23 February 2016 – Expansión
Mapfre is taking advantage of the emerging recovery of the Spanish real estate sector to accelerate the disposal of non-strategic assets from its investment portfolio. And, as a result, increase its economic return from the sale of homes, premises and offices, amongst others.
Last year, the insurance company sold 45 properties of different types for €34.5 million in total, according to its annual report submitted to the CNMV. The gross profit from these transactions amounted to €11.3 million, more than twice the amount recorded a year earlier from similar operations. In 2014, Mapfre reported profits of €4.5 million from the sale of properties.
The main asset sold in 2015 was a plot of land in Cotochico, Marbella (Málaga), which was disposed of for €12.2 million. Mapfre also sold the San Javier and San Antonio clinics in Bilbao for €4 million and €3.3 million, respectively. The other 42 properties sold by entity were “minor, non-significant assets”.
On the buy-side, the insurance group did not pass up the opportunity to acquire several iconic buildings. As such, it invested €82 million in the acquisition of a property in Madrid’s Plaza de la Independencia, 6. And, outside of Spain, it bought an office block in One Winthrop Square in Boston (USA) for €55 million. At the end of 2015, Mapfre held a property portfolio worth €2,267.7 million, which represented 4.9% of the entity’s total investment portfolio, which in turn amounted to €46,264.7 million and mainly contained sovereign debt (57.1%) and corporate fixed income (22.5%).
€943.4 million (41.6%) of the Group’s real estate portfolio related to facilities that it makes use of itself, in other words, retail outlets and offices that provide support to the insurance company’s administrative and commercial network. The remaining 58.4% (€1,324.3 million) comprises every kind of asset, available for sale and rent. The occupancy rate of its properties for rent increased slightly with respect to the previous year, to 85.9% at the end of 2015 (compared with 85.5% in 2014).
Unlike other investments in its portfolio, some of Mapfre’s properties are accounted for at book value, i.e. at acquisition cost, and not at market price. Thus, the group calculates that it has unrealised gains of €975 million. Meanwhile, the Group says in its annual report that “the unrealised gains will offset a decrease in property prices equivalent to approximately 30.06% of their own market value”.
Mapfre clarified to the CNMV that the Brazilian CEO, María Leticia de Freitas Costas, has not signed the 2015 accounts yet “due to her inability to attend the Board meeting”, and not because of any kind of disagreement.
Original story: Expansión (by M. Ponce de León)
Translation: Carmel Drake