Merlin: Catalonia’s Independence Movement Harmful to Property Investment

16/12/2014 – ExpansionPro

One of the leading companies of the real estate sector of Spain announced that the pro-independence movement observed across Catalonia is increasingly affecting property investments in the region. ‘The uncertainty in Catalonia is incredibly harmful to the real estate market, especially to the real estate market of this region’, said Ismael Clemente, chief executive of Merlin Properties.

Battered by the recession, Spanish housing is picking up. That attracts investors betting on its recovery. Merlin Properties is one of the REITs (known as Socimis in Spain) which were listed on the stock earlier this year. At its flotation June 30th, the vehicle raised 1.25 billion euros. A Socimi that had gone public just before it, Hispania Activos Inmobiliarios, gained trust of such prominent investors as John Paulson and George Soros.

In last month survey carried out among 2.3 million Catalans, 80% voted in favor of independence.

The Perception Change

‘We have noticed a change in investors’ sentiment about the region’, Clemente said. ‘They are asking about stress scenarios regarding revenues proceedig from Catalonia’s monetary switch resulting in depreciation of properties’.

Spanish Socimis pay out at least 80% of their profits in dividends. Merlin, buying both office and retail assets, is not leaving from the region. Around 9% of its portfolio is formed by properties in Catalonia and the Reit is going to expand the percentage.

Local authorities admitted the political tensions negatively impact Catalonia’s economy.


Original story: ExpansiónPro (by Thomas Hale, Lunes 15 de diciembre, pp 5)

Translation: AURA REE