Cerberus Postpones Haya’s IPO until its Purchase of BBVA’s RE Portfolio has been Signed

26 April 2018 – Eje Prime

Cerberus is putting the brakes on Haya Real Estate’s stock market debut. The US fund, owner of the real estate servicer, has decided to suspend the process to convert its company into a listed entity until after it has signed the agreement that it reached last year to administer €13 billion of BBVA’s toxic asset portfolio, which is expected to be signed before the end of the year. In addition, the investment firm is waiting to see what decisions its partner Sareb will take regarding a portfolio worth €10 billion that it has recently put up for sale.

The fund, a giant in the sector with almost €40 billion in real estate assets, had planned to complete Haya’s stock market debut before the summer and it had even requested permission from Spain’s National Securities and Market Commission (CNMV) to seal the admission process on the stock exchange.

A few months ago, Cerberus engaged the services of Rothschild to lead the process to convert Haya into a listed company, whilst JP Morgan and Citi were making a Public Sale Offer to the servicer, hoping to obtain a valuation of around €1.2 billion for the fund, according to El Confidencial.

The US firm did not want Haya to debut on the stock market without being sure that Sareb’s mega-operation is not going to affect the valuation of its servicer. Currently, Cerberus manages €24 billion in assets for the so-called bad bank, which accounts for 60% of Haya’s portfolio. That percentage will decrease significantly when BBVA’s €13 billion real estate portfolio enters the equation.

In light of this move, the question now arises as to whether Cerberus will choose to maintain the same strategy of debuting on the stock market with the assets of third parties or to include the properties that are going to be transferred from the bank as its own.

Original story: Eje Prime

Translation: Carmel Drake

Andbank Launches Fund To Invest In Galician Real Estate

13 November 2017 – La Voz de Galicia

(…) The real estate market in Spain is back with a vengeance, above all in the central areas of large cities where, due to a lack of (past) activity in the property development sector, there is now insufficient supply to cover the growing demand (…).

And this business opportunity has not passed unnoticed for the financial sector, which, in an environment of low-interest rates and minimal profitability on the most conservative products, has launched a series of investment vehicle. Their objective is to buy buildings in prime areas, renovate them and then sell the resulting homes on to individuals, whereby generating high returns for investors.

This model, which was first tested, successfully, in Madrid and Barcelona, is now being introduced in Galicia, with the help of Andbank. The entity, specialising in private banking, has launched a real estate investment vehicle, Seagull Real Estate, which is going to acquire residential buildings in the central areas of A Coruña and Vigo, undertake comprehensive renovation work and then sell the homes (individually, in order to maximise prices).

According to Rubén Casales (pictured above), Director of Andbank’s branch in A Coruña, this is the first product that focuses exclusively on the Galician market, and it is being born with the objective of securing investment of €20 million (minimum of €250,000), which it will use to perform between five and ten operations, given that in order to minimise risk, external financing should not exceed 50%.

The appeal of this product for savers is an expected return of 14%, well above the yields they can expect to achieve on fixed income and other conservative products and, which Casales justifies due to the illiquidity of the fund, which obliges investors to maintain their investment for at least five years.

For the execution of this project, Andback has teamed up with two local partners: Ünique Singular Properties and Desarrolla. The first is the only Galician real estate agency specialising in prime residential assets and is the market leader in unique properties; it will help identify investment opportunities and will be responsible for selling the homes once they have been renovated. The second is a construction company known for its renovation work and with a great deal of activity in the autonomous region, which will take care of giving the properties a facelift.

More than 50 properties

According to Andbank, there are lots of investment opportunities: “We have identified some very interesting buildings due to their architectural uniqueness”, says Luis Touriño, territorial director of the entity in Galicia. (…). The bank currently has a team of eight people analysing more than fifty properties, of which between eight and ten will be selected.

Casales explains that the response from investors is proving positive, and so they hope to be able to launch the vehicle before the end of the year (…).

The launch of this fund is another sign of the investor interest in the Galician real estate sector, which, although somewhat lagging behind other parts of Spain, has resumed its upwards path. This news follows the announcement by a group of Galician real estate companies linked to the trade association Fegein that they are going to create a Socimi, which will manage assets in Vigo, Santiago and the north of Lugo, and which seeks to trade on the MAB.

Original story: La Voz de Galicia (by Gabriel Lemos)

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