Tag: daciones en pago

Blackstone Builds Rental Home Giant In Spain

18 May 2017 – Cinco Días

The fund Blackstone is the largest property owner in the world and has been backing real estate Spain for a while now. And, it is going to continue to do so in the short to medium term. For the time being, the fund’s plans involve becoming a giant in the rental housing segment and it is already starting to show its investment strategy through several companies, including three new Socimis.

Blackstone’s first major step was to create the servicer Anticipa Real Estate, under the structure of the former entity Cataluña Caixa Inmobiliaria. This asset management platform purchased 40,000 mortgages from the extinct Catalan entity for €4,123 million in 2015. Since then, it has continued acquiring these kinds of mortgage portfolios, to accumulate a total investment to date of almost €7,000 million.

The latest acquisitions made by Blackstone – which is headquartered in New York – have included a €400 million portfolio of loans backed by property developer collateral and another portfolio from BBVA comprising 3,500 properties, for around €300 million.

This entire portfolio of mortgage debt and properties is managed by Anticipa, a company that is led by its CEO, Eduard Mendiluce, a veteran director in the sector. (…).

The work that the servicer performs for Blackstone involves managing the loans granted by banks to individuals and property developers. In many cases, that task ends with the “dación en pago” or foreclosure of the property or development, due to non-payment. The company says that it treats each client on a case by case basis, and the process often means it has to accept a discount on the debt.

Of the portfolios acquired from banks, “daciones en pago” and foreclosures, Anticipa already owns 12,000 properties, which are leased out (in around 75% of cases) and put up for sale. “The idea is for it to become one of the large owners of rental housing in Spain”, explains a spokesperson.

The opportunistic fund – which purchases problem assets at a discount – is planning to remain in the Spanish market beyond the short term, and has absolutely no interest in selling its businesses within the next 5-7 years, but rather intends to benefit from the upwards trend in property.

To create the residential giant, the US firm has started to create vehicles to which it will transfer properties for rent. The first of these companies is Albirana Properties, a Socimi that started to trade on the Alternative Investment Market in March. That listed investment company, which benefits from certain tax advantages, already manages 5,000 homes.

But it is only the first to be listed. Other Socimis, namely Pegarena and Tourmalet, which have already been constituted and are already owned by several Blackstone funds, will follow. These firms, in turn, operate using Anticipa as their manager. (…).

Packaging up these homes into different companies will facilitate the sale of those companies in the future to various interested parties.

Blackstone decided to back the rental sector rather than the sales market at a time of change in the type of demand, according to experts in the sector. In particular, the generation of millennials, for cultural reasons – are more inclined to live without the tie of a mortgage – and, above all, the difficulties being faced by young people to obtain loans given the job insecurity.

Unlike other Socimis that specialise in rental housing, the management of assets by Albirana is more complex, given that its properties are relatively scattered geographically, as they proceed from individual mortgages. Typically these companies opt to manage entire buildings, but Blackstone’s company has specialised in what is known as granular management.

Currently, the majority of these properties are located in Cataluña. They are followed – at some distance – by homes in Madrid, Comunidad Valenciana and Andalucía.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Anticipa Strengthens Its Commitment To The Rental Business

30 November 2016 – Economía Digital

Anticipa is continuing to grow its rental home business. At the end of 2015, the real estate manager bought a batch of empty homes from Banc Sabadell, specifically, 3,700 properties that it has been incorporating into its portfolio over the last few months. In addition it owns 5,500 homes from the real estate stock of the former Catalunya Caxia, the seed for the current firm Anticipa.

“We are clearly in a buying position” said Eduard Mendiluce, CEO of the company, in comments to La Vanguardia. The group has already formalised its offer to buy the Eloise portfolio that Sareb or the bad bank has put up for sale. This package of unpaid loans to property developer includes 150 buildings, containing around 4,000 homes”.

“We are already one of the largest rental home real estate companies in Spain, and we have an orderly portfolio, with market profitability and the capacity to continue growing, by incorporating more homes”, said Mendiluce.

Renegotiation of mortgages

According to explanations given by the director in a recent interview with Economía Digital, Anticipa is renegotiating 3,000 of the mortgages that it inherited from the Catalunya Caixa portfolio in their first year of life. 2,400 will result in “daciones en pago” (the cancelation of the debt in exchange for handing over the keys) and another 600 cases will see their terms and conditions renegotiated, in such a way that homeowners will be able to afford their debt repayments.

Original story: Economía Digital

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

Registrars: House Sales Soared By 23.7% In Q2

30 August 2016 – Expansión

Between April and June, 107,838 homes were sold, specifically 88,291 second-hand homes and 19,547 new homes. The figure represents the highest number of transactions recorded in a single quarter in the last three years.

(…). According to data published yesterday by the College of Registrars, house prices rose by 7.48% in Q2 compared with the same period last year. Compared with the figures recorded during the first quarter, the rise between April and June amounted to 2.19%. Despite these significant increases, prices have still not returned to their pre-crisis levels. And although the cost of housing is now similar to the level last seen in 2004, the cumulative decrease still amounts to 26% with respect to 2007, when prices reached their highest level before the burst of the real estate bubble.

The data from the College of Registrars also shows that the figures for the second quarter “comfortably” exceeded the 100,000 transaction threshold, after more than three years below that figure. Specifically, 107,838 transactions were signed during the second quarter (representing an increase of 23.7%), of which 88,291 corresponded to second-hand homes and 19,547 to new homes. Nevertheless, sales of new homes recorded their second consecutive positive inter-quarter variation (0.84%), after a long period of steady decline. It is the highest level seen in the last five quarters, proof that this type of housing is now showing its first signs of recovery.

Second-hand homes

In addition, sales of second-hand homes continued their strong upwards trend, already seen in recent quarters. The 88,291 sales recorded represented a QoQ increase of 10.31%, resulting in the highest number of second-hand sales in almost nine years, according to the College of Registrars. We have to go back to Q3 2007 to find such a high level of quarterly second-hand home sales.

Most autonomous regions recorded a QoQ increase in the number of house sales (specificially fifteen), with double-digit increases in six of those. The highest number of transactions were recorded in Andalucía (20,846 homes), Cataluña (17,300), the Comunidad Valenciana (15,734) and Madrid (15,540). In relative terms, the highest increases were recorded in the autonomous regions of the Balearic Islands (31.4%), País Vasco (24.07%) and Murcia (22.2%).

Furthermore, demand for housing from foreigners maintained its traditional strength during the second quarter, to account for 13.38% of all house purchases, up from the figure of 12.93% recorded during the first quarter. The historical maximum was recorded in Q4 2015 (14.38%). British citizens continue to buy the most residential properties in Spain; they accounted for 19.73% of all purchases made by foreigners. They were followed by German (7.3%), French (7.05%), Swedish (6.9%) and Italian buyers (5.9%). (…).

Meanwhile, 11,470 mortgage foreclosure proceedings were initiated during Q2 and there were 2,432 “daciones en pago”, down by 30.8% compared with a year earlier.

Mortgage debt grew by 1.6% during the second quarter, to reach an average of €110,981.

Original story: Expansión (by Calixto Rivero)

Translation: Carmel Drake

Bank Of Spain: Home Evictions Down By 20%

21 July 2016 – El Mundo

A total of 17,939 homes were evicted by court order in 2015, up by 11.3% compared with 2014, of which 77% related to primary residences. Nevertheless, only 902 of those properties were occupied, which represents a 20.1% decrease compared with 2014, according to data from the Bank of Spain, which shows that the aforementioned increase was concentrated in the eviction of empty primary residences (35.7%).

In addition, the issuing bank states that 82% of the mortgages that gave rise to forced evictions of occupied homes, both primary residences and others – corresponding to 1,112 properties, down by 18.2% – were originated in or before 2007.

The lower level of activity in terms of evictions is also observed in the data relating to law enforcement involvement in property evictions. In this way, only 14 such interventions were recorded in 2015, down by 44%. Of those, less than half were carried out in primary residences.

If we add together the legal and voluntary proceedings during 2015, there was a 3.8% decrease in the total number of homes handed over, to 36,929 – i.e. 0.57% of all mortgages – which in the case of primary residences amounted to 2.4%, with 29,327 properties.

More than half of the homes handed over were done so voluntarily

The number of voluntary home hand overs decreased by 14.8% last year, to 18,990, with a reduction of 20.1% in the case of primary residences. Thus, voluntary home hand overs accounted for 51.4% of the total.

On the other hand, there were 16,175 “daciones en pago”, down by 12.4% compared with 2014, which accounted for 85.2% of all voluntary home hand overs. Of those, 81.5% related to primary residences, down by 19.9%.

Other data provided by the Bank of Spain indicates that the total number of mortgages granted for house purchases amounted to 6.3 million at the end of 2015, down by 1.1% compared to a year earlier.

Original story: El Mundo

Translation: Carmel Drake

Blackstone To Offer Debt Forgiveness On Spanish Mortgages

1 July 2015 – Bloomberg

Blackstone Group LP is seeking to restructure some of the €6.4 billion Spanish home loans it bought at a discount to help borrowers meet repayments, according to three people with knowledge of the matter.

The world’s largest private equity firm is offering to cut outstanding debt or allow homeowners to hand back the keys and walk away from loans, said two of the people, who asked not to be identified because the matter is private. Blackstone holds the mortgages of 40,000 homeowners in Spain after buying the debt for €3.6 billion from struggling savings bank CatalunyaCaixa.

Blackstone can avoid the time and expense of repossessing homes by helping borrowers find ways to continue paying their mortgages, something that is more difficult for Spanish banks because of provisioning requirements and central bank regulations. Avoiding evictions may also mute political claims that private investors are coming to Spain to take people’s homes away.

“If you are struggling to pay your mortgage, you are undoubtedly better off having Blackstone as your creditor than a traditional Spanish bank,” said Juan Villen, Head of Mortgage Services at property website Idealista.com. “Blackstone can be much more flexible.”

Andrew Dowler, a London-based spokesman for Blackstone, declined to comment when called by Bloomberg News.

Loan Portfolio

The subject of Spaniards losing their homes is a hot-button political issue, with power in the Madrid and Barcelona town halls swinging to parties that pledged to ban evictions during municipal elections in May. The Platform Against Evictions activist group organized demonstrations outside Blackstone’s offices in New York, London, Madrid and Barcelona in March, and posted a video on its website accusing the firm of intending to evict “en masse.”

Anticipa, Blackstone’s mortgage servicing unit, took over the management of the loan portfolio two months ago, with about 75 percent of the debt classified as under-performing or non-performing, according to the people. It will take about seven years to restructure the debt, they said.

Spanish home prices have fallen by more than 42% since the peak in 2007, according to Tinsa, Spain’s largest homes appraiser. That has left about a fifth of borrowers in negative equity, according to Villen. Lenders in the country foreclosed on more than 70,000 properties in 2014, with Andalusia, Catalunya and Valencia hit the hardest, according to the National Statistics Institute, which began compiling data at that start of that year.

Post Keys

Blackstone’s plan to allow homeowners to post the keys and walk away from their debts, a legal process known as “dation in payment”, is seen as a significant step by analysts.

“Unlike in the U.S. and other European countries, Spanish law stipulates a bank can foreclose on a home and still pursue the borrower for the rest of his life if the value of the loan is higher than the price that the bank forecloses at,” Villen said. “The offer of “dation in payment” is a refreshing way of approaching borrowers that are in negative equity.”

The private equity company will only foreclose on “strategic defaulters” who can pay but refuse to, while homeowners at risk of social exclusion, which represent about 3% of Blackstone’s portfolio, will be allowed to remain in their property paying subsidized rents, the people said.

Original story: Bloomberg (by Sharon R. Smyth)

Edited by: Carmel Drake

The RE Sector Is Showing Important Signs Of Recovery

9 June 2015 – Cinco Días

The recovery in the mortgage market is just one variable that shows that the Spanish economy is continuing to accelerate on more than one front.

The data showing an increase in the number of new loans taken out, after a long period of credit restrictions, is accompanied by statistics that reveal a decrease in the number of mortgage foreclosures, which have decreased by more than 14% since their peak in 2010. In total, 600,000 mortgage foreclosures have been processed since 2007. If we analyse the evolution of this figure since the beginning of the year, the seizure of homes has decreased by almost 7% during Q1 2015, with respect to the same period in 2014.

At the same time, an in-depth analysis of the mortgage sector reveals that the volume of real estate asset foreclosure is continuing to increase for banks, just like is happening with “daciones en pago” (assignment of deeds in lieu of payment). The explanation is that the banks are not managing – or are delaying, due to the disadvantageous market conditions in terms of price – the sale of the high volume of assets that they still hold on their balance sheets. This delay may, amongst other consequences, increase the exposure of Spanish securitisation funds to higher losses, just at a time when the first residential mortgage-backed securitisation in Spain has been subscribed after an eight-year drought. For the experts, the return of these transactions is a clear sign of the recovery in the credit market. Moreover, the fact that financing is beginning to flow again at a time when interest rates are low indicates that there will be faster growth in the housing market.

The signs of revival in terms of real estate transactions are good news, not only for the sector itself and its suppliers, but also for banks, consumers and the economy as a whole. In the case of the financial sector, the return of the flow of credit is opening the door to new financing proposals for the acquisition of real estate assets. This applies to the possibility of creating a specific mortgage loan for investors who want to purchase a home and rent it out, a typical financial product in the UK (buy-to-let). Nevertheless, it seems unlikely that a proposal that combines high risk – particularly in an immature market, such as the rental market in Spain – and limited growth prospects, will be of interest to banks, which today, more than ever, must not only channel their resources in accordance with (strict) solvency and efficiency criteria, but which must also orientate themselves towards higher-yielding, longer term investments.

The challenge for the house market is to start to learn to walk again, and to do so in an orderly and rational way, without repeating the mistakes that Spain has paid for so dearly in recent years.

Original story: Cinco Días (Editorial)

Translation: Carmel Drake

Moody’s Warns That Banks Are Delaying Their Property Sales

9 June 2015 – Expansión

Moody’s warns that Spanish banks are delaying the sale of foreclosed properties to avoid losses, as they wait for market conditions and house prices to improve.

In a report about residential mortgage-backed securities (RMBS), Moody’s observes that, despite the recent decrease in mortgage foreclosures, data from the Bank of Spain shows that the volume of foreclosed real estate assets in the banks’ portfolios amounted to €83,400 million in 2014. As such, it warns that a delay in the sale of these properties may expose securitisation funds to greater losses.

In turn, it adds that the figures regarding the number of foreclosures that go to court actually under-estimate the real number of homes the banks have foreclosed in the last two years. And it points out that, in its opinion, a single property may be involved in more than one mortgage foreclosure process. Furthermore, it notes that, in general, Spanish mortgage lenders have become more willing to accept “daciones en pago” (assignment of deeds in lieu of payment).

Improvements

The number of mortgage foreclosures has decreased by almost 14% from the peak they reached during the crisis, recorded in 2010. Moody’s also highlights the decrease in the default rate in Spain, which is being driven by the decrease in interest rates and the improvement in the economic environment.

Original story: Expansión

Translation: Carmel Drake

BBVA Has Renegotiated 66,166 Mortgages Since Start of Crisis

2 June 2015 – Expansión

BBVA has refinanced 66,166 mortgages and granted 11,680 “daciones en pago” (assignment of deeds in lieu of payment) since the start of the crisis, according to the report ‘BBVA’s Social Impact in Spain’, which was presented by the entity yesterday, having been prepared in collaboration with KPMG. The report seeks to quantify and detail the social impacts associated with the bank’s activity.

In Spain, 896,203 families live in homes financed by BBVA and during 2014, the entity granted new loans worth €1,379 million to 13,394 families for the acquisition of first homes. In addition, it financed 17,416 homes so that they could undertake energy efficiency improvements.

In terms of employment, BBVA has launched various initiatives such as “Yo Soy Empleo”, which has granted direct aid for the recruitment of almost 8,500 people; and “Project Momentum”, which has a 60% job placement rate.

The total number of jobs linked to the bank’s activity, including indirect or induced roles, amount to almost 100,293 people, i.e. 0.6% of the active Spanish working population.

Meanwhile, 951,284 individual shareholders received an average dividend of €870; 940,367 people have pension plans; and 875,448 employed people are covered by employment pension plans managed by BBVA.

Original story: Expansión

Translation: Carmel Drake

Election Fallout: Uncertainty May Deter Investors & Delay Large Deals

28 May 2015 – Cinco Días

Experts predict that there will be an impact on the rental market and on the sale of debt portfolios. They warn that Madrid and Barcelona will be affected by anti-eviction initiatives.

The rise of political parties advocating the suspension of mortgage foreclosures, the relocation of evicted families (to vacant properties owned by banks and Sareb), and the end of sales of public properties to private owners, at the elections last Sunday, has put the international investment funds, which have been arriving in Spain in recent years with a renewed hunger for property, on alert.

Experts in the market say that although we are still waiting to see the specific impact of these initiatives by the governments, which depend on pacts that are just as uncertain, the situation will cause funds to reduce their already low purchase offers and to postpone large transactions until they know the results of the general elections, scheduled for the end of the year.

“Madrid and Barcelona are the showcase for the country”, explains Mikel Echavarren, CEO of the real estate consultancy firm Irea, predicting that the expected appointment of Ada Colau (Barcelona en Comú) and Manuela Carmena (Ahora Madrid) as the mayoresses of the two large capital cities, “will cause investors’ interest to disappear for four years” in all areas “that depend on decisions by local councils”.

In his opinion, there are three areas of particular concern. On the one hand, the suspension of evictions – or their delay, because, as Echavarren points out, municipalities do not have the legal power to eliminate them altogether – because that would result in a penalty for the budding rental market and above all “longer timeframes, more uncertainty and lower prices” in the offers made by funds for packs of credit with real estate collateral.

Secondly, proposals such as the one made by Colau to suspend the opening of new hotels in Barcelona, “which is one of the most important hotel markets in the world”. And thirdly, the review of the general urban plans in Madrid and Barcelona.

“Either you have a local council that is “pro-business” or investors pack their bags and take their money elsewhere”, warns the director of an investment fund who asked to remain anonymous, stating that “Anglo-Saxon capital does not understand it when urban development is not encouraged”.

“Any change represents uncertainty and money flees from uncertainty”, says Julio Gil, Chairman of the Real Estate Research Foundation (Fundación de Estudios Inmobiliarios or FEI), bearing in mind that as a minimum “funds will consider their investments in Spain to be more risky and therefore will demand high returns”.

Nevertheless, Gil states that for the time being this support for social rather than economic policies is only being seen at the local government level and, to a lesser extent, at the regional government level, but he thinks that the fear of what might happen in the general elections this year may well “delay several (large) transactions” as investors wait to see the outcome.

“The greatest risk is that we drop off of the radar of investors”, warned sources yesterday at ETC Real Estate, a new platform for the management of debt and mortgaged assets, promoted by TDX Indigo, Equifax and Cobralia.

Its partners expect that funds will lower their asset purchase offers, but argue that the change in the political paradigm will make it necessary to promote alternative means of eviction, such as discounts and “daciones en pago” (delivery of the deeds in lieu of payment), amongst others. A management model they promote, they assure, to the funds and banks to whom they render services.

Original story: Cinco Días (by Juande Portillo)

Translation: Carmel Drake