Lar Raises Dividend by 67% and Opens the Door to Corporate Operations

9 October 2018

The socimi will distribute €75 million in 2019 / The socimi will book 115 million euros with the delivery of its luxury flat development Lagasca, in Madrid, and roughly 110 million euros from the sale of its three office buildings.

Lar España is moving forward with its plan to focus on the retail market and pay-outs to its shareholders. The company, which expects to deliver the homes in the Lagasca99 luxury development (Madrid) before the end of the year, will raise its dividend to 75 million euros in 2019, compared to the 45 million euros it distributed last May and the €30 million in 2017.

The socimi will propose a dividend equivalent to 5% of the value of its assets (NAV), which will imply an outlay of about €50 million. The company will also pay an extraordinary dividend in 2019 associated with the sale of Lagasca99 for about in €25 million.

The president of Lar España, José Luis del Valle, highlighted, yesterday on Investor Day, the socimi’s evolution and the fulfilment of its strategic plan. “In a few months, we are going to become a socimi focused exclusively on retail. With approximately 550,000 square meters of commercial space, we are the largest operator in Spain, and we also have a specialised manager who is committed to the project.”

Sale of assets

Del Valle recalled that, of the disinvestments of non-strategic assets planned for the years to 2021, the company has already executed 47% in one year for €276 million. Another €115 million will be added to that figure from for the delivery of Lagasca99 and the sale of the three office buildings that the company still has in its portfolio – two in Madrid and one in Barcelona -, which will take place between this year and the beginning of 2019, for about €110 million. As Expansión announced on October 5: “Disinvestments are taking place above the purchase price and with capital gains compared to the last valuation.”

At the same time, it will continue with its investment plan with the purchase of assets for approximately €250 million. Lar bought the Rivas Futura business park in Madrid for €62 million and the Parque Abadía shopping mall in Toledo for €14 million. “We will continue to take advantage of opportunities and, where appropriate, we will address new developments such as Vidanova Parc, in Sagunto, which opened in September and O Lagoh, in Sevilla, which will open in mid-2019,” Miguel Pereda, board member and managing director of Grupo Lar.

Regarding future corporate operations, Del Valle recalled that Lar “is in the market and attractive.” He added: “I think the best thing for the shareholder is the execution of the current business plan, but we are in the market and we can evaluate buyer interest at any time.” Among the shareholders of Lar España, the manager Pimco stands out (19.6%), along with Group Lar (its manager, with 10%); and Franklin Templeton (7.9%).

Regarding potentially negative changes to the tax regime governing socimis, Del Valle found the enactment of such a measure to be unlikely: “There is no point in undoing a formula that has worked and is not part of the problem.”

Original Story: Expansión – Rebeca Arroyo

Translation: Richard Turner

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