9 June 2017 – Eje Prime
The Socimi Vitruvio is adding new assets to its portfolio in the midst of its own corporate changes. The company has just acquired a hotel in Madrid, for which it has paid €12 million. This acquisition is going ahead after the General Shareholders’ Meeting voted on Tuesday to approve a €25 million capital increase and the company’s merger with Consulnor Patrimonio Inmobiliario (CPI), a vehicle managed by Banca March.
On 25 May, Vitruvio signed an “exclusive and binding” agreement to acquire a building dedicated to hotel use in Madrid for between €11 million and €12 million. Although the company did not want to provide more details about the operation, it has explained that the estimated annual rent will be more than €650,000, “which represents a net yield of more than 5.55%”. (…).
“This (capital) increase mechanism is essential for Vitruvio’s philosophy”, say sources at the company – “All of the Socimi’s capital increases are undertaken once investment opportunities have been identified, never before”. “It is a mechanism to prevent the pressure to invest money leading to poor purchase operations. Moreover, it also serves to avoid the dividends of the existing shareholders from being diluted if they decide not to invest in the new acquisitions”, they add.
Another point approved at the General Shareholders’ Meeting was the company’s merger with Consulnor Patrimonio Inmobiliario. “It was approved with 81% of the votes going in favour of the resolution and none against”, explain the group’s sources; “As such Vitruvio has received the green light to absorb CPI as part of its growth strategy”.
In addition, Vitruvio’s Board will be expanded to make way for the participation of four representatives of the Basque group, and other high-profile shareholders will participate in Vitruvio’s advisory committee, although for the time being, the company has not revealed any details of the names of the directors that will be incorporated into the Group’s most senior management body.
The resultant firm, which will retain the name Vitruvio, will manage a portfolio of assets comprising office buildings, homes and retail premises located in Madrid, País Vasco and Barcelona. By virtue of the operation, Vitruvio will absorb Consulnor Patrimonio Inmobiliario through a non-monetary capital increase.
The merger will allow the company to double in size, given that at the end of June 2016, its portfolio was worth €51 million, a figure that will increase to around €90 million following the integration of Consulnor Patrimonio Inmobiliario. Moreover, following the capital increase, which will be undertaken within the next few months, the resultant company will own a portfolio of assets worth €133 million. (…).
Original story: Eje Prime
Translation: Carmel Drake