Reale Seguros Reorganises its Properties to Obtain Higher Returns

15 October 2018 – Expansión

Reale Seguros is reorganising its real estate investments with the aim of achieving higher returns.

The insurance company, the Spanish subsidiary of the Italian firm Reale, has removed from its balance sheet properties with a combined market value of €67 million, which it has transferred to Igarsa, a real estate company belonging to the Reale group, under the formula of a capital increase.

The properties are not linked through provisions to the activity of Reale Seguros. The main asset is located on Vía Augusta in Barcelona and is occupied by Deutsche Bank as the tenant. The package also includes smaller offices, which Reale Seguros could divest.

The assets contributed by the insurance company to Igarsa will join those already owned by that company, with a market value of €80 million, says José Ramón López, Director General of Resources and Media at Reale Seguros. Its main assets are two properties located on Paseo de la Castellana and Paseo de Recoletos in Madrid, which are leased to Condé Nast, the editor of Vogue, and Garrigues, respectively.

The relocation of the real estate assets of Reale Seguros is the starting point for starting to apply an active management of these properties with purchases and sales depending on the opportunities in the market.

The divestments are expected to focus on the smaller offices and in terms of acquisitions, “we are looking at alternatives, although we do not have anything concrete on the table at the moment”, said López.

To move forward with this project, the insurance firm has signed an agreement with the real estate arm of the group in Italy, which has assets under management amounting to €1.5 billion and “which will help us to undertake an industrial management of our portfolio, with the possibility of selling assets to funds as well as looking for opportunities”, said the director of Reale Seguros.

Igarsa, which is headquartered in Madrid, is controlled (95%) by the Italian firm Mutua Reale, whilst the Spanish firm Reale Seguros owns the remaining 5% stake.

The properties linked to the commitments of Reale Seguros remain on the company’s balance sheet. They include its headquarters in Madrid, located on Calle Príncipe de Vergara, a building that was purchased from Sabadell.

Reale recorded premiums of €456 million during the first half of 2018, up by 2.5% compared to the same period in 2017.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake

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