11 June 2018 – La Información
“Investors are asking us for a larger portfolio, more geographical diversification and, above all, more liquidity”. The CEO of Témpore Properties – the Socimi launched by the bad bank to generate returns from its portfolio of residential rental assets -, Nicolás Díaz Saldaña, speaking at a recent conference organised by the Stock Exchange of Madrid, linked the success of the project with the acceleration of the milestones established in its strategic plan and reaching the objective of listing on the main stock market – which is planned for 2020 – as soon as possible.
The first step in that direction was taken just a few days ago by the team at Témpore Properties when it exercised “the right to submit the first offer” extended to it by the framework of the relationship signed with Sareb and which gives the Socimi priority when it comes to accessing rental assets that the bad bank wants to put on the market, according to sources at the Socimi speaking to La Información (…). On 24 May, the first window was opened for Témpore to expand its portfolio of assets by resorting to Sareb’s funds and the Socimi did not want to miss out on the opportunity.
Témpore made its stock market debut on 3 April 2018 with a portfolio containing 1,553 residential rental assets, worth €152.7 million in total. Its plans – according to its own IPO prospectus – include the intention to expand its portfolio to almost double the size this year with the addition of 1,000 new residential assets worth €160 million, which Díaz Saldaña’s team – which is very familiar with Sareb’s portfolio – has already cast its eyes over.
The Socimi has two opportunities to do this: now in May or later in November when the second window will open for incorporating assets from the bad bank into its portfolio (the agreement that gives priority over Sareb’s assets to Témpore expects such a window to open every six months over the next three years). The problem in both cases is how to finance the operation. The Socimi has a consolidated portfolio of assets but hardly any available capital. Sareb’s 98.51% stake reflects the value of the assets transferred for the creation of the Socimi and the minority stake is distributed between 24 small investors, who have contributed €2.12 million.
Sareb neither wants to nor could increase its stake in the share capital of the Socimi, which means that the acquisitions of the assets proceeding from the bad bank that Témpore executes will have to be undertaken at market prices and following their valuation by an independent expert: otherwise, the entity will either have to borrow or increase its share capital, or both, which according to the sources consulted is the most viable solution given that the Socimi has self-imposed a restriction on its debt capacity equivalent to 40% of its asset value, which leaves a margin of €80 million through that route.
Díaz Saldaña acknowledges that the lack of liquidity on the MAB is a barrier when it comes to attracting institutional investors, but he also recognises that he doesn’t have any choice but to do this if the Socimi wants to strengthen its portfolio to configure a project capable of debuting on the main stock market. For the time being, he says that he has a list of 40 investors interested in providing the €100 million that the company needs to finance this operation.
According to the sources consulted, Témpore’s team is already analysing the portfolio of assets offered by Sareb, although the real scope of the operation will depend on the Socimi’s capacity to incorporate new investors into its share capital.
Nevertheless, the objective of the operation is very clear: the geographical diversification of the Socimi’s portfolio of assets (…). Currently, 84% of the Socimi’s residential assets – calculated by market value – are concentrated in Madrid and Barcelona.
The priority is to open up the range of possibilities. The sources consulted specify that options are being evaluated in Valencia, Málaga, Sevilla, Alicante, Valladolid and Logroño (…).
Original story: La Información (by Bruno Pérez)
Translation: Carmel Drake