The Grifols Family Joins Forces with Corp Promotor to Create the Largest Rental Home Group

8 January 2019 – El Confidencial

After two small ventures in the sector, the Grifols family is entering the real estate sector in a big way. And it is doing so to create the largest rental home developer in Spain. Through the company Scranton, which is controlled by the Grifols family and a group of former directors from the pharmaceutical company, they are joining forces with the Catalan property developer Corp Promotors to constitute a group that is going to build 2,500 rental homes in the Barcelona area over three years, according to sources in the real estate sector familiar with the group’s plans, which are expected to involve an investment of €230 million in total.

This corporate alliance is being carried out by the company Scranton and does not involve the Grifols as a company, which has been left out of the operation. But the success of Grifols has been impacting its shareholders for a long time now. The Dutch firm Scranton, owner of 8.67% of Grifols, is mobilising investments in other sectors using the profits obtained by the company that bears the family name.

Spokespeople from Corp declined to comment on the matter. But other financial sources familiar with the project explain that Scranton and Corp are going to create a joint venture company, in which Scranton will hold 66% and Corp will own 34%. Corp will provide land, including assets such as plots on Rambla Guipúzcoa, Bonaplata and Can Batlló II, next to Gran Vía, all in the Catalan capital. And the Grifols will provide the funds to build on that land. Sources in the real estate sector indicate that half of those 2,500 homes will be constructed in the city of Barcelona and the remainder will be built in nearby cities such as on the Torreblanca plots in Sant Just Desvern and in towns such as L’Hospitalet, Badalona and Terrassa, for example.

Corp Promotors was created by two partners who left a nightclub business in Mataró to enter the real estate sector a decade ago, at the height of the real estate crisis, when almost all of the property developers in Barcelona had abandoned their activity after running out of bank credit. Those two partners are Pedro Molina Porras and Pau Castro Sáez. According to the consolidated accounts of the group deposited at the Mercantile Registry, Corp Promotors recorded revenues of €99.8 million in 2017 and profits of more than €7 million. The book value of the group’s plots are worth €209 million but not all of them will be involved in the operation with the Grifols.

The Grifols and its partners have detected a housing emergency in Barcelona, with an alarming lack of developments and they have entered the market in search of profitability at a time when investors have surplus funds, but there are insufficient assets (…).

New player

Through its alliance with Corp, the Grifols are aspiring to become one of the major players in the Spanish real estate sector. According to the business plan prepared by the partners, once the new company is operating at full capacity, in three years time, it could be worth €1 billion and with rental assets that will convert it into a kind of high yield bond for investors.

That will be possible because Corp is one of the largest owners of land at the moment in the Barcelona area. But with so many projects underway, the group is very indebted. Its accounts reflected debts of €142 million at the end of 2017, twice the figure of a year earlier. Corp’s shareholders have been trying to sell the property developer, in whole or in part, for a year, according to sources in the real estate sector. Now, with the new partner, they can forget those plans and enter another phase of their corporate life (…).

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

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