2023 proved to be a positive year for the listed property sector. Six major real estate companies posted gains, with two of them listed on the Ibex-35 and the remaining four on the Permanent Market. The average revaluation for Merlin Properties, Colonial, Lar España, Aedas Homes, Neinor Homes, and Metrovacesa stood at 28.53%, excluding the dividends distributed during the year.
Spain’s best-performing SOCIMI stock in 2023 came from the listed real estate investment companies. This agency, which will celebrate its tenth anniversary in 2024, specializes in shopping centers and parks, areas whose prospects have improved in recent months after several years of pressure from the growth of online shopping. Lar España began 2023 around 4.3 euros per share and closed the year above 6.1 euros, a gain of more than 43% in value.
Apart from Lar España, the strongest increases were seen in Aedas Homes, Neinor Homes, and Metrovacesa, three listed developers focused on land acquisition and housing development. Aedas Homes recorded a roughly 49% rise in 2023, trading above 18 euros per share, while its overall revaluation reflected gains of about 35% for Neinor and around 25% for Metrovacesa.
Two companies that rose notably last year were Merlin Properties and Colonial, with gains close to 13% and a little over 6% respectively. The real estate group led by Ismael Clemente remains about 12% below its pre-Covid highs. In contrast, Colonial has traded roughly 47% below its 2020 peak, reflecting a longer downward trend.
Far from historical peaks
Even with 2023’s revaluation, there have been pronounced declines in national real estate securities over the years. Some declines mirror the sector’s business realities, while others track broader stock market conditions and upheavals such as the pandemic. Lar España’s 2018 high remains the only peak surpassed in the current period, reached again recently.
Colonial sits about 99% below its recent highs, a level reached during the housing boom of 2007. That period also required recapitalizations after the boom, which altered shareholding, yet Colonial subsequently surged more than 330% from its 2014 lows.
Metrovacesa faced a similar scenario, including delisting and a later return to trading. Its recovery paused after a series of declines, with current levels sitting around 23% below the price seen at the market peak. For the remaining two developers, Aedas declined roughly 30% after entering the stock market, and Neinor shed about 35%.
Dividend winds
In 2023, dividends paid to shareholders complemented the returns offered by listed real estate firms. Merlin Properties distributed 0.2 euros per share, totaling about 93.9 million euros across all outstanding shares. Colonial distributed 0.25 euros per share, corresponding to roughly 134.9 million euros in total payments. Spain’s market also recorded significant shareholder distributions in aggregate terms, around 50 million euros or 0.59 euros per share.
The developers also rewarded shareholders: Aedas allocated 94 million euros in dividends, equivalent to 2.15 euros per share; Neinor paid 75 million euros, or one euro per share; Metrovacesa distributed 66 euros per share, amounting to a total of 100 million euros in dividends.
Analysts are positive
Most analysts covering listed real estate players issued buy recommendations. For Merlin Properties, among 26 financial firms that evaluated the company, only one advised selling, while 18 recommended buying. Several prominent institutions, including both national and international names such as Goldman Sachs, Renta 4, CaixaBank, Banco Santander, and CaixaBank, have price targets above 11 euros per share, versus a starting level around 10.5 euros at the outset of 2024.
For Colonial, 12 financial institutions advised buying, and four suggested selling. The most optimistic targets imply potential upside of up to 50% for the Pere Viñolas-led firm, with names like Société Générale, Alantra, and Intermoney Valores among the contributing analysts.
Notes from market watchers emphasize that the sector’s share prices have been buffeted by a mix of internal operating dynamics and external macro factors. Nonetheless, the consensus remains skewed toward positive expectations for the larger players, supported by ongoing development activity and strategic asset allocations.
Overall, the year underscored the resilience of the listed real estate segment in Spain, even as some holdings faced pressure from cyclical factors and past peaks. The combination of steady dividends, selective growth, and favorable analyst sentiment points to a continuing interest from investors looking for exposure to property assets and developmental activity.