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

Ibercaja Outsources Its RE Management To Aktua

3 February 2016 – Expansión

Yesterday, the Aragonese group Ibercaja signed an agreement to outsource the management of its real estate assets to Aktua.

The platform, which is owned by the US fund Centerbridge, has itself been up for sale since the end of 2015. Altamira is one of the favourites in the running to acquire it.

The operation signed by Ibercaja is the first of its kind in the Spanish banking sector since 2013, when the large entities, such as Santander, CaixaBank, Bankia and Popular all sold their real estate platforms under management contracts lasting around ten years.

Those operations allowed the Spanish banks to raise capital in exchange for ceding future commissions, and transferring the administration and sale of their assets to specialist firms. Those deals allowed them to focus on their strategic business, namely: to grant loans and take deposits.

“This operation, which is going to have a positive impact on the income statement of Ibercaja Banco, aims to establish a stable partnership with a prestigious industrial partner, to strengthen the entity’s strategy of boosting the sale of its real estate assets through the retail channel and simplifying and optimising its structure in the real estate sector”, said Ibercaja in a statement.

With this operation, the financial group takes a step closer towards its future debut on the stock market in the medium term. This comes after the sale of the majority if its bad real estate loans to Oaktree last year.

Ibercaja has been advised in this process by N+1 and Baker & McKenzie, and Aktua has been advised by KPMG, as its financial and legal advisor.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

Socimis Raise A Further €2,600M As They Lead RE Purchases

7 August 2015 – Expansión

Merlin Properties, Axiare, Hispania and Lar España have now spent all of the money they raised through their IPOs last year, after investing almost €5,000 million in assets between them.

The Socimis are gaining financial muscle as they continue to lead the new property boom. Merlin Properties, Axiare, Hispania and Lar España, the four large Socimis, have increased their share capital by almost €2,600 million in recent months, attracting funding from several major investors.

The companies, which have invested almost €5,000 million in the acquisition of all kinds of assets, have already spent all of the money they raised from their debuts on the stock exchange last year. The Socimis are the stars of the recent significant increase in investment in real estate assets, which reached a record figure of €5,264 million during the first six months of 2015.

The first company to list on the market was Hispania. The real estate company controlled by Azora requested a capital increase at its shareholders’ meeting in December to finance its purchase of Realia. At the time, Hispania planned an initial round to raise funds from its shareholders, but that transaction was foiled after the Socimi’s bid for Realia was exceeded by a counter-bid from Carlos Slim. In April, Hispania proposed a further extension of up to 50% of its share capital in order to purchase new properties. It achieved its objective of raising €337 million in just three hours.

Hispania has made investments worth €1,107 million, since its debut on the stock exchange in March 2014, including Project Bay, the hotel Socimi that it is developing jointly with Barceló.

A few months ago, Merlin Properties, the largest Socimi on the Spanish stock exchange, raised €613.8 million. Merlin, which already had a portfolio worth more than €1,250 million at that stage, was planning to continue with its acquisition of properties, mainly offices and retail assets. Nevertheless, in the midst of this strategy, the Socimi decided to embark on an ambitious corporate transaction: the purchase Testa, the real estate arm of Sacyr. The acquisition turned Merlin into the leader of the office business in Spain, as it took ownership of a portfolio worth €3,231 million, containing assets such as Torre Sacyr in Madrid.

In the end, the transaction closed for almost €2,000 million, of which €1,793 million was paid to the construction company and €183 million was injected into Testa as cash. Merlin has recently completed a new capital increase amounting to €1,034 million to finance this purchase. The Socimi is funding the transaction through its own shareholders, which have already expressed their support for the transaction, according to sources close to the company.

The other two Socimis on the Stock Exchange, Axiare and Lar España, also announced their own capital increases, in June and July, respectively. (…).

Other capital increases

The Socimis are not the only entities that are taking advantage of the international funds and management companies to invest in the Spanish real estate sector. So too are the traditional companies in the sector.

Quabit, the real estate company controlled by the construction group Rayet announced its own capital increase in June amounting to €70 million with the aim of raising funds to start new projects.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake