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14/08/2014 – Expansión
‘PROJECT LAKE’/ The bank offers foreign investment funds a part of the assets from its real estate entity, Bankia Inmobiliario, in which it has recently acquired a 100% holding.
Bankia wants to dispose in the coming months of a large part of the assets of its property investment fund. The bank presided by José Ignacio Goirigolzarri started to distribute last month a sales pamphlet among investors with close to 300 million euros in assets leased to the property sector, many of which come from the bank’s real estate entity, Bankia Inmobiliario.
This sales process, known as Project Lake, has generated a large interest among the big foreign funds, and especially among the so-called Socimis (listed real estate investment companies).
Together with the assets of Bankia Inmobiliario, the nationalised bank has also included in Project Lake some properties which have been adding to the list of foreclosed properties after the transfer of assets to Sareb.
Bankia has begun this transaction after having acquired 100% of its property fund last March. This product of collective investment is inherited from Gesmadrid’s old company, Madrid Patrimonio Inmobiliario, which as a result of the liquidity crisis suffered by these funds from 2008 onwards, began to buy shareholdings from those investors who wanted to recover their money. In this way it avoided becoming a case similar to that of Banif Inmobiliario, which had to suspend repayments for two years, causing a great fuss among its shareholders.
With this strategy, Caja Madrid and later Bankia began to take over virtually all the shareholdings of the fund, until they held 98% of the share capital at the start of 2014. In this situation, they transferred the rest of the shareholders to the investment fund Bankia Monetario Euro Deuda III.
Thanks to this move, Bankia no longer has its hands tied and can carry out whatever strategy it considers appropriate with the fund.
Bankia Inmobiliario currently holds assets valued at 375 million euros, according to data from the end of the first half. The majority of the properties are situated in Madrid and, to a less extent, in Barcelona. Two thirds of the portfolio is to be used for rental homes, and the rest for offices and commercial properties.
Better perspectives
The managers of the fund indicated at the end of 2013 that the property market is showing “a notable increase in activity,” “as a result of more investment by foreign funds.” Furthermore, they add, “in locations where the stock of homes has been reduced or rental prices have fallen the most, small price increases are starting to be seen.”
In this context, the investment fund managed to raise occupation rates of the homes it owns to 78,5%. The occupation ratio in offices is slightly lower, around 60%.
Leased property assets are in great demand among Socimis, which are obliged to invest 80% of their portfolio in them.
Together with this sale, Bankia has in the pipeline another of the largest property sales of the moment: Project Amazon (Proyecto Amazonas), which includes 300 loans guaranteed by properties and hotels. Furthermore, the bank is closing the sale of 430 million in loans to developers which it did not transfer to Sareb, as part of Project Sky.
Original article: Expansión (by Jorge Zuloaga)
Translation: Aura REE