New MAB Segment For SOCIMIS -Spanish REITs - Begins

26/11/2013

  • MAB will list its first SOCIMI, Entrecampos Cuatro Socimi, S.A., on Thursday, 28 November
  • The second, Promorent Socimi, S.A., will be listed during the first week of December

The new segment of the Mercado Alternativo Bursátil (MAB) for SOCIMIS (Spanish REITs) will start with the listing of Entrecampos Cuatro SOCIMI, S.A. on Thursday, 28 November.

Entrecampos Cuatro was set up in 2004 to merge a number of family-owned businesses. Its equity comprises mainly homes, commercial premises and offices for lease in Spain and Germany. Last year, Entrecampo Cuatro decided to avail itself of the special tax regime for SOCIMIs. Since then, it has been taking the steps to meet the related requirements, which include listing on the MAB. VGM Advisory Partners, a MAB-registered advisor, was engaged to advise the company.

Circular 2/2013, which governs the regime applicable to SOCIMIs, requires independent expert appraisals. Entrecampos Cuatro was appraised at between €84 million and €97 million. The company’s board of directors set a benchmark value within this range of €1.59 per share, implying a total valuation of €86.9 million.

The second SOCIMI to be listed on MAB will be Promorent Socimi S.A., a family-run business whose equity is mainly composed of homes, although it has some commercial premises and developable land. Processing of the company’s application is in the advanced stages and it could be listed as early as sometime in the first week of December. Promorent’s registered advisor is Armabex Asesores Registrados.

SOCIMIs are Spain’s version of real estate investment trusts (REITs), which operate in other countries. They are listed companies with a specific tax treatment. They mainly develop, refurbish and operate leased properties, invest in other SOCIMIs and perform ancillary real estate activities. Key features of SOCIMIs include minimum share capital of €5 million and mandatory listing on regulated markets or multilateral trading systems like the MAB. SOCIMIs pay zero tax on income and must distribute at least 80% of income among shareholders through dividends.

SOCIMIs will trade in a special MAB segment. Operation of the segment will be subject to the same rules as those applied to the growth companies segment. These companies will also have liquidity providers, acting as counterparties to investors wishing to buy or sell shares in them. Banco Sabadell will be Entrecampos Cuatro’s liquidity provider, while Promorent Socimihas chosen Cortal Consors.