Gran Roque Seeks Buyer for its 105-Home Residential Project Next to Operación Calderón

23 April 2019 – El Confidencial

Change is afoot in the real estate sector in Madrid. Several property developers have started to put whole developments up for sale ahead of an increasingly likely change in the cycle.

The phenomenon began on the Costa del Sol, where the experts say there is excess supply and where prices could be peaking; and it is now spreading to Madrid, where developers with plans, building permits and pre-sales in place are keen to divest promotions.

Such is the case of the Venezuelans Miguel Ángel and Áxel Capriles, owners of Gran Roque Capital, who have started to sound out the market regarding the sale of one of their residential projects in the capital: Acacias 51, next to the famous Operación Calderón.

The development comprises 105 homes, which have been on the market for a few weeks (initial phase), with asking prices of around €5,700/m2. Gran Roque purchased the site, which already had the necessary urban planning permission, in 2017, for €25 million, equivalent to around €2,900/m2. Now it wants to sell it for between €28 million and €29 million, with the plans and building permits, which would represent an increase of 16%.

The property developer denies the alleged motive but has chosen not to launch a high-profile competitive process or engage a large consultancy firm to coordinate the sale.

The development comprises four 5-storey buildings and one 4-storey building, containing two, three and four-bedroom homes. 20% of the first phase (55 units) has already been reserved.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

Sabadell Puts its Property Developer Subsidiary Up For Sale with Assets worth €1.2bn

5 February 2019 – La Vanguardia

Banco Sabadell announced on Tuesday that it is putting its subsidiary Solvia Desarollos Inmobiliarios up for sale. The property developer owns assets worth around €1.2 billion. The assets are mostly plots of residential land, located in prime areas of Madrid, Barcelona and other major cities, as well as 130 work-in-progress real estate developments.

Less than a week ago, the President of Banco Sabadell, Josep Oliu, announced at the presentation of last year’s results that “we are going to continue with our asset divestment policy”. On this occasion, Sabadell has chosen the investment bank Rothschild, according to the relevant fact sent to the CNMV, to circulate the sales prospectus amongst possible buyers. According to market sources, large funds such as Blackstone, Cerberus, Värde and Oaktree, amongst others, may be interested in buying the company.

The entity, led by Francisco Pérez, has around 40 employees, who will also exit Sabadell’s orbit. The sales process may last six months. Firstly, the candidates will have to submit offers and then a competitive process will be carried out.

This sale is running in parallel to the sale of 80% of the real estate manager Solvia. In theory, an agreement has been reached to sell that firm to Lindorff Holding Spain, which belongs to the Swedish fund Intrum, for €300 million. That price may increase by an additional €40 million if certain conditions established in the sales agreement are fulfilled.

Original story: La Vanguardia (by Conchi Lafraya)

Translation: Carmel Drake

Cajamar Sells 2 Problem Loan Portfolios

23 December 2017 – La Voz de Almería

Grupo Cooperativo Cajamar is continuing with the gradual reduction of its non-performing asset balance thanks to its strong performance in terms of the commercial management of its foreclosed assets and a reduction in its default rate.

In recent weeks, the entity has completed the sale of two portfolios, one containing foreclosed assets and the other containing non-performing loans, bringing the volume of problem assets sold so far this year to €791 million.

In this way, with the ordinary management of recoveries, boosted by the sale of these portfolios, Grupo Cooperativo Cajamar expects to close 2017 with a non-performing loan balance of less than €3.4 billion and a default rate of less than 11%.

Asset sales

Based on data as at 15 December, the rural Almería savings bank has sold more than 4,100 real estate assets for more than €600 million in terms of their gross book value, which represents an increase in sales of 55%.

Meanwhile, its non-performing loan balance, which amounted to €4.211 billion at the end of last year, had decreased to €3.964 billion as at September.

Interest in the market

The operations that have accumulated the largest volumes have been the sale of the Escullos portfolio, containing 1,456 loans worth around €176 million, sold to CarVal Investors and the combined organisation of Lindorff and Intrum Justitia; and the Tango portfolio, comprising around 400 assets, worth more than €57 million, which was sold to the US fund Waterfall.

Both operations were carried out through competitive processes and sparked a great deal of interest in the market. They received financial advice from Alantra.

The first portfolio of non-performing loans to companies and SMEs, most of which were secured, was mainly concentrated in the Community of Valencia (48.9%) and Andalucía (25.8%), although it also contained assets in Murcia, the Canary Islands, Cataluña, Castilla (La Mancha) and Madrid. The second comprised residential properties, although it also contained commercial and industrial assets, most of which were located in Andalucía, Murcia and Valencia.

Cajamar will close a positive year in terms of divestment, with a YoY variation in terms of the number of assets sold of more than 62%. The final numbers will also reflect the results of the current promotional campaign “Now or never”, with a selection of 4,500 properties with discounts of up to 40% (…)

Original story: La Voz de Almería

Translation: Carmel Drake

Morgan Stanley Joins Forces With Gestilar To Build 1000+ Homes

15 September 2017 – Expansión

A new alliance between international funds and Spanish real estate companies has been forged in the market. This time, the stars are the fund Morgan Stanley Real Estate Investing and the Madrilenian property developer Gestilar.

Created in 2009 by Javier García-Valcárcel (pictured above), the real estate company specialising in residential property development has become a leading player in the north of Madrid, following the construction and completion of more than 800 homes in just four years. With García-Varcárcel as the sole shareholder, the company launched the so-called Project Orizone, with the aim of finding a strategic partner. Through a process led by A&G, more than a dozen international funds interested in the project were invited to participate, and in the end, the winner was the fund owned by Morgan Stanley.

“The investor was looking for a partner in Spain and after a year of negotiations, we have reached an agreement. We were never looking for a corporate operation but rather a strategic partner to work with over the next four or five years”, explains Javier García-Valcárcel, President of Gestilar.

The agreement between the fund and the real estate company has materialised in the creation of a joint venture, in which the former will hold a majority stake of the share capital, whilst Gestilar will take care of searching for the land and of the construction and sale of the homes. “The objective is to launch 14 or 15 new projects, with around 1,000 homes”, said the executive.

Currently, Gestilar has a portfolio of 1,000 homes under development, which will generate revenues of €500 million for the company. Its land portfolio has involved investment of more than €350 million.

After closing the agreement with Morgan Stanley, Gestilar has already selected three plots of land to contribute to the joint company, to which it will also incorporate new assets soon, says its President.

“Although our current developments are located in Madrid and Cataluña, following the agreement with Morgan Stanley, we could increase our activity right across Spain”, explain sources at the company.

This is not the first time that the real estate company has reached an agreement with a fund to invest jointly in housing. Nevertheless, on this occasion, it is a long-term alliance for more than one development.

Return to Spain

The agreement between Gestilar and Morgan Stanley represents the return of one of the investors that backed the Spanish real estate market most heavily before the burst of the bubble.

In this way, in 2006, the American fund announced that it had €1,000 million proceeding from various funds to invest in real estate assets in Spain.

As part of its commitment to this market, Morgan Stanley launched a joint venture with another real estate group Lar (managers of the Socimi Lar España). In February 2005, the fund joined forces with the real estate company owned by the Pereda family to construct shopping centres and holiday homes on the coast. In 2009, they closed that company after investing in 5 holiday home projects (comprising more than 1,500 units) and ten shopping centres.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Anticipa Evaluates Purchase Of Sareb’s Large RE Debt Portfolio

8 November 2016 – Expansión

The real estate manager Anticipa Real Estate, a subsidiary of the US fund Blackstone, has expressed its interest in acquiring a portfolio of 200 non-performing loans worth €1,000 million, which the bad bank Sareb put up for sale last month.

It is the largest real estate debt portfolio that the Spanish bad bank has put on the market in its three and a half years of life. Sareb hopes to sell the portfolio in its entirety to a single buyer, and it is expected to award it through a competitive process that will be completed at the end of 2016 or the beginning of 2017.

In an interview, the CEO of Anticipa, Eduard Mendiluce, said that the company has not yet submitted a binding offer for the portfolio, which was put up for sale just three weeks ago, but he confirmed that his firm intends to analyse the portfolio because it is very attractive.

Mendiluce commented that in the last twelve months, no large real estate portfolios have come onto the market, which he explained was due to the crisis in the financial sector, which “needs time to absorb the provisions required for foreclosed assets and non-performing loans before those assets can be sold”.

Anticipa, which has starred in some of the major operations undertaken in the sector in recent years, such as the purchase of a portfolio of non-performing mortgages from CatalunyaCaixa and the purchase of a portfolio containing property developer loans from Sareb, currently manages around €10,000 million in problem loans and owns a stock of 5,000 homes.

All of these properties have come into its possession as a result of “daciones en pago” – when the owner hands over the home to pay off his outstanding debt – and 70% of them are currently being leased out.

In fact, one of Anticipa’s objectives is to become a leading manager in the rental market in Spain.

In this sense, Mendiluce has called on the different governments to launch a “clear and convincing” aid program to support the rental market (in Spain) and place it at the level of other countries in Europe, where this way of accessing a home is much more widespread.

For example, the Director is proposing tax incentives for families who choose to rent, for renovations and for people who are unable to pay market prices.

“In short, a set of measures that incentivise private operators to back this market as an alternative for investing and managing a supply of competitive and high-quality homes”, he said.

Mendiluce added that as “large, stable and solid” companies emerge with a stock of high-quality and attractive homes for rent for families, so demand will consolidate in Spain, just like it has done in other European countries, such as Germany and United Kingdom, where several large, listed and unlisted, companies operate with thousands of rental properties on their balance sheets.

“In addition to the aspects of professionalisation of the sector and improvements in techniques and procedures, we need a dedicated aid program to support rental housing from the central, regional and local governments”, he said.

Anticipa is based in El Prat de Llobregat (Barcelona) and currently employs 303 people.

Original story: Expansión

Translation: Carmel Drake

Santander Considers Repurchasing 85% Of Altamira From Apollo

27 July 2016 – Expansión

The financial institution is considering taking back control of its real estate platform to improve its margins and create a large global firm to provide services in other countries.

The sale of Altamira could turn full circle. Santander and the US fund Apollo have held meetings in recent weeks to discuss the possibility of the Spanish bank repurchasing 85% of the real estate platform, according to financial sources consulted by Expansión.

These negotiations come just two and a half years after the financial institution decided to get rid of its controlling stake in the real estate platform. Then, Apollo fought off other funds in a competitive process in which it paid €664 million for 85% of the company, generating a gross profit of €550 million for the bank.

According to financial sources consulted, Santander’s new approach has arisen for three main reasons: the aim of creating a new area for the management of doubtful assets at the global level, ahead of the forecast increase in default rates in countries such as Brazil; to improve its margins, given that the current agreement forces the bank to pay commission to Altamira; and to take advantage of the financial improvement that Altamira is enjoying.

For the time being, the plans are in a very preliminary phase and both Santander and Apollo have explored other options for Altamira. One of the options would involve a movement in the opposite direction from the 85% repurchase: namely, to extend Apolllo’s agreement to other countries.

New management

Since Apollo took control of Altamira, changes have been introduced in the management of the platform with the aim of maximising sales. One of the new administrators’ great successes came when the company was awarded one of the four management contracts that Sareb put up for tender at the end of 2013.

Specifically, Altamira Asset Management took over the second largest contract on offer, comprising 44,000 properties and loans to doubtful property developers that had been originated by Catalunya Ciaxa, BMN and Caja 3, worth €14,000 million initially. To win this tender, the platform controlled by Apollo paid out €174 million as a deposit for this contract, which it will recover as it achieves its objectives.

In addition to these assets, Altamira administers foreclosed properties and loans linked to properties from Santander and from its main shareholder Apollo. Nevertheless, the Spanish bank will reduce the perimeter of the assets that it holds on its balance sheet as a result of the merger between Metrovacesa and Merlin Properties.

According to its accounts for 2015, Altamira Asset Management Holdings, the company in which Altamira holds a 85% stake, recorded profits of €25.2 million last year, down by 11% compared to the previous year. Part of that decrease was due to the costs of migrating Sareb’s portfolio of assets. Its turnover amounted to €267 million and the operating profit stood at €81 million. The company forecasts that its profits will increase this year thanks to the sales it will generate from Sareb: “In 2016, we will manage Sareb’s portfolio for the whole year, which is expected to increase the group’s turnover”, according to last year’s annual accounts.

Original story: Expansión (J. Zuloaga)

Translation: Carmel Drake

Abanca Sells €1,400M NPL Portfolio To EOS Spain

14 June 2016 – Expansión

Two years after taking ownership of Abanca, the Venezuelan company Banesco has started to sell off the bank’s toxic assets. Yesterday, the financial entity headquartered in Galicia reported its first sale of non-performing loans, amounting to €1,385 million, which represents approximately 20% of its total NPL portfolio.

All of the loans were overdue and unsecured, which makes it one of the largest operations of its kind in recent years and also, concentrated in a single buyer.

EOS Spain, a company that specialises in collections management was the winner of the competitive process. It is headquartered in A Coruña and is a subsidiary of the international group EOS. The transaction generated profits of €57.4 million for the bank, according to a statement filed with the CNMV.

The auction generated significant interest, with participation from around twenty investment funds and entities specialising in the recovery of overdue debt. For this competitive process, Abanca was advised by KPMG, the same firm that audits its accounts.

The operation (…) will open a series of future transactions as part of Abanca’s strategy to divest of its non-performing assets. In fact, it says that it is already evaluating similar operations for its non-strategic assets, with the aim of focusing the business on providing credit to families and companies and to boosting the economy.

One of the upcoming operations will involve a portfolio of non-performing loans, secured by mortgaged assets, although that will be smaller than the portfolio just sold. By contrast, the bank will hold onto the other overdue unsecured loans so that they can be managed by Abanca itself.

For EOS, the purchase “represents the strengthening of its relationship with Abanca”, according to a statement from the bank, as well as an intensification of competition and an improvement in its position in the domestic market.

Improved capitalisation

The main effect of the sale has been on the solvency of the entity, given that it had fully provisioned all of the non-performing loans that it has now sold. Abanca calculates that with this transaction, it has improved its capital coefficient by five basis points since the first quarter of the year, when it stood at 14.8%, one of the highest in the sector. Meanwhile, the doubtful asset coverage ratio amounted to 60.8% during that same period. According to the annual accounts, Abanca had decreased its doubtful debt balances by 30% last year to €2,695 million as at December 2015; furthermore, it reduced the weight of foreclosed assets on its balance sheet to just 1%.

Of the total impaired asset balance, more than half (€1,900 million) are secured and only €114 million were overdue by three months or less (as at December 2015), according to details disclosed in the consolidated annual accounts for 2015.

Beyond its consolidated balance sheet, the entity accounted for €5,376 million of financial assets that it had written off. The bank explained that it was not including them on its balance sheet because it regarded (the likelihood of) “their recovery to be remote”, although it clarified that it has not stopped trying to collect the amounts due.

Original story: Expansión (by A. Chas and J. Zuloaga)

Translation: Carmel Drake

Sabadell Buys Núñez i Navarro’s Loans From Sareb

24 February 2016 – Expansión

A new operation has been signed between Banco Sabadell and Sareb. The entity led by Josep Oliu has acquired a portfolio containing thirteen loans, with a nominal value of €131 million from the bad bank. None of the loans are in arrears.

According to sources in the real estate sector familiar with the operation, the loans acquired by Sabadell were granted back in the day to the property developer Núñez i Navarro, by one of the (financial) entities that was later nationalised. Subsequently, the loans fell into the hands of Sareb. The real estate company, owned by the former President of Fútbol Club Barcelona, will make its loan repayments to Sabadell from now on and not to Sareb, which hereby makes progress in its process to divest its assets.

The thirteen loans are associated with 185 real estate collaterals in total, primarily commercial premises, offices, homes and land, located for the most part in the provinces of Barcelona and Tarragona. The amount paid by Sabadell to Sareb for this performing loan portfolio has not been disclosed, but the sources consulted say that the bank will obtain a return of 10% from the portfolio.

Strong interest

The offer submitted by Sabadell, through its specialist Real Estate Finance arm, won an auction in which ten investors participated, mainly investment funds specialising in the purchase of debt. The law firm Ashurst advised the Catalan bank, whilst Sareb was supported by the advisory firm Irea and the law firm Baker & McKenzie. Given that Sabadell forms part of Sareb’s Board of Directors, the bank’s offer was subject to “internal rules governing conflicts of interest”, said the bad bank yesterday. The FROB holds a 45% stake in Sareb and Spanish banks own the remaining 55%.

Sabadell, through Solvia, also manages assets on behalf of Sareb, with a gross value of €13,000 million. In November, Sareb also engaged Solvia to manage the construction of ten real estate developments.

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake

Bankia Sells 500m2 Gran Vía Branch For €20M

5 January 2016 – El Economista

Bankia has recorded income of more than €20 million from the sale of its branch located at number 44 on the Madrilenian street of Gran Vía, which represents a property valuation of €38,779/m2, according to real estate sources.

The sources say that the price obtained in this operation was due to “the property’s excellent location” – it is situated on one of the capital’s main shopping streets and there is a “shortage” of supply in the area.

The branch has a surface area of just over 500 m2, spread over the ground floor (325 m2), basement (167 m2) and other service areas (25 m2).

In order to maximise the transaction price, the bank has conducted a competitive process over the last few months, in which eleven investors have participated. The deal was signed in December.

Original story: El Economista

Translation: Carmel Drake