Warburg Pincus acquires stake in Spanish developer

The acquisition of an 18 percent stake in Grupo Pinar increases the private equity firm’s exposure to European real estate.

Warburg Pincus, the global private equity firm, has agreed to acquire an 18 percent stake in Grupo Pinar, the privately owned Spanish homebuilder and developer.

The parties declined to reveal how much the stake is worth but the acquisition is being funded through a capital increase of Grupo Pinar’s holding company, Sociedad Desarrollos Inmobiliarios Pinar.

Warburg Pincus has been stepping up its exposure to European real estate recently. In December, it was part of a group that formed a new development company focusing on industrial estates, offices, shopping malls and residential housing in Southeast Europe, initially in Romania. The venture has an initial commitment of €50 million to invest.

Prior to that, it backed Robert Laurence who set up UK property company Resolution Property in 1998. Resolution has been stepping up its exposure on the Continent recently, as well.

Warburg has also been active in Asia where it is reportedly acquiring a 49 percent stake in Beijing Wangfujing Department Store.

Grupo Pinar is a family-owned firm, which is reportedly considering a public listing in the next five years.

The company has a portfolio of more than 8 million square feet of land and generated €180 million turnover in 2005.

Axel Urquijo and Fortis Bank acted as advisors to Grupo Pinar. Irea acted as financial and real estate advisor to Warburg Pincus.

Olga Sánchez Carrascal, Grupo Pinar chief executive, and Joaquín Ros Felis, general manager, said in a statement: “The arrival of Warburg Pincus as a new shareholder is a significant step in implementing the group’s growth strategy as it continues the process of streamlining its operations at all levels. It strengthens our shareholder structure and financial base whilst enabling us to pursue our medium and long term growth strategy, both nationally and internationally.”

Warburg’s investment comes amid an increase in corporate activity involving Spanish property companies.

Leading Spanish property developer Metrovacesa, which is quoted on the Madrid stock exchange, has been the subject of a takeover battle between its chairman, Joaquin Rivero and private company Sacresa.