Quid Pro Quo Launches a €3.5M Capital Increase to Grow its Portfolio

18 June 2019 – Eje Prime

Quid Pro Quo has launched a €3.5 million capital increase to continue investing. The increase will be carried out through the issue and launch into circulation of almost 3.5 million shares with a nominal value of €1 each, according to the Official Gazette of the Mercantile Registry (Borme).

The Socimi owned by Alquiler Seguro will use the funds to continue growing its portfolio. Historically, the company has invested in rental homes costing less than €100,000, mostly in Madrid, but also in Barcelona, Valencia, Alicante, Málaga and Álava.

If the capital increase goes ahead, its total share capital will amount to €12.5 million.

Original story: Eje Prime (by M. C. P.)

Translation/Summary: Carmel Drake

Alquiler Seguro Finalises MAB Debut of its Rental Home Socimi Worth €9M

4 July 2018 – Eje Prime

The Alternative Investment Market (MAB) is going to welcome another new Socimi into the fold very soon. Alquiler Seguro, owned by the Enacom group, is going to debut its rental home Socimi, Quid Pro Quo (QPQ). The company has obtained the green light from the MAB’s Coordination and Incorporations Committee, according to a statement issued by the Spanish Stock Exchange and Markets (BME).

The company owns 37 assets, all of which are located in Madrid except for one that is situated in Barcelona, and it is worth €9 million in total. The aim of the manager’s Socimi is to buy homes in “the main provincial capitals and their metropolitan areas”, taking advantage of the high current demand for rental homes in the main areas of the country.

Alquiler Seguro is managing the rentals of QDQ’s homes. Of the homes that it operates, 34 are located in the city of Madrid, two in Torrejón de Ardoz and Alcorcón, and one in Barcelona.

The Socimi has indicated that it has a new asset acquisition plan for the next few years, with the aim of “continuing to grow in an organised fashion”, with a maximum indebtedness ratio equivalent to 50% of the value of its portfolio, and future capital increases to finance its investment needs.

The holding company that owns QDQ is Enacom, which owns other companies in the group such as Ivermax, which specialises in advising and managing residential assets for investors; FIM Ibérica, which manages cases involving tenants in arrears; and the technological firm Anexia.

Original story: Eje Prime

Translation: Carmel Drake

Rental Housing Is Booming Following The Crisis

26 October 2016 – El Economista

The rental market, which had never really caught on before in Spain, is now enjoying a genuine boom following the economic crisis. The employment instability experienced in recent years and the inability of people to buy a home in the face of mortgage restrictions have raised the prominence of the rental market in Spain, which now accounts for 15.6% (of the total housing stock), a ratio not seen since 1987, according to the latest data from the Bank of Spain and reported by Idealista. By contrast, the percentage of owned homes has decreased to 77.3%, a figure not seen since 1988.

With this data on the table, it is logical to think that the decrease in owned homes this year will exceed the figure recorded in 2015. Specifically, last year, there was a decrease (in the number of rental properties) of almost 9% from the peaks registered in 2002, when owned homes accounted for 84.72% of the total housing stock.

The increase in demand for rental properties has had a significant impact on prices. After seven years of continuous decreases, which peaked at 25% in some cases, the first increase – of 3% on average – was recorded in 2015. The impact on rental prices was felt most acutely in the country’s ten largest cities, led by Barcelona, where prices rose by 17% on average.

Although the supply has also increased since then, average rental prices have continued to rise and according to pisos.com, they increased by 5.09% during the third quarter of 2016. In this way, the average rental price amounted to €661 in September 2016 for a typical home with an average surface area of 112 m2. In comparative terms, this figure represents a 0.3% increase compared to August. Nevertheless, the YoY increase amounted to 9.26%.

These average increases are symbolic if we focus on specific areas in Madrid and Barcelona, where potential rental clients look for properties in central, prime areas, that are well connected (in terms of transport links). Thus, in the Catalan neighbourhoods of Sant Martí, Gràcia and Sants-Montjuïc, prices are rising by between 12% and 16% p.a..

The real estate market itself is not oblivious to this trend and for this reason, a wave of Socimis are getting reach to focus on the rental housing sector.

For the time being, Fidere and Optimum III are the only Socimis that are actually up and running. Imminent debuts are expected from Alquiler Seguro, with its Socimi Quid Pro Quo, which will have 625 units in its first phase, and Domo Activos Socimi, the cooperative manager, with its portfolio of 1,400 units. The Valencian group Inveriplus, the US fund Blackstone – with Albinara Properties, Pegarena and Tourmalet – and Testa Residencial, with 4,700 homes, are also expected to enter the market.

Original story: El Economista (by Alba Brualla and Cristina Alonso)

Translation: Carmel Drake

Socimis Turn Their Attention To The Rental Housing Market

26 September 2016 – El Mundo

The real estate market is constantly evolving and adapting to new times and players, such as, for example, Listed Real Estate Market Investment Companies (Socimis). These investment vehicles, which have significant tax advantages and whose structure was created in 2012 to promote the leasing of properties, is now becoming a major player in the residential rental market.

To date, large real estate firms have created most of the Socimis in the market. They have spent billions of euros on investments, with the primary aim of managing tertiary and commercial assets. There have been a handful of purely residential Socimis on the scene, but they have been mostly driven at a family level. But that is now changing, after several high profile firms linked in one way or another to housing have decided to launch new Socimis. This is being perceived as a real declaration of intent that will lead to the professionalization of the rental housing market.

This professional boost will happen through initiatives such as those launched by Quid Pro Quo Alquiler (the Socimi being prepared by Alquiler Seguro) and Domo Activos Socimi (Domo Gestora), amongst others. They are just two of the new companies that are being called upon to define the before and after in the rental housing sector.

Why is this change happening in the real estate sector? “Nothing in particular has happened. We are seeing a normal process in terms of the evolution of the Socimis. At the beginning, it made complete sense to use them to acquire offices and shopping centres, because it was easier to find those products and at good prices. The situation was completely the opposite in the residential sector, where there were few packages of private homes available to buy. Over time, it has made sense for companies to start to group together large residential portfolios and commit to that formula”, explains José Luis Ruiz Bartolomé, real estate consultant and partner at Certus Capital.

Sources at Hispania, one of the leading Socimis in Spain, confirm that housing is less attractive. “The asset is very intense in terms of management and it requires a certain condensed critical mass to be profitable. Portfolios of very diverse homes should be avoided as they make management more difficult and increase costs”, said Cristina García, CEO at Hispania. For this reason, Hispania only investments in whole buildings, “because that means that we are able to renovate entire assets, increase their values significantly and optimise costs”, said García.

In this sense, it is worth highlighting that the new Socimis are backing the rental of diverse homes. The best example is the Socimi owned by Alquiler Seguro – a firm that specialises in brokering leases -, which will settle for properties purchased by qualifying investors from their current clients (it manages more than 50,000 contracts). On the other hand, Domo Activos Socimi will be the first property developer Socimi in Spain; it will focus on acquiring buildable land and constructing apartments for rental.

Alquiler Seguro’s initial plans involve capturing €50 million in funding and for the Socimi to launch with around 500 homes. Within four or five years, it hopes to raise up to €500 million and expand the portfolio to include around 6,000 units. Antonio Carroza, CEO at Alquiler Seguro, confirms that Quid Pro Quo’s goal is “to professionalize leasing and provide the market with a constant, homogenous and continuous supply”. (…).

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake

The Socimis Set Their Sights On Rental Housing

30 August 2016 – Expansión

After buying up offices, shopping centres and hotels, many Socimis are now setting their sights on rental housing.

The Socimis owned by Domo, Alquiler Seguro and Inveriplus, amongst others, are preparing to start trading on the stock market. (…).

At least five new Socimis, focusing on rental housing, are expected to debut on the stock market over the next few months. Some of these Socimis have already started the process to join the MAB by preparing their Information Memorandums for Incorporation onto the Market (DIIM), which will, subsequently, be submitted for review by the MAB’s Coordination and Incorporations Committee and the Board of Directors. These bodies must analyse the document and decide whether or not to approve their debuts on the market.

The potential new joiners to the MAB include the Socimi owned by the management company Domo, which has the distinction of being able to offer its investors the possibility of participating in every project phase – from the acquisition of land, to the monitoring and control of developments, to placing homes up for rent and, subsequently, where appropriate, the sale of the assets. This Socimi is scheduled to join the MAB in September.

New joiners

Domo Activos Socimi, which was constituted on 11 June 2015, aims to raise up to €50 million in initial capital and then carry out capital increases to raise up to €250 million.

Meanwhile, the Socimi owned by Alquiler Seguro – Quid Pro Quo – is planning to debut on the stock market before the end of the year. The company initially wants to raise €50 million, which it will use to purchase properties for their subsequent rental.

The company’s plans involve incorporating 500 homes into its portfolio during the first phase, and its five year objective is to own around 6,000 homes and reach a fund volume of €500 million through subsequent capital increases.

Another Socimi that is finalising its debut on the stock market is owned by Inveriplus, a firm that specialises in the clean up of real-estate assets. This company will be created with €10 million, which will be used to purchase developments. In addition, the company plans to invest €60 million in assets before its debut on the stock market.

Armabex – which specialises in the constitution of Socimis and their subsequent incorporation onto the stock market – is working with two other companies that it expects will be ready to debut on the MAB before the end of the year. One of those Socimis is the subsidiary of a real estate company and the other is a company owned by two architects with projects in the south of Madrid. (…).

Currently, the average gross yield on rental housing amounts to 4.6%, according to the latest available data from the Bank of Spain. If we include future capital gains, from the sale of assets, those yields can soar into the double digits. (…).

For the time being, the ratio of rental properties to owned properties in Spain stands at around 20%, whilst the European average is closer to 35%, with some cities, such as Berlin, reporting percentages of almost 60%. These figures indicate that there is still a lot of potential (in Spain). (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Alquiler Seguro Prepares Its Socimi’s Debut On The MAB

10 June 2016 – Expansión

The first Socimi specialising in the residential rental market in Spain is finalising its debut on the stock market and hopes to be ready to list on the Alternative Investment Market (MAB) before the end of the year. Quid Pro Quo – the name of Alquiler Seguro’s real estate investment company – wants to raise €50 million initially, which it will use to purchase properties for their subsequent rental.

The CEO of Alquiler Seguro, Antonio Carroza (pictured above), explained that the company wants to begin by incorporating 500 homes into its portfolio during the first phase. To that end, it has identified around 6,000 homes, from the total pool of homes that it manages, which fulfil the requirements set in terms of rotation, tenant retention and which are also likely to be acquired from their owners at market prices. The company has already signed purchase options with owners worth €12 million in total.

“Within 5 years, the aim is that the Socimi will own around 6,000 homes and achieve an investment volume of €500 million, through several capital increases”, explained the CEO.

Carroza said that, with that volume of assets, the group would then be able to consider moving onto the main stock exchange. Quid Pro Quo’s assets will be mainly located in Madrid, although it will also have a portfolio of homes in Barcelona, Valencia and Sevilla and, to a lesser extent, in Alicante, Vitoria and Bilbao. “We have worked hard to make the intermediation business profitable and to encourage both supply and demand; now, we want to close the circle by professionalising the supply”, said Carroza.

For the CEO, the future of the Socimis will involve specialisation. “The few (Socimis) that have been working in the residential sector until now are getting rid of that part of their businesses”, he said.

In terms of Quid Pro Quo’s shareholders, Alquiler Seguro will acquire up to 5% of the Socimi’s share capital, whilst the remainder will be offered up to domestic and international investors.

In terms of the Board of Directors, the Socimi’s highest executive body will comprise five members: the President of Alquier Seguro, Gustavo Rossi; the CEO, Antonio Carroza; and three independent directors, one of whom will come from a multinational entity and will have a financial background, to lead the Audit and Internal Control Committee. The other two independent directors will be Salvador Garriga – who has served as an MEP for the PP for twenty years – and José Luis Bartolomé, a real estate consultant and advisor.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake