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11 June 2015 – Expansión
Since Colonial’s exit from the Ibex 35 in March 2008, none of the major players in the Spanish real estate sector have been listed on the stock exchange. However, in parallel to the return of large international investors, some real estate companies are starting to emerge, and are knocking on the door of the selective Madrid index. They are the new giants in a sector, which is gaining strength and becoming fashionable again.
These companies include several newcomers, such as Merlin Properties. The Socimi, which went public on 30 June, has managed to create a portfolio of properties worth €2,322 million and has just purchased Testa, the real estate subsidiary of Sacyr, for almost €1,800 million. The operation will create a group with assets worth €5,500 million and a market capitalisation of €4,000 million. Another example of a new company success is Hispania.
The real estate company, which has a Socimi subsidiary, has a market capitalisation of €1,120 million. After purchasing assets worth €422 million and creating a hotel Socimi with the hotel chain Barceló containing 16 properties, it has launched a takeover bid over another listed company in the sector, Realia.
Lar España and Axiare are the other two large Socimis, with portfolios worth around €500 million each.
Traditional giants
Some of the traditional real estate companies are looking to regain the status they lost when the real estate bubble burst. The survivors include only companies whose main activity is the rental of buildings and not property development. This is the case of Testa (which will soon be integrated into Merlin), Realia, Colonial and Metrovacesa.
In the case of the latter, its main shareholders (Santander, Sabadell, BBVA and Popular) excluded it from the stock exchange in May 2013 in order to clean up the (balance sheet of the) company, which had debt of almost €6,000 million. At the end of 2014, Metrovacesa had reduced its net financial debt to €3,285 million and cut its losses by half.
Realia should undertake a similar exercise when the takeover war between Hispania and Carlos Slim for control over the entity has been resolved. The Mexican businessman is already a shareholder in the real estate company, after he purchased the 24.5% stake that Bankia held and he is also a major shareholder in FCC, which owns another 36.9% stake in Realia. In both purchase proposals, the objective is to get rid of the housing and residential land stock held by Realia to focus on the management of office buildings and shopping centres.
In the case of Colonial, the restructuring is much more on track, after the Villar Mar Group became its major shareholder. The real estate company owns office buildings across Madrid and Barcelona worth more than €1,290 million, and also holds a majority stake in the French real estate company SFL.
Original story: Expansión
Translation: Carmel Drake