Testa’s Sales Soar But Profits Fall Due to Extraordinary Expenses

7 September 2018 – Expansión

Testa – the residential rental Socimi – has closed the first quarter of the year with a net profit of €8.94 million, down by 81% YoY, due to extraordinary expenses, such as the €107 million it paid to Merlin for the cancellation of management contracts. Excluding those extraordinary items, and others such as variations in asset values, the funds generated from operations (FFO) – equivalent to the firm’s operating cash flow or the recurring profit – increased by 60% to €19.58 million.

In terms of gross revenues from rental income, the company generated €36.98 million, which represented an increase of 69% with respect to the same period as last year. That increase was due to an improvement in the occupancy rate, growth in the number of homes in the portfolio and an improvement in annualised rents (GRI). On a like-for-like basis, revenues grew by 9%. Net rental income, after deducting direct operating costs, amounted to €28.47 million, up by 75%.

Testa Residencial, which had initially scheduled its stock market debut for June, decided to delay its listing plans for the main stock exchange and debut on the Alternative Investment Market (MAB) instead. The company, in which Santander (36.9%), BBVA (25.2%), Acciona (20%) and Merlin Properties (17%) all hold stakes, owns 10,615 homes with a gross asset value (GAV) of €2.637 billion. Moreover, it recently agreed the purchase of a group of 549 rental homes in the province of Madrid for €66.8 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Armabex: 35+ Socimis Will Debut On The Stock Market In 2017

14 October 2016 – Invertia

Over the last year, there has been a steady flow of Socimis debuting on the stock market, but in 2017, we could see a genuine explosion. According to the registered advisor Armabex, at least 35 Socimis will make their stock market debuts next year, including one company worth €2,000 million.

Overnight, the Socimis have become one of the new kings of the Spanish property sector. Although the corporate structure has existed for decades, the sector underwent a real revolution in 2012, when the Tax Authorities started to allow these companies to not pay corporation tax on their real estate revenues and asset sales and purchases, in exchange for publicly listing and distributing high dividends (the minimum pay-out threshold is 80%).

That led to a wave of IPOs, as companies constituted new Socimis to benefit from the tax advantages and overseas fortunes used the vehicles to enter the maligned Spanish real estate market. In less than five years, 29 Socimis have debuted on the Spanish stock market and Alternative Investment Market (the MAB). But, we could see an avalanche of debuts next year, according to Armabex, a MAB registered advisor and firm that specialises in this niche.

The Chairman of the consultancy firm, Antonio Fernández (pictured above), estimates that in 2017, we could see “no less than 35 IPOs” if market conditions allow. His firm is working on the placement of around fifteen Socimis next year, include one worth around €2,000 million. These types of companies tend to debut at a discount with respect to their book values, which means that the final listed share capital (for that company) may be lower, but even so, the company will be sufficiently large to be able to aspire to join the Ibex 35 and become the second largest company in this segment, surpassed only by Merlin Properties (€3,200 million). The total value of the other 14 companies will amount to around €3,500 million.

Although most of the Socimis that will be created next year will debut on the MAB, Fernández expects that at least three will list on the main stock exchange. The first may involve Acciona, which has been evaluating the placement of its real estate assets for some time now. Meanwhile, the expert confirmed that one listed company and one Spanish bank have already taken the decision to list their Socimis directly on the main Madrid stock exchange. (…).

Original story: Invertia (by Aitor Atozqui)

Translation: Carmel Drake

5 Socimis Have Debuted On The MAB So Far In 2016

10 June 2016 – Expansión

Silvercode, which owns the Castellana 200 complex, is the latest Socimi to have joined the MAB, on 2 June 2016.

Since the beginning of the year, the following Socimis have all debuted on the MAB: Corpfin Capital Prime Retail III, Heref Habaneras, Inversiones Doalca, Jaba I Inversiones and Silvercode. In 2015, eight Socimis listed on the stock market in total.

In addition to the 17 Socimis listed on the MAB, four other companies of this type – Merlin, Lar, Hispania and Axiare – are listed on the main stock exchange.

Merlin is the only Socimi in the Ibex 35. The firm, chaired by Ismael Clemente, which has been listed on the reference index since the end of last year, debuted on the stock market on 30 June 2014 and was the third Socimi (after Lar and Hispania) to list on the main stock market.

Original story: Expansión

Translation: Carmel Drake

Socimi Fever Shakes Up The Stock Market

28 September 2015 – El Economista

After a flurry of activity during 2015, Spain now has 14 listed Socimis, of which 10 trade on the MAB. And this figure is expected to continue to grow over the coming months.

Last week, two Socimis went public on the Alternative Investment Market (‘Mercado Alternativo Bursátil’ or MAB). The first, Autonomy Spain, debuted with an increase of 1.52%, to €16.75.

Autonomy is the parent company of a group that currently comprises two sub-Socimis. The group’s real estate portfolio contains six office buildings – five located in the Community of Madrid and one in Cataluña.

A day later, it was the turn of the Socimi Corpfin Capital Prime Retail II, which became the tenth real estate investment company to go public on the MAB.

The company, which has already invested €75 million in retail premises in “prime” areas of Madrid, San Sebastián, Burgos and Vitoria, expects to invest a further €35 million before November 2016, whereby taking its total investment to €110 million.

This is the first Socimi that the private equity firm Corpfin Capital has listed publicly. The firm also has plans to list another Socimi, Corpfin Capital III, through which it holds joint investments in 8 real estate assets.

The week before, Zaragoza Properties, which owns a stake in the Puerto Venecia Shopping Resort shopping centre in Zaragoza, debuted on the MAB.

Also this year, the Socimi Obsido entered the market for small companies. Its growth plans involve the purchase of hotels in Spain’s principal tourist destinations.

In addition, Trajano Iberia debuted on the stock market (in July). It is managed and promoted by a division of Deutsche Bank, and focuses on “semi prime” offices in Madrid and Barcelona; “prime” offices in secondary cities, shopping centres, and logistics assets.

Also in July, Mercal went public with a portfolio of assets in strategic locations in Spain. Four months before that Uro Property Holding, which owns one third of Santander’s bank branches, began trading on the MAB with a valuation of €259.7 million.

The Socimis Entrecampos, Fidere and Promorent also trade on the MAB, but the largest Socimis, namely Merlin Properties, Hispania, Lar España Real Estate and Axiare, all trade on the main stock exchange. Between them, they had purchased assets amounting to more than €3,100 million as at the middle of August, strengthened by the funds raised through their respective capital increases.

Even Acciona is evaluating the possibility of creating a Socimi for its real estate assets, and this Monday, the General Shareholders’ Meeting of Testa is expected to approve the conversion of the company into a Socimi after it was acquired by Merlin.

Original story: El Economista

Translation: Carmel Drake