The Market Forecasts a Massive Sale of NPLs at the End of the Year

Axis expects to see a massive sale of non-performing loan portfolios before January 2021, since the banks will be keen to remove those assets from their balance sheets.

The consulting firm Axis Corporate predicts that, as a consequence of the impact of the global crisis caused by Covid-19, there will be a massive sale of portfolios comprising non-performed loans guaranteed by mortgages (NPLs) during the last quarter of 2020 in the real estate sector.

According to José Masip, a Real Estate Partner at Axis Corporate, “in this scenario, two ingredients are coming together in the face of uncertainty: buyers who, in the context of this new shock environment, may or may not see the market uncertainty as an opportunity, and sellers who are not willing to modify prices and who are able to evaluate the best option within their ‘possibilities’.

Cerberus Plans to Create a Real Estate Giant by Acquiring Altamira & Solvia

10 November 2018 – Expansión

Cerberus is increasing its commitment to the Spanish real estate market. The US fund is the favourite candidate to take over the reins at Altamira, the manager of property loans and foreclosed real estate assets currently owned by Apollo and Santander. Moreover, Cerberus is battling it out with the fund Lindorff (now Intrum) and other investors to purchase Solvia.

As Expansión revealed on 8 October, Apollo renewed its contract with the investment bank Goldman Sachs at the beginning of the summer and distributed the teaser (the sales document containing a general description) to potential interested parties to dispose of this asset for between €500 million and €600 million. Although it is not alone in the process, Cerberus is the candidate that has the best chance of acquiring that company.

But Cerberus is not going to settle for that asset only. Financial sources assure that the US fund is also bidding for Solvia, in a process in which it is also competing with Lindorff. The CEO of Sabadell, Jaume Guardiola, noted, during the presentation of the results on 26 October, the “good appetite” in the market for Solvia, “whose sale will close “soon”. He whereby confirmed the sale of Solvia Servicios Inmobiliarios (SSI) and Solvia Desarrollos Inmobiliarios (SDI). For the sale of SSI, in which it is being advised by Alantra, the bank hopes to receive up to €400 million.

Concentration of the market

If Cerberus ends up being the winner of both processes, it will become the clear leader of the servicer sector and a proponent of concentration between the servicers. These companies, created from the former real estate subsidiaries of the banks, have become some of the stars of the new real estate cycle.

Currently, almost all of the assets under management of the banks are in the hands of a few companies such as Altamira, Servihabitat, Haya Real Estate, Aliseda, Anticipa, Solvia and Divarian (previously Anida). These firms are mainly responsible for the management and recovery of debt and transformation of loan obligations into foreclosed real estate assets, as well as the sale and rental of assets.

If Cerberus ends up taking control of Altamira and Solvia, it will control almost 65% of the market for servicers, which will allow it to mark a differentiation in its strategy. Currently, the US fund controls Haya Real Estate, one of the large servicers with €40 billion in assets under management. Moreover, it took over the reins at Anida, which was in the hands of BBVA, and which manages €13 billion.

If it adds Altamira and Solvia to its portfolio, the volume of assets under management will soar to €138.9 billion, with a market share in the servicer segment of 65%. According to numbers managed by the consultancy firm Axis, the other two dominant funds are Blackstone, with Anticipa and Aliseda (also from Santander) and LoneStar, which controls Servihabitat after purchasing that company from La Caixa in the summer.

Other assets

In addition to the servicers, Cerberus is also the owner of the property developer Inmoglacier; the online estate agency between individuals Housell; and the debt recovery company Gescobro (…).

Original story: Expansión (by R.Arroyo and D.Badía)

Translation: Carmel Drake

Axis: Spain’s Servicer Sector Is Being Redefined

23 December 2016 – El Mundo

In order to understand the current situation in the Spanish real estate market, beyond the reactivation of the construction of homes in certain specific areas, it is worthwhile looking at the amount of debt and real estate assets, left over from the bubble, that are still sitting on the balance sheets of financial institutions and other major owners, such as investment funds.

This real estate indigestion, which led to the restructuring of the financial system, the creation of Sareb (popularly known as the bad bank) and the launch of the bank’s servicers (which are now mainly owned by funds), has drawn a new real estate reality. The involvement of these new players has changed the rules of the market. They have and will continue to play a key role.

The Asset Under Management Report, which the consultancy Axis Corporate has just prepared and presented, is an extremely useful tool for understanding this business, which is being completely redefined. Axis Corporate specialises in advising these new players in the sector.

Regarding the role of the servicers, the study explains that, once each one has established itself in the market and following the Íbero tender whereby Sareb awarded the management of its assets, they must consolidate or adapt their respective models.

In this sense, and taking into account what is happening in other countries, Luis Fernández, Managing Partner of Financial and Real Estate Services at Axis believes that “over the medium term, the number of servicers will be reduced to two or, at the most, three”. Corporate movements forecast not only the “inevitable” concentration process, but also the repurchase of these platforms by financial institutions, their sale to industrial partners and international growth.

This will happen in a context in which the major investors, which are currently their main shareholders, will have their interest diverted to other problem economies such as those of Greece, Cyprus and Italy, where financial restructuring processes, such as the one undertaken in Spain, are still pending and where they may try to replicate the asset management model as servicers.

“The funds entered this business three years ago and their perspective as investors tends to be fixed for four years, which means that we are now approaching the divestment phase”, said Fernández. In this process, sources at Axis expect that the exit of funds with a more opportunistic profile will make way for others, with a more industrial focus”, who are committed to creating value more over the long term”.

In this regard, José Masip, Partner at Axis, draws our attention to the rental market, which is going to be “highly attractive” over the next few years and he predicts that we will see a “clear commitment” from the latter type of funds to obtaining profitability, not only from the value appreciation of their assets, but also from their rental.

“Both banks and funds are going to continue removing assets from their balance sheets through Socimis or by means of other vehicles specialising in rental”, said the expert. In this context, sources at Axis estimate that “over the medium term, it will not be unusual to see companies managing volumes of up to 50,000 homes for rent”.

Original story: El Mundo (by L.M.C.)

Translation: Carmel Drake