Sareb Puts a €1 Bn Loan Portfolio Up For Sale

2/07/2014 – Expansion

Sareb has just started off a new project aiming at speeding the sales of its assets up. The Management Company for Assets Arising from the Banking Sector Reorganization (the Sareb) puts up for an auction more than 100 medium-big loans valued jointly at over €1 billion.

Unlike the other portfolios sold by Spain´s bad bank, the “Kaplan Project” will seek buyers through block sales (investors choose the asset lot) or by bilateral sales process.

Collateral Property

The majority of the loans are non-performing with residential assets (houses and land) as collaterals. Both the finished dwellings and the plots are spread all over the country but mostly they concentrate in Madrid, Catalonia and Andalusia.

“Kaplan”´s appearance on the market has evoked great interest among large international investment groups eyeing the Spanish real estate market in search of opportunities. However, Sareb is also weighting up giving the one hundred debtors a chance to acquire their loans.

The bad bank will pursue at closing the transaction within two months. The term seems longer than usual due to the sale complexity level, the size of the portfolio and the summer time.

The public company manages assets estimated to be worth of €50 billion, out of which 80% are financial assets. Roughly two weeks ago, Sareb announced the sale of portfolio “Pamela“, including at least 24 loans with property for rent in Madrid as the guarantees.

In the first four months of the year, the Spanish bad bank sold 5.175 housing units. Retail sales brought it more than €250 millio, while through the wholesale channel €130 million flew into it. Last year, Sareb sealed deals on over 12 wholesale portfolios with institutional investors, out of which 80% were syndicated credits or with real estate assets as collaterals.

 

Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE

Saba Wins the Parking Lots in Barcelona

2/07/2014 – Expansion

Saba outbidded Interparking at the auction assuming a partial privatization of the best car parks belonging to Barcelona City Hall.

The company chaired by Salvador Alemany presented the best financial offer stating that Saba will acquire 60% at Bamsa, a firm that is bound to manage the 26 parking lots in the downtown for the next 25 years. The remaining 40% will remain in hands of the City Council.

Saba, held by La Caixa, KKR, ProA and Torreal, has offered €232 million, juxtaposed with the €166.5 million proposal of Belgian Interparking. The price started at €160 million.

Apart from that, Saba also turned out to be better in technical aspects scoring by 91 points higher than the competitor. Another suggestion that convinced the City Hall was handing over 100% of the revenues above those foreseen in the bidding, whereas Interparking offered only 21%.

Although the socialist group of workers at the City Council raised objections to the sale, Barcelona´s mayor is very pleased with the deal. On signing the contract, the Hall will receive €100 million which will be intended for development of social housing blocks.

Over the past months, Saba has purchased car parks at 50 Adif´s railway stations and a bunch of parking lots from Aena, including spaces of the Barcelona-El Prat airport.

 

Original article: Expansión (by A. Zanón)

Translation: AURA REE

Experts Forecast Rise in Home Prices Within 2 Years

2/07/2014 – Cinco Dias

Seeing eye-to-eye with the optimistic data flowing in from all sectors, the Insitute of Economic Studies (or IEE by its acronym in Spanish) and the Association of Home Builders and Developers (or APCE) presented yesterday their collaborative analysis on the situation on the wrecked real estate market after six years of tough recession.

Both José Luis Feito from the IEE and head of developers José Manuel Galindo agree that if the general improvement persists, in 2015, but especially in 2016, housing prices will go up again and they may even do it “abruptly“, although neither of the organizations ventured to give more details on the adjustment.

However, both admitted that this year the real estate prices will fall by another 5%-10% in some areas and the future increase will not arrive equally all over the country. According to the analysts, housing values accumulate a slump of 35% since their 2008 peaks.

The most powerful factors that will fuel the sales growth are the employment and lending, but recently also the flourishing confidence of the foreign investors. Spain´s returning popularity will help draining the stock estimated at between 477.000 and 560.000 properties.

Another conclusion comprised in the report assures the sector will not come back to the boom times anymore. Thus, while the construction in 2008 represented 21% of the country´s GDP, last year it reached a little bit more than 12% due to building construction halt.

Likewise, the study demonstrates how the property sector is affecting the tax collection system. In fact, income from the real estate activity represented in 2012 2.4% of the GDP and 12.5% of the entire fiscal collection.

When it comes to demand, both organizations predict its prolonged weakness due to the ongoing price adjustment, restricted lending, high indebtness of the operators and ailing progress in job creation. However, Feito foresees gradual growth in demand for houses in spite of stagnant supply. Future interest rates will be very low, the same as the inflation, while workplace generation and foreign demand will climb up.

 

Original article: Cinco Días (by Raquel Díaz Guijarro)

Translation: AURA REE

AURA REE Reports: Cerberus Is the Leading Real Estate Servicer in Spain

1/07/2014 – Bloomberg

Haya Real Estate, a property management company run by Cerberus Capital Management LP, has taken the lead in the distressed-real estate servicing, encompassing a €19.9 billion share of administered assets. The firm currently holds a 22.4% market share with 210.949 properties (30% more than last year), according to OUR REPORT quoted by the site´s journalist Sharon Smyth. Therein, we have analyzed data on assets published on the websites of Spanish banks.

In the article, the reporter adduces the words of our founder and CEO, Fernando Acuña Ruiz, commenting on the matter: “that figure for the value of market is just the tip of the iceberg. It uses only published data. In reality, the market is much larger as there is product, including bad loans, that isn’t made public.”

Madrid-based Haya has added considerably to its market share by signing the 10-year agreement on management of €7.3 billion worth of assets owned by savings bank Cajamar.

Moreover, among other funds buying-out distressed debt and assets, in September 2013 Haya bought Bankia Habitat real estate manager from Bankia for €90 million. Apart from that, Cerberus´s arm signed a contract with Spain´s bad bank on administration of its €17 million worth of soured assets in December 2012.

In total, Haya manages property valued at €35 billion and scattered all around Spain. The servicer sells at pace of 30 homes per day.

Haya, Anida and Servihabitat are the biggest real estate managers in the country, accounting for 50% of the market. They are followed by smaller companies such as Aliseda, CXG, Altamira, Aktua and Solvia, according to Aura REE.

 

Original article: Bloomberg (by Sharon Smyth)

Summary: AURA REE

Mortgages Approved During the Real Estate Bubble Responsible For 62% of All Foreclosures

Two out of three property foreclosures (62.6%) initiated or entered in the books during the first quarter of the ongoing year corresponded to mortgages granted in the real estate peak years 2005-2008. This fact is revealed in the Foreclosure Statistics report published yesterday by Spain´s National Institute of Statistics (or INE).

During that period of time, the years 2006 and 2007 provoked now the biggest number of repossessions (38.5%). Moreover, 2007 marks the highest rate of mortgage execution (0.29%) ,whereas the years 2008 and 2006 showed 0.27%. The data proves the excessive lending during the real estate fever just before the recession.

In general terms, there have been 9.464 foreclosures of the main residence homes by the end of March, by 19.1% more than in Q4 2013. In turn, compared with the Q1 2013, the number declines by 4.2%.

By Spanish regions, Andalusia leads in the foreclosure ranking with 4.373 repossession processes ongoing in the first quarter of 2014. The second ranks Catalonia with 3.993, followed by the Valencian Community with 2.726 foreclosures. On the other end, one may find La Rioja with only 37 trials, Navarra with 102 and the Basque Country with 122 property seizures.

The first quarter saw 32.565 initiated foreclosure processes, by 10% more than in Q4 2013 and by 19.5% more than in Q1 2013. Urban property was seized by 10.5% times more until reaching 31.054 cases.

Andalusia takes the lead again with 8.034 repossessions, followed by Catalonia with 5.792 and the Valencian Community with 4.282 open proceedings.

The data arouse voices about indifference of the Government about the evicted families and pointed at the weakness of the mortgage law in Spain.

 
Original article: El Mundo (by Daniel Viaña)
Translation: AURA REE

Frob to Save a Part of CatalunyaBanc´s "Hercules"

The Fund for Orderly Banking Restructuring (or Frob by its acronym in Spanish) will buy a stake in the troublesome loans included in the “Hercules” portfolio together with international funds.

Frob distributed a blueprint contract explaining this option among the interested bidders. Precisely, it is going to create an Asset Securitization Fund (ASF) in the shape of the public aids it is obliged to grant.

Sources close to the operation say the entity will not obtain more than €3.5 billion for the €6.5 billion worth of soured loans. Apart from the direct absorption of the portfolio losses, this solution also offers tax incentives.

There are five final team-bidders for the CatalunyaBanc´s toxic credits: Soros and Värde Partners, allied Apollo, Centerbridge and Lone Star, then Pimco, Marathon, Oaktree, Deutsche Bank and Finsolutia, as well as Cerberus – Goldman Sachs team and Blackstone bidding with TPG.

The transaction includes three sub-portfolios made up of non-, sub- and completely performing mortgages. Frob assured it would prevent massive evictions once the “Hercules” changes hands.

CatalunyaBanc told the bidders the deadline for offers passes on July 10th. Possibly, the entity will run another phase in order to obtain better proposals.

 
Original article: Expansión (by Jorge Zuloaga)
Translation: AURA REE

Frob to Save a Part of CatalunyaBanc´s “Hercules”

1/07/2014 – Expansion

The Fund for Orderly Banking Restructuring (or Frob by its acronym in Spanish) will buy a stake in the troublesome loans included in the “Hercules” portfolio together with international funds.

Frob distributed a blueprint contract explaining this option among the interested bidders. Precisely, it is going to create an Asset Securitization Fund (ASF) in the shape of the public aids it is obliged to grant.

Sources close to the operation say the entity will not obtain more than €3.5 billion for the €6.5 billion worth of soured loans. Apart from the direct absorption of the portfolio losses, this solution also offers tax incentives.

There are five final team-bidders for the CatalunyaBanc´s toxic credits: Soros and Värde Partners, allied Apollo, Centerbridge and Lone Star, then Pimco, Marathon, Oaktree, Deutsche Bank and Finsolutia, as well as Cerberus – Goldman Sachs team and Blackstone bidding with TPG.

The transaction includes three sub-portfolios made up of non-, sub- and completely performing mortgages. Frob assured it would prevent massive evictions once the “Hercules” changes hands.

CatalunyaBanc told the bidders the deadline for offers passes on July 10th. Possibly, the entity will run another phase in order to obtain better proposals.

 

Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE

Miami Skyline Investor Arrives in Spain With €500 Mn

He has cooperated with Donald Trump during the construction of the Trump Towers on the Sunny Islands (Miami) and he owns many luxury properties embracing both skyscrapers and housing developments on the south of Florida. He has just expanded his business area to the South America and now he is heading to Spain.

Jorge Perez, Argentinian investor and the owner of the U.S. real estate Related Group, does not want to miss a chance to invest in the Spanish property market. He is planning to take out €500 from his pocket for this intention. Perez´s group reckons that Spain “has got a huge potential in terms of the main and the second residence”.

Sources with knowledge of the analysis conducted by the businessman tell he is pondering investing both in REO and RE assets. For exploration of the first, he is going to meet several Spanish entities and later on, to arrange a meeting with Sareb.

Related Group is jointly valued at around €7.3 billion. Since its establishment thirty years ago, the firm has constructed, developed and managed over 100.000 halls of residence, properties and condominiums in the US main cities, such as Miami, New York, Los Angeles, Chicago or Boston. Its investors range from public to private and from international to domestic.

The arrival of  Jorge Perez, named as one of the Times´s top 25 influential Hispanics in the USA, confirms the huge interest shown by Anglo-Saxon and Asian investors in the Spanish real estate market. To illustrate, Blackstone has just opened an office in Madrid for its property management arm.

According to CBRE, in Q1 2014, investment in the CRE (offices, retails and shopping malls, logistics but not in residential RE) tapered out by 132% reaching €988 million, comapred with the €426 million volume registered a year before. “Related Group seeks growing in Spain, and consequently, in Europe”.

BNP Paribas Real Estate predicts that at the end of the year, the investment will hit between 5 and 6 billion Euros.

 
Original article: Expansión (by D. Badía & R. Ruiz)
Translation: AURA REE

Urbas to Receive a €280 Mn Capital Injection

1/07/2014 – Expansion

Real estate company Urbas is bound to carry out a non-monetary capital enlargement valued at €280 million in order to absorb Alza Residencial and Aldira Inversiones Inmobiliarias and by the deed becoming “one of the main players in the Spanish real estate sector”.

 

Original article: Expansión

Translation: AURA REE

Default on Mortgages Marks a New Record High in Q1

1/07/2014 – Expansion

According to the data of the Bank of Spain, unpaid mortgages amassed nearly €37.9 billion out of the €599.1 billion credit portfolio in the first quarter of 2014.

The default on mortgages keeps on growing and in case of the loans to individuals it upsurged to 6.3% in the first quarter of the year, marking the new record high. The real estate sector only accounted for a 37.8% default at the end of 2013.

The delinquency jumped by 2 points in regard to the last year (4.22%) and it is higher than the 5.98% rate registered at the end of 2013. However, one shall take into account that even though the default hits the roof, the credit portfolio in banks shrank to the minimum since 2007.

During this period of time, banks held 36.2 billion in the unpaid mortgages only, out of the entire 576.2 billion loan portfolio, resulting in a 6.28% default rate.

Moreover, there have been 1.65 billion unpaid loans out of the total of 22.68 billion granted for dwelling refurbishment, giving a 7.27% default rate.

Developer debt

The indebtness accumulated by property developers against their lenders reached 171.2 billion in March, out of which amount 64.8 billion (37.85%) were non-performing,  exceeding significantly the 29.56% rate showed a year earlier, although slightly lower than the 37.99% registered at the end of 2013.

Alike mortgages, the loan portfolio of the real estate sector and its default have declined over the past months: the developer debt by 16% in the last year, while the unpayment fell by 3.54% in Q1 2014.

When it comes to construction solely, the default hits 33% with non-performing loans representing 19.27 billion inside a 58.4 billion portfolio, delicately lower than the 34.3% noted down at the end of 2013.

Other sectors also suffer high delinquency rates, for instance in case of hospitality it shows 21.24%, commerce 15.2%, the rest of the industries 13.47% and in agriculture 13.1%.

The blooming default development is said to be the effect of the regulation established in April 2013 by the Bank of Spain, setting the new rules for refinancing, renovation, renegotiation and restructuring of the loans and debt of the banks customers.

 

Original article: Expansión

Translation: AURA REE