Tag: remuneration

Testa Compensates Merlin with 4.2% of its Share Capital in Exchange for Management Freedom

27 March 2018 – El Economista

Testa is starting to go it alone. The Socimi has decided to terminate the management contract that it had with Merlin Properties, which has been in force since 2016. Following the recent incorporation of the new CEO, Wolfgang Beck, the real estate firm considers that it has the structure and staff necessary to carry out the management of its portfolio itself internally. Thus, at the last extraordinary general shareholders’ meeting, a decision was taken to cancel the contract with Merlin, which will receive new shares in Testa by way of compensation.

Specifically, Testa is going to carry out a capital increase amounting to €89 million, which the Socimi led by Ismael Clemente will subscribe to in its entirety, whereby increasing Merlin’s stake in Testa from its current level of 12.7% to 16.9%.

The rental housing Socimi notified Merlin of its decision in January. Until now, it had been receiving annual remuneration of €7.7 million for advisory and management services.

Merlin, which is Testa’s fourth-largest shareholder, behind Santander (38.8%), BBVA (26.9%) and Acciona (21%), already announced, at its results presentation, its intention to divest its position in the Socimi when it makes its stock market debut, a step that it is expected to take place between May and June this year.

Within the framework of procedures to complete prior to its stock market debut, Testa also approved the execution of a counter split of one new share for every 100 existing shares. Thus, it will give its four existing shareholders one new share with a nominal value of €1 each for every 100 shares that they currently own, which have a nominal value of €0.01 each. Moreover, the new shares will be represented by book entries.

With a workforce comprising more than 80 employees, Testa has positioned itself as the largest owner of rental homes in Spain with a portfolio of 10,702 units in less than two years.

It closed its most recent purchase last week after reaching an agreement with the BuildingCenter, the real estate subsidiary of the CaixaBank group, for the acquisition of 1,458 homes for around €228 million.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Témpore Properties Appoints Directors & Finalises its IPO

6 March 2018 – Expansión

Témpore Properties, the Socimi created by Sareb, has started the countdown to its debut on the stock market. It will make the leap within the next few weeks, possibly before Easter, once the bureaucratic procedures have been completed. It will list on the Alternative Investment Market (MAB), like the vast majority of the 50 Socimis whose shares already trade on the stock market.

The company has been created with a selection of 1,500 assets, of which 1,383 are urban residential properties that generate returns of 3% per annum. The remainder are storerooms and garages. The combined value of the assets amounts to €175 million. Témpore’s size places it in the low-medium bracket in the sector, excluding Socimis backed by family capital. Its perimeter may be increased depending on the needs of Sareb, which has been backing property development in recent times. “Other Socimis do not have that option”, explain sources at the bad bank.

Azora is the manager of the Socimi and Renta 4 and Clifford Chance are advising the IPO process.

Yesterday, the Board of Témpore Properties held its first meeting after approving agreements relating to the entity’s internal operation and the listing process. The Socimi is chaired by Juan Ramón Dios Rial, Director of Real Estate Development and Promotion at Sareb. During the course of his career, Mr Dios has held various positions at TSB Bank, Citigroup, General Electric Capital Bank and Barclays España.

The Board of Directors comprises five members: three independent directors, one executive director and one proprietary director. They are Juan Ramón Dios, Nicolás Díaz Saldaña, Socorro Fernández, Rafael de Mena and Galo Juan Sastre.

Appointments

Témpore Properties is going to be led by Nicolás Díaz Saldaña, who has been the Director of Rental Mangement at Sareb until now. He will serve as the CEO and will sit on the Board as an executive director. Previously, he worked at BBVA, was Director of the International Team at Metrovacesa and CEO of the French Socimi Gecina. The company’s Finance Director is going to be Pelayo Barriga, who has been performing the same role at Sareb until now.

With Témpore Properties, the managers of Sareb are intending to open a window into the rental market, which is proving more profitable than property sales in certain segments. Moreover, through this route, the bad bank is going to be able to access new private capital and slightly reduce its high level of indebtedness.

By law, Socimis are obliged to remunerate their shareholders, and so Sareb can expect to receive dividends from Témpore.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

Merlin Earned €1.1bn in 2017 & Will Pay A Complementary Dividend

28 February 2018 – Expansión

The Socimi in which Santander and BBVA hold stakes doubled its earnings last year to €1.1 billion, compared with €582.6 million the previous year.

The Socimi Merlin Properties closed 2017 with revenues of €484.3 million, up by 34% compared to the previous year. Of that figure, €469.4 million stemmed from gross rental income.

Operating profits grew by 49% to €1.215 billion, whilst recurring EBITDA reached €396.6 million, up by 29% compared to 2016.

At the end of the year, the company owned a portfolio worth €11.254 billion, up by 15% compared to the previous year and 10% larger in terms of comparable surface area. Of that figure, €5.219 billion corresponds to its office portfolio, the value of which grew by 4.1% like for like.

At the end of the year, Merlin had gross financial debt amounting to €5.413 billion, placing its level of indebtedness (LTV) at 43.6%, compared with 45.5% a year ago. The CEO of Merlin, Ismael Clemente, said that he was satisfied with that reduction and assured that his firm would continue working to reduce the liability (…).

For this year, the company has set itself the objective of repositioning its assets, such as the case of Torre Gloriès (Barcelona), whose marketing is forecast to begin during the first half of the year. In the case of new acquisitions, the directors of Merlin indicated that they are going to be “very selective” in their purchases, with the focus placed primarily on Portugal and logistics assets.

Complementary dividend

The real estate investment company has announced an increase in its complementary dividend, payable in May, of 26 cents per share, which will be added to the 20 cents already allocated to the account. In total, shareholder remuneration for this year is going to grow by 15% to reach 46 cents, compared with the 40 cents disbursed in the previous year.

Merlin revealed that for the year ahead, corresponding to the accounts for 2018, it is going to distribute a minimum of €235 million amongst its shareholders, a disbursement that it will pay in full in cash, which will correspond to more than €0.50 per share. This remuneration will be distributed partly as a dividend and partly as a refund of the share premium.

Executive salaries

The real estate company in which Santander and BBVA hold stakes also published the salaries of its main executives. In this way, it was revealed that the CEO, Ismael Clemente, was paid €2.557 million last year, compared to €2.155 million in 2016. Of that figure, €1 million corresponds to his salary, whilst €1.55 million corresponds to his bonus.

Meanwhile, Miguel Ollero, also CEO of Merlin Properties, was paid €2.5 million in 2017, compared to €2.1 million the previous year; meanwhile, the directors Rodrigo Echenique, Francisco Javier García-Carranza and Agustín Vidal did not receive any remuneration whatsoever for their roles on the Socimi’s Board of Directors.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Amancio Ortega Offers €490M For Torre Cepsa

28 June 2016 – El Confidencial

Amancio Ortega has entered the bidding, through Pontegadea, to acquire Cepsa’s skyscraper, by placing an offer on the table worth €490 million, according to sources familiar with the operation.

The owner of Inditex is thereby setting himself up to undertake his largest operation in the country to date, in a deal that would rank well above the figure of €400 million that he paid for the iconic Torre Picasso, the building he acquired from Esther Koplowitz almost five years ago.

Then, like now, the businessman approached the operation without the need to request financing from the banks – he has a wealth that differentiates him from the other candidates and enables him to bid slightly below the other interested parties.

In addition to Pontegadea, two other funds have expressed their interest in putting €530 million on the table, according to sources. Clearly, those bids are higher than Ortega’s, but they are linked to certain financial and payment structures that are a long way from offering the guarantees that Pontegadea provides to all vendors.

The hunt

Thanks to his dividend from Inditex, the businessman receives an annual cheque amounting to €1,100 million, which he uses, almost entirely, to acquire properties. This policy has converted Pontegadea into one of the largest real estate owners in Spain, comparable only with the newly created Merlin-Metrovacesa and Colonial.

Nevertheless, the dimensions of this remuneration mean that it is becoming increasingly difficult for the second richest man in the world to find opportunities in Spain. His interests focus on operations with at least eight zeros in the price, and as a result he has multiplied the number of operations undertaken overseas in recent years. (…)

Despite his financial prowess and the increasing challenge of finding desirable properties, Pontegadea remains faithful to its conservative policy and avoids processes that involve increasing the price in the final stretch.

In fact, its offer for Cepsa falls a long way below the €550 million asking price that the Sheik Khadem al Qubaisi hopes to obtain. The Sheik owns the purchase option over the Madrilenian skyscraper and has until September to exercise it if he wants to stop Bankia from taking over the asset once again. (…).

Nevertheless, Pontegadea is remaining firm in its valuation of the building, a figure that, if they end up closing the operation, will be significantly lower than the €558 million paid by the Philippine Group Emperador to acquire Torre Espacio. Nevertheless, according to several experts in the sector, there are important differences between the two operations, not least the higher risk of having OHL as a tenant rather than Cepsa.

The 248 metre tall skyscraper, designed by Norman Foster, has a leasable surface area of 56,000 sqm, spread over 34 floors. The sale has sparked interest from large institutional investors, such as Invesco, AEW, Deka, Hines, Patrizia, Etoile Properties and Axa.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake