The acquisition of Castellana Properties from the American manager Pimco of 21.7% of its stake in the socimi Lar España has been a “operation roundaccording to analysts.
“The transaction is positive for Castellana Properties due to the price at which it has been carried out,” he says. Javier Diaz Izquierdo, Renta 4 analyst.
Diaz has been surprised by the discount at which Pimco has sold its stake in Lar, with just a premium of between +4 percent and +6 percent over the company’s current price. The transaction has been closed at a 48 percent discount to the net value of tangible assets.
Díaz considers that the entry of Castellana Properties in Lar “gives you shareholding stability and reduces the risk of overhang“.
After the operation, Castellana becomes the largest shareholder of a company with which it shares the same strategic approach.
A strategic purchase
According to sources at Castellana Properties, the operation represents a very attractive financial investment, as it combines high dividend yields with long-term capital appreciation potential.
In addition, “it is consistent and logical with its strategy of investing in assets in the Spanish retail real estate sector and represents a very good opportunity if it is compared with the prices of other similar assets in the market,” the same sources indicate.
The financing of the operation will be mixed
The operation will be financed with a combination of the liquidity of Castellana Properties and a capital injection of 75 million euros already committed by the largest shareholder Vukile Property Fund.
“This is a financial investment and Castellana Properties will not ask for any position on the board of Lar España Real Estate. As a capital vehicle focused on retail and not as an investment fund, we believe that this transaction is positive for Castellana Properties”, assures Laurence Rapp, president of Castellana Properties.
Lar goes up in the stock market
Investors liked the operation and, after hearing the news, the value, which is listed on the Continuous Market, rose 3.3 percent on the stock market. It rises in the year by 3.52 percent.
Javier Diaz recommends overweight the value and gives it a target price of 7.30 euros per share, slightly lower than the 4.45 euros given by the consensus of finance.com analysts. They place their potential return at 40.6 percent.
62.5 percent of the consensus recommends buying the stock, which is now trading at 5.3 euros, 25 percent holding and 12.5 percent selling.
Castellana’s income exceeds pre-pandemic levels
Castellana Properties presented last November the half-year results in which it obtained a recurring EBITDA of 23 million euros between April and September and a net profit of 16.9 million euros. Its total gross income exceeded pre-pandemic levels, with an increase of 5.7 percent.
The company has 16 assets in Spain with a gross leasable area of 350,271 m² and a gross value of around 1,000 million euros.