Tag: värde partners

Aelca to Build 2,100 Homes in Sevilla

20 February 2018 – Expansión

The property developer in which Värde Partners holds a stake has acquired several plots of land in the town of Entrenúcleos, where it plans to invest €250 million.

The residential property developer Aelca, in which the US fund Värde Partners holds a 75% stake, has completed a major land purchase in Sevilla, which is going to allow it to enter the Andalucían capital with a huge real estate project.

The company, led by Javier Gómez and José Juan Martín (pictured above), has announced the purchase of several plots in the Sevillan municipality of Dos Hermanos, where it is going to build more than 2,100 homes, according to ABC Sevilla.

In total, Aelca has acquired a portfolio of land with a buildable surface area of 227,788 m2, which it is going to develop in several phases. The first phase will be launched in May, with the development of 163 multi-family dwellings on one site and 78 family homes on another.

The investment in Entrenúcleos will amount to €250 million, said the company today.

“Andalucía is a key market for the company and, as part of our strategic plan, we hope to strengthen our presence in the region, where we have just opened a local office. We know that there is latent demand there at the moment in terms of housing and we are convinced that this is going grow further still, because the capital’s entire area of influence is already sparking a great deal of interest due to the numerous benefits that it offers and its competitive prices”, says Javier Gómez, CEO of Aelca.

The company, founded in 2012 by its current CEOs, Javier Gómez and José Juan Martín, closed 2017 with 1,118 homes sold. This year, the firm plans to launch 3,777 homes, spread across around 50 developments.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Aelca Plans Stock Market Debut for 2019 After Investing €500M in Land

6 February 2018 – Eje Prime

Aelca has one objective: to debut on the stock market in 2019. The Spanish property developer thinks that making its debut on the stock market in 2018 would be too soon, but considers that the goal is achievable for next year. The company is ambitious in terms of the years ahead, in part thanks to the financial help that it is receiving from the fund that holds a stake in it, Värde Partners. The US firm has granted Aelca sufficient financial stability for it to commit to investing €500 million in land purchases between 2017 and the end of this year.

Last year, Aelca accumulated a portfolio of land sufficient to build 13,000 homes, across a large part of Spain. With a presence in Madrid, Malaga, Sevilla, Cataluña, the Community of Valencia and, as of a few months ago, Euskadi, the company spent €300 million in 2017 buying up developable land, an extremely scarce asset of late, according to complaints from property developers.

The roadmap of the real estate company led by José Juan Martín (pictured above, right) and Javier Gómez (pictured above, left) for 2018 involves starting to market around fifty developments all over the country, which means putting around 3,700 homes on the market. Aelca’s forecasts indicate that it will sell 2,000 properties (…).

Whilst in 2017, the property developer’s revenues ranged between €130 million and €140 million, and its profit amounted to between €25 million and €26 million, for the current year, the company hopes to exceed the €200 million threshold in terms of turnover.

Original story: Eje Prime 

Translation: Carmel Drake

Vía Célere Invested €227M in 2017 Buying 473,000 m2 of Land

5 February 2018 – Eje Prime

The property developer led by Juan Antonio Gómez-Pintado accelerated its pace in 2017. By the end of the year, Vía Célere had invested in land purchases amounting to €227 million, whereby increasing the surface area of the company’s buildable land portfolio by 473,000 m2.

With its stock market debut looming, the company also closed some high-profile corporate operations last year, such as the integration of Dos Puntos into the group, in which the US fund Värde Partners has held a stake for a year, and the carve-out of its property business.

Vía Célere’s portfolio of land for residential construction now spans 1.43 million m2. With these plots, the property developer has the capacity to build 12,200 homes in Spain over the next few years.

The most recent purchases made by the real estate company in this field were in Barcelona, A Coruña and Ibiza. The investment on the White Island was the first to be made by the company in that area of the Balearics.

By region, besides the provinces already mentioned, Vía Célere closed land purchase operations in 2017 in provinces such as Madrid, Sevilla, Valladolid and Girona. During the course of its ten-year life, Vía Célere has handed over more than 2,300 homes, a figure that, in light of the business plan launched, it is seeking to increase to 10,000 units over the next two years.

Original story: Eje Prime 

Translation: Carmel Drake

Vía Célere, Aedas, Neinor & Aelca are Open to Corporate Operations

22 January 2018 – Expansión

Spain’s large property developers are warning that the shortage of land and the slow pace at which licences are being processed will lead to a rise in house prices.

Following the start of the concentration of the large Socimis, with the takeover of Axiare by Colonial as the main exponent, the real estate sector is looking to other companies in the sector to star in the new corporate operations, namely, property developers led by investment funds.

With a land portfolio spanning almost 5 million m2 and more than 10,000 homes under construction, Neinor Homes, Aedas, Vía Célere and Aelca are the leading property developers to have emerged from this current real estate cycle. With the first two listed on the stock market and the second two with plans to that end, their directors say that the commitment from large investment funds and the creation of new property developers is positive, despite the competition. “Competition motivates and helps us. It improves processes, which leads to a better purchase experience for the end customer”, explains Javier Gómez (pictured above, top right (on the left)), CEO and founding partner at Aelca, speaking at the New Housing Industry conference, organised by Expansión and its supplement magazine ‘Su Vivienda’ (Your Home), both part of the El Mundo group.

Operations

Although companies and funds, such as Harbert, Patrizia and ASG, have their own growth plans in the residential market, the shortage of available land for all of them implies that they will have to form alliances between them. “We are in a privileged position. We hold land on our balance sheet for the development of our business plan over the next five years. Having said that, we are obliged to analyse operations that add value for our shareholders, including corporate operations”, said Sergio Gálvez, Director of Business Development at Aedas.

In this context of corporate operations, Vía Célere, which is preparing to debut on the stock market in 2018, and Aelca, have something in common, which, nevertheless, also pushes them apart: their largest shareholder is the US fund manager Värde Partners. “There has been a lot of talk about whether Aelca and Vía Célere could work together, but the structure of and funds and the assets they own are different and that could lead to conflict. We would need to resolve that first”, said Juan Antonio Gómez-Pintado (pictured above, top left), founder and CEO of Vía Célere.

“We think that Spain is a market that is going to be consolidated, where there is space for between five and ten large players and where size is a significant advantage”, reveals Juan Velayos (pictured above, bottom left), who, nevertheless, recognises that it is difficult in his case, since his firm does not have a single controlling shareholder, following the gradual departure of its founder, Lone Star, from the company’s share capital over the last few months.

Original story: Expansión (by Rocío Ruiz and Jesús de las Casas)

Translation: Carmel Drake

No Buildable Land Left in ‘Sevilla Este’ After Fund Shopping Spree

16 January 2018 – Sevilla ABC

The supply of land in Sevilla Este has almost run out. And that milestone represents more than just a symbolic fact. It is a clear sign that a new cycle of real estate expansion is underway, characterised by significant interest from property developers in neighbourhoods and towns on the outskirts of Sevilla. It also provides evidence of the shortage of buildable land that exists in the municipality of the provincial capital, which has caused the few plots of buildable land that have come onto the market to spark a great deal of interest amongst investors.

Whilst the property sector started its rebirth in certain parts of the city centre in 2015, interest in other areas of the city has been increasing significantly over the last two years to meet the new demand that is being generated by the growth of the economy. The result of this trend is that in just three months, almost all of the residential plots in the Sevilla Este area have been sold.

“With just a few exceptions, everything that was on the market has now been purchased”, along with plots that still need to be developed for public and social services, explains Juan Aguilera, Manager at Gaesco, speaking to ABC.

And this investor boom in that area of the city is due to the fact that “Sevilla is running out of buildable land for new developments, since vital infrastructures such as the SE-35 ring-road have not been built, which is the main artery that ought to be boosting all of the new areas of metropolitan expansion”, says Aguilera (…).

Q21’s investment

The most recent large land operation in Sevilla Este was carried out by Q21 Real Estate, the property developer that emerged from the merger between the US investment fund Baupost and the Spanish company Grupo Pinar (one of the most recognised firms in the former property sector). That company has acquired a plot measuring 5,400 m2 at the end of Avenida Emilio Lemos, opposite the Aleste Plaza shopping centre, where it will build around 164 homes. The company is currently processing the permits it requires to start the building work and, once it has received the green light, will complete the construction of the properties within a period of 26 months. The plot that Q21 has acquired belonged to another company in the sector that filed for bankruptcy.

That purchase operation took place at the same time as two other large investments in Sevilla Este, also made by companies that are partly owned by large investment funds. One of them was led by Vía Célere, in which Värde Partners owns a majority stake; it acquired a plot for the construction of 1,700 homes that had belonged to BBVA. And in parallel, the fund Activum purchased plots for the construction of more than 1,000 homes (…).

In Aguilera’s opinion, the interest from these investment funds in Sevilla Este has arisen because several factors have converged. “There is significant built-up demand in Sevilla from families who chose to rent during the crisis and who are now interested in buying a home, plus the years of recovery are now creating new families who can also afford to buy one of these new homes”. This demand, combined with the shortage of buildable land in Sevilla, is what has caused the interest in Sevilla Este to soar, which is exactly what already happened with Hacienda Rosario (which used to belong to Gabriel Rojas and which was acquired by Aedas Homes).

Interest in Entrenúcleos

In these circumstances, Aguilera considers that future real estate investments will not be made directly in Sevilla, but rather in the some of the population nuclei of the metropolitan area, especially in Dos Hermanos (which has made the effort to develop an area like Entrenúcleos).

Aguilera thinks that, unfortunately, time has proved him right. “If we had done our homework, we would now be enjoying a great period for the reactivation of large residential projects: demand and the economy are growing, financing is available at very reasonable prices…but none of the areas that require the SE-35, like Higuerón Norte, Buen Aire, San Nicolás Oeste and Villanueva del Pìtamo, have the infrastructure they need to capitalise on this new construction boom” (…).

Original story: Sevilla ABC (by Luis Montoto)

Translation: Carmel Drake

Activum Buys Land From CaixaBank to Build 1,000 Homes in Sevilla

2 January 2018 – Eje Prime

The real estate funds are back in Spain. The German group Activum (which has undertaken a large part of its investments in Madrid in the last two years) has just completed the acquisition of 19 plots of land in Sevilla Este, which, were owned until now by the Building Center, the real estate arm of CaixaBank.

The land in question is located on Avenida de las Ciencias and on Calles Soledades, Homero, Argos and Laertes and may accommodate more than 1,000 homes, together with other tertiary and commercial developments, according to ABC Sevilla.

In fact, this deal represents the second largest operation in this part of the city in recent months, given that Vía Célere, controlled mainly by the fund Värde Partners, acquired another large land portfolio in September, next to the Aquópolis leisure park, which in that case belonged to BBVA, and which has the capacity for the construction of more than 1,700 homes.

Currently, Activum’s portfolio in Spain comprises a dozen assets, with the exception of two that have been divested in recent months, located in Manuel de Falla and Santa Leonor, both in Madrid. Even so, the operation that caused the fund to shoot to fame was its purchase of the Mercado de Fuencarral.

The fund undertook that investment through the vehicle Activum SG Fund III and, although Talus Capital headed up the operation, the bulk of the money proceeded from the fund (approximately €22 million in total). Since then, it has been busy making purchases almost every month.

One of its latest involved the acquisition of six plots of land, all in Madrid, on which more than 1,000 homes can be built. The fund manager closed the agreement with Altamira for those plots in Alcalá de Henares, which have a buildable surface area of up to 50,000 m2.

Its portfolio of assets in Spain is completed with a building in Atocha, in Madrid, acquired in 2015, which it plans to convert into a hotel; the Sexta Avenida shopping centre, also located in the Spanish capital, which has a surface area of 16,800 m2; and the Ruta de Plata shopping centre, the only retail complex in Cáceres, which spans 8,300 m2.

Original story: Eje Prime

Translation: Carmel Drake

Spain’s Banks Sell RE Assets Worth €52,000M+ In 2017

2 November 2017 – Cinco Días

According to all of the experts consulted, there is no doubt that the operation carried out by Santander in August, involving the sale of €30,000 million in property to Blackstone, marked a before and after in the formula for the financial sector to get rid of its real estate deadweight.

That operation significantly boosted the total amount transacted in these types of portfolio sale operations this year. Taking into account those operations that already have been closed, as well as those that are currently underway, the transaction volume in 2017 will comfortably exceed €52,000 million. That figure contrasts with the volume recorded in 2016 (€22,000 million), even though this year (2017) was expected to be more modest in terms of transactions.

The new international accounting standard IFRS 9, which will enter into force in January, and which will toughen provisions for real estate portfolios, as well as the pressure from the Bank of Spain and, above all, the European Central Bank (ECB) for the sector to accelerate the sale of its NPL assets, have served as a trigger for the banks to accelerate the sale of their foreclosed land and properties.

The heads of Spain’s largest banks (Santander, BBVA, CaixaBank, Bankia and Sabadell) have said, during the recent presentations of their results for the first nine months of the year, that their objective is that property will no longer weigh down on their income statements by the end of 2018 and, in some cases, by a year later, at most (…).

By way of example, Bankia has two very different financial operations underway, but international funds are the interested investors in both cases. One involves the upcoming sale of between 7% and 9% of the entity’s share capital, a placement that is expected to be carried out during the month of November and whose buyers will be institutional investors.

The other operation will involve the sale of several real estate portfolios. One of those, for €100 million, goes by the name Jets; and another, amounting to almost €2,000 million, is known as Giant, comprises property from Bankia’s own balance sheet and maybe some from BMN, the entity that it will integrate into its perimeter at the end of the year (…).

CaixaBank, with around €18,000 million in at-risk assets, of which €10,000 million are NPLs, may also star in a similar operation to the deal closed by Santander with Blackstone within the next few months, according to two experts.

For the time being, all of the consultancy firms and investment banks agree that (with the exception of the sales processes already underway) the trend is to carry out much fewer placements of small portfolios and “to undertake a few, large sales instead”.

These same sources also agree that the investment funds (Apollo, Oaktree, Bain, Cerberus, Blackstone, Lone Star, Castlelake, Värde Partners, Lindorff, TPG and Goldman Sachs, amongst the most active) “are in a hurry to buy and the banks are in a hurry to sell”.

One of the large banks that has shown reluctance to sell its real estate assets until now, despite its bulky portfolio of foreclosed assets, has been BBVA. It has carried out some operations (refer to the table above) but it has been, together with Sabadell, the only entity that has not sold its real estate platform.

Nevertheless, the bank chaired by Francisco González has been holding exclusive negotiations with Cerberus for months regarding the sale of part of Anida (in an operation known as Sena). Specifically, it is interested in 20% of Anida Grupo Inmobiliario SL, which is equivalent to around €1,200 million, an operation for which it would pay approximately €300 million.

But several sources say that the bank is rethinking its sales strategy and in 2018, will be willing to put a much larger portfolio up for sale and whereby tackle an operation similar to the one closed by Santander, but this time with Anida as the protagonist.

Sources at investment banks and managers add that the upcoming regulatory changes affecting securitisations in Europe will also help to boost the sale of packages of property portfolios amongst investors (…).

Original story: Cinco Días (by Ángeles Gonzalo Alconada)

Translation: Carmel Drake

Santander Wants To Sell RE Assets Worth €6,000M In 1 Year

30 October 2017 – Voz Pópuli

Banco Santander does not want to stand idly by following the sale of Banco Popular’s real estate. After the completion of that operation (the largest ever real estate transfer in Spain), the entity chaired by Ana Botín wants to continue accelerating its real estate clean up. In this way, it plans to reduce its real estate exposure by more than €6,000 million over the next year.

That would mean that Santander’s real estate balance would decrease by half, given that it currently amounts to around €12,300 million in gross terms (excluding provisions).

According to the bank’s CEO, José Antonio Álvarez, speaking at the results presentation, the objective is for the entity’s real estate exposure “to be immaterial” by the end of 2018.

This immateriality means having a net balance of between €1,000 million and €2,000 million left on the balance sheet within 14 months, besides the rental properties, explained the banker. That, in turn, means selling around €6,000 million (in gross terms) and leaving around €6,000 million on the balance sheet.

The numbers

In this way, Santander España’s net exposure to the real estate market is €5,900 million. The entity has an average coverage ratio of 52% over these assets, which means that their gross value is €12,300 million.

Of those €5,900 million, €3,372 million are foreclosed assets, €1,203 million are rental properties and €1,325 million are delinquent real estate loans.

In August, Santander agreed to transfer almost €30,000 million (in gross terms) of Popular’s property to Blackstone. Specifically, the bank sold 51% of a new real estate company, for €5,100 million and retained ownership of the remaining stake.

In terms of the rest of the real estate assets on its balance sheet, Santander could undertake similar operations, although it will also continue to analyse sales through the retail network and the option of putting properties on the market through Socimis. Both the Spanish bank and its competitors are under pressure from the ECB to get rid of the real estate on their balance sheets as soon as possible.

Meanwhile, Santander is negotiating with Värde Partners, owner of 51% of WiZink, to repurchase Banco Popular’s customer card business and to sell it Barclays and Citi’s business in return.

Original story: Voz Pópuli (by Jorge Zuloaga)

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

Bankia Considers Rapid Sale Of BMN’s Property Portfolio

13 October 2017 – Cinco Días

Bankia is currently considering how it will deal with the exposure to real estate through BMN that it will end up with following the planned integration of the two entities at the beginning of 2018. The bank chaired by José Ignacio Goirigolzarri is considering the rapid sale of BMN’s problem assets to one of the opportunistic funds that typically participate in these types of operations.

Goirigolzarri’s entity has already made contact with several of the intermediaries that typically advise on these types of transaction, according to sources familiar with Bankia’s intentions, to sound out the options available. These intermediaries include large consultancy firms and several investment banks. The bank has reportedly asked all of these companies to share their ideas about how to best handle a potential sale.

Bankia’s initial idea involves carrying out a rapid operation, similar to the deal undertaken by Santander in August, with the sale of the portfolio that it inherited from Popular that it transferred to the fund Blackstone in just six weeks. That agile move was very well received by the market.

Unlike in the case of Popular, BMN’s exposure to property is considerably less. The entity owns around €1,100 million in net foreclosed assets, according to data about the merger of both entities reported by Bankia in June. The entity has a coverage ratio of 28% over its foreclosed assets and 40% in the case of its doubtful debts (somewhat lower than the average for the sector, which stands at around 50%).

Moreover, of the total net foreclosed assets, 64.4% correspond to finished homes and 19.1% relate to land. In terms of the entity’s total loan book, which amounts to €21,900 million, only 2.7% relates to property developer loans.

The merger of Bankia and BMN was approved by the General Shareholders’ Meetings of both entities in September. The authorities are expected to declare their approval of the union in December and the definitive integration is forecast to take place at the beginning of 2018. The operation will be articulated through the handover of 205.6 million newly issued shares in Bankia to the shareholders of BMN, which effectively means assigning a value of €825 million to the latter (0.41 times its book value).

As such, BMN’s shareholders will hold 6.7% of Bankia’s share capital. Following the merger, Bankia will be the fourth largest entity in the country, behind Santander, BBVA and Caixabank (…).

Another of the differences compared to the operation involving Popular is that BMN does not have its own servicer. In the case of the bank acquired by Santander, it repurchased the 51% stake in Aliseda that was held by the funds Värde Partners and Kennedy Wilson, to subsequently include it in the operation that was then sealed with Blackstone.

In 2014, BMN sold its real estate asset management company Inmare to the servicer Aktua (controlled by the Norwegian fund Lindorff), to become strategic partners in the management of those assets.

The most likely scenario is that Bankia will execute the sale of the assets proceeding from BMN as the single transfer of a portfolio, given that it no longer owns a servicer. The entity chaired by Goirigolzarri declined to comment on any possible operation given that the merger has not yet been approved by the authorities (…).

The potential buyers will presumably include the usual suspects, such as Apollo, Oaktree, Bain, Cerberus, Blackstone, Lone Star, Castlelake, Värde Partners, Lindorff, TPG and Goldman Sachs.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake