Real Estate Companies Cut In Debt by 23% to €12.57 Bn in H1

10/09/2014 – El Economista

There have been six years already since the real estate bubble burst and the first traces of recovery begin to appear in the balance sheets of the main property managers of the sector. Namely, they achieved trimming the total amount due to banks by 23.4%.

Six largest realtors: Colonial, Quabit, Testa, Martinsa, Reyal Urbis, Renta Corporacion, Realia and Montebalito, closed the first half of the year with €12.57 billion in the red. To compare, in H1 2013, the figure was reaching €16.42 billion.

To achieve that, the companies had to go through debt restructuring and shed their best assets via sales or in lieu payments. Although their joint indebtness still hits high, there is a hope for their balances as economic indicators show promising numbers and foreign investors eye the market in search of opportunities.

Quabit has made a U-turn in its revenues in the last year. Specifically, the company chaired by Felix Abanades has managed to trim its indebtness by €242.19 million, 41.23%, in just 12 months.

After four financial restructurings, Quabit may surely state it is a balanced firm without any economic stress in the short term, the group reports.

With clean books, net value of €65.6 million and €44.88 million in assets, the company plans to launch a Socimi on the stock market which is expected to debut still before the end of the year. Mr Abadanes hopes to raise between €300 and 500 million in shape of real estate assets, mainly residential, commercial, offices and, to less extent, logistics.

In turn, Renta Corporacion that in 2013 was pulled down to insolvency process by a €161 million financial and €27.5 million property indebtness, today celebrates crawling out of the jeopardy. To be precise, the firm beated the red down by 62% in one year. At the moment, it owes €60.32 million.

The assets repossessed from us have a book value of €93.7 million, while the repaid debt represents €98.6 million and therefore we registered a €4.9 million revenue, the group explains.

Colonial has been the first to show that it was possible to overcome the crisis. The company cut in its debt by 35.68% to €1.66 billion.

Now the firm is controlled by such big-name investors as the Villar Mir group and the Qatar Sovereign Wealth Fund. Together with them, Colonial submitted a €650 million bid for a part of Realias property division Patrimonio.

On the other hand, Realia, Reyal Urbis and Martinsa are still up to their ears in debt.

Moreover, Realias main shareholders (Bankia and FCC) have been seeking to sell their stakes since long. Before summer, the real estate company received several offers for a part of its indebtness from Fortress acting on behalf of funds King Street, Orion Capital and AEW.

In the middle of that process, Realia transferred its stake in French branch SIIC de Paris for €560 million. The operation helped it to beat the red down by 40.36% to €995.32 million.

When it comes to Reyal Urbis, this firm has been struggling in the voluntary bankruptcy declaration for over a year. In spite of that, the company managed to trim the debt by 23.62% to €3.55 billion.

Both Reyal and Martinsa, which reduced its debt by 14% to €4.18 billion, will be able to benefit from the new bankruptcy law.


Original article: El Economista (by Alba Brualla)

Translation: AURA REE