SOCIMIS (Spanish real estate investment trusts) are public limited companies whose corporate purpose is the ownership of (i) urban assets for lease (by means of acquisition or development) or (ii) stakes or interests in the capital of other SOCIMIS or foreign entities pursuing a similar or analogous activity (real estate investment trusts or REITs).
The main features of the current SOCIMIS regime are:
This trading segment on MaB became operational on 15 February 2013 when Circular 2/2013 outlining the framework for SOCIMIS whose shares are admitted to trading came into effect.
Investors in SOCIMIS have the possibility of investing in a variety of real estate assets using various instruments, thereby diversifying their investment portfolio.
The SOCIMI shall be responsible for managing the real estate assets, thereby offering investors access to professional management services to monitor, trade and value the assets comprising their portfolio.
SOCIMI's income is not taxed and shareholders only pay tax on the dividends received.
As these companies are admitted to trading on MaB, shareholders are able to buy and sell securities quickly at market prices and obtain immediate liquidity.
MaB Circular 2/2013 of 15 February establishes the rules applicable for SOCIMIS whose shares are admitted to trading on MaB. This Circular is based on the rules currently applicable to securities traded in the growth companies segment (Circular 5/2010), although it does establish specific rules for this new segment.
The following rules shall apply:
Both Spanish public limited companies which are SOCIMIS and foreign public limited companies whose corporate purpose and investment regime are analogous to that established for Spanish SOCIMIS may be admitted to trading.
The share capital of these companies must be fully paid up and the tradability and transferability of their shares must not be restricted. The shares shall be represented by book entries..
The accounting regime and the financial information provided by SOCIMIs shall comply with the following standards: a) if the company is incorporated in a country in the European Economic Area, it may choose between adopting International Financial Reporting Standards (IFRS) or the national accounting standards of its Member State; b) if the company is incorporated in a country which is not a member of the European Economic Area, it may choose between IFRS and US GAAP.
A request to be admitted to trading must be submitted to MAB, along with an "Information Document for Admission on MaB" containing detailed information on the company, its business and outlook.
SOCIMIS must appoint a Registered Advisor, who shall act as an intermediary with the supervisory authorities during the initial listing and during the period that the company is listed. The adviser shall assess the suitability of those SOCIMIS interested in joining this new segment on MAB and shall advise them on the new trading regime and on the preparation and presentation of the financial and business information required in order to trade in this segment.
The SOCIMIs and their principal shareholders shall sign a contract with a liquidity provider, which may be an investment services company or a credit entity, to facilitate the liquidity of the transactions affecting shares in these companies, achieve an adequate trading frequency and reduce price variations which are not caused by market trends themselves. In order to facilitate the role of the liquidity provider, the issuer shall make available securities and cash, in an amount to be determined by MAB through an operating instruction.
SOCIMIs must have a minimum free float to be able to join MaB. Shareholders owning less than 5% of the company's share capital must hold a number of shares that equal to or greater than either of the following: an estimated market value of €2 million; or 25% of the total shares issued by the company. This calculation will include any shares made available to the liquidity provider for the exercise of its designated role.
One of the new requirements for SOCIMIs whose shares are admitted to trading on MaB is the obligation to provide an independent expert valuation on the initial reference price at the time of admission to trading, unless there has been a share placement or relevant financial transaction in the six months prior to the admission to trading.
The valuation shall determine the value of the company as a whole, not just the real estate provided. The report shall also include the proposed business plan, the valuation assumptions and the methods used to calculate the final valuation.
The principal shareholders must adhere to the following requirements (the last three must be included in their bylaws):
Circular 2/2013 states that once the shares have been listed on MaB, principal shareholders and senior officers must undertake not to sell shares or engage in any transactions analogous to the selling of shares during the first year of the company's listing on the Market, with the exception of any shares made available to the liquidity provider.
SOCIMIS are obliged to disclose to the market, as they become aware, of any significant acquisitions or disposal of shares that increase holdings to above or below 5%, or multiples thereof, of the issuer's share capital.
The threshold shall be 1% in the case of transactions performed by directors and executives of the SOCIMI.
SOCIMIS shall inform MaB, for publication and as soon as they become aware of them, of all information on transactions performed by directors and executives and of the agreement, extension or termination of any shareholder agreements which restrict the transfer of shares or which affect in any way the voting rights of shareholders.
Any shareholder who receives a purchase offer which would result in the acquirer obtaining control of the company (>50%) shall not accept such offer unless the party wishing to acquire the shares makes the same offer to all shareholders under the same conditions.
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