28/11/2014 – Expansion
Spanish banks detect improvement in the real estate market, including segments so much battered by the crisis as the housing development.
At the latest meeting organized by Esade Business School, Sabadell’s Property Investment head Joan Bertran (pictured leftmost) assured that the entity noticed an increase in applications for new home construction loans. Moreover, he foresaw that the financial sector will grant €5.5 billion to developers in 2015.
Mr. Bertran explained that around 15%-20% of 300.000-350.000 homes sold each year is new. And of those, 80% have been raised relatively recently.
In the director’s view, banks should approve the loans as they are demanded by ‘best developers who survived the recession and for quality product. This might not be seen in the next years’, he added.
A year back, such an increase in developer lending was unthinkable because this kind of asset turned toxic and made up to €320 billion in 2009 in the Spanish entities’ balances. Since then, until the end of the first half of 2014, a €161 billion amount has been deleveraged, as the Bank of Spain informs.
Likewise, Spain’s bad bank’s CEO Jaime Echegoyen (pictured next to Bertran) explained that the banks return to lending due to engines like carry trade effect, bringing 15% of the revenues, having disappeared. Speaking of Sareb’s future, Mr. Echegoyen foresees closing ‘large, living-up and complex’ – five or six – deals.
Among the portfolios he referred to one may find €250 million outstanding developer loan Project Olivia, a €130 million worth of hotel credits inside Project Meridian, Project Aneto with €40 million in non-performing loans given for land and residential purchases, €80 million residential loan portfolio with collateral property in the Balearic Islands called Project Dreamland, as well as Project Agatha including debt linked to subsidized apartments and Project Corona and its four office buildings located in the north part of Madrid.
Original article: Expansión (by J. Z.)
Translation: AURA REE