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ACCIONA to receive 21% of Testa Residential in exchange for its home rental business

07/27/2017
  • This deal will enable the company to achieve its objective of optimising the value of its home rental business so as to concentrate on real estate development
  • The deal, based on a gross asset value (GAV) of 400 million euros, will take place through a new equity issue

ACCIONA has reached an agreement to contribute its home rental business to Testa Residencial in exchange for a 21% stake, thereby achieving its goal of optimising the value of this asset portfolio.

The deal is based on a gross asset value (GAV) of 400 million euros and a net asset value (NAV) of 336 million euros, reflecting the portfolio's high quality.

The portfolio being contributed to Testa Residencial comprises 1,058 rented homes, 95% of which are in Madrid, with a 94% occupancy rate and gross rental revenues of 12.6 million euros per year. 

The deal will be completed once Testa Residencial's Shareholders' Meeting in September approves the issuance of equity in exchange for the assets. When the transaction is completed, ACCIONA will be third-largest shareholder of Testa Residencial, with a 21% stake. The other shareholders will be Banco Santander (35.7%), BBVA (26.9%), Merlin Properties (12.7%), Banco Popular (3.1%) and others (0.6%).

Following the transaction, Testa Residencial will have 9,041 homes (concentrated in 118 buildings), 51% of which will be in the Madrid Autonomous Region. Gross annual rental revenues will exceed 70 million euros; the company will have a gross asset value (GAV) of 2,179 million euros and a net asset value (NAV) of 1,816 million euros.

The contribution of the residential rental assets to Testa Residencial is part of the strategic review of ACCIONA's real estate business focused on two goals: revive the residential property development business, and maximise the value of the rental properties.

This deal fulfils the real estate area's goal with respect to the residential properties by integrating them into a specialised SOCIMI (Spanish REIT) that is a leader in the residential rental market in Spain. ACCIONA will continue to optimise its asset value by gradually rotating tertiary assets in order to fund growth in real estate development through ACCIONA Real Estate.

The revival of the property development business in Spain and other countries (Mexico and Poland) seeks to maximise the opportunities offered by the market upswing and crystallise the value of the company's portfolio of mature land assets.

ACCIONA Real Estate has just launched its first six projects in Spain, totalling over 500 homes in Madrid, Zaragoza and Alicante. In the coming months, ACCIONA Real Estate will commence construction of six new residential properties in Spain, located in Madrid, Estepona, Marbella, Valencia and Pamplona.

This year, the company will begin marketing around 1,000 homes in the Spanish market, most for delivery to buyers in the fourth quarter of 2018 and the first half of 2019.

The company currently has two developments under way in Poland (261 homes) and it is building a complex of 78 homes in Acapulco, Mexico.

With 25 years' experience, ACCIONA Real Estate is one of Spain's leading residential property developers and operators, having developed over 9,000 homes to date throughout Spain and in Portugal, Poland and Mexico.

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