Posts tagged with SICAVs

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12 September, 2011 No Comments

It is quite difficult to give advise but it is even harder to predict.

The fact that 2010 was characterized by the wisdom with which real estate investors operated, lead us to think that 2011 could go the same way, especially in the residential sector (heavily influenced by the lack of financing for properties that were not within the bank´s portfolio).

The engine for non-residential real estate transactions during 2011 could be malls and store space, surpassing demand for office space (mainly due to the decrease in rental income and to the turnover of some portfolio´s investors).

Due to the lack of financing many companies cannot continue to develop their regular activity, and their investment side has had to put their Real Estate assets for sale, in many cases through the common “Sale & Leaseback” method, at very attractive prices for external investors.

It is interesting to see that a crisis can also be a source of opportunities. It is especially at the end of it when one can make the best investments…. but the big question is: are we close to the end? To answer this you must pay attention to the moves investors are making.

If we take a look to the moves Amancio Ortega (Zara) is doing, we see that he is closing its SICAVs (variable income Investment Companies) to spend his money on real estate. With this money, the Ortega Family Office “Pontegadea” negotiates the purchase of buildings of financial institutions such as BBVA. This bank previously sold them to real estate fund REEF (owned by Deutsche Bank), in which BBVA went from owner to tenant. Later on, REEF started to sell these assets and, Ortega as well as many other investors, have been taking advantage of the liquidity needs financial institutions are facing, by acquiring quality properties at a discount. Besides the investments Pontegadea was doing in Spain, they are also investing in international destinations such as the US, Mexico, Portugal, France, and Germany. Pontegadea  focuses on commercial and office buildings that have long-term rental contracts, and that are located in the city’s prime location, which is the sector that better withstand the crisis (Expansión, 12/21/10)

Other great fortunes (ie. Isak Andic, owner of fashion brand Mango, who recently bought a building in Paseo de Gracia, 36) are investing in real estate. This type of investors are very well advised, and are able to see great business opportunities in the midst of this profound crisis and a broken housing market.

Read the following phrases that Albert Einstein proposed in order to overcome a crisis,