Cerberus Plans to Create a Real Estate Giant by Acquiring Altamira & Solvia

10 November 2018 – Expansión

Cerberus is increasing its commitment to the Spanish real estate market. The US fund is the favourite candidate to take over the reins at Altamira, the manager of property loans and foreclosed real estate assets currently owned by Apollo and Santander. Moreover, Cerberus is battling it out with the fund Lindorff (now Intrum) and other investors to purchase Solvia.

As Expansión revealed on 8 October, Apollo renewed its contract with the investment bank Goldman Sachs at the beginning of the summer and distributed the teaser (the sales document containing a general description) to potential interested parties to dispose of this asset for between €500 million and €600 million. Although it is not alone in the process, Cerberus is the candidate that has the best chance of acquiring that company.

But Cerberus is not going to settle for that asset only. Financial sources assure that the US fund is also bidding for Solvia, in a process in which it is also competing with Lindorff. The CEO of Sabadell, Jaume Guardiola, noted, during the presentation of the results on 26 October, the “good appetite” in the market for Solvia, “whose sale will close “soon”. He whereby confirmed the sale of Solvia Servicios Inmobiliarios (SSI) and Solvia Desarrollos Inmobiliarios (SDI). For the sale of SSI, in which it is being advised by Alantra, the bank hopes to receive up to €400 million.

Concentration of the market

If Cerberus ends up being the winner of both processes, it will become the clear leader of the servicer sector and a proponent of concentration between the servicers. These companies, created from the former real estate subsidiaries of the banks, have become some of the stars of the new real estate cycle.

Currently, almost all of the assets under management of the banks are in the hands of a few companies such as Altamira, Servihabitat, Haya Real Estate, Aliseda, Anticipa, Solvia and Divarian (previously Anida). These firms are mainly responsible for the management and recovery of debt and transformation of loan obligations into foreclosed real estate assets, as well as the sale and rental of assets.

If Cerberus ends up taking control of Altamira and Solvia, it will control almost 65% of the market for servicers, which will allow it to mark a differentiation in its strategy. Currently, the US fund controls Haya Real Estate, one of the large servicers with €40 billion in assets under management. Moreover, it took over the reins at Anida, which was in the hands of BBVA, and which manages €13 billion.

If it adds Altamira and Solvia to its portfolio, the volume of assets under management will soar to €138.9 billion, with a market share in the servicer segment of 65%. According to numbers managed by the consultancy firm Axis, the other two dominant funds are Blackstone, with Anticipa and Aliseda (also from Santander) and LoneStar, which controls Servihabitat after purchasing that company from La Caixa in the summer.

Other assets

In addition to the servicers, Cerberus is also the owner of the property developer Inmoglacier; the online estate agency between individuals Housell; and the debt recovery company Gescobro (…).

Original story: Expansión (by R.Arroyo and D.Badía)

Translation: Carmel Drake

Sabadell to Sell Solvia As It Unloads Real Estate Assets

30 August 2018

Banc Sabadell is taking offers for Solvia after ruling out placing it together with portfolios of real estate assets.

Unlike Santander and Caixabank, which unloaded most of their real estate assets when they transferred their portfolios of properties to investment funds, Banc Sabadell kept Solvia out of its sale of assets to Cerberus, which was concluded in July. Now, however, the Catalan bank is taking offers for its subsidiary, with an eye on wrapping up the sale within a few months.

Sources in the financial industry told Economia Digital that Sabadell, which is chaired by Josep Oliu, has decided to finalise the sale of its real estate assets through a partial or total sale of its servicer, Solvia. Although it has not yet initiated a formal sales process, the bank reportedly hopes to finalise the deal during the last four months of 2018.

“We are not a property firm, it is not our line of business,” Jaume Guardiola, CEO of Sabadell, has stated on several occasions when asked about the future of the bank’s real estate assets and its property firm, Solvia. Market sources had speculated that Solvia would be sold off together with the bank’s portfoli0 of property, land and related loans. However, Solvia remained in the bank’s hands.

Sabadell decided to leave the property firm out of its sale of the bank’s three property portfolios, worth 11 billion euros. Two of the three were eventually acquired by the venture capital fund Cerberus. The bank held on for a higher price for the servicer and hopes that the asset will help in the sale of the portfolio of properties that it still possesses, which is worth about another €2 billion.

That decision was made just over a month ago, but Guardiola’s position seems to have won, and the bank has put the sale of its property firm on the table again. The idea is that the company will be sold without any included assets, and the sale will be restricted to Solvia’s network and operations, in addition to its roughly 800 employees.

Sabadell has not yet received any formal offers, although Solvia is expected to draw some interest, considering that it is one of Spain’s biggest servicers. Several investment funds are investing in the country’s property market and could be interested in acquiring a servicer.

Solvia, in the hands of a fund?

All the large funds that have acquired real estate assets in Spain already have subsidiary property firms. Cerberus, which bought assets from BBVA and Sabadell, has Haya Real Estate. Apollo, which acquired Santander’s assets, owns Altamira. Lone Star owned Neinor, though it subsequently sold it, it will also acquire Servihabitat when it completes its purchase of 80% of Caixabank real estate assets. Lastly, Blackstone owns Anticipa.

However, other funds are making smaller purchases and could be interested in a property firm such as Solvia to help unload their property holdings in the future. Oaktree, which has acquired several buildings, the Canada Pension Plan Investment Board (CPPIB) and Bain Capital are all possible buyers.

Sabadell waves goodbye to its real estate business

This summer, Banc Sabadell sold a good part of its real estate assets. Of the three large portfolios it had on sale, two went to Cerberus and the third to Deutsche Bank. The assets sold to the investment fund were valued at 9.1 billion euros, while the portfolio that Sabadell sold to the German bank had assets worth €2.4 billion.

Sabadell applied a 57% write-off on the sales, a figure below previous large sales by BBVA and Santander, where the discount exceeded 60%. The banks that waited most, such as Caixabank and Sabadell itself, benefited from the growing interest of investors in Spanish property to sell their holdings at a higher price.

Original Story: Economia Digital – Xavier Alegret

Translation: Richard Turner


Sabadell Earns €35M From the Sale of its Last 11 Hotels

15 May 2018 – La Vanguardia

Banco Sabadell has definitively completed its divestment from the hotel business by selling off the last of the establishments that did not form part of the package acquired by Blackstone last year. Overall, the bank chaired by Josep Oliu has recorded income of around €35 million from the sale of 11 medium-sized establishments in different parts of Spain. The last one to be sold is the Barceló Estepona, which has been acquired by Hotusa.

In that case, the financial entity has sold the ownership of the property in which the hotel is located. In the majority of cases, the establishments were managed by a specialist company. All of the hotels were left over from the real estate crisis. Sabadell ended up taking ownership of them in recent years in lieu of payments for the debts that their owners had taken out and which they could not repay. In other cases, they were the direct result of mortgage foreclosures for non-payment.

In recent months, the bank led by Jaume Guardiola has been considering several alternatives for its hotel portfolio, including a possible stock market debut. In the end, the entity opted to sell most of the assets owned by the company HI Partners to Blackstone last year. The 11 establishments that were left out of that operation are the ones that have just been sold. In the operation with Blackstone, the bank obtained gains (extraordinary profits) of €55 million from proceeds of €630.7 million. In that deal, it sold establishments such as the ME Sitges Terramar, the Hilton Sa Torre in Mallorca and the Axel Hotel in Madrid to the international fund.

In addition to the Barceló Estepona, the bank has also just divested the following hotels: Barcelona Gate, Margas Golf, Cunit and La Selva. Most of the establishments sold in this final phase were not beachfront properties, nor were they large. Other properties sold recently include the Asta Regia Hotel Jerez de la Frontera acquired by Hotusa, the Aparthotel Augusta in Boí Taüll bought by Kesse Invest, the Balt Hotel Spa in Gijón purchased by Artiem, the Barceló Oviedo acquired by Barceló and the AC Lleida bought by AA Hoteles.

In parallel, the bank is continuing with the process to divest a large proportion of its non-hotel real estate assets that also resulted from the real estate crisis, including those inherited from the now extinct entity CAM. The bank has launched the sale of toxic assets amounting to €10.8 billion through a number of separate operations. It is a significant amount with respect to the €13.5 billion in assets that the bank had registered on its balance sheet at the end of last year.

The CEO Jaume Guardiola also announced last month during the presentation of the entity’s quarterly results that the entity is analysing the future of its real estate subsidiary Solvia. “When there is an opportunity to create value”, it will be sold, explained the director (…).

Original story: La Vanguardia (by Eduardo Magallón)

Translation: Carmel Drake

50% Of Banco Sabadell’s New Mortgages Are Fixed Rate

1 April 2016 – Expansión

Strategic commitment / The entity, which held its General Shareholders’ Meeting yesterday, considers that we are facing “an historic opportunity” for clients to protect their mortgage contracts.

Banco Sabadell’s message was convincing on Wednesday, when it explained to Spanish customers that they are facing an “historic opportunity” to shield the interest rates on their mortgages for at least 20 years by taking out fixed-rate mortgages. That was the message from both the Chairman and CEO of the entity, Josep Oliu and Jaume Guardiola (pictured above), respectively, at a press conference ahead of yesterday’s General Shareholders’ Meeting.

Guardiola announced that more than 50% of Sabadell’s new mortgage loans are now being taken out with a fixed interest rate, a trend that he believes will continue to increase, given that Euribor is at historic lows and therefore, has significant potential to increase and little margin to decrease. The executive said that the bank recommends all of its clients to take out this type of mortgage and also advises holders of variable contracts to move across to the new product, even if their spreads are low. (…).

Sabadell has been one of the Spanish banks that has most heavily backed this product, and it says that there is still a reduced supply in the market. The entity is currently offering mortgages with fixed interest rates of 2.70%, 2.50% and 2.15%, depending on whether its clients take out their mortgages for a 30 year, 20 year or 10 year term, respectively. Meanwhile, BBVA is offering 2.25% rate over 20 years and 2.75% over 30 years; and Bankinter is offering 2.10% over 15 years and 2.50% over 20 years. (…).

Dividend of €0.07

Sabadell was also due to submit to its shareholders the approval of the distribution of a dividend amounting to €0.07, which would represent a pay out of 53% and a yield of 4.3% based on the year end share price at 31 December 2015. (…).

In 2015, Sabadell made a profit of €708 million, up by 90.6%. The General Shareholders’ Meeting was also expected to approve a long-term bonus linked to the evolution of its share price until 2019 to incentivise 482 directors.

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake