9 July 2018 – Expansión
The Socimi dedicated to the rental of rooms for young people is going to make its stock market debut at a price of €1.40 per share. The Socimi is going to debut with a portfolio of 28 homes, which contain 181 rooms for rent, all located in the centre of Madrid.
The real estate firm Excem, which was constituted in 2015, has the aim of investing in urban properties located in central areas of Madrid, Barcelona and other main cities in Spain. It targets properties that are suitable for renovation and redecoration and subsequently leases out rooms to students and young professionals.
Currently, the Socimi is looking to extend its activity in the capital to other cities with “high demand and limited supply of these types of assets for rent”, including Barcelona, Sevilla, Valencia, Málaga, Bilbao and Santiago de Compostela, according to information provided in the explanatory prospectus that accompanies its debut on the MAB.
Around 40% of the company is controlled by Excem, a group owned by the Hatchwell family. In fact, the Socimi is chaired by David Hatchwell, who started his professional career in Goldman Sachs and HSBC before joining the group.
With the aim of undertaking its investment and growth strategy, Excem’s Socimi has conducted a number of capital increases since 2016 and has mortgaged all 28 of the homes that it holds in its portfolio.
At the moment, it has an indebtedness level equivalent to 38.5% of the value of its assets, well below the leverage limit of 70% that the company has imposed on itself.
The Socimi markets the rental of its homes through its own online platform (www.homiii.com) and by subleasing through other specialist companies. Since September last year, it has had an agreement with Uniplaces, a company from the United Kingdom specialising in reserving accommodation for students in a number of European cities. According to the prospectus, at the end of March, the firm had 175 lease contracts for its rooms (96.7% of its portfolio) with different tenants.
By virtue of the contracts, the tenants pay a monthly rent and make a contribution towards shared utilities (water, electricity, gas, internet and central heating) after handing over a deposit equivalent to one month’s worth of both concepts by way of guarantee.
Excem has the aim of achieving a gross return on each asset of between 4% and 6%, a percentage calculated as gross income from rental over the investment made. The Socimi has been created with the option of setting itself an expiry date, given that it does not rule out selling its properties once the minimum period of three years established for Socimis has come to an end, or dissolving the company after the seventh year, “depending on what the shareholders agree on the basis of the performance of the company, as well as the current and future properties in the portfolio”.
Original story: Expansión
Translation: Carmel Drake