28 December 2016 – Expansión
Santander, BBVA and Banco Popular will contribute a package of new homes worth €665 million, through a capital increase, to Testa Residencial, the rental home Socimi that they own together with Merlin Properties.
The operation will double the size of Testa Residencial, however it will also lead to the dilution of Merlin’s 34.2% stake as the second largest shareholder behind Santander, which controls 46.2% of the share capital.
The contribution of homes by the shareholder banks forms part of the growth strategy that has been set for this new rental home Socimi, which may debut on the stock market next year.
In fact, it is the first transfer of new assets that the shareholders will make to Testa Residencial, following its constitution in October this year, with a portfolio of 4,700 homes, most of which (63%) are located in Madrid.
The transfer of homes by the company’s shareholder banks will materialise through a non-monetary capital increase amounting to the aforementioned value of €665.50 million. Testa Residencial will approve this operation at its shareholders meeting on 30 January. Given the value of the firm’s current portfolio of homes, estimated to be worth around €701 million, the injection of these new assets will almost double the size of the company.
Testa Residencial was created as a subsidiary of Merlin using the homes that Testa and Metrovacesa contributed when they merged with the Socimi. The company led by Ismael Clemente considered this business to be non-strategic and for that reason, decided to put it up for sale. But following frustrated negotiations with potential buyers, Merlin decided to deconsolidate this portfolio by creating a new Socimi, in which the shareholder banks hold a significant stake, amounting to 13% in the case of BBVA and 6% in the case of Popular.
Subsidiary of the new real estate giant
The merger of the 100-year old giant Metrovacesa (until then owned by the creditor banks of its former owner, Román Sanahuja) with the Socimi Merlin, which was completed in October, gave rise to a new Merlin that, according to its own figures, is the largest listed real estate company in the country, with assets worth €9,100 million.
Similarly, the integration paved the way for Testa Residencial, which is the largest rental home company in the country, with the aim of segregating out a subsidiary dedicated to the rental home business.
The agenda for the shareholders’ meeting that this company will hold in January will include the creation of a corporate website and setting the remuneration for the shareholders.
Original story: Expansión
Translation: Carmel Drake