Chenavari Puts its Entire Property Portfolio in Spain Up For Sale

The British investment manager is looking for a buyer for its real estate portfolio in Spain, which is valued at 700 million euros.

The London-based real estate investment manager Chenavari has decided to find a buyer for its portfolio of assets in Spain. According to El Confidencial, the firm created by former partners of BNP Paribas, Société Générale and Bear Stearns, already had plans to exit the Spanish market before the coronavirus and had engaged Alantra for that purpose.

Chenavari entered the Spanish market in 2014, by purchasing both assets and loans from Spanish banks. In this way, it participated in the purchase of two of the first portfolios that were sold by Bankia following its rescue by the state, specifically, Project Wind, amounting to €1.3 billion, which it acquired together with Oaktree, and another portfolio containing property developer loans worth €335 million.

Dazeo Acquires a 5,000m2 Plot in Estepona to Build 20 Luxury Apartments for €15M

10 September 2018 – Eje Prime

Dazeo has closed its first operation following its creation. The joint venture between the Spanish real estate firm Dazia Capital and the French fund Eurazeo, has invested €15 million in the development of a 20-unit luxury apartment complex in Estepona.

The company has acquired a plot of land spanning 5,000 m2 on the coast of Málaga. The project, which will be undertaken by Arata Arquitectura, will house twenty apartments with terraces, a swimming pool, gardens, a spa and a gym.

Following this first purchase, Dazeo is planning to undertake further acquisitions in Madrid, Málaga and Valencia. The group is going to spend €70 million on residential projects in urban nuclei in its first phase. The joint venture, controlled by Eurazeo, will grow to reach €250 million, according to forecasts.

In addition to its venture with the French fund, Dazia Capital has signed other international alliances in recent years. In 2017, for example, it closed an agreement with the British fund Chenavari. Over the last four years, the Spanish real estate company, created in 2013 by Daniel Mazín, has acquired buildings and land with a surface area of 86,000 m2 and 500 homes located in Madrid and the Costa del Sol.

Original story: Eje Prime

Translation: Carmel Drake

Dazia Teams Up With British Fund Chenavari To Promote Growth

10 October 2017 – Expansión

Vía Célere was one of the pioneers in seeking foreign finance to accelerate its growth, but the explosion of the real estate market in Spain means that its formula is now being copied right across the sector. The latest example, in the form of Dazia Capital, has demonstrated it once again. The real estate group specialising in the residential segment has teamed up with the British fund Chenavari with the aim of obtaining a financial boost for the construction of its developments.

In an operation advised by Montalbán, the two entities have agreed to participate together in the construction of a new housing development in Madrid with a market value of €30 million, according to sources at the companies.

The project, located just a stone’s throw from Cuatro Caminos, will contain around 90 homes, as well as parking spaces and green spaces with a swimming pool and will occupy around 8,000 m2. According to the terms of the agreement, Chenavari will hold a majority stake of around 85%, whilst Dazia Capital will retain the remaining 15% and will be responsible for managing the development, as well as for constructing and marketing it.

The model that Dazia has chosen to finance its growth is not new. In the past, the company resorted to a similar structure, although in that case, its partner was a family office. Now, it is leaping into a more significant alliance, with a fund that specialises in taking advantage of investment opportunities in the credit market.

“The agreement reached with the Chenavari group will allow Dazia to increase its real estate investments, accelerating the rate of growth and the expansion of the residential market”, says Daniel Mazín, CEO of the Spanish company. “This market demands a lot of capital”, he added.

“It makes sense that real estate groups are allowing funds to enter their projects as they grow because it is the quickest way of obtaining returns from the investments that they have made in land”, explains a director in the sector.

Dazia is currently constructing 500 homes in Madrid and the Costa del Sol, with a combined market value of €180 million.

In the last quarter, the group acquired four new assets in Madrid and expanded the focus of its activity to include Valencia and Alicante, ahead of the surge in new housing in Spain.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Project Wind II: Bankia To Put €800M NPL Portfolio Up For Sale

21 March 2016 – El Confidencial

After withdrawing Project Big Bang from the market, through which it had hoped to divest the real estate assets that it did not transfer to Sareb amounting to €4,800 million, Bankia has decided to accelerate the pace of its other divestments, as it continues to analyse how to get rid of all of the property that it has on its balance sheet.

To this end, the entity chaired by José Ignacio Goirigolzarri is finalising the launch of Project Wind II, involving the sale of a portfolio of overdue mortgages. Although the details are still being finalised, the bank’s idea is to place a portfolio containing loans amounting to almost €800 million.

Last year, Bankia successfully closed Project Wind I, an operation that represented the entity’s first major sale of mortgages to investors in its history. On that occasion, the bank put loans with a value of €1,300 million on the market, divided into three sub-portfolio: more than 4,000 mortgages worth €918 million; loans to SMEs secured by RE collateral worth €180 million; and unpaid loans to SMEs worth €216 million.

Oaktree ended up acquiring the mortgages, whilst Chenavari bought the two smaller packages. For this second version, Bankia has already started to make contact with the funds, a temperature check that has awakened interest in the sector, given that it involves one of the most important portfolios forecast for this half of the year, together with Project Normadía, launched by Sabadell.

As El Confidencial revealed, the bank chaired by Josep Oliu has engaged PwC to sell its €800 million portfolio of consumer loans and credit cards, and is also analysing placing another package containing loans to property developers amounting to €1,700 million.

Appetite in the market

The funds that normally participate in these types of processes, such as TPG, Cerberus, Apollo, BofA, Goldman, Oaktree and Chenavari, are paying particular attention to the sale of these portfolios, above all, after Sareb shifted its strategy and decided to commit itself more to the retail channel.

Bankia is expected to resume Project Big Bang at some point during 2016 but, instead of forming a single portfolio, the market expects that it will divide it into several batches, given that the interested funds have already advised the bank that it is too large and diverse a portfolio to be ‘hunted down with a single shot’.

Last year, the entity carried out four major loan portfolio sales for a combined total of almost €2,800 million, which benefitted the bank’s balance sheet and allowed it to reduce its doubtful balance by more than €2,000 million.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Bankia Reduced Its Doubtful Loans By €2,000M In 2015

11 January 2016 – Expansión

The BFA-Bankia group reduced its doubtful debt balance by more than €2,000 million in 2015 through the sale of several loan portfolios. According to the entity, these operations allowed the bank to improve the quality of its balance sheet, raise liquidity and free up resources to grant new credit.

During the year, the bank completed four major operations involving the sale of loan portfolios with a total value of almost €2,800 million.

In May, BFA-Bankia agreed the sale of a portfolio of doubtful property developer loans amounting to €558 million to the fund Sankaty. Some of those loans were secured by real estate collateral.

A month later, the bank sold a portfolio of loans secured by hotel assets amounting to €383 million. The portfolio contained 91 operations in total, linked to 45 assets, and was sold to Bank of America and the investor Davidson Kemper.

In September, the bank closed the largest of its operations, by selling a portfolio of loans linked to the real estate sector amounting to €1,206 million, of which €986.8 million was secured. The purchasers in this case were the funds Oaktree and Chenavari.

In the last few weeks, BFA-Bankia has transferred a loan portfolio amounting to €645.1 million, all granted to the business sector and partly secured by real estate collateral, to Deutsche Bank.

Sources at Bankia highlight that, in order to maximise the prices obtained, a competitive process has been adopted for all of the portfolio sales between prestigious institutional investors and financial institutions.

Original story: Expansión

Translation: Carmel Drake

Apollo, Oaktree & Elliott Buy 1,000 Homes & 5,000 Mortgages

7 July 2015 – Expansión

Overseas funds are becoming the new owners of banks’ problem homes and mortgages. In recent weeks, Bankia, BMN and Bankinter have all signed deals – or are close to doing so – to transfer almost 5,000 mortgages and 1,000 homes to five international funds.

According to financial sources, Apollo, Oaktree and Elliott have invested the most in the transactions, although the funds Chenavari and Ellington are also close to finalising agreements.

These sales could just be the tip of the iceberg, since many of the banks currently have divestment projects underway, with the aim of transferring more than 50,000 homes to large investors.

The largest transaction to have gained momentum in recent days is Bankia’s Project Wind – the portfolio contains 4,300 mortgages to individual borrowers and it will be sold to the funds Oaktree and Chenavari. This sale is just awaiting its formal signing and the investors are expected to pay between €250 million and €300 million for the portfolio.

New transactions

BMN has also finalised agreements in recent days, for the transfer of two portfolios. The first is Project Coronas, which contains 550 homes located all over Spain, but primarily in coastal (beach) regions. The US fund Apollo has acquired this portfolio for €16 million. It represents the fund’s first major purchase of this kind since it purchased 85% of the Altamira platform from Santander.

Moreover, the entity chaired by Carlos Egea (BMN) has also sold a portfolio of problem loans, including almost 500 mortgages, of which three quarters relate to individual borrowers and the remainder to SMEs. This project, known as Pampa, has been awarded to a fund that has so far had little presence in Spain: the US fund Ellington Management, which specialises in the purchase of overdue mortgages. This investor bought a small portfolio from Barclays in Spain a few years ago.

Meanwhile, Bankinter has closed the sale of 300 homes to the US fund Elliott. The portfolio was initially valued at €60 million. It is Elliott’s first property-related purchase; until now the fund had focused on the NPL segment through its Spanish platform Gesif.

With these kinds of transactions, overseas funds are looking to capitalise on their purchases of large real estate platforms, for which they have so far paid around €3,100 million.

With that in mind, the Spanish financial institutions have initiated the sale of other large foreclosed asset portfolios, such as Bankia’s Big Bang portfolio, with 46,000 real estate units. Sabadell and Popular will also sell portfolios of homes in the near future.

Besides the sale of mortgages and foreclosed assets, Spanish entities are selling large portfolios of loans to property developers and hotel debt, as part of their objective to continue divesting property from their balance sheets. Financial institutions such as Santander, BBVA and CaixaBank all have sales projects of this kind underway.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

Bankia Sells €1,300M Loan Portfolio To Oaktree & Chenavari

6 July 2015 – Idealista.com

As the summer approaches, many financial entities are stepping down on the accelerator to sell their unwanted real estate portfolios as soon as possible. To this end, Bankia has just sold a portfolio known as ‘Project Wind’ to the funds Oaktree and Chenavari, in a mega-transaction worth €1,300 million, which primarily contains doubtful mortgages to individual borrowers.

The transaction actually comprises three different portfolios, which have been shared between the US fund Oaktree and the British fund Chenavari, although according to financial sources, the signing of the sale is still pending:

  1. Portfolio Mast: €918 million of unpaid mortgages from individual borrowers, which has been shared between Oaktree and Chenavari.
  2. Portfolio Board: €178 million of debt backed by real estate collateral, which has been awarded to Oaktree.
  3. Portfolio Find: €216 million of unsecured debt without any real estate collateral. There are lots of lines of credit in this package. It has been awarded to Chenavari.

This transaction follows Bankia’s sale of another portfolio, containing hotel debt, to Bank of America at the beginning of June. That operation, known as ‘Project Castle’, comprised 91 operations, in total, linked to 45 assets. 56% of that portfolio related to doubtful debts.

But Bankia also has another packet of real estate assets up for sale, the so-called ‘Project Big Bang’, which includes a portfolio of residential and commercial assets, as well as land, worth €4,800 million. The bank is very keen to accelerate the sale of that portfolio, which would represent the largest sale of real estate assets since the real estate bubble burst.

CaixaBank is also selling off property

2015 is turning into the year of the large real estate transactions. CaixaBank has put several portfolios up for sale. One of those contains new-builds, known as Project ‘Tourmalet’ and it contains loans secured by 271 completed new residential developments, 160 plots of land and work-in-progress residential developments. The packet is worth close to €1,000 million.

Another package up for sale is the so-called ‘Eurostars’ portfolio containing 1,091 assets, including 807 homes, 253 parking spaces, 26 storerooms and 5 commercial premises. It is worth almost €103 million and the transaction is being managed by the real estate consultancy JLL.

Original story: Idealista.com (by P. Martínez Almeida)

Translation: Carmel Drake

Bank Reduces Development Risk To Levels Seen A Decade Ago

02/01/2015 – Expansión

LATEST DATA FROM BANK OF SPAIN / The sector lowers its credit portfolio for real estate development to 156.2 billion, levels not seen since 2004. The balance has fallen 52% from a record 325 billion in 2009.

The Spanish banking sector is leaving financial restructuring behind, having reduced its development risk by half, which has been a major point of weakness throughout the crisis. The sector’s credit balance declined to 156.2 billion in September, according to the latest data published by the Bank of Spain. Thus, financial institutions have placed their stock in the levels seen a decade ago, in 2004, when the housing bubble began to rise.

With this, the bank has cut 52% exposure to real estate development from its June 2009 record, when it was at 325 billion euros.

Factors

Reducing direct exposure to developers is due to several factors. Some of them reflect the fact that risk has not been eliminated in the strict sense, but that balance sheets have been transformed or moved from banks to other economic agents.

In this regard, one of the elements that explains this reduced exposure is the creation of SAREB, also known as the ‘bad bank.’ The financial institutions with public aid transferred a net development loans (with already reduced provisions) of almost 35 billion euros between 2012 and 2013. This risk has stopped pressuring state-backed groups, but has been assumed by the shareholders of the bad bank.That is, by taxpayers, through the Restructuring Fund (Frob), with a share of 45%, and healthy banks: Santander (17%); CaixaBank (12%); Sabadell (7%) and Popular (6%), mainly.

As important or more than this factor are the allocation of assets and debt swaps for property. The bank began to systematically implement this strategy at the beginning of the crisis, in order to ease the financial burden on developers and give the sector some breathing room. Currently, gross property portfolio of banks totaled at 84.5 billion, up 12.6% from 75 billion a year ago.

The transfer of loans to bad debts (considered irrecoverable and given at 100%) and sales, still emerging, of developer credit portfolios to vulture funds have also contributed to lowering stock. In October, for example, Bankia sold a loans portfolio to real estate companies with a nominal value of 335 million euros to the Anglo-Saxon hedge fund, Chenavari. Sabadell, CaixaBank and BMN are also discussing developer sales credit, which is scheduled to be closed soon.

Looking ahead, analysts believe that the activity of the real estate sector and the continuing process of risk reduction of banks will be slow. Experts from International Financial Analyst (AFI) predict that the total portfolio of developer and constructor loans, which in September totaled at 205 billion (156.2 billion in loans to developers and 48.8 billion more to constructors), will amount to 198 billion at the end of 2014. In 2015, the number should be reduced to 187 billion (with a quarterly decrease of 5.8%), and in 2016, it may even reach 179 billion euros (-4.3%).

Profitability

The institutions and investment firms agree that development risk is no longer a source of uncertainty for the Spanish financial system. The arrears of these companies, with dubious loans of around 58.5 billion, is 37%. This exposure, however, is properly covered by the financial reform and restructuring of the real estate sector, which has placed the average coverage levels at around 50%. For the next year, AFI experts estimate that the default rate will remain at 34.3%, decreasing to 30.8% by the end of 2016. However, this exposure remains a major disadvantage in terms of profitability, which is the main challenge being faced by Spain’s financial system. Although not by disturbing amounts, institutions assume that they will have to keep making provisions to cover the deterioration of their real estate portfolios. For its high default rate, this risk also entails significant capital consumption as well as an increase in expenditures for the operational costs of maintaining their enormous portfolios.

Original article: Expansión (by M. Martínez)

Translation: Aura REE

 

Bankia Applies 80% Discount on Developer Loan Portfolio Sold to Chenavari

10/10/2014 – Expansion

Bankia has sold a part of its real estate-backed loan portfolio to Anglo-Saxon hedge fund Chenavari. The credit package formed the part which was not transferred to Sareb (Spain’s bad bank).

Chenavari put up €79 million for the portfolio, known as Project Sky. Face value of the loans was estimated at €400 million which means that the entity applied an 80% reduction on the original appraisal prices. According to the information provided by Bankia, the sold portfolio consisted of credits of par value of €335 million. The amount shall be extended by the value of 419 collateral properties.

Great majority of the loans is non-performing with a real estate collateral, apart from being fully provisioned. In fact, the bank led by Jose Ignacio Goirigolzarri (pictured) assured that the operation allowed it to cut in defaulting loan volume by €320 million.

Not long ago, Bankia transferred another non-core portfolio called Project Amazona to Starwood and Sankaty. The €800 million worth of credits was sold for half of this amount, €400 million.

 

Original article: Expansión (by J. Zuloaga & R. Casado)

Translation: AURA REE