Spanish lender BBVA has agreed to buy back 662 branches, which it sold between 2009 and 2010 under a sale and lease back agreement to Tree Inversiones Inmobiliarias, currently owned by Spanish REIT Merlin.
In a statement, BBVA said that the deal gives ‘greater flexibility in the management of its network of offices in Spain - as it resumes ownership - and generates significant economic savings between now and the date the agreement is set to end in 2040, despite increasing inflation’. The current contract includes a clause according to which rental incomes are adjusted annually at 1.5 times the inflation rate, it added.
BBVA has agreed to pay €1.99 bn for 100% of the shares of Tree Inversiones Inmobiliarias, which owns the properties (659 branches and three individual buildings).
The transaction is expected to be completed by the end of the second quarter.
Following the transaction, BBVA will own around a third of its branches in Spain, totaling 1,895 offices at the end of 2021.
A consortium led by of Deutsche Bank's property fund RREEF put together the portfolio in 2009 spending €1.15 bn to buy three office buildings and 944 bank branches located throughout Spain.
The buying consortium called Tree Inversiones Inmobiliarias comprised RREEF, Area Property Partners and Europa Capital.
In 2010 the partners bought a second portfolio for €364 mln.
A few years later Merlin Properties, a newly created REIT managed by Magic Real Estate, an asset management firm headed by former RREEF executive Ismael Clemente, went public and took control of the bulk of the assets.
Clemente was familiar with the BBVA assets, having led the acquisition of these assets back in 2009 and in 2010 on behalf of RREEF where he previously held the post of head of Spain.
Merlin was said to have put the portfolio back on the market earlier this year for over €1.75 bn.
