8 September 2017 – El Confidencial
The cooperative manager Domo now has everything in place for the debut of its Socimi on the stock market. The company led by Feliciano Conde has just submitted the incorporation document (known in the jargon of the industry as the DIM) and has received the corresponding ISIN code from Iberclear, as well as the green card necessary to be able to operate on the stock market.
With those procedures completed, the firm now just has to wait for the authorities of the Alternative Investment Market (MAB) to approve all the documentation for the Socimi to debut on the stock market. And provided there are no surprises, that procedure should happen between the end of this month and the beginning of next month. The property developer wants to ring the bell with an army of first-rate advisors, aware of the revolution that debuting on the stock market will have on its value proposition.
The Socimi has hired the law firm Pérez-Llorca as legal counsel; PwC as the auditor; CBRE as the real estate expert; and Armabex as the registered advisor and global coordinator of the whole incorporation process. Alongside all of them, the corporative manager has been working for almost two years to promote a new sub-segment within the Socimi framework, which has been included via the circular, and which allows it to also include the property development business.
To this end, these vehicles are granted more time to distribute dividends, rather than requiring that at least 80% of the assets in the portfolio are profitable from day 1 and the profits be distributed amongst the shareholders.
The major novelty of Domo Activos’ arrival on the stock market is the possibility of allowing investors in Socimis to also benefit from the property developers’ margins. In fact, the company’s road map forecasts that it will raise up to €250 million through capital increases over a period of two years, money that it will allocate to acquire buildable land on which to construct homes.
Investments amounting to €500 million
Once constructed, the homes will be rented out for a period of three years, to safeguard the tax benefits, and subsequently, they will be sold, with all the profits being shared out amongst the investors. Even before its debut on the MAB, Domo has already undertaken a €7 million capital increase, which it has used to acquire a plot of buildable land in Esanche de Vallecas (Madrid), where it started work last week to build 80 apartments.
These homes will be put up for rent from the summer of 2019, which will allow the Socimi to start distributing dividends that same year. This is the only asset with which the Socimi will make its debut on the stock market, although it will quickly start to execute its growth plans, with a capital increase planned for October, through which it hopes to raise between €20 million and €50 million to acquire plots of land that it has already identified.
Focused in Madrid, but also interested in buildable plots in Málaga and Palma de Mallorca, Domo Activos will be a genuine collective investment vehicle, given that from the start it will have 54 investors and none of them will hold a majority stake. The largest shareholder will be Domo, with a 5% stake. With the €250 million that the entity plans to raise, it should be able to undertake operations amounting to €500 million, given that its objective is to maintain a leverage level of 50% and to offer annual returns of 10%.
Original story: El Confidencial (by Ruth Ugalde)
Translation: Carmel Drake