Month: June 2013

The Supreme Court ratifies the nullity of the minimum limit clauses of mortgages even if they benefit the customer.

The Supreme Court has ruled a decision after the clarification demanded by BBVA, Novacaixa Galicia and Cajamar on the decision dated May 9th that declared the nullity of these clauses in those cases with a lack of transparency.

The Supreme Court has clarified today that that these clauses are void even if the client  benefitted “for a certain period of time” from descents in the Euribor, and that it is enough if they do not comply with one of the transparency requirements detailed in the previous sentence.

This ruling also declares that simple “formalities with no efficiency” such as the reading out of the agreement by the notary public” cannot substitute the ”perfect understanding” of all terms within the contract, which is indispensable for a customer to decide whether they sign or not their mortgage agreement. (…)

Source: Expansión

The sale of homes increases by 10,8% in April.

Monthly (from April to March) it is an increase of 6,8%, which means 2,6 points more than that of last year, and the highest in the last five years. The rise in April takes place after the purchase of homes  dropped more than 12% annually in March and reached its lowest figure in nearly one year, with just 22.000 operations.

Before that, in December 2012 and January and February 2013 the sale of homes had experienced  annual increases due to the end of tax benefits for the acquisition of homes since January 1st, 2013.

The gap in the Registry entries (these are operations that were closed a few months ago) could be behind those advances. 90% of the transferred homes in April were free and 10% were subsidized. In annual terms, the number of free homes transferred by sale increases by 12,7%, while that of the subsidized ones decreases by 3,3%.

On the other hand, 43,4% of the properties were new and 56,6% second hand ones. As for the figures by regions, the Canary Islands and Murcia were those with the highest increase in sales: The Canary Islands (64,6%) and Murcia (48,3%). Those with the highest decreases were Asturias (-22,1%), Basque Country (-21,8%) and Navarra (-18,2%).

 

Source: Expansión

Tinsa: The price of homes drops by 10,4% in May and 37,4% since 2007.

The price of homes dropped by 10,4% in May, mainly in the capitals and big cities, according to the Index of Spanish Real Estate Markets, published today by Tinsa. The sector has been suffering a price adjustment for five years and the accumulated fall since the maximum level registered in December 2007 reaches 37,

As for the behavior by areas, the capital and greater cities suffered the biggest cut with an annual drop of 13,3%, followed by the metropolitan areas, with 13,2% and the towns at the Mediterranean coast, that suffered a descent of 8,5%.

The most moderate descents took place in the rest of municipalities not included in other divisions with a 7,2% followed by the Balearic and Canary Islands, that showed an annual descent of 5%, a tendency that shows the stability of prices in those markets. Starting from the highest value registered before the crisis, the greatest cuts took place in the Mediterranean coast in May, with an adjustment of 43,2%; followed by the capitals and great cities with 41,9%, the metropolitan areas with 40,3%, the rest of municipalities with 31,2% and the Balearic and Canary Islands with 27,9%.

Source: Expansión

Botín launches a mortgage to finance properties from Sareb.

Santander has just launched a specific financing line of up to 1000 million Euros to facilitate the acquisition of properties and other assets from the bad bank, Sareb.

For this reason it launches its Supermortgage-Sareb Santander, which will be commercialized in the network of the bank and that will finance the principal home in up to 30 years, for a maximum of 80% of its valuation and at a minimum price of Euribor+2,25%. For second residences, the maximum financing is of 60% of the value, with datelines of more than 25 years, from Euribor+ 3%.

Apart from the homes, Santander will finance the acquisition of non residential real estate assets in the hands of Sareb, such as industrial units, trade premises, or hotels.

This agreement – signed until 2014, but extendable- will allow potential buyers to have an additional source of financing in “favorable” conditions that will make it easier to buy any of the 55.700 properties in the hands of the “bad bank”.

The properties´ company had recently announced that it wanted to reach financing agreements with financial institutions, and this would be the first one with a bank that has not transferred assets. It has already signed such agreements which those institutions that transferred assets.

Sareb, which has a portfolio of 55.700 homes and other properties, is negotiating similar agreements. They are a key element in its sales policy.

Source: Expansión

Torreal is looking into competing against Villar Mir in their bid on Colonial.

Torreal, the investment group belonging to the Abelló family, analyzes its entrance in the capital of the real estate company Colonial. Its interest joins that of other national and international groups, such as Villar Mir, with whom Colonial has negotiated in the past few months with the objective of carrying out a capital extension of around 700 million Euros.

Sources close to Torreal admit that they are analyzing an investment in Colonial, without having still taking a decision or presented an offer. The same sources declare that there have not been any approaches from Villar Mir so as to present a joint offer.

A capital injection of 700 million Euros would mean a reduction of the debt of the real estate assets of 50% of their value, a level that the real estate sector considers optimal. Colonial could start negotiating with banks the refinancing of its debt, which is due in 2014. If it does not achieve the capital increase in order to reduce its liability, the company would study the sale of patrimony, although the chief executives from Colonial have always seen this option as the last alternative.

Sources close to the Catalan real estate company explain that “the capital extension does not have to be endorsed entirely by external investors; Colonial has shareholders within its capital that could also participate in the extension and make it reach 700 million Euros”. The main shareholders are HM Treasury, Eurohypo and Crédit Agricole.

Sources close to  Villar Mir confirm that they go ahead with the operation, which would mean their participation in the capital extension so as to attain up to 30%. They are currently negotiating in order to find the right financing to face the purchase of shares from Colonial and they deny any contacts with Torreal so as to design a joint offer. Sources close to the president of OHL assure that Villar Mir will join the project to lead alone.

Torreal, one of the great private investment companies in Spain, is particularly active this year. It is said that it has a portfolio of assets valued in 1300 million Euros in different sectors. The group of the Abelló family is present in nearly twenty companies of different businesses, such as the textile (Pepe Jeans, Hackett), education (Laureate), infrastructures and industrial (Saba, Cie Automotive), technology and multimedia (Imagina, Zed), finances (Banca Leonardo) and food (CVNE).

In the last few months, the company has made great movements. In February, it entered indirectly in Talgo and only one month later, it sold its 9,6% in Sacyr.

Source: Expansión

The Ministry of Infrastructure has created the rental map in order to detect which incentives are necessary.

The Government will carry out a statistic of rentals in Spain, something like a rental map. The aim: to get to know better the problems within the sector, so as to find solutions. The rental has always been the outcast of the real estate sector, in a country with a majority of owners. And in spite of the proliferation of statistics on housing, there is not one that assesses officially the reality of the rentals.

It will be a global inventory, that will include the number of rentals and their prices- and not only the percentage variation, as done by the NIS until now-, as well as their locations (where there are more or less rentals), according to the consulted financial sources. The statistics on empty properties and therefore susceptible to be rented will also be demanded from the NIS.

All this in collaboration with the regional governments, which are the ones competent on real estate matters, and which will have to defray all necessary bureaucratic costs.  Agreements will be signed and working groups will be created by the Government and the regions, according to sources within the Ministry.

This great statistic is created by the Rental Law, which comes into force today, after being published yesterday in the state official gazette.

In its first additional ruling it is stated that “with the intention of defining, proposing and executing the Government policy on access to properties”, the Ministry of Infrastructure will be able to demand “information on the location of properties, on rental agreements (…), from the administrative registries of agreements and deposits from the regional governments and the National Council of Notaries Public”.

All this is required to get a real picture of rentals and “get to know the market better”, so as to detect where there is more offer, where more demand of social housing, or in which areas the express evictions are working better as well as the new advantages for owners so that they put their properties for rent. “We would also like to check the influence of the new law”, they add from the Ministry.

Along with the new law, the Government has approved a new policy of subsidized housing, focused only on the social and rotating rental, with low prices – less than 400 Euros- and not on the acquisition.

The final objective of this new law is to reduce the gap between the rental and the ownership. Because Spain is still lagging behind in the percentage of people that rent instead of buying. Only 17% of Spaniards prefer it, opposite to the 83% that goes for ownership. In Germany, however, 46,8% goes for rental. In France, 38%. And in Switzerland, 55,7%. This close relationship from Spaniards to the construction business affects the labor mobility – and therefore the employment- as signaled frequently by the Bank of Spain.

Also, the Government will demand all statistic data stored by the IRS “derived from the access to tax benefits from tenants and landlords”. All this without violating the legislation on data protection.

Source: Expansión

Fortress and Lindorff, finalists in the bid for the bad bank of NCG.

The sale of the bad bank of NCG Banco enters its decisive stage. The Galician institution has filtered the first offers of the interested funds and has designated two finalists, the funds Fortress and Lindorff, to whom a third investor could be added.

The US managing company and the Norwegian recovery platform will start analyzing in the next few days the assets on sale and will need to present their definite offer in the first half of July, according to financial sources.

The sale could be delayed a few weeks from the initial plan due to the complexity of the assets on sale. The operation, known as Project U2, includes the properties that were left outside the bad bank (Sareb); the recovery unit of NCG; the branches outside Galicia that were not included in EVO Banco; a debt management agreement for more than 20.000 million Euros; and part of the central services.

In total, the winner of this auction, which is being coordinated by the Italian group Mediobanca, will retain 30 branches; a team of 700 people; real estate assets for 250 million Euros; and the management agreement.

NCG Banco values that jobs are maintained that the buyer has a broad experience in the recovery market in Spain.

One of the points to be defined in the operation is if the institution that keeps the Single Asset Management Unit (SAMU) from NCG, will also manage the assets transferred to Sareb. The Galician institution transferred 5100 million Euros in properties and credits linked to the construction business.

From these two candidates, the Norwegian group Lindorff is the one that has bet on Spain in the last few years. This institution bought  the recovery platform from Santander, Reintegra, between 2011 and 2012, with more than 700 professionals included in the operation. This institution has also reinforced itself with the acquisition, along with the fund AnaCap, of default credits from Popular for 1143 million Euros.

On the other hand, Fortress has not closed any operation in Spain since the sale of 1000 million Euros in default credits from Santander, Banesto and Santander Consumer Finance, at the beginning of 2012. This is why, according to financial sources, “it has more ammunition to buy banking assets in the next few months”. This US fund negotiated to enter Sareb´s capital, along with Cerberus and Centerbridge, and it is seen as one of the firmest candidates to buy lots of real estate assets in Spain.

The offers of these new investors have won over those of at least six funds or financial institutions: EOS, the German group that acquired recently the recovery platform from Popular; GFKL, the German fund whose subsidiary in Spain is Multigestión; Deutsche Bank; the technological group IBM; WL Ross, from the US millionaire Wilbur L. Ross; and Centerbridge, the US management company that acquired the recovery business of Banesto.

NCG Banco has decided that the offers of these funds did not fit in with their business plan.

NCG still needs to negotiate with Lindorff or Fortress the duration of the management contract of the credits of the group. It should be between five and ten years.

The 30 branches can be used to maintain the already existing business, but the buyer of SAMU will not be able to provide credit nor liability, based on the ban by Brussels.

These branches have the worst quality business of the Galician saving banks outside Galicia, Asturias and Leon, in those regions where it arrived later and where it grew more disproportionally.

The branches with quality assets and more trusted customers outside Galicia were placed in EVO Banco, a subsidiary whose sale has also been negotiated in the last few weeks.

Source: Expansión

Doors are opened to the sale of properties in Spain.

International investors in risk real estate assets are searching for operations in Spain, and this raises hopes that the market has reached its inflexion point after the creation of the bad bank in order to clean all consequences of a construction bubble that has lasted a decade.

The sale planned by Sareb, the bad bank created by the Spanish state, of a portfolio of properties, mainly in the regions of Andalusia and Valencia, has captured the interest of venture capital firms. It is understood that the U.S. funds Apollo, Lone Star and Blackstone are included.

“It seems just the right moment”, a person close to the buyers declares. “There have been no operations up to now, but this should open doors to many transactions”.

The bad bank should raise at least 200 million Euros, while funds should make their offers at the end of this week, according to sources involved in the process.

Sareb´s strategy is to sell assets as soon as possible, with the objective of establishing a minimum level of prices for other investors thus contributing to a recovery of the real estate sector. Investment bankers established in Spain have noticed an increase of the interest of international investors that search for real estate assets since the beginning of the year.

Investors have been looking for opportunities in Spain for years, but the venture capital funds and the investors specialized in risk properties have been frustrated by the lack of opportunities and affordable objectives. Nevertheless, the creation of Sareb last year in order to acquire seized properties with a value of 90.000 million Euros has allowed Spanish banks to get rid of numerous properties, increasing the hopes that the dying national market might be unblocked.

In relation to this, Sacyr, the indebted construction company that was included in Ibex 35, has started negotiations with Lone Star, the venture capital group, to sell its real estate subsidiary Vallehermoso for a symbolic sum if the investor agrees to assume its debt of 1200 million Euros.

Those aware of the negotiations declared that they were in a preliminary stage and that it was not probable that an agreement would be reached in the next few months.

Sacyr, that suffered great losses after an inappropriate investment in the oil company Repsol, has fought to reduce its debts after the implosion of the real estate bubble devoured its national construction business.

Both sides declined any statements on these negotiations, but Sacyr assured that the company was searching actively for ways of reducing its debt and that it considered the sale of assets. (…)

Source: Expansión

Santander creates a subsidiary to speed up the sale of properties.

Santander wishes to speed up the sale of its portfolio of properties with a new organization of this activity. For this reason it has founded a new subsidiary, Altamira Real Estate Distribution, which will be in charge of the commercialization of these products.

The new institution takes on all commercial competences which until now had been in the hands of the real estate company of the group, Altamira Real Estate, which will from now on concentrate on administrative tasks.

The subsidiary starts with a capital of 2,5 million Euros. Its president, Eduardo Quintana, holds the same position in the real estate company of the group, but the members of the board are different in the two institutions.

The target of Altamira Real Estate Distribution is to reach a greater specialization in the sale of properties, one of the main objectives of the group.

The requirements of efficiency when getting rid of this type of assets are greater after the entrance of Sareb into the market. , which has received properties from the weaker institutions and that will progressively get rid of them in the next fifteen years. Anyhow,  the institution declares that Sareb is not a direct competitor and will not condition its offer, as both institutions target different markets.

Santander offers 8766 new and second hand properties in the website of Altamira Real Estate, scattered around Spain. Valencia, with 841, is the city with more assets. Las Palmas, with 72 and Barcelona with 640, follow.

The institution has launched a campaign with discounts of 25% on the market price. These discounts are a constant in most real estate subsidiaries from banks in order to adjust to the market situation and the fall of prices.

Santander sold last year 33500 properties with a discount of 51%. These operations reduced its exposure to the construction business (12500 million Euros in 2012 from the 24900 million Euros at the end of 2011) after the effort in provisions carried out by the institution.

During the first quarter of 2013, the bank has gotten rid of 4500 properties and its target is to close the year with the sale of 20000.

Altamira Real Estate, the bad bank of Santander, had losses of 609 million Euros last year and the group carried out a capital extension of 987 million Euros in order to restore its financial situation. The capital of the real estate company after these operations reaches 1112 million Euros.

The group has contributed to the social housing fund with 590 properties to rent. Santander has contributed with 441 and Banesto, with 149.

The fund has 5981 properties scattered around 33 financial institutions, the rural saving banks included. Bankia is the one that has contributed more, with thousand properties, followed by BBVA, with nine hundred properties, and Caixabank with a total of 943.

This method was created at the beginning of the year with the drive of several Ministries, the Bank of Spain and the Spanish Federation of Municipalities.

Source: Expansión

Sareb received this week the first offers for a portfolio of assets of 200 million Euros.

Sareb, the bad bank, receives this week the preliminary offers of the institutional investors interested in acquiring the first big portfolio on sale: the Bull Project. It includes finished assets in Seville and Valencia, along with other properties under construction with a value of 200 million Euros.

According to the established timetable, the deadline for investors to present their preliminary offers is the 6th June. One month later, the 15th July will be the moment to formalize the final and binding offers.

According to financial sources, around a dozen opportunistic funds would be analyzing the operation. Among them there would be Lone Star, Apollo, Colony, Centerbridge, Cerberus and Fortress.

After closing the first sales of assets to individuals and selling debt to Metrovacesa for 35 million Euros, the market is eager to see if Sareb settles on its first operation with big investors.

In some spheres it is considered vital that the bad bank closes as soon as possible four or five operations with opportunistic funds. These operations would help to settle reference prices for the assets, provide liquidity to the real estate market and attract other investors that are awaiting the first step.

Sareb has now six months to comply with its target of selling assets for 1500 million Euros in 2013. 

Source: Expansión