Acciona Real Estate Set To Merge With Testa Residencial

22 May 2017 – ABC

Acciona and Merlin are finalising the merger of their respective rental housing subsidiaries, Acciona Real Estate and Testa Residencial, in an operation estimated to be worth €350 million. The deal will result in the creation of the largest rental home company in the country.

That is according to the President of the construction and renewable energy group, José Manuel Entrecanales, who expects that the “operation with Merlin” will be closed “before the summer”.

“We have been holding negotiations with Merlin for a while and I think that we will decide whether or not to go ahead with the deal within the next few months, probably before the summer, although in my opinion, we will”, said Entrecanales following the company’s General Shareholders’ Meeting.

When the operation comes to fruition, Acciona will fulfill its objective of finding a strategic exit for its real estate business, which it carved out into the subsidiary Acciona Real Estate in 2015, and after it decided against listing it on the stock market last year.

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

The portfolio in question contains homes worth €350 million and the majority (73%) are located in Madrid.

Meanwhile, with this operation, the Socimi led by Ismael Clemente will give a new boost to the growth of Testa Residencial, the subsidiary that it constituted last year together with Santander, BBVA and Banco Popular, with the homes that it “inherited” from the fusion with Metrovacesa and which it did not consider strategic.

A new giant

The integration with Acciona will establish Testa Residencial’s position as the largest rental home real estate company in the country. One of the entity’s many objectives includes debuting on the stock market.

The merger of the two companies would give rise to a new Testa Residencial, which would own a portfolio of around 9,400 rental homes. Currently, Santander is the largest shareholder of the company, with a stake of 44.3%, ahead of BBVA with 33.5%, Merlin (16.10%) and Banco Popular (3.9%).

This is a new real estate giant, unprecedented in Spain until now, whose creation coincides with the recovery that the real estate sector is experiencing in Spain and the increase in the prominence of the rental market with respect to home purchases.

In terms of the other assets that Acciona holds in its real estate division, specifically, several hotels and office buildings, the company is planning to sell them off gradually. With the land portfolio, it recently announced its return to the residential business through the promotion of new homes.

Original story: ABC

Translation: Carmel Drake