18 October 2016 – Expansión
Sareb has just launched a competitive process to sell the largest portfolio so far in its three and a half year life. The macro-operation was approved at the most recent Board meeting, in light of the investor appetite that is being left unsatisfied by the shortage of products currently available for opportunistic funds, which buy distressed debt at knockdown prices. The target audience for this latest portfolio are international specialist funds with management capacity and knowledge of the Spanish market.
According to sources in the sector familiar with the operation, the portfolio comprises a package of 200 non-performing loans, which are secured by residential flats, mainly housing blocks located in Cataluña, Andalucía, Madrid, Galicia and the Community of Valencia. Together, their nominal value amounts to €1,000 million.
The competitive process is now officially open, although no offers have been received yet. (…). According to the sources, Sareb plans to sell the whole package to a single buyer before the end of the year.
The bad bank has its own investor relations department and regularly holds road shows for large financial institutions. Last year, it held meetings with 780 international investors. In Spain, the opportunistic funds that have sold portfolios over the last four years have managed to obtain returns (IRR) of between 10% and 20%, according to sources in the sector.
This year, Sareb’s activity has been characterised more by individual operations than by high volume deals. Its transactions have become more complicated since the Bank of Spain introduced accounting regulations requiring the bad bank to mark to market the value of its assets each year. (…).
Sareb is a giant container of NPLs, above all loans to property developers, which it purchased from the savings banks that received public aid. 25.7% of the entity’s remaining balance sheet correspond to real estate assets. (…).
Sareb has outsourced the sale of its real estate assets to four agents: Solvia, Altamira Asset Management, Servihabitat and Haya Real Estate. On average, it is selling around 27 units per day and has a market share of 4%, which is low because the market is very fragmented. For the first time in 2015, sales of land exceeded sales of residential properties. The latter are being sold for an average price of €74,000, according to Sareb’s annual report for 2015.
Sareb is also a property developer
Earlier this month, the entity put its first completed residential developments on the market. They contain 700 homes located all over Spain, which were left unfinished when the savings banks started to have solvency problems. These properties are being sold to the public for prices ranging between €32,000 and €390,000, and along with 1,300 other new build homes, form part of the “Casas de Estreno” campaign. The corporate website receives 409,000 visits per year and intensive utilisation of big data is helping the entity to maximise its returns from these transactions. (…).
Original story: Expansión (by Raquel Lander)
Translation: Carmel Drake