Tag: real estate assets

Spain’s Banks Look to Sell €19 Billion in Real Estate Assets and NPLs in 2019

21 October 2019 – Although the pace of sales has fallen in recent years, Spain’s banks are continuing their efforts to reduce their exposure to non-performing loans and foreclosed real estate assets left over from the financial crisis of the first half of this decade. In the year to date, those banks have sold portfolios of toxic assets worth a total of more than €7 billion. Another twelve other transactions worth approximately €11.7 billion, however, are on course to conclude by the end of this year.

Sabadell has been particularly active, having sold €2.55 billion in portfolios such as Greco and Rex. Unicaja and Ibercaja have also sold assets worth more than €1.5 billion. Santander is currently negotiating the sale of another two portfolios.

Spain’s financial institutions are expected to end the year with total sales of nearly €19 billion, compared to 41.7 billion euros last year, down by more than half.

Original Story: El Español – María Vega

Adaptation/Translation: Richard D. K. Turner

El Corte Inglés Considers Creating a Socimi to List its Real Estate Assets on the Stock Market

15 February 2019 – Modaes.es

El Corte Inglés is looking for solutions for its portfolio of real estate assets. The Qatari sheikh Hamad Al Thani, the third largest shareholder in the Madrilenian department store group, has proposed the creation of a Socimi to manage the rental of its assets.

The plan proposed by Al Thani, who entered the company’s share capital last summer, involves creating a company in which El Corte Inglés would own a 51% stake. The remaining 49% of the shares would be listed on the stock market.

The Qatari investor already proposed this solution to the previous President of the group, Dimas Gimeno, but it was not successful then, according to El Economista. For the time being, the Board of Directors of El Corte Inglés has not received a formal petition regarding the plan.

The real estate portfolio of El Corte Inglés is worth €17.1 billion, according to a report from Tinsa. The department stores and hypermarkets are worth €15.0 billion, whilst the warehouses, offices and mixed-use buildings are worth €1.1 billion. Finally, the high street establishments are valued at €1 billion.

It is estimated that, in the event that the operation proposed by the sheikh goes ahead, the valuation of the assets could amount to half their current value, around €8.2 billion, according to Tinsa.

In parallel, the group is continuing to work on the sale of 130 real estate assets worth €2 billion in conjunction with the consultancy firm PwC. The property that El Corte Inglés wants to divest now comprises land, offices and buildings defined as non-strategic. Those assets also include some logistics centres.

The objective of these divestments is to reduce the group’s debt so that it can obtain a level of solvency that will allow it to raise financing in the capital markets at a lower price. In this sense, Núñez de la Rosa, the President of the group, has committed to reducing the group’s liabilities by €1 billion in twelve months.

Currently, the real estate portfolio of El Corte Inglés comprises 94 shopping centres, which account for 87% of the total value of the company’s assets. Two of those properties are valued at more than €500 million each, and another two are worth between €400 million and €500 million each.

The department store group recorded EBITDA of €335 million during the first half of 2018, up by 4.4% YoY. Between January and August, the company recorded turnover of €7.6 billion, up by 0.4% YoY.

Original story: Modaes.es

Translation: Carmel Drake

Brussels Authorises Creation of Real Estate JV By Sabadell and Oaktree

11 June 2018 – Europa Press

On Friday, the European Commission approved the creation of a joint venture in the real estate sector by Bitarte, a company belonging to the Banco Sabadell group, and the US company Oaktree Capital Group Holdings.

The creation of this joint venture, which will be dedicated to the identification, acquisition, development and commercialisation of residential plots in Spain, does not represent a problem for the competition authorities due to its limited impact on the structure of the market, according to a statement issued by Brussels.

In this way, the operation has been approved by virtue of the European rules governing concentrations and has been examined under the framework of simplified control procedures, which is used by the EU executive in less complex competition cases.

Bitarte owns real estate assets under development, whilst Oaktree Capital Group is a global company specialising in management and specifically in loan and financing strategies.

Original story: Europa Press

Translation: Carmel Drake

Bain & KKR In Final Round To Acquire Liberbank’s RE Portfolio

22 September 2017 – Expansión

Liberbank is on the verge of closing the sale of a portfolio of real estate assets worth €800 million. The funds Bain and KKR are the finalists in the process, according to financial sources in the know. There may also be a third finalist in the running, which could be any one of Apollo, Blackstone and Lone Star.

These last three funds approached Liberbank during the initial phase to express their interest in the portfolio of real estate assets for sale, according to sources close to the operation. The funds will have already had access to the virtual data room to find out more details about the assets for sale.

As is usual for this type of real estate operation, they would have also performed the corresponding due diligence. The interest parties signed confidentiality agreements during the first few weeks of August.

The sources specify that Liberbank will close the binding offer phase in the last week of September, most likely on Friday 29.

Development of land

Liberbank is willing to offer favourable conditions to those funds interested in developing the land included in the portfolio, according to sources familiar with the operation, which has been baptised as Project Invictus by Alantra. An incentive for the sale in light of the good times that the Spanish real estate sector is enjoying, which is in the middle of a growth spurt.

The objective of the bank is to divest this batch of property, mostly homes, during the month of October, at the same time as it undertakes a capital increase, amounting to €500 million, which it plans to launch on 9 October. The capital increase, which has preferential subscription rights, is expected to be approved by the Extraordinary General Shareholders’ Meeting on that date.

At the end of July, Liberbank engaged Alantra to coordinate the sale of a package of 9,000 real estate assets, worth €1,200 million. But that firm has reduced the sale perimeter to a batch worth just over €800 million.

The entity is being forced to clear up the uncertainty over the health of its balance sheet. The bank’s high real estate exposure led to doubts in the market following the resolution of Popular’s future on the morning of 7 June. Its stock of non-performing assets accounts for 22% of its balance sheet, one of the highest levels in the sector.

New strategy

Until then, Liberbank had been selling its real estate assets to individuals above all, and it was even generating profits in some cases. The sale of the real estate portfolio worth more than €800 million to one of the major funds will represent a change of strategy to accelerate the reduction of the entity’s real estate exposure.

But the speed of getting rid of this real estate could come at the expense of its financial results. Operations with opportunistic funds are typically signed at a loss, and so sources at the bank have not ruled out the possibility that this strategy will see Liberbank record losses this year. During the first quarter of the year, the most recent accounts published in the market, Liberbank earned 8% less than during the same period in 2016. The entity thinks that the pure banking business, the interest margin, bottomed out in June, when it dipped by 11%.

Real estate subsidiary

In August, the bank led by Manuel Menéndez started its cleanup plans. It sold its real estate subsidiary, Mihabitans, to Haya Real Estate for €85 million. The company specialising in the provision of management services for financial and real estate assets for entities and funds then become a partner of the bank for the next seven years.

Liberbank, the fruit of the integration between Cajastur, Caja Extremadura, Caja Cantabria and Caja Castilla-La Mancha (CCM), has been facing the rumour of a takeover for several months. The entity’s share price is trading at 0.29% of its book value (..).

Original story: Expansión (by R. Sampedro)

Translation: Carmel Drake

BBVA Puts Its RE Arm Anida Up For Sale

6 September 2017 – El Confidencial

A new major real estate transaction is on the horizon: BBVA has announced that it is analysing the sale of its servicer Grupo Anida. The real estate specialist is a giant in its own right, with gross assets of more than €5,000 million. BBVA is looking to take advantage of the appetite from large international funds to acquire a ring-side seat in the recovery of the Spanish market.

According to four sources in the know, the plans of the entity chaired by Francisco González are to focus on completely divesting this subsidiary, which accounts for just a proportion of the €8,750 million of net real estate exposure on its balance sheet. BBVA has declined to make any comments.

Nevertheless, last Thursday, the bank itself acknowledged in its results for the first half of the year, that its objective for the whole area known as Non Core Real Estate, which includes Anida, is “to accelerate sales and reduce stock, with specific actions for those products that have been on the balance sheet for the longest”.

Grupo Anida is the heir of the former fund BBVA Propiedad, which the bank practically rescued at the end of 2008, when the first effects of the crisis swept away these types of vehicles, a crisis that the entity averted by investing €1,600 million to continue as the sole shareholder and provide an exit for its other investors.

The bank also owns a property developer division, Anida Desarrollos Inmobiliarios and various subsidiaries that it has been accumulating under the same umbrella, such as Anida Operaciones Singulares, and subsidiaries in Mexico and Portugal.

According to the latest audit report, corresponding to the year 2015, the real estate company has managed to reduce its losses by 36%, to €311.4 million. But, since the publication of those accounts, BBVA has completed some major transactions, such as the sale of the Boston and Buffalo portfolios, and the transfer of 1,500 homes to Testa, whose gross value amounts to €485 million; and the transfer of land worth €431 million to Metrovacesa.

But, even after all of these moves, the entity is now willing to serve the main dish in the form of the sale of Anida, whose potential purchasers include some of the funds who expressed their interest in the sale of Popular’s toxic assets, such as Apollo and Cerberus, not to mention firms such as Bain, which expressed its interest in Vía Célere in the past, according to the sources.

For BBVA, closing an operation of this kind would represent the cherry on the top of almost ten years of hard work, a period during which the entity decided to follow its own strategic approach, setting itself apart from the market trend, by opting to retain the bulk of its property on the balance sheet rather than sell it badly.

The entity has been able to maintain this policy thanks to it high provisioning levels, one of the most generous in the finance sector, given that the average coverage rate of its entire real estate exposure, including live and foreclosed property developer loans, amounted to 57% at the end of the first half of this year.

The sale of Anida will, therefore, allow it to release the bulk of the provisions linked to those assets and take advantage of the soaring appetite from the large international funds to own a large real estate platform through which to try to benefit from the recovery in the market.

Nevertheless, any happy ending in this regard will always be dependent upon the thorny matter of price, a stumbling block that has caused the entity to reject several offers for Anida in the past.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Criteria Cuts Ties With Servihabit & Will Manage Its Own Properties

2 June 2017 – Expansión

Criteria Caixa has taken another step forward in the process to deconsolidate itself from CaixaBank. The holding company that owns stakes in subsidiaries of the La Caixa Banking Foundation (Fundación Bancaria La Caixa) has decided to internalise the management of its real estate assets, a function that until now have been performed by Servihabitat.

That servicer is owned in part (51%) by the US fund TPG and the remaining 49% stake is owned by CaixaBank. According to sources, Criteria will have to indemnify Servihabitat for the early termination of the contract with a payment amounting to €34.5 million.

The original agreement between the two companies was signed in 2014 and the contract still has six years left to run, given that it is due to terminate in 2023. The document included a clause to cover the possibility of an early termination in exchange for the payment of compensation, which has now been agreed by mutual agreement between the two parties.

The properties owned by Criteria account for around 7% of the total volume of the portfolio that Servihabitat has under management. The company also manages the properties foreclosed by CaixaBank, but its aim over the last few years has been to increase its client base by incorporating new portfolios onto its platform. The servicer took a giant leap when it was awarded the management of several portfolios by Sareb, comprising real estate assets from Novacaixagalicia, Liberbank and Banco de Valencia.

In 2016, the assets managed by Servihabitat increased by 4.8%, to reach 239,132 units, with a value of almost €50,000 million. The company recorded turnover of €285 million, up by 14.8%, thanks to the sale of homes worth €1,645 million, up by 11%.

Portfolio of €2,842 million

Criteria, which is chaired by Isidro Fainé, considers the decision to move to directly managing its own real estate assets, worth €2,842 million, to be strategic. Of the total amount €515 million – 18% of the total – are assets allocated for sale; €1,021 (36%) correspond to the land portfolio – noteworthy plots include those adjoining Port Aventura park –; and €728 million (26%) relate to rental properties. Finally, another €578 million (20%) constitute assets allocated to La Caixa Banking Foundation’s affordable housing programs.

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake

Altamira Buys Oitante’s Servicer In Portugal

5 April 2017 – La Vanguardia

Altamira Asset Management and Oitante, the company created to manage Banif’s assets, have agreed to purchase the business unit responsible for managing the latter’s real estate assets and loans (the servicer) in Portugal.

The new servicer will initially manage real estate and financial assets worth more than €1,500 million, according to a statement issued by the manager, which currently has assets under management worth more than €50,000 million.

The manager indicated that the operation has been structured in such a way that ensures “significant” financial support, but it did not reveal any more details.

Alantra acted as the financial advisor to the operation, whilst Linklaters advised Oitante on the legal side and Uría Menéndez-Proença de Carvalho advised Altamira

Original story: La Vanguardia

Translation: Carmel Drake

Realia’s Profits Rose Almost 7-Fold In 2016 To €115.7M

28 February 2017 – Expansión

Realia recorded a net profit of €115.7 million in 2016, compared with €17.2 million in 2015, which represents an almost seven-fold increase in earnings, according to a report submitted yesterday by the real estate company to Spain’s National Securities and Exchange Commission (CNMV).

Sources at Realia explained that this evolution in profit reflects the impact of a series of extraordinary items, including a positive variation in the value of its real estate investments, amounting to €49.2 million.

In addition, the company recorded a positive impact of €113 million, due to discounts associated with the refinancing of the residential debt and loan acquired by Inversora Carso from the bad bank Sareb.

During 2016, the group generated total revenues of €97.2 million, up by 2.4% compared to 2015, driven by an increase in revenues from promotions and land (+€7.1 million) and despite a decrease in rental income (-€4.8 million) after the Los Cubos building in Madrid was vacated – that property is now up for sale.

Meanwhile, the gross operating income (EBITDA) amounted to €41.8 million in 2016, compared with €40.5 million in 2015, which represents an increase of 3.3%.

Original story: Expansión

Translation: Carmel Drake

Banks Have Put €2,000M In RE Assets Up For Sale In 2017

6 February 2017 – Idealista

Real estate assets are still treated like a hot potato in the banking sector. In order to reduce the default rate (which still exceeds 25% in the case of loans to property developers) and avoid more provisions, entities such as Bankia, BBVA and Liberbank are continuing in their efforts to accelerate the sale of portfolios of unpaid secured loans, as well as packages of real estate assets. 2017 has started with almost €2,000 million in properties up for auction. (…). They include homes, premises, offices, industrial warehouses and land.

Most of the operations have been on the market for several months, since no buyers have yet been found. Some are well known, such as BBVA’s Project Vermont, a portfolio of loans to property developers secured primarily by newly built homes and worth almost €100 million. Several funds were interested in acquired this lot: Oak Hill, Fortress and AnaCap.

And it is BBVA that has the most packages on the market, including: Project Buffalo, which contains homes worth €400 million; and Project Boston, which comprises 16 office buildings located in Madrid, Barcelona and Valencia, worth €200 million. (…).

Liberbank has put Project Fox on the market. It is a portfolio of real estate debt worth around €200 million and is the entity’s first (but not its last) portfolio of unpaid mortgages.

Other operations have also made their debuts in 2017. Such is the case of Project Tour, a package being sold by Bankia, one of the most active players in the sale of real estate portfolios. It comprises 1,800 properties (…) and is worth €166 million.

Funds start to divest their purchases

The market has also started to see how some of the international funds that have invested in our country in recent years are starting to sell some of the assets they have purchased. Last year, Lone Star made its debut as a vendor (…) when it put Project McLaren on the market. It comprises two portfolios: one containing more than 1,000 mortgage loans worth €102 million and secured primarily by homes, although there are also some commercial assets in the mix. The other portfolio, comprising more than 600 homes, has a combined appraisal value of €51 million. The firm Cabot, which specialises in managing bank loans, has expressed its interest in that portfolio.

Another fund that wants to divest some of its real estate investments in Spain is the US firm Ares Management, which has put Project Firefox onto the market: real estate debt worth around €160 million.

Bankia, Caixabank and Sareb were the most active at divesting real estate in 2016 (…).

Sareb has been one of the key players in the market (in recent times), having managed to place €1,565 million of real estate debt of all kinds with international investment funds (during its three year life). Its largest non-performing loan portfolio (Project Eloise) had a nominal value of €553.3 million and it was purchased by Goldman Sachs. (…).

In 2016, Bankia had several portfolios up for sale, including Project Ocean, Project Tizona and Project Lane.

Caixabank become one of the most proactive entities in the sale of Spanish property last year. Its most high profile sales included Project Sun, with hotel debt worth around €1,000 million; Project Carlit, with around €750 million of real estate debt; and Project More 2, containing €200 million of owned properties (REOs). (…).

Other players with more limited activity included Abanca (formerly Novagalicia) and Cajamar.

Original story: Idealista (by P. Martínez-Almeida)

Translation: Carmel Drake

Sabadell Still Struggling To Digest CAM’s RE

30 January 2017 – El Mundo

Real estate is continuing to weigh down heavily on Banco Sabadell’s balance sheet, above all due to the complications involved in digesting the enormous portfolio of properties that it inherited from CAM, most of which are located in the Community of Valencia. The entity is selling more properties than ever, its revenues have soared, the number of assets being sold exceeds the number of properties being foreclosed and the prices at which it is selling its real estate are continuing to rise, however, the overall impact of the initiative is still generating losses, albeit for the time being. Specifically, Sabadell’s real estate asset business unit lost €908.4 million in 2016, according to the Group’s annual results, which were presented in Barcelona on Friday.

Those losses already reflect the effect of the Asset Protection Scheme (EPA), which the entity relies on to cover 80% of the losses generated by CAM’s real estate portfolio.

The Catalan bank still holds €9,035 million in real estate assets on its balance sheet, which represents just 2% less than at the end of 2015. Most of those properties (land, buildings, homes etc) belong to the stock of loans that it inherited from CAM and are located in that former entity’s areas of operation, in other words, the Community of Valencia and Murcia. Of those €9,035 million real estate assets, €7,166 million stem from foreclosed assets and embargos of construction companies and property developers, which were unable to repay their loans, and of those €3,851 million corresponds to land. In other words, 42% of the entity’s stock is land, the least liquid asset.

Sabadell owns finished homes worth €1,377 million. Moreover, its properties from unpaid mortgages amount to €1,918 million.

Overall, the bank has managed to offset the mass entry of properties onto its balance sheet with an intensification of sales. For example, it closed 2016 with the entry of properties (homes, land, premises, etc) worth €384 million, whilst the sale and divestment of these assets amounted to €457 million. In other words, it is now selling more than it is taking on.

Solvia is working hard too

In addition, Solvia, the bank’s real estate subsidiary, which has its operations centre in Alicante, sold assets worth €1,557 million last year, up by 40% compared to the previous year, with 14,553 operations, i.e. 27% more. The entity said that “the reduction in the sales discount and the overall increase in prices are signs of the recovery”. Last year, Solvia relied on sales of large asset portfolios to institutional investors to improve its ratios. Not in vain, 22% of its sales are made to that kind of buyer. (…).

Original story: El Mundo (by F.D.G.)

Translation: Carmel Drake