At Least Five Socimis Prepare To Debut On The MAB

17 May 2016 – El Economista

The real estate sector is booming. Its appeal has barely declined despite the political uncertainty, in fact the creation of new Socimis seems unstoppable and over the next six months, at least five more Socimis are expected to debut on the Alternative Investment Market (MAB), where 15 other similar companies are already listed. The banks are also keen to get involved in the action.

The market capitalisation of the five soon-to-be-listed Socimis will exceed €1,500 million, according to Antonio Fernández, Chairman of Armabex, which is preparing to launch as the registered advisor of these companies.

The figure will continue to grow gradually, given that the political uncertainty has not curbed investors’ interest in these vehicles, which have a special tax framework that allows them to not pay tax on their profits, provided they distribute 80% of those profits as dividends. In this way, Fernández says that he has around 40 files on the table from Socimis wanting to debut on the stock market over the next few months. “They all have very different profiles and we are receiving proposals almost every day”, he explained.

Although the names cannot be revealed yet, the Director said that one of the five Socimis is focused on the hotel sector and its initial market capitalisation amounts to €220 million. Similarly, he says that a company focusing on homes for rent with assets worth €100 million, will also debut on the MAB soon.

The fact that that specialist Socimis are starting to flourish and establish themselves in Spain is a “very good sign”, according to the sector. With this type of vehicle, the market is managing to secure money from private investors, which due to their size are not able to commit to significant investments individually in the real estate sector.

Now they have several entry points and can select both the type of assets they like, as well as the yield that they want to obtain. Moreover, the specialist Socimis are also arriving hand in hand with wealthy Spanish families, which have been accumulating assets for years and can now take advantage of the new tax benefits. That is the case of the Socimi created by the property developer Tomás Olivo through his company General de Galerias Comerciales. With a portfolio of six shopping centres, whose star asset is La Cañada (Marbella), and hundreds of other assets (land, premises and homes), it is positioning itself as the third largest Socimi behind Merlin (Ibex 35) and Hispania (Stock Exchange).

According to experts, the value of its portfolio may exceed €1,000 million. (…).

And it is not only wealthy Spanish families who are making use of these vehicle; foreign capital is also backing them and one company, financed by capital from Latin America, will soon make its debut on the stock market. On the other hand, Domo is another company that is preparing to list on the stock market, as its Chairman, Feliciano Conde, announced last year, when he explained that the company would be tailored to medium-sized investors “so that they can participate in the returns generated from the purchase of land, and the subsequent rental and sale of the homes”. The market capitalisation of that company, the first property development Socimi, will amount to €50 million.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

CBRE: Experts Expect 100,000+ Homes To Be Built In 2016

20 January 2016 – Cinco Días

The property sector, one of the causes of the crisis, and certainly one of the sectors that was hardest hit by it, appears to have bottomed out. At least that is the opinion of 100 executives from the real estate sector interviewed by the consultancy CBRE for its “Trends in 2016” barometer, published yesterday.

82.9% of the experts consulted think that the residential sector has now bottomed out in terms of price decreases. Of those, 77% expect the cost of house purchases to grow by up to 10%.

“We are seeing a two-speed market when it comes to the recovery of prices. Prices in Madrid, Barcelona and the Costa del Sol are increasing, along with those in certain large provincial capitals”, says Lola Martínez-Brioso, Head of Research at CBRE. For example, prices in Madrid are increasing by 5%. “New developments have more opportunities in those cities where there is greater demand and at the same time, the stock of empty homes is smaller”, she adds.

According to this barometer, 39.5% of the experts point to the development of residential properties as one of the best segments for business opportunities, double the number that thought the same in this report a year ago.

Moreover, these experts predict a surprisingly high volume of new construction. 72.3% of the executives expect that more than 100,000 new homes will be constructed this year. Of those, 19.7% believe that this figure could even reach 250,000 new homes.

These forecasts represent a stark contrast to the reality of 2015. According to the Ministry of Development, during the 10 months to October 2015, construction began on 39,871 homes, which means that by year end, that figure may have reached 50,000. Nevertheless, the forecasts according to the barometer show that this rate of new builds will be at least double in 2016. “For the first time since 2007, we consider that residential development is the business with the greatest potential”, says Martínez-Brioso.

In the past, the record high was recorded in 2006, when more than 865,000 new homes were constructed in just one year. The last time more than 100,000 new units were constructed (in one year) was in 2009 (when 110,849 homes were built, according to the Ministry of Development).

One of the reasons behind this trend, according to CBRE, is the entry of foreign capital into property development in Spain, such as the case of the fund Lone Star, which acquired the real estate company Neinor last year and now plans to invest €1,000 million in land and new builds. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake