Apollo Commits To Spending €1,000M On Land And Loans
3 June 2015 – El Confidencial
The fund that bought Banco Santander’s real estate arm has reiterated its commitment to Spain and says that the new political map that has emerged following the elections will not alter its plans to invest up to €1,000 million in loans and property.
Whilst several foreign banks and funds are looking askance at the new political map and deciding whether to continue with their expansion plans in Spain or put the brakes on, Apollo, the owner of Banco Santander’s real estate arm, has confirmed that it will continue with its investments in our country, mainly focusing on the purchase of portfolios of loans and land, an asset that none of the investors have shown any interest in until recently.
According to sources close to Apollo, Andrés Rubio, the President of the US fund in Spain, has said that the firm has authorised a budget of €1,000 million for further investment in the Iberian Peninsula, where it has already made two significant purchases: the acquisition of Altamira Real Estate from Santander for almost €700 million and the purchase of EVO Bank from Abanca. His statements were made a week before the local and regional elections, but sources close to the firm have reaffirmed his plans.
Rubio did not specify the timeframe in which the €1,000 million budget will have to be put to work, but sources close to Apollo say that the majority of the funds will be invested during the next 18 months for two reasons. The first is that prices are starting to increase and the second is the arrival of many specialist funds, which are snapping up offices, shopping centres and residential developments.
Given the concentration of competitors in other segments, Apollo has decided to focus its efforts on land, an asset that has been fully depreciated in the portfolios of most banks, which hold it on their balance sheets following foreclosures due to unpaid client loans. Jorge Valle, from Deutsche Bank…said that funds are being invested aggressively in the purchase of land in large cities such as Madrid, Barcelona and Valencia.
Although Apollo’s investments are made through Bisonte Luxco, an equity company owned by Apollo that is based on Luxembourg, the management of the real estate assets acquired to date is being handled by Altamira Real Estate, which now has assets under management amounting to €55,000 million.
The proof that Apollo remains committed to Spain lies in the fact that it has hired more than 100 people to work at Altamira that in recent months. The company has become the largest real estate management servicer in Spain and currently has more than 300 residential developments underway. Internally, the firm is adapting its IT systems to receive new assets from third parties…which indicates that Apollo will soon start to spend the €1,000 million authorised from the USA.
Original story: El Confidencial (by Agustín Marco)
Translation: Carmel Drake