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Sareb Searches for an Ally to Develop Land Worth €2.5bn

3 January 2019 – Eje Prime

The bad bank is looking for a partner to increase its profitability through the development of its land. Sareb owns plots throughout Spain worth €5 billion, but almost half (€2.4 billion), lack building permits. For this reason, the company is combing the market to reach agreements with companies that specialise in converting plots into buildable sites.

The company is thus planning to turn the tide in its strategy for the management of its portfolio when the contracts that it has signed with several Spanish real estate servicers come to end, which they will do soon, according to El Economista.

At the end of the first half of 2018, Sareb’s buildable land had a value of €2.15 billion. The rest of the portfolio owned by the publicly owned company comprises rural plots, worth €450 million.

Sareb, with €36 billion on its balance sheet, is also working on the creation of a fund with a residential property developer in which it will own a large stake. By way of consideration (payment for that stake), the bad bank will grant land worth €800 million for the development of new homes. Aelca is currently the favourite in the running to be awarded that contract.

Original story: Eje Prime

Translation: Carmel Drake