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12 February 2016 – Expansion
The American fund is the favorite to acquire the residential portfolio that Merlin put up for sale in October.
Blackstone is finalising a new real estate transaction in Spain. The US fund is the hot favorite to buy the residential portfolio from Testa, a large lot with 1,519 homes for rent, several commercial premises and over 600 parking places. The portfolio was put up for sale last October, after Socimi Merlin Properties took over the control of Testa. In June, the Socimi chaired by Ismael Clemente agreed with Sacyr the purchase of its then property subsidiary Testa for €1,793 million. The aim of the operation was to create one of the largest companies of the sector with one of the best office portfolios in the market , which included several buildings in la Castellana in Madrid, such as the Four Towers skyscrapers and the headquarters of L’Oréal, Endesa and Indra. After formalizing the purchase, Merlin remarked that the residential assets were not considered strategic, reason why it commissioned CBRE and Deloitte consultants the sale of this lot.
Testa portfolio comprises 11 residential buildings for rent. Of these, five are in Madrid and the sixth in Toledo, with an occupancy rate of nearly 100%. It also includes several social housing in Bentaberri (Guipúzcoa), about thirty commercial premises and 640 parking places. In spite of the interest shown by several international investors, as Patrizia, and Spanish real estate, as Hispania, it has been Blackstone’s the best tender for the lot. According to real estate sources, the fund, which has already notified the operation to its managing board in New York, would be willing to pay a figure close to the 390 million Merlin asked for Testa residential portfolio.
The transaction would be carried out through the provision of assets to a vehicle. It is expected that Blackstone’s committee authorizes the operation in the coming weeks. There is some doubt about the price, which stands at the maximum valuations range. Did the negotiations with the fund finally not succeed , Merlin could resort to the other candidates.
More than 1,500 hosing of Testa would add to some other residential purchases of Blackstone in Spain and which have made it one of the largest owners of rental housing in Spain, with more than 4,000 units. Most of them are managed through the Socimi Fidere, controlled by Blackstone and trading in the Mercado Alternativo Bursatil (MAB). The US fund has been one of the most active investors in the Spanish market after the bubble burst. In addition to homes, Blackstone owns several office buildings in Madrid and Barcelona, occupied by major international companies such as Citibank and Capgemini. Meanwhile, Merlin would get a significant cash injection though this transaction to continue growing through new asset purchases, while completing the integration of Testa in its company. With the 390 million, Socimi would not rush to sell the logistics assets of Testa, another of the lots considered as non-strategic.
Original story: Expansion (by Rocio Ruiz)
Translation: Aura Ree