Vulture Funds Manage Half of the Banks´ Property

If you have ever wondered of buying property from a bank in upcoming years, the odds are high that the operation will be finalized by a foreign fund called Apollo, TPG or Kennedy Wilson. The international investors already manage 52% of the awarded banking assets after the recent purchases of the two real estate companies: Altamira from Santander Bank and Aliseda from Popular. And it points just the tip of the iceberg.

In the contrary to the recession of 90s, the banks cannot wait to get rid of the real estate ballast and focus on their traditional work: granting credits and taking deposits in.

Inside the strategy, five entities (six if Banesto taken into account) transferred the management of their property to the third-parties: Santander by selling 85% of Altamira to Apollo for 664 millon Euros (with 550 million capital gain); Popular, handing control over Aliseda (valued at 815 million Euros) to Värde Partners and Kennedy Wilson for 415 millons; CaixaBank that sold 51% of ServiHabitat to TPG for up to 189 millons; Bankia that transferred its real estate company to Cerberus for about 90 millons; and Catalunya Banc that did the same, selling to Kennedy and Värde property valued at 60 millon Euros.

(…) In the next 10 years the funds will be responsible for administration and commercialization of 82.000 properties dumped into banks during the recession, valued at 20.000 million Euros.

Positioning

Answering the question “what´s in it for the foreign funds?”: their aim is to become super real estate companies and sell their business once Spain recovers from the crisis. Thus, not only are they interested in banks´platforms but also they are acquiring debt of the large companies of the sector: for instance Realia, Colonial or Metrovacesa.

Vulture funds usually invest for five to ten years, planning to sell when the real estate sector revives. (…) In Spain a race among the funds may be observed, running for positioning themselves as benchmark real estate managers. (…)

At the moment the most successful competitor is the consortium of Kennedy Wilson and Värde Partners, managing 25.000 million Euros in assets and loans. TPG, Apollo and Cerberus follow the funds at a distance.

Pending Transactions

(…) Sabadell gave clues of selling Solvia, the biggest real estate company after absorbing CAM. BBVA has not shown any inclination to get rid of Anida. Another real estate company bound to change the owner soon is the one of NCG, that has been already put on sale few months ago.

Source: Expansión

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