The Spanish REIT, Persépolis Investments, will stop trading in the BME Growth

The company specializing in touristic apartments, Persépolis Investments, will cease activity in the BME Growth in January 2023. The decision will take effect once the company’s Extraordinary Board, scheduled for January 10, ratifies the decision taken by the Board of Directors on December 9.

The investment vehicle lead by Mitra Ghamsari already announced in October its intention to dispose of some of its assets in their portfolio in order to tackle its financial difficulties and ‘give a more profitable exit to the company’. Regardless, after considering several alternatives the board considered exiting the BME Growth would be the suitable decision for the future of the company and their investors.

The company composed in 2014, began investing in touristic apartments, residential and office space, however over the years their strategy has been more focused on the hospitality segment. Their current portfolio comprises 16 buildings, 275 apartments of which 239 are touristic. Pérsepolis has chosen prime locations within key touristic cities with a big majority of apartments being located in Madrid and several buildings in Barcelona, Valencia, Granada and Málaga.  

The boutique investor has a partnership with operator UrbanStays, a key element of their business model which has managed to raise 200 million euros since 2014 and has a portfolio project valuated at an estimated 530 million euros.

Pérsepolis Investments is composed by three vehicles, Persépolis SOCIMI (Spanish REIT) which focuses on the acquisition, transformation and sale of touristic apartments, is currently at a stage of disinvestment and is valued at around 60 million euros. Additionally, they manage the Mahnaz multi-strategy fund, this vehicle invests in the traditional and luxury residential sector, as well as hotels and touristic apartments with a value-add perspective. One of their focuses is acquiring distressed hotels in prime areas such as the Costa del Sol and the Balearic Islands to reconvert to income producing assets. This fund is in partnership with Revcap, a European fund based in the UK, which together target Madrid and Barcelona’s residential sector with an estimated GAV of 100 million euros.

Persépolis Investments began activity in 2014 with an initial capital of 100,000 euros and a subsequent capital increase of 5.9 million euros in 2015, where Wedgewood Investment entered the shareholding, an American firm funded by two former senior members of JP Morgan. Benjamin Smith and Sheehan Maduraperuma have been the main investors in all capital increases that Persépolis has carried out since then. In May 2021, the vehicle raised a total of 200 million euros through its funds with the aim of investing in the residential and hotel sector over the span of 2 years.

Persépolis has struggled to deliver positive results as they have only noted profits in 2019 and 2021. Profits in these years were recorded primarily as a result of disinvestment strategies of some of their assets. The best year in terms of income was 2017, the year the REIT was composed, where they managed to earn 990,000 euros, but figures were not enough to translate into profits. As of 2022, their latest earnings announcement in the BME Growth also recorded a loss of 183,000 euros, despite having tripled their income compared to the first 6 months of 2021.