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Metrovacesa Starts Building Offices Again

2 December 2017 – Expansión

Metrovacesa, which is controlled by Santander and BBVA, is looking to generate value from its tertiary (non-residential) portfolio of land and resume the development of offices. The real estate company plans to start construction of 37,000 m2 of space on tertiary land in Madrid and Barcelona.

The company, which has been focused on house building until now, owns more than 1,317,000 m2 of tertiary land, with an approximate value of €684 million. Of the total, it plans to allocate approximately 83% to offices and 10% to hotels.

In this way, in November, Metrovacesa completed the sale of an office under construction to the Socimi Axiare for €29.7 million. That property, located at number 40 Calle Josefa Valcárcel in Madrid, has a leasable area of 8,652m2, spread over seven floors and 261 parking spaces. The firm plans to hand over the asset during the last quarter of 2018.

Metrovacesa’s land does not require any urban planning permissions, and so the plots are very liquid and ready for construction to begin, allowing a quick response to the most important demands that may arise in the market.

“Our team has more than 20 years of experience in these assets, and so we are in a privileged position to maximise value through a sustainable proposal that follows the latest trends and that knows how to take advantage of the current potential in that market”, explained María Ruiz Gallardo, Director of Tertiary Assets at Metrovacesa.

Metrovacesa’s portfolio of tertiary land accounts for 25% of the total value of its assets, which amount to €2.6 billion.

These plots proceed from both the former Metrovacesa, as well as from the contributions made by the shareholder banks.

In this way, the new Metrovacesa emerged following the carve out of the land business from the 100-year old real estate company, which integrated the rest of its activities with Merlin. Metrovacesa’s shareholders decided to give the company a significant boost, with the contribution of new land worth €1.108 billion in June. Santander owns a 70% stake in Metrovacesa, having taken over the 9.21% held by Popular, whilst BBVA controls 29.6%.

Following this injection, which was articulated through a non-monetary capital increase, Metrovacesa now owns a portfolio of buildable land spanning 6 million m2 for the construction of more than 40,000 homes. Its main rivals, Neionr and Aedas, own land with the capacity to build 12,000 and 13,000 homes, respectively.

Metrovacesa, which plans to return to the stock market in February, has convened an extraordinary shareholders meeting for 19 December, when it plans to give the green light to the request for admission to the stock market of the company’s shares.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake