Correos to Set Up Real Estate Division to Generate Cash from Property Holdings

11 December 2019 – Spain’s Correos (post office) is looking to set up a real estate division to lease or sell many of the properties it owns in the most central areas of the country’s provincial capitals. So far, the firm has only reported income of two million euros on the properties. The new plan is a part of Juan Manuel Serrano’s new strategic plan for Correos. Serrano, the president of the firm, wants to generate more cash using the company’s real estate portfolio.  

Original Story: Idealista

Adaptation/Translation: Richard D. K. Turner

Testa’s Sales Soar But Profits Fall Due to Extraordinary Expenses

7 September 2018 – Expansión

Testa – the residential rental Socimi – has closed the first quarter of the year with a net profit of €8.94 million, down by 81% YoY, due to extraordinary expenses, such as the €107 million it paid to Merlin for the cancellation of management contracts. Excluding those extraordinary items, and others such as variations in asset values, the funds generated from operations (FFO) – equivalent to the firm’s operating cash flow or the recurring profit – increased by 60% to €19.58 million.

In terms of gross revenues from rental income, the company generated €36.98 million, which represented an increase of 69% with respect to the same period as last year. That increase was due to an improvement in the occupancy rate, growth in the number of homes in the portfolio and an improvement in annualised rents (GRI). On a like-for-like basis, revenues grew by 9%. Net rental income, after deducting direct operating costs, amounted to €28.47 million, up by 75%.

Testa Residencial, which had initially scheduled its stock market debut for June, decided to delay its listing plans for the main stock exchange and debut on the Alternative Investment Market (MAB) instead. The company, in which Santander (36.9%), BBVA (25.2%), Acciona (20%) and Merlin Properties (17%) all hold stakes, owns 10,615 homes with a gross asset value (GAV) of €2.637 billion. Moreover, it recently agreed the purchase of a group of 549 rental homes in the province of Madrid for €66.8 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Neinor Recorded Losses of €8.2M In Q1

28 April 2017 – Fianzas

The real estate company Neinor Homes recorded losses of €8.2 million during the first quarter of the year, according to a statement filed with Spain’s National Securities and Exchange Commission (CNMV).

Neinor, which debuted on the stock market on 29 March 2017, is the former real estate arm of the Basque bank Kutxabank, which was acquired by Lone Star; that fund that is still the entity’s main shareholders with 39.5% of its share capital.

The real estate company recorded revenues of €72 million during the first quarter and a gross margin of €10.8 million.

The firm’s debt amounted to €314 million, the same as last year, although the company highlighted the strong generation of cash flow – €106 million – which reduced its net debt balance to €208 million, i.e. 28% lower than the figure last year (€291 million).

That left the ratio between net debt and net equity at 29%, compared with 46% last year. (…).

Original story: Fianzas

Translation: Carmel Drake

Deutsche Bank’s Socimi To Buy Alcalá Magna Shopping Centre

23 January 2017 – Cinco Días

The Socimi Trajano, managed by Deutsche Bank, is finalising what will be its largest purchase since its creation in 2015. It is planning to acquire the Alcalá Magna shopping centre (Alcalá de Henares, Madrid) for €100 million.

Deutsche Bank is investing in Spain again and in a shopping centre once more. Whilst last year, it broke records through its vehicle Deutsche Asset Management’s purchase of  Diagonal Mar in Barcelona for €493 million, now it is planning to close its Spanish Socimi Trajano’s largest operation to date, by acquiring Alcalá Magna for around €100 million.

This shopping centre in Alcalá de Henares is currently owned by the Spanish fund Incus Capital, whose shareholders include Estanislao Carvajal, Álvaro Rivera and Alejandro Moya. The investment vehicle has assets amounting to €600 million in its portfolio and it spent €200 million on a dozen operations in 2016. In turn, Incus acquired Alcalá Magna from CBRE Global Investors two years ago.

Alcalá Magna was inaugurated in 2007, has a gross leasable area of 34,165m2 and employs around 500 people. It has 1,265 parking spaces and 94 stores, including H&M, Zara, C&A, Sfera, Cortefiel and a Mercadona supermarket. Moreover, almost 25% of its space is used for leisure and restaurant purposes.

For Trajano, the Socimi managed by Deutsche Bank, this will be its largest acquisition. Last October, the company successfully completed a €47 million capital increase “to be able to undertake additional investments amounting to between €95 million and €100 million”, according to reports by the company in a statement.

The company’s investment strategy focuses on: offices located in peripheral areas of Madrid and Barcelona and in prime areas of other cities; shopping centres that are in leadership positions and that generate recurrent cash flow; as well as logistics parks, primarily in Madrid, Barcelona, País Vasco and Valencia.

Trajano already manages €181 million in four assets, with a total managed surface area of 117,000 m2. It closed its last transaction at the end of last year, with the purchase of four logistics warehouses in Zaragoza for €42.9 million.

Original story: Cinco Días (by Alfonso Simón Ruiz and Pablo Martín Simón)

Translation: Carmel Drake

Al Breck’s Socimi Debuts On The MAB With 300 Rental Homes

30 November 2016 – Cuatro.com

The Socimi RREF II Al Breck will debut on the MAB today (Wednesday 30 November) at a price of €5.40 per share.

The fund Al Breck will debut its new Socimi on the Alternative Investment Market (MAB) today, Wednesday 30 November. The Socimi was constituted with a stock of around 300 rental homes, located in the centre of Madrid. The fund acquired the properties from the Spanish fund Segurfondo Investion in December 2014.

The firm, known as RREF II Al Breck Socimi, will debut on the stock market at a price of €5.40 per share, which represents a company valuation of €28.8 million, according to the BME.

Specifically, the new Socimi owns a stock of 293 homes located in the centre of Madrid (in the following neighbourhoods: Centro, Salamanca, Chamberí and Chueca), as well as in La Moraleja (Alcobendas) and in towns close to Alcobendas and Torrejón de Ardoz. It also owns twelve retail premises and one office.

According to the prospectus for the IPO, the market value of this portfolio of assets, calculated by an independent firm, amounts to €110.52 million.

On the other side, the company’s debt amounts to €70.03 million, and comprises a participative loan granted by the parent fund, i.e. a liability equivalent to 63% of the value of the portfolio. In addition, all of the homes are mortgaged in favour of Banco de Sabadell, the entity that financed their acquisition.

The Socimi will debut on the stock market with a business plan that involves generating value from its portfolio, in other words, forecasts selling all of the homes within a five-year period, which will end in December 2020.

Aggressive strategy

Specifically, the plan involves investing in improvements in the homes “to increase returns and improve occupancy rates to stable levels, implementing an aggressive rental strategy that includes, where necessary, lowering rents and making concessions to tenants to improve their cash flows”.

Subsequently, “once the occupancy rates have increased, we will ensure they remain stable and start to progressively increase rental income, in accordance with the improvements made at the properties and market prices”.

Finally, the Socimi expects “to optimise the value of the portfolio by selling the assets either individually or in batches, when demand and price make such a decision worthwhile and only after the minimum holding period of three years (applicable to all Socimis) has been exceeded”, according to the prospectus.

Original story: Cuatro.com

Translation: Carmel Drake

Axiare May Veto Colonial’s Purchase Of Its Share Capital

25 October 2016 – Cinco Días

The Board of Directors of Axiare Patrimonio has submitted a relevant fact to the National Securities and Exchange Commission (CNMV) in which it states that it has delegated to its CEO “the authority to select and engage the investment banks and legal advisors deemed necessary to analyse and study the possible effects of the recent entry of Inmobiliaria Colonial into its share capital”.

Colonial announced the acquisition of a 15.09% stake in Axiare on 17 October, as part of its strategy to strengthen its position in the area of rental properties in Madrid. It paid €135 million for its stake in the Socimi, which manages assets amounting to €1,050 million and which is obliged to distribute dividends each year. Those dividends will represents a steady cash flow for the Catalan company.

Original story: Cinco Días

Translation: Carmel Drake