The USA’s Largest RE Firm Launches its Second Socimi in Spain

15 December 2017 – La Información

The largest real estate company in the United States, Lennar Corporation, has just redoubled its commitment to the Spanish market with the creation of a second Socimi. The aim is to reinforce the role already being played by its company Al Breck Socimi, to optimise the performance of the real estate assets that the US giant owns in Spain, through this special tax regime.

The operation has been formalised through the company Rialto Capital Management, one of the investor vehicles – headquartered in Luxembourg – that Lennar uses to carry out real estate operations in Europe and the only one that has a stable structure in Spain. Rialto Captial is listed on the Mercantile Register, according to information provided by the website Informa, as the sole shareholder of the new company, Ceres Real Estate Socimi. In turn, Ceres is the heir of Clearfield Invest, a firm constituted just over two months ago and whose administrators form part of the team in Spain of Grupo TMF, a company specialising in the provision of all kinds of services for companies.

This singular sequential corporate structure is identical to the one that preceded the launch of Rialto Capital’s other Socimi, Al Breck, between September 2014 and October 2016. In that case, a parent company Cornwall Invest was constituted with three subsidiary companies. Two months after the creation of those companies, the firm Al Breck Luxembourg, which Rialto Capital owns outright (100%), acquired Cornwall Invest, which acquired the three subsidiary companies a week later, as the prologue to the formal application for adopting the special tax regime afforded to Socimis.

Al Breck Socimi took over the management of the portfolio of real estate assets acquired by Rialto Capital and Drago Capital from Inverseguros, the collective investment platform created back in the day by several insurance companies and which was the first real estate fund to be registered with the CNMV. The package included parking spaces, offices, shops and homes, most in very central areas of Madrid, and was valued by the company in the MAB incorporation document, at €110 million.

According to Lennar’s annual report for 2016, besides that operation, the company only formalised one other operation last year, namely a real estate development in which it invested USD 1.6 million (…).

Rialto Capital’s new Socimi is feeding a market on the rise; this year alone 17 new companies with a combined asset portfolio of more than €4.5 billion have joined the MAB (…).

In October, Lennar Corporation became the largest real estate company in the USA after closing the absorption of Cal Atlantic, the most important company in the state of Virginia. According to the local press, the operation has resulted in the creation of a giant with annual revenues of USD 17 billion (€14.4 billion), a market capitalisation of USD 18 billion (€15.26 billion) and a portfolio of more than 240,000 properties.

Original story: La Información (by Bruno Pérez)

Translation: Carmel Drake

Meridia Converts New RE Fund Into A Socimi

19 May 2016 – Expansión

The private equity manager Meridia has decided to convert its latest real estate fund, Meridia Real Estate III, into a Socimi, which will be listed on the Alternative Investment Market (MAB) within a maximum period of two years, according to sources at the company led by Javier Faus (pictured above).

The fund, which was constituted last year, has available resources of around €250 million, but its investment capacity increases to €600 million including its bank debt.

The same sources explained that the conversion into a Socimi comes in response to the fact that, unlike its predecessors, large institutional players have invested in this fund – together with a family office. Such players tend to employ the REIT structure for their operations in the real estate sector. REITs are very similar companies to the Spanish Socimis, with significant tax incentives and the obligation to list on the stock exchange.

Meridia Real Estate III debuted in April with the acquisition of a batch of eight office buildings and a logistics warehouse located in Madrid and Barcelona. The package, which belonged to the real estate fund Segurfondo Inversión, managed by Inverseguros, was sold for €52.45 million. It is a diversified portfolio with great potential.

Original story: Expansión (by J.Orihuel and M.Anglés)

Translation: Carmel Drake

Meridia III Makes Its First Acquisition In Madrid & Barcelona

3 May 2016 – Press Release

Meridia Capital’s new real estate vehicle, Meridia III, makes its first acquisition in Madrid and Barcelona.

On Friday, Meridia Capital Partners, SGEIC, S.A., (“Meridia Capital”) announced the first deal of its recently launched real estate vehicle, Meridia III. The fund has acquired a portfolio of 9 assets in the metropolitan areas of Madrid and Barcelona. The portfolio totalling c.42,000 sqm mainly includes office buildings, as well as a logistics warehouse and 581 parking spaces. The properties are located in established and integrated business areas of Spain’s two main markets. Meridia III acquired this portfolio from the Spanish real estate fund Segurfondo Inversión (managed by Inverseguros).

Six assets, which account for 87% of the portfolio in terms of square metres, are located in Madrid, whereas the remaining 13% (totalling 3 buildings), are situated in Barcelona. The properties have attracted prominent tenants such as BBVA and Telefonica.

Juan Barba, Partner, Managing Director Real Estate at Meridia Capital, said “This is an excellent opportunity to acquire a diversified portfolio with high value creation potential. The country has been showing clear signs of recovery in the office segment, triggered by an increase in occupancy levels as well as gradual rental growth. This transaction brings new office assets to those acquired through Meridia II, thus reinforcing our local presence in this sector.”

Meridia Capital’s Founding Partner & CEO, Javier Faus, stated “The launch of Meridia III and this first deal demonstrate that we continue to be very positive about the prospects that the Spanish real estate sector offers. Through the new vehicle we aim to leverage on our track record and extensive experience in this market, which we believe will allow us to continue achieving attractive returns for our investors.”

Meridia Capital was advised on this deal by Aguirre Newman, Garrigues and Dokei.

Original story: Press Release

Edited by: Carmel Drake

U.S. Lennar Buys Buildings in Madrid

22/07/2014 – Cinco Dias

Lennar, one of the major builders in the United States, has purchased a property portfolio containing mostly residential buildings in Madrid for the total of €142.3 million paid to Inverseguros.

The U.S. company materialized the acquistion through its arm Rialto Capital and allied with Drago Capital. The properties were included in the Segurfondo Inversión FII fund which was liquidated in March 2011. It is also the oldest fund to trade on the stock exchange market (since 1995). As per the valuation carried out by Tecnitasa last year, the buildings were worth of €267.6 million.

The transaction will be officially sealed on 30th October and  the buyer has already made a cash deposit.

In May, Drago Capital purchased the Castellana 200 complex in Madrid, shoulder in shoulder with Canadian fund PSP, for €400 million.


Original article: Cinco Días (by Alberto Ortín Ramón)

Translation: AURA REE