Spanish real estate investment trust Merlin Properties Socimi SA dropped on its trading debut after raising 1.25 billion euros ($1.71 billion) in an initial public offering that was completed in a declining market.
The REIT lost 3.5 percent to close at 9.65 euros a share, compared with its 10-euro sale price. The IBEX 35 index fell 0.3 percent, its sixth drop in seven sessions. Merlin was Spain’s fifth IPO in 2014. Lar Espana Real Estate Socimi SA, an earlier REIT IPO, has lost 5.3 percent since its February debut.
Merlin is a new company formed to buy and manage real estate as the Spanish market emerges from a crash. It will target acquisitions of assets such as office and retail properties with a value of $60 million to $150 million. The Madrid-based company is focusing on the nation’s biggest cities, as well as Lisbon, according to its June 13 prospectus.
Credit Suisse Group AG, Deutsche Bank AG and UBS AG organized Merlin’s IPO. Credit Suisse’s Spanish brokerage was the biggest net buyer, acquiring 3.7 million shares, according to data compiled by Bloomberg. An over-allotment option, or greenshoe, of 8 million shares was reserved for excess demand.