Tag: problem mortgages

Blackstone will be the Landlord of 25,000 Rental Homes by the End of 2019

31 January 2019 – Voz Pópuli

Blackstone, one of the largest investment companies in the world, expects to end the year with 25,000 rental homes under management in Spain.

Eduard Mendiluce (pictured above, left), the man from Blackstone who leads the US giant’s real estate emporium in Spain, has explained that the firm believes in the Spanish market, as it has done since 2014, and will end 2019 managing 10,000 more rental homes that it currently owns (15,000).

“We continue to believe in the fundamentals of the residential sector in Spain”, said Mendiluce at a conference about the real estate sector organised by Iese in Madrid. “Spain was one of the countries that suffered the most during the real estate crisis of 2008; prices are still 30% below their maximums”, he said.

The CEO of Aliseda and Anticipa explained that the US fund’s strategy in Spain in terms of real estate involves renting or buying and selling second-hand homes worth between €120,000 and €150,000. “When you have more than 200 homes under management in a given municipality, the business becomes profitable”, he explained.

Blackstone has invested almost €26 billion in the Spanish market over the last five years. In March 2014, it purchased 40,000 problem mortgages from Catalunya Caixa for €3.6 billion.

Since then, it has purchased: Banco Popular’s toxic property, together with Santander, for more than €5 billion; the Socimi Hispania for €2 billion; and 50.01% of the rental home Socimi Testa for €947 million. Last year, it bought Cirsa, a leading company in the gaming industry in Europe in a deal worth €2 billion.

In terms of the criticisms directed at the rental policies of Blackstone and other funds from certain sectors, Mendiluce has highlighted that in Spain, the funds own just 3% of the total rental housing stock, and that the rest is in the hands of individuals.

“I think that it is difficult to manipulate prices when you only account for a small percentage (of the market)”, he said. “I firmly believe that if there has been very concentrated price inflation in a handful of towns, then that has been due to a lack of supply”, and he pointed out that Spain has the lowest percentage of social housing in Europe.

Fashionable market

Juan José Brugera, President of the real estate company Colonial, was very optimistic about the real estate sector in Spain.

“We are in an expansive phase of the cycle, we are facing lower growth, but growth is growth, and it’s strong in Spain”, he said at the conference organised by Iese. “In the rental cycle, we are still in the growth phase, we have potential for rental growth that we believe ensures a strong performance over the next two or three years” he said.

“The Spanish market is fashionable at the moment, we predict expansive behaviour”, he said. “I have a positive vision, the stock market is behaving a bit strangely, but I think that is due to certain turbulences, both external and internal, that are generating uncertainty”.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Blackstone Increases Volume of Spanish RE Acquired During the Crisis to €20bn

6 April 2018 – Voz Pópuli

With €20 billion, all of Bankia’s pending aid could be returned and the extra pension increase announced by Cristóbal Montoro last week could be applied. That figure is how much Blackstone has committed to the Spanish real estate sector during the crisis.

That €20 billion includes the most recent major investment announced by the US fund, one of the largest in the world, in Hispania. Blackstone has acquired a 16.5% stake in the Spanish real estate company, worth €315 million, and has launched a takeover bid for the whole company, worth €1,900 million.

Even if that operation does not prove successful, Blackstone has already placed €18 billion on the table in real estate acquisitions in Spain in recent years. That figure, which includes debt, represents 7% of the €300 billion that the fund manages in the real estate sector around the world.

At the European level, Spain is one of the fund’s favourite destinations, together with Germany, Italy, the United Kingdom and Scandinavia.

It is already managing Quasar

Of that €18 billion, the bulk corresponds to the recent acquisition of Popular’s property, which is worth €10 billion. Blackstone controls 51% of the new company that owns the €30 billion in real estate assets inherited from the bank that was sold to Santander.

Another recent operation was Blackstone’s purchase of Sabadell’s hotel subsidiary, HI Partners, for €630 million.

An acquisition in 2014 also stands out involving Catalunya Banc’s problem mortgages, for which it paid €3.6 billion. Moreover, Blackstone has been purchasing assets from CaixaBank, BBVA and Sareb, amongst others, in recent years, and has also made investments in logistics centres through Logicor.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

CatalunyaCaixa Inmobiliaria Completes 87% Capital Reduction

4 November 2015 – Economía Digital

During the crisis, the real estate and mortgage businesses of many banks in Spain ended up becoming a major hindrance on their balance sheets, due to soaring delinquency, the large portfolio of homes resulting from evictions and the depreciation of assets.

One of the most exposed savings banks was CatalunyaCaixa and, although it transferred a significant volume of its homes to Sareb and sold its portfolio of non-performing loans to Blackstone, the property crash left a marked dent on its results, which the bank – now in the hands of BBVA – has had to offset with a significant reduction in the capital of its real estate arm.

A capital reduction of €240 million

CataluynaCaixa Inmobiliaria has recently carried out a capital reduction amounting to €239.67 million, equivalent to 87% of its share capital prior to the operation. Following this reduction, the real estate company’s share capital has been reduced to €35 million, according to registry data.

Sources at the entity have explained that the reduction has been carried out to offset losses from previous years. Although the entity had already reflected these losses in its annual results, it had to reduce its share capital to make it equivalent to its equity position, something that is has done this year in one fell swoop.

Only 6,000 homes left

CatalunyaCaixa Inmobiliaria is the holding company for the homes owned by the bank, of which there are around 6,000, according to a statement by the entity. In 2012, it transferred the majority of its portfolio to the so-called bad bank, Sareb, involving 27,500 homes, as well as around 10,000 other assets from property developers.

It got rid of its most problematic properties through this transfer, but not its homes worth less than €100,000 or the developments worth less than €200,000. Those, together with the homes that have entered its portfolio since the transfer as a result of new foreclosures, bring the total to around 6,000.

Moreover, so as to not accumulate more housing stock and at the same time, clean up its balance sheet, it closed the sale of a problem mortgage portfolio to the US fund Blackstone in April for €4,123 million.

Original story: Economía Digital (by Xavier Alegret)

Translation: Carmel Drake