Socimis Raise A Further €2,600M As They Lead RE Purchases

7 August 2015 – Expansión

Merlin Properties, Axiare, Hispania and Lar España have now spent all of the money they raised through their IPOs last year, after investing almost €5,000 million in assets between them.

The Socimis are gaining financial muscle as they continue to lead the new property boom. Merlin Properties, Axiare, Hispania and Lar España, the four large Socimis, have increased their share capital by almost €2,600 million in recent months, attracting funding from several major investors.

The companies, which have invested almost €5,000 million in the acquisition of all kinds of assets, have already spent all of the money they raised from their debuts on the stock exchange last year. The Socimis are the stars of the recent significant increase in investment in real estate assets, which reached a record figure of €5,264 million during the first six months of 2015.

The first company to list on the market was Hispania. The real estate company controlled by Azora requested a capital increase at its shareholders’ meeting in December to finance its purchase of Realia. At the time, Hispania planned an initial round to raise funds from its shareholders, but that transaction was foiled after the Socimi’s bid for Realia was exceeded by a counter-bid from Carlos Slim. In April, Hispania proposed a further extension of up to 50% of its share capital in order to purchase new properties. It achieved its objective of raising €337 million in just three hours.

Hispania has made investments worth €1,107 million, since its debut on the stock exchange in March 2014, including Project Bay, the hotel Socimi that it is developing jointly with Barceló.

A few months ago, Merlin Properties, the largest Socimi on the Spanish stock exchange, raised €613.8 million. Merlin, which already had a portfolio worth more than €1,250 million at that stage, was planning to continue with its acquisition of properties, mainly offices and retail assets. Nevertheless, in the midst of this strategy, the Socimi decided to embark on an ambitious corporate transaction: the purchase Testa, the real estate arm of Sacyr. The acquisition turned Merlin into the leader of the office business in Spain, as it took ownership of a portfolio worth €3,231 million, containing assets such as Torre Sacyr in Madrid.

In the end, the transaction closed for almost €2,000 million, of which €1,793 million was paid to the construction company and €183 million was injected into Testa as cash. Merlin has recently completed a new capital increase amounting to €1,034 million to finance this purchase. The Socimi is funding the transaction through its own shareholders, which have already expressed their support for the transaction, according to sources close to the company.

The other two Socimis on the Stock Exchange, Axiare and Lar España, also announced their own capital increases, in June and July, respectively. (…).

Other capital increases

The Socimis are not the only entities that are taking advantage of the international funds and management companies to invest in the Spanish real estate sector. So too are the traditional companies in the sector.

Quabit, the real estate company controlled by the construction group Rayet announced its own capital increase in June amounting to €70 million with the aim of raising funds to start new projects.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake