Goldman Puts the ‘Edificio Mediterráneo’ in Valencia Up For Sale

11 March 2019 – Expansión

Goldman Sachs has put the ‘for sale’ sign up over the building that it owns on Avenida Cardenal Benlloch in Valencia, which used to house Bancaja’s calculation centre (Cemeca) and which has subsequently been renamed Edificio Mediterráneo.

Goldman considers that the recovery of the office rental market in Valencia and the increase in rental prices make now a good time to consider offers.

The US bank acquired the property at the end of 2014 from Bankia as part of a package of 38 real estate assets, which it purchased for €335 million.

Edificio Mediterráneo comprises seven storeys and has a surface area of 10,300 m2, with its own parking lot. Its tenants include Indra, Nedgia Cegas and Haya Real Estate.

Original story: Expansión (by A.C.A.)

Translation/Summary: Carmel Drake

House Prices Keep Rising, Approaching 5.1%

1 September 2015 – Expansión

The real estate market continues its slow but steady recovery. In the second quarter of the year house prices increased by 5.1% compared with last year, placing this rate exactly in the pre-crisis level, as indicated today by the data of Property Registrars Association (Colegio de Registradores de la Propiedad).

This price rise, 2.8% in the second quarter as opposed to the first, was accompanied by an increase in the number of sales operations, which also grew by solid 11% YoY. Thus, between April and June, property records registered 87,187 home sales operations, representing the second highest quarterly result in the last two years. However, only in the second quarter the number of transactions fell by 3.7%, due to an exceptional increase in these registrations between January and March, explain registrars.

These experts believe that the year growth of housing prices “strengthens and intensifies the turnaround begun in 2014”. That said, they add that “the high growth rates (of house prices) are not foreseeable for the next quarters,” as the recovery in demand has been very progressive.

Moreover, they say it is “desirable that this housing market recovery, especially of housing prices,” occurs with moderate growth rates. This, in their opinion, will help to consolidate high levels of demand, thus depleting the new housing stock pending for sale, allowing also to absorb the newly built stock.

Andalusia (with 17,751 sales), followed by Catalonia (13,228) and Valencia (12,760) were the communities with the highest number of such operations in the second quarter. Demand for housing by foreigners also continued recovering. Home purchases registered by non-residents rose from 12.2% of the total between January and March to 12.8% in the second quarter.

Similarly, another indicator of the stabilization of real estate market has been the reduction of  the number of foreclosures (distraints mostly) for non-payments,which decreased by 4.8% compared to the previous quarter and 11.1% compared to last year.

Original story: Expansión

Translation: Lee La

Popular Predicts Record Property Sales Of €2,000m In 2015

26 January 2015 – Expansión

2015 / The entity and the funds Värde Partners and Kennedy Wilson are undertaking an active process to contact investors and whereby accelerate the sale of its portfolios of flats and land to improve profitability.

Top priority. The bank led by Ángel Ron is stepping down on the accelerator to remove property from its balance sheet, with the aim of returning to profitability. Popular has set itself a target of selling €2,000 million worth of property during 2015, which would represent an increase of 33% with respect to 2014. Thus revealed Francisco Sancha, CFO at Popular, in a recent meeting with analysts.

Popular already set a record by selling €1,500 million of real estate assets in 2014, which represented a twofold increase on its sales in 2013 and a 50% increase on its combined sales in 2013 and 2012. It closed last year exceeding its own initial sales expectations of €900 million.

The speed of Popular’s sales has a lot to do with the strategic agreement that the entity, led by Ángel Ron, signed with the investment funds Värde Partners and Kennedy Wilson in 2013. The funds acquired a majority stake in Popular’s Unidad de Negocio Especializado (UNE or Specialist Business Unit), which comprises its real estate subsidiary, Aliseda, and manages foreclosed assets and developers’ portfolios. Ownership of the properties and loans lies with the bank.

The architect of the agreement, which includes an extendible 10-year exclusivity period, was Sancha, the former director of the UNE. Its current head, the Director General of Subsidiaries, Rafael de Mena, predicts a “magnificent” 2015 in terms of the property sales. “We are definitely facing a change with respect to real estate management”, he explained to Expansión. “Aliseda is becoming an industrial service company, which combines knowledge of the local market with input from industry partners”, he says.

Network coordinator

To provide strong support to its initiative, Popular has appointed a sales coordinator for its commercial network, since its branches are the main channel for its property sales. It has also shortened the process for foreclosing assets in exchange for the payment of debt, to increase the volume of assets it has available for sale. “The portfolio has grown by 54%”, says the Director General of Subsidiaries, who is convinced that the bank has already incorporated best business practice into its processes.

But, he expects wholesale transactions to drive the boom in sales. “The bank has undertaken an active process of contacting investors”, says De Mena. He met with more than 70 during the course of last year. As a result of this intense work, the entity completed the sale of 500 subsidised homes to Blackstone for €80 million, against the clock, during the last few days of 2014. The sale of another portfolio in December took the amount of wholesale transactions to €160 million and the number of homes to 1,000. Thus, in total, Popular offloaded 7,700 homes in 2014, an increase of 128% on the previous year. Furthermore, the bank sold land amounting to €250 million to local developers, which represented an increase of 95%.

Digital initiative

The bank also wants to maximise its sales through the internet, which currently accounts for only 2% of transactions. It will launch a new website during the first half of the year and is preparing itself for a battery of commercial attacks through its Aliseda portal.

The entity will also benefit from the “tail winds” resulting from the improvement in the real estate market, according to De Mena “We closed 2014 with the feeling that the deepest and longest property crisis of the last four to hit Spain since the 1970s, was coming to an end” he says. Not only are property prices stabilising, supply is certain geographical areas is drying up, says the director, who senses “a recovery in property development in 2015, which will clearly intensify in 2016”.

Popular has a gross real estate exposure of €32,400 million, the highest of any entity in the Spanish banking sector in absolute terms. Accelerating its exit from property and progressing with its initiative to focus on lending to SMEs, in an environment of fierce competition, are both key to improving its profitability. Its return on equity (ROE) amounted to 2.45% at the end of the third quarter 2014.

Original story: Expansión (by Alicia Crespo)

Translation: Carmel Drake

Increased Mortgage Lending Supports Spanish Property Market Recovery

21 January 2015 – Spanish News Today

Spanish banks regain confidence in real estate loans

One of the various encouraging aspects of the latest figures published by Spain’s notaries for November, in which further indications are shown that the country’s property market is at last achieving stability and even limited growth, is the increase in the extent to which residential property purchases are being financed by mortgage loans.

The notaries report that during November last year 13,857 residential property purchases were made with the aid of mortgages, 35% more than twelve months previously. At the same time, the average amount loaned by banks remained generally stable, falling by just 0.6% to €113,093 on property purchase mortgages (whilst the price of property itself fell by 1.5%).

In general terms, the notaries conclude that 40.6% of all residential property purchases last November were financed by means of a mortgage loan, the highest proportion in the first eleven months of 2014, and that in these cases the loans covered 74.9% of the total price.

It seems that as price stability becomes a reality it is not just purchasers who are becoming more confident about venturing into the market: banks also appear to be reaching the conclusion that the market is now solid enough for mortgages to represent an acceptable risk.

Original story: Spanish News Today

Translation: Carmel Drake