Another Big REIT Scheduled to Launch

Barcelona city viewReal estate company Quabit is planning to launch a SOCIMI, Spain’s version of a real estate investment trust, later this year, joining an already crowded field.

The new entity will go by the name of Bulwin Investments and Quabit hopes to raise more than €400 million through an initial public offering. While details are scarce, Quabit is promising a diversified fund, with a 40 percent allotment to residential, and Madrid and Barcelona the obvious first choices for target purchases.

As SPI discussed in previous articles, the REIT market is already full of newly-funded players looking for bargains. In a statement earlier this month, Grupo Lar acknowledged that it is growing increasingly difficult to find good deals, with so many funds looking for discounted property.

Since Grupo Lar’s launch in March, Spain has been leading Europe in the launch of public real estate trust launches. The €1.2 raised by Merlin Properties stands as the biggest property offering in Europe this year.

In addition to tax benefits, REITs allow the real estate companies to raise funds from small investors, who get a chance to bet on the property market without a large risk. But investors have shown little enthusiasm for Spain’s REIT shares; most have seen their share price dip below the initial offering price.

The Quabit offering will be coordinated by Banco Santander and advisors will include Knight Frank, the international consultancy, according to media reports. The offering is expected to go public in November.

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