Spain’s Top 5 Socimis Have A Combined Market Cap’n Of €12,160M

2 August 2017 – El Confidencial

The Socimis are still proving fashionable. Spain’s listed real estate investment companies are continuing to capture the attention of large investors. And they are not disappointing them. The companies’ results for the first half of this year show that their average profits have risen by 50% YoY.

Colonial (Ibex 35), Axiare, Lar and Hispania are four of the five Socimis listed on the main stock market (another 30 are listed on the Alternative Investment Market (MAB)) that have published their accounts for the first half of 2017. Meanwhile, Merlin, the largest Socimi in Spain, which is also listed on the main stock market, will wait until after the summer to publish its half year accounts (on 22 September).

Since their debut on the stock market, these Socimis have not stopped growing. (…). Hispania has appreciated in value by 66%, followed by Axiare (64%), Merlin (43%) and Lar (6%). “The case of Colonial is not comparable with the others because it already existed as a company. Moreover, it is worth noting that Merlin comes off worse than Hispania in terms of pure value appreciation, but it has distributed the most dividends”, explain sources at Bankinter.

On Monday, Colonial reported that it increased its net profit by 90% compared to the same period last year. Moreover, it is the first Socimi to publish results having been transformed under the new tax regime. The entity chaired by Juan José Bruguera has seen its real estate asset portfolio increase in value by 7%. The portfolio contains office buildings located in the centre of Madrid, Barcelona and Paris (…). The company’s share price rose by 1.4% off the back of the good results, to reach €7.8 per share (…).

Meanwhile, Axiare Patrimonio increased its profits by 36% to €114 million. The asset portfolio of that firm has appreciated to €1,709 million, according to the valuation certificate issued by CBRE Valuation Advisory (…). Currently, Axiare Patrimonio is working to refurbish four of its office buildings in Madrid and Barcelona (with a combined surface area of 49,202 m2) and two logistics projects (for 76,816 m2 in total). (…).

Meanwhile, Lar España has increased its net profits by 50%. (…). The company chaired by José Luis del Valle generated profits amounting to €65 million. (…). Between January and June 2017, Lar acquired the Parque Abadía retail complex in Toledo and 22 retail premises in different locations across Spain.

In the case of Hispania, the Socimi in which the US magnate George Soros holds a stake, the entity reported net profits of €185 million, which represents an increase of 35% with respect to the same period in 2016. (…). The company chaired by Rafael Mirando explained that its half-year results continued to benefit from the positive effect of tourism so far this year.

In terms of the Socimis in the Ibex, analysts at Bankinter are still backing Merlin Properties as their main investment plan, with a “buy” recommendation and a target price of €12.6 per share, representing a potential appreciation of 9.6%. (…).

For Colonial, the analysts maintain their “neutral” recommendation with a target price of €8.1 per share, representing a potential appreciation of 4.8%. (…).

New requirements to debut on the MAB

In July, six new Socimis debuted on the MAB. The reason is that new requirements entered into force on 1 August affecting all companies wanting to debut from this month onwards and in particular, the Socimis (…).

Meanwhile, all eyes are fixed on the Socimi that is being promoted by Sareb (…). It is expected to make its stock market debut before the end of the year, once it has completed all of the procedures required by the MAB.

Sareb has announced that it has already taken the first steps to constitute the new company. It has also engaged several advisors to accompany it through the process, such as Renta 4 (…) and Clifford Chance (…). Although the so-called ‘bad bank’ has not provided details about the assets that will form part of its Socimi, it is understood that a quarter of the 4,600 homes and 820 tertiary assets that it currently rents out could be transferred to this new vehicle, which would represent almost 1,500 properties in total.

Original story: El Confidencial (by Carmen Alba)

Translation: Carmel Drake