Q1 2014: Spain´s Largest Banks Double Their REO Property Sales

8/05/2014 – Cinco Dias

Spanish financial sector has become a real estate expert since the property bubble burst and flooded banking balance sheets with dwellings, housing developments and plots.

Over the past two years, Spain´s six biggest entites solely sold 18.000 properties. In parallel, they have turned into the most efficient developers in the country, finishing thousands of houses with intention of subsequent sales. This activity allowed the large banks to double the pace of reducing their REO stock volume at the very beginning of the ongoing year.

Precisely, Santander, BBVA, CaixaBank, Sabadell, Popular and Bankia sealed jointly 22.121 transactions year-to-date, including both own and the financed developers´properties for around €3 billion (€2.64 million without Bankia that does not reveal the data), compared to the 14.339 units sold in the first quarter of 2013.

In spite of strong boost received by banks which outsourced the management of their real estate to the third parties, also those entities that decided to bet on their servicers are among the most successful sellers.

Thus, a priori, CaixaBank leads in stock trading volume. The bank sold 51% of Servihabitat to Texan fund TPG. Thanks to the agreement, in the first quarter the Catalonian entity earned €630 million by selling 6.302 units. This is almost twice as much as 3.227 properties sold in the same period last year. However, one shall bear in mind that 42% of its activity focuses on rent, while other entites exclude this field from their calculations.

Therefore, the first place is disputable as BBVA together with its Anida is treading on CaixaBank´s heels with a 4.996 unit score (in Q1 2013 it sold about 3.000). Although the entity registered €231 million losses, it has got a positive outlook for the future.

When it comes to Santander, this bank sealed 4.200 transactions for €700 million and the figure is similar to the previous year´s value. The entity has transferred its platform Altamira to Apollo, however the operation had not been closed before January so its influence is hardly detectable.

Next in the ranking stands Banco Sabadell which has been fiddling the market for last months keeping it on tenterhooks by not making the final decision about the future of its property manager, Solvia. The odds are high that after seeing the 3.271 property score (2.497 a year before) bringing it a €657 million revenue, the bank will confirm the belief that investing in Solvia and launching it on the market is the right step.

One of the sharpest surges was noted by Bankia that shed its servicer handing it over to Cerberus. The bank sold 2.235 properties in the first quarter this year, juxtaposed with only 700 units transferred in the same period of 2013. 

As per Sareb, the bad bank managed to find a new owner for 3.800 housing units with an average of 40 transactions a day (25 in the entirety of 2013).

Banco Popular has almost tripled the speed of its real estate sales. Namely, in the first quarter of 2013 it sold 1.117 properties for €248 million (last year it shed shy 415 untis). The entity reckons that the jump yet is not reflection of the sale of 51% of Aliseda to Kennedy Wilson and Värde Partners as the management change is believed to multiply sales in the forthcoming months.   

 

 

Original article: Cinco Días (by Juande Portillo)

Translation: AURA REE

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