Blackstone tipped as preferred bidder for Testa's resi assets

US asset management giant Blackstone is believed to be the preferred bidder for Testa's 1,500-property strong residential portfolio in Spain.

Spanish REIT Merlin Properties, Testa's new owner, put the package on the market in late 2015 through Deloitte and CBRE for around €300 mln.

The portfolio comprisies 11 buildings in Madrid, Toledo and Guipúzcoa., with an occupancy rate of 96%. The sale is believed to have drawn interest from several players including investment bank Goldman Sachs, Germany's Patrizia, and Spanish REIT Hispania.

The portfolio contains both unsubsidised and social housing properties, as well as around 30 commercial premises and an optional 640 parking spaces.

The sale will be used to reduce Testa’s €1.6 bn of debt prior to the integration with Merlin.

Merlin currently owns 77% of Testa, after agreeing to buy the company in phases from builder Sacyr. It bought an initial 25% stake through a capital increase and committed to pay a total of €1.8 bn to take full control of the real estate unit, its largest acquisition since launching on the stock market in spring 2014.

Merlin acquired a further 25% interest in July and another 27% in August. The company expects finalise the takeover by June 2016.

Testa is a €3 bn Spanish property company and formerly the real estate subsidiary of construction Group Sacyr. The merger between Merlin and Testa will create a property giant with assets of around €5.5 bn and gross rents of €290 mln. The portfolio will consist of just under 1,000 assets, largely offices in the major cities of Madrid and Barcelona.