Acciona Rules Out Socimi Creation & Replaces Walter de Luna As CEO

17 November 2016 – Expansión

Acciona has revised its real estate strategy after spending the last year working on its stock market debut and searching for a partner for its real estate division, which is worth more than €1,000 million.

The rethink has resulted in the departure of Acciona Inmobiliaria’s CEO, Walter de Luna (pictured above), the star recruit from Sareb, who joined the group owned by the Entrecanales family in 2014, with the aim of listing the company on the stock exchange, whereby taking advantage of the recovery in the market.

After 18 months working on a possible IPO and being advised by Morgan Stanley, Acciona has decided to cancel its stock market plans, due to an increase in the uncertainties and volatility surrounding such markets. That same uncertainty also put pay to its plans to list its renewable assets on an overseas stock market, through a yield (high dividend) vehicle in the USA.

The company has now redefined its strategy, which, in principle, sets aside the real estate activity and focuses on development. This change means that its rental portfolio (1,382 homes, 36 premises, two hotels, several office buildings and 155,000 m2 of land) will be moved into the main portfolio, as assets available for sale.

Acciona has just executed one divestment, with the sale to the Socimi Merlin of its 50% stake in the Arturo Soria Plaza shopping centre, for €44 million. Sources in the sector indicate that the construction company chaired by José Manuel Entrecanales is holding conversations with Merlin to sell other assets to the Socimi, such as Urbanizadora el Coto, which other investors have also expressed interest in.

The revenues obtained from the sale of Acciona’s rental assets will be used to invest in new developments. Acciona currently has a stock of around 300 homes, of which around one hundred are located in Mexico and Poland.

In 2015, Acciona carved out its pure property development business from its real estate business. Its rental homes, buildings and land were transferred into a new company called Acciona Real Estate, whose most recent valuation, according to the company, amounted to €630 million. In total, the division is worth €1,200 million.

The real estate company was born with a debt of €199 million. An important part of the subsidiary is Urbanizadora del Coto (rental homes and premises in Madrid), which Acciona purchased from the Cavero family in 2006.

According to the accounts for 2015, the real estate division saw its turnover fall by 45% to €51 million and its EBITDA decrease by €3 million to €6 million, compared with the previous year. Acciona’s share price closed down 1.2% yesterday at €63.80 per share.

Original story: Expansión (by C. Morán and R. Arroyo)

Translation: Carmel Drake

Merlin Buys 50% Of Arturo Soria Plaza Shopping Centre

16 November 2016 – Expansión

Merlin is continuing to make selective purchases following its merger with Metrovacesa. The Socimi, which presented its quarterly results to analysts yesterday, reported a net profit of €255 million during the 9 months to September, compared with losses in €130 million during the same period in 2015 – when it integrated Testa and Obraser. And today, it has announced the purchase of the remaining 50% stake in the Arturo Soria Plaza shopping centre from Acciona, as well as the acquisition of an office building in the same area, for (a combined price of) €44.2 million.

Merlin, which spent almost €30 million last year when it bought half of this shopping centre, located in Madrid, has now acquired the rest of the property a year later. Arturo Soria Plaza, which has a gross leasable area of 6,965 m2, is spread over four floors in total (two floors of shops and another two floors of parking), generates gross annual rental income of €4.5 million and has a 100% occupancy rate.

The firm, which has not consolidated Metrovacesa onto its balance sheet yet, given that the operation was only closed in October, owns assets worth €6,568 million according to the latest accounts. At the end of September, shopping centres accounted for 11.9% of its total asset value, behind offices (35.8%) and high street premises (30.8%).

During his presentation to analysts, Ismael Clemente highlighted Merlin’s presence in the A-1 corridor in Madrid, following its purchase of Adequa for €380 million. The company will complete the purchase of this complex, located in the Las Tablas area, in the northeast of Madrid, in December.

Adequa, which is home to the offices of firms such as Técnicas Reuindas, Renault and Costa Cruceros, has a gross leasable area of approximately 75,000 m2 (currently leased) and a licence to construct another two buildings with an aggregate surface area of almost 45,000 m2, including one 24-storey tower.

In addition, the firm has purchased an office building in Ática (Pozuelo de Alarcón) from Värde. As such, Merlin owns six of the seven buildings in that business park.

With these acquisitions, the company’s real estate portfolio contained 1,013 assets at the end of September, with a gross leasable area of almost 2.5 million m2.

In terms of Merlin’s plans for next year, Clemente explained to analysts that the company is going to analyse several options for its hotel assets, including the sale or spin-off of the business through a similar formula to the one applied in the case of Testa. Merlin’s hotel portfolio has grown considerably as a result of the merger with Metrovacesa.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake