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12 December 2017 – Expansión
Spain’s real estate companies are on a roll: the recovery in activity has given these companies more visibility on the stock market. On average their share prices have risen by 30% in 2017. Renta Corporación, Hispania and InSur are the best performers and all three are very much in favour with the experts.
The property sector is in fashion on the stock market. On average, the share prices of real estate companies rose by 30% in 2017, well above the 10% rise that the Overall Index has registered since the beginning of the year.
Within this group, three companies shine the brightest: Inmobiliaria del Sur, Hispania and Renta Corporación all saw their share prices rise by between 39% and 53%, and the experts think that the upward trend will continue.
Moreover, Urbas and Axiare also saw their share prices rise by more than 30% in 2017, but for diametrically opposite reasons. The first was suspended from trading in September after the National Court announced that it was investigating the firm’s President for “suspected fraud” following a complaint filed by the Anticorruption Prosecutor.
Meanwhile, Axiare is the target of a takeover by its counterpart Colonial, which launched its bid in the middle of November and saw it approved by the CNMV just a few days ago. The operation, which is expected to result in the creation of a real estate group with assets worth €10 billion, offered a 13% premium over the company’s share price at the time, which led to a sharp rise. Currently, the company’s shares are trading just below the offer price (€18.29 compared to €18.36 per Colonial’s latest offer).
The economic environment, improvement in activity and greater investor appetite for housing are all working in favour of these companies, said Nicolás López, from M&G Valores.
However, the expert points out that the low market capitalisation of some of them and their very low liquidity increase their volatility, which makes them options suitable only for high-risk profiles.
Renta Corporación’s share price has risen by more than 50%
In the case of Renta Corporación, which is limited in size: amounting to just €92 million. The company is the best performing real estate company of 2017, with a share price increase of 53% (…). The company has taken advantage of its knowledge of the real estate market to launch, together with the Dutch pension fund APG, a Socimi. Since its creation, eight months ago, the new listed company has invested €93 million in the purchase of more than 1,000 homes, all located in Madrid and the surrounding area (…).
Strategic diversification favours InSur
Inmobiliaria del Sur completes the podium of the most profitable real estate companies this year. Its share price has risen by 40%. The secret to its success is the new business plan that the company has launched and which has been welcomed warmly by the market.
The family business, which has more than 70 years of experience, splits its activity between the construction of homes and the rental of office buildings, which allows it to have two revenue streams. With a business plan that involves building more than 2,000 homes between now and 2020, InSur has closed alliances with partners such as Anida, the real estate arm of BBVA, to become a key player in residential development (…).
Hispania’s specialisation boosts its share price
Meanwhile, Hispania’s share price has risen by more than 39% since the beginning of the year. This year, the company (…) has initiated a new phase, specialising in hotel assets (in June, it became the largest hotel owner in Spain with 38 establishments) and divesting the rest of its properties (…).
A few weeks ago, the company published its results for the third quarter, which went down well. The Socimi recorded a profit of €179 million during the first nine months of the year, up by 31% compared to the same period in 2016 (…).
Original story: Expansión (by D. Esperanza and R. Ruiz)
Translation: Carmel Drake