Saturday, August 27, 2016

Merlin closed the merger with Metrovacesa – The Economist

The National Commission Markets and Competition (CNMC) okayed the integration of Metrovacesa, controlled by Santander and BBVA, in the Merlin REIT. It will result in a company with more than EUR 9,000 million

Active The National Commission Markets and Competition (CNMC) gave this Friday approval to the acquisition of Metrovacesa by the REIT Merlin, bringing the largest real estate of Spain is formed, with some exceeding 9,000 million euros assets.

When in 2014 one handful of professionals was creating the Merlin properties REIT, and perhaps no one could imagine them either- would become the largest owner of property in Spain and one of the ten largest in Europe. With the momentum of two close friends, Ismael Clemente, as president, and Miguel Ollero, CFO, have managed to possess assets worth 9,300 million euros. How have done?

Clemente and Ollero are two experienced managers in the real estate sector. When home, Deutsche Bank, withdrew candles brick crisis in Spain, they decided to create their own manager, called Magic Real Estate, which had significant international funds as clients. Until in 2013 decided they wanted to not only manage other people’s money, but wanted to make decisions and responsibilities to invest.

The first key to their success was to join the wave of the new fiscal vehicle ends created:. the figure of the public limited company listed real estate investment trusts (REITs), like the large international REITs

the first step was to approach owners known as Portfolio Tree, more than 1,000 BBVA offices held by various funds and family office. Clemente and his team were well aware of those assets, as had been involved in their sale. To the disbelief of the owners, he reached an agreement presale in which it stated that if he showed up with 740 million remained with the bank offices and with a debt of more than 830 million. He stood before the large international funds and told them the business plan and already had an agreement to buy the branches.

To everyone’s surprise, they got the money. Ollero Clemente and obtained the investment commitment of over 700 million foreign funds. A 550 million which joined other investors through the stock market debut in June 2014. They just start the unstoppable career of Merlin. Since that time, they decided that the company should take a very aggressive purchasing policy, while acompasaban debts in the long term. In fact, in December 2014, the REIT refinanciació 10 940s million.

Investors who rely on Spain

Another key to success was to channel the resources of funds international beginning to bet on the recovery of the Spanish economy, understand that improvement will also be moved directly to the then very deteriorated housing market.

the obsession of Clement passed to create a set of properties it large as possible in the shortest time, taking advantage of the bonanza cycle, so that when the winds change, Merlin can move to a more conservative strategy, protected income from offices, commercial and logistics centers. Therefore, he did not miss the opportunity to buy Sacyr its subsidiary Testa patrimonialista by 1,800 million in June last year. and added emblematic buildings in Barcelona and Madrid to its portfolio, as one of the four towers north of the Castellana. He received the blessing of investors with an increase by 1,034,000 and immediately followed sanitation liabilities, with a syndicated loan of ten entities 1.700 million and the issuance in April bond 850 million.

Merlin 2015 became the first REIT happens listed on the Ibex 35. But the rush to grow not stop there. In the midst of negotiations with Metrovacesa controlled by Santander and BBVA to create a small joint venture with residential assets inherited from Testa, both companies decided it would be a good idea to a complete merger.

fondos@eleconomista.com .in

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