress is now more focused on other business niches in Spain and most notably in the Italian market, where it purchased, together with Pimco, the largest portfolio of loans, worth €17,000 million, from Unicredit last year. Given its profile, the Spanish banking sector will become the focus of Fortress once again when the next crisis hits.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake