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Spain’s Socimis Have Properties Worth €1.2bn up for Sale

8 December 2017 – Expansión

Hispania and Lar are looking for buyers for their respective office portfolios, whilst Colonial plans to divest Axiare’s non-strategic assets if its takeover bid goes ahead.

On the verge of starting their fifth year of life, Spain’s large listed real estate investment companies (Socimis) are now working on a new phase. After spending their first few years growing in size, Merlin, Hispania, Lar España, Axiare and Colonial (which was converted into a Socimi in June) are currently focusing on becoming large real estate companies, each specialising in a different asset type.

Hispania

Such is the case of Hispania. The company made its debut on the stock market in March 2014, with the financial backing of investors of the calibre of George Soros and John Paulson. At the time, Hispania proposed a lifespan of six years, spending the first three years focusing on building a diversified portfolio of rental properties and the remaining three years managing and subsequently divesting them.

In February, having completed the first three years, the firm’s shareholders decided to: continue with the initial plan of liquidating the company in 2020, focus on hotel assets for the next few years (in June, it became the largest hotel owner in Spain, with 38 establishments) and divest the rest of its properties. In this way, it began with the individual sale of residential assets, and it launched a block sales process for its offices.

In August, Hispania reached an agreement with the insurance company Swiss Life to sell it the portfolio of offices. Nevertheless, three months later, at the height of the Catalan sovereignty challenge, the Socimi decided to postpone the sale until next year. Now that the negotiations with Swiss Life failed, sources in the sector bet that Hispania will not launch a new block sale but rather will opt to divest the portfolio, worth €500 million in total, building by building. In fact, the Socimi managed by Azora already sold its first property in June, the future headquarters of the law firm Uría, for more than €37 million (around €7,800/m2).

Lar España

Hispania’s offices are going to come onto the market at the same time as a portfolio owned by another large Socimi. Lar España, whose major shareholder is the fund manager Pimco, has hung up the “For sale” sign on the office buildings it owns (three in Madrid and one in Barcelona) for €170 million. In addition, Lar will divest other assets regarded by the company as non-strategic, such as logistics warehouses and some medium-sized spaces, worth another €100 million.

These new divestments come in addition to the €110 million that the Socimi hopes to obtain from the sale of the 44 homes that comprise the luxury residential complex Lagasca 99 (which are being sold for an average price of €14,000/m2).

In total, Lar España expects to generate €380 million, which the Socimi managed by the real estate company Grupo Lar, will use to increase its portfolio of shopping centres.

Axiare

On 13 November, Colonial completed its entry into Axiare’s share capital, started in October 2016, with the launch of a takeover bid for 100% of the company, with the aim of creating a large Socimi specialising in offices, worth almost €10 billion.

The CEO of Colonial has already revealed that he would sell the non-strategic assets worth around €300 million from that portfolio, which spans 1.7 million m2, to finance the takeover of Axiare.

Currently, Axiare’s portfolio comprises more than a dozen industrial assets, worth around €340 million (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake