Merlin & Metrovacesa Will Complete Their Merger Next Week

11 October 2016 – ABC

Next week, Merlin and Metrovacesa will finalise the merger that will give rise to the “new Merlin” – the largest real estate company in the country, with assets worth around €9,300 million. The entity will be listed on the Ibex 35 and Santander will be its largest shareholder.

“We will sign a notarial document to make the merger a reality between 20 and 23 October”, said the Chairman of the current company Merlin, Ismael Clemente, after speaking at a conference about “Brexit” organised by KPMG.

The two companies are currently finalising the integration of their management teams, personnel and property portfolios, said the man who will be the CEO of the new company, which will be chaired by Rodrigo Echenique.

Once the notarial document governing the merger has been signed, the existing company Metrovacesa will disappear, given that its office buildings and shopping centre assets will have been integrated into Merlin.

In exchange, the current shareholder banks of the real estate company will take shares in the new Merlin and will thereby become its key shareholders. Santander will be the largest shareholder of the new real estate group, with a 21.9% stake, followed by BBVA with a 6.4% stake and Banco Popular with 2.86% of the new shares.

In addition, the entities will retain their new stakes in the Socimi for the medium term at least, given that, in addition to signing a commitment to not sell their shares for six months after the merger, none of them has expressed any intention of divesting at all.

Iconic buildings

The new Merlin will begin life with a portfolio of office buildings, shopping centres and logistics centres with a combined surface area of more than 3 million sqm, worth around €9,317 million, which will generate revenues of €450 million per year.

This portfolio contains several iconic buildings, such as Torre Madrid and one of the four towers at the north of Paseo de la Castellana in Madrid.

By virtue of this operation, and in parallel to it, a new company Testa Residencial will be created, which will be the largest rental home company in the country. It will begin life with a portfolio of 4,700 homes for rent and Santander will also be its largest shareholder, with a 46% stake.

Clemente said that the firm has already filed a request to adopt a Socimi structure, with effect from 1 January 2016, with a view to analysing its eventual debut on the stock exchange.

With the final signing of the merger and the constitution of the two companies, the process that was launched in June, when the Socimi Merlin and the real estate company Metrovacesa first agreed to join forces, is now coming to an end.

Original story: ABC (by S.E.)

Translation: Carmel Drake

Talus To be Ortega’s Neighbour On Gran Vía

29 January 2015 – Cinco Días

Two buildings on the same street in Madrid have changed hands within just over a week of each other. The fund Talus Real Estate has agreed the acquisition of the building on Gran Vía 30 (on the corner of Calle Valverde) for €42 million. On Monday, the company Drago Real Estate announced the sale of its building on Gran Vía 32 to Pontegadea, the company that owns Inditex’s real estate assets and receives its dividends on behalf of Amancio Ortega, the founder and primary shareholder of the fashion group.

According to sources close to the negotiations, JLL and Aguirre Newman have participated in the sale of the property on Gran Vía 30, as advisory consultants. However, the companies involved did not want to confirm this information yesterday.

The same sources said that the buyer plans to refurbish the property. The fashion chain Sfera, owned by El Corte Inglés, has a store that occupies two floors of the building.

Talus Real Estate’s main executives are David Finkel and Jordi Moix and its headquarters are located in Madrid. According to the company’s website, before joining Talus, Finkel worked for Westbrook Parners, where he co-directed their business in London. Westbrook Partners is a real estate investment group that was founded in 1994, has offices in the US, London, Munich, Paris and Tokyo and has invested USD 10,000 million to date. Prior to that, he worked for the Japanese entity, Nomura and for iStar Financial, another international real estate investment group.

Moix has held senior positions in the Spanish real estate companies Reyal Urbis, Metrovacesa, Layetana and Habitat; he has also worked for IAG and Citibank. Currently, he is vice-president of FC Barcelona’s real estate business.

Gran Vía is trading up

The sale of the property on Gran Vía 30 is the latest in a series of transactions undertaken on the Madrid street that will change its appearance as it approaches its 105th birthday.

The fashion group Primark will occupy several floors of Gran Vía 32, when it opens its largest store in Spain there. Talus Real Estate will also refurbish the Gran Vía 30 building. In Plaza de España, the Chinese group Wanda will convert the Edificio España into a luxury hotel and shopping centre. Next to the building sold by Santander, the hotel chain Barceló will take over some of Torre Madrid to open another hotel.

Late last year, Axa Real Estate, a subsidiary of the insurance company Axa, acquired Gran Vía 37, where the fashion retailer H&M has its largest store in Spain and which used to house the Avenida cinema, for €80 million. Also last year, the Community of Madrid sold Gran Vía 20 for €20 million to Caja Rural de Almendralejo Sociedad Cooperativa de Crédito.

2015, another big year for real estate investment

With the sale of Gran Vía 32 and the upcoming sale of the Plenilunio shopping centre, the amount of investment in Madrid will amount to €800 million. According to sources familiar with the transaction, the sale of the shopping centre will reach a figure close to €400 million.

In 2014, investment in real estate in Spain amounted to between €6,000-€9,000 million, almost twice the figures recorded in the previous three years.

During the year ahead, Socimis, which revolutionised the sector in 2014, will continue to invest, as will investment banks, whereby replacing opportunistic funds. The liquidity injection announced by the ECB will boost the sector. The expected sale of Realia will be another major transaction. Industry experts are also drawing attention to investment in logistics platforms.

Original story: Cinco Días (by Alberto Ortín Ramón)

Translation: Carmel Drake

Barceló To Operate The Torre Madrid Hotel

18 January 2015 – Cinco Días

Metrovacesa and Barceló Hotels & Resorts signed a 20-year lease contract on Friday morning for the operation of the future hotel in the Torre Madrid, built by Metrovacesa in the Plaza de España in 1957.

The companies report that the hotel will provide superior four star accommodation, with 256 rooms, a cafeteria, a restaurant, a spa, meeting rooms and common areas.

“Metrovacesa plans to undertake major investment in the refurbishment of the first 9 floors of the building, covering approximately 22,000 square metres, with the aim of converting the hotel into a destination of choice in Madrid, unique in its design and facilities”, the companies report in a statement. The new Barceló hotel will operate alongside luxury apartments, which occupy the top floors of the building, and will become the chain’s fourth hotel in Madrid.

In 2011, Metrovacesa, a then listed company, informed the CNMV about the sale of homes in Torre Madrid for €28.7 million. The cheapest home in Torre Madrid, covering around 80 square metres, cost €530,000. The most expensive home occupies 240 square metres. The height and orientation determine the final price of homes of a similar size.

In 2005, Metrovacesa put two of Madrid’s most famous skyscrapers, the Edificio España and the Torre Madrid, up for sale. Santander acquired the Edificio España for €389 million in the same year; and last year the entity agreed the sale of the building to the Chinese group, Wanda, for €265 million.

Original article: Cinco Días

Translation: Carmel Drake