16 September 2016 – Expansión
Sareb has just sold a portfolio of non-performing loans worth €70 million to Bank of America and Hayfin Capital Management (founded by former directors of Goldman Sachs), which is secured by several residential buildings in Madrid. The agents of the operation have been Haya Real Estate and Solvia, who have declined to comment. Sareb does not have its own sales network, but uses the exclusive services of the two real estate managers, together with those of Servihabitat and Altamira Asset Management.
According to sources close to the operation, the discount obtained in the transaction has been 50%.
As a result of the new accounting legislation, operations are now a lot more segmented and therefore smaller.
Solvia, which belongs to Banco Sabadell, has been collaborating as one of Sareb’s agents for almost two years. It won the management of a portfolio containing 42,900 assets, of which 33,000 were properties originally from Bankia and the others were loans acquired from Banco Gallego and Banco Ceiss with various kinds of real estate guarantee.
In March, Sareb completed the sale of another batch of loans, which were secured by industrial logistics assets, hotels and offices, located in Madrid, Barcelona, Cáceres and Tarragona. The nominal amount of the operation amounted to €73.7 million.
The opportunistic funds, the typical stars of these operations, are starting to withdraw from the Spanish market and funds with more potential are now arriving, including Socimis and family offices. The funds that have sold portfolios in the last four years have managed to obtain IRRs of between 10% and 20%, according to business people in the sector.
Sareb was created in 2012 and is owned by the FROB (45%) and by the main banks (55%), with the exception of BBVA. 80% of its assets are loans to property developers and the remainder are real estate assets. Their total nominal value amounts to €107,000 million. By size, the bad bank exceeds its Irish counterpart Nama. Even so its market share barely reaches 4%, because it is a very fragmented market. The large banks compete directly with Sareb in the sale of properties, but bank bad has the advantage of time on its side. It has 12 years to execute its business plan and is under no pressure to list on the stock market.
According to the latest statements by its Chairman, Jaime Echegoyen, Sareb should stop losing money next year. Recently, it has started to develop plots of land from scratch, which will result in 700 homes and €100 million of investment. 21% of Sareb’s revenues are generated by the sale of real estate assets. It is currently selling an average of 27 units per day.
Original story: Expansión (by R. Lander)
Translation: Carmel Drake