10 March 2017 – Expansión
The Socimi boom continues unabated. Ores, the listed real estate vehicle backed by Bankinter and Sonae Sierra, which debuted on the Madrid stock market a few weeks ago, was the thirty-first company of its kind to list on the MAB. And, all indications are that this phenomenon is going to continue to grow.
Socimis specialising in offices, hotels, shopping centres and the residential sector. In this environment, and in the face of investor interest in the real estate sector, a Socimi backed by RKS, specialising in residential assets in peripheral areas and going by the name of Ktesios Properties, is also planning its debut on the stock market. The intention is for this Socimi to make its stock market debut with assets worth around €20 million and a portfolio of approximately 250 homes.
The Managing Partner of RKS, Henry Gallego, explains that this Socimi, which is backed by the fund RKS Real Estate as an anchor investor, will be ready to debut on the stock market by the end of this year and will offer investors “better returns” by focusing on cheap rental properties with high occupancy rates.
“We are looking for opportunities with potential. Prime areas are not our core focus because they already have too many suitors and their yields are not as attractive. Whilst rents in prime areas amount to €1,000/month, our products are rented out for around €400/month”, said Gallego. The fund currently owns 136 properties – homes and garages – worth around €11 million, and the aim is that by the end of this year, it will have acquired new properties to double that valuation. In this sense, the company has selected more than 2,500 properties that are suitable for including in its portfolio of assets.
Gallego explains that its process for incorporating assets includes: searching for properties, analysing them, updating the assets and negotiating with creditors. “The fund identifies property developers that have bank debt, acquires the right to operate their properties and, in parallel, begins conversations with their creditors”, he said.
Gallego explains that the portfolio includes properties with non-performing mortgages (overdue portfolio) that are overvalued (…).
Original story: Expansión (by R. Arroyo)
Translation: Carmel Drake