Värde Funds $155 Million for Two Office Developments in Hyderabad, India
MUMBAI – Värde Partners, a leading global alternative investment firm, today announced it has provided senior construction financing on two pre-leased office assets in the Gachibowli Financial District of Hyderabad, India.
The $155 million facility will be used to refinance and fund to completion over 2.5 million square feet across the two Grade A developments owned by Phoenix Group. To date, over 1.5 million square feet has been pre-let to two multi-national companies, reflecting the quality and location of the assets. Construction of both projects is well-advanced, with sub-structure development complete and super-structure phases underway.
Hyderabad is a recognized global tech hub, with the city’s financial district home to a large number of multi-national tech, financial services and professional services companies. Hyderabad is one of the fastest growing metropolitan cities in India and one of the strongest markets in the country for office absorption.
Värde believes that India’s real estate market is experiencing a significant imbalance in the supply and demand of capital, leading to many businesses with robust balance sheets seeking alternative sources of capital.
“We see significant opportunity across the Indian office market for both the financing and purchase of assets, in a market that offers potential strong cash-flow visibility, multinational tenants and strong absorption,” said Tim Mooney, Partner and Global Head of Real Estate at Värde Partners. “India is a dramatic example, but emblematic of what we’re seeing across the Asia Pacific region, and across the globe. We believe that a real estate cycle is upon us and while not nearly as pronounced as the cycle brought on by the global financial crisis, the opportunity set is significant and growing.”
About Värde Partners
Värde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, the firm has invested $75 billion since inception and manages more than $14 billion on behalf of a global investor base. The firm’s investments span corporate and traded credit, real estate and mortgages, private equity and direct lending. Värde employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.varde.com.
About Phoenix Group
Phoenix Group, a Hyderabad focused group, is one of the leading Grade A commercial office space developers who have successfully developed more than 12 million SF of mixed-use developments. The group has a healthy pipeline of SEZ and Office space developments and has been at the forefront of developing and leasing quality office space in Hyderabad. Investment by Ascendas India Trust in the SEZ development projects and Lake Shore India Advisory in the mall projects are some of the notable strategic investments attracted by the group in the past (https://www.phoenixindia.net/about.html).
Värde-owned Vía Célere Issues First Green Bond by Residential Developer in the Euro Market
LONDON AND MADRID – Värde Partners, a leading global alternative investment firm, today announced that one of its portfolio companies, Vía Célere, has issued the first green bond by a residential real estate developer in the Euro market.
Vía Célere is the largest homebuilder in Spain by units delivered in 2020, with a deep residential land bank in key markets across Iberia.
The 5-year €300 million 5.25% high yield bond issued at par received strong demand from international investors. It was issued in accordance with the Green Bond Principles, as published by the International Capital Market Association, and reviewed by Sustainalytics, the independent global provider of ESG and corporate governance research and ratings.
The successful bond issue diversifies Vía Célere’s funding sources and supports its growth strategy in the Iberian market. The proceeds will be used, among other things, to fund cash on balance sheet and re-finance existing indebtedness, each in connection with the construction of energy efficient residential buildings in Vía Célere’s portfolio across Iberia. The developments must meet the green bond’s eligibility framework by achieving an Energy Performance Certificate rating in the top 15% of local housing.
“This is an important milestone for Vía Célere and reinforces the company’s commitment to create more sustainable housing, with greater energy efficiency and reduced carbon footprint,” said Tim Mooney, Partner and Global Head of Real Estate at Värde. “Through the lifespan of our investment, we have worked closely with Vía Célere to put in place a robust governance framework, strengthen the management team and enhance the company’s operating model.”
Vía Célere had a strong year in 2020, despite the challenges caused by Covid-19. The company led the Spanish residential market, delivering 1,932 homes, 65% more than in 2019, and has already sold 78% of the units to be delivered in 2021. 88% of developments currently under construction have Energy Performance Certificates rated A or B, with buildings emitting 89% less carbon dioxide emissions than the minimum requirement under Spanish regulations. Vía Célere continues to maintain a robust balance sheet with low leverage and high interest coverage.
Background to Värde’s investment in Vía Célere
In 2014 Värde began buying the debt of Grupo San Jose (GSJ), a large, publicly listed Spanish construction company and real estate developer that was in distress following the long-term impacts of the global financial crisis on the Spanish housing market.
Between December 2015 and July 2017 through a series of restructurings, acquisitions and capital increases, Värde ultimately took control of GSJ’s real estate development business and executed a reverse merger with Vía Célere, a smaller Spanish residential developer that Värde had acquired separately. By 2019, following the acquisition of land bank assets from Aelca – a real estate developer and asset manager – Vía Célere had established itself as Spain’s largest homebuilder.
About Värde Partners
Värde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, the firm has invested $75 billion since inception and manages more than $14 billion on behalf of a global investor base. The firm’s investments span corporate and traded credit, real estate and mortgages, private equity and direct lending. Värde employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.varde.com.
Värde Partners Agrees €128 Million Sale of Barcelona Office Tower to DWS
MADRID – Värde Partners, a leading global alternative investment firm, today announced it has agreed the forward sale of its One Parc Central office development in Barcelona to DWS for €128 million.
The sale was agreed through Dospuntos Asset Management, a Värde-controlled real estate company in Spain, formed in December 2017 following its carve-out from the residential developer Vía Célere.
Located in the 22@ region in Barcelona, the 23,500 square meter office tower forms part of the city’s major urban transformation project which seeks to establish a new technology and innovation hub in the former industrial area of Poblenou. Construction began in the third quarter of 2019 and is expected to be completed in the third quarter of 2022.
“The land purchase in late 2017 reflected our long-term conviction in the 22@ region and Barcelona’s strength as a destination for international business, in a market that continues to show fast absorption of high-quality office space,” said Héctor Serrat, Managing Director at Värde. “We have a long history of investing in Spanish real estate across different sectors, and remain focused on opportunities to develop and manage assets where we can seek to create and unlock value for our investors.”
Dospuntos Asset Management initially acquired the land in October 2017, before securing planning and licensing approvals for a total of 53,000 buildable square meters, including office, student housing and residential uses.
One Parc Central will be 14 stories high with 2,158 square meters of terraces, with a view of the Parc Central de Poblenou and Avenida Diagonal. It will have three underground floors, with 154 parking spaces for cars, 133 spaces for motorcycles and 122 for bicycles.
Construction of a second office tower next to One Parc Central will begin imminently and ultimately include a gross lettable area of 23,000 square meters and 190 parking spaces. Dospuntos Asset Management owns additional land in the Parc Central area, where a 7,000 square meter student housing project and a 2,500 square meter residential block will be developed.
Alfredo Laffitte, Director General of Dospuntos Asset Management, said: “The One Parc Central construction is at the forefront of a major transformation in the 22@ area, and we’re pleased the development’s ESG features have been recognized with LEED Gold and WELL Silver ratings. The purchase by DWS demonstrates the attractiveness of the project as we begin construction of the second office tower.”
About Värde Partners
Värde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, the firm has invested $75 billion since inception and manages more than $14 billion on behalf of a global investor base. The firm’s investments span corporate and traded credit, real estate and mortgages, private equity and direct lending. Värde employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.Varde.com.
Värde Partners Invests $250 Million in U.S. Residential Real Estate Developments
MINNEAPOLIS and NEW YORK – Värde Partners, a leading global alternative investment firm, today announced it has provided more than $250 million of capital to purchase and fund the development of single family residential projects across three transactions in the U.S.
“The U.S. housing market represents a significant investment opportunity for Värde, with compelling supply demand dynamics driven by low interest rates, demographic trends and secular shifts accelerated by Covid-19,” said Brian Schmidt, Partner at Värde. “These deals demonstrate the speed, scale and flexibility with which our platform can invest across the capital structure to provide appropriate financing solutions while traditional lenders continue to retrench.”
The transactions announced today include:
- A $100 million land bank facility with Dream Finders Homes (DFH), a leading homebuilder based in Jacksonville, Florida. The capital will be used to acquire land in Florida and Colorado, with a focus on Jacksonville, Orlando and Denver, to be developed into residential lots by DFH. Having first invested in DFH in January 2019, this deal expands Värde’s ongoing partnership with the company, working together to develop high quality and affordable homes in attractive communities.
- The acquisition of Verde River, an ‘active adult’ resort lifestyle master-planned community (MPC) in Scottsdale, Arizona, including 55+ housing and an agreement with Shea Homes, one of the country’s leading private homebuilders, to continue developing and building out the project. The community will include 1,210 homes and is already well established with over 600 homes sold.
- The acquisition of Sunfield, a late-stage MPC based in Austin, Texas, and formation of a joint venture with IHP Capital Partners to manage the project. Located in one of Austin’s fastest growing suburbs, the community is nearly half complete with 2,770 lots remaining out of 6,550 in a market with high demand for more affordable homes.
Brendan Bosman, Managing Director at Värde, added: “We have deep experience in housing-related investments and we welcome the opportunity to deepen existing relationships and establish new ventures, as we continue to grow our footprint across the U.S. residential real estate market. MPCs in particular have maintained strong levels of demand with buyers seeking attractive lifestyle communities that offer substantial open space.”
Significant Opportunity Across U.S. Housing Market
Värde believes there are substantial opportunities in certain segments positioned to outperform the broader U.S. housing market, which entered the pandemic from a position of relative strength. Household formation was in line with new build activity, there were record low inventories and vacancy rates, relatively cheap mortgages, reasonably controlled credit, good levels of affordability, healthy levels of homeowner equity and a positive outlook on prices.
The unique nature of the disruption of Covid-19 then caused supply and demand factors to play out in a very different way to a ‘typical’ downturn. The immediate effect has been to reduce supply and bring demand forward, as home buyers seeking more space have accelerated their decision to acquire a single-family home, helping to support prices.
Government policy has also played a very important role, providing short-term stability to the market and preventing extreme scenarios that could have had a destabilizing effect. In particular, through stimulus, generous unemployment benefits and policies on forbearance, government policy has prevented the traditional translation of severe economic damage and high unemployment through to housing prices.
As the market is gradually weaned off this support, Värde expects a far more nuanced picture to emerge, caused by the differing impact Covid-19 has had on sectors, geographies and age groups. Secular trends accelerated by the pandemic, including the desire for more suburban housing, and demographic trends, such as later household formation for millennials and a large baby boomer population, will create clear winners and losers.
With a great deal of uncertainty surrounding the forward environment, the firm continues to focus on assets that are likely to perform well in all scenarios. Assets that provide an inflation-protected income stream and have strong levels of underlying demand, such as active homebuilding projects in desirable locations, offer the most attractive opportunity.
Strong Background in U.S. Housing
Värde has more than 25 years of experience investing in real estate. The firm has made substantial equity and credit investments in residential land development and homebuilding transactions with a focus on MPCs in recent history. Previous investments in MPCs include equity investments in Daybreak in South Jordan, UT (SLC metro) where 20,000 residential units and 10 million square feet of commercial real estate will be constructed and Windsong Ranch in Prosper, TX (Dallas metro) where nearly 3,000 residential units and 2 million square feet of commercial real estate will be constructed. These MPCs outperformed in 2020 with home sales up 40-70% relative to 2019 sales.
About Värde Partners
Värde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, the firm has invested $75 billion since inception and manages more than $14 billion on behalf of a global investor base. The firm’s investments span corporate and traded credit, real estate and mortgages, private equity and direct lending. Värde employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.Värde.com.
Värde Names New Partner and Senior Managing Directors
MINNEAPOLIS and NEW YORK – Värde Partners, a leading global alternative investment firm, is pleased to announce that Brendan Albee has been promoted to Partner.
“Over the past six years, Brendan has demonstrated strong leadership and character while driving advances in scaling our world-class global operations and infrastructure. His direction and forethought have proven instrumental to the growth and success of the firm in many ways, not least of which includes ensuring Värde was well prepared with the technology and systems for a seamless transition to remote work in 2020. We are excited to welcome him as a partner,” said George Hicks, Värde Co-Founder and Co-CEO, and Ilfryn Carstairs, Co-CEO and CIO.
Brendan joined Värde in 2014 to serve as the firm’s Chief Operating Officer with global responsibility for the accounting, treasury, valuations, operations and technology functions. Based in Minneapolis, he is a member of the firm’s Investment Committee, Senior Leadership Committee, and Operating Committee. He is also active in the firm’s fund and product development as well as enterprise risk management.
Prior to joining Värde, Brendan served as global COO for the Alternative Asset Management, Equities, Structured Products, Asset Servicing and Securities Operations teams at Barclays Bank. Prior to Barclays, Brendan spent more than a decade in various roles within audit, investment banking, and strategy at JPMorgan Chase.
Alongside Brendan’s appointment, Värde announced two promotions to Senior Managing Director:
- Ria Nova, Head of Americas Business Development and Investor Relations, also oversees the firm’s consultant, intermediary and product specialist efforts. Based in New York, she joined the firm in 2017.
- Michael Reimler, Global Head of Finance, is responsible for leading and managing the accounting and financial reporting for Vӓrde’s investment funds, general partner entities and management companies, and for leading and managing the firm’s Treasury function. Based in Minneapolis, he joined the firm in 2010.
In addition, Värde recently hired Monty Cook as Head of Financial Services, North America. Based in New York, Monty leads the firm’s investing in financial services assets across North America with a focus on private credit investments in traditional and emerging asset classes. He reports to Aneek Mamik, Global Co-Head of Financial Services.
“We’re pleased to welcome Monty at an exciting time for the financial services team,” said Aneek. “Leveraging Monty’s tremendous industry experience and the strength of Värde’s platform, we are pleased to be expanding our lending solutions for the financial services sector and building on the firm’s capabilities to deliver value for investors.”
Monty joins Värde from First Eagle Alternative Credit, where he served as Head of Financial Services. Monty was with THL Credit for seven years before it was acquired by First Eagle and most recently served as Co-Head of Direct Lending. Prior to THL Credit, Monty was a Director in Deutsche Bank’s Credit Solutions Group where he sourced and structured credit investments across numerous specialty finance and other asset classes.
About Värde Partners:
Värde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, the firm has invested more than $75 billion since inception and manages over $14 billion on behalf of a global investor base. The firm’s investments span corporate and traded credit, real estate and mortgages, private equity and direct lending. Värde employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.varde.com.
Värde Partners Raises More Than $2.6 Billion Targeting Dislocation Opportunities
MINNEAPOLIS, NEW YORK, LONDON & SINGAPORE – Värde Partners, a leading global alternative investment firm, today announced the final close of The Värde Dislocation Fund (the “Fund”) with more than $1.6 billion of commitments, exceeding its $1 billion target in five months of fundraising.
The Fund will look to invest in opportunities presented by the historic market dislocations and economic disruption resulting from the Covid-19 pandemic. It has a flexible, global mandate to pursue a broad universe of mispriced, stressed, and distressed credit.
Earlier this year, Värde also launched a $1 billion dislocation fund that was raised through a private banking platform. This brings the total capital Värde has raised specifically for dislocation strategies to more than $2.6 billion and follows on the heels of the close of Värde’s 13th flagship fund in December 2019.
“We believe the profound impact of Covid-19 has marked the start of a major, connected cycle,” said George Hicks, Co-Founder and Co-Chief Executive Officer. “Having established a deep expertise in credit over the past 27 years, we bring to bear our experience investing through many credit cycles to guide us as the crisis unfolds.”
“The unparalleled speed and disruption to society and markets has caused fundamental damage to the global economy. The range of potential outcomes remains incredibly wide, and we expect varying degrees of impact around the world,” said Ilfryn Carstairs, Co-Chief Executive Officer and Chief Investment Officer. “Our platform is well-suited to the opportunity in front of us, with the ability to pivot to markets and geographies where we see the best relative value.”
Jon Fox, President, added: “The strong demand for this strategy from a diverse, global investor base underscores expectations for a deep credit cycle. We are pleased to see 55% of commitments to this Fund come from new investors, notwithstanding it was raised entirely with no in-person meetings. We took innovative steps to engage investors through virtual platforms and were able to exceed our target in just five months.”
About Värde Partners
Värde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, the firm has invested $75 billion since inception and manages more than $14 billion on behalf of a global investor base. The firm’s investments span corporate and traded credit, real estate and mortgages, private equity and direct lending. Värde employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.varde.com.