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Testa Becomes A Socimi & Puts Its Residential Portfolio Up For Sale

29 September 2015 – Expansión

The real estate company Testa is making progress with its integration with the Socimi Merlin Properties. Yesterday, the company held an extraordinary shareholders’ meeting to approve a change in the corporate structure of the real estate company into a listed real estate investment company (Socimi).

The decision comes after an agreement was made between Sacyr and Merlin in June to sell Testa for €1,793 million. Currently, the Socimi led by Ismael Clemente (pictured above) controls 77% of Testa’s capital and is expected to own 100% of the shares before the end of June 2016.

The Socimi-conversion will apply (retrospectively) from 1 January 2015, which means that Testa may benefit this year from the tax advantages afforded to this kind of company, although they have yet to be quantified.

At the meeting yesterday, the shareholders approved the appointment of Ismael Clemente as a Director of Testa; he currently also serves as the Chairman and CEO of Merlin Properties. In addition, Miguel Ollero, a Director of Merlin, was also appointed as an independent Director of Testa, following the resignation of Juan María Aguirre Gonzalo.

Following the entry of these two new Directors, Testa’s governing body comprises seven members, including the Chairman, Fernando Rodríguez Avial and the CEO, Fernando Lacadena.

Once the purchase of the whole company has been completed, the two companies will merge into a single Socimi. The new Merlin Properties will have assets worth around €5,000 million.

Having taken control of Testa, the Directors of Merlin have decided to divest the real estate company’s residential portfolio, which contains around 1,500 homes. They have engaged two consultancy firms to coordinate this process, which is expected to begin within two weeks.

Potential purchasers of the portfolio include other Socimis and investment funds.

In addition to the sale of this package of properties, which generates annual rental income of €10.5 million, Merlin has also announced that it will sell the portfolio of hotels currently owned by Testa, before the end of the year.

Merlin’s shares closed trading on the stock exchange yesterday at €10.72 per share, up 0.33%, taking its market capitalisation to €3,461.3 million, whilst the market capitalisation of Testa is €2,055.5 million.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake