Santander, JPMorgan & Deutsche Bid For €5.000 Million Estate Credit

4/03/2014 – Cinco Dias

Sunday midnight was the deadline for presenting non-binding offers for the credit portfolio, known as the Octopus Project, put up for auction by Eurohypo, a branch of Commerzbank in Spain. The credits granted to Spanish real estate companies by the German bank have been valued at €4.681 million. 

More than 12 funds expressed their interest in the bidding and some of them formed alliances with financial entities to strenghten their position. For example, Santander and Apollo, Deutsche Bank and Blackstone or JPMorgan and Lone Star. The institutions´task is to provide the financial back-up, whereas the funds will have to absorb the toxic assets.

The offers may refer to the entire portfolio, a part of it or to individual assets. Preliminary choice will be accomplished within a week and the final stage of the sale conducted in July this year.

During the last year, the U.S. funds bought many credit portfolios in Spain, however the Octopus knocks off all of them in terms of the asset and debt volume. Such transactions as the sale of Altamira, Aliseda or Servihabitat were just a starter. (…).

Speaking of the bidders, Blackstone acquired 18 subsidized-housing developments from Madrid´s City Council for €125.5 million. In turn, Lone Star ran in the race for the Bull Portfolio from Sareb for €100 million but finally it was acquired by HIG Capital. The fund, however, has bought a real estate credit portfolio in the United Kingdom from Eurohypo for £4.000 million.

At the end of 2012, the fund Centerbridge acquired a real estate platform from BanestoAktua, for €100 million (…).

The Ritz Hotel, La Vaguada shopping center, Dolce Vita in La Coruña…

The list of assets linked to the credit portfolio of Eurohypo in Spain is long and includes debts of hotels and shopping malls. The loans the German entity granted for the shopping center manager company SCCE, like for instance the La Vaguada in Madrid or Gran Vía Shopping in Barcelona, are put up for sale. So is the debt related to the Dolce Vita in La Coruña, currently abandoned and vacant, or the Zielo Shopping in Pozuelo belonging to the U.S. group Hines.

Among the hotel credits found in the Octopus, noteworthy are the Ritz in Madrid, owned in 50% by Omega Capital of Alicia Koplowitz. The property was valued at €99 million in 2011. Other hotels that ought to be highlighted are the Melia in Barcelona (Sarria), Los Galgos (Madrid) and Fénix (Madrid) or the AC Hoteles in Aravaca (Madrid), Ciudad de Sevilla and Palacio del Carmen in Santiago de Compostela.

Metrovacesa, Realia, GMP, Aguirre Newman, CB Richard Ellis…

The portfolio of Eurohypo also contains the assets being collateral to credits granted to several Spanish real estate companies. For instance, the debt of Metrovacesa related to offices it manages in Madrid, loans granted to Testa and Sacyr for more than €900 million or the corporative debt of GMP.

Additionally, the German entity sells a part of two syndicated loans of Realia and Nozar´s debt related to land to centers of Lualca, Bami or Lugarce.

Eurohypo also sells Aguirre Newman´s debt connected to its company Zaphir Retail Properties and loans granted for shopping canters managed by Sonae Sierra and CB Richard Ellis, plus offices in La Moraleja.



Original article: Cinco Días (Alberto Ortín Ramón)

Translation: AURA REE