- The 72 REITS in Spain boast an investment volume in real estate assets of 50 billion euros and a market capitalisation of over 22.3 billion euros
- Since their start-up in 2012 the value of REITs trades executed on the stock markets have reached a value close to 35 billion euros
Jorge Yzaguirre, Director of Markets and Market Data of BME, and Enrique Losantos, CEO of JLL, today presented the report "REITs. Stability and investment in the real estate sector. Market Report 2019". During the presentation, which took place in the Madrid stock exchange and was attended by over a hundred professionals from the sector and investors, the growing importance of Spanish REITs (called SOCIMIs in Spain) in the economy and in the markets became apparent.
Jorge Yzaguirre stressed that "the REITs have provided a new source of financing for the real estate sector at a particularly difficult time for it. These investment vehicles also benefit from the transparency and visibility inherent to the Stock Exchange and MAB". Enrique Losantos stated that "these vehicles acted as major drivers of the real estate market by capturing large volumes of domestic and foreign investment, thus favouring the reactivation of the sector and increasing its professionalism, transparency and efficiency, essential for achieving a more stable industry and one resilient to cycle changes ".
Among the conclusions of the report, pointed out by Alberto Segurado, Director Debt Advisory at JLL, and Jesús González-Nieto, managing director of MAB, several figures stand out that reveal how REITs have taken centre stage since their inception. These vehicles were born in Spain in 2009, but did not start operations until the 2012 law was amended. In just over six years, the Spanish markets managed by BME have listed 72 REITs, with investment in real estate assets reaching close to 50 billion euros and a market capitalisation of over 22.3 billion euros.
In terms of activity, in 2018 the REITs as a whole generated rents exceeding 2.1 billion euros (up 25% year on year), an EBITDA of 1.5 billion (+ 22%) and a net profit of 2.3 billions euros.
In addition, since their inception these vehicles have distributed 1.3 billion euros in dividends to their shareholders and have increased capital 48 times to the value of 8.3 billion euros. The value of REITs securities traded on the Spanish stock exchange currently stands at 34.6 billion euros. Today, the weight of the REIT subsector in the General Index of the Madrid Stock Exchange is four times as much as that of the real estate companies outside this classification.
As for dividends, one of the variables most valued by investors, the REITs offered a return of 3.8% last year and in addition these vehicles have given investors significant returns during the first four months of the year. From January to April, the REITs listed on the Spanish Stock Exchange posted a 14.35% increase, which would have been 16.73% if the dividends distributed during the four-month period had been reinvested.
There are currently four REITs listed on the Stock Exchange (Merlin Properties, Inmobiliaria Colonial, Lar España and Árima Real Estate). The other 67 are traded on MAB.
In the Eurozone the number of vehicles similar to the Spanish REITs at the end of the first quarter of 2019 reached 141 companies with a market value of 140 billion euros. Spain contributes half of the companies (72) but only 19% of the market value in the Eurozone, which points to the smaller average size of Spanish vehicles compared to their European counterparts.
Access to the report (available only in Spanish) and photographs of the event:
https://www.bolsasymercados.es/esp/Sala-Comunicacion/Documentos-Interes
