Socimis Are The Real Stars Of The RE Sector

14 August 2015 – Cinco Días

The Socimi Merlin Properties now owns a 77% stake in Testa, formerly a subsidiary of the Sacyr group. By the time the integration of the two companies has been completed, scheduled for 2016, the new entity will own assets worth more than €5,000 million, according to a report submitted by Merlin to the CNMV at the time of acquisition. It will then become the largest real estate company in Spain dedicated to the rental of space. (…).

However, Merlin, led by Ismael Clemente, is not the only firm seeking to become the king of the property sector. Hispania tried unsuccessfully to acquire Realia, the real estate company owned by Caja Madrid and FCC, but had to withdraw its takeover bid last July. Only the interest from the tycoon Carlos Slim, who in turn controls FCC, was able to stop the Socimi from completing the transaction.

According to the most recent information submitted to the CNMV, Merlin Properties currently owns properties worth €2,231 million; that figure increases to €5,166 million if we include the assets owned by Testa. Merlin’s market capitalisation has reached €3,406 million. It owns 904 assets, including a portfolio of BBVA’s bank headquarters and the Marineda shopping centre (A Coruña). Through its new subsidiary Testa, for which it will pay €1,793 million, it will acquire assets as iconic as Torre PwC – one of the four skyscrapers at the north of the Paseo de la Castellana in Madrid – and the headquarters of Endesa and L’Oreal.

Hispania, in which the investors George Soros and John Paulson hold a stake, owns properties worth €710 million and has a market capitalisation of €1,175 million. In April, the company completed a capital increase amounting to €337 million. Moreover, the listed company signed an agreement with the Barceló group during H1 2015 to create Bay, the first specialist hotel Socimi. According to reports to the CNMV, Hispania’s portfolio included a total of 1,439 hotel rooms during the first half of 2015. In addition, it has a further 6,097 hotel rooms that it will contribute to the Bay portfolio.

Another one of the large players is the Socimi Lar España Real Estate, which announced a few days ago that it will resume a shopping centre project that is years behind schedule in Sagunto (Valencia). The company, managed by Grupo Lar, has so far acquired property worth more than €852 million, of which €588.7 million relates to the purchase of 12 shopping centres.

Meanwhile, the Socimi Axiare Patrimonio completed a capital increase amounting to €346.6 million in June, with the aim of raising the funds needed to continue with its investment plan, according to a statement by the company, in which Citigroup, Deutsche Bank, Perry Partners and JP Morgan hold a stake (…). Since its debut on the stock market in July 2014, it has closed 18 transactions, where 71% of its portfolio are offices.

Between them, these four large Socimis now own assets worth €7,500 million.

In fact, these Socimis are almost the newcomers to the sector. They have become the leading players in just over a year, since the PP reformed the law that gave rise to their creation in 2013. The Socimis have tax advantages – they do not pay corporation tax – and they are required to pay dividends. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake