Vbare Completes €7M Capital Increase

3 August 2017 – Eje Prime

The Socimi Vbare has increased its share capital by more than €7 million. During the preferential subscription period, which ended on 22 July, 154,775 shares were subscribed in total, accounting for 19.63% of the total new shares offered under the framework of the capital increase.

During the discretional allocation period, which ended on 28 July, 391,914 shares were subscribed in total, accounting for 49.71% of the total new shares offered under the framework of the process.

“This capital increase has been performed in response to the demand from numerous investors to continue growing through the acquisition of a series of assets that have been identified and that fit with the company’s strategy”, said Vbare in a statement.

Last month, Vbare acquired two residential properties in Madrid as part of its portfolio growth policy. “The company is continuing to evaluate new investment opportunities in several locations”, said the company, which owns a portfolio of 196 homes in different areas of Madrid.

The company is a real estate investment vehicle, specialising in the acquisition and management of residential assets for rent. It debuted on the MAB on 23 December 2016. To date, the company has analysed assets worth more than €500 million.

Original story: Eje Prime

Translation: Carmel Drake

VBARE Iberian Properties Approves €10.4M Capital Increase

6 June 2017 – Press Release

At a meeting held yesterday (5 June 2017), the Board of Directors of VBARE Iberian Properties Socimi (VBARE) approved an increase in the company’s ordinary share capital amounting to €3,941,505.00, through the issue of a maximum of 788,301 ordinary shares. The new shares will be issued for a nominal value of €5.00 plus an issue premium of €8.00 per share, which results in an issue figure of €13.00 per share. In the event that the capital increase is fully subscribed, it will amount to €10,247,913.00 in total, in other words, €3,941,505.00 corresponding to share capital and €6,306,408.00 corresponding to the issue premium.

VBARE, which was created with a clear mission for growth, has achieved an average cumulative appreciation in value on the amount invested of 57% (which represents an average discount of 36% on the investment made), which, at the end of the first quarter of 2017, amounted to €15.9 million.

The aforementioned capital increase has been undertaken in response to demand from several investors, with a view to continuing growth, through the acquisition of a series of identified assets that fit with the company’s strategy.

About VBARE Iberian Properties Socimi (VBARE)

VBARE is a real estate investment vehicle specialising in the acquisition and management of residential assets for rental under the special regime afforded to Listed Real Estate Investment Companies (Socimis). The company has been listed on the MAB since 23 December 2016.

VBARE was constituted in March 2015, with the aim of generating a high return for its shareholders through the implementation of a value-added strategy and of benefitting from existing opportunities in the Spanish residential market, which has been showing clear signs of recovery.

For the time being, VBARE owns a portfolio of 182 homes. To date, the company has been analysing assets worth more than €500 million and it is constantly on the look out for new business opportunities that fit the scope of its investment policy.

Original story: Press Release

Translation: Carmel Drake

Vbare Invests €100M To Expand Rental Home Portfolio

17 May 2017 – Expansión

The Socimi Vbare is currently analysing the possible purchase of new rental homes worth €100 million. In addition to expanding its business portfolio, the firm wants to expand the geographical reach of its activity, currently centred on Madrid, to include other cities.

The firm plans to close these operations in the short term provided it manages to raise the necessary funds. It is currently working to secure financing from domestic and overseas institutional investors, according to a statement issued by the company, whose shares are traded on the MAB.

Vbare believes that the Spanish residential market “will continue to attract the attention of large investors in the market and will consolidate itself as one of the priority investment focuses of 2017”.

To this end, the Socimi ratified its intention to raise funds in order to “take advantage of the investment opportunities that will arise in the Spanish market over the next three to five years”.

Vbare has just published its results for the first quarter of the year, which saw it record a net profit of €1.19 million, down by 8.8% compared to a year earlier. The rental income from its housing portfolio increased six-fold to €260,000.

Original story: Expansión

Translation: Carmel Drake

Can Spain’s Rental Price Hikes Be Contained?

6 February 2017 – El País

(…) A strong increase in demand and a shortage of supply have led to increases in rental prices, which soared by 15.9% in Spain last year, according to Idealista. Barcelona and Madrid recorded historical rises, with increases of 16.5% and 15.6%, respectively.

No-one in the sector is talking about a bubble, but rather about an imbalance between supply and demand. Nevertheless, this mismatch has raised alarm bells in the two hardest hit cities. The Town Halls of Madrid and Barcelona have asked the Government to change the Law governing Urban Leases (LAU) in order to regulate prices and prevent disproportionate increases.

And the Government of Cataluña has gone even further: it is going to punish landlords who charge expensive rents. The regional government is going to establish a rental price reference index in the Spring, which will establish orientative prices per square metre, based on the size of the home, age of the building, characteristics of the home and its location. Work will be performed on the mathematical formula over the next two months.

Carrot and stick

The tool will reward or penalise ownera through the tax system, in the form of the Property Tax (IBI), in the autonomous section of the Income Tax Return (IRPF) and in renovation work. Moreover, empty home owners may even avoid fines if they rent their properties out in line with the “benchmark price”. “If the rent is lower than the reference index, then the incentive will be positive and if the rent is higher, then the incentive will be negative”, explain sources in the Housing Department at the Universitat Rovira i Virgili (URV) – which (…) at the guidance of its director, Sergio Nasarre, has coordinated the working group whose conclusions form the basis of the Generalitat’s new initiative.

The rental market is gaining weight in Spain. “It has gone from accounting for 17.9% of the market in 2001 to 22.3% in 2015”, said José Peral, Director of Sales and Marketing at Solvia, who notes that the rental sector is undergoing a seismic change. Moreover, we are seeing “market convergence towards average volumes and prices that are more aligned with those observed in other European countries”, said David Calzada, CEO at the Socimi Vbare. Calzada expects prices to continue to rise in Madrid and Barcelona, at a sustained, albeit more contained rate. Oscar Bellette, CEO at Inveriplus, forecasts that rental prices will rise by 7% in both cities this year.

Despite this, the creators of the index consider that Spain still has the smallest residential rental market in Western Europe. Moreover, “it is dysfunctional, expensive and poor quality in nature; 46% of homes are rented on the black market and more than 3.5 million homes are empty”, says Nasarre. (…).

The Catalan method, the first of its kind in Spain, is based on a methodology that has worked in Berlin for years, where 95% of rents are open-ended. The index fulfils its objective in the German capital: indexed rents rise by between 2.7% and 3% per year, whilst those not subject to the index increase by between 5% and 10%, p.a., says Jutta Hartmann, from the Berlin Tenants’ Association. (…).

Nevertheless, the initiative is generating a lot of questions and concerns amongst agents in the sector in Spain. “It is a useless and counterproductive measure, which will lead to an increase in black market activity and in the number of empty homes”, says Sergi Gargallo, Director General at Alquiler Seguro. (…).

Nevertheless, all of the agents agree that the market will benefit from professionalization, thanks to the arrival of companies such as Socimis. “In Spain, 3.8 million primary residence homes are rented out and 97% of those are owned by individuals”, says José Peral, at Solvia.

Original story: El País (by Sandra López Letón)

Translation: Carmel Drake

Vbare Debuts On The MAB With Almost 200 Rental Homes

27 December 2016 – Idealista

With just a few days left until the end of the year, the stock market is still receiving new Socimis. The trickle of debuts is incessant and on this occasion, the star of the show is Vbare Iberian Properties, a vehicle that owns a portfolio of residential rental assets.

The company has debuted on the stock market at a price of €12.90 per share, which represents a market capitalisation of €20.6 million, according to the consultancy firm Grant Thornton, and as such has become the twenty-eighth Socimi to trade on the MAB.

According to idealista.com, the company is backed by foreign capital (one of its main shareholders is the Israeli investment firm Value Base) and it has 183 real estate assets in its portfolio. Almost all of them are homes, but the Socimi also owns some garage spaces and some storerooms.

All of the properties are rented out and are located in the Community of Madrid. They are worth €20.84 million in total, according to Aguirre Newman. Half of the homes are located in Madrid capital, although the company also owns other homes in the municipalities of Aranjuez, Móstoles, Parla and Torrejón de Ardoz. In total, they have a useful surface area of more than 2,000 m2, comprise between one and four bedrooms and have an average occupancy rate of 72%.

One of the objectives that Vbare has set itself for the future is to raise more funds to allow it to expand its asset portfolio and to make the jump onto the main stock market, where some of the largest Socimis are already listed (Lar, Hispania and Axiare; meanwhile, Merlin Properties is listed on the Ibex).

In its market debut prospectus, the Socimi explained that it wants to centre its portfolio on residential real estate assets, aimed at middle-class tenants and located in the metropolitan areas of Spain’s major cities. In other words, areas with significant demand and with future development prospects in the short and medium term.

“Our properties are currently located in the metropolitan area of Madrid, this represents our first phase of investment. Progressively, the Socimi plans to diversify its asset portfolio by acquiring properties in the metropolitan areas of the main provincial capitals in Barcelona, Málaga, Valencia, Alicante, Bilbao, Sevilla, Zaragoza, Palma de Mallorca and La Coruña, which represent the company’s core business”.

Original story: Idealista

Translation: Carmel Drake

MAB Approves Socimi VBare’s Debut On The Exchange

24 November 2016 – Expansión

The Socimi will debut on the stock exchange at a price of €12.90 per share, which represents a total company value of €20.6 million.

The MAB’s Coordination and Incorporations Committee has issued a favourable report to the exchange’s Board of Directors confirming the Socimi VBARE Iberian Properties’ compliance with the joining requirements, after studying all of the documentation submitted by the company.

Prior to joining the MAB, the company will launch a share subscription offer. According to the Spanish Stock Exchange and Markets (Bolsas y Mercados Españoles), the incorporation still requires the approval of the MAB’s Board of Directors.

Renta 4 Corporate is the Socimi’s registered adviser. Renta 4 Banco will act as the placement entity, liquidity provider and agent entity and, in addition, Value Base Underwriting and Securities Distribution will serve as the placement entity for the shares that are going to be issued in Israel, amongst qualifying investors only.

The company’s Board of Directors has set the reference value for each share at €12.90, which represents a total company value of €20.6 million. This estimate has been performed taking into consideration the share valuation report performed by the independent expert Grant Thornton.

VBARE Iberian Properties specialises in residential rental assets. Its strategy focuses on the acquisition of real estate assets, for their subsequent renovation and rental. It currently owns 183 real estate assets, all of which are located in Madrid.

Original story: Expansión

Translation: Carmel Drake

VBare: Rental Prices Are Rising Most Rapidly In Madrid & Barcelona

23 November 2016 – El Mundo

The Socimi VBare Iberian Properties, which specialises in the rental housing sector and which will soon make its debut on the MAB, has conducted a study whose findings show that, on average, it takes between 2.5 and 4 months to rent a home in Spain’s largest cities. “The current high level of activity in the rental market in Spain’s major cities is manifesting itself not only in terms of rising rents, but also in a reduction in the time it takes to let out properties”, say sources at VBare.

In this sense, the Socimi said that Barcelona and Madrid lead the ranking of cities for the time it takes to lease a property. On average, it takes less than three months to rent out a home in both cases. In other cities, such as Valencia, Málaga, Palma de Mallorca, Bilbao, La Coruña and Alicante, it takes less than four months, whilst in Zaragoza and Sevilla, it takes around 4 months. “Nevertheless, those averages are significantly shorter in neighbourhoods with significant demand and limited supply”, say sources at VBare.

Specifically, it takes less than two and a half months to rent out a home in Barcelona. In areas such as Vila de Gràcia, Poble-Sec, Sant Antoni and Sants-Les Corts, it takes around two months on average, whereas in Diagonal Mar, it takes around three months and in Vallvidrera, the Urquinaona-Arc de Triomf-Gran Vía triangle and the area to the south of Paseo de Gracia, it takes more than four and a half months.

“There is a certain amount of positive correlation between the time it takes to lease a property and the rental cost in euros per month, as well as with the independent price of the surface area (in euros/m2/month)”, explain sources at VBare. “Thus, broadly speaking, it takes longer for landlords to find tenants in areas with larger homes and higher rents than it does for landlords in more affordable neighbourhoods with smaller homes”. “Nevertheless, demand is high across the city and the average deviation between the different micro-markets (by post code) in terms of the time it takes to find a tenant is less than two weeks”.

In terms of Madrid, it takes slightly less than three months for landlords to find tenants. Like in the case of Barcelona, the average search times are shorter in peripheral neighbourhoods, where prices are more affordable, such as in Villa de Vallecas, and areas to the south of the M-30 (Puerta del Ángel, Usera, Vista Alegre, etc.), whereas it takes between three and four months to lease a property in the more exclusive areas of the city, such as the southern quadrant of the neighbourhood of Salamanca, Cortes-Jerónimos and along the Paseo de la Castellana.

“Nevertheless, unlike in Barcelona, for the group of post codes analysed, there is no significant relationship between the time it takes to lease a property and the price per m2 per month, although there is a link between the time it takes to lease a property and the average surface area homes in each neighbourhood: the smaller the home, the easier it is to find a tenant, and vice versa”, explain sources at VBare.

A similar phenomenon is being experienced in cities such as Bilbao (3.3 months on average) and, to a greater extent, Palma de Mallorca (which has a similar average time to Bilbao) and Alicante (3.6 months): it takes longer to rent out homes in central areas with high rents per m2, whereas it is quicker to lease more affordable properties in peripheral areas.

By contrast, in Sevilla (where it takes just over four months to rent out a home on average), there is an inverse relationship between the two variables, given that homes located in the centre of the city – which are more expensive per m2 per month – are leased out more quickly than homes in peripheral neighbourhoods (with exceptions such as Sevilla Este, where supply is limited and demand is steady) (…).

Original story: El Mundo

Translation: Carmel Drake

Socimi VBare Will Debut On MAB In Dec With 166 Mid-Range City Flats

14 November 2016 – El Mundo

The rise of the residential rental business in this new real estate cycle seems to be undeniable. And this is evidenced by the fact that increasingly more companies are committing themselves to the professionalization of the market, which has, in Spain at least, traditionally been handled by individuals and small and medium-sized investors. The emergence of the Socimi structure has played a key role in enabling large investors to place their focus on the segment.

First came the shopping centres, then the offices and then the industrial and logistical warehouses. Over the last few years, the Socimis have placed their focus on all of these assets. But now, it seems that homes are attracting the most attention. And, following in the footsteps of the large Socimis, such as Merlin, Hispania, Lar and Axiare, we are now seeing smaller entities, focusing on the management and operation of residential rental businesses, and many are about to debut on the Alternative Investment Market (MAB).

This group of new players includes VBare, a company constituted in March 2015, from an initiative created by Aura Real Estate, a company that specialises in the valuation of large real estate portfolios and which has vast knowledge of the market, and the Israeli investment bank, Value Base.

In addition to the real estate knowledge and financial muscle of its founding companies, the Socimi’s offering is enhanced even further by the extensive experience of David Calzada (pictured above). Calzada is the CEO of Vbare, having previously worked as a Partner at the international consultancy firm PwC for four years, where he led the team responsible for Socimi research.

Since its constitution as a Socimi, VBare has raised €16.2 million in financing. Those funds have been contributed by 35 qualifying investors, of which only the Israeli bank can be considered as an institutional investor (the bank holds a 15% stake). Of that volume, €14.5 million has already been spent on the acquisition of 166 homes, 61 storerooms, 28 parking spaces and three retail premises.

Real estate portfolio

According to Calzada, the company’s strategy is to buy residential assets in the metropolitan areas of major cities with an average discount of 10% compared to market price. The firm then undertakes capex investment of around €2,700 per flat to ensure that each one fulfils certain aesthetic and quality criteria, with a view to obtaining initial net returns of 4%. According to the company’s CEO, the portfolio is currently generating a yield of 6.1% and its asset value has already increased to €20.8 million.

In terms of its core product, the Socimi mainly focuses on properties with “affordable, middle-class” rents of between €550 and €600 per month. Its portfolio is characterised by one-bedroom homes, measuring around 40 m2.

Calzada interprets the current period in the housing market as “the end of the decrease in prices”, which means that from now on he expects prices to rise and for there to be “more competition in the residential market”. In terms of rental prices, Calzada estimates that they may rise by 6% between 2017 and 2018 and by 5% in 2019.

VBare’s plans to debut on the MAB in the middle of December, and it hopes to raise between €5 million and €10 million. Ultimately, according to Calzada, our objective “is to move onto the main stock market, as soon as we are the right size”.

Original story: El Mundo (by Luis M. De Ciria)

Translation: Carmel Drake

Socimi VBARE: Why Are Rental Prices Are So High?

10 November 2016 – Invertia.com

Rental prices are soaring in Spain, in particular in Barcelona and Madrid. And the question on everyone’s lips is what is happening to make rents in Spain’s two major cities increase to such an extent that they are now even higher, in certain districts, than they were during the years of the real estate bubble?

According to the latest report from Idealista, the latest price rises have turned Barcelona into the regional capital where rental prices have increased the most in the last quarter, making it the most expensive capital (€17.40/m2), followed by Madrid (€13.80/m2).

The company VBARE Iberian Properties Socimi (VBARE), which specialises in the residential rental market and which will debut on the Alternative Investment Market (MAB) next month, has been busy analysing the rental market in Barcelona and Madrid with a view to identifying residential investment opportunities for subsequent lease. As such, its President, Fernando Acuña, is well positioned to explain the drivers behind this significant increase in rents in the two Spanish cities.

According to Fernando Acuña, the significant growth in demand, both from households, as well as from domestic and overseas investors, has not been accompanied by any increase in the supply, which is “still very limited”. The expert stresses that demand for housing is greater in Madrid and Barcelona, given that more jobs are being created in those cities, as the economy gradually recovers. He also points out that demand for housing is moving away from the ownership market towards the rental market and that this change is playing an important role in driving up prices.

The President of VBARE stresses that demand for rental properties is continuing to rise, not only because there has been a change in mentality (in favour of renting), but also because many of the people who need housing cannot afford to buy homes because they do not have the purchasing capacity (due to prohibitive mortgage conditions). He gives the example of the number of mortgages being signed – highlighing that, although the figures have been growing for 25 months – according to statistics provided by the National Institution for Statistics (INE) – they are doing so from a very low base. In fact, according to INE, 244,827 mortgages to buy homes were signed in 2015; meanwhile, in 2006, the year before the real estate bubble burst, 1,768,198 mortgages were constituted in total over rural and urban properties.

According to research performed by VBARE, several other factors are influencing the consolidation of the rental market across Spain, including: “short-term circumstantial reasons (high levels of unemployment, restricted (albeit improving) access to credit, loss of purchasing power, job insecurity affecting certain age groups susceptible to buying their first homes…) as well as medium and long-term structural factors (increase in labour mobility, a change in the traditional ownership mentality as the preferred option, decrease in the average size and nature of households…). (…).

According to the Socimi, another factor at play, particularly in Barcelona, is “the record tourism figures, which have turned some of the traditional rental stock into “seasonal rental properties”, especially in the centre, which has led to a rapid decrease in supply (…).

Original story: Invertia.com

Translation: Carmel Drake