Merlin Properties has listed as a Spanish SOCIMI, raising €1.25 billion making it Spain's biggest flotation in the last three years and the largest listing ever of a SOCIMI.
The SOCIMI, which is Spain's version of a REIT, is being orchestrated by MAGIC Real Estate, which has almost €5 billion of assets under management in Spain, Portugal and Morocco, and whose founding partners are Ismael Clemente and Miguel Ollero. Clemente is executive chairman and chief executive officer of Merlin, while Ollero is chief financial officer and COO. Ex-RREEF and Brookfield Asset Management executive David Brush, who recently joined the firm, is chief investment officer.
Merlin debuted today on the stock markets of Madrid, Barcelona, Bilbao and Valencia. Clemente, Ollero and Brush were all present at the Madrid Stock Exchange this morning to celebrate the floatation.
Clemente said: “We have successfully executed the largest ever stock market flotation of a REIT in Europe, which is clearly testament to the trust the market has placed in our business model. I'd also like to express my sincere thanks to the investors for the backing they have given our company.”
Details of the IPO were announced today in which the company said that the size of the IPO was set at 125 million shares excluding an over-allotment option which if exercised would take the company’s market capitalization to €1.33 billion.
Merlin is targeting a long-dated, cash-flowing portfolio, and part of the seeded portfolio includes a package of sale and leaseback BBVA bank branches bought in 2009 and 2010 before MAGIC, partially spun out of Deutsche Bank. These consist of 898 bank branches and five buildings in 52 provinces leased to BBVA for an initial period of 30 years.
The deal was struck by Deutsche Bank mainly on behalf of third-party investors, predominantly private banking clients of Deutsche Bank, as well as co-investors Europa Capital Partners and Area Property Partners, who are both fully exiting the investment now.
In a statement, Merlin said: “As part of the IPO, the company has signed irrevocable undertakings with the shareholders of Tree Inversiones Inmobiliarias, subject to the completion of the IPO, whereby MERLIN Properties will acquire 100 percent of the share capital of Tree Inversiones Inmobiliarias for €739.5 million euros, after adjustments, to reflect 2014 sales. Tree Inversiones Inmobiliarias currently holds a portfolio of real estate assets – 880 bank branches and 5 buildings – located throughout Spain and leased in their entirety to BBVA. This acquisition is expected to be executed in the coming days.”
See the July issue of PERE for an interview with Clemente.