Vbare Iberian Properties SOCIMI S.A. Opportunities in the Spanish - - PowerPoint PPT Presentation

January 17, 2017

Vbare Iberian Properties SOCIMI S.A.

Opportunities in the Spanish Residential Market

The Opportunity

• Real Estate capital values in Spain, are at the

lowest levels seen in recent years, representing a unique opportunity for future capital gains.

• The Spanish economy has reached the floor

and is recovering in most of the key economic and real estate indicators.

• Expected positive evolution of both the rental

and the sale price of the Spanish residential market in the next 3-5 years.

• Highest levels of GDP growth in the EU

(3.5% GDP growth in 2015, and 2016 in the same range)

Source: Instituto Nacional de Estadística (INE)

10 20 30 40 50 60 70

Economic Confidence Index

Economic Confidence Current Economic Situation Economic Expectations

• 10.0%
• 5.0%

0.0% 5.0% 10.0% 15.0%

100,000 120,000 140,000 160,000 180,000 200,000 220,000 240,000 260,000 280,000 300,000

00Q1 00Q3 01Q1 01Q3 02Q1 02Q3 03Q1 03Q3 04Q1 04Q3 05Q1 05Q3 06Q1 06Q3 07Q1 07Q3 08Q1 08Q3 09Q1 09Q3 10Q1 10Q3 11Q1 11Q3 12Q1 12Q3 13Q1 13Q3 14Q1 14Q3 15Q1 15Q3 16Q1 16Q3

Nominal GDP (seasonally adjusted)

5 10 15 20 25 30

Unemployment rate evolution (%)

Spain Madrid

Source: Centro de Investigaciones Sociologicas (CIS) Source: Instituto Nacional de Estadística (INE)

Why Residential?

• Prices are at all time low – c. construction cost
• Although Spain is traditionally an owners market (more than 80% of

Spain’s population own their homes), the Spanish government has taken measures to increase the rental market in the country, including, among others, establishing the Socimi regime

• High rental demand – time to lease app. 3 weeks
• No institutional landlords/multifamily assets – difficult to acquire a

critical mass

• Average rent increased by 6.7% in 2016 – pushing yields higher.

Spain Residential Market Overview (1/2)

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Source: Ministerio de Fomento Source: Ministerio de Fomento Source: Idealista Index

• Since 2008, major global players such as Apollo,

Blackstone, Fortress, TPG and others have invested significant amounts in the Spanish RE Market.

• 40% of the amount invested in Spanish RE in 2015

(~€15 Billion), were invested in Madrid, ranking the city at number 5 in Europe in real estate investments.

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

€ Million

Residential Housing - Total transactions (value)

Spain Madrid

0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0

€/m2

Residential Prices Madrid vs. Spain (€/m2)

Spain Madrid

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0

€/m2

Rental evolution Madrid (€/m2) (Madrid)

Spain Residential Market Overview (2/2) The Time is Now!

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“Renting will consolidate as the main way to fly the nest, as happens in countries with a similar development to Spain”

(Spanish Property Insight - February 2016)

“In general the rental prices will stabilize in the following years, because the lease market has arrived to Spain to stay”

(Fotocasa Index - May 2016)

“The rental market is expected to continue to expand in 2016 and the ratio of rented housing (14.9% in 2014) will continue to converge towards the Eurozone average.”

(CBRE - February 2016)

“As long as the recovery of the real estate market consolidates, residential become more attractive for investors. Acquiring residential assets , is nowadays a high return operation with a low risk”

(Expansion - March 2016)

Structure

10

Socimi Structure Zero Taxation (capital gains and rents) 95% reduction on Transfer Tax (6% in the Madrid area) Going public within 2 years

• Originally introduced in 2009 to support investments in Spanish Real Estate

following the financial crisis

• There are several large SOCIMI’s that are traded on Madrid’s main market

(Merlin, Lar, Hispania etc..), and 27 Socimis traded on the MAB, most of which are not truly public

• VBA is the first dedicated residential public SOCIMI – on December 2016

the company registered on the MAB

Strategy

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• Acquiring distressed mid level residential assets in main cities
• Acquisitions done mainly from banks or other distressed sellers, at prices

significant lower than current market prices (backed by an international non affiliated appraisal) creating significant capital gain in the short term.

• Dedicated on the ground local operational and managerial personnel

Lease Property Management Origination Acquisition Refurbishment

Creating Substantial Added Value Over Time

Examples of our assets

13

Contact

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Vbare Iberian Properties SOCIMI S.A. C/ Almagro, 3 – 5º Dcha. 28010 Madrid (Spain) Yair Ephrati Director T +972 3 622 3381 M +972 54 4866 866 yair@valuebase.co.il

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• ffer to sell or issue, or the solicitation of an offer to buy or acquire securities. This Presentation is solely for informational purposes and should not be treated as

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