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Paulson and Soros Bet on Spainish real estate

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Spanish real estate

John Paulson and George Soros have taken stakes worth 92 million Euros in Spain’s Hispania Activos Inmobiliarios, say sources. John Paulson and George Soros bagged the fourth and first spots worldwide, in 2013, for their respective earnings, putting them at the top of the charts.

Being the leading groups in head fund management, the move definitely sheds some light on the growing confidence among investors in Spain’s real estate market.

Hispania to focus on prime cities with Azora managing the Reit

Hispania is looking at listing itself in the Madrid Stock Exchange, as an investment trust that mainly concentrates on properties in thriving cities, which have room for growth in terms of value. It’s aiming for a double digit return annually in a six-year time frame.

It had earlier announced plans on putting up the remaining shares to the public, after obtaining a major portion of the 500 million Euro target it had set, from early investors.

The prospectus is in place, waiting for a nod from Spanish regulators. Azora, which shelved out 2.8 billion Euro European assets, back in 2003, is said to be managing the Reit. Mr. Paulson was reported to have said that he was impressed with Azora’s management, and find them to be well-positioned to make the best of the opportunities presented in Spain’s real-estate market.

Trends in the real estate market

If the IPO plan succeeds, it will make Hispania the second company in Spain’s real estate to float, from the time Spain’s financial crisis came to the front. Lar Espania had announced a 400 million Euro target a couple of weeks ago. Property sales in Spain faltered during the 2007 to 2013 period, but its rising popularity in the recent past is setting a change in pace.

The change can also be accounted to the increasing prices of real-estate assets in Irish and UK markets. During 2013, the year-on-year investment seen in Spain’s real-estate market doubled to 2.7 billion Euros, making it the highest levels it had seen since the Eurozone crisis in 2010, as per data released by Cushman & Wakefield.

The past few years have seen the market experiencing a renewal, and more investors are expected to pour in, in the next few months. Researchers say that Europe is expected to see an increase in its listed real-estate assets. They also throw in a cautionary word to the investors saying, they should make a wiser decision while dealing with the not as experienced managers from smaller IPOs.

Many hedge funds have been actively betting on the recovery in the economic scene of Southern Europe. Other companies in a state of despair in Greece and Spain, have already been invested in by Mr. Paulson and Mr. Soros. Last month, Spain’s FCC was bought into by funds close to Soros, and last autumn, Paulson invested in Greek banks, garnering it much attention. The peripheral countries in the Eurozone are also reported to have secured funding at some of the highest rates, since the crisis.