They are the protagonists of the great M&A operation of the Spanish real estate sector. If you had to point out three attractions that you saw on Quabit, what would they be? Without Covid, do you think the “attraction” relationship would have been mutual?
For us, the greatest attraction of the operation was the land. Quabit had an important portfolio of land, both finalist and under management in the regions of Spain with the greatest urban interest and therefore fully compatible with the Neinor Homes portfolio. Especially, this merger has given us a very important amount of land in Madrid, specifically in the Corredor del Henares area. In this way, Quabit provides a portfolio of 7,000 homes that we have been able to acquire at a very attractive cost; It is a high volume but it fits well for the size of Neinor and that, thanks to our operational capacity, we will be able to digest very well. On the other hand, it allows the company to maintain an adequate level of indebtedness, especially after the success of our first issuance of green bonds of 300 million euros, of which a part will be used to refinance this operation.
As for the influence of Covid, it is a reality that the health crisis increased a delicate financial situation that Quabit was already going through and that was putting the company’s viability at risk. In our case, as a leading company in the market, we are always attentive to opportunities that may arise and are positive for our clients, investors and shareholders, and this, without a doubt, was.
They expect a quick return on capital with this operation. Where will the keys to achieve it be?
The soil bank provided by Quabit contains approximately 65% of “finalist” or ready-to-build land, with more than 1,300 units under construction and 250 units in finished product. If we add to the above that the rate of pre-sales in the promotions launched is very high, we obtain a return on the invested capital in a very short term.
Why did you decide to do a bond issue? How do you assess the result?
Bond issuance is a very interesting form of financing and the decision to carry it out is in line with the company’s strategy. Although Neinor Homes enjoys a privileged financial situation, as shown by the support of the banks in 2020 when they granted us about 400M of developer credit, we do believe that this issue could extend the maturity of the debt and, in view of the absorption of Quabit, allowed us a better restructuring of corporate debt. In fact, this issue allows us to repay Quabit’s debt at a rate of 4.5% and with a maturity of almost 6 years, which means less financial expenses and more benefits for our shareholders.
We are very satisfied with the reception: the issue has had a demand of more than 1,500 million euros, that is, an over-subscription of 5 times the offer issued, and the investor profile has been very varied.
What purposes do you have for Quabit’s land portfolio? Do you have an estimate of how much volume you are going to divest?
Article source: https://es-us.finanzas.yahoo.com/