Tag: real estate debt

Santander Considers Selling 51% Of Popular’s RE To A Single Fund

20 July 2017 – Expansión

The process initiated by Banco Santander at the end of June to find partners willing to take on some of Popular’s portfolio of foreclosed assets and doubtful real estate debts (with a gross value of €30,000 million) is moving ahead and the entity’s preferred options are starting to emerge (…).

According to sources familiar with proceedings, one of the options that Santander is considering is the sale of 51% of this real estate business to a single buyer.

The same sources explain that the sale of a majority stake to an investment fund would allow the Cantabrian bank to deconsolidate all of the non-performing real estate risk from its balance sheet, as it would be left with a minority stake. Santander has engaged Morgan Stanley as the advisor bank for the process and has appointed independent director Pedro Pablo Villasante to supervise the entity.

Sources in the market indicate that interested parties include some of the funds specialising in these assets, such as Apollo, Blackstone and Lone Star. They add, nevertheless, that the definitive format through which these firms will enter into the operation has not been defined yet since any deal is still in a very preliminary phase.

Non-binding offers

Sources at Banco Santander acknowledge that this possible deconsolidation of the real estate business, through its sale to a partner, is just one of the options being considered. However, they maintain that the definitive decision as to whether the entity will choose a single buyer or more than one buyer has not been taken yet and is not even close to being taken.

According to sources close to the bank, the operation is still in the “attracting interest and receiving non-binding offers” phase. This period will continue until at least after the presentation of the results corresponding to the first half of the year, which is planned for Friday 28 July.

The period during which the various funds may submit their non-binding offers is expected to remain open until that same date, at least. Market sources are confident that other major investors will also express their interest, including Cerberus, Goldman Sachs, KKR, Kennedy Wilson and Värde Partners. The next phase will see the receipt of the binding offers

Following the resolution of Popular and its acquisition for €1, Santander revealed its plan to reduce its non-performing real estate assets by 50% within 18 months. The segregation of the property portfolios into a single vehicle could reduce that period even further (…).

Santander’s proposed plan may also include an additional agreement with the buyer fund to acquire 51% of the servicer Aliseda. That subsidiary, which is responsible for managing all of the real estate assets proceeding from Popular, is currently controlled in its entirety by Santander, after the entity chaired by Ana Botín repurchased the 51% stake held by Kennedy Wilson and Värde Partners on 30 June (…).

Popular’s real estate portfolio, which is located primarily in Andalucía, the Comunidad Valenciana and Cataluña, includes around €17,000 million in foreclosed properties and another €13,000 million in doubtful property developer loans. These assets include, for example, more than 25,800 homes (which are being marketed by Aliseda) and office complexes (…).

Original story: Expansión (by Nicolás M. Sarriés)

Translation: Carmel Drake

CBRE: Madrid Is EMEA’s 3rd Most Attractive City For RE Investors

30 March 2017 – Mis Oficinas

Madrid is the third most attractive city in Europe, the Middle East and Africa (the EMEA region) for real estate investment. At least that is according to the “Global Investors Intentions 2017” report compiled by CBRE, the leading real estate consultancy and services company in the world, based on a survey of 2,000 international investors.

According to the study, London leads the ranking of the most attractive cities for real estate investment, after it was chosen by 17% of investors. It was followed by Berlin (15.8%) and Madrid (8.4%). Amsterdam and Paris complete the top five (…). For the first time in 2017, cities such as Hamburg and Milan did not appear in the top ten, due to growing concerns from investors about (high) asset prices in some of Europe’s most established markets, following years of increases.

“Madrid is a very attractive city for international investors for a variety of reasons. Prices here are still below those of other markets, and in recent years, some very interesting renovation and development projects have been launched. Similarly, rental income is forecast to rise. These factors caused investment in the Spanish capital to exceed €4,000 million in 2016”, said Paloma Relinque, National Director of Capital Markets at CBRE Spain.

Meanwhile, Spain is ranked sixth in the list of the most attractive countries to invest in, whereby maintaining its top-10 position, against competition from all of the countries in Europe, the Middle East and Africa. In this sense, Germany is the market of choice for 22% of those surveyed as an investment market in 2017. It is followed by the United Kingdom (20%), Eastern Europe (10%), Scandinavia (10%) and The Netherlands (9%).

In terms of the sectors that these investors plan to invest in, the office market was mentioned the most, by 34.7% of investors. It was followed by the industrial-logistics sector, chosen by 25.9% of respondents. Nevertheless, one of the most interesting conclusions was the growing appetite for alternative assets, in which 7 out of every 10 real estate investors are now investing. Specifically, real estate debt is the segment that is sparking the most interest amongst investors (31%), followed by leisure and entertainment (27%) – which is the segment that grew by the most in comparison to the previous year – and student halls of residence (25%).

On the other hand, the report described investors’ main concerns for 2017. The most frequently mentioned concern was the risk that interest rates rise more quickly than expected, a fear cited by a quarter of the investors surveyed. It is noteworthy that, despite the numerous elections on the horizon in Europe and their possible implications for the sector, investors place greater importance on the economic climate than on geopolitical matters. The third concern is the fact that prices are forecast to increase and the risk of a possible bubble. (…).

Original story: Mis Oficinas

Translation: Carmel Drake

Lindorff Finalises Purchase Of Aktua For €200M

2 March 2016 – Expansión

Project Pegasus / The Norwegian group is in exclusive negotiations to acquire the platform that manages homes and RE debt on behalf of BMN, Ibercaja and Santander.

Centerbridge and Lindorff are negotiating the details of one of the largest corporate transactions in Spain so far in 2016. The US fund has selected the Norwegian group as the main candidate to acquire the real estate platform Aktua, a former subsidiary of Banesto, whose asking price amounts to just over €200 million, according to several financial sources.

Aktua currently manages homes and real estate debt for Santander, BMN and Ibercaja. Aktua reached an agreement with the Aragonese group just over a month ago, which has somewhat delayed the sale of the management platform.

The sources consulted explained that the main terms of the agreement have now been established, but the fine print may take a few more days to finalise before signing.

In this way, Lindorff has beat off the other two finalists in the process, known as Project Pegasus: the US fund Apollo, the owner of Altamira; and the private equity firm Activum. The investment banks Bank of America and Barclays are acting as advisors to the operation.

The Norwegian group has been operating in Spain for eight years now, although to date, it has focused on the management of unsecured loans. Within this market, Lindorff acquired the collection subsidiaries of Santander, Banco Sabadell and BMN. The acquisition of Aktua will allow the firm to enter a new business segment with higher returns.

Aktua was founded in 2008 and currently employs 400 professionals working in 24 offices. Following the purchase of Gestión de Inmuebles Salduvia, from Ibercaja, it now manages more than 42,000 real estate assets, worth over €8,000 million. (…).

According to the latest available accounts, Aktua earned almost €5 million in 2014 and generated an EBITDA of €8.5 million. The forecasts from the advisors to the sale predict that the firm will generate EBITDA of between €40 million and €50 million in 2015.

According to data at the Commercial Registry, Centerbridge owns a 83% stake in Aktua’s capital, Santander owns 6% and the company’s managers own 11%. The latter group includes the CEO and former Director of Banesto, Enrique Dancausa. (…).

Original story: Expansión (by J. Zuloaga and D. Badía)

Translation: Carmel Drake