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

Goldmans & Oaktree to Bid for €100M Land Portfolio that Iberdrola will Auction on 28 Feb

22 February 2018 – Voz Pópuli

On Wednesday 28 February, Goldman Sachs and Oaktree are scheduled to submit binding offers for a portfolio of land owned by Iberdrola Inmobiliaria. The subsidiary of the multinational energy company has thus started one of its largest asset sales processes in recent years, coinciding with the recovery of the sector and the voracious appetite shown by international funds for land in the Spanish market.

The two US investment banks have expressed their interest in what is considered, in the Spanish real estate sector, to be a very good portfolio of land. It is ready for the construction of more than one thousand homes in locations such as Madrid, Málaga and Granada (more than half), as well as Navarra, Salamanca, Murcia, Cantabria and Valencia. The valuation of the plots amounts to around €100 million, according to sources familiar with the negotiations.

The sources consulted warn that if the offers prove to be unsatisfactory, the door will be opened to other investment funds “who are queuing up to participate in the operation”. In total, the plots, owned by the subsidiary of the group chaired by Ignacio Sánchez Galán, that have been put up for sale span a buildable surface area of 126,000 m2.

Iberdrola Inmobiliaria, with which Vozpópuli made contact yesterday, denies the existence of this operation. Nevertheless, two different sources consulted by this newspaper confirm that Banco Sabadell is also participating in the process. According to the sources, Solvia Desarrollos Inmobiliarios, the subsidiary of the financial institution, is going to create a joint venture with the buyer of the land to construct homes, whilst Iberdrola Inmobiliaria is expected to retain a minority stake in the new company.

The Spanish energy group created Iberdrola Inmobiliaria in 1991. The company managed to survive the greatest crisis in the history of the Spanish real estate sector – the one suffered following the burst of the bubble at the end of 2007 – and now owns a portfolio of assets worth more than €1.7 billion. Moreover, it is a highly respected manager in the sector.

Just before the start of the economic and financial crisis, Iberdrola Inmobiliaria undertook significant investments in projects in Spain, Mexico and Bulgaria. In 2015, Iberdrola injected €616.7 million into its real estate subsidiary through a capital increase of €154.2 million and the rest as an issue premium. In 2016, Iberdrola Inmobiliaria recorded revenues of €63.8 million and profits of €3.2 million, according to the latest accounts filed in the Mercantile Registry to which this newspaper has had access through Insight View.

According to those same accounts, the Board of Directors of Iberdrola Inmobiliaria, chaired by José Sainz Armada, led by Emilio Sánchez Castellano and in which Ignacio López del Hierro participates as director, did not receive any remuneration in 2016, but they were paid for out-of-pocket expenses amounting to €196,000 (€206,000 in 2015). The CEO and four other directors earned €1.25 million

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Socimis Have Raised €1,700M In Funding In YTD16

11 August 2016 – Expansión

Merlin, Hispania, Grupo Lar and Axiare are increasing their capital and attending the bond market in order to finance new acquisitions, increase their asset portfolios and grow in size.

The large listed real estate investment companies (Socimis) – Merlin, Hispania, Lar España and Axiare – are preparing themselves to gain financial muscle and resume their property purchases. Specifically, so far this year, those Socimis have raised almost €1,700 million between capital increases, financing agreements and bond issues and they are expected to continue to pull on the real estate sector this year.

These four companies, which debuted on the Madrilenian stock exchange between March and July 2014 with €2,560 million to invest, have been the stars of the reactivation of the real estate sector and intend to continue to grow this year. Last year, the Socimis accounted for more than 40% of all real estate investment, with an investment volume of around €5,300 million. To that end, Merlin, Axiare, Hispania and Lar España managed to raise almost €3,000 million on the main market through several capital increases.

Bond issue

So far in 2016, the Socimis have again been very active in terms of raising funds for investment. Specifically, Merlin, which is preparing for its merger with Metrovacesa in a deal that will see it become the largest real estate company in Spain, has opted to go to the bond markets. The company chaired by Ismael Clemente completed a bond issue in April amounting to €850 million, with a maturity of seven years and an annual coupon of 2.225%, payable annual in arrears.

Similarly, in June, the Socimi announced that it had signed a revolving loan (a flexible arrangement) for a maximum amount of €320 million over five years, which will be used for the current investment program that it is undertaking, as well as to finance new acquisitions. (…).

Meanwhile, Hispania, which focuses on the hotel sector above all, completed a capital increase in June amounting to €231 million, through the issue and placing into circulation of 25.8 million new shares, at €8.95 per share (the sum of the nominal value and the issue premium). The company in which George Soros owns a stake, which had used up almost all of its investment capacity, has identified new opportunities worth €1,500 million. (…).

Another of the Socimis listed on the stock market that wants to gain financial muscle to make purchases is Lar España. That company has completed a €147 million capital increase this year, through the issue of 30 million shares at a price of €4.92, in order to be able to undertake new transactions.

In addition, in February, the company signed a loan with a banking syndicate comprising Natixis, Credit Agricole and Santander, amounting to €97 million over a seven year term. This financing was associated with the acquisition of Megapark Barakaldo. (…).

Financing agreements

In March, also with the aim of raising funds for investment, Axiare Patrimonio signed a new financing contract with Banco Santander for €14.9 million over two premises in Edificio Velázquez, in Madrid.

In addition, in June, Axiaire reached a financing agreement with Bankinter amounting to €31.2 million, with a five-year term. (…).

Similarly, the company has also signed an agreement with BBVA amounting to €7 million, also with a five-year term. In this case, the financed property is an office building on Calle Josefa Valcárcel (Madrid).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hispania Will Pay Its Dividend On 5 July

10 June 2016 – Expansión

The Board of Directors of the Socimi Hispania will pay a gross dividend of €0.096 per share on 5 July 2016, which will be recognised as an extraordinary distribution of €10.4 million against the share issue premium, in accordance with the decision taken by the group’s General Shareholders’ Meeting on 5 May 2016.

Original story: Expansión

Translation: Carmel Drake

Realia Refinances €802.75M Debt Balance

14 December 2015 – Cinco Días

Realia, the real estate company controlled by Carlos Slim, has signed an agreement to refinance its debt, which currently amounts to €802.75 million, according to a statement made by the company on Friday to Spain’s National Securities Market Commission (CNMV).

The company has signed the agreement with the entities Puffin Real Estate, CF Aneto and Goldman Sachs International with the aim of enabling it to comply with its short and medium-term financial feasibility plan and to “significantly” reduce its financial indebtedness.

In this way, according to the agreement, the repayment of the loan has been brought forward to 30 May 2016; a new calendar has been established, which divides the repayment of the existing debt into four phases; and a discount has been established on the existing debt balance, which will be applied to the payment milestones to be made by Realia.

Similarly, the real estate company has increased the amount of the capital increase it initially launched for €87 million, which the real estate company’s majority shareholder, Carlos Slim, has committed to participate in, with the injection of around €21 million, on the basis of the 25.1% stake that he currently holds in the company.

Specifically, Realia’s Board of Directors has agreed to increase the amount of this capital increase from a nominal value of €36 million to €36.81 million, whereby increasing the total number of new shares to be issued by 3.38 million.

In this way, it will issue and put into circulation a total of 153.38 million ordinary shares, with a nominal value of €0.24 each and a share premium of €0.34.

Original story: Cinco Días

Translation: Carmel Drake