AXA Completes Buy of Santander Assets

AXA Completes Buy of Santander Assets

AXA Completes Buy of Santander Assets

AXA Real Estate has given a vote of confidence to Spain’s recovering property market with the acquisition of 381 branch offices from the country’s biggest bank Santander.

AXA Real Estate, the largest real estate portfolio and asset manager in Europe, brokered the 308 million euros deal on behalf of a joint venture involving two of its institutional clients.

Most of the offices are located in major cities like Madrid, Barcelona and Malaga, but there are also some in prime locations in smaller towns across Spain.

They are currently fully let to Santander on 24-26 year leases and will provide AXA Real Estate’s clients with long-term revenue schemes.

 

AXA NO STRANGER TO SPAIN PROPERTY

AXA Real Estate is no stranger to Spain’s property market. In mid-2013, when prices were at record low, it bought 13 office blocks in Barcelona let to the Catalan regional government for 172 million euros.

One of the main attractions for AXA of that particular investment was the yield of about 9.5 percent, much higher than anything on offer in London or Paris at the time.

And just last year, the French asset manager bought a building in central Madrid’s emblematic street Gran Via. It paid 80 million euros for the former cinema which is now rented to Swedish clothing retailer H&M.

With Spanish property prices now starting to stabilise and even moving up in prime areas, and rental yields in cities like Madrid still higher than many other European capitals, it’s no surprise that AXA Real Estate snapped up Santander’s branch offices.

These were sold off by the Socimi Uro Property, in which the bank holds a 24 percent stake.

A Socimi is a listed Spanish real estate investment trust (REIT), vehicles which have been set up over the last few years to facilitate investors’ entry into the property market. They offer attractive tax advantages.

 

SPAIN PROPERTY MARKET BACK IN FAVOUR

Spain’s recovering economy has fuelled renewed interest from international investors in its property sector.

Between 2007 and 2013, Spanish property prices fell by nearly 40 percent as the country struggled to weather the storm of the global financial crisis. But both the residential and commercial segments of the market are now back on investors’ radar.

Significant amounts of private equity capital have been raised to invest in Spanish property and transactions have also started to pick up. So all good news!

And more deals like AXA Real Estate’s buy of Santander’s offices are likely to emerge, as other local banks try to sell branches as they continue to cut costs and boost their capital base to meet tougher European banking regulations.

For information on investment in Spain, contact corporate law firm Argali Abogados.

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