“You establish the price. Tell us how much”. This slogan, used in Altamira´s last campaign, fits perfectly with the sale process started by the institution presided over by Emilio Botín in order to transfer this subsidiary. This disinvestment is now the operation of the year among international funds, which see Altamira as the biggest real estate platform to grow in the Spanish market.
Nearly ten foreign investors have shown their interest in Santander´s real estate company and could present in the next few days their non-binding offer for the Bison Project, as the operation has been officially named.
The sale includes the real estate management platform of Santander, with its 250-300 workers, and an exclusive agreement for the sale of properties for around ten years. The fund which acquires Altamira will manage and sell the properties awarded by Santander – the webpage includes around 15.000- and the failed real estate credits. Initially there have been talks of including the transfer of some portfolios of awarded assets, but this option has been finally discarded.
The Bison Project will not only mean that the winner will become the manager of the properties of the biggest Spanish financial group, it will also be the entrance key to manage the assets of the bad bank in the future. Santander is the biggest private shareholder of this company, only behind the Restructuring Fund, with 17% of the capital.
This expectancy has been a decoy for funds such as Cerberus, which already has a real estate company in Spain: Bankia Habitat, acquired in September for 90 million Euros. Altamira would provide this investor the leadership in the Spanish real estate sector and it would allow it to enter the management of Sareb. This fund already acquired 350 million Euros in mortgages from the bank presided over by Botín last year.
Centerbridge also has experience in closing agreements with Santander. It acquired Aktua, the recovery management company of Banesto, in 2012.
For the fund Apollo, this operation would mean completing the recent acquisition of Evo Banco with a real estate platform. This management company has the intention of investing up to 1.000 million Euros in Spain in the next few years.
Meanwhile, for Lone Star it would mean the first great operation in Spain after losing the first sale of Sareb, the Operation Bull, at the very last moment. This fund acquired 140 million Euros in credits from Santander in the same operation as Cerberus.
There are other funds specialized in real estate operations which cannot be discarded, such as TPG, which has acquired Servihabitat, from CaixaBank, for up to 189 million Euros; Kennedy Wilson and Värde Partners, which has acquired the real estate company of Catalunya Banc; and Fortress, which has recently acquired Lico.
Morgan Stanley, who tried to acquire a portfolio of real estate assets from Santander valued at 3.000 million Euros in the Operation Scuderia, is also present in the pools. The differences in prices and the reservations from the Bank of Spain blocked the sale.
Since then the restructuring driven by Economy in 2012 has allowed banks and foreign funds to get closer. The Spanish institutions are opting for transferring their real estate platforms first, as a first step to sell great packages of homes.
At the same time, the institutions have accelerated the sale of properties through their commercial network. Santander transferred 33.500 properties last year and has sold another 4.500 in the first quarter of 2013. The institution has a target of closing the year with 20.000 properties sold. Thanks to these operations, the net exposure of the bank to the construction sector has decreased down to 11.600 million Euros, from the 24.900 million Euros at the end of 2011.