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LONDON-Metrovacesa is looking to sell housing assets and reinvest the proceeds in commercial property. A company spokesman confirmed that Metrovacesa chairman Joaquin Rivero had outlined a plan to sell about one third of Gecina’s less profitable holdings, mainly in the residential sector, and also some smaller office buildings.

“They are preparing a five-year plan that is likely to be presented in November,” the spokesman for the Madrid-based property company says. “This year, euro 600 million ($724 million) of Gecina assets will be sold, and this will rise in coming years.” Rivero told Gecina shareholders earlier this week that the sales could raise between euro 2 billion and euro 3 billion ($2.4 to $3.6 billion) over the life of the plan. These funds would be reinvested in more profitable investments, mostly in the commercial sector.

Gecina’s assets total about euro 8.3 billion ($10.2 billion), split 56% commercial and 44% residential. Metrovacesa bought 68.5% of Gecina for euros 3.8 billion ($4.5 billion) financed by a rights issue and the sale of properties in Spain.

Recent published reports further reveal that Metrovacesa plans to increase the free float of Gecina from the current level of about 32% by increasing the company’s capital. The spokesman confirmed that this was being considered, adding that Metrovacesa would never sell part of its own holdings but would raise new capital in Gecina if it needed to make a large investment.

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