BBVA Sells Most of Real Estate Business to Cerberus for €4bn

29 November 2017 – Reuters

Spain’s BBVA said on Wednesday that it had agreed to sell 80% of its real estate business to US fund Cerberus for €4 billion ($5 billion), showing how investor enthusiasm for Spanish property is reviving.

A burst property bubble in 2008 sent Spain into a downturn that lasted for nearly five years, causing mass unemployment and prompting a more than €40 billion bailout for the country’s banks.

The economy returned to growth in 2013 and has outperformed the rest of Europe since then, helping to revive residential construction as house prices pick up, which has started to attract foreign investors back into the market.

The BBVA real estate assets included in the deal have a gross book value of some €13 billion, Spain’s second-largest bank said in a statement.

BBVA said the whole portfolio was valued at €5 billion, with the price involving a discount of 61.5%, in line with the coverage ratio for its foreclosed assets.

As at the end of September, BBVA had a non-core real estate property portfolio with a gross value of around €17.8 billion, of which the bulk were foreclosed assets worth around €11.9 billion.

The deal is the largest since Santander sold control of property worth €30 billion to the US investor Blackstone Group in August.

Santander sold its portfolio at a net value of €10 billion after a discount of around 66%.

The rebound in the property market has also allowed Spanish banks to tackle toxic balance sheets faster than rivals in Italy. Banks in Europe are under pressure to reduce soured loans after new guidelines on this from the European Central Bank announced last month.

Analysts at broker Keefe, Bruyette & Woods viewed the transaction as a positive step towards reducing BBVA’s non-performing assets ratio (non-performing loans and foreclosed assets) from 7.2% to 4.5%.

BBVA’s shares were up 1.94% at 1150 GMT, compared with a rise of 1.6% on the European STOXX banking index SX7P.

At a group level, BBVA has non-performing assets worth around €33 billion on its balance sheet – of which around €25 billion are in Spain.

Since 2015, BBVA’s real estate business has generated losses of €1.37 billion.

BBVA said it would retain control of 20% of the real estate portfolio, which it said would be exclusively managed by Cerberus’s Haya Real Estate.

The bank said the deal was not expected to have a significant impact on profits and would have a slightly positive impact on the fully loaded core tier 1 capital ratio (CET1), a measure of financial strength.

It also said that once the transaction was completed in the second half of 2018, BBVA would have the lowest relative real estate exposure among the main Spanish financial institutions.

Original story: Reuters

Translation: Carmel Drake


Blackstone Raises its Bid for Rental Housing …

27 August 2015 – Expansión

The venture capital firm has closed the purchase of the Ferrocarril Intermediación y Patrimonios.

The US fund Blackstone continues to expand its investment property portfolio in Spain. In this case, the venture capital firm has bet on the rental housing business, where it operates through the REIT, Fidere. Blackstone has completed the purchase of Ferrocarril Intermediación y Patrimonios, a company with almost 500 subsidized homes spread over two promotions in the Community of Madrid.

The fund already was a minority shareholder in this company. Specifically, it held 35% after buying Bankia’s holding. This company, until last year controlled by the financial institution, acted as a holding participating with national companies in about twenty partnerships to promote low-cost housing in the Community of Madrid. Ferrocarril Intermediación y Patrimonios was among these companies, with others in the sector participating as well: Hercesa, OHL, and Bigeco Gestesa, among others.

Now, Blackstone has agreed with Ferrocarril to get hold of 100% of the company, which has some 406 subsidized homes under lease in Las Rozas and another 80 in Alcalá de Henares.

Through it, the fund would have paid about 54 million euros, according to market sources, 46.6 million of which would correspond to the promotion of las Rozas and the rest to the homes of Alcalá de Henares.

The operation will be used so that Ferrocarril Inmobiliaria, presided by Rafael González Cobos, could minimize its debt and strengthen its own funds to take on new projects, as the company itself confirmed.

Blackstone has not only managed with the nearly 500 homes; it has also paid the debts that had linked these two promotions. For the construction of these projects, the Ferrocarril company asked Bankia for several loans worth over 47 million euros. These credits passed on to SAREB and after the purchase by Blackstone have been canceled, according to the public entity.


The 500 homes will be managed by Fidere. The fund took this company to the MAB (Mercado alternativo Bursatil/Alternative Investment Market) on June 29 with 3,000 homes to rent (now totaling almost 5,000 units), coming from portfolio purchases to the City of Madrid, FCC and Martinsa Fadesa. Then, it was valued at 212 million euros. Yesterday, it closed with a market capitalization of 217.7 million, its shares being worth 21.61 euros.

In addition to residential assets Blackstone boasts of a significant real estate portfolio in Spain. Among offices, stand out several buildings acquired last year, such as the headquarters of Capgemini and Citibank, in Madrid, and central offices of HP and Mediapro in Sant Cugat and Esplugues de Llobregat (Barcelona), respectively.

The US fund has a logistics subsidiary called Logicor, with assets in several European countries, including Spain.

Blackstone also owns a portfolio of doubtful mortgages purchased from Catalunya Banc, which runs through the company Anticipa and several shopping centers controlled by the Multi Development firm.

Original story: Expansión

Translation: James Leahu

Blackstone To Buy €790M Of Property Loans From CaixaBank

22 July 2015 – Bloomberg

Blackstone Group LP is buying a portfolio of bad loans with a nominal value of €790 million ($858 million) from Spanish lender CaixaBank SA, according to two people with knowledge of the matter.

The debt is linked to newly completed residential units as well as land and homes under development, according to the people, who asked not to be identified because the deal is not yet complete. The sale of the portfolio, known as Tourmalet, is expected to close at the end of the week, the people said.

Spanish banks are seeking to sell off bad real estate debt that has weighed on their balance sheets since the financial crisis sparked a property crash. Lenders foreclosed on more than 70,000 homes in 2014 with Andalusia, Cataluña and Valencia hit the hardest, according to data from the National Statistics Institute.

The assets backing the CaixaBank debt comprise 88% residential property, 9% land and 3% commercial property, according to a sales document obtained by Bloomberg News. The assets are mainly based in Andalusia, Madrid, Castilla La Mancha and Cataluña, according to the document.

Blackstone, which is run by billionaire Stephen Schwarzman (pictured above) has become the largest private equity real estate investor.

Spokesmen for Blackstone and CaixaBank declined to comment on the deal.

Original story: Bloomberg (by Sharon R Smyth)

Edited by: Carmel Drake