Tag: profits

BNP: RE Inv’t Amounted To €11,700M In 2015

13 January 2016 – Cinco Días

Real estate investment soared by 67% in 2015 to reach €11,700 million, a record figure that exceeds the total level of investment seen even in the years before the crisis by 25%, according to the consultancy BNP Paribas Real Estate.

After a record year, the firm considers that it is more than likely that the volume of investment will stop growing and will instead stabilise at around €8,500 million (compared with €9,000 million in 2007), due to, amongst other reasons, the scarcity of appropriate investment opportunities and a forecast rise in the cost of money.

This recovery in the real estate sector has also manifested itself in terms of the number of transactions completed, which reached figures never seen before in the historic series, with a total of 271 operations in 2015 compared with 169 in 2014.

The retail and office segments were the most popular in 2015, with investment of almost €4,000 million in each, whilst residential assets accounted for just 5% of total investment.

The consultancy explains that this increase is due to, amongst other factors, the price of properties, many of which still have upwards potential, which would generate profits, as well as the expectations of an improved performance in terms of rental income and occupancy rates.

Madrid and Cataluña continued to be the busiest areas, with investment volumes of €6,000 million and €2,000 million, respectively. By type of asset, shopping centres were the most sought-after properties during the first half of the year, whilst operations involving office buildings were in most demand during the second half of the year.

The most active players in the market were international investors, which made acquisitions both directly, as well as through their shareholdings in Socimis.

In terms of direct investment, players from France, the USA and UK were the most active, but there were also significant capital inflows from Asian countries, such as China and the Phillipines, as well as from countries in the Middle East and Latin American, although the latter was more symbolic than anything.

In September, the company revealed that the total annual investment volume may amount to almost €12,000 million, or to €10,000 million excluding merger deals.

The real estate investment data provided by BNP Paribas Real Estate is based on certain economic indicators that forecast GDP growth of 0.8% in Q3 with respect to the previous quarter, which would mean GDP growth of 3.2% for the year as a whole. In addition, GDP is expected to grow by 2.5% in 2016.

Original story: Cinco Días

Translation: Carmel Drake

Merlin Delays Hotel Portfolio Sale Until June 2016

23 December 2015 – El Economista

Merlin Properties is certain that it wants to divest the hotel portfolio that it inherited from Testa, the former real estate subsidiary of Sacyr, which it acquired in June for €1,800 million, from its balance sheet within five years. Nevertheless, the company expects that it will not begin the sales process until the second half of 2016. The reason for its decision to delay this divestment until June is a question of regulations.

The aim of the Socimi was to use the money from the sale to reduce its indebtedness, which amounted to €2,939 million at the end of the third quarter, and to undertake new investments. The problem is that according to the rules that apply to Socimis, Merlin must allocate at least 80% of its profit from the sale as extraordinary dividend, which does not fit with the company’s plans.

“We are analysing other legal options to avoid this. Our analysis and its implementation will take some time”, explain sources at the group.

One of the possible options includes the launch of a new Socimi that will be dedicated solely to the hotel business; another includes the creation of a company containing all of these assets, which would then be sold and, in that way, the hotels would be sold all together, without the need to allocate 80% of the profits to shareholder remuneration.

According to Fernando Lacedena, CEO of Testa, the Socimi is focusing on the integration of both companies at the moment, “that is our primary objective”.

In addition, Merlin has just completed the refinancing of €1,700 million of Testa’s debt with a group of ten entities and it is preparing itself for a €850 million bond issue.

Sale of Testa Residencial

The Socimi, which has just joined the Ibex 35, has also launched its divestment of Testa Residencial. In this case, the tax considerations do not apply in the same way, since the 1,519 homes and 26 retail premises that it has put up for sale all sit within a separate company.

“The residential business is very ordered within Testa, it all sits within a single entity and therefore, the operation does not involve the movement of any assets or the transfer of any shares”, says Lacadena, who says that “this makes the transaction a lot easier, since it does not involve the partial divestment of some assets to one investor and other assets to another investor”.

The completion of this operation, which could amount to €280 million and is known as Project Crete, was scheduled for this year, however, even though “there has been lots of interest”, Lacadena explains that it may be delayed until the beginning of next year.

The Director explains that the price is not a critical element in this sale, however, like in any process, there are certain details that must be agreed. In this case, the company has an associated debt, which amounts to €100 million and therefore, “we need the financial institutions to be open to changing the ownership of that debt (before we can proceed)”.

Moreover, the sale of Testa Residencial will involve the transfer of the professional team that manages the business. In total, the workforce comprises around 40 people, between the Servicers and the Residential team. In this sense, the Director was keen to highlight that the integration of the two companies will not result in any redundancies.

Original story: El Economista (by Alba Brualla and Javier Mesones)

Translation: Carmel Drake

Iberostar Refinances Its Debt & Releases Guarantees

11 December 2015 – Expansión

New financing conditions / The hotel group owned by the Fluxà family is restructuring its debt and postponing its repayments until 2021. Its profits remained stable in 2014.

Iberostar is refinancing its debt for the second time in less than three years. In April this year, the hotel group controlled by the Fluxà family restructured the majority of its financial liabilities, according to the 2014 annual accounts of the parent company, Iberostar Hoteles and Apartamentos, filed with the Mercantile Registry. At the end of last year, the group’s short and long-term debt amounted to more than €400 million – most of which was held with financial institutions – and the liabilities between the group’s companies amounted to €533 million.

The agreement establishes a new timetable, which runs until 2021 – three extra years – and reduces the guarantees provided by Iberostar. Under the previous refinancing agreement, completed in 2012 and amounting to €768 million, the hotel chain offered a personal guarantee against the obligations of a €285 million loan, as well as mortgage guarantees over Spanish assets and the pledge of its 5% stake in ACS.

Percentage in ACS

The Fluxà family is the shareholder of the construction group that has been chaired by Florentino Pérez since 2006, when Iberstar sold its tourism division to Carlyle and Vista Capital for around €900 million to focus on the hotel sector. The private equity companies created Orizonia – which no longer exists as it filed for bankruptcy in April 2013 – and the Fluxà family invested almost all of the resources obtained on the purchase of ACS.

Iberostar paid €46.82 for each share – €826 million in total. Yesterday, ACS closed trading with a share price of €28.49, representing an increase of 2.76% during the session. In 2012, Iberostar was forced to recognise an impairment on its shareholding amounting to €147.12 million, which meant that the company recorded losses that year. At the end of 2014, the company recognised its shareholding in ACS at €36.41 per share and set its recoverable value at €40 per share. Despite this difference, Iberostar has not reversed the impairment recorded in previous years.

Iberostar is represented on the board of ACS by Sabina Fluxà, the Executive Co-Vice-President and CEO of the hotel chain, and it received dividends amounting to €20.34 million on its shareholding.

In 2014, the parent company’s turnover amounted to €43.47 million, down by 6.36%. The operating result decreased by 76.4% to €7.97 million, due to a reduction in other operating income and an impairment for the transfer of tangible assets and financial instruments. Iberostar expects to improve that figure this year, by maintaining stable turnover and cutting down its expenses. Nevertheless, the net result remained stable – at around €15.7 million – due to the positive effect of the lower tax charge on its profits.

As a whole, Iberostar and its subsidiaries invoiced €1,435 million in 2014, up by 29.6%, to place it in fourth position by turnover, surpassed only by Grupo Barceló – which also includes its tourism business – , RUI and Meliá.

Dividends

In 2014, the parent company allocated its profits to offset its negative results from previous years, but it distributed €55.7 million in dividends distributed against reserves. Moreover, it repaid debt amounting to €18.78 million owing to the Tax Authorities for Corporation Tax for the years 2007 and 2008.

Meanwhile, Iberostar has the option to purchase an additional 29.15% stake in Royal Cupido, in which it already holds a 29.5% shareholding, for €44.54 million. Pontegadea, the investment arm of Amancio Ortega, controls 45.5% of Royal, which owns five hotels in Spain and earned €3.43 million in 2014.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Banks Delay Property Sales & Await Higher Returns

11 August 2015 – Cinco Días

Spain’s banks are delaying their property sales and are instead waiting for conditions in the market to improve significantly before they increase their rate of sales. That was the conclusion of a report published by the ratings agency Moody’s in May about the management of the property glut still sitting on entities’ balance sheets, which now amounts to €83,000 million. And the trend has been confirmed by the (most of the) banks themselves in their recent half-year results presentations. (…).

In particular, Santander, BBVA, CaixaBank, Sabadell, Popular and Bankia sold 32,397 properties in total during the first six months of 2015, which represents a decrease of 18% with respect to the 39,241 transactions recorded during H1 2014.

However, the transactions this year have been closed with average discounts of around 35% – a significant improvement on the  60% discounts that the entities were forced to accept just a few years ago, as they desperately tried to get rid of the assets they had accumulated on their balance sheets following the burst of the real estate bubble. Some entities are now even generating profits from the sale of properties.

That is the case of BBVA, which recorded profits of €36 million from the sale of real estate assets worth €456 million during the last quarter. This turnaround enabled the entity to reduce the losses from its real estate arm to €300 million during H1 2015, which represents a decrease of 35% on the negative figures it recorded a year earlier. And it achieved this result selling half as many properties, with 5,190 transactions closed in the 6 months to June 2015, compared with 11,402 in H1 2014.

Banco Santander also reported similar success…the entity sold 5,200 properties during H1 2015, compared with 6,000 during H1 2014…it closed Q2 2015 with the “smallest quarterly loss” ever since the creation of the bank’s RE arm.

Meanwhile, Banco Sabadell reduced its sales volume by a third from 7,541 during H1 2014 to 5,190 in H1 2015, and with lower discounts – specifically, with an average reduction to gross value of 46.4%, versus 52.4% last year and 60% in 2013.

CaixaBank sold 5,907 properties in H1 2015 compared with 7,392 in H1 2014…and has also offered lower discounts this year.

However, two banks stand out as the exceptions to the rule – Bankia and Popular – which actually both increased their sales volumes during H1 2015. The former sold 3,345 properties in H1 2014 and 4,135 in H1 2015, with discounts this year of 35%…(…). Meanwhile, the latter really bucked the trend, with the sale of 1,172 properties in H1 2014, increasing to 4,135 in H1 2015, whereby doubling its revenues from asset sales…(…).

Original story: Cinco Días (by Juande Portillo)

Translation: Carmel Drake

Colonial Earns 64% Less & Neutralises Effect Of Asentia

30 July 2015 – El Economista

The real estate company Colonial has closed the first half of the year with earnings of €202 million, down by 63.8% with respect to the same period last year, when it recorded earnings of €559 million, due to the deconsolidation of Asentia, its bad bank.

In a statement, Colonial said that its recurring net profit for the first half of the year, i.e. the profit generated by the real estate company’s ordinary activities, amounted to €11 million in H1 2015, an increase of 39.2% compared with the first six months of 2014.

Although Colonial’s accounts for H1 2014 included a positive extraordinary item for Asentia amounting to €704 million, the accounts in H1 2015 also included a €348 million revaluation of the company’s assets. Colonial said that the value of its assets has increased by 21% in twelve months.

Colonial’s business model is simple – essentially, it purchases buildings in prime areas of Barcelona, Madrid and Paris, renovates them for rental and then collects the corresponding rental income. Most of the company’s assets are leased as offices.

In terms of revenues, the real estate company, whose main shareholder is Grupo Villar Mir with its 24% stake, earned €111 million during the first six months of 2015, up by 6%.

So far this year, Colonial has invested €165 million in the acquisition of buildings, including three properties in the centre of Madrid and one in the centre of Paris.

To illustrate the strong performance of the business, Colonial highlights that during the first six months of the year, it has signed rental contracts for space covering 107,692 m2, which is equivalent to the entire surface area that it signed contracts last year as a whole.

Original story: El Economista

Translation: Carmel Drake

Renta Corporación Intends To Double Its Profits In Five Years

24 July 2015 – El Economista

Renta Corporación has launched a new five-year strategic plan (for the period 2016-2020), in which it details its plans to double its profit to €20 million by 2020, compared with the €9 million that it expects to generate this year, according to the real estate company.

Thus, the company, which exited from bankruptcy proceedings last year, embarks on a new growth phase, driven by the economic recovery and the real estate sector.

In this context, the real estate company, which specialises in the purchase of buildings for their renovation and subsequent sale, will focus on “taking advantage” of the opportunities that arise in the sector “mainly, in the management of assets for third parties” and in increasing the number and size of its transactions.

In this sense, Renta Corporación expects its turnover to almost double (+88%) over the next five years to reach €340 million by 2020.

The real estate company will combine this new policy with its compliance with a creditors agreement (through which it emerged from bankruptcy in June 2014), as well as a unilateral agreement it made with the Tax Authorities to repay its senior debt.

During the first half of the year, Renta Corporación recorded a net profit of €4.5 million, i.e. 47% less than in 2014, because of the effect of a reclassification that it had to record for part of the debt it holds with the Tax Authorities.

Appeal to the Supreme Court regarding its debt with the Tax Authorities

Specifically, as a result of a ruling issued by the Provincial Court of Barcelona, the real estate company had to classify €9.3 million of the amount it owes to the Tax Authorities as senior debt.

Nevertheless, the company has appealed against the ruling to the Supreme Court and estimates that “the effects of this reclassification may be reserved in the event that this judicial review considers it appropriate”.

Renta Corporación’s half year results were also affected by the extraordinary items that the company recorded in 2014. Profits remained stable during H1 2015 at €4.4 million; meanwhile, the company recorded a negative EBITDA of €500,000), compared with an EBITDA loss of €25.2 million a year earlier.

At the end of June, Renta Corporación held net financial debt amounting to €17.6 million, roughly in line with its debt balance at the beginning of the year.

The company’s new strategic plan also envisages a gradual reduction in its level of indebtedness, from a liability of €17.5 million forecast for the end of 2015, to €4.9 million in 2019, to a positive balance by 2020.

Original story: El Economista

Translation: Carmel Drake

‘La Zagaleta’ Tripled Its Profits In 2014 To €10M

15 June 2015 – Expansión

La Zagaleta is regarded as the most luxurious residential development in Europe / The complex in Marbella, which has 235 homes, tripled its profits in 2014 to €10 million.

In just 900 hectares of land nestled in a Mediterranean forest a few kilometres from Marbella, and guarded by the highest level of security, the residential development of La Zagaleta hides a real estate oasis to which only a few wealthy individuals can aspire.

The Chairman of the company, Oswald Grübel, estimates that the 235 mansions that comprise the residential development are worth €1,800 million at market prices, although that figure increases to €3,000 million if we include the golf courses and other facilities at the site, which is linked together by a 60km-long internal road.

Considered the most luxurious and exclusive urban development in Europe, La Zagaleta is located in the middle of the Golden Triangle – between Marbella, Benahavía and Estepona – the area where the real estate recovery has started in Spain, driven by the pull of international investors.

Grübel, a former CEO of the Swiss bank UBS, took over the reins in 2013, after the Chairman and founder, Enrique Pérez Flores, decided to stand down from his role, at the age of 90. Last year, the company reported record sales of €40 million and tripled its net profit to €10 million. One of the drivers (behind these results) was the sale of several plots of land to a US fund, whose identity has not been disclosed for confidentiality reasons.

An agreement has been made with that fund to manage its assets, i.e. to build villas (on the acquired plots) and then sell them. The contract provides for the construction of the first two (villas) through a joint venture, on which work will begin this year; and then to build several more (villas) over the next five years, although that figure may increase.

According to Jacobo Cestino, CEO of La Zagaleta, in 2006, a strategic decision was taken for the firm to develop the land, in order to generate higher margins and so it reserved all of the available land. “Homes may end up forming part of the stock for a year and a half. That is a risk we run, but the reality is that we have sold properties that have not even been completed”. Thus, this year, the company will invest €15 million in three new mansions, whose market price will be around €40 million.

Cestino also revealed that the company is considering corporate operations, “because our aim is to grow and export our brand. We are analysing operations to form partnerships overseas on a daily basis. We expect to finalise at least one purchase between now and the end of the year”.

In La Zagaleta, around 150,000 m2 of land is occupied, although the buildability ratio is reduced to 15%. Thus, there is still 200,000 m2 available, divided into 185 plots. In terms of rotation, Cestino indicates that “there is still quite a lot”. In recent years, there have been 8 or 9 re-sales per year on average.

Original story: Expansión (by Lidia Velasco)

Translation: Carmel Drake

One Shot Wants To Expand To 15 Hotels, In Europe & USA

8 June 2015 – Expansión

Geographical diversification / One Shot Hotels, which has just signed its third project in Madrid, is evaluating an IPO on MAB in the medium term as it looks to open a hotel in New York.

One Shot Hotels is quickening the pace and looking towards Europe and the USA. The chain led by Luis Felipe Mendieta and owned by the Solís family is, despite its young age, the new star in Madrid’s hotel market. In just two years, One Shot has signed three projects in the capital. The latest one, the conversion of an office building into a hotel on Calle Fortuny, was completed a few weeks ago.

“One Shot began as a university start up, with several 30-bedroom hotels in Andalucía”, says Luis Felipe Mendieta, the CEO of One Shot Hotels. After obtaining financial backing from the Solís family, the project made the leap to the Premier League, in Madrid: “We saw that there was very little differentiation; price was the only factor”.

To differentiate itself, One Shot put its commitment to contemporary art on the table, by converting its hotels into a dynamic platform for unknown artists. One Shot 23, a 42-room three-star hotel on Calle Prado (pictured above) was the company’s first property in the capital, which opened in 2013.

Since then, One Shot has invested €35 million in eight projects. Only two of its hotels are currently operational – Prado 23 and Recoletos – but this year, the firm will open nine establishments in Valencia, Sevilla and London – owned 50% with the Arab investor Riz Ali- and more hotels will be opened in Madrid and Barcelona in 2016.

In terms of its model, the chain mainly focuses on four-star hotels that have between 50 and 80 rooms. “And for the purchase and rental, the management is complicated because we do not generate sufficient critical mass”, according to Mendieta.

Spain – Barcelona, Bilbao and San Sebastián; UK – London; Italy – Rome; USA – New York, Los Angeles, Miami and San Francisco – are all on the radar… In numbers, “our objective is to double our size, to 15 hotels by 2020, and mainly concentrate on overseas expansion”.

At an operating level, the company closed 2014 with revenues of €3.5 million and a gross operating profit of close to 35% of turnover. Once the eight hotels in the pipeline have been opened, the firm expects to generate revenues of between €18 million and €19 million p.a.. The average daily rate (including VAT and commission) at the Hotel One Shot Recoletos, on Calle Salustiano Olozaga, is €135 – €105 in the hotel on Calle Prado – with an occupancy rate of 96% and with 75% of the guests coming from overseas. “So far in 2015, we have noted an increase in the average revenue per room (RevPar), which is not being driven by an increase in the occupancy rate, but rather by an improvement in prices”, says Mendieta.

(…)

Mendieta is considering an IPO on the MAB, but says that “it is wiser to wait until the entire project has been developed”. And he explains why: “It is more attractive (for us) than a Socimi, which forces you to distribute dividends, whereas what we want to do is reinvest, and that is the strategy we value for expanding into the market in New York, listing on the MAB or joining forces with a fund”.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Barceló Acquires 42.5% Stake In Occidental Hoteles

5 May 2015 – Expansión

42.5% shareholding / The tourism group acquires the stakes held by Amancio Ortega, owner of Inditex, and several minority shareholders, and continues to negotiate with BBVA to take control of the chain.

The sale of Occidental Hoteles has been unblocked with Barceló’s purchase of a share of its capital. The tourist group has acquired a 42.5% stake from Amancio Ortega, owner of the textile empire Inditex, and several minority shareholders. In parallel, it is also negotiating with BBVA, which controls the remaining 57.5%, to gain control of 100% of Occidental and strengthen its position in the Caribbean.

Although the exact amount of the transaction is unknown, it has been closed with a discount of between 40% and 50% with respect to the €700 million that BBVA and Ortega paid in 2007. That was the figure that the shareholders hoped to obtain through the divestment process launched in 2013, which was thwarted last December, with Barceló as the favourite, due to differences over price.

Then, Barceló was bidding together with the fund Caribbean Property Group (CPG). Now, the tourism group is going to single-handedly undertake the purchase of the shares held by Ortega (who holds 23.63% through his company Partler 2006), Gregorio de Diego (who controls 13.5% through Tamar International) and the Miarnau family (whose company Iosa Inmuebles holds 5.26%).

Competition

The transaction, which is pending approval by the Mexican competition authorities, will be structured as a financial investment, and so Barceló will not take over the management of Occidental’s hotels. The chain operates 13 properties in the Caribbean and owns the majority of those establishments.

Nevertheless, sources in the sector are convinced that BBVA will end up selling a non-strategic stake. In fact, that is the joint position that the entity chaired by Francisco González and Amancio Ortega held until the end of 2014. The only thing that has separated them has been the timing (of their respective exits).

The textile businessman wanted to accelerate his exit from Occidental before the company looses value, since there is no growth plan on the table. In contrast, BBVA was keen to wait for a better offer and set a limit below which it was not willing to divest. In the end, the partners have broken their shareholders’ agreement, which has opened the door to Occidental for Barceló.

In terms of convincing BBVA, the close ties that unite the companies work in the tourism group’s favour. Barceló, BBVA and FCC created an asset company Grubarges in 1998, with the aim of channelling its surplus investors and growing in the hotel sector. Grubarges was dissolved in 2004 due to strategic differences between the partners, but the relationship is still strong.

If Barceló acquires 100% of Occidental, it will strengthen its position in the Caribbean, one of the priorities on its roadmap to become the world leader in the holiday hotel sector. Through the integration, Barceló would obtain a presence in new countries – Colombia, Aruba and Haití – and would strengthen its position in the Dominican Republic, Mexico and Costa Rica. Furthermore, the transaction would involve an investment plan to reposition Occidental’s properties.

Barceló currently operates 94 hotels and 30,000 rooms in 16 countries. In 2014, the company generated profits of €46.4 million, up 85.6% and turnover of €2,056.6 million, up 6.2%.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Santander’s Landlord Finalises The Sale Of 400 Branches

5 March 2015 – El Confidencial

Uro Property, the name given to the company formerly known as Samos, will begin trading on the MAB (‘Mercado Alternativo Bursátil’ or Alternative Investment Market) with the minimum legal amount, given that its ultimate aim is to move onto the main stock market.

Another one of the Socimi giants is counting down the hours until its goes public. Uro Property, the name give to the company formerly known as Samos, and the company through which several investment funds advised by Oleguer Pujol purchased a one third stake in Santander’s branches, will list on the MAB within the next few days and will continue to put the pieces in place to fulfil its aim of listing on the main stock market, with a healthier financial structure.

With this challenge in mind, the company chaired by Carlos Martínez Campos and led by Simon Blaxland is finalising the sale of 400 of the 1,316 branches that it owns, a transaction that it is already negotiating with an institutional investor and that will allow it to repay some of its €1,424 million loans ahead of time. This debt was already financed last year, when Samos’s creditor entities, led by Santander and CaixaBank, took control of the company, by capitalising €424 million of mezzanine debt and creating Uro.

This transaction turned Santander into the main shareholder of the Socimi, with a 24% stake, whilst CaixaBank took ownership of 14.89%; BNP Paribas holds a 8.81% stake and Société Générale holds 3.14%. In addition, several hedge funds and other entities, including Barclays and Bayerische Landesbank were left with stakes of less than 1%; whilst the former shareholders, Sun Capital, now known as Atisha Holding and the Pearl Group, now Phoenix Life, hold 21.7% and 14.38%, respectively.

All of the shareholders have committed to retaining their stakes for a minimum period of 12 months, during which time Uro Property is confident that it will close a new financing deal that will allow it to reduce its spread from its current level of 300 basis points to closer to 200 basis points.

In fact, the listing on MAB is seen as another step in this process, given that by law, all of the Socimis are obliged to go public within a period of two years. Although Uro Property’s deadline in this sense does not expire until after 2015, it has chosen to go public as soon as possible precisely because it believes that its status as a listed company will facilitate its refinancing.

This explains why Santander’s landlord is going to limit its initial placement to the minimum established by law: two million euros, a paltry figure, considering that its assets have been valued by CB Richard Ellis to amount to €2,000 million and given that forecasts suggest its market value amounts to around €500 million.

An independent audit to separate the company from Pujol

Renta 4 has been hired as the liquidity provider, whilst EY has performed the valuation of the company ahead of the placement. Aware that all eyes are focused on it, given its historical ties with Oleguer Pujol, the company commissioned Deloitte to conduct an independent audit (the auditor of the Socimi’s accounts is PwC), which certified that the maximum investment made in the Socimi by the son of the former President of Cataluña amounted to €67,000.

The Socimi has signed a new lease agreement with Santander, which has committed to occupy the properties for a minimum period of 25 years, and it may extend that period by 14 more years for a third of the assets, which the bank, chaired by Ana Botín, has identified as more strategic for its business. In return, the company has been granted the right to review the portfolio each year, as well as the ability to exchange some branches for others, provided these exchanges do not represent more than 1% per year, under any circumstances.

Santander will pay Uro rent amounting to €125 million net, since the bank itself will bear all of the costs relating to the properties. This guaranteed income, together with the refinancing deal signed last year, allowed the Socimi to generate profits in 2014. Moreover, with the new financial structure that it is negotiating, which it is hoped will extend the current six year maturity period, the Socimi is confident that it will significantly improve its results; this is key for a vehicle such as this, whose main attraction is the fact that it is obliged to distribute the majority of its profits in the form of dividends.

Uro will be able to begin working on its plans to list on the main stock market and expand its portfolio of assets from 2016, in line with the steps being taken by its competitors, such as Merlin, which acquired BBVA’s offices.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake