Chinese luxury hotel boss buys Madrid’s Edificio Espana

Skyscraper in Madrid has been sold to a Chinese tycoon after years of being left empty and in disuse.

The Edificio España, in the Plaza de España and at the top of the Gran Vía, is a tourist attraction due to its unusual shape and size and, until now, it has been owned by Banco Santander.

Regional president of Madrid Ignacio González says multi-millionaire businessman Wang Jianli – who has so far invested in the UK and USA but wants to expand into Spain – is in the middle of closing the deal to buy the Edificio España.

Wang Jianli’s company specialises in luxury hotels and élite shopping centres, meaning his purchase of the Edificio España could ‘turn around’ the area completely, according to González.

The new owner is currently the richest man in China and has long expressed an interest in breaking into the Spanish luxury leisure and tourism market.

Until 2006, the Edificio España – which has 25 floors and is 117 metres high – housed the Hotel Crowne Plaza, a shopping centre, apartments and offices.

 Source: news.gnom.es

Second best year for foreign investment in Catalonia, up over 30% in 2013

In Catalonia, direct foreign investment – excluding the stock-exchange –grew by 31.5% year-on-year to reach €3.51 billion in 2013, as indicated by a report from the Spanish Ministry of Economy and Competitiveness.

According to the Foreign Investments Registry, with such a figure, Catalonia achieved its second best year in history, only surpassed by the €4.82 billion received in 2010. Besides, Catalonia accounted for 22.2% of all foreign investments in Spain in 2013, which amounted to a total of €15.81 billion, meaning 8.8% more than the previous year.

The region of Madrid was the leading Autonomous Community in Spain for foreign investment attraction, receiving €8.64 billion, which is it to say 54.6% of the total amount. However Madrid's sum also represents a 7.1% decrease on 2012 figures.

Source: catalannewsagency.com

Spanish Properties Breathe Again A Good Time To Invest

Noted billionaires John Paulson and George Soros, are well-known for their ability to make bold calls. Despite showing different styles in their ventures in the past, the two have shown a common interest in the Spanish real estate market this year. The two recently invested $127 million each, in Hispania .

With Soros being one of the most celebrated hedge-fund managers in history, and Paulson being right in his predictions of the 2007-2008 US mortgage market bust, is it time for other investors to follow their lead, probably on a smaller scale? The proposition certainly looks inviting to investors, considering that current Spanish property prices are at their lowest.
An inrush of foreign investors

The prices of prime properties in the Spanish real estate market, are less than the peak values they reached, about five years back, by nearly 30 percent. The difference in property prices of those along the Costas is almost 70 percent, although, properties have been experiencing a renewal in the recent past.

Savills claims that the inflow into the retail property sphere in Spain, last year, increased almost three-fold. The inflow in 2012, was €320 million, when compared to last year's inflow of €850 million. The majority of the inflow can be accredited to foreign investment.
Predictions for 2014

Gema de la Puente, the research head at Savills, says that bullish multinationals have a built-up demand, and that they are trying to make their way into the improving mid-term economy in Spain. Many of these multinationals have been biding their time, waiting for suitable opportunities to spring up.

Recently, Vodafone bought Ono, one of Spain's biggest cable TV and broadband unit, for €7.2 billion. The economy has been looking promising too, as the credit rating was upgraded by Moody's last month. Among other stories of Spain's recovery, the yield from 10 year government bonds have hit their lowest values, since early 2006.

Whether or not the recent improvements will reflect on the property market, is the big question on everyone's lips. Fitch reports that mainland Spain will see slow progress for the most part, as it is yet to recover from the crisis, and its repercussions. The agency predicts that property prices in Spain, will continue dipping further this year, and will hit their lowest in 2015. While the Costa de Sol expects a gloomy phase, the classier markets to the north of Mallorca, near Deja, are looking promising.

According to reports from Knight Frank, property sales in the area went up 40 percent during 2013. The sales were largely propelled by investors from Northern Europe, who were looking for properties at bargain prices. The upmarket districts in Barcelona and Madrid, currently look promising for city dwellers.

The government has been working towards attracting in buyers too, hosting multiple property roadshows and highlighting bargain prices of Spanish properties. Aside from following in Soros' footsteps, the Spanish real-estate market now seems inviting to investors of all levels.

Source: property-abroad.com

Southern Europe: From Death’s Door to Real-Estate Haven

Property investors are venturing to Spain, Italy and even Greece in search of bargains, reasoning that the lure of higher returns trumps the risk that Southern Europe will remain mired in sluggish growth.

Investors are venturing to Spain, Italy and even Greece in search of bargains on commercial property, reasoning that the lure of higher returns trumps the risk that Southern Europe will remain mired in sluggish growth.
For much of the extended slowdown that plagued the European Union, many investors focused on offices and high-end residences in cities such as London and Paris, where real-estate markets came through the euro crisis in relatively good shape.

While rents and occupancy levels in Southern Europe remain anemic, the region is benefiting from the widespread belief that the worst of the financial crisis has passed.
“People are just waking up to the fact that Spain didn’t fall into the Mediterranean,” says Eric Adler, chief executive of Prudential Real Estate Investors, which invested about $1.5 billion in European real estate in 2013 and is hoping to do more this year.
Last year, investors purchased €177.8 billion ($245.3 billion) of commercial property in Europe, up 17% from the prior year and the highest since 2007, according to Real Capital Analytics.
In Southern Europe—comprising Spain, Portugal, Italy and Greece—transactions picked up speed in the fourth quarter, with deals doubling from a year earlier to €3 billion, according to broker JLL, formerly Jones Lang LaSalle.

Among this year’s transactions in the region was the €61 million purchase by a UBS real-estate fund of a shopping center in San Sebastian, Spain with 62 stores and 11 restaurants.
International investors are even looking at Greece, the longest-suffering country in the euro zone, where the economy has shrunk more than a quarter since 2008.
Houston-based Hines is considering investing in the Greek hotel and retail sectors because tourists are “pouring in” while many property owners and their lenders remain financially distressed, says Michael J.G. Topham, chief executive of Europe for Hines, which controls assets valued at approximately $25.2 billion.

“They need us,” Mr. Topham says.
The surge in real-estate deal volume in Europe is part of a broader trend resulting from the low interest-rate environment in much of the world. Pension funds and other institutions are increasing allocations to real estate in the hunt for higher returns, something Spain and Italy both offer.
For example, the largest public U.S. pension funds last year increased their allocations to global real estate to 7.4%, according to Wilshire Consulting. Before that, the high-mark for this group was 6.4% in 2008, says the National Association of State Retirement Administrators, which tracks public pension-fund investments.

Opportunistic investors also are scooping up portfolios of distressed property loans that European banks are trying to get off their balance sheets. Commerzbank AG has seen high demand for Project Octopus, its portfolio of Spanish property loans with a face value of €4.4 billion that will be one of the biggest such deals in Europe this year.

Some of the big investors in Europe continue to be U.S. private-equity funds that showed up early, including Blackstone Group LP, Lone Star Funds, Apollo Global Management LLC, Cerberus Capital Management and Kennedy Wilson Holdings. Pacific Investment Management Co., the giant Newport Beach, Calif., asset manager, also has been looking at deals.
Blackstone Group last week closed a €5 billion Europe-only property fund, the largest ever of its kind, which it raised in just six months. Recent Blackstone deals include a purchase of a portfolio of Italian offices and retail centers from AXA Immoselect, an open-ended German investment fund, for about €180 million, according to a person familiar with the deal.

New players also are showing up on the Continent from countries such as South Korea, Malaysia and China. Chinese property developer Dalian Wanda Group, for example, purchased an iconic Madrid skyscraper for €280 million from Spanish lender Santander, according to data from Real Capital Analytics. At the end of last year, sovereign-wealth fund China Investment Corp. acquired Chiswick Park, one of London’s largest office developments, from Blackstone for 780 million British pounds.
Other sovereign-wealth funds are turning to European real estate, too. Such funds invested €13.6 billion in European real estate last year, a 31% increase in activity from 2012, Real Capital data show. Globally, allocation to real estate from sovereign-wealth funds increased only 9%.
Until recently, investors in European real estate had little appetite for risk. Most of the deals involved trophy, fully-leased office buildings, shopping centers and other properties in cities like London and Paris.

But demand for those so-called core properties drove up prices to the point that some are now at record values, reducing yields for buyers. For example, an investor buying a core property in London today would wind up with less than a 5% annual yield from the building’s income.
By contrast, in markets such as Spain, yields are over 6%. That has set off a rush for property in that country, putting upward pressure on prices, according to real-estate executives in Spain. “It wasn’t like the sun slowly going up,” said Rupert Lea, head of retail for real-estate broker Cushman & Wakefield Inc. in Spain, describing the increasing interest. “It was like a ricochet.”
Some owners are taking advantage of the interest by putting property on the block. The Spanish region of Catalonia, for example, plans to meet with international investors in New York this week to drum up interest in a portfolio of 13 buildings in Barcelona.
The roadshow was in London last week. Even the investor presentation in Barcelona was conducted in English.

“Many investors we are meeting have mandates to invest in Spain,” said Isabel Tornabell, a director in Catalonia’s real-estate office. “That’s something new…they are looking for what to buy, not if.”
But as demand increases for property in riskier markets, some experts are warning that investors are moving too quickly given the tepid pace of the economic recovery.
“When the pendulum swings back, it almost always overshoots,” said Ric Lewis, chief executive at Tristan Capital Partners, a private-equity firm that recently raised €950 million for an opportunistic fund aimed at buying distressed European assets. Demand for the vehicle was €5 million oversubscribed, he said.

Mr. Lewis said competition has got hotter in the past three months, and he often gets outbid for individual assets by as much as 30%. “I think we’ve making a pretty good bid on the fundamentals. And we’re wrong by 30%? These aren’t complicated assets,” he says.


Source: stream.wsj.com/

J.P. Morgan to invest $138 mn in Spanish port of Valencia

J.P. Morgan Asset Management plans to invest 100 million euros (about $138 million) in an expansion project at the Spanish Mediterranean port of Valencia, maritime industry representatives said Tuesday.

The Valencia Port Authority approved the investment plan submitted by Noatum, the largest port operator in Spain.

The plan calls for expanding the piers and work area, as well as improving intermodal infrastructure, Noatum said.

The investment plan shows J.P. Morgan's "firm commitment" to Noatum, in which the New York-based financial giant has a majority stake that it oversees for institutional investors, and to the Port of Valencia, the company said.

J.P. Morgan believes "strongly that the Spanish economy has reached an inflection point and this will have a positive effect on trade activity," Paul Ryan, CEO of infrastructure equity and debt at J.P. Morgan Asset Management, said.

Economic growth turned positive in the second half of 2013 and growth of "around 1 percent in 2014 and 2 percent in 2015, and possibly higher," is expected, Ryan said.

"Total trade volumes and activity at Spanish ports have just come out of a very difficult process, and to the extent that the economic recovery has started, the recovery in trade volumes transported by sea will be even greater," Ryan said.

J.P, Morgan, as a long-term investor, has a commitment to Noatum Ports and Noatum Maritime, or Marmedsa, that "remains strong and firm," Ryan said.

Noatum Ports has interests in Noatum Container Terminal Bilbao, Noatum Container Terminal Valencia, Noatum Container Terminal Malaga and Operaciones Canarias Las Palmas, or OPCSA, as well as in Barcelona's Autoterminal, the largest automobile terminal in the Mediterranean.

The company also operates bulk and general freight terminals - the Noatum Terminal Graneles Santander, Noatum Terminal Polivalente Santander and Noatum Terminal Polivalente Sagunto - and Conterail, an intermodal terminal in Madrid.

Source: latino.foxnews.com

Apollo's Leon Black: Best Investment Opportunities Are in Europe

The United States has pockets of potential for private equity, credit and real estate investments, but the pickings are better in Europe, says Leon Black, CEO of private equity titan Apollo Global Management.

"Europe is a place where we are very, very active," he said at a private equity conference in New York, CNBC reports. "There are interesting things to do."

Apollo has recently bought banks in Spain and Germany and auto loan portfolios and credit card companies in Spain and Ireland, Black says.

He sees potential for non-performing loans, real estate and consumer investments in Spain, Ireland, the United Kingdom and Germany.

Last week, the European Commission upgraded its economic forecasts, predicting a modest recovery if reforms are obeyed, AFP reported.

The 18-nation eurozone will expand 1.2 percent this year and 1.8 percent in 2015, up from estimates in November for 1.1 percent and 1.7 percent, the European Commission said.

Similarly, the full 28-member EU will expand 1.5 percent and 2.0 percent, also both revised up by 0.1 percentage point.

"Recovery is gaining ground in Europe," said EU Economic Affairs Commissioner Olli Rehn. "The worst of the crisis may now be behind us but this is not an invitation to be complacent as the recovery is still modest," Rehn said.

"To make the recovery stronger and create more jobs, we need to stay the course of economic reform."

As for the United States, Black thinks "right now the deal flow is OK. I wouldn't say it's robust." Slow economic growth, a likely rise in interest rates and "pretty full" company valuations are holding things back, he says.

But "there are idiosyncratic things to do off the beaten path," he said. Black cites his firm's recent investments in Chuck E. Cheese restaurant and an undisclosed chemical company as examples.

Possibilities also exist in natural resources, such as shale oil; chemicals and financial services, he says.

Meanwhile, the top 10 executives at publicly-traded private-equity firms garnered at least $1.7 billion combined in dividends last year, as rising stock prices allowed them to sell stakes in many of their companies, according to Bloomberg.

Black led the way with about $369 million in payments from his stock ownership in Apollo.

Source: moneynews.com

Banks, funds line up for landmark Spanish property sale: sources

 
Banks such as Deutsche Bank and JPMorgan are teaming up with international funds to bid for a multi-billion-euro portfolio of Spanish property loans as the country's real estate market thaws, sources close to the process said.

The loan package of over 4 billion euros ($5.5 billion), from Germany's Commerzbank , is one of the biggest of its kind to be auctioned in Spain's six-year real estate slump as lenders burned in the crisis clean up their books.

It is made up of some soured debts and other performing loans backed by office blocks and shopping centers, rather than debts related to residential homes which have more commonly been offered to investors.

That is helping the portfolio attract buyers, the sources familiar with the process said, though funds have also been flocking to Spain recently as the country emerges from recession and property prices come closer to hitting bottom after falling around 40 percent since 2007.

Banks have been joining up with funds to bid together for the Commerzbank portfolio, and would most likely split the assets afterwards, with banks keeping the performing ones.

U.S. private equity firm Lone Star is bidding with JPMorgan for the loans, while Blackstone is working with Deutsche Bank, two sources familiar with those offers said. Apollo Global Managament has put in a joint offer with Spain's Santander , a third source said.

U.S. private equity firm Cerberus has also put in a bid, two other people said, as has Oaktree Capital Group, according to a sixth source, though it was unclear whether these investors had bank partners.

Commerzbank, and the banks and funds declined to comment, as did Lazard which is handling the auction. Over 10 parties have put in bids, which were due at the end of last week, the sources said. Another round of bids is scheduled for April.

"Bidders can put in offers for the whole package, or just the parts they're interested in, such as the non-performing loans for example," said a real estate adviser close to the auction, which is known as "Project Octopus."

The portfolio includes 3.3 billion euros in performing loans and roughly 1 billion in non-performing loans, people familiar with the transaction have previously said.

A lawyer familiar with the process added that the deal could come with a small real estate management platform and a team of people to handle the debts.

International funds have been chasing these kinds of assets in Spain so they can build up credit management units and buy more loan portfolios. Apollo recently bought 85 percent of Santander's property management division, while bailed-out lender Bankia transferred the management of its platform to Cerberus for the next 10 years.

Source: chicagotribune.com

Troubled European Economies Like Portugal, Spain And Greece Lure Wealthy Chinese Willing To Invest Millions In Exchange For Permanent Residency

Europe’s troubled economies have found unlikely saviors in wealthy Chinese. Many European countries are hoping to turn the recession around by luring Chinese millionaires with investor visas and cheap real estate prices.

Countries like Portugal, Spain, Romania, Hungary and Greece, not traditional destinations for emigrants from China, have all passed policies aimed at attracting foreign investment from wealthy Chinese. In exchange for investing millions in local businesses, or purchasing properties, Chinese families can now gain residency permits to a number of European nations.

Portugal introduced a “golden visa” program in 2012, offering residence permit to the immediate family of anyone who could invest 1 million euros ($1.38 million), or create 30 jobs in the country, the South China Morning Post reported on Monday. Out of 542 golden visas issued so far, 433, or nearly 80 percent, are received by the Chinese.

The same consideration is given to anyone who purchases 500,000 euros in local real estate, and helped increase the number of properties sold in the country’s struggling market by 70 percent in 2013. Most of these “golden visa” property buyers, however, are not living in their Portuguese houses.

Source: ibtimes.com

Pimco Said to Compete With Perella for Spanish Real Estate

Pacific Investment Management Co. is one of three bidders chosen to make final offers for an office and shopping-mall complex in Madrid’s business district, two people with knowledge of the matter said.

Pimco, in partnership with Talus Real Estate, is competing against Perella Weinberg Partners LP and a third bidder, according to the people, who asked not to be identified because the talks are private. Bids may be about 140 million euros ($193 million) and are due by March 14, the people said.

The Castellana 200 property -- two office buildings totaling 20,300 square meters (219,000 square feet) and a 6,200 square meter retail mall -- was put up for sale by banks including Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA and the Bankia Group.

Pimco, one of the world’s largest asset managers, is joining Blackstone Group LP and Goldman Sachs Group Inc. in investing in Spanish real estate as the economy recovers. Government policy changes have made the property market more attractive to overseas investors.

Officials from Pimco and Perella Weinberg declined to comment.

Pimco, based in Newport Beach, California, will own as much as 12.5 percent of Lar Espana Real Estate Socimi SA after the company sells shares to the public for the first time next month. Lar Espana will become a Socimi, Spain’s version of a real estate investment trust.

Property Buys

Investment firms including Blackstone and Goldman Sachs have been buying real estate in Spain after home prices fell more than 45 percent from their 2007 peak. Grupo Lar, along with Fortress Investment Group LLC, bought more than 1,000 homes from Spanish bad bank Sareb in December for 146 million euros.

Investment in Spain by funds, private-equity firms and financial-services companies totaled 13.9 billion euros in 2013, according to Madrid-based debt-restructuring firm Irea. About 37 percent of the money was spent on real estate assets and that figure is expected to increase this year as special emphasis is put on the property market, according to Chief Executive Officer Mikel Echavarren.

Source: sfgate.com

Spanish Property Investor Lar Espana Rises on First Trading Day

Lar Espana Real Estate Socimi SA, a company that plans to buy distressed property in Spain (SPNPTHQ), rose on the first day of trading in Madrid on expectations it will benefit from a recovery in the country’s real estate market. 

Lar Espana, which raised 400 million euros ($549 million) in a share placement last week and counts Pacific Investment Management Co. among its investors, rose as much as 10 percent. The shares traded at 10.25 euros at 12:20 p.m. in Madrid, compared with the 10 euro price set for the share sale.
Overseas investors are entering Spain’s property market after home prices fell by more than 40 percent. Paulson & Co., the hedge-fund firm founded by billionaire John Paulson, plans to invest in Hispania Activos Inmobiliarios, another Spanish real estate company that’s due to sell shares to the public for the first time this month. Other investors include Quantum Strategic Partners LP.

Story: Greece May Finally Sell Some Olympic Venues

Lar Espana is a Socimi, which is similar to a real estate investment trust. It will focus on buying undervalued offices in Madrid and Barcelona as well as retail parks and warehouses throughout Spain, the company said in the Feb. 13 offering documents. Lar Espana is targeting a total shareholder return rate of more than 12 percent a year when all net proceeds have been fully invested, according to the documents.

Investment in Spain by funds, private-equity firms and financial-services companies totaled 13.9 billion euros in 2013, according to Madrid-based debt-restructuring firm Irea. About 37 percent of the money was spent on real estate assets and that figure is expected to increase this year as special emphasis is put on the property market, according to Irea Chief Executive Officer Mikel Echavarren.

Source: businessweek.com