Silicius Socimi Raises €29M In Financing To Accelerate Asset Purchases

4 October 2017 – Press release

Silicius has signed a long-term financing agreement in order to continue with the acquisition of several new profitable assets ahead of its debut on the stock market in 2018.

The Socimi managed by Mazabi has taken another step forward. The company, which specialises in long-term profitable assets, is preparing a new phase of growth with the acquisition and incorporation into its existing portfolio of new assets, in accordance with its policy to invest in assets that generate stable returns.

Silicius has signed its first financing agreement with two Spanish banks for a combined amount of €29 million. The average maturity period for the financing is 12.5 years. Over the next few months, the company will secure another €13 million of financing, which it will use to make new acquisitions and invest in Capex for its existing properties.

Since this is the first loan that Silicius has signed, the company’s objective was to obtain financing conditions that “match” its long-term Business Plan and allow the payment of an annual dividend to its shareholders.

According to Juan Diaz de Bustamante, Director General of Silicius, “The company’s average indebtedness may not exceed 25-30% if we are to maintain the objective of paying a stable dividend to our shareholders”.

Silicius is governed by the following principles: conservative investments over the long term, the liquidity of our assets, the payment of an annual dividend and low indebtedness.

Currently, Silicius owns assets worth €120 million and its expected annual revenues amount to €6 million. Its assets all generate stable income over the long-term, with a combination of some of the investments held in value-added products.

The objective of Silicius is to make its debut on the stock market in 2018 with a value of between €250 million and €300 million through the incorporation of investor partners and real estate projects considered “suitable”. Once listed, the aim is to incorporate institutional shareholders to achieve the minimum objective of €400 million, the amount necessary to consider the Socimi’s shares liquid. The target investors are “family offices” and “institutional investors” looking to invest in exchange for an annual dividend payment and liquidity through listed shares.

Original story: Press release

Translation: Carmel Drake

Hispania Gets Ready To Debut On The Bond Market

17 January 2017 – Cinco Días

The Socimi Hispania is planning to join the bond issues undertaken in recent months by other major players in the sector, including Merlin and Colonial, with the aim of diversifying its financing. To this end, it has already started to sound out the ratings agencies. Its objective is to obtain an investment grade rating for its securities.

Hispania Activos Inmobiliarios is studying the option of debuting on the capital markets with a bond issue to refinance some of its gross debt, which currently amounts to €631 million, according to sources familiar with the operation.

The Socimi has already started the process to request a rating from the ratings agencies, with the aim of launching the operation during the first few months of the year.

The firm has made contact with the three large players –Standard & Poor’s, Moody’s and Fitch–, although it will not need a rating from all of them, rather from just one of them or two at most. The aim is to achieve an investment grade rating – BBB – or Baa3 – , which would allow it to debut on the capital markets at a reasonable cost.

Hispania, in which the magnate George Soros owns a 16% stake, will thereby join the other bond issues undertaken recently by other companies in the sector.

The Socimi Merlin Properties – which forms part of the Ibex 35 – went to the market in October with a 10-year bond placement amounting to €800 million. The current yield on that debt is 2.3%. It has a Baa2 rating, which is one notch above the limit that separates junk bonds from investment grade securities, according to Moody’s nomenclature. Moreover, Merlin has assumed another €1,550 million in bonds from two bond issues made by Metrovacesa, with which it completed its merger at the end of October. (…).

Hispania’s current debt has an average maturity period of 7.2 years and €497 million of the balance is due to be repaid from 2022 onwards. The current average debt cost is 2.7%. Hispania also has hedges in place to avoid any surprises if interest rates rise. 96% of its debt is guaranteed. (…).

In general terms, the optimal balance sheet structure of these types of companies rests on three pillars: bank debt with an additional guarantee – in the majority of cases, properties from the company’s portfolio – , unsecured financial loans and listed debt.

With the proceeds that it raises from the bond issue, Hispania plans to repay some of its current debt balance. It would thereby take advantage of the good conditions in the market with liquidity and the environment of low interest rates. This company, created in 2014 under the special tax regime for Socimis, is led by Concha Osácar and Fernando Gumuzio, and is managed by Azora. In addition to Soros, its shareholders include the funds Fidelity, FMR, Tamerlane and BlackRock.

Hotel specialist

Hispania’s portfolio of real estate assets closed the third quarter of 2016 with an appraisal value of €1,680 million. The Socimi owns 36 hotels in Spain with 10,407 rooms. 68% of the value of those assets is located in the Canary Islands and 64% is managed by Barceló, with which it has signed a strategic alliance. The Socimi recently purchased three properties in the Cala San Miguel in Ibiza (pictured above) for €32 million.

Original story: Cinco Días (by A. Simón and R.M. Simón)

Translation: Carmel Drake

Lar España Doubles Its Profits In H1 To €43.3M

13 September 2016 – El Economista

Lar España Real Estate recorded a net profit of €43.32 million during the first half of this year, which represents a two-fold increase compared with a year ago, when its profit amounted to €19.34 million, according to reports from the Socimi.

At the end of June, the company chaired by José Luis del Valle, owned a portfolio of properties amounting to €1,050 million. That amount is equivalent almost twice the value of its assets a year earlier and represents a revaluation of 9.3% with respect to the amount paid to acquire them.

The investment made to incorporate new assets into the portfolio of buildings and improvements that, according to the firm, has been performed under its management, boosted the Socimi’s rental income by 9%, to €26.9 million.

In turn, the gross operating profit (EBITDA) amounted to €23.80 million between January and June, whereby tripling the €8.30 million recorded during the same period in 2015.

The retail group Carrefour, the textile company Inditex, Media Markt and the public engineering company Ineca are Lar’s largest four tenants, given that they generate between 5.1% and 8.1% of their total rental income.

Reduce debt

In terms of financing, Lar España ratified its commitment to continue advancing towards its dual aim of reducing its cost of debt, which amounted to €456 million at the end of June, and extending its average maturity period, which currently amounts to almost seven years, on average.

The Chairman of the Socimi thinks that the half-yearly accounts will allow the company “to successfully tackle its commitments to shareholders”.

Original story: El Economista

Translation: Carmel Drake