🏢 The company primarily focuses on real estate investment, specifically the acquisition and rental of properties, including the MIM hotel chain.
⚽ 100% owned by Leo Messi’s holding company, which recently moved to Andorra, potentially for tax benefits.
📉 The company is currently operating at a loss, but the analysis of real estate investment trusts (REITs) requires different metrics.
💰 It has invested around 223 million euros, primarily funded by contributions from Messi’s holding, showing no external financial debt.
@mfncristianbarros:
“We are going to start analyzing the company, and in this case, it is what is known as Edificio Rost Tower SOCIMI. A SOCIMI is a real estate company that is listed on the stock exchange. Precisely there, in that same newsletter, we were seeing how these real estate investment companies have certain tax advantages because they practically do not pay taxes in exchange for paying a large part of the profits they generate as dividends to their shareholders. One of the requirements is that this company has to be listed on the stock exchange, and possibly for these reasons, Messi has taken this company public. We know that it is Messi’s, evidently, because the president is the president of the board, his wife is the vice president, and he also has the executive, let’s say, the person who has always been in charge of running his family office, as one of the directors, as you see here. And his own brother, Rodrigo Messi, appears in the signatures as the administrator of this company. 100% of this company is owned by Leo Messi’s company, IMQ España, which, if we look, evidently, the sole administrator is Leo Messi’s brother. Therefore, he is the one who owns 100% of this company that has gone public, which we will later see a little bit about what Messi’s holding company is made of. So, if we go to look a little more at the emission prospectus, which, as you see, is from December 23, 2024, when this company went public on this new stock exchange, which we will see a little more in detail later, it is a fairly simple document. And as you see here, it is dedicated to a bit of what we have discussed: the objective of real estate investment and acquisition, and especially the rental of these properties. Here you see that it is 100% owned by Leo Messi’s holding company, which is the one we will later see that has been moved to Andorra. And then we can also see a little more detail about the properties it currently has. Well, this company, let’s say, is the owner of Messi’s hotel chain, MIM, and it has hotels in Andorra, Baqueira, Ibiza, Mallorca, Sitges, as you see, Sotogrande in Cádiz, etc. They are six hotels, and at the same time, this company owns those hotels and rents them to another Leo Messi company, which is the one you see here, Ross Hotel SLU, which is in charge of operating these hotels. This company only owns these properties and then rents them. In this case, as I said, the hotel part is rented to another Leo Messi company, which is the one that ultimately manages it. And then it also has other types of properties. Well, it has the investments that he himself makes with his own assets, mainly to protect them in real estate, as you see in Barcelona, in towns in Barcelona, in Castelldefels, as you see in Sitges, which is really close by, and then in Barcelona itself. They are office buildings. Then it also has homes, also mainly around Barcelona, and then it also has some luxury homes in London. In the end, it is a way of diversifying assets. So, this same company has a total, to give you an idea, between what it has spent on these investments, the necessary material, and then the software that this company has had, in the end, it is about 223 million approximately, if we adjust it to what Leo Messi has really invested. Normally, it is very typical in this type of company to use leverage, debt, to increase profitability, but in this case, he has not done so. If you look, the contributions from the partners and the capital are, that is, these 223 million that he has bought in real estate are mainly contributions from the partners themselves, that is, from Messi’s holding company. And the debt it has is basically debts with companies in the group, that is, it is money that Messi’s own holding company has also lent to this company, but instead of in the form of shares, it has lent it in the form of debt, but they are not debts with financial entities to take advantage of that leverage that can give you that additional profitability. We see that it is a vehicle for managing his own real estate assets. In fact, if we then go to the income statements, we see that it has revenues of 7 million plus other peaks around here, but if you look, we go to the profit before taxes, and we see that the company loses about 2.2 million euros. And here you have to take something very much into account, and it is something that precisely we have been talking about a lot in the newsletter, and in fact, in the private community, we are talking in depth about this, which is about how to analyze this type of real estate company that is listed on the stock exchange. We see that everything is analyzed differently: both the profit, the profitability, the indebtedness, everything is analyzed quite differently from what a traditional company is. They have, let’s say, their own metrics, so to speak. And then, when it comes to valuing them, it can also vary in some things. So, if you look, just broadly speaking, we can see that yes, it loses 2 million accounting-wise, and remember that profit is not the same as cash generation. I’m tired of saying it, and there’s a lot of joking around with this, but it’s completely true because if you look here, then we have some adjustments like impairments and especially depreciation, which, if you adjust it to the real profit, these funds from operations, which is what it’s called, or funds from operations, which is how profit is measured in these real estate investment companies, you would see that it would be about 3.4 million euros, which, on the revenues we have seen, which are about 7 and a half million approximately, is indeed a profit margin of 45%. But then, if we compare it with the assets, which are about 223 million euros, on the investment that has been made, it is a return of 1.5%, which is quite low for this type of investment vehicle. And this is also due to the issue of what we said about not taking advantage of that leverage. In the end, it is a vehicle that Messi is not using as a company to generate even more profitability from his own assets, but rather it is a company that he is using basically to preserve those assets. Possibly, also, the fact of having wanted to take it public is so that in the future, he can issue bonds or issue new shares or whatever and leverage the company a little more through partners, mainly through debt. Then, if you look, if we look a little at the stock price of this company, it is trading at 57.5 per share, and in total, it has a market value, a market capitalization, of about 223 million euros, which is more or less, if you look, the value of the properties, which is very similar to how this type of company usually trades on the stock exchange. They are usually worth on the stock exchange more or less the same or around what their net assets are worth, what all their real estate properties are worth minus the debts they have.”
@mfncristianbarros channel states that below, viewers can see the exact part of the YouTube video where the stock is discussed:
View the video on YouTube.
Read more articles analyzing Edificio Rost Tower SOCIMI, S.A. at the provided link. BLOG.
