Santander Mulls Over €15 Bn Popular Property-Asset Sale

16 June 2017 – Bloomberg

Banco Santander SA is testing investor appetite for soured loans and repossessed property assets with a face value of as much as €15 billion ($16.8 billion), in a sign that the company is racing ahead with its plan to clean up Banco Popular Espanol SA’s balance sheet, according to three people with knowledge of the situation.

Santander acquired the assets when it bought stricken lender Popular last week, said the people, who asked not to be identified because the matter is private. The Spanish bank is also preparing the sale of commercial property assets valued at as much as €500 million, the people said.

Spain’s biggest lender paid 1 euro for Popular in a sale brokered by European regulators after it suffered a run on deposits. Santander said it would raise €7 billion in capital to shore up Popular’s balance sheet and embark on a rapid sale of its property. Popular has €29.8 billion of property assets and soured real estate loans, according to a presentation on Santander’s website.

Real estate assets that may be sold include Popular’s new headquarters and the Beatriz building in Madrid, whose tenants include KKR & Co., the people said. Also on the block are 1,000 rented homes, plots of land and offices in Madrid and Barcelona, two of the people said.

Santander Chairman Ana Botin told Bloomberg TV last week that her plan to turn around Popular includes the goal of selling at least half of Popular’s real estate assets in the next 18 months. Popular’s troubles reached a crisis point as doubts about the scale of its real estate losses scared away would-be buyers and its plunging share price made raising capital impossible.

The proposed sales are separate from a process Popular had in place before it was taken over to divest a €480 million batch of non-performing loans backed by 16 hotels across Spain, the three people said. The deadline for bids for those loans was June 9.

Original story: Bloomberg (by Sharon R Smyth and Estebán Duarte)

Edited by: Carmel Drake

Popular’s Future HQ Is Left Without A Tenant

12 June 2017 – Expansión

Banco Popular’s future corporate headquarters has been left without a tenant before the financial entity has even moved in. It was scheduled to take up residence in the last quarter of this year. The complex, located on the A2 motorway in Madrid, and designed by the architects Ayala and the Aguilera Ingenieros engineering team to be Popular’s financial city, comprises two buildings with a combined surface area of around 120,000 m2, as well as 1,600 parking spaces.

Currently, only one of the buildings – the property located at number one on the Madrilenian Calle Abelias – is occupied. The building has been Popular’s corporate headquarters since January 2013 and employees from the financial institution’s Information Technology (IT) team work there.

The Abelias building has a surface area of 54,300 m2 and is reportedly worth around €80 million. According to market sources, this property is currently the one with the most likelihood of finding a buyer and, potential candidates for acquiring these facilities include many of the Socimis and value added investment funds, which are generally willing to take on more risky assets.

The entity’s technological headquarters has an above-ground surface area of 22,600 m2 and another 31,700 m2 of space underground, as well as around 700 parking spaces. The building has been granted a Leed Gold certification by the United State’s Green Building Council (USGBC).

Very close to this building, on a plot of land on Calle de Juan Ignacio Luca de Tena, is the other property that was going to house Popular’s corporate headquarters. That building, which has an above-ground surface area of around 45,000 m2, dedicated to office space, and around 1,000 parking spaces, is reportedly worth around €120 million, without a tenant.

Banco Popular’s existing headquarters in the Beatriz Building, at number 29 on the Madrilenian Calle Ortega y Gasset, will have a new tenant from January: the law firm Baker&McKenzie. That property, which was constructed in 1975, has seven storeys, an attic and an upper attic, is owned by Vyosa.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake