15 November 2016 – Idealista
(…). According to a report prepared by the firm Armabex, the registered advisor of the Alternative Investment Market (MAB), most of the Spain’s Socimis share the following features: ownership structures, location of their assets and even the type of properties that comprise their portfolios.
“A study of the sector shows that, nowadays, the standard Socimi is: listed on the MAB; belongs to non-resident shareholders; holds between 5 and 20 assets in its portfolio; invests primarily in offices and rental housing; invests in properties that are primarily located in Madrid and Barcelona; and has very controlled levels of debt”, explains Antonio Fernández, Chairman of the advisory firm.
There are currently 25 listed real estate investment vehicles on the MAB and more than half have debuted on the platform during 2016. So far this year, 14 companies have listed on the MAB, up by 75% compared to last year. Those companies have a combined market value of more than €3,230 million (equivalent to the market capitalisation of giants such as Mediaset), have assets worth around €7,600 million; and they share several characteristics.
One of the most important is the proliferation of foreign shareholders. According to data from Armabex, 56% of these companies depend on non-resident capital. They tend to be funded by international, professional and specialist investors, who have extensive knowledge about management and the real estate sector and who use companies established in Luxembourg to channel their investments, (….), which allows them to be more tax efficient.
There are currently 14 vehicles on the MAB that display these characteristics; and together, they hold assets worth more than €5,300 million, equivalent to 70% of the total value. Examples include Euro Cervantes, owned by the Singapore Government; and ISC Fresh Water Investment, which is headed up by Mosiés El-Mann Arazi, a famous Mexican property developer. (…).
The second point that the Socimis have in common is their clear commitment to Spain’s capital city. “68% of the Socimis hold assets in Madrid in their portfolios and 32% own properties in Barcelona. Moreover, the two cities account for almost 60% of the total market value of these entities’ real estate assets, which have a combined value of €4,519 million. (…)”.
The third common denominator is the type of asset most frequently contained in these vehicles’ portfolios, which are, undoubtedly, offices. Since the beginning, offices have been the real estate asset of choice, accounting for 32.68% of total investment, followed by homes, which account for 18.95%, premises (16.55%) and shopping centres (16.42%). The least common assets are hotels and plots of land, which together account for just 7%.
In terms of the number of assets in the Socimis’ portfolios, it is most common for them to contain between 5 and 20 real estate assets (there are 11 examples in this range), although another four Socimis have been constituted with just one asset in their portfolios and another four own more than 200 properties.
According to Armabex, we can expect to see some changes over the next few years. For example, we can expect to see an increase in the number of hotel assets and plots of land (for the development of homes) held in the portfolios of these vehicles.
In addition, “over the next few years, we can expect to see a significant increase in the number of family vehicles”, says Fernández. (…).
On the other hand, although Madrid currently leads the investment figures in terms rental properties, “the difference between the capital and Barcelona will decrease over the medium term. (…)”.
In the meantime, more than 30 Socimis are expected to debut on the stock market next year and some may even debut on the main stock exchange, where they would join three of the heavy weights in the sector: Lar, Axiare and Hispania (…).
Original story: Idealista (by Ana P. Alarcos)
Translation: Carmel Drake