Metrovacesa - a Spanish commercial real estate heavyweight during the last boom - is planning a comeback to the Madrid Stock Exchange as a pure residential developer. The stage has been set by successful IPOs of two other residential landlords this year.
Metrovacesa has reportedly hired Deutsche Bank and Morgan Stanley to prepare the listing which is expected to take place next year. The company was taken private by Spanish banks, Banco Santander (61%), BBVA (30%) and Popular (9%) in 2012 following the implosion of the Spanish real estate market.
According to news reports in the Spanish media, the flotation would give Metrovacesa a market cap of €2.6 bn, the same as its gross and net asset value, as the company currently has no debt.
Metrovacesa focuses on residential development after spinning off its commercial real estate business, which merged with Spanish REIT Merlin Properties last year.
This would be the third major initial public offering by a Spanish residential developer following the listing of Neinor Homes and Aedas.
Aedas – owned by US private equity firm Castlelake – sold €665 mln worth of shares ilast week, priced at the bottom of the €31.65 and €33.15 range. This resulted in an market capitalisation of just over €1.5 bn.
The company went ahead with the listing despite political turmoil in Catalonia, which has rattled financial markets.
Aedas will have a 44-48% free float while its sponsor will retain the majority or a 52-56% share, depending on whether a greenshoe over-allotment option is exercised after the IPO.
CEO David Martínez said demand was three times the amount of shares being offered and largely came from international, institutional investors.
Lone Star listed Neinor's shares on the Spanish continuous market in Madrid on 29 March in the largest-ever IPO for a European residential developer and the first IPO by a developer since the onset of the financial crisis.
Priced at €16.46 per share, the oversubscribed IPO gave Neinor a market capitalisation of €1.3 bn. Lone Star retained a 40% share in the residential developer.
