Realia has announced that it has sold two buildings located in Madrid in the last few weeks: Cine Proyecciones and Amper-Tres Cantos. The transaction totalled €42.5 million, a value 8.8% higher than the valuation made by CB Richard Ellis in December 2006. This valuation was taken as a reference in the company's recent Initial Public Offering.
Realia acquired the Cine Proyecciones building in 2001 and completely refurbished it for a total amount of €10.8 million. Cine Proyecciones, located in Fuencarral Street in Madrid, is leased to Cinesa and consists of eight projection rooms with a total of 1.800 seats. The company sold the property for €19.75 million, showing an initial yield for the buyer slightly lower than 5%. The gains obtained are reflected in the Realia's 2007 second quarter results.
The Amper office building, located in the Tres Cantos Technological Park, was acquired by Realia for an amount of €15 million in a sale-and-leaseback transaction in 2002. The whole building is leased to Amper. The building has been sold to a Morley's European Property Fund for €22.7 million, showing an initial net yield for the buyer of around 5.5%. The gains obtained with this transaction will be shown in Realia's 2007 third quarter results.
Morley's European Property Fund was launched in February 2007. It is the first British daily-priced open-ended fund offering investors access to continental European direct property investment. The Amper building is the second property that the Fund has acquired and its first property acquired in Spain. Morley is part of the Aviva Group and is the largest property fund manager in Europe with more than €45 billion of funds under management.
Morley has worked with a number of local advisors in this transaction, including the Galeón Property Group who served as their financial and real estate consultants, as well as the Company Profacilty for technical advice and the Pérez Llorca Law Firm.
Including these transactions, Realia has sold in 2007 non-strategic assets for a total amount of €88.5 million, generating capital gains of €32.9 million, confirming the appraised values of its property portfolio, and maintaining the objective of reinvesting the proceeds in new assets that show a similar upside in value creation.