Spain’s Socimis More than Double their Market Capitalisation in 3 Years

9 January 2020 – Expansión

Altogether Spain’s Socimis have a market capitalisation of €28 billion, having seen their value on the stock market soar by 60% in 3 years, according to a report compiled by Gloval Building Value.

The two largest Socimis, Merlin and Colonial, which are both listed on the Ibex, account for more than 40% of that total, with a combined market capitalisation of €12 billion and asset portfolios of €12.4 billion and €11.8 billion, respectively. They are followed by General de Galerías Comerciales (GGC), with a market capitalisation of €3.7 billion; GMP (€1.1 billion); Testa (€850 million) and Castellana Property (€600 million). The latter four all trade on the Alternative Investment Market (MAB).

The specialist real estate companies (Socimis) first began to take off in Spain in 2012 following a legislative change that afforded their shareholders tax benefits. In the last 7 years, more than 80 Socimis have joined the MAB and more still are expected to make their debuts over the coming years.

Just two of the major Socimis have disappeared in that time: Hispania, which was acquired by Blackstone and merged with HI Partners; and Axiare, which was absorbed by Colonial in 2018. Finally, four smaller Socimis have been excluded from trading (Bay, Kingbook, Colón and Autonomy) and one (Promorent) has transferred to the Expanding Companies segment.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

Colonial, Merlin and Lar Rotating Assets Worth €2.5 Billion

20 August 2019

Spain’s largest socimis have all been taking advantage of the benign economic climate to implement a strategy of asset rotation, selling off non-strategic assets to raise funds for further investments. Colonial, Merlin and Lar España have completed more than 2.5 billion euros in divestments over the past two years.

Of the four, Colonial has been most active in this regard. The socimi has sold assets worth approximately €1.5 billion in the last two years, more than half stemming from its acquisition of Axiare. In October 2018, Colonial sold seven office buildings to Tristan Capital Partners and Real IS, as well as a development under construction in Madrid to Grupo Catalana Occidente, for 441 million euros. Of the seven properties sold, five originated with Axiare.

Colonial also recently sold a portfolio of 18 logistics assets, covering an area of 473,000 square meters, to Prologis for an estimated €425 million. What’s more, the socimi sold an office building in Paris for €450 million in mid-2017. The firm is investing the proceeds of some of its sales, allocating €468 million in twelve projects under development in Madrid, Barcelona and Paris, the three markets where the company operates.

Merlin, for its part, sold its 17% stake in Testa to Blackstone last September for €321 million. The firm also sold its portfolio of hotels to Foncière des Regions for €535 million. Lar has also sold €425 million of assets in the last 18 months. Of that, €120 million stemmed from the sale of a logistics portfolio to Blackstone, while another €190 million resulted from the sale of four office buildings in Madrid and Barcelona and some small retail assets.

Original Story: Expansión – Rebeca Arroyo

Adaptation/Translation: Richard D. K. Turner

Prologis, Blackstone & Deutsche Bank Bid For Colonial’s Logistics Portfolio

20 June 2019 – Cinco Días

Inmobiliaria Colonial has chosen the three finalists who have submitted the highest bids for its logistics portfolio and they are: Prologis, the largest owner of warehouses in Europe; Blackstone, the US fund; and Deutsche Bank, through its manager DWS, according to market sources.

Colonial inherited a sizeable logistics portfolio from Axiare following its takeover of that firm last year, but since the Socimi focuses on offices in prime areas of Madrid, Barcelona and Paris, it put the logistics portfolio up for sale a few weeks ago.

The company has received around a dozen offers, from which it has selected three that exceed €400 million. It is planning to close the operation before the summer.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation/Summary: Carmel Drake

Colonial Finalises the Sale of its Logistics Centers Worth €480M

14 June 2019 – La Vanguardia

Colonial is finalising the sale of a portfolio of 15 logistics centres worth €480 million that it inherited from Axiare. The assets span a surface area of 574,462 m2 and are located on the outskirts of Madrid, Barcelona and Sevilla.

The Socimi led by Pere Viñolas hopes to complete their sale within a maximum of two months as it seeks to take advantage of the strong demand for these types of assets thanks to the boom in online commerce.

Colonial’s core portfolio comprises office buildings located in the centres of Madrid, Barcelona and Paris, with a market value of around €11.4 billion. The firm is also working on fourteen new projects located in its three key markets, which have an associated investment of €1.3 billion.

At its recent General Shareholders’ Meeting, Colonial approved the appointment of two new independent directors and ratified the distribution of a dividend amounting to €0.20 gross per share, up by 11% YoY.

Original story: La Vanguardia 

Translation/Summary: Carmel Drake

Socimi Árima Closes €40M Capital Increase (20% Below the Forecast)

4 April 2019 – Europa Press

The Socimi Árima has completed an accelerated capital increase by raising €40 million, which fell 20% below the target of €50 million, according to the firm.

The operation, which targeted qualifying and institutional investors, was participated in by “certain” members of the management team, led by the former CEO of Axiare, José Luis López de Herrera-Oria.

All of them subscribed shares in the company at a price of €10 per share, equivalent to the debut price on the stock market in October, and below the closing price at the end of trading on Thursday (€10.20).

Despite having raised less than expected, López de Herrera-Oria concluded that the operation has been a success.

Original story: Europa Press

Translation/Summary: Carmel Drake

Colonial’s Profits Fell by 23% in 2018 to €525M

26 February 2019 – El Confidencial

Colonial closed 2018 with revenues from rental income of €347 million, up by 23% compared to a year earlier. Nevertheless, the Socimi’s profit decreased by 23% to €525 million, given that in 2017, the firm recorded a gain from the sale of a building in Paris – In & Out – for €445 million and was converted into a Socimi. The buildings contributed by the merger with Axiare generated €56 million, equivalent to 16.1% of the total.

These are Colonial’s first results following the completion of its merger with Axiare, the Socimi over which it launched a €1.45 billion takeover in November 2017, and in a year in which it also increased its stake in the French firm Société Foncière Lyonnaise (SFL).

In a relevant fact sent to the CNMV, the Socimi also announced that it ended the year with assets worth €11.3 billion – distributed across the centres of Paris, Barcelona and Madrid – up by 22%, following the integration of Axiare onto its balance sheet. Excluding the effect of that integration, the increase would have amounted to 8% (…).

“Following an excellent year, we are confident of achieving a very satisfactory performance in the market and of generating rental income of €500 million over the next three or four years”, explained the CEO of Colonial, Pere Viñolas, who added that the company’s recurring profit, after excluding extraordinary items and asset revaluations, amounted to €101 million and represented an increase of 22%.

In operational terms, last year, Colonial signed 103 rental contracts, spanning a total surface area of 175,000 m2, which will generate rental income of €43 million p.a. (…).

In financial terms, at the end of 2018, Colonial recorded net debt of €4.7 billion at the end of 2018, up by 52% with respect to 2017 (€3.1 billion) before the purchase of Axiare. That liability accounts for 39% of the firm’s asset value (…).

Original story: El Confidencial (by E.S.)

Translation: Carmel Drake

Qatari Sovereign Fund Becomes Colonial’s Largest Shareholder

8 November 2018 – Europa Press

Colonial has approved a capital increase at an extraordinary shareholders’ meeting, whereby enabling the Qatari Sovereign Fund to become the Socimi’s largest shareholder since it will see its stake in the company double to 20%.

Qatar is becoming the largest shareholder of the second largest Socimi in Spain, a firm that owns office buildings in Madrid, Barcelona and Paris worth €11 billion, through an agreement reached with Colonial to exchange the shares of its French subsidiary Société Foncière Lyonnaise (SFL).

Specifically, Colonial is going to give Qatar the own shares that it issues during the capital increase and, in exchange, the fund is going to hand over the 22% stake that it holds in SFL.

In this way, Qatar will double its presence in Colonial from its current position of 10% to the aforementioned figure of 20% and will become its largest shareholder. Meanwhile, the real estate firm will increase the controlling stake that it holds in SFL from 59% to 80.74%.

It is an operation worth €718 million, which Colonial is framing in the context of simplifying the group’s shareholder structure and of strengthening its position in SFL and in France, a company and market that it considers to be “strategic”.

The real estate company is tackling this transaction after completing the merger of the Socimi Axiare and at a time when it is immersed in a full growth strategy through investments in purchases and the new build developments.

In the case of Qatar, it is strengthening its position as the largest shareholder of the second largest listed real estate firm in the country, in line with the commitment that many large international funds are making to the Spanish real estate sector. Moreover, it will retain an indirect stake in SFL.

No changes on the board

These shareholder exchanges will not have any impact on the Board of Directors of Colonial, given that the Qatari fund will retain the two seats that it has had on the management board for a while, when it had a larger stake, according to a statement made by the President of the Socimi, Juan José Brugera, after the meeting.

Brugera said that the operation was approved unanimously by all of the shareholders, whereby ruling out any bad feeling on the part of Colonial’s largest shareholder until now, the Mexican group Finaccess, not only for losing its status (as the largest shareholder), but also for seeing its stake diluted from 18% to 16% as a result of the capital increase.

Original story: Europa Press

Translation: Carmel Drake

Héctor Colonques Acquires 4.9% of Árima for €5M

29 October 2018 – Europa Press

Héctor Colonques Moreno (pictured below, centre), the controlling shareholder of Porcelanosa, has acquired a 4.99% stake in Árima, the company constituted by the former CEO of Axiare, José Luis López de Herrera-Oria, which made its stock market debut last week with a public share offering (OPS).

Colonques has acquired half a million shares in the firm, a package worth €5 million based on the share price of €10 that was set for the IPO.

Nevertheless, that stake is currently worth €4.65 million, given that the firm’s shares are trading at around €9.30.

The investment by the co-owner of Porcelanosa follows others made by institutional investors, which are emerging in the days following the firm’s placement in the register of Spain’s National Securities and Exchange Commission (CNMV).

In this way, Bank of Montreal has acquired 9.79% of the share capital of the new Socimi, whilst Morgan Stanley has purchased 9.4% and the fund Pelham Capital another 9.9%.

Árima made its stock market debut last Tuesday, 23 October, after reducing its OPS by one third. It was set at €100 million in the end and its placement period was extended by several days (…).

Original story: Europa Press 

Translation: Carmel Drake

British Fund Pelham Acquires 10% of Árima

25 October 2018 – Eje Prime

Árima has opened the door to British capital. The UK fund Pelham Capital has declared a stake of 9.98% in the new Socimi from Luis López de Herrera-Oria (pictured below), according to a statement filed by the company with Spain’s National Securities and Market Commission (CNMV).

The new real estate vehicle of the former founder and CEO of Axiare (which was taken over by Colonial) has convinced the London-based firm to enter its share capital by acquiring 999,028 shares, worth €9.5 million, on the basis of the real estate firm’s current share price.

After completing its debut on the main stock market, with a dip of 10%, Árima’s share price recorded a slight upturn on the second day of trading, with an increase of 5.56%.

It is expected that, over the coming days, other funds and institutional investors will be revealed that have participated in the €100 million capital increase that Árima launched to complete its stock market debut. Initially, the Socimi had intended to raise up to €300 million, but it lowered its expectations in light of the unstable situation in the markets.

Original story: Eje Prime

Translation: Carmel Drake

S&P Increases Colonial’s Credit Rating to BBB+

18 October 2018 – Expansión

Standard & Poor’s has increased the rating assigned to Colonial from BBB to BBB+ within the investment grade category.

The credit agency has ruled out possible revisions of that rating by assigning a stable outlook for the company.

Colonial managed to increase its rating after reaching an agreement with Qatar, whereby the sovereign fund of that country became the company’s largest shareholder by acquiring 20% of its share capital through an exchange of shares.

By virtue of that operation, the Spanish Socimi consolidated its controlling position in its French subsidiary Société Foncière Lyonnaise (SFL), given that Qatar granted it the 22% stake that it owned in that company, allowing it to increase its share of the capital to 80%, in exchange for shares in the Spanish real estate company proceeding from a non-monetary capital increase.

S&P also reviewed Colonial’s rating upward after the Socimi completed the merger of another Socimi Axiare and closed the sale of a portfolio of offices owned by that company which did not fit with its business strategy.

Original story: Expansión 

Translation: Carmel Drake