Tag: REIT

Entrecampos, the first Socimi to enter the Alternative Stock Market.

 The real estate business is taking a different shape in the market. Entrecampos will start on the next 28th November its path in the Alternative Stock Market (ASM). And it will do so with the new alternative of the Socimi (listed public limited companies for real estate investment), a financial vehicle oriented to those companies renting buildings. “We represent a very different business to the one of the real estate companies listed in the stock exchange. The rental business has already digested the crisis, decreasing the rents. It is an activity which continues to be necessary”, Ignacio Segura, managing director at Entrecampos, explains. The company will start operating at a price of 1,59 Euros per share and will have 54,6 million  bonds  (representing  a  value  around  86,8  million  Euros).  In  this  operation, Entrecampos has been assessed legally by DLA Piper and by VGM Advisory Partners as a registered counselor.

The changed to the ASM takes place after the legal reform of last December. “We have left the market when the law has allowed us to do so”, Segura declares. The change in the law made the criteria to create the socimis more flexible, improving its taxation (0% on the company tax) and opening new ways to be listed with its negotiation in multilateral management systems, which are less strict than the traditional stock exchanges. This impulse has motivated that other companies within the sector would also be working in their change to that market.

Entrecampos pretends “to consolidate, grow and prevail in time” with the listing in the ASM, Segura declares. He admits that, generally, there can be some mistrust within investors to enter a company linked to the Spanish real estate sector. However, he hopes to catch the interest of other patrimonies wishing to enter an already consolidated socimi. “The future of the socimi will be linked to the patrimonial mergers”, he comments.

Entrecampos has some presence abroad (12,8% of its properties is located in Germany). However, Segura dismisses the entrance of foreign investors. “Before working with foreign patrimony it is necessary for us to grow”, he points out.

Source: Expansión

The new taxation system attracts the real estate fund Orion.

The investment fund Orion has created a Socimi (Real Estate Investment Listed Public Limited Company) of nearly 300 million Euros with its asset the mall Plenilunio, located in Madrid. It constitutes the first great Socimi with the new favorable taxation system for the real estate investment, days before the final date to create these vehicles in 2013.

Until now, only a few small Socimis had been created, of no more than 15 million Euros, like the ones from Visionlab or El Corte Inglés. Orion is the first international fund with experience in the real estate market and in Real Estate Investment Trusts that decides to invest in Spain. The advisors of Orion have been Pablo Serrano de Haro and Alfonso Benavides, partners at Clifford Chance. Sources within the sector do not rule out the creation of new Socimis before the end of September, the final date to do it this year. They assure that the new system is very favorable and they point out that there have been no operations until now because investors have preferred to wait as much as possible.

Taxation for the company is zero, while until this year it was 19%, and it is transferred to investors. The new norm provides two years for the company to be listed. Orion is thinking of doing it on the short and medium term.

The Socimis can now be listed in the Alternative Equity Market.

The listed limited companies which invest in the real estate market (Socimis) can now be listed. The circular which allows its listing in the alternative equity market was published yesterday. The Socimis were created in 2009 with the aim of promoting the rental market, offering tax advantages to investors. At the end of 2012, the reform of the Law 11/2009, modified on the 27th December, was approved. The most important novelties were the tax exemption in the Company tax and the possibility of being listed in the alternative equity market, instead of in the official stock exchange, as proposed in 2009.

For the Socimis to be listed it is necessary that the number of shares have an estimated value of two million Euros in the market. The issuing institution needs to provide a valuation made by an independent expert in order to establish a first reference price. This, unless there has been an offering of shares or a financial operation which results relevant to determine its initial valuation in the six months prior to the request.

For the moment, only one company has requested the start-up of this type of firm and its listing: the firm Promociones, Renta y Mantenimiento, controlled by the group Pavón Olid, owners of Moneygram and the optician´s shops chain Madrid Vision. José María Luna, analysis director of Profim, thinks it is positive that this type of firms appear, even though he thinks their yield will not be very high in the short term.

Source: Expansión