Tag: real estate companies

Bankia Habitat Returns To Profitability Thanks To A Tax Credit

26 January 2015 – Expansión

Bankia has cleaned up its real estate subsidiary with a fund contribution and a tax credit. The application of deductions for deferred taxes allowed Bankia Habitat to emerge in 2013 (the latest data published by the entity) from the losses it had recorded in previous years.

The real estate company recorded losses before tax of €86 million, which were offset by the application of deferred taxes amounting to €383 million, taking the net profit of the company to €297 million, compared with a loss of €1,347 million in 2012. This result offset losses recorded in previous years. Furthermore, Bankia Habitat reversed certain asset impairment losses amounting to €68 million, to take the total cumulative profit for the year to €350 million.

In parallel, Bankia restored the equity balance of its subsidiary by completing two debt-relief transactions, whereby injecting €700 million and €606 million of its own funds into the real estate subsidiary. This inflow of €1,306 million allowed the group to rebalance the company’s equity. Its own funds amounted to €995 million at the end of 2013, compared with a negative figure of €607 million a year earlier.

Bankia Habitat has accounted for a credit amounting to €596 million, demandable by the Public Administration, for deferred tax assets arising from losses, according to its audit report for 2013. Bankia Habitat’s total deductions pending offset amount to €221 million at the individual level and €2,451 million at the consolidated level.

Valuations

These amounts have been generated since 2004, although the bulk was recorded between 2008 and 2012. The timetable for realising the outstanding deductions finishes in 2013 and is conditional upon the company generating profits.

Bankia Habitat was the focus of many of Bank’s solvency problems. The solution began with the transfer of some of its assets to Sareb at the end of 2012, for a consideration of €1,250 million. The bank signed an agreement with Haya to manage the marketing of the Group’s properties.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake

JLL Appoints Benoît du Passage As CEO In Spain

23 January 2015 – Expansión

Benoît du Passage (pictured), the current Chairman of the real estate consultancy firm JLL in Spain, has taken over as CEO of the group as well, where he will lead an ambitious strategic plan that the multinational company has for Spain over the next few years.

Original story: Expansión

Translation: Carmel Drake

Property Managers Look Forward to the End of the Recession

22/08/2014 – El Pais

The majority of large developers that escaped the unforgiving financial crisis are trapped in vagueness which prevents them from confirming the recovery peeping into the real estate market. They no longer owe the terrific €35 billion of 2008, but they still have a €20 billion debt, crippling them from resuming their activities.

After the first five years of the recession, marked by many refinancing agreements, all the measures turned out to be insufficient as the firms still had no capacity of paying the debts. In 2013, the dinamics changed.

Only Catalonian Fergo Aisa has not survived the tough process, liquidated fast and quietly.

The undisputable master in staying afloat is Colonial. In May this year, the company enlarged its capital with a €1.263 million amount and gained such promintent investors as Juan Miguel Villar Mir (the president of OHL) and the Sovereign Wealth Fund of Qatar. Furthermore, the realtor shed the troublesome assets and earned €559 million in the first half of the ongoing year.

The business was faring so well, that Colonial decided to take part in the bidding for a 62% stake of Realia put up for sale by FCC and Bankia. Colonial has taken everyone aback by outbidding sure-bet Fortress and King Street with its €650 million offer submitted exclusively for a real estate affiliate of Realia.

However, before the best bidder acquires the branch, it must meet several requirements, like selling 9 shopping malls of Realia. Then, the real negotiations on buying 20 offices in Madrid, the Fira tower in Barcelona and the Kansas City business center in Seville will commence.

At present, after selling the stake at SIIC de Paris for €1.51 million, the real estate assets of Realia represent a value of €830 million, whereas the developer activity and the land together barely cross €520 million.

Sacyr also successfully overcame the black days of the recession, although finally it sold its arm Vallehermoso, allowing the firm to redeem a €1.2 billion indebtness.

Principally, the company had to deal with too many plots, a very common problem among property managers, such as Reyal Urbis, Martinsa-Fadesa or Metrovacesa.

When the crisis came around, banks realized they had lent nearly €15o billion to developers for purchase of 200 million square meters of land in total. As the borrowers progressively failed to pay-off their debt, six years later, the entites owned over 100 million square meters of land.

Apart from banks, the magnitude landed in balance sheets of Spain‘s ‘bad bank’ (Sareb) or was sold to investment funds with up to 60% discount. The remaining 95 square meters stay in hands of the property managers who hurry to sell them out to pay the debts.

Other companies like Martinsa-Fadesa, Reyal Urbis and Renta Corporación found themselves at the risk of being auctioned. The two first still struggle to crawl out of the insolvency process, whereas the last had managed to do so but was then hit by an unexpected €10 million debt owed to the Tax Office.

 

Original article: El País (by Juan Carlos Martínez)

Translation: AURA REE