Spain's Axia wins JP Morgan, Citigroup as investors

US-based banks JP Morgan and Citigroup have become two of the largest shareholders in newly-launched Spanish REIT Axia Real Estate after taking a combined 6% and 9% stake respectively.

Axia Real Estate, which raised €360 mln last week in an initial public offering, received backing from international institutional investors including hedge fund Perry Capital, which committed €105 mln, representing a 29% interest, as well as JP Morgan and Citigroup, which bought around €55 mln worth of shares.

Other investors include fund manager Taube Hodson Stonex Partners with 11%, investment manager T. Rowe Price with 10% and UBS with 5%

The company issued 36 million new shares at €10 each.

Axia was initially targeting €400 mln of equity to be spent on commercial property in Madrid and Barcelona.

Axia is being launched by Luis Alfonso Lopez de Herrera-Oria and the Rodex Asset Management real estate advisory group he controls. The Spanish real estate entrepreneur will run Axia as chief executive after leaving his job as CEO of property group Alza Real Estate.

Axia plans to invest the proceeds from the offering in the next 12 to 18 months, largely in offices (70%) and logistics assets (20%).

TAX-EFFICIENT ROUTE
Foreign investors looking to enter the Spanish property market are increasingly opting for tax-efficient REIT structures to make their first move.

Earlier in July Merlin Properties made its debut on the Spanish stock exchange with the largest listing ever of a European real estate investment trust (REIT).

In March Hispania Activos Inmobiliarios went public and currently has a market value of about €530 mln. The REIT, managed by investment manager Azora, received commitments from a number of cornerstone investors and other players including Quantum Strategic Partners, Paulson and Co, Moore Capital Management, APG, Cohen & Steers and the Canepa group.

Similarly, Spanish family-owned property company Grupo Lar’s newly-launched Socimi raised around €400 mln from the issue of 40 million new ordinary shares at a price of €10 per share. Lar Espania Real Estate Socimi currently has a market value of €417 mln.

Spanish property firm Quabit also recently unveiled plans to launch a listed real estate investment trust with €500 mln worth of assets through an initial public offering.

Quabit said it is working with Spanish bank Santander to prepare the listing which is expected to be completed before year-end. The new company would invest in both residential and commercial assets, the company added.

‘Recent regulatory changes to the REIT structure in Spain have made these vehicles very attractive and today these structures strongly contribute to the investor-friendly climate that Spain is trying to foster,’ commented Wynn Williamson, a former director of Aguirre Newman and founder of Aura Asset Management.

Williamson believes the REIT market’s potential for growth is enormous. ‘Several other Socimis are expected to launch in the next few months,' he added.