Tag: valuation

Cerberus Starts to Value the 160,000 Assets it has Acquired in Spain Ahead of their Sale

19 February 2019 – Voz Pópuli

Last year, the giant Cerberus strengthened its team with the appointment of the former JLL director Maurice Kelly as its Vice-president of Real Estate in Spain. The professional has become a key person for the fund, given that he is now responsible for meeting with the real estate consultancies regarding the valuation of the 160,000 assets that the investment giant has acquired in recent years in Spain, according to financial sources consulted by Vozpópuli.

Its haul also includes assets acquired in the Apple Portfolio from Santander, a sale that was negotiated in 2018 and which is expected to close between February and March. Moreover, that figure could increase during the coming months due to the great activity that there is in the market at the moment.

The fund wants to generate value from everything that it has purchased from the banks through large portfolios and has now spotted a window to put its acquisitions on the market from April onwards and over the next two or three years. Similarly, the fund is constantly rotating the assets that it acquires and assessing everything that it purchases for its subsequent placement on the market.

New portfolios

The first sale strategy involves the placement of new portfolios, of medium sizes, ranging between €100 million and €200 million, and will be distributed amongst medium-sized funds, above all those from the UK, Ireland and the Netherlands (…).

Another way to sell is through operations involving “unique assets”. In other words, buildings that have added valued and that may be of interest to a private investor or family office. The price of those would be over €50 million.

Finally, the most typical approach will see it sell portfolios of homes, in groups of more or less 500 units, for between €10 million and €20 million apiece.

The valuation of those 160,000 assets is included within the Cerberus European Servicing division and the placement of them is not going to be easy, given that “the fund has purchased a lot” and has “things” that even it does not know about. “It has picked up a lot of parking spaces and assets of that kind that are going to be very difficult for it to place”, warned the sources.

A taste for Spain

Cerberus has invested more than €10 billion in Spain in total and now wants to operate new lines of business such as rental and logistics. It is also planning to multiply its property development activity three-fold by purchasing more land and following its acquisition of Inmoglaciar (…).

Cerberus entered the Spanish market at the height of the financial crisis (between 2010 and 2012) with the aim of taking over banks and real estate firms, like it did in other countries. The former did not work out well following several attempts with former savings banks. But its conquest of property has proved a lot more successful.

Its next acquisition could be the property developer Solvia Desarrollo Inmobiliario (SDIN) from Banco Sabadell, which has put land worth more than €1 billion up for sale. The bid for those assets has already started and financial sources say that the fund has expressed interest in them.

Original story: Voz Pópuli (by David Cabrera)

Translation: Carmel Drake

El Corte Inglés Considers Creating a Socimi to List its Real Estate Assets on the Stock Market

15 February 2019 – Modaes.es

El Corte Inglés is looking for solutions for its portfolio of real estate assets. The Qatari sheikh Hamad Al Thani, the third largest shareholder in the Madrilenian department store group, has proposed the creation of a Socimi to manage the rental of its assets.

The plan proposed by Al Thani, who entered the company’s share capital last summer, involves creating a company in which El Corte Inglés would own a 51% stake. The remaining 49% of the shares would be listed on the stock market.

The Qatari investor already proposed this solution to the previous President of the group, Dimas Gimeno, but it was not successful then, according to El Economista. For the time being, the Board of Directors of El Corte Inglés has not received a formal petition regarding the plan.

The real estate portfolio of El Corte Inglés is worth €17.1 billion, according to a report from Tinsa. The department stores and hypermarkets are worth €15.0 billion, whilst the warehouses, offices and mixed-use buildings are worth €1.1 billion. Finally, the high street establishments are valued at €1 billion.

It is estimated that, in the event that the operation proposed by the sheikh goes ahead, the valuation of the assets could amount to half their current value, around €8.2 billion, according to Tinsa.

In parallel, the group is continuing to work on the sale of 130 real estate assets worth €2 billion in conjunction with the consultancy firm PwC. The property that El Corte Inglés wants to divest now comprises land, offices and buildings defined as non-strategic. Those assets also include some logistics centres.

The objective of these divestments is to reduce the group’s debt so that it can obtain a level of solvency that will allow it to raise financing in the capital markets at a lower price. In this sense, Núñez de la Rosa, the President of the group, has committed to reducing the group’s liabilities by €1 billion in twelve months.

Currently, the real estate portfolio of El Corte Inglés comprises 94 shopping centres, which account for 87% of the total value of the company’s assets. Two of those properties are valued at more than €500 million each, and another two are worth between €400 million and €500 million each.

The department store group recorded EBITDA of €335 million during the first half of 2018, up by 4.4% YoY. Between January and August, the company recorded turnover of €7.6 billion, up by 0.4% YoY.

Original story: Modaes.es

Translation: Carmel Drake

Unicaja Sells Problem Assets to Cerberus & AnaCap for €120M

23 January 2019 – Eje Prime

Unicaja is divesting its toxic assets. The Málaga-based entity sold two portfolios of problem assets amounting to €330 million to Cerberus and AnaCap at the end of 2018. In this way, it managed to clean up its balance sheet and improve its accounts for last year, ahead of the merger with Liberbank, reports El Confidencial.

The problem assets consisted of one portfolio of mortgages amounting to €230 million, which were sold to Cerberus and another portfolio containing property developer loans amounting to €100 million, which was acquired by AnaCap.

According to the latest published accounts, Unicaja held €3.9 billion in problem assets (flats, land and unpaid loans) as at September 2018, and so the two portfolios sold account for more than 8% of the total. In the market, it is estimated at the Málaga-based bank obtained proceeds of around €120 million in exchange for the sale of the two portfolios.

Original story: Eje Prime

Translation: Carmel Drake

Sabadell Puts ‘Solvia Desarrollos Inmobiliarios’ Up for Sale

19 January 2019 – El Periódico 

Banco Sabadell has launched the sales process of Solvia Desarrollos Inmobiliarios (SDIN), the company that owns the bank’s land and which carries out its real estate development projects in Spain. On Friday, the entity placed the sales brochure for the firm in the hands of possible buyers, including international real estate funds, such as Cerberus, Blackstone, Värde and Oaktree, amongst others, according to confirmation provided by real estate sources. The process, regarding which the bank itself has declined to comment, could go on until April. The time necessary for buyers to express their interest and conduct analysis of the company for sale.

The process to sell the development company is beginning just a month after the bank chaired by Josep Oliu completed the sale of 80% of its servicer – real estate manager – to Lindorff Holding Spain, a company that belongs to the Swedish fund Intrum, after it fought off competition from the funds Cerberus and Centricus, which were also bidding for the real estate subsidiary. In that operation, Solvia was valued at €300 million. The price corresponded to 80% of the stake in the company, which could be increased by a maximum amount of €40 million if certain conditions, relating to the performance of some of Solvia’s lines of business, are met. The completion of the operation is scheduled for the second half of 2019.

Maturity period

SDIN is in the maturity period for its sale, according to sources familiar with the operation. The firm has a stock of more than 300 buildable plots, which are worth around €1.2 billion and has almost 130 developments underway across different parts of Spain, with more than 5,000 homes under construction. The size of the portfolio of SDIN, which is led by Francisco Pérez (pictured above), places it in the second league in the sector ranking, just behind the listed property developers, led by Metrovacesa, Neinor, Aedas and Vía Célere. Only Sareb has more assets (…).

Original story: El Periódico (by Max Jiménez)

Translation: Carmel Drake

Approval Granted for Socimi Arrienda Rental’s Debut on the MAB

21 December 2018 – La Vanguardia

The Coordination and Incorporations Committee of the Alternative Investment Market (MAB) has issued a favourable report ahead of the stock market debut of Arrienda Rental Properties Socimi, with a reference value of €2.74 per share, after the company was valued at €56.4 million.

The MAB has reported that the stock trading code for Arrienda Rental will be YARP and that it will be governed by the fixing system, with prices being fixed twice in each session, at 12 noon and 16h.

Arrienda Rental is a real estate company that has adopted the Socimi framework and which is dedicated to the acquisition and development of urban properties for their rental.

The Socimi owns 239 assets, all of which are located in the Community of Madrid: 2 hotels (Clement Barajas and Täch), 3 plots of land, 4 offices, 18 retail premises, 40 homes and 172 garages.

Before its stock market debut, the Socimi had 51 shareholders, including Francisco García Rubio, who owns 21% of the capital.

Arrienda Rental has 4 managing directors who are also owners, namely: José García Sánchez, Luis Miguel Gutiérrez Abella, Víctor García Rodríguez and Juan Francisco García Muñoz.

Arrienda’s valuation has been performed by the appraisal company Gesvalt.

Original story: La Vanguardia

Translation: Carmel Drake

Bankinter’s Hotel Socimi Atom will Make its MAB Debut with a Valuation of €265.7M

21 November 2018 – Eje Prime

Atom is lining up to make its debut on the stock market. Bankinter’s hotel Socimi will ring the bell soon on the Alternative Investment Market (MAB) with a portfolio comprising 21 assets located all over Spain. The company will make its debut with a valuation of €265.7 million and a share price of €10.60 after the stock market regulator issued a favourable report for its inclusion on the alternative market, scheduled for before the end of the year.

Atom’s main partner is the Melià Group, which operates six of its establishments. In addition, the Socimi has agreements with AC Hotel by Marriott, Eurostars, Ibersol and B&B, amongst other chains.

Twelve of the company’s hotels are vacation properties, and the remaining nine are urban assets; most are four-star establishments. The properties are worth €483.5 million altogether, according to an independent valuation of the portfolio carried out by EY.

In addition to Bankinter, which owns 5.3% of the shares, other shareholders of the management company include Alcor, which controls 5% of the shares; Mistral Iberia Real Estate, with 5.15%; and Línea Directa Aseguradora, with 2%.

Original story: Eje Prime

Translation: Carmel Drake

Azaria Rental Debuts on the MAB with a €125M Investment Plan

25 September 2018 – Eje Prime

Azaria Rental made its debut on the stock market today with the clear intention of expanding its asset portfolio. The Socimi, specialising in the rental market and managed by Drago Capital, started trading at a price of €5.40 per share, which means that its valuation amounts to €45 million, according to a statement filed by the company with the Alternative Investment Market (MAB).

On its first day on the MAB, the Socimi confirmed its plan to search for new investment opportunities to increase returns for its shareholders. Specifically, according to Mayte Medina, CEO of Drago Capital, the firm’s future acquisitions are expected “to amount to €125 million in total”.

Currently, Azaria Rental owns just one asset: a 100% stake in Bifur Investments, the owner of the industrial and office complex located at number 40 Calle Miguel Yuste in Madrid, which houses the headquarters of the El País newspaper. The property spans a surface area of 46,480 m2 and comprises five buildings, leased to the Prisa group until 2033 for €4.9 million per year, according to Expansión.

Azaria Rental is the 19th Socimi to debut on the MAB so far this year. The objective of the company is to create a real estate investment vehicle to generate returns of between 4% and 5%, “from rental contracts with a net triple income profile over the long-term”.

Meanwhile, Drago Capital is a real estate asset management company that operates in the Spanish market as well as in the United States of America. Founded in 2001 by a group of professionals from the sector, it has offices in Madrid, Lisbon and Miami.

Original story: Eje Prime

Translation: Carmel Drake

El Corte Inglés Values its Real Estate Assets at €17.1bn

25 September 2018 – Expansión

The properties owned by El Corte Inglés are worth €17.147 billion, according to the most recent valuation entrusted by the company to Tinsa for the end of its financial year, February 2018. That is the valuation that the company shared with investors interested in the placement of €600 million of its bonds.

This real estate portfolio, which according to previous reports was worth almost €17.0 billion, comprises 94 shopping centres, of which two are located in Portugal. These shopping centres account for 87% of the total value of the company’s assets. El Corte Inglés warns investors that this valuation may have to be adjusted in the future, given the illiquid nature of its real estate assets.

Tinsa’s study segments the distribution company’s shopping centres by value. Two of them are worth more than €500 million each, and another two are worth between €400 million and €500 million. The bulk of the centres, 45 to be precise, have a valuation of between €100 million and €200 million. Six of the centres are worth between €300 million and €400 million.

32% of the value of the real estate assets of El Corte Inglés are located in Madrid, whilst 10% are located in Barcelona. Málaga and Valencia are home to 6% each; Sevilla another 4%; and the other Spanish regions, the remaining 42%.

The bulk of the valuation of El Corte Inglés’s real estate portfolio, €14.964 million, corresponds to its stores and shopping centres

The company highlights that it owns the largest portfolio of real estate assets of any of the companies in its sector in Europe. The total surface area of its real estate assets spans 3,994 million m2.

This independent valuation entrusted to Tinsa does not include the real estate operations carried out by El Corte Inglés since February of this year. In August, the company sold two shopping centres located in Madrid (Princesa) and Bilbao (Gran Vía) to Corpfin Capital Real Estate for around €100 million.

Quarterly results

The results of El Corte Inglés remained practically stable YoY during the first quarter of its financial year, which finished at the end of May. According to the unaudited provisional accounts, the company lost €50 million during that quarter, compared with losses of €51 million during the same period in 2017.

The company’s sales grew slightly, with net revenues of €3.417 billion, just above the €3.413 billion recorded during its first quarter last year.

According to the unaudited provisional data at the end of July 2018, corresponding to the first five months of the financial year, sales fell by 0.1% YoY and EBITDA decreased by 0.6%.

This result is explained by a decrease in revenues in the retail and technological departments, which were partially offset by an increase in sales in its travel agency and insurance departments.

El Corte Inglés explains to investors interested in its bonds that sales of clothing were hit during that period due the unusual climate this year (…).

Original story: Expansión (by A. Roa & D. Badia)

Translation: Carmel Drake

Blackstone Will Pay Merlin, Santander & BBVA €948M for 50.01% of Testa

18 September 2018 – Cinco Días

Another major movement in the real estate sector and with the same star as the buyer: the US giant Blackstone. After acquiring the Socimi Hispania, which specialises in hotels, the fund has now set its sights on Testa, the largest owner of rental housing in Spain.

Blackstone has already agreed to purchase 50.01% of the Socimi (…) from three of Testa’s largest shareholders (Merlin Properties, Santander and BBVA), according to a statement filed by the real estate company with the Alternative Investment Market (MAB) on Monday. Nevertheless, Acciona, the other major shareholder, has not sold its stake. The US fund manager is carrying out the operation through the company Tropic Real Estate Holding and is paying €948 million, whereby valuing Testa at €1.895 billion.

Blackstone is paying €14.327 per share. The company’s closing price at the end of trading on Friday was €14, representing a premium of just over 2%.

Blackstone is keeping the offer open for the other shareholders. In fact, the document sent to the exchange by Testa explains that the bidder “has committed to buying all of the remaining shares in the company” under the same conditions.

Testa’s shareholders regard this operation as an exit following their failure to launch a major IPO in June, when the political uncertainty, above all surrounding Italy, caused a surge in the markets. The intention of Merlin, Santander and BBVA (and to a lesser extent Acciona, which wanted to remain as an industrial partner) was to divest their stakes with that great stock market debut. Now they have found an escape route with Blackstone as the buyer.

Merlin also reported on Monday that with this operation, it will raise €321.2 million in exchange for its 16.95% stake in Testa. The funds obtained by Merlin will be used to reduce its debt in line with the objectives set out in the company’s business plan.

BBVA, which owned 25.24% of Testa has also sold all of its shares. Meanwhile, Santander sold just 7.82% of the 36.87% that it held in Testa, which made possible the operation that has given Blackstone control over the entity.

The new Testa Residencial is a listed real estate investment company promoted in 2016 by the banks and Merlin. The latter company had been left with homes following its purchase of the former Testa from Sacyr in 2015; meanwhile, Santander and BBVA contributed rental homes from the property developer Metrovacesa. Finally, last year, Acciona incorporated more than 1,000 homes, worth €340 million, to close the current alliance between the four shareholders.

Testa is currently the market leader in the residential rental sector in Spain. It has a portfolio of 10,615 units, worth €2.675 billion, mainly private housing, with annualised gross rental income of €85 million and an occupancy rate of 91.4%.

Original story: Cinco Días 

Translation: Carmel Drake

Axactor Buys 1,500 Assets From a Spanish Bank Worth €102M

17 September 2018 – Eje Prime

Axactor is continuing to heat up its Norwegian capital with Spanish real estate. The Scandinavian fund has purchased a portfolio containing almost 1,500 foreclosed assets from a Spanish bank whose value amounts to €102 million. With this deal, the European company has now completed seven operations in the Spanish real estate sector.

The portfolio, called Omega B, has been transferred to Axactor under the joint venture format: the financial entity, whose name has not been revealed, will retain ownership of 25% of the assets, whilst the remainder will pass into the hands of the Norwegian fund.

Since its arrival in the Spanish real estate market in 2017, Axactor has accumulated more than 8,000 assets under management. One of the largest operations that the Norwegian fund has completed in the last year was the acquisition of a portfolio of problem assets from Banco Sabadell worth €900 million.

Original story: Eje Prime

Translation: Carmel Drake