Tag: property sales

INE: House Sales In Balearics Rose By 32.8% In Nov 2016

16 January 2017 – Diario de Ibiza

House sales rose by 32.8% YoY in November in the Balearic Islands, as 1,258 operations were closed, representing the highest increase of all of the autonomous regions.

Of the homes sold, 1,234 were unsubsidised and 24 were protected (subsidised); meanwhile, 232 were new homes, compared with 1,026 second hand, according to data published on Thursday by Spain’s National Institute of Statistics (INE).

The total number of properties sold on the islands in November 2016 amounted to 4,208, up by 2.9% compared to the same month a year earlier.

Overall in Spain, house sales rose by 17.3% in November with respect to the same month in 2015, with 33,806 operations recorded in the property registries, to complete ten consecutive months of increases.

According to the data from INE, house sales grew by 15.1% between October and November 2016.

This monthly rate is 10.6 basis points higher than that registered during the same period a year ago, when the increase amounted to 4.5%, and is the highest monthly variation since 2012.

Second-hand homes

The increase in sales in November was due yet again to the second-hand market, which increased by 19.8% to reach 27,996 transactions, whereby accounting for 82.8% of the house sales registered.

The number of operations involving new homes also rose although to a lesser extent, by 6.8%. 90.3% of all homes sold were unsubsidised compared with just 9.7% that were protected (subsidised).

By autonomous region, the sale of homes grew by 32.8% YoY in the Balearic Islands; by 26.3% in the Canary Islands; and by 25.8% in Aragón, which saw the highest increases. By contrast, La Rioja, País Vasco and Galicia recorded the lowest increases.

In total, the number of properties (rural and urban) registered as sold in the property registries during the month of November stood at 143,470, up by 6.8% compared to the same month in 2015.

In the case of property sales recorded, the increase amounted to 15.6%.

Original story: Diario de Ibiza

Translation: Carmel Drake

Popular Sells 2 Doubtful Debt Portfolios To Apollo & Blackstone

13 January 2017 – Expansión

Banco Popular has sold two debt portfolios to the funds Apollo and Blackstone for the combined amount for more than €620 million, according to sources close to the operation.

Specifically, the entity has sold one €220 million debt portfolio, secured by hotel assets, to the Apollo group; and another to Blackstone, for more than €400 million, secured by property developments, primarily in the residential sector, containing more than 750 homes and a similar number of parking spaces and storerooms.

Although the portfolio sales is one of the sales channels established by the bank for the divestment of non-productive assets, it is the first time that Popular has sold any doubtful portfolios, which demonstrates a change in its strategy towards the management of non-productive assets, besides the traditional route of repossession and subsequent sale of the collateral, which has been applied in most cases to date.

The portfolios sold have been grouped into homogenous assets to simplify their analysis and optimise their price. The sales have been conducted at coverage levels in line with the objectives of Popular’s Business Plan.

In addition, another €100 million of refinanced assets under special surveillance have been sold with the aim of reducing the risk profile of the portfolio and freeing up capital.

During the first nine months of 2016, Popular maintained a steady pace of property sales, amounting to €1,554 million in total.

In its Business Plan for 2016-2018, Popular has set itself the target of reducing its non-productive assets by 45%. Specifically, the bank is aiming to reduce its non-productive asset balance by €15,000 million by 2018, placing its strategic focus on maximising the value of those assets.

Original story: Expansión

Translation: Carmel Drake

Servihabitat Records Revenues Of €1,300M In YTD Sept 2016

21 October 2016 – Expansión

Servihabitat, the loan and property management company that is jointly owned by the fund TPG and CaixaBank, has recorded revenues from property sales and rentals amounting to €1,300 million during the first nine months of 2016.

Original story: Expansión

Translation: Carmel Drake

BBVA Research: House Prices Will Rise By 3.5% In 2017

19 October 2016 – Expansión

(…). BBVA Research indicated yesterday, in its report entitled “The Real Estate Situation in Spain” for Q2 2016, that “the improvement in sales is permitting a gradual appreciation in house prices”, which are expected to grow by 2.5% this year and by 3.5% next year. It added that this rise will be accompanied by very significant growth in terms of transaction volumes, given that sales are forecast to grow by 10% this year and by 6.5% next year, to reach 475,000 real estate operations in 2017.

This report echoes data published by Spain’s National Institute of Statistics (INE) and the Bank of Spain, as well as by property registrars and several appraisal companies. One of them, Tinsa, recently indicated that house prices rose by 2.4% in September, with a strong increase in rental prices. Nevertheless, BBVA Research went a step further and said that this positive trend will continue well into next year, and may even accelerate thanks to job creation, improved confidence, the opening of the credit tap and demand from overseas buyers.

All of this will reinforce the effect that the price rises seen in recent months have had in terms of encouraging the market and investors who do not want to miss out. In this sense, BBVA Research said that “the path observed in terms of residential property prices is generating positive expectations, which will become a new factor that will support the demand for housing”. As a result, the sector will manage to offset some of the forecast deterioration in other factors next year, such as economic growth (which will slow by almost one percentage point in 2017, according to the main analysts, including BBVA itself), the moderation in global growth and the expected increase in oil prices.

Knock-on effect

Nevertheless, this increase in prices and transactions is not isolated, but rather is generating even greater positive effects in other aspects of the market. In this way, permits for new homes have recovered at a rate of almost 35% across Spain as a whole and by more than 100% in regions such as the Canary Islands and La Rioja. As a result, 90,000 new permits are expected to be signed next year, with housing starts at record highs compared to recent years.

In addition, the market for land is also enjoying more activity, with a 19.2% increase in the surface area sold during the first half of the year. This increase has also been accompanied by an increase in land prices (5.9%) following an increase of 4.3% in 2015, which reflects the outlook for the sector. Meanwhile, the purchase of land has undergone a significant change in recent years, given that at the start of the crisis, the major investors were individuals and now 70% of buyers are companies, thanks to the return of credit to the market.

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake

Spain’s Banks Sold RE Assets For c.€5,000M In H1

8 August 2016 – Expansión

Spain’s banks are still working hard every day on the unenviable task of cleaning up the property on their balance sheets. And that was reflected in their reported sales figures for the first six months of 2016, which increased by 9% compared with 2015. In total, the major Spanish entities (which have now published their results) received proceeds amounting to €4,860 million from the sale of homes and other real estate assets during H1 2016.

This acceleration was also accompanied by another piece of good news for the banks, namely that the improvement in the real estate market is allowing the entities to record profits in many cases.

In terms of the number of real estate units, the figure remained stable during the first half of the year, with around 37,500 assets sold during the first six months, up by 0.9% compared to H1 2015. This reflects the fact that the banks completed the same number of operations, but at higher prices.

This acceleration in real estate sales comes at a time when the banks are concerned about the effect that the accounting changes applied by the Bank of Spain will have. It is hoped that the new legislation – which comes into force in October – will tighten the bolts on the provisions made by entities against foreclosed assets. In fact, some groups recorded large provisions during the first half of the year to reflect the possible impact.

Mismatch of provisions

According to several financial sources, there is a mismatch in the provisions recorded against many of the banks’ foreclosed assets. In this way, the two Royal Decrees proposed by (Luis) de Guidos in 2012 established linear provisions for all of the banks’ properties, but there are significant deviations for homes depending on the region and condition, which are not reflected in their valuations.

In addition, both the Bank of Spain and the European Central Bank (ECB) have indicated on several occasions that the entities have to decrease the weight of non-performing assets on their balance sheets, one of the major impediments against improving yields.

“If we add the doubtful asset balance to the foreclosed asset balance, we arrive at a figure of €213,000 as at December 2015 […]. Although those two numbers decreased by 14.5% in the last year, they still account for a significant percentage of the banks’ assets in Spain and they weigh down negatively on their accounts”, say the Bank of Spain.

Just like last year, Popular was again the entity that recorded the highest revenues from property sales, with 5,227 assets sold for just over €1,000 million. (…). Santander and Sabadell came in close behind Popular, with sales amounting to €994 million and €974 million, respectively. Nevertheless, it is worth mentioning that the figures provided by the entities are not homogenous, given that some include sales by property developers linked to banks as well as sales of other assets such as garages, storerooms, retail premises and land. (…).

CaixaBank was ranked in fourth place, with sales of €610 million. (…). BBVA and Liberbank were the entities that saw the highest increase in property sales. Sales by the former rose by 62% to €323 million and that figure increases to €529 million if we include the sales of assets from its property developers’ balance sheets.

Meanwhile, Liberbank increased its volume of property sales by five times to €89 million, after reconfiguring its real estate arm and assigning more resources to it.

The other entities – primarily groups created from the former savings banks – fall well behind in terms of sales volumes because their balance sheets are smaller, in part because they transferred assets to Sareb. (…).

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Don Piso Invests €36M To Build New Homes In Barcelona

11 July 2016 – La Vanguardia

The real estate group Don Piso has 10 housing developments underway, worth €36 million, in the province of Barcelona, according to its majority shareholder and CEO, Luis Pérez. “Property development has always been a complementary part of our company’s activity; we mainly focus on brokering the sale and purchase of homes”, explained Pérez. The group, which has created an independent company for each construction site, has already completed one development in Badalona, the first one it started following the end of the real estate crisis; and it expects to finish its flagship development, opposite the Clínica Quirón in Barcelona, on the site of the former headquarters of the Tusquets publishing house, in September. In addition, Pérez explained that the group has three developments underway in l’Hospitalet de Llobregat, two in Cornellà and three in Sabadell. “We buy small plots of land on which to construct between 10 and 30 homes, in areas where we already have representatives and therefore where we know the market”, he explained. The developments are all at different phases, some are still under construction, whilst others are waiting for licences to be processed.

Don Pizo, explained Pérez, has accelerated its pace of growth to manage the increase in transactions being brought about by the real estate recovery. Thus, he explained, the group already owns 20 offices of its own and a network of 51 franchised agents. “We are going to open an office in Madrid, with 8 people, which will operate as a sales office and which will also centralise the relationships with our franchisees: this represents our return to this market following the crisis”, he explained. The firm has also returned to the Canary Islands, where it had 60 offices before the crisis. “It is a very important market and we have hired a very powerful local partner there to undertake the significant expansion”.

Don Piso used to have more than 400 offices before the outbreak of the real estate crisis, in 2007 – it owned 156 of those outright and also had more than 260 franchises, but the crisis forced it to cut back, to just 8 own offices and less than 20 franchises, with a workforce of 40 people. Thanks to the recovery of the market, the firm now employs 296 people.

“We are enjoying an ideal market at the moment, with affordable prices and satisfied buyers. We hope that the market will continue like this, with price increases of between 2% and 6% p.a., and that we avoid repeating the mistakes of the past”, he acknowledged. Last year, Don Piso recorded a turnover of €7 million and brokered property sales worth €92 million. The firm, which returned to profit in 2014, expects to close this year with a 30% increase in revenues, to reach €9 million, with brokered property sales of €117 million.

Original story: La Vanguardia (by Rosa Salvador)

Translation: Carmel Drake

Banks Delay Property Sales & Await Higher Returns

11 August 2015 – Cinco Días

Spain’s banks are delaying their property sales and are instead waiting for conditions in the market to improve significantly before they increase their rate of sales. That was the conclusion of a report published by the ratings agency Moody’s in May about the management of the property glut still sitting on entities’ balance sheets, which now amounts to €83,000 million. And the trend has been confirmed by the (most of the) banks themselves in their recent half-year results presentations. (…).

In particular, Santander, BBVA, CaixaBank, Sabadell, Popular and Bankia sold 32,397 properties in total during the first six months of 2015, which represents a decrease of 18% with respect to the 39,241 transactions recorded during H1 2014.

However, the transactions this year have been closed with average discounts of around 35% – a significant improvement on the  60% discounts that the entities were forced to accept just a few years ago, as they desperately tried to get rid of the assets they had accumulated on their balance sheets following the burst of the real estate bubble. Some entities are now even generating profits from the sale of properties.

That is the case of BBVA, which recorded profits of €36 million from the sale of real estate assets worth €456 million during the last quarter. This turnaround enabled the entity to reduce the losses from its real estate arm to €300 million during H1 2015, which represents a decrease of 35% on the negative figures it recorded a year earlier. And it achieved this result selling half as many properties, with 5,190 transactions closed in the 6 months to June 2015, compared with 11,402 in H1 2014.

Banco Santander also reported similar success…the entity sold 5,200 properties during H1 2015, compared with 6,000 during H1 2014…it closed Q2 2015 with the “smallest quarterly loss” ever since the creation of the bank’s RE arm.

Meanwhile, Banco Sabadell reduced its sales volume by a third from 7,541 during H1 2014 to 5,190 in H1 2015, and with lower discounts – specifically, with an average reduction to gross value of 46.4%, versus 52.4% last year and 60% in 2013.

CaixaBank sold 5,907 properties in H1 2015 compared with 7,392 in H1 2014…and has also offered lower discounts this year.

However, two banks stand out as the exceptions to the rule – Bankia and Popular – which actually both increased their sales volumes during H1 2015. The former sold 3,345 properties in H1 2014 and 4,135 in H1 2015, with discounts this year of 35%…(…). Meanwhile, the latter really bucked the trend, with the sale of 1,172 properties in H1 2014, increasing to 4,135 in H1 2015, whereby doubling its revenues from asset sales…(…).

Original story: Cinco Días (by Juande Portillo)

Translation: Carmel Drake

Sareb Sold 5,000 Assets In H1 2015, A Decrease Of 38%

3 July 2015 – El Economista

Sareb’s Chairman, Jaime Echegoyen (pictured above) has revealed that the entity sold 5,000 properties during the first half of 2015, which represents a sales rate of 28 units per day, with the majority of its activity concentrated in the retail market.

These figures show that the so-called ‘bad bank’ reduced its sales rate by 38.27%, with respect to the same period last year, when it sold 8,100 properties during the 6 months to June, i.e. 45 properties per day. Sareb has set a sales target of 15,000 properties for 2015.

According to Echegoyen…60% of the 5,000 properties sold during the first half of the year came from the balance sheet of property developers, as a result of agreements to facilitate the sale of homes that had been held as collateral for loans. (…).

The head of the ‘bad bank’ highlighted that the majority of the company’s debtors are small and medium-sized companies “which, in many cases, need support to settle the debtor position that they hold”. In this sense, he reiterated that Sareb “is not a bank” and therefore it cannot offer new financing, but it can collaborate by affording borrowers time and flexibility. Thus, during the first few months of the year, the company has evaluated more than 2,500 proposals from debtor companies to arrive at sale, restructuring and refinancing agreements.

Sale of land

Although the volume of property sales decreased during the first six months of the year, the volume of land sales increased, by 43% with respect to the same period last year, to reach 23, whilst the income from these transactions grew four-fold.

Moreover, Sareb closed 14 transactions in the tertiary sector, i.e. double the number recorded during the same period last year, with growth in income of almost 50%.

Echegoyen acknowledged that Sareb’s activity in the institutional market during the first half of the year “has been moderate” and he announced that the company intends to continue its divestment initiative during the second half of the year, with the launch of several loan portfolios, linked to different kinds of collateral, such as land, work in progress properties and logistical assets.

The Chairman of the ‘bad bank’ indicated that the current environment in the real estate sector “is very different” from that seen in 2012 and 2013, since the volume of transactions is beginning to grow, and prices are stabilising and have even started to recover in certain parts of the country, both for new and second-hand homes.

Social purposes

“Moreover, the recovery is not limited to the market for homes, but rather it is affecting other segments as well, such as land and tertiary assets, which is positive for us given the large range of real estate assets in our portfolio”, he added. In this sense, Echegoyen revealed that the bank plans to exploit this ‘stock’ of assets to deepen its commitment to society and he indicated that they are working to expand their social initiatives through other types of assets, beyond housing. (…)

Original story: El Economista

Translation: Carmel Drake

Moody’s Warns That Banks Are Delaying Their Property Sales

9 June 2015 – Expansión

Moody’s warns that Spanish banks are delaying the sale of foreclosed properties to avoid losses, as they wait for market conditions and house prices to improve.

In a report about residential mortgage-backed securities (RMBS), Moody’s observes that, despite the recent decrease in mortgage foreclosures, data from the Bank of Spain shows that the volume of foreclosed real estate assets in the banks’ portfolios amounted to €83,400 million in 2014. As such, it warns that a delay in the sale of these properties may expose securitisation funds to greater losses.

In turn, it adds that the figures regarding the number of foreclosures that go to court actually under-estimate the real number of homes the banks have foreclosed in the last two years. And it points out that, in its opinion, a single property may be involved in more than one mortgage foreclosure process. Furthermore, it notes that, in general, Spanish mortgage lenders have become more willing to accept “daciones en pago” (assignment of deeds in lieu of payment).

Improvements

The number of mortgage foreclosures has decreased by almost 14% from the peak they reached during the crisis, recorded in 2010. Moody’s also highlights the decrease in the default rate in Spain, which is being driven by the decrease in interest rates and the improvement in the economic environment.

Original story: Expansión

Translation: Carmel Drake

Spain’s 6 Largest Banks Sold 236 Properties Per Day In Q1 2015

18 May 2015 – Cinco Días

Moody’s believes that the entities are delaying their property sales to avoid selling at a loss.

Sales decreased by 4% compared with 2014, but the entities increased their revenues.

The large banks boost sales by 19%, by lowering prices.

The large Spanish banks seem to have reached cruising velocity in terms of the rate of property sales. During the first quarter of the year, the six largest entities in the country sold a total of 21,221 properties, which represents an average rate of sales of 236 per day, a slight decrease of 4% compared with the 246 properties that were sold per day during the same period last year.

Although the market is very susceptible to seasonality and traditionally the fourth quarter yields many more transactions that the first quarter each year, these results show a certain degree of stabilisation after the transfer of the bulk of the banks’ real estate assets to investment funds caused sales to soar by 57% at the beginning of 2014. However, this boost did not allow the sector to reduce the heavy weight of property on its balance sheet.

“With the exception of the partial transfer of assets to Sareb, the so called Spanish bad bank, the stock of foreclosed properties on the balance sheets of Spanish banks has increased steadily since the start of the financial crisis in 2008”, said the risk ratings agency Moody’s, in a report about the sector to be issued this week.

The latest data compiled by the Bank of Spain reveals that the banks’ real estate charge at the end of 2014 was still €83,409 million. Although that figure exceeded €100,000 million in 2012, it was primarily the transfer of toxic assets from the banks to Sareb that enabled it to decrease to €75,000 million, since when the figure has continued to rise because the rate of sales still does not exceed the rate of new foreclosures.

“The banks are avoiding selling assets at a loss and are instead waiting for the market conditions to improve significantly” before they increase their current rate of sales, conclude experts at Moody’s.

The high volume of provisions already recorded by the sector and the gradual stabilisation of prices in the market also threatens to moderate the sale of properties, as banks wait for higher returns. That was the view of Javier de Oro, the Director of Real Estate Assets at Aliseda, when he spoke to this newspaper a few days ago.

The real estate arm of Banco Popular is one of the platforms that has improved the most since the transfer of 51% (of its share capital) to the investment funds Kennedy Wilson and Värde Partners; it managed to double its rate of sales in 2014 and has been the only entity to increase its sales (volumes) during the start to 2015.

However, as De Oro says, its “goal is not to sell for the sake of it”. “I would not be surprised if the bank says “stop” at some point, “we are going to focus on returns””, commenting on a possible brake on sales over the medium term.

For the time being, the sector seems to be comfortable with the cruising speed it has obtained in terms of property sales, even though that is not reducing the (size of) its foreclosed portfolio. After all, despite a 4% decrease in the number of sales, the six largest Spanish financial institutions have maintained practically the same volume of revenues that they achieved during the first quarter last year, around €3,000 million (€2,496 million excluding Santander, which has not provided its data, but which recorded turnover of €700 million during the same period last year).

Banco Sabadell explains that this phenomenon is occurring because “discounts are being reduced” at the same time as “sales with a value of more than €100,000 are increasing”.

Moody’s warns that the banks’ total exposure to property, which includes not only foreclosed assets, but also loans to property developers and real estate companies (susceptible to becoming new foreclosures), amount to €300,000 million.

“Only if the tepid recovery of the real estate market in 2014 gains momentum will the banks be capable of substantially reducing the very high stock of problem real estate assets”, say the analysts.

Data by entity – Q1 2015

CaixaBank

The Catalan entity, which sold 51% of its real estate arm to the fund TPG, leads the ranking of transactions in Q1 with the sale and rental of 5,029 of its own properties for €498 million (of which €216 million relates to rental) and 5,638 transactions (€962 million) including assets from property developers (down by 10% versus 2014).

Popular

The sale of 51% of Aliseda to Kennedy Wilson and Värde Partners enabled Popular to increase its sales by 48% to 2,780 own properties, for which it recorded turnover of €525 million.

BBVA

BBVA’s real estate arm, Anida, sold 4,094 properties (2,105 own properties), i.e. 18% fewer, for €360 million.

Sabadell

Sabadell’s platform, Solvia, has sold and leased 3,123 properties (2,559 own properties), i.e. 4% fewer for €474 million. 10% of all of its transactions relate to rental properties. The entity has improved sales of properties worth more than €100,000.

Santander

Altamira, which is 85% owned by Apollo, has sold 3,500 properties during the first quarter, which represents a decrease of 16%. Santander was the entity that began with high sales before lowering them year after year.

Bankia

The real estate arm of Bankia, which is controlled by Cerberus, has multiplied sales of its own properties: 2,086 for €197.7 million during the first quarter, compared with 822 sold (for €57 million) at the beginning of 2014.

Original story: Cinco Días (by Juande Portillo)

Translation: Carmel Drake