MADRID, March 3 A Spanish property investment
vehicle set to list shortly on the stock exchange has raised 314
million euros ($433 million) from investors including U.S. fund
managers George Soros and John Paulson, according to a
regulatory filing on Monday.
Foreign investors have been flocking to Spain in search of
bargains as the country emerges from a prolonged recession, and
the battered real estate sector in particular is attracting
funds after prices slumped around 40 percent since 2007.
Hispania, a vehicle which will be managed by Spanish
investment firm Azora, aims to raise 500 million euros in total
through its Madrid flotation, which it will then use to invest
mainly in residential property, offices and hotels in Spain.
The investment secured so far means it has already reached
over 60 percent of its target. It is aiming for returns of over
15 percent for investors, according to a prospectus filed with
Madrid's stock exchange on Monday.
Real estate investment trusts (REITs), or SOCIMIs in Spanish
- listed vehicles that usually invest in income producing assets
- are only just taking off in Spain, where the government has
had to introduce new rules and shake up the rental market.
But they are common in other regions such as the United
Hispania will have a complex structure whereby investors
will be stakeholders in a company that is not strictly a REIT,
but which will own one.
That will allow it to get around REIT restrictions and
invest in different types of assets through the parent company,
including property debt, which many banks have been shedding.
"With this formula Hispania will be able to buy loans,
stakes in companies - we think the market is ripe for this right
now," said Fernando Gumuzio, co-founder of Azora, which is the
biggest manager of social housing in Spain.
Billionaire financier Soros, who recently bought shares in
Spanish builder FCC, is among the cornerstone investors
in Hispania. Quantum Strategic Partners, managed by Soros Fund
Management, is putting in 92 million euros, according to the
Quantum has also recently invested in Italian real estate,
which has been hit hard by a deep recession too.
Paulson & Co, founded by billionaire John Paulson, is also
investing 92 million euros in Hispania.
U.S. hedge fund Moore Capital Management and real estate
investment specialist Cohen & Steers are among the investors
which have already signed up.
A fund owned by Azora - which is chaired by former Goldman
Sachs partner Juan del Rivero - and members of Hispania's
management are also investing in the vehicle. Including these
commitments, the funds raised so far stand at 326 million euros.
Hispania is due to start trading on March 19, and could grow
to 550 million euros if an option to increase the offering is
exercised. UBS and Goldman Sachs are advising
on the offering.