Spanish property companies Merlin Properties and Metrovacesa have merged to become the nation’s largest real estate investment trust.
The merger will create a single REIT, or SOCIMI as it is known in Spain, that will operate in the growing office, residential and shopping centre markets of Iberia.
Merlin will pay €1.7bn (£1.3bn) in shares to the owning group of banks of Metrovacesa, including Santander and BBVA, for a controlling stake in the commercial property portfolio. Merlin will issue 146.7m shares at €11.40 per share.
The combined company will manage 32m sq ft of offices, shopping centres and hotels valued at around €9.3bn and generating €450m pa.
The deal will also see the company operate as two entities. The commercial portfolio will come under the control of Merlin as the major shareholder with 69% of the shares, with Metrovacesa continuing to control the residential element with 66% of the shares.
The Metrovacesa brand will continue to be used in the residential markets, where it will develop rental homes and hotels.
