southern europe opportunity investment briefing · commercial real estate finance market conditions...
TRANSCRIPT
Patricio Palomar Murillo Head of Research & Investment Strategy – Spain
CBRE
London, 9th September 2014
Opportunity
&
Distressed
Southern Europe
Investment Briefing
Visuel
p. 2
1 THE MACROECONOMIC CONTEXT
p. 3
Macroeconomic Data
Spain GDP
-4%
-2%
0%
2%
4%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
% annual change
0.4%
-1.3%
2.2%
1.3%
-1.6%
2.0%
2.4% 2.4% 2.6%
p. 4
5%
10%
15%
20%
25%
30%
2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3
Unemplo yment rate
Spain Labor Market
Macroeconomic Data
p. 5
Spain Growth beats Bank of Spain Estimate Even as Prices Fall
Bloomberg Businessweek
p. 6
Spain Unemployment Rate Drops as Job Creation Gathers Pace
REUTERS
p. 7
Europe’s property IPOs at eightyear high - Tuesday 15th July 2014
Financial Times
Visuel
p. 8
2 INVESTMENT MARKET
p. 9
CRE Investment Volumes in Southern Europe
p. 10
CRE Investment Volumes in CEE vs. Southern European Economies
In nominal figures
Million €
0
2.000
4.000
6.000
8.000
10.000
12.000Q
1 2
006
Q2 2
006
Q3 2
006
Q4 2
006
Q1 2
007
Q2 2
007
Q3 2
007
Q4 2
007
Q1 2
008
Q2 2
008
Q3 2
008
Q4 2
008
Q1 2
009
Q2 2
009
Q3 2
009
Q4 2
009
Q1 2
010
Q2 2
010
Q3 2
010
Q4 2
010
Q1 2
011
Q2 2
011
Q3 2
011
Q4 2
011
Q1 2
012
Q2 2
012
Q3 2
012
Q4 2
012
Q1 2
013
Q2 2
013
Q3 2
013
Q4 2
013
Q1 2
014
Q2 2
014
CEE PIIGs
p. 11
CRE Investment Volumes in Southern Europe
Spain
Million €
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000Q
1 2
006
Q2 2
006
Q3 2
006
Q4 2
006
Q1 2
007
Q2 2
007
Q3 2
007
Q4 2
007
Q1 2
008
Q2 2
008
Q3 2
008
Q4 2
008
Q1 2
009
Q2 2
009
Q3 2
009
Q4 2
009
Q1 2
010
Q2 2
010
Q3 2
010
Q4 2
010
Q1 2
011
Q2 2
011
Q3 2
011
Q4 2
011
Q1 2
012
Q2 2
012
Q3 2
012
Q4 2
012
Q1 2
013
Q2 2
013
Q3 2
013
Q4 2
013
Q1 2
014
Q2 2
014
Italy Spain Portugal 4Q average
p. 12
Change in Direct CRE investment
Twelve months to Q2 2014 compared to previous twelve
Change in € Value (%)
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
Iberia Italy UK Benelux Europe France Germany Nordics CEE
p. 13
Commercial Real Estate Finance Market Conditions in Europe
Key Lending Terms*: Top Quality Real Estate and Tenant, Q4 2013
Market Max Loan** Max LTV Margin***
Germany € 200 m 75% 150 bps
Ireland € 80m 70% 300 bps
Netherlands € 120m 70% 200 bps
Russia €150m 70% 450 bps**** 600 bps*****
Spain € 50m 60% 4600 bps
UK £150m 70% 170 bps
Market Trend /
* New 5-year loan based on the maximum underwriting ability of a single lender.
** Max ticket size for a single lender.
*** Margin over EURIBOR/LIBOR swap.
**** Lending in RUB.
***** Lending in US Dollar / €.
p. 14
1H of 2012, 2013 & 2014 Total Investment volume; Spain
Doubling year on year
697
1.455
3.226
0
1.000
2.000
3.000
4.000
1H 2012 1H 2013 1H 2014
€ 1,455 MM
€ Millions
€ 3,226 MM
€ 697 MM
p. 15
1H 2013 vs 1H 2014 Total Investment volume; Spain
The share per sectors (% of total)
196 468
1.148 333
203
1.110
45 169
128
123
615
840
0
1.000
2.000
3.000
4.000
1H 2012 1H 2013 1H 2014
Offices Retail Industrial Others
€ 1,455 MM
€ Millions
€ 3,226 MM
€ 697 MM
p. 16
The new tax efficient vehicles established in Spain
Current and futures SOCIMIs and FABs
SOCIMI Capitalization
90
55.4
50
500
500
1,250
400
p. 17
Spain H1 2014: Cross-Regional CRE Investment
€ 2,201 out of 3,226 million came from over seas in H1 2013
North America
€ 583 million
Europe
€ 927 million
South LatAm
€ 63 million
North LatAm
€ 130 million
Asia-Pacific
€ 359 million
Middle East
€ 138 million
p. 18
Spain H1 2014: Cross-European CRE Investment
UK
€ 233 million
Germany
€ 55 million
France
€ 509 million
Only 28% came from other European countries
Netherlands
€ 130
million
p. 19
Spain: Historical CRE Turnover
Investor demand is now reflected in investment volumes
1.527
2.537
1.757
3.818
5.879
4.289
1.199 1116 960 803 1074 1148
332
1.766
1.868
2.889
3.591
1.261
2.288
1670
924 930
1912 1110
97
196
288
430
609
605
117
120
222 82
259
128
72
214
381
370 508
1688
840
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
10.000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1 2014
Offices Retail Industrial & Logistics Other Forecast H2€ million
p. 20
Madrid: Prime yields evolution
3
4
5
6
7
8
9
10
11
Q2 1
997
Q4 1
997
Q2 1
998
Q4 1
998
Q2 1
999
Q4 1
999
Q2 2
000
Q4 2
000
Q2 2
001
Q4 2
001
Q2 2
002
Q4 2
002
Q2 2
003
Q4 2
003
Q2 2
004
Q4 2
004
Q2 2
005
Q4 2
005
Q2 2
006
Q4 2
006
Q2 2
007
Q4 2
007
Q2 2
008
Q4 2
008
Q2 2
009
Q4 2
009
Q2 2
010
Q4 2
010
Q2 2
011
Q4 2
011
Q2 2
012
Q4 2
012
Q2 2
013
Q4 2
013
Q2 2
014
Industrial Offices High Street Shopping Centres
p. 21
2014 Investment activity in the Madrid Office Market
A-6
A-5 A-4 A-3
A-2
A-1
M-50
M-50
M-50
M-40
M-40
M-30
R-2
R-3
R-5
R-4
A-42
MADRID
Avenida de América, 115 (Q1 2014) Price: € 117 million
€/sqm: 2,312 Purchaser: London & Regional
Edificio España (Q1 2014) Price: € 265 million €/sqm: 4,308 Purchaser: Dalian Wanda Group
Castellana, 200 (Q1 2014) Price: € 150 million €/sqm: 5,500 Purchaser: PSP & Drago Capital
Edificio IBM (Q2 2014) Price: € 130 million
€/sqm: 1,800 Purchaser: Finaccess
Castellana 77 (Q3 2014) Price: € NA MM €/sqm: NA Purchaser: NA
2.028 2.028
p. 22
H1 2014 Investment activity in the Barcelona Office Market
Diagonal, 00 (Q2 2014) Price: € 107 million
€/sqm: 3,543 Purchaser: NA
Paseo de Gracia, 111 (Q3 2014) Price: € 90 million €/sqm: 6,308 Purchaser: Emin Capital
Avenida Diagonal, 211 (Q3 2014) Price: € 150 million €/sqm: 3,543 Purchaser: Emin Capital
p. 23
II Public disposal of the Catalonia Government ( 13 assets for a value of € 201 mios)
Paseo Taulat 266
Casp, 24-26 Gran Vía, 639 Pamplona,103-113 Avinguda Meridiana, 38
Ausias Marc,36-40
Pere IV, 134-146 Vía Laietana,2
Girona, 20-22
La Rambla, 6-8 P. de Sant Joan 39-41/ Diputació, 355
P. De Sant Joan,45
Diputació, 353
8
8
1
1
2
2
3
3
4
5
6
6
5
7
7
4
9
9
10
10
11
11
12
12
13
13
p. 24
H1 2014 Shopping Center investment activity in Spain
Parque Vistahermosa (Alicante)
C.C. El Mirador (Burgos) C.C. Atalayas (Murcia) C.C. Montigalá (Badalona) C.C. Las Rosas (Madrid) C.C. Madrid Sur (Madrid) C.C. Getafe 3 (Madrid) C.C. Rosaleda (Málaga)
Varios activos (Q4 2013) Price:€ 160 million Purchaser: Baupost, GreenOak, Lar
C.C. Parque Ceuta (Q1 2014) Price: 18 Price: € 18 million
Purchaser: HGI
C.C. Modóo (Q1 2014) Price: € NA million Purchaser: Alpha Capital
CC El Boulevard (Q2 2014) Price: € 155 million Purchaser: ING – Nationale Nederlanden
C.C. Gran Vía de Vigo (Q2 2014) Price: € 115 million Purchaser: Oaktree
PVistahermosa (Alicante)
C.C. El Mirador (Burgos) C.C. Atalayas (Murcia) C.C. Montigalá (Badalona) C.C. Las Rosas (Madrid) C.C. Madrid Sur (Madrid) C.C. Getafe 3 (Madrid) C.C. Rosaleda (Málaga)
C.C. Vialia Málaga (Q2 2014) Price: € 63 million Purchaser: Brazilian Investment Club
C.C. Mercado de Fuencarral (Q2 2014) Price: € 22 million Purchaser: Thalus
C.C. Txingudi (Q1 2014) Price: € 24 million
Purchaser: Grupo Lar Socimi
C.C. Las Huertas (Q1 2014) Price: € 15.5 million
Purchaser: Grupo Lar Socimi
p. 25
H2 2014 Shopping Center investment activity in Spain (a)
C.C. Imaginalia (Q3 2014) Price: € 11.5 million
Purchaser: Benson Elliot
C. C. Marineda City (Q3 2014) Price: € 250 million Purchaser: Merlin Properties
C.C. L’Anec Blacu (Q3 2014) Price: € 80 million
Purchaser: Lar España
C.C. Alcalá Magna (Q3 2014) Price: € 67 million
Purchaser: Incus Capital
P.C. MediaMarkt Villaverde( Q3 2014) Price: € 9.2 million Purchaser: Lar España SOCIMI
C.C. Albacenter (Q3 2014) Price: € 28.4 million
Purchaser: Lar España Socimi
C.C. Los Alfares (Q3 2014) Price: € NA million Purchaser: Carmila
C.C. As Cancelas ( Q3 2014) Price: € NA million Purchaser: Carmila
C.C. Holea ( Q3 2014) Price: € NA million Purchaser: Carmila
C.C. Planetocio ( Q3 2014) Price: € 14 million
Purchaser: AXIA RE
Visuel
p. 26
3 THE DISTRESSED ASSETS
p. 27
The Servicing Platforms of the banks
… and there are only very few ones in hands of the banks!
Mandatory for those who want to invest in big resi portfolios …
Bank Platforms Investors
p. 28
The bank repossessions in Spain
In € Million as of June 2014 *
401
404
596
789
940
958
1.000
1.381
2.820
4.562
5.998
6.159
6.396
6.822
• Net value. It includes assets from loans to companies that promote mortgages for buying houses of equity instruments.
• ** Bfa-Bankia data.
**
p. 29
SAREB: A bunch of investment projects
… a new world of opportuties for non risk averse investors!
… either NPLs, land banks, CRE, Resi, etc …
Visuel
p. 30
Conclusions
p. 31
Why invest now?
Spanish cycle is very volatile
Main structural reforms are being implemented
Banks are starting lending again but gingerly
Rentals levels adjusted heavily and have started growing
Good quality stock is not in oversupply
p. 32
Where is the opportunity?
Bigger ticket assets (Castellana 77 for instance)
Good asset/location with capex requirement (Castellana 89 for instance)
Public sector sale and lease (Junta de Andalucia for instance)
NPL´s (Amazona Project for instance)
Good companies over leveraged that go for sale and lease
Supply segmentation is key to separate the good from the bad
Offices (Good locations not so good asset or vacancy)
Retail (regions with license granting moratorium)
Logistic portfolio lease (>7,5 % net yield)
Resi (Costa del Sol, resort type with track record)
Student housing and health sector
For more information regarding this presentation please contact: PATRICIO PALOMAR MURILLO Head of Research & Investment Strategy T +34 91 5143934
F +34 619 137151
Email. [email protected]