The socimis started their activity in Spain in 2009, although its first regulation dates from 2013. Their success is due in part to enjoy a tax exemption instead of distributing nearly all of its dividend (which yes, are taxed individually for their recipients). According to the consultancy firm JLL, these companies controlled the assets at the end of 2019 by value 48.800 million euros. The figure is an approximation based on the value declared when requesting the addition to the Bag (does not take into account revaluations later), and moved forward in the past year 2.289 million euros, 4.9% more than in 2018.
Despite the progression, has not been his best year in terms of new investment is concerned. In 2019, they debuted 22 socimis, the same number in 2018. But while those created in the past year we contributed real estate with a value of 2.805 million euros, the value of the assets of which made their debut a year before amounted to 5.054 million, according to the report Socimis 2019 Armabex, a consulting registered for incorporation in Bag.
The estimate in this case is a little greater than that of JLL because it also takes into account companies with headquarters in Spain that made their debut on Euronext (the law requires them to quote, but not necessarily in a Spanish index). In any case, what is relevant is that the number of new investment is the lowest since 2014, when this type of societies were still in their infancy in Spain.
reits
Main socimis market continued
gross Value of the portfolio in millions of euros
Merlin,
0
12.400
Colonial
11.798
Lar Spain
1.562
0
Distribution of assets
In percentage
Offices
Commercial
Other
Merlin,
50
36
14
Colonial
95
5
Lar Spain
99
1
The ten largest socimis in capitalization
stock
Typology
assets
main
December 31,
In million euros
Office/
Commercial
6.008
Merlin
Colonial
Offices
5.772
General
Galleries
Commercial
Commercial
3.744
GMP Property
Offices
1.090
Testa
846
Housing
Office/
Commercial
Zambal Spain
795
Lar Spain
643
Commercial
Castilian
Properties
604
Commercial
Vivenio
503
Stay.
Atom Cheap
355
Hotels
0
Source: own Elaboration.
THE COUNTRY
reits
Main socimis market continued
gross Value of the portfolio in millions of euros
Merlin,
0
12.400
Colonial
11.798
Lar Spain
1.562
0
Distribution of assets
In percentage
Offices
Commercial
Other
Merlin,
50
36
14
Colonial
95
5
Lar Spain
99
1
The ten largest socimis in capitalization
stock
Typology
assets
main
December 31,
In million euros
Office/
Commercial
6.008
Merlin
Colonial
5.772
Offices
General
Galleries
Commercial
3.744
Commercial
GMP Property
1.090
Offices
846
Testa
Housing
Office/
Commercial
795
Zambal Spain
643
Lar Spain
Commercial
604
Castilian
Properties
Commercial
503
Vivenio
Residential
355
Atom Cheap
Hotels
0
Source: own Elaboration.
THE COUNTRY
reits
Main socimis market continued
gross Value of the portfolio in millions of euros
Merlin,
0
12.400
Colonial
11.798
Lar Spain
1.562
0
Distribution of assets
In percentage
Offices
Commercial
Other
Merlin,
50
36
14
Colonial
95
5
Lar Esph
99
1
The ten largest socimis in market capitalization
December 31,
In million euros
Typology
assets home
6.008
Office/Commercial
Merlin,
Offices
Colonial
5.772
General Galleries
Commercial
Commercial
3.744
Offices
GMP Property
1.090
846
Housing
Testa
795
Office/Commercial
Zambal Spain
643
Lar Spain
Commercial
604
Castilian
Properties
Commercial
503
Vivenio
Residential
355
Atom Cheap
Hotels
0
Source: own Elaboration.
THE COUNTRY
Despite the fact that it has slowed down the pace of growth, the sector continues to enjoy good health. Spain was crowned during 2019 as the second country in the world with more REITs (the acronym that is known internationally socimis). Ends the year with 83 listed real estate both in the Continuous Market as well as in the Alternative Stock Market (MAB). If they join the seven listed on Euronext, the total rises to 90. Only the US, the country where it was created this figure company six decades ago, has more socimis Spain.
The fragmentation is precisely one of the features of the Spanish market. Other countries have less socimis, but of more value. In Spain, in front of the two large (Merlin and Colonial, both listed on the Ibex 35), there is a swarm of small companies. Against this backdrop, analysts a long time ago that were subject to mergers. Unlike 2018, marked by large-scale corporate operations that raised the volume of investment in real estate (such as the absorption of Axiare by Colonial or the purchase of Testa on the part of the fund, Blackstone), in 2019 the movements were fairly modest.
Two operations highlighted the past year. Vitruvius and Single staged mid-year, the first fusion of the MAB after throwing the first a takeover bid for the second of 32.4 million euros. And, in the final throes of 2019, the uk group Intu sold to Generali and Union Investment 100% of its shares in Zaragoza Properties, the reit that owns the largest commercial center of Spain (Port of Venice), for 475 million euros.
Alberto Safed, area director of Debt Advisory (financial advice) of JLL, believes that both exemplify the future of the sector, because the concentration of the market, “converge two processes: mergers are friendly, and the rotation of portfolios or shareholders in socimis of a single asset or a few assets.”
MORE INFORMATION
The socimis conjure up before the political storm Merlin buys nearly 15% of the Operation Chamartín to constructora San José, “The Reit does not have anything to do with the rise in the price of the rental”
Specialization
The specialization is another trend that is advancing, unstoppable. “Has a sense: the efficiency,” says Safed. “You get the maximum efficiency when you are the biggest expert in a sector,” he continues. Clear examples are seen in two of the socimis traded on the continuous. Colonial has been followed by disposing of part of the portfolio inherited from Axiare, and put on the market 475.000 square feet of logistics: 314.000 has sold already and the rest will follow the same path soon.
In this way, its portfolio of offices (the main core of their business) now accounts for 95% of the total, compared to 91% in 2018. For its part, Lar Spain sold two office buildings in Madrid and opened Lagoh commercial center, the star of your portfolio. With this, the business assets pass to represent the 87% to 99% of its properties.
The largest socimi in Spanish in terms of market capitalisation and volume of assets, Merlin, a challenge in part this trend to specialization. “Possibly, ” is the only different case, but it is true that you get a high efficiency in the management of the assets by the volumes that have”, explains the expert of JLL.
Merlin has been one of the most striking of the year to buy Grupo San Jose, a 14,46% of its participation in District Castellana Norte by 169 million euros.
The transaction involves the entry of Merlin into the known as Operation Chamartin, one of the largest urban developments in Europe. San Jose is having a 10% and the rest belongs to BBVA. But Merlin will have priority to purchase if they decide to sell. To overcome the last obstacles to legal and political, after three decades of obstacles, the project will release and 2.65 million square meters of land to build housing, offices, commercial centers and green areas in the north of Madrid.
Noise political for the housing
The money allocated for housing by the socimis in 2019 fell from the at 1,953 million euros in 2018 to 742 million last year, according to Armabex. Despite the change of the Law of Urban Leases last march —which raised the minimum duration of the rentals of three to seven years when the landlord is a company— Alberto Safed rule out that this is the main reason for the decline. “It has influenced but there is another major effect: the socimis specialized in residential are rental buildings complete and the product is very scarce in Spain,” he says. In the next few years, he adds, will be to build entire blocks of housing for a company dedicated to the rental. There are so-called turnkey projects.
Despite this, the relationship between socimis and housing has led to noise political. In the Government agreement signed undertake to seek ways to limit increases in rents and to vary the tax regime for listed real estate to pay a 15% for the part of profit not distributed (and are obligated to distribute annually at least 80% of the dividends).
