AmProp, Grosvenor to jointly invest in Spanish real estate

PETALING JAYA: Amcorp Properties Bhd (AmProp) is teaming up with Grosvenor Europe Investments Ltd (GEIL) and Grosvenor Fund Management Spain, SLU (manager) to invest in real estate in Spain.
In a filing with Bursa Malaysia yesterday, AmProp said its wholly-owned subsidiary Amcorp Horizon Sdn Bhd (AHSB) has entered into a joint venture agreement (JVA) with GEIL and the manager in respect of a joint venture company (JV Co) known as Urban Value Add I (Spain), which is also a party to the JVA.
“After years of negative growth, the Spanish economy recorded its first annual growth in 2014 of 1.4% and further strengthening to 3.2% in 2015. On the back of a resurgence in economic activities, there has been rising interest in the Spanish real estate market by both domestic and international investors,” it said.
“Starting from low price base with Spanish real estate prices 30% below their peak in 2008 coupled with a low interest rate regime, the Spanish real estate market offers huge potential for capital appreciation,” it added.
AmProp aims to ride on the recovery of the real estate market in Spain, replicating its business models in the UK and Japan, by committing up to €35 million (RM153.65 million) for a 50% stake in JV Co. GEIL will contribute an equal amount and hold the remaining 50% stake.
It will also leverage on the expertise and experience of the manager, which has been operating in Spain since 2000, to further diversify its international property investment and development portfolio.
JV Co will invest in a portfolio of real estate development and value-added projects in Madrid and any other cities in Spain, to be mutually agreed by the parties (AHSB and GEIL) from time to time. Incorporated under Spanish law on June 6, 2016, JV Co has an issued and paid-up share capital of €3,000 comprising 3,000 shares of €1 each with the joint venture partners each holding 1,500 shares.
JV Co will make its investments directly at project company level through the establishment of one or more project companies, said AmProp.
The JVA will be in force for five years and may be extended for one year (JV term) upon the manager’s proposal and subject to the approval of the joint venture partners. Upon expiry of the JV term, the parties and the manager will proceed to wind up JV Co.
The acquisition period during which the investments will be carried out will begin from the date of the JVA and end on the second anniversary of the JVA date. This acquisition period may be extended for one year.
AHSB will finance its capital commitment via advances from AmProp by way of internally generated funds of AmProp Group and bank borrowings. The joint venture is expected to contribute positively to the future earnings and growth of the AmProp Group.