No Truce at the Mortgage War: 12 Banks Offer Differentials Below 2%

29/08/2014 – Cinco Dias

In September 2008, all banks consistently started to refuse the loans as they saw one of the greatest recession on the planet was looming. However now, six years later, liquidity circles in the eurozone are going stable so financial entities can return to lending. Commercial leverages of their offices hand out mortgages, including those with homes as collaterals.

Large majority of the entities offer interest rate differentials below 2% plus Euribor for 12 months, whereas less than a year ago they could not afford for less than 3%. Bankinter was the first to break the pattern with a 1.95% + Euribor mortgage last year.

The challenge was soon accepted by the rest of the banks and reached its fever peak in the last months. ING Direct, Barclays, Deutsche Bank, Sabadell, Liberbank and Unoe are among those that trimmed their differentials below 2%.

Since July, BBVA is the number one with its up to (or down to) 1.7% + Euribor loan (2.25% in the first year). Obviously, the final price will depend of the economical record of the client and the loyalty products they buy together with the mortgage.

Aside from the competitive Cajasurs credit found exclusively in Andalusia and Extremadura, BBVA is second to no one. However, the spread of Santander (1.89%) treads on its heels.

According to data gathered by the Ministry of Public Works, the surplus cash in hands of banks currently exceeds €100 billion in the euro zone and the fact that the property prices have fallen by over 30% since the 2008 peak are key for recovery of the real estate market. The number of new mortgage approvals has already risen by 19%, as per information published by the National Insititute of Statistics (or INE by its acronym in Spanish).

The fierce deleveraging process run by financial entities and the necessity to return to their traditional business also impulsed the improvement in lending. Official statistics start to confirm the new credit flow. According to Spains central bank, in June mortgages with a house as collateral represented more than €767 billion, though still much less than in 2008. Furthermore, the INEs information tells that in the same month, the average interest rate in mortgages was equal to 3.88%, compared with the 4.37% rate from May 2013.

At the new war on mortgages – although far away from the differentials of 0.3% seen in 2006 and 2007 – internet banking smooths its offers out as well. Even if the rates are similar to those proposed by classical entities (i.e. slighly lower than 2%), less loyalty products are required. Most sophisticated in this field turns out to be Evo Banco that cuts in the differential if the Euribor reference goes up. In the first year of the credits life, a customer pays a fixed rate and after the term the differential declines in line with Euribor. Thus, given that it was set at between 2% and 4%, the rate will shrink by 0.2%, in case of a 4% to 6% one by 0.4% and so on, and so forth.

 

Original article: Cinco Días (by P. M. Simón & V. Gómez)

Translation: AURA REE

The Bank of Spain Flooded With 144% Complaints About Ground Clauses More

29/08/2014 – El Economista 

Complaints about caps in mortgage agreements that prevent the borrowers to benefit from decline in the Euribor reference have massively arrived at the Complaint Department of Spains central bank.

Over the seven past months, the Department received 20.826 letters of complaint, out of which 9.925 referred to abusive clauses in mortgage contracts. The figure is by 144.54 per cent greater than the total of 33.185 complaints sent during the same time period last year with only 17.979 documents regarding loan interest rates.

The data is very alarming as many of the affected customers cannot come to an agreement with their lending entities. It should not be forgotten that last year, the incidence sky-rocketed by 246%.

Received complaints represent such a volume that the Bank of Spain had to call for an auction to outsource their management. Five companies were awarded contracts on the service: Deloitte, Ernst & Young, Indra, KPMG and PricewaterhouseCoopers.

Complaint flooding was triggered by a decision of the Supreme Court which in March last year cancelled the minimum clauses stipulated in certain mortgage agreements of BBVA, Abanca (former Novagalicia) and Cajamar.

Most of the doubtful contracts have been signed during the real estate boom when no one expected Euribor to fall below the current minimum. Usually, the rate was fixed at 3% or 4% cap in order to prevent loss of the bank in case something like this occurs. Now, people realize what they have signed and bring their lenders into trials.

Taking as an example a teorethical mortgage of 140.000 Euros for 20 years with a spread over Euribor of 0.50 and an interest rate fixed at 3.5 per cent, a borrower would have to pay 168 Euros more each month.

Abusive Clauses Disappear. Do They?

Banks reluctantly remove the minimum clauses as this would mean closing a goldmine to them. For instance, BBVA would stop collecting €420 million, whereas Abanca and Cajamar €100 million both. However, the clauses disappeared from the new mortgage advertisements. As a compensation, the sector bases on higher differentials of 1% – 2% rather than 0.5% – 0.6% applied before the recession.

The Government modified the law in a way that each and every customer must now confirm they are aware of existence of such a clause in their mortgage agreement before signing for it.

 

Original article: El Economista (by E. Contreras)

Translation: AURA REE

Quabit Turns the Corner in 2014

29/08/2014 – Expansion

The real estate company earned €62.3 million in the first half of 2014. To compare, during the same period of time a year later, it lost €10.6 million. Quabits sales duplicated and yielded €50.3 million, out of which €40.3 million proceeded from land sales.

 

Original article: Expansión

Translation: AURA REE

Bankia to Shed Stakes at Realia, Metrovacesa and Mapfre Still This Year

28/08/2014 – El Economista

Bankia accelerates its divestment plan. Sources from the entity assure that if the market circumstances permit, the bank will eagerly sell its majority stakes at Mapfre, Metrovacesa and Realia in 2014.

The sales process of Realia, where the bank holds a 24.95% stake, is already ongoing and offers are being reviewed. In case of Mapfre, Bankia saved only 1% out of the 15% holding inherited from Caja Madrid. Compromise with Brussels obliges it to sell the industrial portfolio before 2016.

Meanwhile, the entity can put up for sale 50% of Globalvia and transfer several minority stakes in small companies.

In total, the strategic plan of the group chaired by Jose Ignacio Goirigolzarri assumes selling a €50 billion worth of assets before the end of 2015.

The calculations do not take into account Bankias affiliate in the U.S.A., the City National Bank of Florida. The biggest revenues proceeded from the sale of the entity´s 4.94% share at Iberdrola (€1.53 billion), a 12% stake at Mapfre (€979.4 million) and a 12.09% one at IAG, merger of Iberia and British Airways (€675 million).

Apart from that, the bank got rid of stakes at: Indra (20.14%), NH Hoteles (12.06%), Inversis Banco (38.48%) making €615.8 million for all, as well as a 16.5% holding at Deoleo and Bankia Bolsa.

Original article: El Economista

Translation: AURA REE

Demand For Logistics Real Estate Up 50% in Madrid

28/08/2014 – El Pais

According to the Logistics Market Monitor report by Aguirre Newman, contracting of logistics space in Madrid registered in the first half of the ongoing year represented 77% of the total number of agreements signed in 2014.

The entire space demanded in the second quarter of 2014 spreads over 97.993 square meters. It means a 48% improvement in comparison to the same period in 2013. Better performance was boosted by the demand for medium-size and large surface as 75% of the Q2 contracting corresponded to areas greater than 7.000 square meters.

Around 87% of all transactions carried out from April to June concerned rentals, whereas the remaining 13% – sales.

The Community of Madrids most demanded area is Corredor del Henares with a 73% total absorption rate. Next rank the Zona Sur (the Southern Area) with 20% and the Zona Norte (the Northern Area) with 7%. The Corredor del Henares – residential, industrial and business area in the north of the capital – also wins in terms of absorption in the second quarter of the year. An 80.000 square meter area in total was contracted during this period of time, representing 82% of the overall score. Noteworthy is the operation carried out in Azuqueca de Henares industrial area called Polígono de Miralcampo, involving 22.000 square meters.

Moroever, the second quarter of 2014 saw many investment projects pursued by both national and international investors. As of the report by Aguirre Newman, the activity on-high will be even enlarged by several huge volume operations currently being in the due diligence phase. For instance, a transport company is negotiationg a turnkey agreement on 11.500 square meters in San Fernando de Henares, while in Leganes a logistics hub of 5.546 square meter is changing hands.

When it comes to the market in Barcelona, during the second quarter of the year, the total area involved post 54.582 square meters meaning a 32% increase in comparison to Q2 2013. The upsurge is due to 10 operations carried out during this period of time, by 4 more than a year earlier. Rental contracts accounted for 90% of the total.

 

Original article: El País (by Paula Cossío)

Translation: AURA REE

Bankia Makes €22 Mn Per Year On Renting the Torre Foster to Cepsa

28/08/2014 – Expansion

Bankia is going to receive 1.803 million Euros each month from rental of the Torre Foster (also known as the Torre Bankia) in Madrid. The tallest skyscraper in Spain was inherited by BFA – Bankia from Caja Madrid which in turn purchased the property in 2007 for €815 million paid to Repsol.

In October 2013, the bank signed an eight-year rental agreement with Abu Dhabi‘s gas-oil firm Cepsa Specifically, the tenant has pledged to pay €21.634 million a year. The contract may be prolonged for additional seven years.

Bankia lets the property to Cepsa through its 100%-owned company Torre Norte Castellana. As it is weighting up sale of the 250 meter tall office building, the lessee was offered a purchase option that may be executed the earliest in 2016 via acquisition of all shares of Torre Norte.

Torre Norte Castellana concluded the year 2013 with a €1.84 million loss. In order to smooth the red out, its stakeholders injected €205 million into the company.

 

Original article: Expansión (by M. Martinez)

Translation: AURA REE

Sareb & Santander Repossess the Last RE ‘Jewel’ of Bautista Soler in Valencia

28/08/2014 – Expansion

One of the real estate kings of the last decade, Bautista Soler Crespo (pictured) reigning in Valencia, who has been the co-owner of Metrovacesa, now must hand over his latest grand development – a three-building residential complex situated at the foot of the sea in La Patacona (Alboraya), bordering with the city of Valencia.

Sareb and Santander, lenders to which Mr Soler owed around €70 million in total, organized a notary tender of the 190 dwellings and apartments.

This way, Spain‘s bad bank grabs 176 homes included in the Phase 5 in the Vera Mar complex. The firm of Mr Soler owed €64.6 million to Sareb that inherited the bad debt from Bankia.

The other entity, Santander, lent equity for development of 14 properties and these will be put up for an auction in October. The bank swapped four out of the ten blocks in exchange for the company‘s indebtness when the recession had begun.

Then, its property manager Altamira finished the apartments and started to trade them with significant discounts.

The two banks are not the only lenders of Bautista Soler. In 2013, Spanish Tax Office seized properties from the complex worth €5.8 million.

In 2006, the housing development consisting of 1.700 flats was valued at €860 million in total.

 

Original article: Expansión (by A. C. A.)

Translation: AURA REE

Saba Sells Logistics Assets to Prologis For €100 Mn

28/08/2014 – Expansion

Logistics arm of Saba, a parking-specialized company at which Criteria holds a 50% stake, has sold two logistics parks in Coslada (Madrid) and Subirats (Barcelona) to U.S. group Prologis, one of the worlds leaders in development and management of logistics complexes.

The transaction also includes lands pending development in San Fernando de Henares and Camarma de Esteruelas (Madrid) and it has been closed at the price of €100 million.

The logistics park of 62.900 square meters located in Coslada fully belonged to Saba, while the other lot of 89.000 square meters situated in the county of Alt Penedes was possessed by CPL. The lands in San Fernando de Henares and Camarma de Esteruelas jointly represent an area of 14.7 hectares.

Without the transferred lots, Saba still owns seven logistics parks in Spain: in the provinces of Barcelona, Seville and Alava, as well as in Portugal and France.

Next, Saba aims at purchase of a 60% stake at Bamsa, a joint venture which will manage 26 downtown parking lots owned by the city of Barcelona for the upcoming 25 years. The firm chaired by Salvador Alemany presently administers 180.000 spaces and with the acquisition of Bamsa he seeks gaining ground in the main business area.

The Tender of Bamsa

At the beginning of July, Saba outbid Belgian Interparking during the auction of Bamsa. The firm is obliged to pay €232 million for the 60% stake, whereas the remaining 40% will stay in hands of the City Hall of Barcelona.

Last year, Saba earned €190 million and obtained a net profit of €66.648 [million]. The company was born as a result of separation of the logisitics and parking division from Abertis. Apart from Criteria that holds 50% of it, other important shareholders are KKR, ProA and Torreal. Saba plans to go public in two or three years.

 

Original article: Expansión (by J. O.)

Translation: AURA REE

Opaque Sale of a Downtown Plot by Madrid´s Subway

27/08/2014 – El Diario

On July 22nd, the Official State Bulletin (or BOE) informed about the call for proposals for plot Granada-Cavanilles, sold by Madrid’s Metro. The 18.500 square meter piece of land is located in the center of the capital (in the south of the Retiro park) and it houses the subway‘s central premises.

The auction attracts attention due to the downtown location of the plot, where there are more no vacant parcels left. Conditions of the bidding were called ‘the blind try’ among the experts from the sector as considerable part of the payment will be conveyed ‘in kind’, materialized through construction of new headquarters for Metro. With the tiny detail that neither the cost, nor the project will become known before the auction.

Another thought-provoking aspect of the sale is the reason why Metro de Madrid is actually selling the plot. The company justifies it as follows: green areas will be given to the public at the expense of land which is today underused by the subway.‘ However, official documents indicate that only 3.210 square meters out of the 18.500 put up for sale (around 17%) will be intended for green areas, while office buildings will occupy over 40% of the plot.

According to terms of reference issued by Metro, bids can be submitted until October 22nd. Asking price is €28.8 million.

As mentioned before, the purchase will be sealed both in cash and in kind. The latter means construction of the new headquarters on the land in the Canillejas neighborhood. ‘Estimated budget for the investment reaches €20 million and the project will have to be adopted as the winners own

Sources from the sector say: it seems Metro wants to keep 90% of the bidders away from the auction. The more, that the firm clearly states that the candidates must provide it with specific job classification certificates, including earthworks, drilling, large concrete constructions and high-voltage installations”, to name just few.

Finally, the Engine Shed (la Nave de Motores), a cultural heritage site from 1919 situated on the land for sale next to the Metro de Chamberi station, has been ommitted in the terms of reference document.

 

Original article: El Diario (by Antonio Ruiz del Árbol)

Translation: AURA REE

First Inspections of Tourist Apartments In Barcelona Result In 24 Closures

27/08/2014 – El Mundo

The City Council of Barcelona decided to put an end to illegal holiday accomodations. Thus, it started from the Barceloneta neighborhood, from which complaints about noisy and inappropriate behavior of drunk tourists have been flowing since long. Throughout 2013, 54 written grievances were sent to the City Hall, while year-to-date their number posts 109. 50 of them concern solely the month of August.

Spanish military police received an official authorization of searching for unregulated homes rented to tourists. When detected, their owners may pay fines of up to 9.000 Euros.

Some politicians claim the measures were taken ‘late and in an improvised way’.

In the last two days, there have been 154 inspections carried out in the neighbourhood which resulted in 24 notices of closure. Barcelona´s mayor Xavier Trias is wholeheartedly in favor of approval of the regulation on illegal tourist apartments, foreseen for October this year.

 

Original article: El Mundo (by Cristina Rubio), El Mundo (after E. P.)

Translation: AURA REE