19 October 2016 – Expansión
Altamira Santander Real Estate, the real estate company owned by Santander, has completed a new reduction in its share capital amounting to €245 million, according to papers filed with the Commercial Registry. In this way, it has absorbed the losses that it recorded in 2015, which amounted to almost twice as much as the losses registered in 2014 (€149 million).
“The real estate market through which the company undertakes its activity has deteriorated gradually since 2007 (…). As such, there has been a negative change in the market value of the company’s real estate investments, which has mean that the company has continued to incur significant losses”, according to the accounts of Altamira Real Estate.
Santander has a gross property portfolio amounting to €8,286 million. It is covered by provisions amounting to €4,506 million, in other words, 54% (61% of which are buildable plots of land). The bank thinks that it will be able to liquidate all of its stock within two years.
Besides the cost of these properties in terms of capital and provisions, Santander, like all of the other banks that have transferred the management of their assets to specialist funds, have to bear the expense of management fees. In 2015 alone, the bank paid Altamira Asset Management, the servicer controlled by Apollo, €185 million in this regard. Santander sold 85% of Altamira to Apollo for €664 million three years ago. It is now considering buying back the entity to regain control of the assets. As part of the bank’s real estate strategy, its stake in Metrovacesa has gained significance, especially following that firm’s upcoming integration with Merlin (Santander will control 21% of the merged company).
Original story: Expansión (by M. Martínez)
Translation: Carmel Drake