All Market News: Spanish Real Estate Intelligence

10 December, Il Sole 24 Ore If it’s finalised by the end of the year, it will be one of the biggest operations of 2018. Poste Italiane is currently evaluating a spin-off operation for all of its non-instrumental real estate assets directly owned or owned by Europa Gestione Immobiliare (Egi). According to the rumours, Poste might constitute a real estate fund which will receive the asset. The fund will be managed by Cassa Depositi e Prestiti Investimenti Sgr (Cdpi Sgr) pursuing the progressive disposal of the assets. The total value of the portfolio is assessed around 500 million euro. Europa Gestione Immobiliare is 55% owned by Poste Italiane and 45% by Poste Vita. It was constituted on 2001 through the transfer by Poste Italiane of its real estate division dedicated to its non-instrumental assets. The company has been studying the asset disposal for years without never completing the operation. The former Poste building in Piazza Cordusio was one of the Egi’s assets. The building went first to Ream Sgr and then to the American Blackstone. What’s inside the Egi portfolio? Several offices that are currently vacant or leased to third parties (hence, not occupied by Poste employees). There are other former Poste Italiane offices in Trento, Venice and Florence, offices in Naples, offices of the Ministry of the Economy in Genoa, and an asset in Milan in Piazzale Lugano. Finally, some other properties had been directly transferred by Poste. Once incorporated the fund, the operation might proceed with the sale of the interests or with the progressive asset disposal. Some value-added international investors are allegedly interested in the portfolio aiming at requalifying the assets through their direct or indirect acquisition. The operation is aligned with the Government’s objective of reducing the public debt through real estate operations as proposed in the new budget which was presented in Brussels. Besides, there are also other operations currently under evaluation by Cassa Depositi e Prestiti implying the requalification of neglected public buildings and the constitution ad-hoc real estate funds. Source: Il Sole 24 Ore Translator: Cristina Ambrosi

07 December, Il Sole 24 Ore It has been a record year for Italian NPLs. Operations will reach 70 billion euro in 2018, as PwC explained in its report “NPL: Entering a New Era”. Banks have disposed of significant volumes of bad loans throughout the year. In June 2018, the NPLs were 222 billion in comparison with the 264 billion registered in December 2017. Meanwhile, the collaterals for bad loans have considerably increased, set at 65.9%. The surveillance authorities and the market will further push the banking system towards more disposals and more standardised credit management processes. NPL operations will continue in 2019 when they’re estimated to reach at least 50 billion. Besides, the first multi-originator NPL transfers have just started (approximately 1.6 billion), opening the market to banks with smaller NPL portfolios which would have no chance to be considered by investors if taken separately. The NPL secondary market has seen an increasing number of transactions due to the exit strategies of early investors as well as to the interest of new players for the Italian NPL market. Concerning UTPs, the market has seen only a limited number of operations so far. As UTP have now surpassed bad loans, amounting to 56 billion in June 2018 against the 43 billion of NPLs, an additional leverage will be essential in 2019, also through structured solutions. Among these, there are securitisation, even with Gacs, if these will also be extended to UTPs in March 2019. Other solutions are the transfer of UTPs of banks and liquidity of third-party investors to funds, and UTP servicing based on restructuring the holdings, their turnaround and the issuance of new funding. The servicing market is still consolidating, if we look at the operations by Intrum-Intesa Sanpaolo and the Banco Bpm. The consolidation phase already started in 2017 with the acquisition by Intrum of 51% of the Intesa Sanpaolo platform along with the NPLs for 10.8 billion, and the trend might continue in 2019 with other M&A operations. According to Pier Paolo Masenza, Financial Services Leader at PwC: “The market is currently extremely challenging for the Italian banks. The financial markets are looking closely at Italy. The proof is the indirect relationship between the market capitalisation (on TBV) and the impact of the NPEs on the listed banks rather than the modest increase of the returns of the 10 years Government bonds or the increase of the cost of CDS related to Italian issuers. The pressure of the market will push Italian banks towards more deleverage activities on NPLs and the optimisation of their internal processes concerning credit management”. Source: Il Sole 24 Ore Translator: Cristina Ambrosi