Franklin Templeton Teams Up with Meridia to Invest in Social Infrastructure

17 June 2019 – El Economista

The global investment manager Franklin Templeton has created a new fund to invest in social infrastructure across Europe, with a specific focus on Spain. To this end, it has teamed up with the Spanish manager Meridia to search for opportunities in the student hall, hospital, nursing home, university and school sectors, amongst others.

Franklin Templeton has committed €160 million to the fund in an initial phase, but the vehicle is open to new funding and so there are really no limits in terms of investment size

The alliance in Spain has already completed its first operation with the acquisition of a juvenile court in Madrid. Meanwhile, the Franklin Templeton Infrastructure Fund has also purchased a clinic in London and a nursing home on the outskirts of Milan.  

Original story: El Economista (by Araceli Muñoz)

Translation/Summary: Carmel Drake

Lar Raises Dividend by 67% and Opens the Door to Corporate Operations

9 October 2018

The socimi will distribute €75 million in 2019 / The socimi will book 115 million euros with the delivery of its luxury flat development Lagasca, in Madrid, and roughly 110 million euros from the sale of its three office buildings.

Lar España is moving forward with its plan to focus on the retail market and pay-outs to its shareholders. The company, which expects to deliver the homes in the Lagasca99 luxury development (Madrid) before the end of the year, will raise its dividend to 75 million euros in 2019, compared to the 45 million euros it distributed last May and the €30 million in 2017.

The socimi will propose a dividend equivalent to 5% of the value of its assets (NAV), which will imply an outlay of about €50 million. The company will also pay an extraordinary dividend in 2019 associated with the sale of Lagasca99 for about in €25 million.

The president of Lar España, José Luis del Valle, highlighted, yesterday on Investor Day, the socimi’s evolution and the fulfilment of its strategic plan. “In a few months, we are going to become a socimi focused exclusively on retail. With approximately 550,000 square meters of commercial space, we are the largest operator in Spain, and we also have a specialised manager who is committed to the project.”

Sale of assets

Del Valle recalled that, of the disinvestments of non-strategic assets planned for the years to 2021, the company has already executed 47% in one year for €276 million. Another €115 million will be added to that figure from for the delivery of Lagasca99 and the sale of the three office buildings that the company still has in its portfolio – two in Madrid and one in Barcelona -, which will take place between this year and the beginning of 2019, for about €110 million. As Expansión announced on October 5: “Disinvestments are taking place above the purchase price and with capital gains compared to the last valuation.”

At the same time, it will continue with its investment plan with the purchase of assets for approximately €250 million. Lar bought the Rivas Futura business park in Madrid for €62 million and the Parque Abadía shopping mall in Toledo for €14 million. “We will continue to take advantage of opportunities and, where appropriate, we will address new developments such as Vidanova Parc, in Sagunto, which opened in September and O Lagoh, in Sevilla, which will open in mid-2019,” Miguel Pereda, board member and managing director of Grupo Lar.

Regarding future corporate operations, Del Valle recalled that Lar “is in the market and attractive.” He added: “I think the best thing for the shareholder is the execution of the current business plan, but we are in the market and we can evaluate buyer interest at any time.” Among the shareholders of Lar España, the manager Pimco stands out (19.6%), along with Group Lar (its manager, with 10%); and Franklin Templeton (7.9%).

Regarding potentially negative changes to the tax regime governing socimis, Del Valle found the enactment of such a measure to be unlikely: “There is no point in undoing a formula that has worked and is not part of the problem.”

Original Story: Expansión – Rebeca Arroyo

Translation: Richard Turner

Lar España Raises €104M To Finance New Purchases

16 March 2017 – Expansión

Lar España has signed two financing agreements with ING and BBVA amounting to €103.9 million. The Socimi intends to use the funds raised to acquire new assets over the next few months.

Following the signing of these agreements, the Socimi now has debt amounting to €558 million, of which €418 million corresponds to bank loans, with the remaining €140 million relating to a bond issue carried out at the beginning of 2015.

In this way, Lar España’s net gearing ratio currently equals 33% of the gross value of its assets and will rise to 38% once the latest funds have been invested. The Socimi has highlighted that “it still has a long way to go” before its financing increases to 50% of fixed leverage.

Meanwhile, Credit Suisse’s funds have acquired a 4.31% stake in the Socimi Lar to become one of its significant shareholders alongside the US manager Pimco, which owns a 20% stake, Franklin Templeton (15%), Brandes Investments (5%), Bestinver (4.1%), Blackrock (3.6%) and Threadneedle Asset Management (5%).

Original story: Expansión

Translation: Carmel Drake

The 4 Largest Socimis Will Specialise By Asset Type

31 January 2017 – Cinco Días

Hotels, logistics assets, offices, shopping centres. The four largest Socimis – Merlin, Hispania, Lar España and Axiare – are entering their third year of life, and as they do so, they are embarking upon a new phase of specialisation by type of asset – the aim is to make their management more effective and ensure that they remain attractive to large international funds. (…). 

Between them, Merlin, Hispania, Axiare and Lar España now own assets worth almost €14,000 million – they have created small empires out of nothing.

Hispania looks set to become one of the major stars of 2017 with a series of operations planned to strengthen its already high degree of specialisation in hotels. The Socimi, in which the magnate George Soros owns a 16% stake, has a portfolio worth €1,793 million (including its most recent purchases at their acquisition prices). 61% of the portfolio value relates to hotels and most are located in the Canary Islands (70%) and the Balearic Islands (16%).

The experts forecast that this company, managed by Azora and led by Concha Osácar, will put the majority of its offices and residential assets on the market, and at the same time, will continue to buy up hotels. (…). 

Meanwhile, Merlin has taken steps to divest its residential and hotel assets, transferring them to Testa and Foncière des Murs, respectively, and is continuing to expand its core portfolio with its recent purchase of the Torre Agbar office block in Barcelona for €142 million. The Socimi’s portfolio currently comprises offices (48%), shopping centres (18%) – Merlin is now one of the major players in this segment – retail premises (22%) and logistics assets (5%). Experts consider that the latter have enormous potential to generate higher returns for this Socimi.

Axiare, led by Luis López Herrera-Oria, has already focused heavily on offices, which account for 73% of its €1,300 million portfolio. It has enhanced its presence significantly in recent weeks through its acquisitions of the headquarters of PSA, Cuatrecasas, McKinsey and Vocento for €242 million in total.

The Socimi’s high decree of specialisation in offices has led Colonial to take advantage of the fund Perry Capital’s departure from its share capital to acquire 15% of the Socimi. Some in the sector view this move as a precursor to a possible takeover bid, but the Catalan real estate company has denied the claim repeatedly. (…). 

Finally, Lar, led by José Luis del Valle and Miguel Pereda, has managed to specialise mainly in shopping centres, which now account for 75% of its €1,201 million portfolio. With shareholders that include Pimco and Franklin Templeton, the company owns 17 assets including shopping centres, retail parks and hypermarkets.

In just three years, Lar España has risen up the ranks to become the third largest owner of shopping centres in Spain, behind Unibail and Merlin. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Pimco Increases Its Stake In Lar España To 19.87%

24 November 2016 – Expansión

Pimco, the largest fixed income manager in the world, has increased its stake in the Socimi Lar España to 19.87%, after passing the 17% threshold last week. The company is standing by its intention to not exceed 30% of the Socimi’s share capital, which would force it to launch a takeover bid for 100% of the company.

This operation strengthens Pimco’s position as the largest shareholder of Lar España, a position that it achieved on 17 November, after acquiring a 4.6% stake in the Socimi for €29.7 million. In that move, Pimco bought 4.16 million shares from Lar España at a price of €7.15 per share, 11% more than the closing price of the shares on the day before the operation. Until then, its stake amounted to 12.4%.

After Pimco, the next largest shareholder is Franklin Templeton, with a 15% stake. Threadneedle Asset Management and BlackRock also hold stakes in Lar España: 5% and 3.06%, respectively, according to the records of the CNMV.

More profits

Between January and September, the Socimi earned €46.6 million, up by 77% compared to 2015, driven by an increase in revenues from rental income and the expansion of its real estate portfolio. Its EBITDA improved by the same proportion, to €30.3 million. Meanwhile, revenues grew by 80% to €42.2 million.

Lar España’s shares closed trading yesterday at €6.97/share, down by 0.43%. So far this year, the Socimi’s share price has fallen by 15.83%.

Original story: Expansión

Translation: Carmel Drake

Franklin Templeton Increases Its Stake In Lar España

20 March 2015 – Expansión

The fund Franklin Templeton has increased its stake in the Socimi Lar España to more than 15%, according to the CNMV’s records. Specifically, the investor, which with its 14.9% stake was already the largest shareholder of the Socimi chaired by José Luis del Valle, has increased his participation to 15.07%, after purchasing a package of 126,537 shares.

Other shareholders of Lar España include the fund manager Pimco, which owns 12.5% of the capital; the fund manager Bestinver, with 4.8% and Ameriprise Financial with 3.7%. These investors spent €400 million on the IPO.

In 2014, Lar España recorded turnover of €7.2 million from rental income. Its market capitalisation amounts to €399.3 million, after its share price fell by 0.26% yesterday to €9.974.

Original story: Expansión (by R.R.)

Translation: Carmel Drake