Qatari Fund ‘Sama Global’ Negotiates Investment in Marina d’Or

6 February 2019 – Expansión

Jesús Ger, the founder and owner of the Marina d’Or holiday city, is looking again at the Arab countries to find an investor with whom to consolidate his business project. And in that respect, all indications are that the Qatari investment fund Sama Global Investment is going to become the new financial partner of Marina d’Or.

Ger’s group, which has promoted and which manages the popular holiday city located in Oropesa del Mar (Castellón), has been actively looking to incorporate partners for years, especially since the end of the real estate bubble paralysed its investments in other countries and threatened the continuity of its property development business.

The business includes the Marina d’Or Golf project, which was the largest urban development plan undertaken by the Community of Valencia spanning a surface area of 18 million m2, which was suspended by the courts and due to a lack of funds. Initially, Ger was looking for capital willing to finance part of the colossal €6 billion investment forecast for the macro-urbanisation around the themed golf course and hotel.

In 2015, it was even understood that the Chinese group Wanda was going to acquire a majority stake in the Castellón-based group after reports were published to that effect by an official news outlet of the Chinese Communist Party. The truth was that, although Marina d’Or maintained contact with several Chinese investors, Wanda was not one of them.

Focus on the tourist business

Now, however, the interest of the Qatari fund is focused on Hoteles Marina d’Or, the company that manages the tourist activity in the Castellón resort and which includes seven establishments – two outside of the complex -, the rental of tourist apartments and the operation of the restaurant area, the spa and the attraction parks in the holiday city. In recent years, those activities have generated revenues of more than €40 million per year and, unlike the real estate business, they are still profitable.

The interest from Sama Global, which dates back to 2017, appears to focus on replicating the holiday city model in other international markets. In fact, the fund, which is headquartered in Doha, has already closed its first operation to become a partner in a property developer and operator in the Philippines, Premiere Horizon Alliance Corporation, which is listed in Manila (…).

Official sources from Marina d’Or acknowledged yesterday that conversations are being held with a Qatari fund, but they said that they are still in an initial phase and are not close to completion yet (…).

Original story: Expansión (by A.C.A.)

Translation: Carmel Drake

Asian Funds Seek Local Allies to Enter Spanish Real Estate Sector

19 January 2019 – Expansión

Asian investors are joining forces with firms such as UBS, AXA and Savills IM to gain weight in the office, logistics and retail segments, where they still have a limited presence.

Spain has become a key destination for international investors interested in real estate assets, and Asian capital is no stranger to this buying fever that has boosted the sector in the country over the last five years. These investors, who are used to large volume operations, are now trying to gain a foothold in Spain through alliances with large European managers, such as UBS, Rockspring, AXA and Savills Investment Management, which will allow them to participate in smaller-sized operations and enter other sectors such as the office, logistics and retail segments.

The incorporation of new investors, capital funds and Chinese, Japanese and Korean family offices, amongst others, at the hand of the large European managers that are already present in Spain and know the local market well, offers them the possibility of arriving in the country by assuming less risk.

One of the most recent examples is that of the Korean fund manager Igis Asset Management, which, through Savills Investment Management, closed the purchase of Nestlé’s headquarters in Esplugues de Llobregat (Barcelona) last October for €87 million. That operation followed others such as the purchase of the Madrilenian Zielo Shopping Pozuelo and that of the office building located at number 2 Calle Santa Bárbara, both through funds managed by UBS, in turn, financed by Asian capital, amongst others.

Indirect investment

(…). These alliances followed the trickle of mega-operations undertaken in Spain in recent years. The most significant include the deal involving the Philippine group Emperador, which purchased the Torre Espacio building in Madrid, one of the skyscrapers that forms part of the Cuatro Torres complex, from Villar Mir, for €558 million.

Another operation that revolutionised the market involved the Chinese holding company Wanda, albeit ephemerally, as it had to abandon the project just three years later. The group purchased Edificio España (Madrid) from Banco Santander in 2014 for €265 million and sold it in the summer of 2017 to RIU, its current owner (…).

Those two Asian investors were joined by the sovereign fund of Singapore GIC, which, through the Socimi P3 Logistics Parks, acquired a foothold in the logistics market in Spain, one of the segments with the most potential.

Investors from Asia are therefore one group of overseas players who are committed to the country, but they are not the only ones. According to a report compiled by Savills Aguirre Newman, international capital was the major star in 2018, accounting for 70% of the €10.8 billion transacted, the largest percentage since the start of the market recovery five years ago (…).

By origin, investors from Europe and the USA account for almost 57% of the domestic and international investment total and 85% of the volume of operations from overseas. Asia is ranked in third place (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Carmena Invites Ministry of Development to Reactivate Operación Campamento with 11,500 Homes

25 September 2018 – El Confidencial

The mayor of Madrid, Manuela Carmena, announced today that she has invited the Ministry of Development to reactivate Operación Campamento, originally proposed in 2005, to be built on disused military land in the south-west of the capital, with the construction of 11,150 homes instead of the 22,100 units projected by the PP initially. This is one of the last remaining urban development projects in Madrid, together with the developments in the southeast of the city and Operación Chamartín, which received initial approval from the Town Hall of Madrid last week.

In April 2015, the Ministry of Defence – the owner of the plots – announced their sale through an online public auction on Addmeet, but in the end, the operation was left hanging. Then, as El Confidencial reported, the asking price for the plots – through the public auction process – amounted to between €200 million and €250 million.

Now, three years later, and with the urbanisation process underway for Madrid Nuevo Norte (MNN) – the new name for Operación Chamartín – Carmena seems to be willing to place enough land on the market to try to put a stop to the sharp rise in prices, both in the purchase and rental markets, that the capital has experienced over the last two years and which has also led Carmena herself to propose to the central Government a moratorium or an automatic extension of the rental contracts that are due to terminate before the Urban Lease Law (LAU) is reformed.

Manuela Carmena made this announcement during her opening speech in the debate over the state of the city, in which she vindicated the Government’s actions in urban planning and its willingness to put a stop to the inequality that exists between the north and the south of the city (…).

As already happened with MNN, where the total buildability was reduced by 21% – from 3.37 million m2 in the previous plan to 2.66 million m2 in the current plan – along with the number of homes – from 18,500 to 10,510, mostly social housing properties – the operation will not go ahead at any price and, according to Carmena’s comments, the total buildability would also be reduced in this new Operación Campamento and the construction of public housing would be strengthened.

Operación Campamento in numbers

Designed on plots of land owned by the state, the Town Hall wants to build 11,150 homes, of which 40% will be private – 4,150 -, 37% will be social housing properties with limited prices – 3,800 – , and 23% will be social housing properties, of which 1,100 will be rental homes.

So-called Operación Campamento was launched in 2005 with the signing of an agreement between the then Minister of Defence, José Bono, and Minister for Housing, María Antonia Trujillo, and the then mayor of Madrid, Alberto Ruiz-Gallardón, for the construction of two phases of up to 22,100 homes on this disused military site to the west of the Spanish capital. Even though today, around half of the homes should have already been built, not a single brick has been laid.

Despite the strategic location of the plots, the reality is that only the Chinese businessman Wang Jianlin, owner of the Wanda group, publically announced his intention to undertake the €3 billion investment on them. That offer never came to fruition because the auction never went ahead (…).

Operación Campamento is one of the most important residential developments in Madrid capital after Operación Chamartín. It spans 1.5 million m2 – with more than 1 million m2 of buildable space – on which offices, hotels, shopping centres, private and public housing, as well as sports facilities and schools could be built. Moreover, the operation would include placing part of the highway to Extremadura (the A-5) underground as well as the construction of a transport interchange at the Aviación Española metro station, where a parking lot is planned for around 2,000 vehicles.

Original story: El Confidencial (by E.S.)

Translation: Carmel Drake

RIU Sells the Commercial Space in Edificio España to Corpfin

4 September 2018 – Ali Market

The Riu Hotels & Resorts group has closed the sale to the investment firm Corpfin of the commercial space in Edificio España. The space is split over three floors (of a total of 27 in the property) and spans a total surface area of 15,000 sqm. This operation has caused the businessman Trinitario Casanova (Baraka), who intervened in the sale of the property by the former owner, the Chinese Wanda group, to the current Mallorcan owner, to file a lawsuit in the courts against Riu for breach of contract, on the basis that he understood that he had the right to recognise that commercial space in his name. Sources at Corpfin declined to deny or confirm the purchase, whilst sources at Riu confirmed that a sale has taken place (without specifying the buyer) and that the contract with Casanova has been cancelled.

Specifically, sources at Riu explain that “the current owner [of Edificio España] is the Riu group, which is undertaking the necessary work, in accordance with current legislation, to convert Edificio España into a reference hotel in Madrid from 2019 onwards, in addition to maintaining the identity of an architectural example that is of great value to the Spanish capital. In this sense, “Mr Casanova says that he purchased the building and sold it hours later, something that is false. Mr Casanova played an intermediary role between the Riu group and Wanda. Subsequently, a contract was signed whereby Mr Casanova exercised an intermediary role to sell the commercial space in Edificio España, owned by the Riu group, in exchange for a commission on the sales value. Mr Casanova breached the contract, given that he did not look for any buyers and merely submitted an offer to Riu in his own name. That offer was assessed by the Riu Group’s Board of Directors, which considered it insufficient and rejected it. “Given that Mr Casanova was not fulfilling the obligations established in the contract signed between the two parties, Riu received a higher offer for the commercial space in Edificio España and decided to accept it, as well as to cancel the contract with Mr Casanova after more than a year of inactivity by him”.

In all other regards, the Riu group, “as the legal owner of Edificio España” is undertaking the necessary remodelling and maintenance work to strengthen the structure and ensure that the front and side façades of the building are preserved “in order to protect the work of the Otamendi brothers, as established by the Law for the Protection of Historical Buildings”. This work requires a series of modifications and reinforcements to the structure of the building to ensure the preservation of the building and façade in perfect condition. “This work is being carried out in continuous dialogue with the municipal experts. None of the reviews by the municipal architects has led to the issuance of an unfavourable report regarding the execution that is being carried out by the Riu group, which always follow the instructions of the Town Hall’s architects”.

Original story: Ali Market (by Paco Mota)

Translation: Carmel Drake

Grupo Baraka Sells a Logistics Warehouse in Murcia to Corum for €14M

11 June 2018 – Expansión

The Baraka Group, controlled by the businessman Trinitario Casanova, has closed an agreement to sell one of the logistics assets owned by its construction company Trabis.

Specifically, Baraka has sold a logistics warehouse, called Trabis II, located in the Murcian town of Yecla, the region where Casanova’s companies are headquartered. The property, which has a constructed surface area of 14,000 m2, has been sold for €14 million through a sale and leaseback contract.

“The advantage is that the buyer is guaranteed an asset in which the tenant will continue to undertake its activity”, explained Pablo Carvajal, Director of Capital Markets at Catella, the consultancy firm that has advised the new owner in the transaction.

The buyer is the French fund manager Corum Asset Management. Created in 2011 and with offices in Paris and Amsterdam, the firm set itself the objective last year of investing €500 million in real estate assets across Europe, with a special focus on Spain. For its investments, whose yields exceed 6%, Corum works with two funds Corum Origin and Corum XL, the latter was launched last year.

This is not the first time that Baraka and Corum have closed an operation together. In July 2016, the French firm paid more than €24.8 million for another logistics building also leased to Trabis.

Corum is one of the international investors that has opted to purchase logistics assets in Spain, a booming market due to its high returns and the increase in the e-commerce business. “The logistics investment market is proving attractive for domestic and international investors alike and increasingly more are investing in this type of asset. Between January and May, €250 million has been invested in these types of properties”, say sources at Catella.

At the overall level, investment during the first half of the year is expected to reach €5 billion. “During 2018, €3 billion has been invested in tertiary (non-residential) assets. Taking into account certain transactions pending completion, we expect to see investment of close to €5 billion during the first half of the year, around €1 billion less than during the same period in 2017”, he predicts.

Casanova

The divestment of this logistics warehouse comes just weeks after Trinitario Casanova entered the Madrid Nuevo Norte real estate project (known as Operación Chamartín). The businessman has committed to pay €400 million to the initial owners for the rights to 1.2 million m2 of land (now in the hands of the Ministry of Development) where the company DCN, controlled by BBVA and SanJosé, is planning to build an urban development with more than 10,500 homes.

In addition, Casanova is working on the marketing of the future shopping arcade in Edificio España, the property that he purchased from Wanda for €172 million to immediately sell it on to the RIU hotel group.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

RIU Starts Work On Edificio España To Open Hotel In 2019

24 October 2017 – Expansión

The Mallorca-based hotel chain RIU has started work to renovate Edificio España, which will house its first hotel in Madrid and which will be the company’s flagship property in the country.

The future RIU Plaza will have a four-star rating and will contain 589 rooms and 15 meeting rooms, with almost 3,000 m2 to be used for events. Moreover, the hotel will have a gastro bar in the reception, two restaurants and a sky bar located on the two upper floors, one of which will have a terrace and a swimming pool.

The hotel chain purchased Edificio España from Baraka back in June in a three-way transaction, shortly after the Murcian group owned by Trinitario Casanova had purchased the property from Wanda for €272 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Riu Gets Green Light For Its Renovation Of Edificio España

22 September 2017 – Eje Prime

After a very drawn out negotiation process and having being passed from Wanda to Grupo Baraka and then to the hotel chain Riu, Edificio España has finally received the green light for its renovation. The Town Hall of Madrid has granted the building permit to allow Riu to start to refurbish its Riu Plaza.

Sources at the Town Hall’s Sustainable Urban Development (DUS) department, explain that the Activities Agency granted the authorisation yesterday, which, given the complexity of the construction work, establishes a program of approval comprising two phases: firstly, the restoration work will be performed, and then the definitive licence will be granted for the inauguration of the hotel, according to EFE.

The first phase of the building permit covers work to conserve the façades, external work to recover recesses, the dismantling of embellishments and the replacement of windows and railings, as well as partial restructuring work, refurbishment and restoration for the adaptation of the existing structure and the dismantling of protected interior elements.

On the other hand, the second phase includes the definitive licence for the inauguration of the hotel activity and the retail space, with the performance of partial restructuring work, construction of internal partition walls and facilities, and external work to assemble the identifying elements of the hotel and the planned retail space, according to sources in the team led by José Manuel Calvo.

Located in the central Plaza de España, the property was constructed by Spanish architects Julián and José María Otamendi between the years 1948 and 1953, and it was the tallest building in Spain at the time. The Chinese multinational Wanda acquired the iconic building with the aim of opening a hotel, luxury homes and a shopping centre, but to that end, it wanted to pull down the existing structure and then reconstruct the façades at a later date, something that the municipal Government refused to allow.

In the end, Wanda sold the building to Grupo Baraka, owned by the Murcian businessman Trinitario Casanova, who visited the property together with the mayor of Madrid and who promised to build a hotel with two swimming pools and a shopping arcade, in collaboration with Riu.

The hotel chain then reached an agreement with Baraka to acquire 100% of Edificio España, and so it will be the entity responsible for undertaking the construction work, in two phases.

Original story: Eje Prime

Translation: Carmel Drake

Cordish, the Last of the Big Failed Real Estate Projects

07 August 2017

Eurovegas, Operation Campamento, the Four Seasons of Barcelona and the Hyatt hotel project in the Torre Agbar are some of the most famous unsuccessful investments in Spain.

They were destined to occupy prominent positions in the ranking of mega real estate projects but were doomed to failure, even before starting out. Failure to comply with regulatory requirements, bureaucratic obstacles and clashes with the relevant authorities have been some of the factors that have caused the failure of multi-million-dollar investments planned by, among others, the North American group Cordish, the Chinese giant Wanda, the American magnate Sheldon Adelson and projects by the multinationals Four Seasons and Grand Hyatt in Barcelona.

The last project to flounder has been Cordish’s. The Baltimore-based group wanted to build a leisure and gambling complex in the Madrid municipality of Torres de la Alameda. But the Madrid Autonomous Community has rejected the proposal under the Integrated Development Center (CID) not once, but twice, considering that the project will not impact the economy, employments levels and culture sufficiently, while also questioning the project’s feasibility.

Cordish’s truncated plan joins Eurovegas, the ill-fated gambling complex that American Sheldon Adelson intended to build in Alcorcón, the Gran Scala fiasco in the Los Monegros desert and the mirage of The Kingdom of Don Quixote in Ciudad Real.

Another of investor that has accumulated bad experiences in Madrid is the Chinese giant Wanda, which owns 20% of Atletico Madrid. The conglomerate, led by the tycoon Wang Jianlin, announced three years ago its intention to invest at least 3 billion euros in a high-end complex with up to 15,000 luxury dwellings in the former Campamento barracks in Madrid owned by the Ministry of Defence. In addition, the urbanization plan included a commercial complex, theme parks and casinos. The Chinese group, however, gave up its plans when faced with land prices it considered exorbitant. Months later, another of Wanda’s star projects in Madrid went up in smoke. The group, which had bought the Edificio España from Santander for 265 million in 2014, decided to put it on sale after disagreements with the Madrid City Council, which required the conservation of the front and side facades, as established by the law on protection of historic buildings.

Vetoes

Hotel investments have suffered a setback in Barcelona as well. Suspended licenses have caused large international chains to withdraw from their projects in the City of Barcelona.

In particular, the arrival of the hotel brand Four Seasons in Barcelona was truncated by a municipal veto. KKH Property Investors paid 90 million euros for the Deutsche Bank building, located at the intersection of Barcelona’s Avenida Diagonal and the Paseo de Gracia. KKH was seeking the demolition of the building, to subsequently build a larger building, to be run by Four Seasons. But the project collided with the then activist Ada Colau, who turned the rejection of the project into one of her electoral promises. Her election to the Barcelona City Council in the summer of 2015 cut short KKH’s plans, which has chosen instead to rehabilitate the old office building and convert it into high-end residential housing. Four Seasons, which will land in Madrid in early 2019 at the Canalejas complex, is still looking for locations in the city.

Another of the big international hotel chains that could have come to Barcelona was Hyatt. In 2013, fund manager Emin Capital, led by Andorran Jordi Badia, announced that it had bought the Agbar Tower for 150 million euros and was preparing to convert it into a luxury hotel that would be managed by the US hotel chain. Three years later, the project had still not been approved and the asset was finally sold to Merlin Properties, which will maintain it as an office building and hope that it will become the headquarters of the European Medicines Agency (EMA).

Original Story: ProOrbyt Expansion – Rebeca Arroyo/Marisa Anglés

Translation: Richard Turner

Baraka To Build Nursing Home In Barcelona For €300M

18 July 2017 – Eje Prime

Baraka is setting its sights on the healthcare market. At the beginning of July, the real estate investment company completed the purchase of 600,000 m2 of land and a roof spanning 300,000 m2 for €300 million in Montcada i Reixac (Barcelona), where it will build a complex for the elderly.

The area acquired is located in Can Cabanyes, a zone that borders Barberà and Santa Perpètua de Mogoda. According to Manuel Abadía (pictured above, right), the representative in Cataluña of Trabis (the group’s construction company) (…) once the sale has been signed, work will begin to define the project in more detail.

The company does not have any experience managing these kinds of facilities, and so it will have to team up with a partner specialising in hospital care and management, according to Expansión.

“We intend to create a complex for the elderly, with villa-type homes and garden areas, which will be accompanied by personal care and also, one or two hospitals”, explained Manual Abadía. The representative for Trabis in Cataluña said that the construction phase alone will provide work for 400 people and that when the complex begins operating, “we think that it will sustain at least 200 permanent jobs”, he added. For the time being, no dates have been set for the opening of the facilities.

Baraka set up shop in Cataluña a year and a half ago with the intention of becoming a leading company in the real estate market, especially in the industrial and logistics sector. One of its most recent operations was the purchase, in June, of Edificio España from Wanda. The firm wants to grow its residential projects, amongst other initiatives.

Original story: Eje Prime

Translation: Carmel Drake

Hotel Chain Riu Ends Up Acquiring Edificio España

2 June 2017 – El Mundo

The soap opera surrounding the sale of Edificio España in Madrid reached its finale yesterday morning, with the completion of a three-way operation, which saw the Chinese Group Wanda official sell the building’s deeds to the hotel chain Riu. The hotel group reached an agreement with Grupo Baraka to acquire 100% of the property and to subsequently undertake the necessary renovation to convert it into the first hotel in Spain to operate under its Riu Plaza brand.

All of the parties met at the notary’s office yesterday morning in Madrid, and once the purchase of the property from Wanda by Grupo Baraka (which held the initial purchase rights) had been formalised, the latter sold the property to Riu Hotels & Resorts. The consideration paid amounted to €272 million, according to the consultancy firm JLL, which has advised the sale.

“Our strategic plans include opening a Riu Plaza hotel in Spain and this opportunity in Madrid, in an unbeatable location and in an iconic building, completely fulfil all of our requirements,” said Carmen and Luis Riu, CEOs of Riu Hoteles. “The operation had been on the cards for several months before the option opened up of Riu acquiring 100% of the building. After analysing that opportunity in detail, we decided that we didn’t want to waste it”, explained the directors.

Trinitario Casanova, President of Grupo Baraka, will take responsibility for leasing the retail space, measuring 15,000 m2, where several department stores will be opened.

The building work could start today

After hearing of the sale, the Councillor for Sustainable Urban Development at the Town Hall of Madrid, José Manuel Calvo, said that the new owner of Edificio España could start the building work to consolidate Edificio España right away. The licence to undertake the structural work was granted on 31 March and its terms are “not affected” by the identity of the building’s owner.

The processing of the permit to open a hotel in the skyscraper will take a bit longer. Sources at the Palacio de Cibeles (the Town Hall) predict that the green light will be given for the construction of the establishment in “the autumn”, given that the municipal technicians and Baraka’s architects have been working together on this project for several months now.

In terms of the retail surface area, which will be housed on the lower floors of the property, in Plaza de España, the presentation of an affidavit is all that is required to start the refurbishment work.

The hotel

The future Hotel Riu Plaza will occupy 24 of the 27 floors in Edificio España, whilst the remainder will be used as retail space. The establishment will have approximately 650 rooms and will be a 4-star property.

The hotel will also have a space measuring more than 1,800 m2 for events, which will include an open plan room measuring 1,500 m2, with 6 m high ceilings, which will become a unique space in the centre of Madrid.

The establishment will also have two restaurants, a rooftop swimming pool, where there will also be a Sky Bar and an additional space for events, spanning more than 900 m2.

Original story: El Mundo (by Luis M. Ciria, Marta Belver and Roberto Bécares)

Translation: Carmel Drake