THE VALUE OF REITS IS FOUR TIMES AS HIGH AS THAT OF OTHER REAL ESTATE COMPANIES LISTED IN SPAIN
- 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:
BME is the operator of all stock Markets and financial systems in Spain and has been a listed company since 2006. BME offers a wide range of products, services and trading systems based on an advanced and stable proprietary technology. The company also provides global market access systems to issuers, intermediaries and investors in Europe, America and Africa. The company is organised into six business-units that represent the broadest and most varied range of products and services that a company in its sector can offer to the financial community: Equities, Fixed Income, Derivatives, Clearing, Settlement and Market Data & Value- Added Services
About JLL Spain
With operations in our country since 1987, JLL currently has representative offices in Madrid and Barcelona. The team, with more than 500 professionals, is led by its CEO, Enrique Losantos. The business of JLL is structured in Spain having the client as the axis of all its activities, and according to its typology it is divided into investors and/or real estate developers (Investor Business) and companies whose main business is not real estate (Corporate Solutions). The Design and Construction area provides the two types with top-to-bottom services.
JLL manages buildings in Spain in all real estate segments, including offices and business parks, logistics platforms and shopping centres and media parks.
The company is a founding partner of the Association of Real Estate Consultants (ACI).
JLL (NYSE: JLL) is a leading professional services firm specialising in real estate and investment management. Our vision is to reconceive the real estate universe, generate profitable opportunities and create exceptional spaces where people can realise their aspirations. In this way, we will build a better future for our customers, our employees and our communities. JLL is part of the Fortune 500 ranking, has annual revenues of 16.3 billion dollars, operates in more than 80 countries and has a global team of more than 91,000 people as of March 31, 2019. JLL is the registered trademark and name of Jones Lang LaSalle Incorporated. For more information, visit jll.com