Tag: dividend

UBS Reveals Aena’s Plans for the Future

12 March 2018 – Cinco Días

The major privatisation of recent times – albeit partial, given that the State still owns a 51% stake – has been an undisputed success. The Spanish airport manager Aena made its debut on the Spanish stock market on 11 February 2015 at €58 per share with a market capitalisation of €5.8 billion. Since then, its share price has soared by almost 200% and the firm is now worth more than €25 billion (around €170 per share).

In Spain, the group manages 46 airports and 2 heliports; it also participates in the management of 12 airports in Mexico, two in Colombia and one in Jamaica, and it controls 51% of London’s Luton airport. It is the number 1 airport manager in the world handling more than 265 million passengers in 2017.

But Aena considers that there are opportunities that it must take advantage of and to this end, it is analysing the creation of a new company to undertake its mergers and acquisitions. Aena would control the new company, but it would not be the majority shareholder. That has been revealed by UBS in a report following meetings with the directors of Aena.

An analyst from the Swiss bank Cristian Nedelcu said that “the new company will probably be consolidated in the capital”. “We consider this as something positive, given that it limits the cash flow and commitments from Aena [allocated to those purposes]”, he added.

UBS revealed another one of Aena’s plans for the medium term. The constitution of a “similar company to manage the real estate business, with the incorporation of specialist managers”, which would also limit the resources that the company chaired by Jaime García Legaz (pictured above) would have to allocate to the segment.

Both initiatives open the door to an increase in Aena’s dividend. UBS considers that with the real estate company and the subsidiary to undertake corporate operations, the company would have scope to increase the percentage of profit that it allocates to remunerating shareholders (also known as the ‘payout’).

Whilst €1 billion in free cash flow is equivalent to €6.5 per share, which is what it will pay out of the profits for 2017, it remains to be seen what the company will do with the €1.6 billion that UBS expects it to make in 2021. “The decisions will be known in the coming months”, said the financial institution.

Aena is planning to market 2.7 million m2 of land in Madrid and 1.8 million m2 of land in Barcelona, as revealed at the presentation of its results on 28 February. In Madrid, of the 921 hectares analysed, 526 hectares are developable and 369 are marketable, whilst in Barcelona, of the 328 hectares analysed, 226 are developable and 180 are marketable.

The company recorded revenues from the real estate arm of €61.1 million last year, which represented 1.2% of its total turnover of €4.0 billion. The aeronautical business accounted for 61.5%; the commercial business, 34.7%; and the international business, the remaining 2.6%.

The group earned €1.2 billion last year, 5.8% more than in 2016, with an EBITDA of €2.5 billion, up by 9.8%, and a margin of 62.5%, compared with 60.8% in 2016, “due to the maintenance of the efficiency achieved despite the operational tension resulting from the increase in traffic”, explained the firm.

Original story: Cinco Días (by Pablo M. Simón)

Translation: Carmel Drake

Aena: Countdown to the Real Estate Megaplan

1 March 2018 – Expansión

Business / Aena is going to market 2.7 million m2 of land in Barajas over 40 years and 1.8 million m2 of land in El Prat over 20 years.

The starting gun has been fired for Aena’s real estate megaplan. The President of the firm, Jaime García-Legaz, confirmed the details of the project yesterday to analysts. It forms one of the pillars of the new strategy that the group is preparing for the period 2018-2021, which will be published within the next few weeks. Aena is going to launch a tender to hire an investment bank to design the process and determine the capex required and the formula to maximise the value. The airport manager, which spent €1.4 million in 2017 on the development of its plans for the project, will kick off in Madrid and Barcelona, where it owns the majority of its plots.

In Barajas (Madrid), it is going to market 2.7 million m2 of land over 40 years for a mixture of uses. According to its estimates, the maximum development potential is 3.6 million m2. Meanwhile, in El Prat (Barcelona), the term will last for 20 years and will span 1.8 million m2 of land, also for various uses, and including the construction of loading and logistics areas. According to the first estimates in the market, the capex associated with this project is going to amount to several hundreds of millions of euros per year.

“Real estate development is one of the main strands of the strategic plan together with the internationalisation of Aena and the dividend policy”, confirmed García-Legaz yesterday. On Tuesday, to coincide with the results announcement, the group announced the distribution of a dividend amounting to €6.50 gross per share, 80% of its profits in 2017, up by 69.7% compared to the previous year. “The Board considered what was appropriate, taking into account the increase in cash generation and the leverage level; and it is applicable to 2017”, he said. And for the future? “The policy will be reviewed with the new roadmap, but the Board’s philosophy involves returning to shareholders all of the free cash flow that is not required for operations overseas or capex over the next few years”, he said. The State is the primary shareholder of Aena with a 51% stake.

The K Factor

Meanwhile, the results for 2017 include a difference amounting to €57.8 million between the maximum annual revenue per passenger set by Dora – the airport framework applicable until 2021 – and actual revenues. That adjustment, known as the K factor, is going to have to be incorporated into the review of the tariffs for 2019. As a result, “the airport charges could be flat” when the forecast was a decrease of 2.2%. This year, Aena forecasts that air traffic is going to continue to rise, with growth of 5.5%.

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake

Merlin Earned €1.1bn in 2017 & Will Pay A Complementary Dividend

28 February 2018 – Expansión

The Socimi in which Santander and BBVA hold stakes doubled its earnings last year to €1.1 billion, compared with €582.6 million the previous year.

The Socimi Merlin Properties closed 2017 with revenues of €484.3 million, up by 34% compared to the previous year. Of that figure, €469.4 million stemmed from gross rental income.

Operating profits grew by 49% to €1.215 billion, whilst recurring EBITDA reached €396.6 million, up by 29% compared to 2016.

At the end of the year, the company owned a portfolio worth €11.254 billion, up by 15% compared to the previous year and 10% larger in terms of comparable surface area. Of that figure, €5.219 billion corresponds to its office portfolio, the value of which grew by 4.1% like for like.

At the end of the year, Merlin had gross financial debt amounting to €5.413 billion, placing its level of indebtedness (LTV) at 43.6%, compared with 45.5% a year ago. The CEO of Merlin, Ismael Clemente, said that he was satisfied with that reduction and assured that his firm would continue working to reduce the liability (…).

For this year, the company has set itself the objective of repositioning its assets, such as the case of Torre Gloriès (Barcelona), whose marketing is forecast to begin during the first half of the year. In the case of new acquisitions, the directors of Merlin indicated that they are going to be “very selective” in their purchases, with the focus placed primarily on Portugal and logistics assets.

Complementary dividend

The real estate investment company has announced an increase in its complementary dividend, payable in May, of 26 cents per share, which will be added to the 20 cents already allocated to the account. In total, shareholder remuneration for this year is going to grow by 15% to reach 46 cents, compared with the 40 cents disbursed in the previous year.

Merlin revealed that for the year ahead, corresponding to the accounts for 2018, it is going to distribute a minimum of €235 million amongst its shareholders, a disbursement that it will pay in full in cash, which will correspond to more than €0.50 per share. This remuneration will be distributed partly as a dividend and partly as a refund of the share premium.

Executive salaries

The real estate company in which Santander and BBVA hold stakes also published the salaries of its main executives. In this way, it was revealed that the CEO, Ismael Clemente, was paid €2.557 million last year, compared to €2.155 million in 2016. Of that figure, €1 million corresponds to his salary, whilst €1.55 million corresponds to his bonus.

Meanwhile, Miguel Ollero, also CEO of Merlin Properties, was paid €2.5 million in 2017, compared to €2.1 million the previous year; meanwhile, the directors Rodrigo Echenique, Francisco Javier García-Carranza and Agustín Vidal did not receive any remuneration whatsoever for their roles on the Socimi’s Board of Directors.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Hispania Puts its €603M Office Portfolio Back on the Market

27 February 2018 – Eje Prime

Hispania has resumed its plan and placed the “for sale” sign up again over its office buildings, worth €603 million. The Socimi, managed by Azora and in which George Soros holds a stake, owns 25 office buildings and one plot of land. The divestment operation was initiated in February 2017 but was suspended in October due to the socio-political situation in Cataluña at that time. Previously, in June, Hispania sold one office building in Madrid for €37.5 million.

The properties for sale span a gross leasable area (GLA) of 153,621 m2 and have an occupancy rate of 87%. The assets are mostly located in Madrid, and the rest are in Barcelona. Companies such as LaLiga, Aegon, Uría and Ilunion have their offices in Hispania’s buildings.

The company will subject the sales process of this portfolio for approval by the General Shareholders’ meeting, which has been convened for 4 April, according to a statement issued by the company to Spain’s National Securities and Exchange Commission (CNMV).

With this operation, which, when it closes, will result in the distribution of almost €2 in extraordinary dividends per share to each shareholder, the Socimi is going to strengthen its strategy of focusing its investments in the hotel segment, where it is the king of the Spanish real estate sector with 46 assets.

Similarly, Hispania is also starting to sell its portfolio of rental homes to individuals, a market that is currently in high demand in Spain.

Original story: Eje Prime

Translation: Carmel Drake

Metrovacesa Will Ask Investors for c. €850M in February Stock Market Debut

27 January 2018 – El Español

The real estate stalwart Metrovacesa is going to return to the stock market on 5 February, as it marks the centenary of its constitution in 1918, albeit with some misgivings.

In particular, concerns have arisen regarding its valuation of almost €3 billion for a company that, as sources at Bankinter say, “is currently in the initial phase of growth” and which has limited forecast revenues for the next few years from the sale of very few apartments.

Moreover, even the company itself acknowledges that it will not be in a position to hand over 5,000 homes per year until 2021 – which will allow it to generate a turnover of more than €1 billion – which means that the €500 million from the sale of land will become its main source of income for the next few years.

Income and dividends will have to wait

Nevertheless, and despite this acknowledgement of an initial shortage in terms of revenues and that no dividend will be distributed until 2020, nobody doubts that institutional investors will be willing to contribute approximately €850 million – equivalent to 30% of the property developer’s share capital – which the two shareholders, Banco Santander and BBVA, will put on the market.

In general, and barring exceptions such as those described by Bankinter, the consensus of the analysts is not worried about the continuation in Metrovacesa’s capital of Santander, with 50% and BBVA with 20% – they represent a valuable guarantee.

The pull of the expansive real estate cycle

Also working in favour of the return of the property developer to the stock market is the expansion of the real estate cycle, which in 2017 led to the stock market debuts of Neinor and Aedas, the first two companies from the sector to list in ten years following the burst of the real estate bubble.

The weight of the opposing positions held by analysts will determine the price at which the shares end up trading; the range has been set at €18 – €19.50. If, like in the case of Aedas, investors put pressure for a debut at the lower end of the range, then the contribution necessary to acquire 30% of Metrovacesa will amount to €819 million. If the placement price comes in at the top end, investors will have to spend almost €890 million.

This range implies a premium over the firm’s net asset value (NAV) of up to 9.6%, lower than that of the recent IPO of Aedas, another real estate company that is languishing on the stock market, below its placement price, after its stock market debut was affected by the Catalan crisis.

Not very significant starting numbers

With what numbers is Metrovacesa returning to the stock market? Not very significant ones, it seems. During the 9 months to 30 September, according to the brochure filed by the real estate company with the National Securities and Exchange Commission (CNMV), the firm’s turnover amounted to €18.88 million, split between €15.62 million from the sale of homes and €3.22 million from the provision of services to third parties. That turnover figure left it a gross margin of almost €4.27 million, after deducting associated costs of €14.62 million.

At the end of the third quarter, Metrovacesa’s stock – land, developments (in progress and completed) – amounted to €1.63 billion. Almost all of that balance was land (…).

The real estate company will make its stock market debut with around 2,300 homes under construction, to hand over between 2018 and 2020, for which it held sales commitments with clients amounting to almost €75 million, according to data as at 30 September 2017 (…).

In theory, the objective is to divest some of its land between 2018 and 2019, worth around €500 million or more if the current demand continues to grow.

To achieve this, Metrovacesa needs to generate value from these plots and turn them into buildable sites. An expensive business, in certain cases, for which the real estate company received a financial injection of €275 million just over a month ago. Unlike Aedas and Neinor, whose plots are ready to be built on immediately, 26% of Metrovacesa’s land portfolio still needs to be urbanised, or, worse, is still classified as non-developable (…).

Original story: El Español (by Juan Carlos Martínez)

Translation: Carmel Drake

Silicius Socimi Acquires Eroski Store in San Sebastián

4 October 2017 – Press Release

Eroski and Silicius Socimi, managed by Mazabi, have signed the sale of a property owned by the supermarket chain on Plaza Arroka, 2 in San Sebastián. The establishment, which operates under the Eroski City brand, will continue its normal activity under a lease arrangement.

“The operation forms part of our business plan, which involves divesting real estate assets to focus on our retail activity”, explained the Director of Property Development and Services at Eroski, Javier España.

The retail store has a surface area of almost 2,000 m2 and is located on the ground floor of a building inside the new San Bartolomé Muinoa urban development (…).

The operation fits within the Socimi’s new growth phase. Silicius plans to invest up to €300 million in these types of assets over the coming months. Currently, the firm owns assets worth €120 million, which generate annual rental income of €6 million (…).

About Silicius

Silicius is a Socimi, managed by Mazabi, specialising in the purchase and active management of rental assets that generate stable long-term rental income for its shareholders to provide them with an annual dividend (…).

About Eroski

Eroski is the largest cooperative distribution group in Spain and is a leading player in the regions of Galicia, País Vasco, Navarra, Cataluña and the Balearic Islands. It has a commercial network of 1,784 establishments, more than 6 million customers and more than 32,000 cooperative partners and employees.

Original story: Press Release

Translation: Carmel Drake

Hispania & Barceló’s Hotel Socimi Will Make Its Stock Market Debut On Monday

21 July 2017 – Expansión

Hispania and Barceló’s hotel Socimi is on the home straight for its stock market debut. Bay Hotels & Leisure – in which Hispania holds a 76% stake and Barceló a 24% stake – will debut on the stock market on Monday after receiving a favourable report from the Alternative Investment Market (MAB)’s Coordination and Incorporation Committee. Taking into consideration the high valuation range of the report prepared by the consultancy firm CBRE, the Socimi’s Board of Directors has set a reference value of €5.29 for each one of its shares, which represents a total company valuation of €494 million. CBRE has considered that the best methodology for valuing the company is the adjusted value of the own funds after tax. This valuation also discounts the ordinary dividend of €3.5 million paid on 10 March 2017.

Holiday hotels

At the end of 2016, the company held 21 assets with a net accounting value of €790 million. Specifically, 19 hotels worth €756 million, as well as two shopping centres and the concession for a marina worth €34 million. So far this year, the company has purchased the Hotel Selomar in Benidorm (245 rooms) for €15.6 million, the Hotel Fergus Tobago in Palmanova (275 rooms) for €20.2 million and the Armadores de Puerto Rico company, which owns the land adjacent to Hotel Barceló Oasis Lanzarote, for €6.2 million.

In this way, the company currently owns 21 hotels and a total of 7,423 rooms located in established tourist areas that receive high volumes of foreign tourists. Specifically, 62% of the rooms are located in the Canary Islands, 30% in the Balearic Islands and the remaining 8% in Andalucía.

The hotels owned by Bay are leased to Grupo Barceló under a series of contracts with an initial duration of 10 years and a maximum of three extensions, with the exception of Hotel Meliá Jardines del Teide, which is leased to Meliá until 2024 (…).

Barceló constituted Bay Hotels & Leisure in July 2014 and in April 2015 signed an investment contract with Hispania whereby the Socimi in which George Soros owns a stake, undertook to acquire a majority stake. By virtue of that contract, Hispania acquired 80.5% of the share capital in October 2015 for around €119 million although, following a capital increase recorded at the end of that year, its stake was diluted to 76%.

The company closed 2016 with a turnover of €65.7 million, compared with €13.2 million last year. Moreover, during the first three months of the year, it recorded revenues of €19.1 million, up by 22% compared to the same period a year earlier.

The company’s financial result as at March 2017 decreased by 7.5% as a result of the acquisition of Hotel Meliá Jardines del Teide and, specifically, the financial expenses resulting from a mortgage loan amounting to €22 million (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

The CNMV Approves Housers As A RE Platform

9 May 2017 – Cinco Días

Housers markets itself as “the leading real estate investment platform”, which allows users to invest in property in the best areas of large cities for as little as €50. It pays rental income to its users and allows them to benefit from the appreciation in real estate prices when the property they invest in ends up being sold.

It is the largest platform in the sector, with more than 42,000 users, of which around 40% have already invested. Since it began life in April 2015, its users have invested more than €22 million. And, following extensive negotiations with the CNMV, the platform has now received approval from the supervisor chaired by Sebastián Albella. (…).

Sources familiar with the situation say that, since the beginning, Housers has been in contact with the supervisor, chaired in theory by Elvira Rodríguez, and then its conversations intensified with Sebastián Albella. In this way, the problem with Housers was that it joined together fund-raising activity with the promotion of that activity, and that was not permitted by law.

Sources close to the entity explain that the platform has spun off both activities. (…).

As such, Housers Global Properties will now be called Housers Global Properties PFP SL. In an email sent out to its users, the firm explained that since it began operations in April 2015, it has managed to finance 92 properties: 73 in Madrid, 9 in Barcelona, 7 in Valencia, 1 in Marbella and 2 in Palma de Mallorca.

Housers generates a return, known as a dividend, which varies by project, but the historical average amounts to around 3.6%. On the firm’s website, it advertises a return of 6.6% from investing in Zurbano. In addition to the rental income, investors benefit from rises in property prices, amounting to more than 12%, on average.

Sources close to the platform highlight that its mantra is to obtain certainty around its investments, which is why it has to buy homes in central areas, as a way of saving. Its core cities are Madrid, Barcelona, Valencia and Palma de Mallorca. Housers mainly invests in housing and retail premises for rent, as well as in properties for renovation and subsequent sale. (…).

How does the platform earn money? Housers charges a 10% commission on the dividends it pays out, as well as on the proceeds from its property sales. (…).

Original story: Cinco Días

Translation: Carmel Drake

Grupo Barceló’s Profits Rose By 25% To €125M In 2016

28 April 2017 – Expansión

Grupo Barceló earned €125 million in 2016, which represented an increase of 25% compared to the previous year. Moreover, the hotel group expects to record a net profit of €150 million this year thanks to improvements in management and investments undertaken. The company obtained a gross operating profit (EBITDA) of €338.6 million in 2016, up by 12% and spent more than €140 million improving its hotel stock, of which €110 million was invested in a dozen establishments in Latin America, according to its annual report.

Grupo Barceló closed 2016 with turnover of €2,855 million, up by 15.1%, and net sales of €1,979.7 million (+23.7%), having managed to reduce its net financial debt by 8.3% to €495 million. At the next General Shareholders’ Meeting, which will be held on 2 June, the Board of Directors will propose the distribution of a dividend amounting to €12.5 million. Last July, the firm distributed a dividend amounting to €10 million, which was charged against the results for 2015.

Forecasts

Looking ahead to this year, the company expects to generate EBITDA of almost €388 million. “This year, we expect to see improvements in all of the countries in which we have a presence. The data for the first few months of 2017 show an improving trend in terms of occupancy rates, tariffs and RevPar (average revenue per available room).

Moreover, Barceló underlined that the soundness of its balance sheet will allow it to have access to “interesting” investment projects and to continue growing across all of its divisions. The company currently has 229 hotels in 21 countries, with almost 50,500 rooms, including 112 hotels from the US manager Crestline, which it consolidates 100% after purchasing the 60% stake that it did not control from AR Global in April last year. Overall, the group owns 39 of its hotels, leases 57 of them and manages the remaining 133.

In addition, the firm stated that in January, the Mercantile Court of Palma dismissed the claim against Barceló filed by the bankruptcy administration of Orizonia, which amounted to €59.6 million. In a letter, the Co-Presidents, Simón Barceló Tous and Simón Pedro Barceló highlighted the “record” results obtained both in terms of EBITDA and net profit, with double-digit growth in both parameters as well as in turnover, all as a result of its ordinary activity.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Lar España’s Profits Doubled In 2016 To €91.4M

2 March 2017 – El Economista

Lar España generated a net profit of €91.4 million in 2016, more than double (+110%) the amount it recorded a year earlier, thanks to the purchase of new assets and an increase in the occupancy rate of its real estate portfolio, according to a statement made by the Socimi, which specialises in shopping centres.

The company chaired by José Luis del Valle (pictured above) saw its revenues soar by 69% last year, when it recorded rental income amounting to €60.2 million.

At the end of 2016, the company’s portfolio of assets was worth €1,275 million, which represents an appreciation of 16%, and of 13.5% in the case of its shopping centres.

At its next general shareholders’ meeting, Lar España will propose the distribution of a dividend amounting to €0.33 per share, which will represent a 65% increase in shareholder remuneration.

Original story: El Economista 

Translation: Carmel Drake