Paralysis In Trading Amongst The MAB’s Socimis

17 January 2017 – Idealista

The Alternative Investment Market (MAB) has become the catapult for many small Socimis – the real estate investment vehicles that are obliged to debut on the stock market to maintain the tax benefits that they enjoy.

Currently, this platform is home to 28 such companies, of which 17 debuted during 2016, however, not all of them are attracting the attention of investors. What’s more, one in five is trading today at the same price per share at which they debuted and some of them haven’t registered any movements in their share prices at all, which means that they are not being traded.

Examples include some of the most recent companies to debut. One of them is Inmofam 99, a Socimi that has 10 commercial and residential assets in its portfolio, which is owned by the Hinojosa family, the founder of the Cortefiel textile group. It debuted on the MAB on 21 December 2016 at a price of €17.60 per share and it is still trading at that price almost one month later, according to data from BME, the company that manages the Spanish stock market.

The same is happening with RREF II Al Breck, which debuted on the MAB on 30 November 2016, at a price of €5.40 per share, the same price at which it is currently trading. This Socimi, controlled by a company headquartered in Luxembourg, is the owner of almost 700 assets, mainly homes located in Madrid, although it also owns retail premises, one office and several storerooms, garages and basements.

Another Socimi that finds itself in the same situation is Euro Cervantes, a company that holds two investment stakes in its portfolio: one 30% stake in GMP, the owner of homes, offices and land, and one 49% stake in La Maquinista shopping centre, the largest in Barcelona. This vehicle is owned by the Government of Singapore and has been trading at €31 per share since 22 September 2016.

Corona Patrimonial and Heref Habaneras are also experiencing very similar situations. (…).

These five Socimis together have a combined market value of €353.8 million, a figure that increases to more than €900 million in we include Zambal Spain, which has also been having a tough time. This vehicle, which owns several offices and retail premises, whose tenants are giant businesses operating in Spain, has been trading for almost 14 months (it debuted on the MAB on 1 December 2015…). It is currently trading at €1.24 per share, the same level at which it debuted, although its shares have been traded significantly. During its first month on the market, the company moved 10,000 shares and €13,000, whilst during 2016 as a whole, it moved half a million in both shares and cash. (…).

Trading plummets during first fortnight of 2017

A certain degree of apathy is being observed amongst the Socimis on the MAB in these early stages of the year. Some other vehicles should be added to the list above, including Corpfin Capital Prime Retail, Fidere Patrimonio, GMP Property, Hadley Investments, Inversiones Doalca and Mercal Inmuebles. In fact, of the 28 Socimis trading on this platform, only five have been traded, to a greater or lesser extent, during the first fortnight of January.

The most liquid of all of them is Entrecampos Cuatro, the first Socimi to debut on the stock market (back in November 2013) and whose portfolio mainly contains homes, premises, offices and land. In two weeks, this vehicle has seen 188,000 shares traded for €350,000.

The second most liquid has been Trajano Iberia…with 9,000 shares traded for €91,000. It is followed by the office specialist Autonomy Spain Real Estate (3,000 shares traded for €51,000); Vbare Iberian Properties (2,000 shares traded for €32,000); and Optimum RE (€3,000 traded). The latter two hold homes in their portfolios.

As such, and despite the fact that investors do not normally back Socimis on the MAB (because they are smaller entities with less liquidity…), it is true that we have found some companies that have managed to increase their value by double digits since they debuted on the platform, such as Entrecampos and Optimum, which are amongst the few that have seen movement in their shares during the first two weeks of the year.

Original story: Idealista (by Ana. P. Alarcos)

Translation: Carmel Drake

GMP Will Debut On Stock Exchange Before Oct 2016

10 November 2015 – Cinco Días

One of the real estate companies that owns some of the best office buildings in Madrid will debut on the stock exchange before October 2016. GMP Property, which was constituted as a Socimi in September last year, has up to two years to list on the stock market, and it seems like the company’s managers are going to maximise that period – by all accounts, they are in no hurry to take the step, but they are already working to prepare the company to that end.

GMP Property is controlled by the Montoro family, which founded the company in 1979, as a pure real estate company, in other words, a company dedicated to the generation of income, primarily from office rentals. The GIC Real Estate International division of the Singapore sovereign fund acquired a stake in the company as part of GMP’s strategy to become a Socimi in September last year. It purchased 30% of the real estate company for €200 million, which meant that the company’s market value then stood at around €670 million.

That is an indication of the potential value of the real estate company on the stock exchange, although the company says that its market capitalisation is greater now than when GIC acquired its stake, given the better climate for economic activity in Spain and thanks to the new properties that the company has incorporated into its portfolio. “GMP is undoubtedly worth more now than a year ago”, said Xavier Barrondo, the CEO of GMP.

In this way, it will become one of the largest Socimis in Spain, alongside Merlin, Axiare, Hispania and Lar España. Zambal is the Socimi that is expected to debut on the stock market next. It is owned by the French fund IBA Capital and holds properties such as the ABC Serrano shopping centre in Madrid and Zara’s flagship store on Calle Preciados. The Socimis have the advantage that they do not pay corporation tax, but they are obliged to pay dividends to their shareholders. Moreover, they have a maximum period of two years to debut on the stock exchange.

Shareholder stability

Once listed, the managers of GMP intend to maintain the union of current shareholders, which includes the Montoro family and GIC. “It is a long-term strategic alliance”, says Barrondo. For this reason, the Socimi will only list the minimum number of shares known as free float on the stock exchange, for a small value, estimated at €2 million.

The Singapore fund holds its stake in GMP through another Socimi, known as Euro Cervantes. That company also holds other investments in Spain, primarily in shopping centres, such as La Maquinista (Barcelona) and Habaneras (Torrevieja, Alicante). The latest data available for GMP, from its annual report for 2014, indicates that the gross value of the company’s assets amounted to €1,282 million as at December 2014. (…).

Some of the most iconic buildings in its portfolio include the BBVA Tower on the Castellana, the historical headquarters of Banco Bilbao, on Calle Alcalá 16 and Garrigues’ corporate headquarters on Calle Hermosilla, all in Madrid. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake