Socimis Have Raised €1,700M In Funding In YTD16
11 August 2016 – Expansión
Merlin, Hispania, Grupo Lar and Axiare are increasing their capital and attending the bond market in order to finance new acquisitions, increase their asset portfolios and grow in size.
The large listed real estate investment companies (Socimis) – Merlin, Hispania, Lar España and Axiare – are preparing themselves to gain financial muscle and resume their property purchases. Specifically, so far this year, those Socimis have raised almost €1,700 million between capital increases, financing agreements and bond issues and they are expected to continue to pull on the real estate sector this year.
These four companies, which debuted on the Madrilenian stock exchange between March and July 2014 with €2,560 million to invest, have been the stars of the reactivation of the real estate sector and intend to continue to grow this year. Last year, the Socimis accounted for more than 40% of all real estate investment, with an investment volume of around €5,300 million. To that end, Merlin, Axiare, Hispania and Lar España managed to raise almost €3,000 million on the main market through several capital increases.
So far in 2016, the Socimis have again been very active in terms of raising funds for investment. Specifically, Merlin, which is preparing for its merger with Metrovacesa in a deal that will see it become the largest real estate company in Spain, has opted to go to the bond markets. The company chaired by Ismael Clemente completed a bond issue in April amounting to €850 million, with a maturity of seven years and an annual coupon of 2.225%, payable annual in arrears.
Similarly, in June, the Socimi announced that it had signed a revolving loan (a flexible arrangement) for a maximum amount of €320 million over five years, which will be used for the current investment program that it is undertaking, as well as to finance new acquisitions. (…).
Meanwhile, Hispania, which focuses on the hotel sector above all, completed a capital increase in June amounting to €231 million, through the issue and placing into circulation of 25.8 million new shares, at €8.95 per share (the sum of the nominal value and the issue premium). The company in which George Soros owns a stake, which had used up almost all of its investment capacity, has identified new opportunities worth €1,500 million. (…).
Another of the Socimis listed on the stock market that wants to gain financial muscle to make purchases is Lar España. That company has completed a €147 million capital increase this year, through the issue of 30 million shares at a price of €4.92, in order to be able to undertake new transactions.
In addition, in February, the company signed a loan with a banking syndicate comprising Natixis, Credit Agricole and Santander, amounting to €97 million over a seven year term. This financing was associated with the acquisition of Megapark Barakaldo. (…).
In March, also with the aim of raising funds for investment, Axiare Patrimonio signed a new financing contract with Banco Santander for €14.9 million over two premises in Edificio Velázquez, in Madrid.
In addition, in June, Axiaire reached a financing agreement with Bankinter amounting to €31.2 million, with a five-year term. (…).
Similarly, the company has also signed an agreement with BBVA amounting to €7 million, also with a five-year term. In this case, the financed property is an office building on Calle Josefa Valcárcel (Madrid).
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake