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Allan Saunderson is managing editor of Property Finance Europe and a contributor to GlobeSt.com.

PARIS-Spain’s struggling quoted property group Metrovacesa has announced that it will accept a stop to the separation agreement with French REIT/SIIC Gecina, calling a halt to a long-running dispute between the two firms. In a related development, Gecina, embroiled in a number of controversies over actions by its senior officers, also said the Paris Appeals Court has overturned a lower court ruling that had appointed a judicial officer to chair its AGM on 15 June.

The separation agreement was signed in February 2007 between former Metrovacesa shareholders and senior officers Joaquín Rivero Valcarce and Bautista Soler Crespo – now the major shareholders of Gecina, of which Rivero is CEO – and Román Sanahuja Pons, head of the family that pushed the two out after a long-running boardroom struggle. “Metrovacesa has acknowledged, after analyzing the overall situation and without prejudice to its consequences, that it is not possible to complete the performance of the Separation Agreement, which involved transferring certain office assets owned by Gecina .. to Metrovacesa,” the Madrid group said in a statement. It will remain a shareholder, with a 26.9% stake, and recently appointed five directors.

Gecina, meanwhile, said the Appeals Court decision means the role of the judicial officer at the AGM will be limited to controlling the attendance sheet and checking votes are counted in accordance with voting rights. However, the Appeals Court also confirmed the restriction of voting rights for the Rivero and Soler groups to 20% – which compares to their actual combined shareholding of over 30%. The restriction was made in response to complaints from small shareholders that the two acted in concert in many instances – an accusation they deny – including paying excessively for a stake in Spanish company Bami that the two men owned.

Gecina is the second largest French REIT (Société d’Investissement Immobilier Cotée, SIIC) after Unibail-Rodamco. It owns and manages a portfolio valued at nearly €12.5bn, primarily made up of office and residential properties in Paris and the Paris Region. Over the last few years, Gecina has diversified into hotels, healthcare, logistics and student residences. pfe

PFE COMMENT: The Gecina situation is raising a lot of heat and irritation in the Paris REIT/SIIC community, deeply concerned for the last four years or so about Spanish companies playing fast and loose in their sector. The Spanish had, until recently, exploited a loophole to invest in French REITs and take home profits tax free. Added to this, Spanish listed real estate did not cover itself with glory in the boom years: Examples such as shooting star Astroc Mediterraneo – which quickly dropped to earth – the disaster of Colonial – now completely controlled by banks – and the collapse of Martinsa-Fadesa – which became badly overextended – also show conclusively that controls of the CNMV supervisory authority are nowhere near adequate for a modern, fast-moving financial market.

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