Tag: stock market

Catalan Socimi Quonia: CNMV Authorises Market Debut

28 June 2016 – Valencia Plaza

The Catalan Socimi Quonia now has an ISIN code, required to list on any organised market, such as the stock exchange, according to sources. Specifically, it was issued the passport by the National Agency for Securities Codification (ANCV), which forms part of Spain’s National Securities and Exchange Commission (CNMV) on 7 June.

This code is essential for listing and it represents an international reference number that may be used on capital markets around the world. In the case of Quonia, the plan is for it to list on Spain’s Alternative Investment Market (the MAB), where a sizeable number of Socimis are already listed.

And others, such as GMP, the powerful Madrilenian Socimi, which sold the Mercado de Campanar in Valencia just four months ago, will not take long to join it, as its also now has the “permit” required to list on the stock market.

Purchase of Hotel Internacional

In theory, the debut of that group (GMP), founded by the Montoro family – in which the sovereign fund Singapur GIC owns a 30% stake – was scheduled for the summer, according to sources consulted by Valencia Plaza. However, in light of the current instability following the triumph of Brexit, we will have to wait and see what the heads of GMP, the owners of Madrid’s iconic BBVA Tower, end up deciding.

Quonia must be thinking the same. The company specialises in the rental of real estate asset and was founded in Barcelona at the end of July 2010. It is led by Divo Milan Haddad, a businessman whose investments are focused on the real estate sector, both in Europe and Latin America, primarily in Mexico.

Quonia acquired Hotel Internacional de la Rambla from Husa last April, after the vendor filed for bankruptcy last autumn, after receiving authorisation from the Catalan court for just over €11 million.

Original story: Valencia Plaza (by Luis A. Torralba)

Translation: Carmel Drake

Santander & BBVA Will Transfer c.7,500 Homes To Testa

28 June 2016 – El Confidencial

Spain’s largest landlord is called Testa Residencial. This is the company that has been chosen by Merlin and Metrovacesa to take over all of the homes that they have for rent – 4,700 properties in total – and to create a new jointly owned company in which the former will hold a 34% stake and the later, the remaining 66% stake.

But those numbers are just the first step of a calculated road map designed by the banks that own Metrovacesa – Santander, BBVA and Popular – which want to take advantage of this new arrangement to get rid of thousands of homes from their own balance sheets.

Although still in the analysis phase, according to sources in the know, the entity chaired by Ana Botín (pictured above) wants to transfer between 4,000 and 6,000 homes, whilst BBVA hopes to transfer around 2,500 of the homes that form part of its real estate portfolio, closed eight years ago.

During the harsh years of the real estate crisis, the two entities struggled to cope with this load, along with the rest of the sector, following the debacle that began back in 2007. But now, they have found a way of reducing the burden.

In fact, if the plans go ahead as expected and they receive all of the necessary blessings, the two entities may begin transferring assets this year, a move that would turn Testa Residencial into the largest rental home company in the country, ahead of Fidere, within a matter of months.

Depending on the final number of homes that end up being transferred to Merlin Properties’s subsidiary, the future Socimi will own between 11,000 and 13,000 homes for rent, which means that it will compete head to head with Azora, which owns 11,892 homes and far exceed the 6,000 homes owned by Fidere and the 775 held by Hispania, the Socimi managed by Azora, which has already announced its decision to put the brakes on its residential business.

Five years to debut on the stock market

Now that this giant has been created, the real challenge for all of its shareholders will be its debut on the stock market, the natural destination and reason why they have created this joint Socimi, which has been given a maximum period of five years to complete its IPO.

First, they must define the definitive portfolio of homes, value them, get rid of those assets that do not fit within the plans of the new Socimi through small operations, and above all, find the ideal window of opportunity on the market for the debut.

The key to the success or failure of this business will depend on the price at which Merlin and the banks manage to sell their shares when the time comes to list the subsidiary on the stock market. (…).

The new Testa Residencial that will emerge from this agreement has been given a period of two years to become a Socimi. Its shares are held by Merlin (34.24%) and the banks (65.76%), as follows: Santander 21.95%; BBVA 6.41% and Popular 2.86%.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Sareb Sold 25 Homes Per Day During H1 2016

15 June 2016 – El Mundo

The Chairman of Sareb estimates that the company sold 25 real estate assets per day during the first half of 2016, a pace that he considers “normal”, albeit below the historical average of 27 properties per day for the last 3years, since the so-called bad bank was created.

“At Sareb, we are constantly pedalling hard. We can’t stop”, said Jaime Echegoyen, who also pointed out that the company has debt to pay off. In this regard, he estimated that Sareb has already paid €3,100 million in interest.

He also admitted that the banks’ efforts to clean up their balance sheets by selling off real estate assets is affecting Sareb’s rate of property sales, due to increased competition. Nevertheless, he said that Sareb will benefit from the trump card in that it has on its side, namely, time.

“Sareb is not in any rush (to sell)”, he said at a summer course organised by the Universidad Internacional Menéndez Pelayo (UIMP) and the Asociación de Periodistas de Información Económica (APIE).

No plans to demolish any properties

The Chairman of Sareb reaffirmed an earlier prediction that the company will stop losing money in 2017 and he confirmed that the bad bank does not expect to undertake any demolitions, despite the fact that some of the assets on Sareb’s balance sheet may take years to sell or “may never be sold”. “Would it be better to knock them down than hold onto them? Perhaps, at first”, he reflected, before adding: “But we are not thinking about demolition, because you need money for that”.

Echegoyen stated that the revenues that the bad bank is generating are mostly being used to pay off debt. In a summary of Sareb’s first three years of life, Echegoyen said that the company has sold 35,200 properties and generated revenues of €12,800 million. In addition, the so-called bad bank has reduced its portfolio by €7,800 million and has repaid €7,700 million (of debt).

On the other hand, Echegoyen stated that the real estate sector “has woken up with clarity” and is enjoying a really “sweet moment”, judging by the recovery in the number of construction permits for new homes and the “stability” that demand for real estate is showing.

Homes as a haven

The Chairman of Sareb emphasised that the improvements in real estate indicators have not only been observed in the large (regional) capital cities; and he pointed out that, at a time of significant volatility on the stock market, properties represent a haven for “Spaniards”.

Finally, the Chairman highlighted the change that is happening in terms of the (property) investment (market), from sale to rental, which is leading to an increase in prices in that segment.

Original story: El Mundo

Translation: Carmel Drake

The Largest 4 Socimis Almost Tripled Their Profits In Q1 2016

31 May 2016 – Expansión

Analysts are convinced that the performance of the Socimis on the stock market has little to do with the underlying evolution of their businesses. The largest four companies – Merlin Properties, Hispania, Lar and Axiare – almost tripled their combined profits during the first quarter of the year, generating more than €70 million compared with €29 million during the same period a year earlier, and they now hold property-related assets worth €5,600 million. Specifically, Merlin recorded a net profit of €45.2 million during the first three months of the year, up by 131%. The only Ibex-listed Socimi has already started to rotate its assets. In this vein, the firm accepted offers for 30 assets amounting to more than €50 million during the first quarter.

Meanwhile, Hispania – the largest non-operator hotel owner in Spain – multiplied its profits by 18x during the three months to March, to reach €11 million, whilst Lar España improved its profits by 129% during the first quarter to €8.7 million. Finally, Axiare increased its profit by 22% during the period, taking its earnings to €5.1 million.

Original story: Expansión

Translation: Carmel Drake

At Least Five Socimis Prepare To Debut On The MAB

17 May 2016 – El Economista

The real estate sector is booming. Its appeal has barely declined despite the political uncertainty, in fact the creation of new Socimis seems unstoppable and over the next six months, at least five more Socimis are expected to debut on the Alternative Investment Market (MAB), where 15 other similar companies are already listed. The banks are also keen to get involved in the action.

The market capitalisation of the five soon-to-be-listed Socimis will exceed €1,500 million, according to Antonio Fernández, Chairman of Armabex, which is preparing to launch as the registered advisor of these companies.

The figure will continue to grow gradually, given that the political uncertainty has not curbed investors’ interest in these vehicles, which have a special tax framework that allows them to not pay tax on their profits, provided they distribute 80% of those profits as dividends. In this way, Fernández says that he has around 40 files on the table from Socimis wanting to debut on the stock market over the next few months. “They all have very different profiles and we are receiving proposals almost every day”, he explained.

Although the names cannot be revealed yet, the Director said that one of the five Socimis is focused on the hotel sector and its initial market capitalisation amounts to €220 million. Similarly, he says that a company focusing on homes for rent with assets worth €100 million, will also debut on the MAB soon.

The fact that that specialist Socimis are starting to flourish and establish themselves in Spain is a “very good sign”, according to the sector. With this type of vehicle, the market is managing to secure money from private investors, which due to their size are not able to commit to significant investments individually in the real estate sector.

Now they have several entry points and can select both the type of assets they like, as well as the yield that they want to obtain. Moreover, the specialist Socimis are also arriving hand in hand with wealthy Spanish families, which have been accumulating assets for years and can now take advantage of the new tax benefits. That is the case of the Socimi created by the property developer Tomás Olivo through his company General de Galerias Comerciales. With a portfolio of six shopping centres, whose star asset is La Cañada (Marbella), and hundreds of other assets (land, premises and homes), it is positioning itself as the third largest Socimi behind Merlin (Ibex 35) and Hispania (Stock Exchange).

According to experts, the value of its portfolio may exceed €1,000 million. (…).

And it is not only wealthy Spanish families who are making use of these vehicle; foreign capital is also backing them and one company, financed by capital from Latin America, will soon make its debut on the stock market. On the other hand, Domo is another company that is preparing to list on the stock market, as its Chairman, Feliciano Conde, announced last year, when he explained that the company would be tailored to medium-sized investors “so that they can participate in the returns generated from the purchase of land, and the subsequent rental and sale of the homes”. The market capitalisation of that company, the first property development Socimi, will amount to €50 million.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

GMP Socimi Finalises Its Debut On The Stock Exchange

17 May 2016 – El Confidencial

One of Spain’s largest real estate groups is about to list on the stock exchange. GMP Socimi, the company jointly owned by the Montoro family (70%) and the Government of Singapore (30%), now has all the pieces in place for its stock market debut.

To this end, the company has engaged the entity Renta 4 as registered advisor and has commissioned CBRE to value its assets, according to sources familiar with the company.

The debut on the stock market is a mandatory requirement for GMP, which was constituted as a Socimi in October 2014. The rules for this type of company grants a maximum period of two years to become a listed company. In fact, this rule has been behind all of the recent debuts of such companies on the MAB.

In parallel with its stock market listing, the real estate company has been negotiating with its creditor entities to secure the refinancing of its financial commitments, which exceed €750 million, according to its accounts for 2014, the most recent year for which figures are available, and the majority of its debt is due to mature in 2017.

Although the gross value of the company’s assets amount to €1,300 million, the company was valued at just over €600 million two years ago, when the Singapore sovereign fund, GIC, acquired its 30% stake for €200 million.

Nevertheless, it was precisely the involvement of the Asian giant that allowed the Montoro family to adjust its financial situation and secure the necessary financing to sign operations such as the purchase of Castellana 77. All of this, combined with the recovery of the real estate market means that the group’s next valuation is expected to be much higher than the amount assigned by GIC at the time of its investment.

The Montoro family’s Socimi has been one of the great survivors of the crisis and its buildings include the iconic Torre BBVA on Paseo de la Castellana, as well as the property on Calle Génova, 27.

Since GIC became a shareholder, the company has handled operations such as the aforementioned purchase of Castellana 77 for €90 million; the former headquarters of Altadis, on the Madrilenian Calle Eloy Gonzalo, for €30 million; the office building located on Condesa de Venadito 1; the headquarters of Cortefiel and SGS in Madrid; and the development of a corporate building in Las Tablas.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Listed RE Companies’ Values Soared By 30% In 2015

29 March 2016 – El Confidencial

(…). Colonial, Merlin, Hispania, Realia, Axiare and Lar, the six largest listed RE companies (in Spain), have been the drivers of the recovery that maligned the property sector until recently and, they are also, the major beneficiaries of the recent change of pace.

During the last year, these companies have been the value of their assets soar by between 25% and 30%, depending on whether one looks at their gross asset value (GAV) or net asset value (EPRA NAV). Although this spectacular rate of growth has been driven in large part by the commitments made by these companies to the recovery of the sector, in the form of lots of purchases, the data also reflects an improvement in the underlying valuations of many of their assets.

That positive trend has been felt most acutely in the segments in which these companies mainly operate, in other words, in the office, hotel and shopping centre segments, as well as the logistics business. By contrast, the residential and land segments have barely entered the portfolios of these companies.

As the table in the original article shows (see link below), the GAV or market value of the real estate investments made by these six companies increased by 25.7% last year, an improvement that in the case of Colonial was also seen in its stake in the French firm SFL, in the case of Merlin, in the purchase of Testa, and in the case of Hispania, in a leap driven by the consolidation of its hotel Socimi Bay, whilst in the case of Axiare and Lar (the latter publishes fair values), the figures simply reflect the high investment rate recorded last year.

But if we take the EPRA NAV as the reference indicator, which reflects the net value of the assets, in other words, which discounts the debt and excludes certain concepts that are not expected to materialise with certainty, we see that the improvement in valuations is even greater, reaching almost 30% on average (in the case of Realia, the NNAV value has been taken as that was the figure published).

Neverthless, this increase in asset values has not been reflected in the same proportion in the share prices of the companies. Although all of them recorded increases last year, and important milestones were reached, such as Merlin’s incorporation into the Ibex 35, the improvement in share prices fell a long way below the variations in the value of their assets.

Stock market

The company that performed best on the stock exchange last year was Realia, whose share price shot up by 49%, thanks to the takeover war between Carlos Slim and Hispania to take control of the company. Despite losing the battle, the Socimi led by Concha Osácar and Fernando Gumuzio was, alongside Axiare, the next best performer on the stock market, closing 2015 with an increase of 20%; whilst the company led by Luis López de Herrera Oria recorded an increase of 21.9%. Meanwhile, Colonial’s share price rose by 16.3%; Merlin Properties was up by 15.1% and Lar España’s rose by 3%.

Nevertheless, most of those gains have evaporated already this year, as the real estate companies have also suffered from the poor start to the year that has been seen on stock markets around the world. Almost all of them have recorded share price decreases during the first quarter, the only exceptions being the company led by Pere Viñolas, which has risen by 4.6%; and Realia, whose share price is being driven by a second takeover bid from Slim, and by the demands from Polygon to increase his offer of €0.80 per share. (…) According to the company’s own annual report, its NNAV per share amounts to €1.20.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

BMB’s Socimi Will Debut On Stock Market In June

6 March 2016 – Expansión

The real estate fund manager BMB Investment Management has already raised capital amounting to €50 million for its new Socimi, Optimum Re Spain, and is getting ready to list it on the stock exchange in June. The investors, which include Spaniards and overseas financiers, are virtually the same as those who participated in its previous funds, Optimum Berlin Property and Optimum Berlin Property Two.

Those two vehicles invested €90 million in the purchase of 60 residential buildings in Berlin between 2007 and 2015. By 2013, given the rise in prices, they had already returned 50% of the capital to investors through rental income. And although the plan was to wait until 2016 to sell the properties, they received an offer for the purchase of 50 of the buildings for €125 million in 2015, which they could not refuse. Given the success of the first two funds in Berlin, the investors have wanted to take advantage of the upwards cycle in Spain.

Last year, the firm BMB created the Socimi Optimum Re Spain, through which it has already purchased nine buildings and is finalising the acquisition of other properties.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Domo Socimi: An Example Of The Boom In Residential Business

11 February 2016 – Expansion

An example of the boom in residential business and new opportunities offered by the development and promotion of housing is Domo Socimi. This company, incorporated in June 2015, is presented as the first in Spain that creates value by offering investors the opportunity to participate and capture the profitability of the entire real estate cycle from the purchase of land, through construction, rental and the subsequent sale. Domo Socimi, with a goal of attracting 50 million initial capital and planned increases up to 250 million, plans to apply for incorporation to the Alternative Investment Market (MAB, in its Spanish acronym) during the first half to provide liquidity for investment. Armabex acts as global coordinator of the transaction and registered advisor for its incorporation to the stock market.

Original story: Expansion

Translation: Aura Ree

Deutsche’s Socimi Trajano To List On MAB On 30 July

27 July 2015 – El Día

The Socimi Trajano Iberia, which is managed and promoted by a division of Deutsche Bank, will begin trading on the Alternative Investment Market (Mercado Alternativo Bursátil or MAB) on 30 July, whereby becoming the sixth listed real estate investment company to be publicly traded on the stock exchange.

Trajano will debut on the MAB once it has completed its €94.8 million capital increase, which is being led by investors of the Wealth Management division of Deutsche Bank in Spain.

Under the ticker “YTRA”, the company will debut on the stock market at a share price of €9.98, according to a statement by the Spanish Stock Exchanges and Markets (‘Bolsas y Mercados Españoles’ or BME).

The listing will be performed through a price-fixing system with the matching of supply and demand in two daily auctions or “fixing” periods (at 12:00h and 16:00h).

Trajano Iberia will invest in offices in “semi-prime” locations in Madrid and Barcelona and in “prime” areas of secondary cities. It will also seek out shopping centres and retail parks, as well as logistics assets in Madrid, Barcelona, Zaragoza, Valencia and the País Vasco.

According to the company’s strategic plan, Trajano Iberia will materialise its investments within a maximum period of 24 months, however the management team considers that this period could be reduced on the basis of the strong prospects that the real estate sector is currently enjoying.

The company will be managed by the team responsible for the real estate division of Deustche Asset & Wealth Management in Spain and Portugal.

Currently, Deutsche Bank manages real estate assets worth more than €46,000 million around the world and €740 million in Spain and Portugal.

Deloitte is acting as the registered advisor and BEKA Finance as the liquidity provider. Since last year, several companies have listed publicly under the Socimi structure.

The first company to debut on the stock exchange was Lar España Real Estate, on 5 March, with initial capital of €400 million. The next company to list in the sector was Hispania, the listed company controlled by the fund manager Azora and owned by the multimillionaires George Soros and John Paulson, who subsequently created a Socimi through which they have made several purchases.

Meanwhile on 30 June, the Socimi Merlin Properties, starred in the largest IPO since 2011 with a valuation of €1,250 million. Axiare also listed on the stock exchange, with a valuation of €360 million, as did Uro Property, the Socimi that owns one third of Santander’s branches.

Original story: El Día

Translation: Carmel Drake