4/12/2014 – Cinco Dias
Over the last year, a genuine revolution has been watched in real estate-owned property sales by Spanish banks due to two fundamental factors: transfers of internal servicers to large international investors and establishment of Sareb (the bad bank of Spain) which considerably boosted the speed of offloading the repossessed assets.
Thus, from January to September 2013, the biggest banks traded their properties directly, sold five times more than Sareb. This year’s nine-month period, though, saw most of the servicers in hands of funds, whereas the bad bank positioned as the sales leader.
The two phenomena were joined by progressively shrinking prices which enforced higher provisions from banks. All these were translated into a 22% jump in sales of six biggest entities of the country that sold more than 68.000 properties in total. To compare, a year earlier they managed to market 55.000.
Three banks clearly monopolize the business: CaixaBank, BBVA and Sabadell, accounting for 77% of all sales. Interestingly, the two last refused to sell their servicers to ‘outsource asset management to professionals’.
CaixaBank did convey 51% of its Servihabitat to fund Texan Pacific Group (TPG), which now ranks first in sales with 20.093 transactions, still having 9.983 dwellings in its balance returnin it €964 million, as well as 10.110 REO units of financed developers.
Moreover, the Catalan entity placed a bet on rentals which represent 43% of its real estate activity. It leases 6.384 properties for €742 million. Together with the bank’s trading activity, the business is worth €3.96 billion.
Ranking the second, BBVA and its servicer Anida have sealed 16.049 deals in the first three quarters of the year, up 10.2% from 2013. Although not disclosed, discunts applied are said to cause a loss of €598 million (€844 million during the same period in 2013). In terms of year-to-date sales, 8.221 properties left its balance and the rest corresponded to developer units.
The success of Banco Sabadell owes to the recent merit of its Solvia which signed an asset management contract with Sareb, including all REO properties of Bankia. This Catalan entity marketed 10.819 houses, both own and developer’s, earning €1.88 billion, at an average price of €173.400 per unit.
The increased mean value is due to better over-€100.000 property sales representing 42% of all deals (showing 26% in September 2013). ‘New homes sell at a good pace’, the bank admitted.
Other leading Spanish banks opted for sharing their servicers, like Banco Popular that sold 51% of Aliseda to a joint venture of Kennedy Wilson and Värde Partners. This entity boosted its REO sales by five in the nine months of 2014, precisely 5.148 properties for €989 million in total. One unit stood at €192.113 on average.
Santander, which transferred Altamira to fund Apollo, managed to convey only 8.300 houses but the truth is the bank sold majority of its REO in the previous years and now it earns most – €1.4 billion in total.
Finally, Bankia which outsourced management of its assets to Haya Real Estate (set up by Cerberus) totalled its sales at 7.663 units for a joint value of €864,5 million, including both own properties and those found in the balance of the bad bank.
Original story: Cinco Días (by Juande Portillo)
Translation: AURA REE