‘Metrovacesa Promoción y Suelo’ Recovers The RE Throne

13 July 2017 – Expansión

Santander, BBVA and Popular have given Metrovacesa a new lease of life. The three banks, together with Sabadell, Bankia and Banesto, were awarded the real estate company at the end of 2008 after its former owner (Román Sanahuja) was unable to meet the debt payments. It was then that a journey began that would last almost a decade, and which will now culminate, as the company celebrates its centenary (in a few months time), in the crowning of Metrovacesa as the largest residential property developer in the market.

The last step on this journey was sealed yesterday with the completion of Plan Horizon.

This process, known as Project Horizon, began at the beginning of the year. To lead it, Santander, BBVA and Popular hired Jorge Pérez de Leza (pictured above), formerly of the Socimi Lar España.

The objective was to flesh out a separate entity for Metrovacesa Promoción y Suelo, the company created in 2016 with assets, primarily land, that did not fit into the merger of Metrovacesa with the Socimi Merlin. Following the integration of the rental assets, the three shareholder banks (Sabadell and Bankia had sold their respective stakes years earlier) have spent the last six months fleshing out the company known as Metrovacesa Promoción y Suelo.

To this end, the heads of the entities and the property developer itself have been working for the last six months to choose from the banks’ balance sheets the ideal plots of land for development. In the end, land worth €1,108 million will be transferred from Santander, BBVA and Popular, to create a portfolio (…) with a land surface area of 6 million m2, on which more than 40,000 homes will be constructed.

“Commentators wondered whether this would be a garbage dump for the banks, but that has not been the case. Metrovacesa has had access to the banks’ portfolios and we have chosen the best plots of land for our shareholders”, highlighted Jorge Pérez de Leza.

“We ruled out more than 50% of the assets that we were offered. It has been a two-way process: approximately 10% of the assets have not been transferred to our company because the banks considered that they could achieve better prices for them on their own”, said Jorge Perez de Leza, CEO at Metrovacesa.

Of the €1,108 million total, Santander has contributed €574 million, BBVA €431 million and Popular €102 million. The contributions have not been made in proportion to the banks’ respective shareholdings, but rather according to the selection criteria of the assets.

Following the capital increase, Santander has decreased its stake to 61.3%, BBVA, by contrast, has increased its shareholding by 10% to 29.6%, whilst Popular retains the same stake (9.2%).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

225