16 November 2015 – Expansión
Mandate / The Socimi owns 775 branches that it acquired from the bank chaired by Ana Botín under a ‘sale and leaseback’ agreement.
Uro Property, the Socimi that owns one third of Santander’s branch network, is looking for new tenants. The company has engaged BNP Paribas Real Estate to sell or re-let 40 branches released by the entity chaired by Ana Botín.
The bank’s exit from these branches is a reflection of its strategy to gradually reduce its installed capacity – a strategy that the whole sector is undertaking – and forms part of the contract between the entity and Uro Property. Under this agreement, Santander may exit between 4 and 5 branches per year. That figure has been increased for 2015 following the refinancing carried out by the Socimi during the summer.
Uro is the successor company of Samos, which purchased 1,152 offices from Santander in 2007 under a sale & lease back arrangement for €2,040 million. The entity’s high debt level caused the creditor bank to capitalise come of its bonds in 2014, with Santander, Atisha (the former Sun Group), CaixaBank, Phoenix Life (formerly Pearl) and BNP taking over control.
At the time, the entity made a commitment to list on the stock exchange, which it did last March, debuting on the Alternative Investment Market (‘Mercado Alternativo Bursátil’ or MAB). It began life by listing at €100/per share and after distributing a dividend of €59/per share, closed trading on Friday at €57/share. Excluding the payment to its shareholders, the company’s share price has increased by 13% since its debut.
Uro sold 381 of the 1,152 branches it acquired initially to Axa Real Estate for around €300 million. They had a gross leasable surface area of 90,000 m2.
Following that operation, Uro now owns around 775 branches, for which it receives annual rental income of just over €100 million.
Now that 40 branches have been released by Santander, Uro Property faces the challenge of looking for new business solutions for the first time. Its priority is to sell the branches one by one, maximising the price. Although by quantity, these branches represent 5% of the total portfolio, they are worth just €20 million, which represents just 1% of the €1,800 million appraisal value of the Socimi’s properties.
These 40 branches have a combined surface area of 9,500 m2 and 50% of them (by surface area) are located in Madrid and Barcelona, whilst the remaining 50% are distributed across the rest of Spain. The properties will be sold empty and may be converted into shops, service outlets or used for other commercial purposes.
In addition to the management of these properties, the other major challenge that Uro Property will face in the coming months is the possible renewal of its shareholder structure. The Socimi’s investors have pledged to continue as shareholders for one year after the company’s debut on the stock exchange; that period will expire in March. Subsequently, one or more of the original investors may exit the company, such as Atisha and Phoenix Life, or other entities. In addition to Santander, CaixaBank and BNP Paribas, other shareholders include Burlington, Société Générale and Stichting Z+S.
Another key milestone for the company in recent months was the refinancing of its debt, which it achieved through an income securitisation amounting to €1,345 million, with a term of between 22 and 24 years. Uro Property agreed a fixed interest rate of 3.348% with investors, whereby reducing its financing cost from 6%, including interest rate derivatives.
The company is led by Simon Blaxland as the CEO and is chaired by Carlos Martínez Campos, the former number one at Barclays in Spain.
Original story: Expansión (by J. Zuloaga)
Translation: Carmel Drake