Spain's Testa Residencial acquires 1.329 apartments for €207m

Spanish private residential investor Testa Residencial has acquired 1,329 apartments for €207 mln from BuildingCenter, CaixaBank's real estate subsidiary.

The deal represents more than 90% of the assets included in the agreement signed in March between the two parties.

Wolfgang Beck, CEO of Testa Residencial, said that the closing of the acquisition 'consolidates Testa’s position as the leading REIT in the Spanish residential rental market, with nearly 10,500 apartments located, mostly, in Madrid and with a prominent presence in Barcelona, San Sebastián and Palma de Mallorca.'

The remaining 129 apartments in the deal will be acquired for an amount of €21 mln over the next few months, after certain conditions are fulfilled.

Based on the current lease contracts in place, it is expected that the apartments acquired now will contribute €8.5 mln of annualised rental income from 1 June, Testa said. Once the rest of the apartments are purchased, the figure is likely to increase to €9.3 mln annually. The apartments currently have an occupancy rate of 92%.

The portfolio from CaixaBank has a diversified geographical distribution, with a prominent presence in the main Spanish cities, including Madrid, Palma de Mallorca, Barcelona and Valencia. The apartments located in these cities represent, jointly, 66% of the total acquired portfolio.

The deal has been partially financed with a new bank loan for €92 mln. The loan has a seven year bullet maturity and an interest cost of approximately 1.6%, including 100% hedging.

Testa was created two years ago from a spin-off of Merlin's housing portfolio, following the acquisition of Testa's and Metrovacesa's income-producing assets. The firm recently approved plans to go public later this year to bankroll an ambitious acquisitions programme.


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