Colonial Pays Its First Dividend In 10 Years

5 July 2016 – Expansión

Colonial will distribute a gross dividend of €0.015 per share to its shareholders today.

Colonial is making dividend distributions again, ten years after it suspended such payments to its shareholders. The real estate company is rewarding its shareholders now that it has completed its recent restructuring and after closing 2015 with a profit of €415 million and a record number of lease contracts.

Colonial will thereby become the first real estate company of those that have managed to overcome the crisis to start paying dividends again, after it also became the first to achieve an investment grade rating from a ratings agency in 2015.

As such, with the recovery of payments to its shareholders, the company has definitively completed the process to clean up, restructure and return to growth that it embarked upon a few years ago and which involved the entry of new shareholders into its capital.

Currently, Colonial’s two largest shareholders are the Qatari sovereign fund, with a 13% stake and the Grupo Villar Mir, with a 9.2% stake, which will thereby receive €6.23 million and €4.43 million in dividends, respectively.

The company’s new third largest shareholder, the Mexican group Finaccess, will receive €4.3 million for the 8% stake that it just purchased in the company in exchange for a batch of assets.

The other high profile shareholders of the real estate company include the Andorran bank MoraBanc, which holds 7%, the Colombian group Santo Domingo (6.8%), the British billionaire Joseph Charles Lewis (5%), the Reig group with a 2.5% stake and several investment funds, which hold between 1.9% and 3% each.

Following the capital increase, which saw the entry of two new shareholders (Finaccess and Reig), and the dividend payment, Colonial is now waiting to carry out another item on the agenda approved at the last General Shareholders’ Meeting: a “reverse share split” of ten shares for one.

The company chaired by Juan José Brugera defines all of these operations within the growth strategy that it is currently undertaking, which has involved expanding the business focus, beyond its three traditional markets (Madrid, Barcelona and Paris) to analyse operations in other European capitals.

Original story: Expansión

Translation: Carmel Drake

Lar Assesses 10 New Deals In Spain Worth €1,000M

22 April 2016 – Expansión

The Socimi Lar España wants to maintain its pace of growth and to that end, it has set its sights on ten real estate operations worth €1,000 million. All of the assets are located in Spain, primarily in the shopping centre segment and, to a lesser extent, in the office and logistics segments, according to comments made yesterday by the Chairman of the Group, José Luis del Valle. He was speaking after the general shareholders’ meeting, at which a six-fold increase in the dividend for 2015 was approved, at €0.201 per share. In total, Lar will disburse €12 million.

Del Valle explained that the company has €200 million to invest, with not need to resort to the bond market or to carry out a capital increase. Currently, Lar España owns 24 real estate assets in ten autonomous regions worth €961 million. Of that figure, €686 million has been allocated to the acquisition of twelve retail spaces; €150 million to the purchase of four office buildings; €70 million to four logistics assets; and €55 million to its residential project on Calle Lagasca 99. Lar’s asset value increased by 5.4% between the Socimi’s launch in March 2014 and the end of 2015.

Miguel Pereda, CEO of Lar España, pointed out that, for the time being, the Socimi is not interested in the hotel segment and clarified that it will be analysing the real estate assets being sold off by El Corte Inglés when that process opens. The retail giant plans to sell up to 200 properties worth €1,000 million.

Original story: Expansión

Translation: Carmel Drake

Meridia Acquires Mercadona Supermarket In Terrassa

20 April 2016 – Aguirre Newman

The fund manager Meridia Capital Partners has acquired a 2,270 m2 supermarket, leased by Mercadona, in the city of Terrassa, in a deal advised by Aguirre Newman.

The purchase has been carried out through its real estate vehicle Meridia II, which now owns a portfolio of more than 20 supermarkets. Through this operation, Meridia seeks to increase its exposure to the retail sector. Mercadona closed 2015 as the leader of the consumer goods distribution sector, with a market share of 22.7% and a net profit of €611 million, up by 12% compared with 2014.

In 2016, Mercadona plans to invest approximately €650 million, which will be allocated mainly to the opening of 60 new stores, the refurbishment of 35 supermarkets, the continued drive for technological change and the on-going construction of its logistics plants in Abrera (Barcelona) and Vitoria-Gasteiz.

Original story: Aguirre Newman

Translation: Carmel Drake

Merlin To Pay Its S/Hs Dividend Of €35M

7 April 2016 – Expansión

Merlin’s General Shareholders’ Meeting has approved the distribution of a dividend on 27 April amounting to €0.1083 per share, of which €0.1026 will be charged to the issue premium and €0.0056 will be the dividend for the year. In total, the shareholders will receive €34.98 million.

Original story: Expansión

Translation: Carmel Drake

Merlin Considers How To Exit Residential Sector In 2016

1 March 2016 – Expansión

On Monday, Merlin Properties presented its results for 2015, its first full year, which closed with a net profit of €49.1 million, slightly lower than the figure it recorded in the previous year (€49.7 million). It also announced a 277% improvement in revenues to €214.5 million, following the consolidation of Testa from the second half of the year onwards.

The acquisition of Testa from Sacyr for €1,794 million involved the incorporation of a residential portfolio, comprising more than 1,519 units spread across eleven buildings. These assets are peripheral for Merlin, which focuses on the office, shopping centre and logistics platform segments.

The President of the Socimi, Ismael Clemente, explained that the objective of the company is to divest that business during 2016 and he indicated that a joint venture is the most likely option.

Clemente revealed that Merlin is working with three investors and explained that this operation, which would result in the departure of 10 people from Merlin’s workforce, would involve designing a co-management structure, as well as exchange equations or contribution calculations.

The residential business accounts for 5% of Merlin’s balance sheet, with a value of around €288 million. “Our maximum priority is to achieve the excellent execution of the operation that we are going to carry out”, said the Director, who ruled out any negative effect on his divestment plans from the political uncertainty.

Regarding the unwinding of its positions in hotel assets, which do not form part of its core business either, Clemente said that the Socimi will act in line with “pragmatic” criteria and in accordance with the performance of the portfolio.

Bond issue

Merlin also announced yesterday that it had obtained an investment grade BBB credit rating from Standard & Poor’s, one notch below the rating for the Kingdom of Spain, which will enable the group to go to the bond market and improve its financial structure.

In this sense, the company is planning a corporate bond issue of between €800 million and €1,000 million, probably in two tranches. The issue, conducted through the parent company, will probably be listed in Luxembourg to reduce its average cost of debt from the current level of 2.4%.

Merlin also announced a distribution to shareholders of, at least, €140 million, which represents a 133% increase with respect to the previous year.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Lar España’s Dividend Soars After Profits Of €44M In 2015

1 March 2016 – Expansión

Lar España generated a net profit of €43.6 million in 2015, which represents a thirteen-fold increase in the figure from the previous year, thanks to growth in revenues from rental assets, which quadrupled to €35.7 million.

At its next shareholders’ meeting, the Socimi will propose the distribution of a €12 million dividend, which represents a payment of €0.201 per share, in other words, six times more than the dividend paid in the previous year. “In 2014, we were one of the few companies in the sector to distribute dividends, having operated for only nine months, and this year we are going to distribute more than a quarter of last year’s profits to our shareholders”, said the President of Lar España, José Luis del Valle (pictured above).

Original story: Expansión (by R.A.)

Translation: Carmel Drake

Bank Revenues From Asset Sales Exceeded €10,000M In 2015

29 February 2016 – Expansión

Last year, Spain’s listed banks recorded revenues of €10,118 million from the sale of assets from their property portfolios. Popular recognised the highest volume of sales with €2,109 million, followed by Santander (€2,070 million) and BBVA (€2,000 million). These three banks accounted for 61% of such revenues. The remaining 39% was spread between Sabadell with €1,902 million, CaixaBank with €1,312 million, Bankia with €465 million and Bankinter with €260 million.

And these entities expect to increase their sales in 2016. (…).

House sales in Spain increased by 11.1% in 2015, thanks to the growth spurt in the second hand market, to reach 354,132 operations, the highest figure since 2011, according to data from the National Institute of Statistics (INE).

Popular stepped on the accelerator during the year, with a 40.3% increase in these revenues, which meant that it exceeded its forecast sales for the year of €2,000 million, by €109 million. If all goes according to plan, then the bank will close this year with sales of €2,800 million, whereby increasing its volume of these operations by another 33%.


Popular groups these types of assets into its real estate arm Aliseda, which it controls 100%. Aliseda Servicios de Gestión Inmobiliaria, in which Popular holds a 49% stake and Värde Partners and Kennedy Wilson control the remaining 51% stake, is responsible for marketing these assets, which current amount to 31,000 units.

Last year, Santander sold 11,423 properties in total, for €2,070 million, according to the entity. The sale of foreclosed assets amounted to €898 million, with a corresponding gross value of €1,375 million. The bank led by Ana Botín controls 100% of Altamira Santander Real Estate, which holds all of its real estate assets. Apollo is responsible for marketing the assets through Altamira Asset Management after Santander sold that entity to the US fund.

By contrast, BBVA retains control over 100% of its distribution process through its subsidiary Anida. The bank recorded revenues of €2,000 million last year from the sale of 21,082 real estate assets. The entity says that these operations were particularly important during the final quarter of 2015, as their returns improved.

CaixaBank recognised €1,312 million from the sale of some of its properties (€1,380 million in 2014) and €765 million from rental income (€1,132 million in 2014). The improvement in the real estate market meant that these transactions mainly took place during the final quarter of the year, with a gain of 2%, although the final balance for the year generated a loss of almost 6%. (…).

Sabadell sold 10,949 properties for €1,902 million, representing an increase of 16% during the year, thanks to the increased interest from investors in the Spanish real estate market, which allowed the entity to reduce its exposure to problem assets more quickly than forecast in its Triple plan.

In this context, the discounts on the gross value of foreclosed assets have been lower, down from 51% in 2014 to 44% last year, said the entity. Sabadell has started 2016 with a boost in this segment, thanks to the sale of 4,500 homes to the fund Blackstone. (…).

Bankia generated revenues of €465 million from these sales, up by 56% compared with 2014. (…). The entity…channels its sales through Haya Real, a wholly owned subsidiary of Cerberus.

Finally, Bankinter sold 2,496 properties, up by 61% compared with 2014, but turnover from those sales fell by 5.3% to €260 million.

Original story: Expansión (by Elisa del Pozo)

Translation: Carmel Drake

Merlin Delays Hotel Portfolio Sale Until June 2016

23 December 2015 – El Economista

Merlin Properties is certain that it wants to divest the hotel portfolio that it inherited from Testa, the former real estate subsidiary of Sacyr, which it acquired in June for €1,800 million, from its balance sheet within five years. Nevertheless, the company expects that it will not begin the sales process until the second half of 2016. The reason for its decision to delay this divestment until June is a question of regulations.

The aim of the Socimi was to use the money from the sale to reduce its indebtedness, which amounted to €2,939 million at the end of the third quarter, and to undertake new investments. The problem is that according to the rules that apply to Socimis, Merlin must allocate at least 80% of its profit from the sale as extraordinary dividend, which does not fit with the company’s plans.

“We are analysing other legal options to avoid this. Our analysis and its implementation will take some time”, explain sources at the group.

One of the possible options includes the launch of a new Socimi that will be dedicated solely to the hotel business; another includes the creation of a company containing all of these assets, which would then be sold and, in that way, the hotels would be sold all together, without the need to allocate 80% of the profits to shareholder remuneration.

According to Fernando Lacedena, CEO of Testa, the Socimi is focusing on the integration of both companies at the moment, “that is our primary objective”.

In addition, Merlin has just completed the refinancing of €1,700 million of Testa’s debt with a group of ten entities and it is preparing itself for a €850 million bond issue.

Sale of Testa Residencial

The Socimi, which has just joined the Ibex 35, has also launched its divestment of Testa Residencial. In this case, the tax considerations do not apply in the same way, since the 1,519 homes and 26 retail premises that it has put up for sale all sit within a separate company.

“The residential business is very ordered within Testa, it all sits within a single entity and therefore, the operation does not involve the movement of any assets or the transfer of any shares”, says Lacadena, who says that “this makes the transaction a lot easier, since it does not involve the partial divestment of some assets to one investor and other assets to another investor”.

The completion of this operation, which could amount to €280 million and is known as Project Crete, was scheduled for this year, however, even though “there has been lots of interest”, Lacadena explains that it may be delayed until the beginning of next year.

The Director explains that the price is not a critical element in this sale, however, like in any process, there are certain details that must be agreed. In this case, the company has an associated debt, which amounts to €100 million and therefore, “we need the financial institutions to be open to changing the ownership of that debt (before we can proceed)”.

Moreover, the sale of Testa Residencial will involve the transfer of the professional team that manages the business. In total, the workforce comprises around 40 people, between the Servicers and the Residential team. In this sense, the Director was keen to highlight that the integration of the two companies will not result in any redundancies.

Original story: El Economista (by Alba Brualla and Javier Mesones)

Translation: Carmel Drake