Blackstone is facing a breakthrough year for rental housing investments in Spain, driven by substantial debt refinancing. The North American manager operates through several subsidiaries in the country, some of which have been dissolved and used to channel the acquisition of rental flats: Testa, Fidere, Anticipa, Aliseda (50% with Banco Santander), Torbel and Euripo.
The two main protagonists of 2023, Head and FidereHE, must refinance debts exceeding 2 billion euros. In the real estate sector, the fate of these subsidiaries is under debate as higher interest rates raise the cost of debt, compounding the financial turbulence in the United States and Europe following Silicon Valley Bank, First Republic Bank and Credit Suisse events.
First big move: Blackstone acted. Fidere received 440 million euros from Crédit Agricole, BNP Paribas and Citi. In a 174-page document submitted to the regulator, on March 17 the North American fund and its creditors agreed to refinance the debt, including a loan and a line of credit of 513 million and 18 million euros respectively, signed in April 2018. About 386 million remained on hold.
On April 28, the banks formalized an agreement. A 426 million-euro green syndicated loan was granted to Fidere, with only 14 million drawn initially, plus an additional 25 million in tranches. In related news, Fidere reported the loan term is two years and can be extended to five years. Depreciation is booked upfront at maturity, with interest calculated as Euribor plus 2.5 percent, payable quarterly under the same terms as before.
How many floors does Fidere have?
The creation of Fidere is tied to one of Spain’s most controversial real estate investments: the sale of 1,860 flats owned by Madrid Municipal Housing and Land Company (EMVS) to Blackstone in 2013 for 128.5 million euros, during Ana Botella’s mayoralty. The publicly traded entity had to divest assets after the bubble burst and carried debts estimated at 626.2 million euros. The operation, surrounded by controversy and subject to a lengthy legal process, was upheld by the Madrid State Court last year, which acquitted Blackstone’s representative and EMVS’s former CEO.
Following EMVS’s purchase, new acquisitions followed: 436 homes from Sareb in Madrid, Guadalajara and Barcelona; 508 officially protected homes in Sareb in Getafe and Móstoles; and 557 houses in Torrejón de Ardoz and Paracuellos de Jarama, controlled by Banco Popular.
Fidere entered the market on the former Alternative Exchange (now BME Growth) in 2015. The portfolio comprised 2,688 residences, 2,986 car parks, 2,222 warehouses and 48 stores, the details listed in the entry brochure. Of the 23 zonings, seven included flats totaling 1,147 homes with lease agreements, and the occupancy rate stood at 76% at that time.
In the years that followed, 2019 saw the first notable sales: two residential buildings were acquired by Vivenio, a joint venture of APG and Renta Corporación. Over the last two years, Fidere has pursued a steady program of divestments to recycle assets and realign its portfolio. In 2022, properties sold included homes in Malaga, Cadiz, Madrid, Barcelona, Torrejón de Ardoz, Majadahonda, Tarragona, Murcia and Valencia, among others. The total portfolio before 2021 included thousands of units, offices and warehouses, with significant activity concentrated in Madrid and surrounding regions.
Today, Fidere’s portfolio spans about 5,000 properties and roughly 409,476 square meters, with an occupancy rate around 90.6%. Most assets are located in the Community of Madrid, with smaller holdings in Castilla-La Mancha, Andalusia, the Valencian Community and Catalonia.
Next step: Refinance Testa
For Blackstone, freeing Fidere from short-term debt maturities was an achievement, but the firm faces a second milestone: refinancing Testa Residencial. Until 2015, Testa was Sacyr’s main equity subsidiary before being sold to Merlin Properties for 1.8 billion euros. Merlin later integrated assets from Metrovacesa and Acciona, creating a portfolio of over 10,600 residential units, mostly affordable housing.
After these mergers, Testa became part of Banque Santander, BBVA, Acciona and Merlin. In 2018, real estate and financial groups shifted their shares to Blackstone, which controls a 50.01% stake in a company with assets valued at about 2.675 billion euros. A year later, in April 2019, Blackstone completed the full acquisition of the company.
Testa’s refinancing needs were set for February 2018 and were expected to mature in February 2024. At the end of the last fiscal year, the company reported debts of about 1.68 billion euros as confirmed by annual accounts filed with the regulator.
Clearly, Blackstone’s credit lines for Testa were not in good standing. The company acknowledged it faced creditor demands and described a cash-flow squeeze, noting it must retain a portion of proceeds from asset sales to fund operations.
To secure more favorable loan terms through 2022, significant divestments were made totaling around 217 million euros. The standout sale involved a building on the Manzana Castellana in Madrid, a property comprising about 250 flats at 200 Castellana Street, plus the sale of a 90-storey building in Galicia and 147 additional flats nationwide.
Blackstone remains confident that Testa refinancing is achievable in the coming months. A spokesperson noted that Fidere and Testa continue to operate with solid fundamentals and the overall market conditions for the sector remain favorable.