Who’s who in the SOCIMI sector: 120 companies owning 0.7% of rental housing

Spain is one of the countries in the world with the largest number of social (listed investment companies in the real estate market), numbering more than one hundred companies. Their growth is due to a special tax regime that governs them, designed to bring retail investors closer to bricks and mortar, an asset type historically reserved for high net worth individuals. Politically, they have been highlighted as one of the reasons for rising house prices, despite the fact that most do not invest in the housing sectorbut also in other types of real estate, such as office buildings, logistics warehouses or shopping centers.

Social mode It was created in 2009, during the second term of José Luis Rodríguez Zapatero.. In 2012, the legislation was changed to bring it into line with that of international REITs, structures that are currently similar to Socimis. This last reform was a success and allowed the birth of large companies

such as Merlin Properties, as well as the revival of Colonial, among others, in addition to spread and penetration of large international funds into Spain.

Socimis that really exist and those that don’t

The first difference between Socimis is the distribution of their shares: there are companies that function as savings and investments for individuals, and others that are just a shell for good tax benefits. The first type includes the aforementioned Merlin and Colonial, as well as Lar España, Vitruvio or Árima: although they all have large shareholders, they have free swimming more or less wide. Are They are a minority among the 117 Socimis. existed at the end of 2023, according to Armanext, although they are the largest.

On the other side are those who simply They are a tax structure controlled by one or two shareholders.. These Socimis are listed on the stock market as this is one of the requirements of the tax regime, but its shares barely move on the stock market

. This class includes, for example, Castellana Properties, owned by the South African fund Vukile; General de Galerias Comerciales, the third largest SOCIMI in Spain, controlled solely by millionaire Tomás Olivo; or P3 Logistic Parks, one of the main owners of logistics warehouses in the country, owned by Singapore’s sovereign wealth fund GIC.

Socimis invests in more than just housing

One myth is that SOCIMI are “vulture funds” causing house prices to rise in Spain. The reality is that most of these companies are not investing in the housing market (some do), but in what is called Commercial real estate

. According to the Association of Commercial Space Owners (APRESCO), Socimis has around 25,000 rental homes across the country, representing just 0.7% of the total. Total, which concentrate 80% of the value of their assets in offices, hotels, logistics and retail, according to PwC.

Among which Blackstone Socimis invests in residential real estateTesta Residencial, Fidere and Albirana, Viveniocontrolled by foreign funds Aware and APG, or Temporary Properties from TPG. They offer rental homes at market rates and are in the hands of a single shareholder.

There is a subgroup of SOCIMI who invest in housing, but do so with the peculiarity that their rent is social. This is the case Tutecho o First Nvehicles that They purchase properties and rent them out at very low prices to NGOs who use them for homeless people.. This class may also include Ktesiosa company that buys houses in small towns where there is no supply and rents them out at prices in many cases less than 500 euros per month.