Tag: AM Locales

AM Locales Socimi Buys 2 Assets In Sevilla For €6.4M

9 October 2017 – Eje Prime

AM Locales has taken its first steps since debuting on the stock market. The Socimi has just carried out its first purchases since it started to trade on the Alternative Investment Market (MAB) in July. The company, which has invested €6.4 million in two assets, has also undertaken a restructuring of its bank financing, through which it will also allocate €23 million to new acquisitions over the next five years, according to a statement issued by the company.

The Socimi has recently acquired two properties in Sevilla, located at number 3 Calle San Eloy and number 4 Calle O’Donnell. Both buildings have been allocated for residential and commercial use and have a combined surface area of approximately 702 m2. AM Locates will undertake work to adapt and renovate the properties to optimise their rental potential.

The group has also recently proceeded to restructure the company’s bank financing, repaying 100% of its existing mortgage debt and short-term bank financing, which had amounted to €30 million.

The new loan, signed with Banco Santander, has a ten-year term and amounts to €53 million in total, split into two tranches. The first, amounting to €29 million, will be fully available to amortise debt, whilst the second, amounting to €24 million (…) will serve to repay the rest of the debt.

The group will, therefore, have financing amounting to €23 million with which to make possible acquisitions of new assets over the next five years. According to the group, “the mortgage guarantee is covered by company assets worth €106 million”.

AM Locales is a real estate investment company that seems to accumulate real estate assets that generate stable long-term rental income. It specialises exclusively in investing in commercial premises of all kinds: high-street premises, retail parks, shopping centres and stand-alone commercial sites with car parks.

The company specialises in managing investments and owning assets, as well as in searching for and managing tenants and the eventual divestment and rotation of properties. The company currently owns a portfolio of 40 properties, with a combined surface area of more than 40,000 m2, located in Madrid, Sevilla, Córdoba, Santander, Zaragoza and Ciudad Real.

The Socimi began its activity in 1990 and since then, has undertaken several real estate acquisitions in Spain. In July of this year,  the company joined the MAB, advised by Armabex and with BNP Paribas as the liquidity provider (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

MAB Introduces Tougher Entry Rules For New Socimis

31 July 2017 – Expansión

In August, an amendment to the regulations governing the Alternative Investment Market will enter into force, which has led to a wave of Socimi debuts on the stock market in July to circumvent the new requirements.

Six new Socimis debuted on the stock market in July, an unusually high level of activity compared to previous months. The reason is that on 1 August the new circular published by the Alternative Investment Market (MAB) will enter into force. It introduces changes for debuting on the stock market and will affect all companies wanting to list from next month (August) onwards, in particular, Socimis. The amendment sees a toughening up of the conditions to debut on the stock market, given that it imposes some very demanding requirements for minority shareholders.

The change is very specific: “At the time of listing, companies must have minority investors owning shares that are worth less than €2 million or 25% of the company’s share capital”, explained José Luis Palao, Partner of the Mercantile Department at Garrigues. Minority shareholders are considered to be those that hold less than 5% of the share capital. Until now, the regulations allowed companies a grace period of one year to fulfil this requirement.

Manuel López, Partner of Financial Regulatory Law at Ashurst, considers that some Socimis have formed closed-end funds of sorts that have no interest in allowing access to minority shareholders. The exception to the regulations that existed benefitted this type of company in particular, as they enjoyed additional time to adapt themselves.

In this sense, López understands that the regulations are reasonable and reflect what the Socimis are designed to be – entities with the vocation to expand and attract new investors, aimed at boosting the real estate sector. His colleague, Ismael Fernández Antón, Partner of Real Estate Law at the same firm, considers that “the legislation has not become less flexible, but rather more coherent”.

Although Circular 1/2017 does not explain the reasons for the change, the experts agree that the market for Socimis has reached maturity and does not require any further encouragement. The MAB was prudent at the beginning, offering these companies a certain amount of freedom to promote their growth. Fernández Antón says that “this measure was always going to have a sell-by date”, given that the Socimis already represent an attractive vehicle for real estate investment in Spain. Moreover, the modification represents a guarantee to “limit the desire to use them as a platform for pure fiscal optimisation”, says López.

The change only affects companies that start trading from August, in such a way that those that have debuted recently still benefit from the exception. This has meant that, in the last month, the rate of Socimi debuts on the stock market has multiplied. Those who have acted quickly can enjoy a period of one year to fulfil this requirement regarding the diffusion of shareholders.

Although almost 40 Socimis trade on the stock market, only five are listed on the Main Exchange and only two of those form part of the Ibex 35: Merlin Properties and Colonial. Within the last few days, the entities Numulae, Bay Hotels & Leisure and AM Locales have all debuted on the MAB.

Original story: Expansión (by Jesús de las Casas)

Translation: Carmel Drake