Tag: Italy

Haya Real Estate Looks to Expand into Italy & Greece to Grow its Business

27 May 2019 – Expansión

Haya Real Estate, the servicer controlled by the US investment fund Cerberus, is looking to grow its business. Following its merger with Divarian (formerly Anida), it is now the second largest servicer in Spain, after Altamira, with 1,200 employees and €47 billion in assets under management.

In order to diversify its portfolio, the servicer led by Carlos Abad (pictured above) is evaluating its expansion into Italy and Greece, two emerging markets in which multiple NPL investment and management opportunities are expected to arise in the short term. That would help alleviate concerns over Haya’s future, which currently depends heavily on the outcome of the servicer’s negotiations with Sareb, whose contract is due to expire in December.

The future of Haya Real Estate has been up in the air since its stock market debut was postponed last year. Cerberus has held its stake in the servicer for six years now and is keen to exit soon given that its typical investment rotation period amounts to five years. Following the postponed IPO, the US giant is now holding preliminary conversations with several other investment funds interested in acquiring its stake, but the price will depend on the servicer’s future with Sareb.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

S&P: House Prices will Rise in Spain by More than in Other Major Eurozone Economies

24 February 2019 – La Vanguardia

House prices in Spain are going to continue rising for at least the next three years, although the rate of growth will slow down as the economy loses momentum and the European Central Bank (ECB)’s monetary policy normalises, according to forecasts from the agency S&P Global Ratings, which points to larger rises in the Spanish real estate market than in the other major Eurozone economies.

According to the ratings agency, house prices in Spain, which registered an estimated nominal rise of 6.6% in 2018, will increase by 4.5% this year, by 3.4% next year and by 3% a year later, although S&P warns that if prices continue to grow by more than the expected incomes of households, then access to housing will continue to worsen over the coming years.

In this sense, as a result of the deep fall in real estate prices in Spain during the crisis, access to housing is still at better levels now than it was before the burst of the real estate bubble, with a ratio of prices with respect to income that is 29% lower than the maximums observed in 2007, albeit 25% higher than the long-term average.

Similarly, S&P considers that the low interest rates applied to mortgage loans for the acquisition of homes will continue to serve to support access to housing in Spain, indicating that, given the rise in inflation between May and October 2018, real rates became negative.

In addition to Spain, the agency forecasts that real estate price will continue to rise across the Eurozone, although at a lower rate than in previous years, with the exception of Italy, where an increase of 0.5% is expected this year, which will accelerate to 1.3% in 2020 and to 1.6% in 2021.

In the case of Germany, prices will rise by 3.9% in 2019, although those increases will moderate to 3.3% and 3% in the subsequent two years, respectively, whilst in France, house prices are predicted to rise by 2.4% this year and by 2% in the following two years (…).

Original story: La Vanguardia 

Translation: Carmel Drake

Sabadell & CaixaBank in the Top 5 European Ranking of Toxic Asset Sales in 2018

29 January 2019 – Expansión

CaixaBank starred in the fourth largest toxic asset sale operation in Europe in 2018 whilst Sabadell starred in the seventh largest. And they were not the only transactions that the two entities undertook (…). In fact, both banks feature in the list of the Top 5 entities in Europe by volume of toxic asset portfolio sales last year, according to data collected by the analysis firm specialising in debt Debtwire.

All of that, despite the fact that Spain’s two largest banks, Santander and BBVA, had a much quieter 2018 than 2017, when the former undertook the largest sale of toxic assets in the country’s history, with the transfer of assets with a nominal value of €30 billion inherited from Popular to Blackstone. Meanwhile, BBVA placed part of its real estate business in the hands of Cerberus that same year.

Last year, Sabadell and CaixaBank took over the baton. The bank chaired by Josep Oliu is the Spanish entity that recorded the largest toxic asset sales in 2018, divesting assets with a nominal value of €12.6 billion. That figure placed it fourth in the ranking, behind only the Italian entities Monte Dei PAschi, Banca Popolare di Vicenza and Banco BPM.

Meanwhile, CaixaBank (…) was the fifth most active bank in the ranking, with toxic asset sales of €12.1 billion, just behind Sabadell.

Together with contributions from the other banks, with Bankia and Santander in high-ranking places, the Spanish sector divested toxic assets worth €43.2 billion in 2018, compared with €51.7 billion in 2017, which represented a decrease of 16%.

Nevertheless, neither CaixaBank nor Sabadell managed to keep Spain at the top of the podium of countries that divested the most toxic assets last year. Italy is the new leader with NPL sales of €103.6 billion (…).

In Spain, the loans and foreclosed assets divested by the banks are now in the hands of Cerberus and Lone Star, primarily, the two funds that purchased the most in Spain last year, with €15.8 billion and €13 billion, respectively.

Well behind them in the ranking is Axactor, which is typically more interested in smaller operations. And Blackstone, which was out of the ranking last year, after starring as the absolute leader in 2017, thanks to the operation that it closed with Santander, according to the report from Debtwire, which takes into account all transactions exceeding €100 million (…).

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Savills & HomeAway: Spain is the Most Attractive Market for Buying a Second Home

29 September 2018 – Finanzas.com

According to an international study compiled by the real estate consultancy Savills and HomeAwayTM, a global expert platform for holiday rentals, Spain is the most attractive destination for investing in a second home, according to 19.3% of those surveyed, followed by Portugal (13.2%) and France (13.1) in third place.

Spain is attractive for overseas investors

According to the survey, 44% of owners of second residences in Spain are foreigners. The main countries of origin of those owners are the United Kingdom (19%), Germany (12%), The Netherlands (4%), France (3%) and Belgium (2%). The remaining 56% of owners are Spanish.

The main areas where second homes are located in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%).

Where are they buying homes?

People’s behaviour when it comes to acquiring a second home is different depending on where the buyers come from. The study reveals that British and Dutch owners are those who buy the most second homes outside of their own countries, nevertheless, Spaniards, Italians and Portuguese citizens tend to choose their own countries as the destination for acquiring second homes (around 95%).

Second homes: for personal use and to rent

According to the study, 28% of Spanish owners cover some of their expenses with revenues generated from the rental of their properties and 38% obtain a profit.

Summary of second homes in Spain

The average price of the second homes acquired last year by the Spanish owners surveyed amounted to €245,000, 22% lower than the average acquisition price ten years ago. Moreover, 28% of those surveyed confirmed that they personally financed the acquisition of their second home, 52% acquired it using a mortgage and 8% inherited or were gifted the property.

In the same vein, Spanish owners of second homes obtain an annual income of €12,000 (from their properties) and they rent them out for 19 weeks a year, on average. 43% of owners had the same number of reservations in recent months as they did during the same period a year ago, 41% had more reservations and 16% had fewer.

Second homes, with some specific characteristics

Two-bedroom apartments are the most popular types of second home for the Spanish owners surveyed.

Features that owners are looking for when it comes to buying a second home include: proximity to restaurants and bars (88%), a balcony or terrace (88%) and proximity to the supermarket and shops.

According to Juan Carlos Fernández, Director General for Southern Europe at HomeAway: “The fact that Spain is the most attractive destination for foreigners looking to buy a second home indicates that Spain is a robust market that is very attractive to investors and that is something that we must take care of and promote”.

Owner profile

  • Average age when they acquired the property, in 2017: 51 years old
  • Average number of weeks leased during the year: 19 weeks
  • Typical property type: 2-bedroom apartment
  • Average acquisition price in 2017: €245,000.

Original story: Finanzas.com

Translation: Carmel Drake

Altamira Hires Borja Ortega from JLL to Lead its International Expansion

11 April 2018 – El Confidencial

Altamira is stepping on the accelerator to become the leading servicer in the south of Europe and, to this end, has hired a heavyweight from JLL as the Head of International Expansion and member of its Executive Committee. Borja Ortega (pictured below), Director of Capital Markets at the real estate consultancy is going to join the company controlled by Apollo in May.

The first major challenge that he will have to handle is Altamira’s entry into Italy, a market that the company led by Julián Navarro has been analysing for a while to consolidate its position in the Mediterranean region, having already made its debut in Portugal and Cyprus.

The servicer entered Portugal a year ago by purchasing Oitante, a company created to manage Banif’s assets, a move that allowed it to take over the management of more than €1.5 billion in assets.

In Cyprus, last summer, the servicer created a joint venture with Cooperative Central Bank (CCB), the second largest bank in the country with €7.6 billion in financial and real estate assets, in which Altamira holds a 51% stake and which has been operational since the beginning of this year.

Heavyweight from JLL

Until now, as Head of Capital Markets, Borja Ortega has led the firm’s direct investment activities (the traditional business), its financial advisory practice (portfolios, debt, mergers and acquisitions) and its private wealth business.

Some of the most important operations that he has managed in recent times include the process to sell the Adequa office complex to Merlin and the sale of Edificio España, operations that helped his division to record growth of around 50% in the last two years.

Moreover, Ortega launched the private wealth division, which is one of the first to channel the arrival of wealthy Latin American investors in the Spanish real estate market, and he collaborated in the sale of €30 billion in toxic assets from Santander-Popular to Blackstone, an operation in which the fund was advised by JLL.

Following the arrival of the Socimis, which have now begun to consolidate in the market with the takeovers of Axiare by Colonial and of Hispania by Blackstone, and the boom in residential property development, with the stock market debuts of Neinor, Aedas and Metrovacesa, the next major movement in the sector is expected in the field of the servicers.

As we await possible mergers, for the time being, Haya Real Estate is the first firm in the sector to set its sights on the stock market, by engaging Rothschild, JP Morgan and Citi to coordinate its debut later this year. Meanwhile, Altamira has opted to create a large international platform before taking the next step, whilst Solvia has created its own property developer.

Anticipa, the servicer of Blackstone, has swallowed up Aliseda as part of the aforementioned operation involving the purchase of toxic assets from Santander, whilst Servihabitat has appointed a new CEO and it is expected that the complex balance of powers between CaixaBank and TPG will tip in one direction or the other within the next few months, as part of the recently launched process of consolidation in the sector.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Mapfre & GLL Launch New €300M Office Fund

8 March 2018 – Iberian Property

The insurance company Mapfre and GLL have just formed a new partnership for the launch of a new investment fund amounting to €300 million.

The vehicle will focus on the purchase of offices in some of the major European markets, such as Germany, France, the Netherlands, Italy and Luxembourg, according to the Spanish real estate firm. The idea is to achieve returns of 4%-6% per year, diversifying the portfolio of the entities.

In Spain, Mapfre already owns a portfolio of buildings including Plaza de la Independencia, 6 in Madrid and Torre Mapfre in Barcelona.

Original story: Iberian Property

Edited by: Carmel Drake

Arcano Will Invest €200M with its Second Real Estate Fund: Ava II

19 February 2018 – El Economista

Arcano Asset Management, the asset management arm of the Arcano Group, is redoubling its commitment to the Spanish real estate market with the launch of its second fund specialising in property.

Known as AVA II, the new vehicle will have a target size of between €150 million and €200 million and will replace its first real estate fund, Asoref, by raising and investing its funds over a period of 18 months.

AVA II is going to focus on value-added operations and will complete its first close at the end of March, although it already has €40 million of funding committed, from domestic and international investors.

The fund, which is going to be open to new investors for the next 15 months, has a target net rate of return (IRR) of 15% and is going to invest in operations involving all types of real estate assets, with a clear focus on residential assets and offices in Spain’s main cities.

In addition, and in an opportunistic way, Arcano’s new fund is also going to have the option of exploring beyond Spain’s borders and investing in real estate assets in Portugal and Italy, although under no circumstances shall its investments in those countries exceed 20% of the fund’s total value.

Eduardo Fernández-Cuesta, Partner at Arcano Real Estate; José Luis del Río, CEO of Arcano Asset Management; and Pablo Gómez-Almansa, Director of Investments at Arcano Real Estate, are going to be responsible for leading this new vehicle, supported by a team of six professionals, including the recent new recruit Diego Vizcaíno, as Development Director.

Operations in Madrid

Asoref, Arcano’s first real estate fund, which has just completed its investment process, has disbursed or committed more than €170 million in total, focusing primarily on office assets and residential properties. Its most recent operation involved the purchase of Hotel La Moreleja in Madrid, for approximately €12 million, which it is going to convert into a state-of-the-art office building, designed by the architecture studio Rafael de la Hoz. The firm is going to spend around €14.5 million on the construction of that project.

That acquisition follows the purchase of another office building for corporate headquarters in Madrid at number 24 Calle Ríos Rosas, in the heart of the Chamberí neighbourhood, which has an above ground surface area of 3,517 m2.

Likewise, through this fund, Arcano has entered the residential market, closing the acquisition of a plot with a buildable surface area of 6,029 m2 in the north of Madrid, in Las Rozas, for the construction of high-end housing.

It also completed the purchase of a residential plot in the centre of Madrid, on Calle Divino Pastor 5, in the Malasaña neighbourhood, for the construction of 30 homes. Beyond Madrid, the fund closed the acquisition of a plot of land on the seafront in Benalmádena, with a buildable surface area of 12,000 m2.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Stoneweg Invests €50M in Alternative Financing in Spain

12 December 2017 – Eje Prime

Stoneweg is betting on Spain for alternative financing. The Swiss fund, which is headquartered in Geneva and led by the Spaniard Joaquín Castellví, is continuing with its purchase in the country through its real estate platform. And now, it has set its sights on alternative financing, where it has already accumulated investments amounting to €50 million. The idea is that the company will reach €100 million in this line of business in 2018.

The fund, which manages a platform from which it has already disbursed €500 million in just two years, is now expanding its range of businesses in the real estate sector with the financing of operations that have short and medium-term value generation processes. “This line of financing is carried out with coverage of the real estate assets, be they hotels, industrial or commercial properties, or even residential assets. The operations have time horizons of between nine and thirty months”, explains the company in a statement.

Stoneweg will place the focus on the search for opportunities in Madrid, Barcelona and other secondary cities, as well as on tourist and coastal destinations.

Currently, the Swiss fund has a presence in Spain, the USA and Italy, and an investment capacity of €750 million. With two in-house teams in Barcelona and Madrid, its platform holds residential and hotel assets spanning 200,000 m2, as well as offices covering 26,000 m2.

Original story: Eje Prime

Translation: Carmel Drake

Savills: Spain Leads RE Inv’t in Southern Europe

12 December 2017 – Expansión

Real estate investment in Spain is on the verge of setting a new record and positioning the country as the leader of the sector’s boom amongst its counterparts in Southern Europe. Specifically, investment in the tertiary market (offices, retail, hotels and logistics assets) in Spain looks set to amount to €8.9 billion in 2017, which represents an increase of 5% compared to the previous year and the highest figure in a decade, according to a report from the consultancy firm Savills.

The report reveals the strong performance detected in the retail and hotel sectors and also highlights that the growth in e-commerce in Spain is expected to result in greater demand for logistics and storage space, a segment that has lagged behind the main markets in Europe until now.

Luis Espadas, Director of Capital Markets at Savills España, also points out that, to the extent that demand in the more traditional sectors grows, so investors are starting to focus on alternative products, such as student halls and nursing homes. “That market may be small still but it has the potential to develop more attractive returns and price differentials”.

Other countries

The recovery of the sector in Spain has been followed by an upturn in other countries such as Italy, Portugal and, more recently, Greece and Cyprus. In this way, after a few years of weak investor activity, the volume of investment in Southern Europe increased by 277% in 2017, compared to the minimum of €5.2 billion recorded in 2012.

Overall, total investment volumes increased by 8% YoY. The markets in Southern Europe now account for 10% of the total investment in the European Union, compared to the 5% that they represented in 2012. “Economic growth, the decrease in unemployment rates and renewed consumer confidence are attracting investors back to Southern Europe”, says Alice Marwick from the Europe Research department at Savills.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

The ECB Demands Higher Provisions For Doubtful Debts From 2018

10 October 2017 – Cinco Días

The ECB has proposed a tightening of the provisions required by banks for any loans that they classify as doubtful from 1 January onwards. The ECB has subjected the draft legislation, currently posted on the body’s website, to public consultation. The standards that the supervisor is preparing complement those published in March of this year. In this way, banks will have to set aside more money from 2018 onwards to cover 100% of the loans that they reclassify, in other words, those that go from being standard to doubtful. The ECB will establish different terms depending on the type of loan: those that are secured by a real estate asset may be provisioned at 100% over seven years from the date of their reclassification. For loans without any type of guarantee, entities will have just two years to constitute the 100% provision.

The provisions will be applied on a linear basis from the date of recognition of the doubtful debt until the date the coverage ratio equals 100%, but national supervisors may require the recognition of provisions more quickly in certain cases. Moreover, loans that are partially covered by real estate assets must be provisions in two parts and with two doubtful rates.

In March, the ECB published a handbook for doubtful loans to be applied to portfolios of doubtful loans already in existence. It demanded that entities undertake procedures to reduce this load that, in its opinion, is restricting banks’ ability to grant new loans. The handbook is not binding, but banks will either have to “comply or explain”. In other words, they will have to comply with the handbook or explain why they are not complying with it. It also requires that they set specific objectives to reduce their existing portfolios.

Based on the response from entities and the evolution of doubtful balances, the supervisor will present new proposals,at the end of the first quarter of 2018, to attack the excess volume of toxic loans in the banking sector. According to the supervisor, the so-called “significant entities” (almost all of the banking system in Spain and 130 in total in Europe) held €865,000 million in doubtful assets during the first quarter (after that balance decreased by almost €100,000 million in one year). “Many entities have made significant progress and have submitted credible strategies that include reduction plans, but others still have a way to go to improve”, said the ECB.

In March, doubtful loans accounted for 47.05% of the total bank loan book in Greece, 17.75% in Ireland, 19.82% in Portugal and Italy. Based on this criteria, the figure for Spain amounted to 5.86%, but its level of foreclosed assets was very high.

Original story: Cinco Días (by Nuño Rodrigo Palacios)

Translation: Carmel Drake