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EXPO REAL 2009 BLOG 4: Taking the U-Bahn with Europa

PERE's European editor Robin Marriott denotes the mood at European fund management firm, Europa Capital, after its purchase of a portfolio of banks in Spain.


I caught the U-Bahn back to Munich city centre yesterday evening with a member of Europa Capital’s team.

Europa hosted a lunch earlier in the day, by the way; and unsurprisingly the firm was in reasonably high spirits. I say unsurprisingly because they have just completed a large sale and leaseback purchase of properties in Spain.

As PEREnews.com reported at the time, Europa has teamed up with Area Property Partners and Deutsche Bank’s alternatives arm RREEF to acquire three landmark office assets and 944 bank branches from BBVA  located throughout Spain, which will all be leased back to the Spanish bank.  BBVA said it had sold them for €1.15 billion.

It is interesting to note that the deal was out there for many months and devised by BBVA when there was a lot more uncertainty around.This was not a distressed move, but a plan to reduce debt a.k.a. strengthening the balance sheet.

I suppose theoretically, now the economic climate seems to have stabilised, BBVA could have been forgiven for calling the sale off. Nevertheless, the bank continued, so it must have felt it remained a good plan to sell the assets. 

The proof of whether this deal is a good one for Europa and its partners will not be known for some time yet of course. But there is little concern about BBVA as a tenant or the leaseback terms.

At some point, Europa and partners, I suppose, will test some of the assets by selling off selected retail banking outlets to los señors and las señoras occupying Spain’s private investor market.

For the moment, though, it is nice just to have a transaction of significant size to talk about.

Anyway, this morning I am off to Aberdeen’s DEGI stand where if my information is correct INREV is hosting informal drinks for members. If I can find any people willing to voice a view, it will be interesting to discover what kind of person members want to replace Lisette van Doorn as chief executive. She is relinquishing her position to run a retail fund in Italy for ING Real Estate.

Will INREV opt for a young up and coming fund manager type as its next chief executive or someone shall we say the twilight of their property career.

Chances are it will be someone in between.