CBRE´s RE Manager to Invest €1 Billion in Spain

 Fund manager of CBRE received an avalanche of requests to invest jointly €1 billion in Spanish assets, said José Antonio Martín-Borregón, director of CBRE Global Investors España, a company created via takeover of ING REIM Europa by CBRE.

Present portfolio of the firm contains assets from Spain and Portugal valued at €2.5 billion as a result of being leader in shopping center management in both markets.

Right now CBRE Global Investors España is considering purchase of three shopping malls within its asset turnover strategy (…). The same framework has been applied for last 20 years and as a consequence, currently the firm manages €72.7 billion in assets globally.

The first steps of the company began with asset acquisition, then liquidity investment and purchase of office buildings, shopping centers and residential assets. (…).

´When we arrived to Spain, there were not many shopping malls so we started to construct and promote them´ – explains Martín-Borregón. Since the beginnings, CBRE Global Investors España has invested €3.3 billion in Spain and has gained ground in the logistic sector.

Original article: El Economista (Alba Brualla)
Translation: AURA REE

About 33.5% of All Tenders Linked to Property

February was the fourth consecutive month of fall in bankruptcy trials number. During this period, 618 formal insolvency proceedings have been launched, that was by 39.94% less than in February 2013, according to data gathered by the economic research bureau of Axesor.

February 2013 was the month with record number of bankruptcy declarations since the Tender Law from 2004 had come into force. The month marked 1.029 proceedings

In geographical terms, Madrid led in variation rate with 105 tenders that tapered down by 67.89% in comparison to February 2013 (222 trials). The data suggests that the capital represented almost half of the Spanish total reduction of 411 auctions in regard to the mentioned month in the previous year.

The reduction was enormous in all large autonomous communities. Thus, in the Basque Country the number fell by 56.7%, in Catalonia by 30.15%, in Andalusia by 26.37% and in Valencia by 23.71%.

In reference to sectors, the most significant decrease post the hotels (from 208 to 34 processes, by 83.65% less than in 2013), then the construction (-36.86%) and the property (-60.47%).

However, in general terms, 33.49% of all the tender processes registered in February corresponded to broadly defined ´real estate´. The construction and the property jointly represented 207 formal insolvency proceedings. Another 21.52% corresponded to the trade sector (247 registrered proceedings, 20.63% of all) and manufacturing industry (199 cases, 16.6% of the total).

Accumulated results from January and February 2014 show 1.197 tenders, that is by 32.1% less in comaprison to the same period of time in 2013.

Catalonia, Madrid, Valencia, Andalusia and the Basque Country amassed 67.9% of the total of legal insolvency processes run this year.

Talking about sectors during the first two months of 2014, there have been 399 bankruptcy proceedings in the construction and  the property sectors, by 36% less than in 2013.

Original article: El Mundo
Translation: AURA REE

Ministry of Economy: No More Legal Shield For Bankruptcy in 2015

Undersecretary of Economy, Miguel Temboury, advises the companies that began arrangements with lenders to take maximum advantage of current Royal Decree that supports debt restructuring and refinancing. Therefore, he announced that 2014 will be the last year with the ´legal shield for bankruptcy´ in force.

The measures became valid in 2008 in order to prevent massive insolvency that seriously threatened whole sector. (…). The exception was supposed to be in force for two following years but it turned into a rule after five consecutive years of accounting exemption.

The department chaired by Luis de Guindos announced last year putting an end to the ´accountancy pardon´, however the suspension has been delayed due to lingering risk of the massive bankruptcy processes. (…).

The Royal Decree 4/2014 from 7th March establishes an exemption to compute annual accounts of tangible assets deterioration, real estate investments and the existence of loans and receivables to be collected. (…).

Instead of being used as ´an exceptional measure´, the law have been applied in situations other than entrepreneur troubles. (…) Luis de Guindos is working now on a regulation focused exclusively on the earliest stage of bankruptcy process that would facilitate debt restructuring and refinancing. However, the wheat must be separated from the chaff, meaning that viable companies must be distinguished from the irretrivable ones.

The ´accountancy bull´ is ought to be cancelled in Spain that aspires for recovering from the recession and in 2015 financial institutions must adjust and provide solvency to firms. The new economic cycle creates challenge and those not capable to face it must come to terms with consequences.

Original article: El Confidencial (José Antonio Navas)
Translation: AURA REE

El Palace Hotel Barcelona Declares Insolvency

The Hotel Palace Barcelona, known as the old Ritz Hotel, has been declared bankrupt, just as two other properties of the Husa Group. The hotel chain run by Joan Gaspart declared its branch Hostelería Unida insolvent in February this year. The group has also pre-arranged insolvency process for two other branches: Banquetes Reunidos and Hostelería Unida Dos. Now they will be joined by Inmobiliaria Sarasate that manages the Hotel Palace Barcelona.

The establishment (…) has always been the crown jewel of the group. The property was sold in 2011 for €68 million and since then Husa has occupied it as a tenant.

According to sources with knowledge of the matter, between 70% and 80% of the group has received an impact of the bankrupcy. Hostelería Unida has got a €227 million debt, owed to the Social Security, suppliers (Vodafone, Unión Fenosa, Gas Natural, Telefónica, Heineken and UGT) and banks (Banco Sabadell, Popular, Deutsche Bank and Institut Català de Finances – ICF). If liabilities taken into account, the amount could rise up to €280 million.

Original article: Expansión (M. Anglés/S. Saborit)
Translation: AURA REE

New Pawns on the Real Estate Chessboard

Spain returns to the monopoly game where every investor wants to gain a piece for themselves. In less than a year two large transactions have taken place: the sale of Edificio España in Madrid and of Torre Agbar in Barcelona. But the pawns changed the players. After seven years of stagnation, the new business board is being formed, in majority on basis of foreign funds, both opportunistic and the U.S. ones, accompanied by collapsed real estate firms declared insolvent.

The new companies might be accounted into one of three groups: banking management platforms (acquired by the foreign investors), patrimony firms and a little group of developers.

During the boom times, the sector repeated such names as Bañuelos, Portillo, Figueras, Martín or Santamaría. But many of these end up falling. According to the National Institute of Statistics, since the beginning of the recession, 9.000 companies related to property market were forced to declare insolvency. All the assets, together with houses of evicted residents, found way into banks´hands. At the end of 2013, the top 7 entities possessed REO assets worth of €72 billion, by 10.7% more than in 2012. If developer´s credit added, the amount rises to nearly €135.3 billion.

Four banking groups decided to sell their real estate branches to foreign funds. Thus, Apollo Global Management acquired 85% of Altamira from Banco Santander for €664 million, Banco Popular sold 51% of Aliseda to Kennedy Wilson & Värde Partners for €400 million, CaixaBank also sold 51% of Servihabitat to TPG for €188.7 million, while BFA said goodbye to Bankia Habitat, today belonging to Cerberus, for €90 million. The sector believes that CatalunyaCaixa will sell its branch to Magic Real Estate and Blackstone, and so will do BMN, Liberbank and Cajamar.

(…) Each purchase of a management platform results in obligation to administer REO assets of Sareb as well (…).

Funds take advantage of the banking asset sell-out and in fact their offers are not competitive at all. They often buy at auctions that originally were unattended. (…) For example, Apollo Global Management´s executive Andrés Rubio reckons that “Spanish property seems tempting due to three reasons: firstly, stable prices. Secondly, 50% of banks sell without financing that means residents prefer to invest in an asset rather than in bank. Thirdly, the biggest number of purchases is registered in Andalusia and Levante, where the stock is abudant.” Apollo plans to invest €1 billion in Spain.

Real estate platforms will also manage delinquent credits as servicing companies. (…) In the future, unfortunately, many of them will end up shutdown or listed on the stock market. The odds-on favourite is Sabadell´s Solvia. (…).

In parallel, the Spanish stock markets welcomed so-called Socimis (REIT companies). Last year, two of them floated on the Alternative Stock Market (known as MAB): Promorent and Entrecampos Cuatro and another on the continuous market, Lar España Real Estate. The last one, worth €400 million, attracted such investors as Pimco, Cohen & Steers, Franklon Templeton or UBS. No wonder that around 20 companies are pondering creation of a Socimi. (…)

Another firm that debiuted this year is Hispania, held by George Soros and John Paulson, among others.  Hispania, managed by Azora, is not a Socimi. (…)

The property market knows well names of Amancio Ortega and his Pontegadea, Colonial that is currently struggling to overcome debt and held by Villar Mir, Santos and Banca Mora from Andorra. Goldman Sachs and Fidelity joined the stake. Realia and Metrovacesa raise more concern, let alone Martinsa Fadesa and Reyal Urbis, presently under insolvency process.

The last part of the players, developers, laggs behind. By now they do not show signs of revival. (…) However, some companies do, like Vía Célere from Grupo Lar or Monthisa. Now the emphasis is put on already finished large buildings offered to thirsty funds.

Original article: El País (Lluís Pellicer)
Translation: AURA REE

The Best Mortgages in the Market

Real estate sector starts to show signs of revival. Housing prices seem to have hit the bottom or if not, they are very close to. In order to gain interest margin and more customers bond by credits, banks compete on the mortgage market (…). Also, yearning to shed their property ballast, they launch special offers (interest rate, term, financed price percentage) on their own real estate.

In general terms, differential applied on Euribor (a benchmark for majority of mortgages in Spain) is set by 50 to 150 points below determined reference for non-subisidized houses.

Moreover, term and amount of money stated in the loan contract are more attractive. From granting 80% of overall property price, now banks begin to finance 100% of the value in case of problematic assets. When it comes to term, they prolong it to 40 years for an ordinary loan and 30 years for a non-subisidized house.

Sabadell is among the most active sellers and landlords. Its real estate Solvia applies an interest rate of 3.25% in the first year and 1.25% above Euribor for the rest of the time, provided that a customer deposits salary and buys a life, house and payment insurances. (…). During the first three months of the year, the bank granted 3.000 loans (by 43% more than a year before).

The strategy undertaken by Bankia for the real-estate-owned asset sales seems one of the most competitive in the market. The bank calculates Eubibor plus 90 basic points and finances entire transaction (given it does not exceed the appraisal price) and allows a 40 year term. (…) Bankia transferred 90.000 properties valued at more than €22 billion to Sareb.

Also, Popular has got an interesting mortgage offer. Its Aliseda loan sets interest rate at 0.90% over Euribor in the first year and after at 1.25% above the benchmark. Moreover, the bank does not require opening fees and permits a qualifying period of 24 months. In December 2013, the group sold management of Aliseda to Värde Partners and Kennedy Wilson.

Altamira, the real estate firm of Santander, has been boasting since long of having the best offer with an interest rate of 2.25% (2.95% on non-subsidized house financing) in the first year and Euribor plus 1.75% for the following 24 years.

Bankinter granted credits worth of  €243 million in the last quarter of 2013, by 2.3 times more than in the previous quarters. The bank´s fixed rate is between 3.90% and 4.20% (first year) and 1.95% over Euribor after one year. Obviously, on condition that a customer deposits salary with three receipts and buys life and house insurance.

Mortgages of BBVA are the most demanding in price. For its REO houses, the bank sets rate at 2.45% plus Euribor. For non-subisidized dwellings it gives an option to choose a term between 1 and 5 years at fixed interest rate of 4% and 5%. Later on, it applies from 2.5% to 4.5% points over Euribor (maximum 60 point bonus).

 Servihabitat, formerly belonging to CaixaBank offers tremendously linked mortgages. Joint loans may be up 4.90% and after one year it becomes  Euribor + 2o3 points. Fixed rate oscilates between 5% and 5.5%.

Catalunya Banc transferred 3.000 units worth of €6.6 billon to Sareb. The Catalonian group has got special offers for its 2.800 properties on sale.

Original article: Expansión (Ana Antón)
Translation: AURA REE