BBVA repurchases offices portfolio from Merlin for nearly €2,000M

BBVA repurchases offices portfolio from Merlin for nearly €2,000M

BBVA has reached an agreement to repurchase from Merlin Properties the almost 700 commercial offices that the socimi owns from the bank. An operation that has been agreed at just over 1,987 million.

The real estate company led by Ismael Clemente announced last year its desire to dispose of this network of branches, although the bank had a preferential purchase option that it has finally exercised.

86% of the portfolio is located in Madrid, Barcelona and provincial capitals. And its book value, according to the socimi's balance sheet, was 1,750 million, so the sale would entail a premium of 13% according to the company, which has notified the CNMV of a capital gain of 304 million euros, for this operation.

BBVA, for its part, foresees an impact on its income statement for this year of 200 million euros from this acquisition. However, he assures that "these impacts will be more than offset by the expected accumulated savings after the execution of this transaction."

And it is that last year, BBVA paid about 85 million euros in rents, although the rents were skyrocketing because the contracts were indexed to the Consumer Price Index (CPI) and were calculated at 1.5 times the average inflation of each year (7.9% so far this year), and the financial entity had an obligation to remain in the Socimi's offices until 2039.

The operation, subject to the approval of the National Commission of Markets and Competition, would be completed in the second quarter of this 2022.

A little history

BBVA sold 880 branches that it had in its asset portfolio to various funds in the midst of the financial crisis, specifically in 2009. Five years later, Merlin bought these offices before going public, with the commitment that the bank would remain as a tenant for 30 years.

However, the current portfolio does not have the same properties as at the beginning, since the bank repurchased 167 of those branches for 252 million from the real estate company in 2018.

Now, Merlin Properties will allocate 50% of the income obtained to the distribution of an extraordinary dividend. The rest of the proceeds are also expected to go towards reducing the company's loan to value, boosting its data center projects and making a small share buyback.

At the end of the 2021 financial year, Merlin's net financial debt amounted to 5,247 million, after closing the return of a bond of 548 million.

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