Mastercard & Commerzbank Move Into Torre de Cristal

13 September 2016 – El Confidencial

The Cuatro Torres district is the new “City” in Madrid and is one of the areas where the leading real estate players have been operating with the most intensity over the last two years. The company chaired by Ignacio Garralda, Mutua Madrileña, fired the starting gun in February 2015, when it signed an agreement with KPMG to lease 18 floors in the Torre de Cristal, a third of the entire building, in an operation that allowed it to boost its occupancy rate from 42% to 70%.

Just four months later, Grupo Villar Mir put Torre Espacio up for sale, which the Philippine Group Emperador ended up buying for €558 million. By then, the skyscraper where PwC has its headquarters – the black tower that is also home to the Eurostars Hotel – had already changed hands, thanks to Merlin’s acquisition of Testa, and the sheikh Khadem al Qubaisi had already started putting the feelers out to sell Torre Cepsa, the skyscraper for which Amancio Ortega has offered to pay €490 million, according to El Confidencial.

Amidst this game of Monopoly being played out at the north of Paseo de la Castellana, two overseas financial entities, Mastercard and Commerzbank, have decided to transfer their offices to Torre de Cristal, the highest building in Spain, which measures 250m tall and contains 52 floors.

The credit card company has already moved into the skyscraper, whilst the German bank is currently undertaking refurbishment work ahead of its move before the end of the year.

But these two entities are not the only ones who have decided to move into the building owned by Mutua Madrileña. In recent months, following the arrival of KPMG with its 1,900 professionals, Torre de Cristial has seen a significant increase in the number of itstenants, after sealing several agreements with companies such as Red Hat, Cerner and Gesternova, which has allowed it to increase its occupancy rate to more than 82% and lease out a further 5,000 sqm.

Hardly any free floors left

The direct impact of the appetite for these skyscrapers from tenants and owners alike means that there are hardly any free floors left in the Cuatro Torres district (…).

Tower Sacyr (now owned by Merlin) is the only fully occupied tower, but it had to drastically reduce its rental prices to reach an agreement with PwC in 2011, during the worst years of the crisis, in order to acheive that.

Bankia also demanded that Cepsa occupy 100% of Torre Foster, but the oil company has now decided to put eight vacant floors up for rent. Those floors have a surface area of 13,000 sqm, a figure that is slightly higher than the 10,200 sqm that is also being marketed in Torre Espacio, the skyscraper where the main tenant is Grupo Villar Mir, which occupies half of the building.

These numbers show that the average occupancy figure for the Cuatro Torres district now exceeds 80%, a ratio that it has reached at a time when Azca, the traditional financial district in Madrid, is seeing a significant number of its properties undergo profound transformations.

The Cuatro Torres area will be further consolidated as a business centre with the upcoming construction of the so-called Fifth Tower, a skyscraper being developed by Grupo Villar Mir, in partnership with the fund Corestate, which Instituto de Empresa will occupy along with the health group Quirón, according to experts.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Merlin & Testa: Birth Of A Giant With Assets Worth €5,500M

10 June 2015 – Expansión

For background to this story, refer to the article published yesterday: Sacyr Sells Its Subsidiary Testa To Merlin For €1,793M

The union of Testa and Merlin will create a giant, with assets worth almost €5,500 million; gross annual income of €290 million; and a market capitalisation that currently stands at €4,400 million.

Specifically, Merlin, the company led by Ismael Clemente and controlled by UBS, Marketfield and Gruss Capital, has a market capitalisation of €2,275 million and a real estate portfolio of €2,594 million, which covers a surface area of 680,000 m2 and generates annual income of €132 million.

Meanwhile, Testa is one of the leading real estate companies in Spain. It has a portfolio of real estate assets for rent, mainly in Madrid and Barcelona, which have a combined leasable surface area of 1,043,000 m2 and a value of €3,180 million. Its assets include one of the four skyscrapers at the northern end of the Paseo de la Castellana in Madrid, the Torre Sacyr (pictured above).

Merlin consolidates its position as the largest Socimi in Spain

Merlin Properties, which acknowledged its intention to invest in Testa’s share capital in April, has consolidated its position as the largest Socimi (listed real estate asset investment company) in Spain.


Phased sale until June 2016

The sale will be carried out in several phases and through an “accordion operation” over the next few months. The first phase was completed yesterday with a capital increase through which Merlin took a 25% stake in Testa’s share capital.

To this end, Testa undertook a €669.7 million capital decrease and distributed an extraordinary dividend of €527.7 million, through which Sacyr generated revenues of €238 million.

Thus, €1,793 million is the amount that results from adding the aforementioned €238 million to the €1,555 million that will correspond to the sale of the remaining 74.6% stake in Testa, which Sacyr owns following the capital increase. This operation will be executed “in successive tranches and phases, which will be completed before 30 June 2016”, according to reports by the company to Spain’s National Securities Market Commission (CNMV).

Once this acquisition has been completed, Merlin plans to make a public tender offer (OPA) for 100% of Testa’s shares. However, Sacyr has agreed to “irrevocably immobilise its shares in Testa and not participate in the process”.

Lazard has advised Sacyr in the deal and Morgan Stanley and Goldman Sachs have acted as financial advisors to Merlin.

Sacyr and Merlin’s share prices increase; Testa’s decreases

Sacyr, which is one of the best-performing securities on the Ibex so far this year, has received a boost from this operation – its shares were up by 4.3% yesterday, to €3.756 per share, leading the increases on the market. Investors also applauded the behaviour of Merlin Properties, whose shares increased by 1.58% to €11.54 per share.

Meanwhile, Testa returned to the stock market with a negative tone. By the end of the session, it had recorded a loss of almost 3%, to €13.15 per share, after the CNMV suspended trading of its shares between 12:00 and 15:00.

Original story: Expansión (by M.L.)

Translation: Carmel Drake

Sacyr Sells Its Subsidiary Testa To Merlin For €1,793M

9 June 2015 – Expansión

Strategy / The construction company cleans up its balance sheet with this transaction and improves its financial position, with a view to growing its international construction and concessions businesses.

Yesterday, Sacyr agreed the sale of its property subsidiary, Testa, to the Socimi Merlin Properties for €1,793 million. The group chaired by Manuel Manrique (pictured above right), which has been advised by the bank Lazard, has opted for Merlin’s proposal after rejecting the bids made by other investors such as the US fund Blackstone and the real estate company Colonial.

The agreement forms part of an “accordion operation”, in which Testa will simultaneously make a contribution to its shareholders of €1,196 million, through an ordinary dividend of €527 million and a reduction in share capital of €669 million. Through this transaction, Sacyr and Testa will normalise their balance sheets.

The sale comes just two days before Sacyr’s AGM, to be held on Thursday, where the Chairman of the group, Manuel Manrique, will reveal the foundations of the new industrial plan based on international construction and the development of concessions.

The largest Socimi

Merlin is the largest Socimi (listed real estate asset investment company) on the Spanish stock exchange, with a market capitalisation of €2,208 million and a portfolio of assets worth €2,594 million. The company debuted on the stock exchange on 30 June last year with €1,250 million of share capital from investors such as UBS, Marketfield and Gruss Capital.

Merlin, the real estate company controlled and chaired by Ismael Clemente (pictured above left), wanted to expand its assets with the purchase of a significant stake in a company in the RE sector and set its sights on Testa a while ago. Sacyr’s subsidiary closed yesterday with a market capitalisation of €2,906 million.

Sacyr holds a 99.93% stake in Testa; the remaining shares are listed on the stock exchange. The company has been looking for a partner for several months, to inject capital into its subsidiary. The search for an ally led Sacyr to consider an IPO of Testa’s shares aimed at institutional investors in order to strengthen its subsidiary’s balance sheet. The initial objective was to place 30% of the shares, but the construction company increased the option to 100%, once it had assessed the appetite of investors.

Merlin has more than enough financial muscle to handle this operation. In April, the company announced a capital increase amounting to €613.7 million. The real estate company, which earned €19.2 million during the first three months of 2015, has already invested the €1,250 million it secured from its debut on the stock exchange.

Testa owns real estate assets valued at €3,180 million, according to the most recent appraisal completed on 31 December 2014. Its properties include the Torre Sacyr, in the Cuatro Torres Business Area in Madrid, and Diagonal, 605 in Barcelona. It also owns two office buildings on Paseo de la Castellana, at numbers 193 and 83, where the construction group has its headquarters. Furthermore, it is the owner of several shopping centres in Malaga and on the Balearic Islands, and also owns residential blocks for rent. In 2014, Testa recorded turnover of €187.9 million.


Original story: Expansión (by R. Ruiz and C. Morán)

Translation: Carmel Drake