Investment capital of 280 million euros will be sought from institutional investors by its sector real estatethrough three successive introductions to Athens Stock Exchangewhich are expected to be implemented gradually by mid-2024.
Orilina Properties
Early next week, Orilina Properties will launch its IPO with a capital increase to raise €30 million and finance its €77.4 million investment program. This concerns the construction of a complex of luxury homes on the Ellinikos property, as well as a private club for the owners of these properties.
Noval Property
A few months later, probably within the first quarter of 2024, the public registration of the Noval Property shares of the Viohalco group will follow. This is the last company in the sector that will have remained outside the Stock Exchange until then, following the recent introduction of Trade Estates of the Fourlis groupwhich raised 57 million euros and the upcoming Orilina of the Natsi family, which will be completed by December 11.
Noval controls a significant real estate portfolio worth more than €500 million and has a major development investment program underway, amounting to more than €350 million. This focuses on green real estate, primarily through the utilization of existing land and buildings in the company’s portfolio. Management will aim to raise €100 million in revenue, of which €10.5 million has already been secured through a recently signed agreement with the EBRD. Based on this, the latter has granted a loan of 10.5 million euros, convertible into Noval shares, in the context of the company’s public registration.
Lamda Malls
Another 150 million euros will be requested from institutional and private investors by Lamda Malls, a subsidiary of Lamda Development, to which the group’s shopping centers have been contributed. The aim of spinning off the mall sector and listing Lamda Malls is twofold. First, a significant goodwill will be capitalized and the investment opportunity will be provided to stakeholders who prefer to secure profits on a regular basis, in contrast to the Hellinikon project where profits are recorded when the corresponding sales are made.
They aim to finance investments of tens of millions of euros by raising capital from institutions.
The second objective is to raise additional funds, through which part of the costs for the development of the company’s two new shopping centers on the Ellinikos property will be financed, which are expected to require funds of the order of 600 million euros in total. The listing of Lamda Malls is scheduled for May or June 2024, as at this time the process of its corporate transformation is being completed in order to facilitate the related listing. However, as explained by industry players, the above funds seem to be only the beginning.
Specifically, they note that the amount that the sector will need to attract from institutional and non-institutional investors is likely to eventually more than double, potentially even exceeding 600 million euros within the next 18 months. This will happen due to the new requirement of the Capital Market Commission from all Real Estate Investment Companies (REITs) to increase the free dispersion of their shares, enhancing their marketability. For this purpose, a period of 12-18 months will be given.
The criticism
This is an issue that has been the subject of criticism, as the main role of REITs is to enable small investors to participate in real estate investments and to own even a small part of the income properties they have in their portfolios. In fact, the favorable tax regime of these companies is based on the provision of the required assistance, so that they distribute at least 50% of their profits to their shareholders in the form of dividends.
However, after the share changes of the previous years, companies such as Trastor of the Piraeus Bank group, or Prodea Investments, the industry’s largest company with a portfolio value of more than €2.5 billion, is five times larger than the next. The new regulation of the Capital Market Commission will stipulate that AEEAPs will have to maintain a wide dispersion of their shares, not only during the period of their listing on the Stock Exchange, but throughout the trading period of their shares.
Stock distribution
Today, the dispersion of Trastor does not exceed 1.7%, with Piraeus Bank controlling 98.3% of the listed company, after the divestment of Varde Partners two years ago. Accordingly, a mandatory public offer is currently underway by Invel, with the object of acquiring 13% of the share capital of Prodea Investments. This process is due to the transfer by the Castlelake investment group of the listed company’s voting rights, which correspond to 87% of the share capital, to the Invel group, of Mr. Chr. Papachristophoros.
Prodea’s management has proceeded with moves to dispose of shares in selected institutional portfolios. For example, Alpha Bank recently acquired a 5% stake for 65 million euros. So if Prodea is asked to allocate, for example, an additional 15% of its share capital, in order to strengthen the free circulation of its shares, it is estimated that approximately 200 million euros will be required.
Accordingly, Trastor will need around 80-100 million euros to increase the dispersion of its shares. It is worth noting that the expansion of the company’s share composition is already on the management’s agenda. As mentioned in a recent information note, on the occasion of the capital increase, amounting to 75 million euros, which is currently “running”, after the completion of the new investment cycle planned by Trastor, new strategic investors will be sought.
