SOCIMIS: The investment vehicle of the moment

Abstract

The crisis of 2008 affected seriously Spain and specifically the Real Estate sector. However, as time has gone by, we have seen a tremendous recovery since that period. In fact, the Real Estate sector is one of the sectors with the highest potential growth for the analysts. This recovery has been mainly due to the appearance of new Spanish real estate investment vehicles, known as SOCIMIs (Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario), which have attracted lots of national and international investors and have pushed the IBEX 35 to reach 11.000 points, the maximum level of its history. The RE sector was hit really hard during the crisis period and the government decided to help to boost this sector by introducing the new law regime for the SOCIMIs in 2013. The main feature of this legal regime was the corporate tax which is zero for these type of companies. The new legislation increased the interest of national and international investors for the RE sector and specifically for this type of investment vehicles. Since 2013, 33 SOCIMIs were created, reaching amongst all of them a market capitalization of EUR14.0bn. Each SOCIMI acquired different RE assets when they first appeared in 2013-14 and now after 3 years, SOCIMIs are starting to dispose its non-core RE assets and focusing on one single RE business line (offices, logistics, hotels, high street retail and shopping centers) in order to win competitiveness. Therefore, it is expected that the M&A activity within this sector is going to exponentially increase over the following years. The main objective of this end of master’s project is to analyze the SOCIMIs market and also analyze which SOCIMIs are the best to invest in, according to the better prospects of the RE sector in Spain.