Ways to Invest in Property

31/03/2014 – Expansion

 Real estate sector raises after knock-off of the recession and property opportunities flourish again. This is proved by two recent listings (Lar España and Hispania Activos) and a possible entrance to the stock market of Solvia. Last year, two other Socimis (Spanish REIT companies) debiuted on the MAB (the Alternative Stock Market): Promorent and Entrecampos.

First Steps

An expert from Profim, José María Luna, claims that investing in a Socimi is not the best idea for a retail investor due to the fact that present listed trusts spend great majority of their revenues on creating their property portfolios. (…).

 Size

(…) Lar and Hispania are said to be worlds apart. The first manages €418 million and has appreciated by 4.5% since its flotation on 5th March.  Pimco bought 12.5% of its stake. The Socimi targets mostly at premises and shopping centers, while Hispania vies for residential assets and hotels.

Hispania has got €527 million capital and has advanced by 5.4% since becoming listed on 14th March. The company is administered by Azora, (…) and held by illustrous George Soros and Paul Paulson.

On the other hand, Lar is legally obliged to pay dividends, while Hispania is free from this charge. (…).

The last funds

Except for the Socimis, there are two funds that survived the recession (before, there existed 12): Ahorro Corporación Patrimonio Inmobiliario and Santander Banif Inmobiliario. (…).

Equity funds

Another option is to invest in companies listed on the stock market, such as Colonial or Realia. However, Ignacio Romero from Banco Sabadell warns about the two firms. “Their balance restructuring has not concluded yet, deleveraging rate remains high, although they head in the right direction.”

The high indebtness underlines security volatility. For example, Colonial has got a 70% rate of debt juxtaposed with net asset value. An ideal rate should balance between 40%-50%. (…).

 

 

Original article: Expansión (C. Sekulits)

Translation: AURA REE

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