The success story of socimis in large cities can be transferred to agriculture. That is the premise of the firm Armanext, adviser to socimis at Euronext in Paris and BME Growth on the Spanish Stock Exchange, in its report "Las Socimi salen al Campo", presented this Monday. Antonio Fernández, president of Armanext, is convinced that the success that these real estate companies had in attracting investment since 2013 can be transferred to agricultural, livestock and forestry activities, helping to fix the population of what is known as emptied Spain.
Listed investment companies in the real estate market (socimis) were created in the likeness of international REITs, operating in the US and other OECD countries for decades. As a tax advantage, they benefit from not paying Corporation Tax in exchange for distributing at least 80% of the profit in dividends to their shareholders, who are obliged to pay taxes. "Socimis are a success story," says Fernández, since after the gigantic real estate crisis due to the bankruptcy of Lehman Brothers they were able to attract investment to Spain and boost the sector as of 2013. In fact, Armanext reports that the 122 Spanish socimis in BME Growth and Euronext add up to 23,921 million in assets at the time of their incorporation to Euronext and BME Growth, not counting the large ones such as Merlin Properties (currently with more than 13,000 million in assets), Colonial (more than 12,000 million) and others such as Lar España and Árima.
The Armanext report considers that it is only necessary to change article 2 of Law 11/2009 on socimis, which specifies that these real estate companies can only operate with urban assets. For this reason, Fernández explains that only with a decree law could the change be modified and be in force in June.
The president of Armanext recalls that since 2020, due to the Covid-19 pandemic and recently with the war in Ukraine, it has been seen how agricultural activity is considered strategic and in Spain it needs investment and new operators due to the aging of producers.
The proposed model would be for an agricultural socimi to gather land, operated by a specialized agricultural manager, and distribute dividends among all its shareholders. Fernández sees this model above all for small owners or heirs of land who contribute their plots to a socimi, in exchange for annual dividends. The manager of the field, as is the case with hotel socimis, would be a company specialized in agriculture. The president of Armanext does not believe that political parties or autonomous communities of the emptied Spain are suspicious of the proposal. "This is the rod for fishing," he points out, referring to the fact that it is better to attract investment to improve production capacity than to wait for subsidies.
Armanext, one of the most relevant actors in the field of Socimis, has not yet presented his proposal to the Government and parties, but hopes to do so in the near future.
Countries that are anticipated
From Armanext it is recalled that Portugal allows the new Sigis (Portuguese version of the socimis) to invest in land dedicated to agricultural, forestry and livestock activities, so it even sees that some of these companies could already buy land in Spain.
In the US, there are cases of this type of listed agricultural real estate such as Weyerhaeuser, which owns 12.2 million forest acres and capitalizes more than 27,000 million, in addition to PotlatchDeltic, Farmland and Gladstone Land. In Australia, the Rural Funds Group has existed since 2014, managing A$1.2 billion in almond crops, cattle, vineyards and macadamias.