Santander, BBVA & Popular Will Contribute Homes Worth €665M To Testa

28 December 2016 – Expansión

Santander, BBVA and Banco Popular will contribute a package of new homes worth €665 million, through a capital increase, to Testa Residencial, the rental home Socimi that they own together with Merlin Properties.

The operation will double the size of Testa Residencial, however it will also lead to the dilution of Merlin’s 34.2% stake as the second largest shareholder behind Santander, which controls 46.2% of the share capital.

The contribution of homes by the shareholder banks forms part of the growth strategy that has been set for this new rental home Socimi, which may debut on the stock market next year.

In fact, it is the first transfer of new assets that the shareholders will make to Testa Residencial, following its constitution in October this year, with a portfolio of 4,700 homes, most of which (63%) are located in Madrid.

The transfer of homes by the company’s shareholder banks will materialise through a non-monetary capital increase amounting to the aforementioned value of €665.50 million. Testa Residencial will approve this operation at its shareholders meeting on 30 January. Given the value of the firm’s current portfolio of homes, estimated to be worth around €701 million, the injection of these new assets will almost double the size of the company.

Testa Residencial was created as a subsidiary of Merlin using the homes that Testa and Metrovacesa contributed when they merged with the Socimi. The company led by Ismael Clemente considered this business to be non-strategic and for that reason, decided to put it up for sale. But following frustrated negotiations with potential buyers, Merlin decided to deconsolidate this portfolio by creating a new Socimi, in which the shareholder banks hold a significant stake, amounting to 13% in the case of BBVA and 6% in the case of Popular.

Subsidiary of the new real estate giant

The merger of the 100-year old giant Metrovacesa (until then owned by the creditor banks of its former owner, Román Sanahuja) with the Socimi Merlin, which was completed in October, gave rise to a new Merlin that, according to its own figures, is the largest listed real estate company in the country, with assets worth €9,100 million.

Similarly, the integration paved the way for Testa Residencial, which is the largest rental home company in the country, with the aim of segregating out a subsidiary dedicated to the rental home business.

The agenda for the shareholders’ meeting that this company will hold in January will include the creation of a corporate website and setting the remuneration for the shareholders.

Original story: Expansión

Translation: Carmel Drake

Merlin & Santander Plan To List Testa Residencial In 2017

12 September 2016 – Expansión

Mega-operation / On Thursday, the General Shareholders’ Meetings of Metrovacesa and Merlin will approve the merger from which the largest real estate company and rental home Socimi will emerge, which will debut on the stock market next year.

Merlin Properties and Santander plan to list Testa Residential on the stock market next year. The rental home Socimi will result from the merger between the real estate company and Metrovacesa, according to comments made by official company sources to Europa Press. The new Socimi will result from a mega merger operation between Merlin and Metrovacesa, the real estate company in which Santander, BBVA and Popular all own stakes.

The largest real estate company in Spain will emerge from this integration. The firm will also be one of the largest RE companies in Europe, with a portfolio of office buildings, shopping centres and logistics assets worth around €9,300 million. The new Merlin will have Santander as its majority shareholder, with a 21.9% stake, and will list on the Ibex.

New company

The operation will also give rise to a second company, Testa Residential, as a result of a decision by Merlin and Metrovacesa’s creditor banks to separate their respective batches of rental homes into an independent company.

Merlin and Metrovacesa are already finalising the integration process, which will give rise to the two companies and which will be completed at the end of October. On Thursday 15 September, the companies will hold their respective extraordinary general shareholders’ meetings, where the merger operation will be approved.

Subsequently, both companies will participate in an asset-share exchange, through which the integration will materialise. By virtue of the operation, Santander and the other banks that currently control Metrovacesa will transfer the real estate company’s office buildings and shopping centres, worth €1,672 million, to Merlin, in exchange for shares in the Socimi. In parallel, the two companies will transfer their rental homes to the new company Testa Residencial, which will have a portfolio of rental homes worth around €980 million.

Testa Residential’s debut on the stock exchange forms part of the growth strategy to be implemented by the new Socimi, which is now the largest rental home company in the country. The real estate company will receive approval for an initial portfolio containing 4,700 rental homes, mostly located in the province of Madrid (63%). The other properties are located in Mallorca, San Sebastián, Pamplona and other cities.

One of the new growth pillars of Testa Residencial will be the provision of new batches of homes by Santander and the other two shareholder banks of Metrovacesa, BBVA and Popular, through non-monetary capital increases.


The entity chaired by Ana Botín will be the majority shareholder of the new firm Testa Residencial, with a 46.21% stake, ahead of Merlin, which will own 34.2% of the share capital, BBVA (13%) and Banco Popular (6%). Merlin Properties plans to hold onto its stake in the rental home company over the long term, despite the dilution of its initial percentage stake, as the banks contribute new assets.

Original story: Expansión

Translation: Carmel Drake