El Corte Inglés and Merlin Properties negotiate alliance to create a real estate'giant'

El Corte Inglés and Merlin Properties intend to create a real estate "giant" and for that they are already negotiating a possible alliance, which will go through the acquisition of part of the portfolio of properties, valued at 17 million euros, October 11st the newspaper "El Confidencial".

El Corte Inglés wants to meet as soon as possible the commitments agreed with the financial rating agencies promised in its recent first official bond issue that will reduce its debt from four billion euros to half over the next 18 months.

Jesus Nuño de la Rosa, president of the distribution group, decided to accelerate the sale of part of his real estate assets. According to financial sources, it is at this point in the operation that Merlin Properties, the largest listed company in the sector in Spain, comes on the scene.

Merlin Properties is the most advanced in the negotiations with El Corte Inglés, which wants to close the agreement before the end of 2018 or, no later than February 28th 2019, when the fiscal year is completed. The current proposal consists of the acquisition of part of the real estate assets of El Corte Inglés and the signing of a contract as a portfolio manager.

The portfolio of the distribution group is composed of 94 properties, most of them in Spain, of which 87% are shopping centers. Of the 7,670 million that Merlin Properties manages in assets, 5,500 million correspond to offices, 934 million to shopping centers and 403 million to stores of commerce in the main streets.