Difference between revisions of "ThomasEzioBonetti"

From Miami to Marbella, it’s “Déjà Vu” - Durendal’s Bonetti

After the huge turnaround in Madrid and Barcelona property investment last year, “The best value opportunities in Spain are now along the southern coast” says Thomas Ezio Bonetti of the Durendal Ventures Group, a speaker at the recent PIE Spain Property symposium in London.

With affiliates in Miami and New York, Mr. Bonetti of Durendal based in Marbella noted that the recovery beginning in Spain mirrors that of the US market of a few years ago. “It’s no coincidence that one of the first major transaction closed with Spain’s ‘bad’ bank Sareb, was with a Private Equity firm based in Miami Beach,” he told PIE. “Looking out their beachfront skyscraper windows on Brickell Avenue, there was a perfect view of the financial tsunami which engulfed and collapsed US markets years before.” That collapse left behind upside-down properties, massive piles of debt, bank and company failures, foreclosures, and dozens of abandoned construction cranes “looming over the city like giant pink flamingos”, he said. Strikingly similar to the Iberian Peninsula and other distressed Mediterranean markets, “It’s Déjà Vu all over again.”

Bonetti continued to say, “At Durendal we believe Spain has now put in a bottom, and is set to mirror the US market recovery.” In fact, “the US markets that were hit the hardest, have delivered the highest rates of returns.” In Miami for example, “the recovery there has been so strong that many of our Clients are now exiting their positions to take profits. We anticipate a similar effect will occur over time, here on the sunny coast of Spain as well.”

Driven by private equity from America, Europe, and more recently Asia, the major markets of Madrid and Barcelona have attracted unprecedented capital in 2014 as Phase One of the Spanish recovery, Bonetti noted. “We saw firms who feasted on an abundance of distressed Sareb portfolios, discounted income producing assets, non-performing debt, and the acquisition of cash flow challenged companies.” However, in those Tier I markets today “competition for quality assets is quickly overtaking supply, with prices and yields responding accordingly.”

According to Bonetti, there are two key macro strategies that investors should consider enhancing in 2015 to unlock hidden value in Spain. First, with quality supply becoming more difficult to find, “You must have a very strong deal-sourcing team with trusted on the ground local partners.” And second, “It’s time to look beyond the major Tier I markets.” Like what happened in Miami and South Florida, “We forecast the next wave of investment will occur in the south of Spain and all along the Costa del Sol with a focus on Marbella and its environs.” While Madrid and Barcelona markets are rapidly maturing, “this Phase Two is only just beginning and will continue for at least the next 12-18 months.”

Validating this advice, several strategic private equity investors are already taking large positions, with recent transactions including the purchase of the Hotel Guadalmina near Marbella, the Sotogrande Resort, and the Junta of Andalusia’s successful leaseback auction.