Villar Mir Sells Land and Development Rights to Two Apartment Blocks in Málaga to Aquila Capital

17 September 2019 Inmobiliaria Espacio, a subsidiary of the Villar Mir Group, has reached an agreement with the German fund Aquila Capital to sell the land and projects for two 450-flat apartment buildings, each more than 120 meters high, part of the Martiricos project in central Malaga.

The Espacio Medina company, 70% owned by Villar Mir and 30% owned by Afinipo, of Unicaja, initially led the Martiricos development.

In addition to the two apartment buildings, the development includes an office building, a subsidised (VPO) 224-flat housing block and 50,000-m2 of green areas. The project’s estimated investment is expected to reach 240 million euros.

The agreement includes the land where the two towers will be built and the associated project. Villar Mir will remain responsible for the urbanisation works. The two firms declined to reveal the amount of the sale.

Original Story: Expansión – Rocío Ruiz

Adaptation/Translation: Richard D. K. Turner

Villar Mir to Invest in Portfolio of Office Buildings

16 August 2019

Villar Mir, through its subsidiary real estate company Espacio, is planning to build a portfolio of office buildings. The firm’s strategy includes development of acquisition of existing assets for rehabilitation and the development of new buildings.

Villar Mir has a land bank valued at 220 million euros on which it intends to build office buildings. The company’s objective is to create a cash flow that will provide it will a secure position during the coming economic cycle.

The group’s first project will be a turnkey development on a 25,000-square-meter plot of land it owns in Valdebebas, Madrid.

Original Story: Eje Prime

Adaptation/Translation: Richard D. K. Turner

Major Real Estate Projects in Madrid to Attract €10.5 Billion in Investments

21 August 2018

Some of the outsized projects for the coming years include the northern Madrid construction, the expansion of the Barajas airport and the Canalejas project.

Madrid will soon be the target of multi-billion euro investments in major real estate and urban development projects, upgrading the Spanish capital’s image in the coming years. The investments will lead to the construction of housing, skyscrapers, hotels, shopping centres, university campuses while also renovating some football stadiums and demolishing others.

Madrid Nuevo Norte, under development by DCN; Aena’s real estate project for Barajas; the Canalejas and Caleido project, along with the renovation of the Bernabeú stadium and the Mahou-Calderón development will involve total investments of €10.5 billion.

Four new skyscrapers

Madrid Nuevo Norte is the most ambitious project and the one that has been the longest in the making. Formerly known as Operation Chamartín, the project involves the construction of 365 new buildings in Madrid, including 10,500 flats and three skyscrapers in the vicinity of the Chamartín train station, in the north of the capital.

Construction of the project, which had been paralysed for a quarter of a century, is expected to begin in 2019. If the developer manages to keep to the announced deadlines, reparcelling and development will start by the end of next year or early 2020, and the first homes will be ready by 2021 or 2022.

Considering the sheer magnitude of the project, which will have a buildable area of 2.66 million square meters, construction is expected to last for more than two decades. Madrid Nuevo Norte will require €6 billion in investments and should create roughly 120,000 jobs during the construction phase and 94,000 posts after its completion.

A building known as the fifth tower will be erected in the area surrounding Madrid Nuevo Norte. The Caleido project will involve investments of €300 million and should be ready by the end of next year. Inmobiliaria Espacio, of the Villar Mir Group, was awarded the development and operationalisation of the project on public land in 2014 and is leading the development together with Megaworld, a conglomerate held by the Filipino billionaire Andrew Tan.

The project will include a 36-floor, 165-meter tower, which will house IE’s new, vertical campus, and a second building, 280 meters long and 60 meters wide, that will host a sports medicine centre operated by Quirónsalud.

Aena’s planned project for the land adjacent to the Barajas airport also stands out. The airport manager is forecasting a total investment of €2.997 billion over the next 40 years.

The project, with 2.7 million buildable square meters, will have logistics warehouses, offices, hotels and even a shopping centre. The company chaired by Maurici Lucena is searching for partners to develop its plans and, for now, the Blackstone fund and other major investors have demonstrated interest.

The Canalejas project, under development by OHL and Mohari Limited, a company owned by the Israeli executive Mark Scheinberg, is located in central Madrid. The venture, which will link seven historic buildings, will host Spain’s first Four Seasons hotel, along with luxury homes and a shopping area. The project is expected to involve €300 million in investments and is expected to be ready by 2019.

Madrid’s real estate and urban development plans will also affect the iconic Santiago Bernabéu stadium. In April, the city council gave the green light to a plan for reparcelling land for the new stadium, which will involve an investment of about €400 million.d

Housing at the Calderón

1,300 homes will be built on the grounds of another stadium, the Calderón, the former home of Atlético de Madrid. The sale of the land is expected to raise about €175 million in investments from any future buyers (developers), in addition to the more than €42 million stemming from the reparcelling project for the stadium and the grounds of the old Mahou factory.

Original Story: Expansion – Rebecca Arroyo

Translation: Richard Turner

 

Villar Mir Sells its 32.5% Stake in Canalejas to OHL for €50 Million

14 August 2018

Grupo Villar Mir has left the Canalejas project (Madrid), selling the 32.5% that it held in the development to its subsidiary OHL for 50 million euros. In this way, Canalejas will be equally owned by OHL, which already had 17%, and Mohari Limited, a company controlled by the Israeli executive Mark Scheinberg. Villar Mir sold 50% of Canalejas to Mohari in February 2017 for €225 million.

The transaction also includes the acquisition, by OHL Desarrollos, of the credit rights agreed to by Grupo Villar Mir with regards to the project for €9.8 million.

As the company explained to the CNMV, this price could be adjusted upwards to reach a maximum of €60 million (an additional €10 million). depending on “possible capital gains generated in a subsequent sale of these shares.”

Reduce debt

This operation will allow Grupo Villar Mir to continue reducing its debt. The Spanish industrial corporation sold 12% of the Spanish construction company last July for €98 million, reducing its stake in OHL to 38% compared to its previous 50%.

The Canalejas project will feature the Canadian luxury chain Four Seasons’ first hotel in Spain, a commercial complex and exclusive homes. The complex will bring together seven historic buildings, some of them built at the beginning of the 19th century, in a single unit, through an investment of 525 million euros.

Expansion – Rebecca Arroyo

BNP Paribas: Spain’s Hall of Residence Market Will Grow by 4% in 2019

16 July 2018 – Eje Prime

(…). With 1,148 accommodation centres for university students located all over the country, split between halls of residences (963) and residential colleges (185), the domestic market comprised 93,500 beds at the end of 2017. Nevertheless, that supply “is small compared with current demand”, explains BNP Paribas Real Estate in a report to which Eje Prime has had access. For this reason, the international consultancy firm forecasts that this alternative market will grow by 4% in Spain in 2019.

In recent years, the sub-sector has recorded some major operations involving the sale of both assets and companies. The most important deal came at the end of 2017, when AXA Real Assets and CBRE Global Investment Partners invested almost €400 million in the purchase of the entire portfolio of Resa, the vehicle specialising in student halls previously owned by Lazora. Following the operation, the manager Greystar became the king of the halls in Spain with 37 assets under ownership (four of which were being developed). In total, more than 9,000 beds changed hands.

Resa’s sale is nothing more than a consequence of the current investor appetite, primarily from international funds, many of which specialise in this sector. In 2017 alone, fourteen student halls opened their doors, adding 2,149 new beds to the sector. Moreover, since this is a very fragmented market with many owners, we are seeing the purchase of large bundles of beds, which the new players arriving in Spain are using to initiate their expansion plans.

Such is the case of Corestate, an investment fund headquartered in Luxembourg, which purchased a former residence, containing 260 rooms and 302 beds, in Madrid in 2016 to renovate the building and give it its personal stamp. With support from Villar Mir, the company disbursed €40 million on that project. A year earlier, the Dutch company The Student Hotel paid the same amount for two halls of residence in Barcelona (Melon District Marina and Melon District Poblesec) containing 600 rooms in total.

Those operations led by international funds show the influence that foreign capital has and, above all, is going to have, in the student hall sector. A large part of this interest in the domestic market stems from Erasmus. Spain is the most sought-after country by university students, ahead of Germany, the United Kingdom and France. Two years ago, 45,813 young people arrived in the country, including Erasmus and international students on secondments, and all of them needed to find a bed for the year.

Geographical dispersion

Another one of the major attractions of the student hall market in Spain is its geographical dispersion. It is not only Madrid and Barcelona that are attractive: Málaga, Valencia, Sevilla, Salamanca and Granada are all cities with a large influx of students, many of them international, arriving every year.

Madrid is the city with the largest supply of rooms for students, with 21,159 beds in 198 centres at the end of 2017. That figure accounts for 23% of the total stock on the market in Spain (…). Cataluña was ranked in second place (…) with 170 centres and 14,177 beds, accounting for 14% of the stock. It was followed by Castilla y León (where Salamanca plays an important role) and Andalucía, with shares of 14% and 12%, respectively (…).

Activity is spreading to the north too. Just last week, the fund WP Carey paid €10 million to buy an office building in San Sebastián from Solvia, which it is going to convert into a hall of residence for students (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Overseas Funds Compete to Finance & Buy Land in Spain

15 April 2018 – Voz Pópuli

At the beginning of 2012, at the height of the economic crisis, one of the directors of the Bank of Spain – José María Roldán, now the President of the AEB – faced a tough meeting with investors. One of them told him that land in Spain was worth nothing. “If that’s the case, then I’ll take it all”, replied Roldán.

And if he had done so, today, the executive would be a millionaire and the same funds that raised doubts over the banks’ balance sheets would today be knocking at his door to buy that land and finance developments on it.

The good times in the Spanish economy and the real estate recovery are causing the opportunistic funds to look for ways to take advantage of the situation. They are buying assets, real estate companies – Habitat and Inmoglacier are the most recent examples – and trying to fill the gap left by the banks in the financing arena. That is where they have set their sights on land, the last bastion, where traditional entities are still wary of lending.

“Bank financing is available for projects and occasionally for parts of plots, but it is inflexible and restricted to certain locations and pre-sales levels. Ours (financing) is flexible in terms of volume, periods and conditions”, says Luis Moreno, Senior Partner at Ibero Capital Management, a firm that has just teamed up with Oak Hill Advisors to lend the property developer at least €400 million. In just a few weeks, they already have projects on the table exceeding that amount.

Types of investors

“Bank financing is still almost non-existent and is only granted in very low percentages in situations of high pre-sales”, says Pablo Méndez, National Director of Capital Markets at Savills Aguirre Newman.

The example of Oak Hill is just one of many. Julian Labarra, National Director of Corporate Finance at CBRE, explains the different types of investors that are interested in land. A first group comprises funds that provide bridge loans. Whilst the banks require “that a development already has the necessary permits and a certain level of pre-sales”, some of the funds financing certain projects with “yields of 14-15%”. And they exit after 18-24 month, by which point the development meets the requirements of the traditional banks (…). Active funds in this segment include Incus, Oquendo and Avenue.

Other funds have chosen to team up directly with Spanish property developers: they put up the capital to buy and develop land and the managers contribute their knowledge. There are several examples: Lone Star with Neinor, Castlelake with Aedas, Cerberus with Inmoglacier; Bain Capital with Habitat; and Morgan Stanley with Gestilar.

Another similar, more recent, example is the association between FS Capital – from Finsolutia – and Inmobiliaria Espacio, a company owned by the Villar Mir group, to relaunch the construction business and sell homes by investing €400 million on land purchases (…).

Other funds also interested in land are those committed to financing the whole process, such as Oak Hill, and those that are buying portfolios of land from the banks and from Sareb, but not to resell them, such as Deutsche Bank and Blackstone.

By location, the experts agree that financing has gone from being limited to the large capitals to appearing in increasingly more cities. “(…). Until two years ago, interest was limited to Madrid, Barcelona, Málaga and the Balearic Islands. Now we are seeing operations along the whole coast, as well as in Sevilla, Zaragoza and Pamplona, amongst others (…)”, says Labarra, of CBRE. “This year we will see operations in cities such as Bilbao, Vigo, Salamanca, Zaragoza and Murcia, which have recently come onto the radar of the large investment groups”, adds Méndez, of Savills (…).

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Torre Caleido: Construction Begins of Madrid’s Fifth Tower

1 February 2018 – Expansión

After five months of preparations underground, the construction phase of the 35-storey skyscraper has finally begun. The 180 m tall tower is going to house the IE campus, as well as a horizontal building that will be home to sports facilities, a shopping centre and parking areas.

The starting gun has been fired for the above-ground work on what will become the fifth tower in Madrid. The future skyscraper, measuring 180 m2 tall and comprising 35 storeys, is going to house the new vertical IE campus, which will emerge from a second building, with a base that is going to be 280 m long and 60 m wide, which will form an inverted T-shaped complex, known as Project Caleido.

Inmobiliaria Espacio, the subsidiary of Grupo Villar Mir and Megaworld Corporation, the business conglomerate owned by the Philippine multimillionaire Andrew Tan, are the owners of the company responsible for the construction and operation of the project, with a planned investment of €300 million and which will result in the generation of more than 5,000 jobs during the construction and operation phases (…).

Caleido –designed by the architecture studios Fenwick & Iribarren and Serrano Suñer Arquitectos– will be located in the epicentre of the new financial district in Madrid and will serve to eliminate a blot on the landscape in the north of the capital by connecting Paseo de la Castellana and Avenida de Monforte de Lemos, as well as to revitalise the existing business complex, explains Fernando Serrano-Suñer, one of the architects behind the project (…).

“To date, we have completed the first two phases, involving the demolition work and the construction of the foundations, which are now complete. This week, we will award the construction work, which has been tendered for through a very transparent process, audited by Dypsa”, says José Antonio Fernández Gallar, Director General of Inmobiliaria Espacio.

Third phase

Now, the third phase of construction is going to be launched, involving the building of the tower and the base (…), where the campus sports facilities, a 600-seater auditorium, an indoor swimming pool, libraries, a dining room, a complete shopping floor and a hospital centre specialising in sports medicine run by Quirón will all live alongside 7,000 m2 of green space (…).

Leisure will also play an important role in the complex, with sports areas and events spaces. “We are studying the possibility of including a cinema of some kind, but it would not conform with the traditional style, it would include an e-gaming and e-sport element, something that doesn’t exist in Spain at the moment”.

Moreover, the base will include parking for students and professors, as well as parking for the retail space and another public parking lot, with a total surface area of 42,100 m2 spread over several floors and with capacity for 1,900 parking spaces (…).

In terms of the skyscraper, the 180 m tall building will house 70 classrooms, work and rest areas, as well as double-height spaces to replicate meeting places in traditional campuses (…).

“The project is progressing at a good pace. We have completed the first phase and we are moving forward with the idea that the work will be finished by 2020”, he said.

Original story: Expansión (by R. Arroyo and R. Ruiz)

Translation: Carmel Drake

Villar Mir Redesigns Fifth Tower & Delays Award of Construction Contract

20 November 2017 – Eje Prime

Grupo Villar Mir has listened to its partners and the Town Hall, and is going to redesign Torre Caleido, the fifth tower in Madrid. The skyscraper, which is going to be built next to the Cuatro Torres, will be adapted to the requests of Megaworld Corporation, its Philippine partner, and the local government led by Manuela Carmena. Amongst other features, the project is now going to include a supermarket and a cinema, as well as more lifts than initially planned, as requested by the Town Hall.

This redesign of the building will result in a delay in the award of the construction contract, which is now expected to take place during the final month of the year. Nevertheless, OHL, the construction company that forms part of Grupo Villar Mir, is currently positioned as the favourite to build the skyscraper, since to date, it has carried out the demolition and the work to prepare the land, which spans a surface area of 33,326 m2, according to El Economista.

An investment of approximately €160 million is estimated for the main construction work to build the skyscraper, out of a total projected budget of €300 million. Moreover, Torre Caleido already knows who its most important tenants are going to be, namely: IE and Quirón. The business school has acquired 50,000 m2 of the skyscraper in its move to become the first high-rise campus in Spain, whilst the healthcare group will turn its section of the building into a state-of-the-art medical centre.

On the outside, Villar Mir has redesigned the plans to include a shopping area, which will contain a supermarket and two cinema screens, an express wish of Megaworld, the company that controls 49% of the project’s capital. The tower will have 36 storeys as well as a four-floor base, which will be 20m tall.

Original story: Eje Prime

Translation: Carmel Drake

International Funds Take Control Of Spain’s Real Estate Companies

6 November 2017 – Expansión

Together they own stakes worth €4.3bn / International funds and managers have become the largest shareholders of the listed companies in the sector. Seven of the top ten have foreign majority shareholders.

Seven of the ten large listed real estate companies are held in foreign hands. That is the new reality of the Spanish real estate market, which is enjoying a new period of growth ten years after the last boom.

Whilst during the previous upwards peak in the sector, the owners of the property companies were domestic businessmen, now it is the turn of the international funds to hold majority stakes in these companies in the sector. That is the case of the new leaders in the property developer sector: Aedas and Neinor Homes. These two companies made their stock market debuts this year, in October and March, respectively. In both cases, the property developers making their IPOs were owned by two large international funds: Lone Star in the case of Neinor; and Castlelake in the case of Aedas (…).

In the case of Aedas, which debuted on the stock market on 20 October with a valuation of €1.518 billion, two international firms became reference shareholders: T. Rowe Price, with a stake of almost 3.8%, and Fidelity Management and Research (FMR), with a 3.6% stake. It is not their first investment in a Spanish real estate company in either case. T. Rowe was one of the funds that participated in the IPO of the Socimi Axiare, in July 2015, acquiring a 9.7% stake; meanwhile, FMR is the third largest shareholder in another Socimi, Hispania, and in the property developer Neinor Homes. In the case of the latter, another international investor is the second largest shareholder, Wellington Management, which already owns 8.5% of the capital, worth around €120 million.

In the case of the traditional real estate companies, the status of the international funds varies. Realia (…) is currently controlled by Inversora de Carso, a firm owned by the Mexican businessman Carlos Slim. In addition to the Mexican magnate’s stake (70.77%), Polygon Global own 10.5% and JP Morgan own 6.026% (…).

By contrast, two of the classic real estate companies on the stock market still have Spanish businessmen as their main shareholders: Quabit, whose largest shareholder is its President, Félix Abánades, with a 21% stake (…); and Renta Corporación, in which Dinomen, a company controlled by its President Luis Hernández, holds a 29.97% stake. In the latter real estate company, Baldomero Falcones also holds a stake, of more than 5%, making him the fourth largest shareholder.

Quabit’s second-largest shareholder is a Spanish company: Sareb. The public company holds a 7.66% stake in that firm (….). By contrast, the second largest shareholder in Renta is Morgan Stanley, with an 8.1% stake.

In total, foreign investors hold shares worth more than €4.343 billion in the five main Socimis and four largest property developers.

Spanish shareholders

(…), the number of domestic investors who control these types of companies is much lower, but they have a very prominent weight.

Such is the case of the banks Santander and BBVA, the largest shareholders in the largest real estate company on the Spanish stock market: the Socimi Merlin Properties. (…). Currently, Santander holds a 22.26% stake in that company, worth €1.162 billion, more than half of all Spanish investment in the ten largest listed real estate companies (around €1.8 billion). BBVA’s stake is worth around €336 million.

Alongside the two large Spanish banks, two real estate groups stand out as prominent investors in the listed companies in the sector. Such is the case of Colonial, which holds a stake worth €200 million in Axaire (…). Meanwhile, Colonial is controlled by three overseas investors, after Villar Mir reduced its stake.

Moreover, the real estate group Lar, controlled by the Pereda family, is the third largest shareholder of the Socimi Lar España, with a stake of more than 5.6% (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Villar Mir Teams Up With ACR To Build Homes Through Its RE Firm Espacio

14 September 2017 – Expansión

Inmobiliaria Espacio, the holding subsidiary of Villar Mir, and the ACR Group have announced the joint purchase of a plot of land measuring 15,000 m2 (buildable surface area), where they plan to construct 160 homes.

The operation, whose consideration has not been revealed, forms part of a joint venture that the two companies have closed to construct homes in different parts of Spain.

In fact, the plot of land in Valladolid is the second purchase made by this joint company, which acquired another plot of land a few months ago in Madrid, specifically in Avenida Daroca, for the development of 32 homes.

“This new acquisition demonstrates the success of the collaboration between both companies and reinforces our idea of continuing to promote homes in those areas where we observe increasingly more demand and where both companies have an outstanding track record”, explains David Botín, Director of Real Estate Development at the ACR Group.

Sources at the company have said that they will continue to look for investment opportunities together with Villar Mir’s subsidiary. Moreover, ACR also has another alliance, with Allegra, the real estate arm of the Losantos family.

At the beginning of the year, Espacio announced its return to residential development, after several years away following the burst of the bubble. At the time, it announced that it planned to construct 241 homes along the coast (specifically, in Málaga, Alicante and Mallorca), whilst it looked for opportunities to buy land in Madrid. Espacio owns approximately 325,000 m2 of land in the urban development of Valdebebas, in the north of the capital.

Moreover, the real estate division of Villar Mir is the co-owner of Torre Caleido, the fifth skyscraper that is being constructed in the ‘Business Area de la Castellana’ complex in Madrid. It also owns a stake in the luxury Canalejas complex, which will soon be home to the first Four Seasons hotel in Spain.

According to the latest results corresponding to the year 2015, Villar Mir’s subsidiary recorded turnover of €114 million in 2015, up by 52% compared to the previous year.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake