8 May 2015 – Cinco Días
Over the next few weeks the German bad bank is expected to sell the assets that it owns in Spain. FMS Wertmanagement expects to sell the so-called Gaudí portfolio, which contains properties in Spain and Portugal, in a single transaction to Oaktree.
“Now is the time to sell the whole portfolio”, said José Holgado yesterday, Commercial Director of FMW Wetmanagement, at the Spanish real estate market’s second investment forum, which was held yesterday as part of SIMA (Salón Inmobiliario Internacional de Madrid or Madrid International Real Estate Fair). Holgado estimated that the value of the portfolio amounts to almost €900 million, although that is the nominal value, which will be reduced during the final negotiations.
The German entity, created in 2010 with assets from the nationalised Hypo Real Estate bank, operates in the same way as Sareb, the Spanish bad bank. Although the nominal value (of the portfolio) is almost €900 million, it is understood that these non-performing loans and assets have lost value since the start of the housing crisis, therefore they will be sold at below market prices, in the same way as (the assets sold by) the Spanish Sareb. Moreover, since (the portfolio is being) sold on a wholesale basis, the cost will also decrease.
Although several funds have valued FMS Wertmanagement’s portfolio, in the end it will be the Californian fund Oaktree, owner of Panrico, which takes over the Gaudí portfolio, subject to the negotiation of the final details. One of the most significant assets in the portfolio is the luxury Hotel Arts de Barcelona, a five star property managed by Ritz-Carlton. This complex was acquired by several buyers in 2006, including one company that was linked to the Singapore fund GIC. The German bank Hypo Real Estate was one of the entities that granted loans (to it). Once HRE was nationalised, part of the unpaid, syndicated debt was transferred to FMW Wertmanagement.
According to the specialist publication CoStar, in addition to Oaktree, the portfolio also sparked interest from other funds including Cerberus Capital Management, Orion Capital Managers and Colony Capital. That publication estimates that the final price of the transaction will amount to approximately €500 million.
The sale of the Gaudí portfolio, which is being managed by Cushman & Wakefield, comprises 16 loans in Spain and two in Portugal. According to sources close to the transaction, Oaktree would immediately acquire another five star hotel in Cascais (Portugal), five shopping centres, four office blocks, 17 industrial storerooms, as well as several other residential and industrial assets.
The shopping centres include the MegaPark in Barakaldo (Vizcaya), Heron City de Las Rozas and Plaza Éboli, both in Madrid.
According to Holgado, FMW Wertmanagement commenced operation holding debt from assets worth €175,000 million, of which €100,000 million have now been sold. The director of the German bad bank said that now is the right time to sell given the significant liquidity in the market.
Original story: Cinco Días (by Alfonso Simón Ruiz)
Translation: Carmel Drake