Spanish REIT Merlín Properties has emerged as the winner in the race to take control of Testa, the €3 bn property arm of Spanish construction giant Sacyr.
Spanish REIT Merlín Properties has emerged as the winner in the race to take control of Testa, the €3 bn property arm of Spanish construction giant Sacyr.
Merlín has agreed to pay €1.79 bn for the real estate unit, its largest acquisition since launching on the stock market last spring.
In a statement to the stock exchange regulator, builder Sacyr said the deal would significantly improve its financial position while helping it to develop its global strategic programme in the construction, infrastructure and services businesses.
Under the deal, to be completed in phases, Testa has reduced its capital, paid an extraordinary dividend to shareholders and carried out a capital increase in which Merlín took an initial 25% stake. This gives indebted Sacyr, which owns about 99.6% of Testa, an initial €238 mln, followed by another €1.55 bn when it sells its stake in Testa to Merlín. CBRE Spain advised Merlin Properties on the deal.
Several bidders
Builder Sacyr reportedly received several offers for Testa, which had been put on the market over a year ago through investment bank Lazard. US private equity firm Blackstone, as well as local REITs Merlin and Hispania, and French listed investor Eurosic are all believed to have tabled offers for the property landlord.
Merlin said last month it had already made a preliminary non-binding offer for Testa. The Spanish REIT has been one of the most active buyers in the country over the past year. On Monday, it announced its first investment in the Portuguese market with the purchase of an office building located in Parque das Naçoes (Expo district), in Lisbon. The acquisition represents an investment of €18 mln, or a net initial yield of 7.4%.
Located on Avenida Dom João II, the fully-let property was built in 2007, under a project signed by Broadway Malyan, and comprises a total of 6,740 m2 of GLA including retail on the ground floor and office accommodation above.
Merlin Properties is managed by Magic Real Estate, the asset management firm headed by former RREEF executive Ismael Clemente. Merlin went public last year raising €1.25 bn in Spain's largest stock market listing in four years.
A week later the company, which has a core and core-plus profile, inked the acquisition of Tree Inversiones Inmobiliarias for €740 mln from Ares Management, Europa Capital, Deutsche Bank and Banca March. Tree was the owner of a portfolio of real estate assets (880 bank branches and 5 buildings) located throughout Spain and leased in their entirety to BBVA through 2029 (the buildings) and 2039 (the bank branch).