Sareb, the bad bank, starts to compete in the retail real estate market. The institution started commercializing yesterday a first lot of 13000 properties among individuals, one way which will not be a priority, as most of the assets within Sareb (non developed properties and credits) will need to find its way into the institutional market.
Sareb will not sell the properties directly (it does not have a commercial infrastructure), but through agreements signed with those banks which have transferred properties to the company. The first agreement has been signed with Bankia, which will commercialize through its real estate subsidiary (www.bankiahabitat.es) and its net of branches those initial 13000 properties. They were transferred to Sareb from Bankia one month ago. In the next few weeks more agreements will be signed with other nationalized banks and other groups which will transfer a new lot of assets to Sareb. (…)
One of the keys of the management agreements signed between Sareb and other institutions is the commission these will charge for selling the properties. The negotiations are still open, but the starting percentage will be around 3%, according to financial sources.
This could increase depending on a system of flexible commissions and incentives which is still being drafted. It establishes that the initial commission, which will be paid to the institution for managing the asset, could be increased if the bank also sells the property and grants financing to the buyer. The features of the financing will be established by Sareb and the institutions in a joint strategy, although the banks will have the last word.
The mortgages will stay in the balance sheets of the banks and will therefore have to be operations with market conditions, with strict risk criteria (there are no plans of financing more than 80% of the value of the property) and respecting the limitations imposed by Europe on the groups with financial aid.
The greatest unknown fact will be the price policy which will be applied by the bad bank. Sareb did not disclose any information yesterday on the average discounts which will be applied to sales. It explained that each asset has its own sale strategy, always searching for the maximum profit.