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npl-reo Market News: Spanish Real Estate Intelligence

Unicaja Considers the Sale of a Large RE Portfolio in 2019

12 February 2019 - Expansión

Unicaja accelerated the clean up of its balance sheet during the course of 2018. The Málaga-based entity decreased its volume of non-performing assets by 22%, in such a way that it is now close to the reduction objective it established in its latest strategic plan for 2020. That is according to the figures provided by the bank itself during the presentation of its results for last year.

The entity chaired by Manuel Azuaga (pictured above) ended 2018 with a volume of non-performing assets (NPAs) amounting to €3.6 billion, of which €1.7 billion were foreclosed assets and €1.9 billion were non-performing loans.

In five years, the bank has reduced its toxic legacy by 51% or more than €3.8 billion. Unicaja’s commitment to investors was to bring its exposure to problem assets down below the €3.5 billion mark before the end of 2020. The rate of sales of small NPA portfolios has allowed it to get ahead in the calendar that it established in its strategic plan. But the entity will continue its clean up.

The heads of Unicaja have reported their intention to continue with small portfolio sales during 2019. Moreover, they do not rule out carrying out the sale of a large portfolio in order to segregate a majority of the non-performing exposure, in a similar way to what most of the Spanish banks have been doing over the last two years.

Unicaja’s decision to carry out a massive property sale will depend, like in other cases, on the discounts that the entity will have to apply to its portfolio. The NPAs of the Malagan bank have an average coverage level of 57%, which means that a discount of a similar percentage could be applied to the book value without resulting in accounting losses for the entity this year.

High asset quality

Unicaja is, together with Abanca, the only Spanish bank entity that still retains ownership of its servicer, the real estate subsidiary through which it sells its homes and commercial premises.

The recent decision by Sabadell to sell 80% of Solvia to Intrum followed other previous operations that have seen the Spanish banks undoing their positions in the property segment, including the sale of Servihabitat to Lone Star by CaixaBank, and of Aliseda to Blackstone by Santander.

Beyond Unicaja’s plans for its property, the entity has been recording a positive trend in terms of the quality of its assets for several years now. The net inflows of problem loans have registered eight consecutive quarters of decreases, and between September and December, they recorded the largest decrease in the bank’s historical series.

Since 2014, Unicaja’s default ratio has also decreased by almost half: from 12.6% recorded in December 2014, the Málaga-based entity has managed to clean up its balance sheet to bring the rate of toxic loans down to just 6.7%.

Original story: Expansión (by Nicolás M. Sarriés)

Translation: Carmel Drake

 
Following Blackstone, Cerberus, Lone Star and Bain Plan to Launch Socimis
7 February 2019 Major investment funds have taken over billions of euros of real estate from the banking sector in recent years and are now planning their exit strategies. Some funds, such as Cerberus, Bain Capital and Lone Star intend to follow in Blackstone’s footsteps, considering the creation of socimis with a portion of their assets, various sources in the sector told the Economista. The sources stated that some funds’ plans are further advanced than others, already at the point where they are analysing the size of the portfolios which they may transfer to the market through this type of listed vehicle. They held out the possibility that one or more of the new socimis may premiere before the end of the year. Under this formula, the funds would increase their investments’ liquidity, taking over from other more core investors, with a longer-term profile and more moderate levels of profitability. The three funds’ future socimis would focus on the residential rental housing market with a model based on largely dispersed units since the apartments they acquired from the banks generally fit such a profile.

Major operations

Cerberus earned its place on the podium as one of the most significant real estate investors in Spain, just behind Blackstone. The fund, based in New York, was one of the first to arrive in Spain during the real estate crisis, between 2010 and 2012, and since then it has been taking positions in almost every sector of the property market through Haya Real Estate , the developer Inmoglaciar, the real estate agency Housell and Gescobro. In November 2017, it bought 80% of BBVA’s real estate business, which had a gross value of some 13 billion euros. The transaction was the second largest portfolio operation ever concluded in the history of Spain, behind Blackstone’s acquisition of Banco Popular’s toxic assets from Banco Santander. Cerberus has also been increasing its portfolio of NPLs and REOs with other smaller operations such as CaixaBank’s Agora project, Sabadell’s Challenger and Coliseum portfolios and BBVA’s Jaipur Project, among others. On the other hand, Cerberus is in the race to acquire Solvia Desarrollos Inmobiliarios, a developer that owns a portfolio of land valued at about €1 billion. Lone Star is also analysing the possibility of launching a socimi with a portion of the properties it acquired during its flagship operation in Spain when it bought CaixaBank's real estate business, which had a gross value of 12.8 billion euros. The fund also acquired the bank's servicer, Servihabitat. For its part, Bain Capital, which owns the developer Habitat, has also been one of the most active investors in debt portfolios. One of its more recent operations, known as the Shell Project, involved the acquisition of some €700 million in NPLs to developers from Kutxabank. Original Story: Eleconomista.es - Alba Brualla Photo: Getty Translation: Richard Turner
 
Sabadell & CaixaBank in the Top 5 European Ranking of Toxic Asset Sales in 2018

29 January 2019 - Expansión

CaixaBank starred in the fourth largest toxic asset sale operation in Europe in 2018 whilst Sabadell starred in the seventh largest. And they were not the only transactions that the two entities undertook (…). In fact, both banks feature in the list of the Top 5 entities in Europe by volume of toxic asset portfolio sales last year, according to data collected by the analysis firm specialising in debt Debtwire.

All of that, despite the fact that Spain’s two largest banks, Santander and BBVA, had a much quieter 2018 than 2017, when the former undertook the largest sale of toxic assets in the country's history, with the transfer of assets with a nominal value of €30 billion inherited from Popular to Blackstone. Meanwhile, BBVA placed part of its real estate business in the hands of Cerberus that same year.

Last year, Sabadell and CaixaBank took over the baton. The bank chaired by Josep Oliu is the Spanish entity that recorded the largest toxic asset sales in 2018, divesting assets with a nominal value of €12.6 billion. That figure placed it fourth in the ranking, behind only the Italian entities Monte Dei PAschi, Banca Popolare di Vicenza and Banco BPM.

Meanwhile, CaixaBank (…) was the fifth most active bank in the ranking, with toxic asset sales of €12.1 billion, just behind Sabadell.

Together with contributions from the other banks, with Bankia and Santander in high-ranking places, the Spanish sector divested toxic assets worth €43.2 billion in 2018, compared with €51.7 billion in 2017, which represented a decrease of 16%.

Nevertheless, neither CaixaBank nor Sabadell managed to keep Spain at the top of the podium of countries that divested the most toxic assets last year. Italy is the new leader with NPL sales of €103.6 billion (…).

In Spain, the loans and foreclosed assets divested by the banks are now in the hands of Cerberus and Lone Star, primarily, the two funds that purchased the most in Spain last year, with €15.8 billion and €13 billion, respectively.

Well behind them in the ranking is Axactor, which is typically more interested in smaller operations. And Blackstone, which was out of the ranking last year, after starring as the absolute leader in 2017, thanks to the operation that it closed with Santander, according to the report from Debtwire, which takes into account all transactions exceeding €100 million (…).

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake