Acciona & Merlin Finalise Merger Of Their Rental Home Subsidiaries

10 July 2017 – Linked In

Acciona and Merlin are finalising the merger of their respective rental home subsidiaries, Acciona Real Estate and Testa Residencial, in an operation estimated to be worth €350 million, which will give rise to the creation of the largest rental home company in the country. At least that much is clear from the comments made by the President of the construction and renewable energy group, José Manuel Entrecanales, who estimates that the “operation with Merlin” will be completed “before the summer”. “We have been negotiating with Merlin for a long time and I think that we will know whether or not it will go ahead within the next few weeks, probably before the summer; and in my opinion, it will”, said Entrecanales following the company’s General Shareholders’ Meeting.

When the operation materialises, Acciona will fulfil its objective of finding a strategic exit for its real estate business, which it grouped together in the subsidiary Acciona Real Estate in 2015, after it withdrew its plans to debut it on the stock exchange last year.

By virtue of the transaction, Acciona will transfer its portfolio of 1,382 rental homes to Testa and in exchange will become a major shareholder in the resultant company, with a stake “of just under 30%”, according to the President of the group.

This portfolio of homes is worth €350 million and most of them (73%) are located in Madrid. Meanwhile, with this operation, the Socimi led by Ismael Clemente (pictured above) will receive a new boost for the growth of Testa Residencial, the subsidiary that it constituted last year together with Santander, BBVA and Banco Popular with homes that it ‘inherited’ from the merger with Metrovacesa and which it does not consider strategic.

New giant

The integration with Acciona will consolidate Testa Residencial’s position as the largest rental home company in the country. One of its objectives over the medium term is to debut on the stock market. The sum of the assets of the two companies will give rise to a new Testa Residencial, which will have a combined portfolio of around 9,400 homes for rent. Currently, Santander is the largest shareholder of this company, with a 44.3% stake, ahead of BBVA with 33.5%, Merlin (16.10%) and Banco Popular (3.9%).

It will be a new real estate giant, unprecedented in Spain until now, whose birth coincides with the recovery that is being seen in the real estate Sector in Spain, as well as an increase in the rental market with respect to the purchase of own properties.

In terms of the other assets that Acciona holds in its real estate division, including several hotels and office buildings, the company is planning to sell them off gradually. And with its land portfolio, it recently announced its return to the residential sector with the development of new homes.

Original story: Linked In (by Jordi Brun)

Translation: Carmel Drake