Operation Tramuntana: CaixaBank Assesses Offers Worth €200M

31 May 2017 – Voz Pópuli

CaixaBank is accelerating the sale of Project Tramuntana, one of the largest divestments that the Spanish bank is currently working on. The entity chaired by Jordi Gual is looking to sell off almost €600 million in unpaid loans linked to real estate developments.

The three funds that have progressed through to the final round of the process are: Cerberus, Deutsche Bank and Bain Capital, according to financial sources consulted by Vozpópuli. Those funds have reportedly put offers on the table of around €200 million for the portfolio during the non-binding offer phase.

They now have one more week to analyse all of the loans in the portfolio before submitting their binding offers, given that the cut-off date that was initially stipulated for this sales process was 8 June. With this, CaixaBank wants to be certain about who has won the bid by the middle of next month, so as to have all of the paperwork ready to close the agreement before the end of the first half of the year and whereby include the results in its half-year accounts.

CaixaBank sold the second largest volume of problem assets in Spain in 2016 (€2,100 million), after Banco Sabadell (€2,800 million) and ahead of Abanca (€2,100 million), Sareb (€1,400 million) and Bankia (€1,100 million), according to data from Deloitte.

Buyers

Project Tramuntana is almost a replica of an operation closed last year, Project Carlit, in which CaixaBank sold a portfolio of loans worth €850 million to Goldman Sachs. In addition, the entity sold hotel loans to Apollo.

Of the buyers left in the running, Cerberus is the one that most urgently wants to purchase the portfolio, given that it did not win any of the processes that it participated in last year. The US fund needs to accumulate assets in order to leverage its two platforms in Spain, Haya Real Estate, which it purchased from Bankia, and Gescobro.

Bain Capital, meanwhile, was the largest buyer of bank portfolios in Spain last year, acquiring real estate assets and debt worth €1,700 million from Sabadell, Bankia, Cajamar.

Meanwhile, Deutsche Bank also had a busy year. On the one hand, it bought assets from several entities, such as the case of the Ocean portfolio, from Bankia, but it also sold the majority of the problem assets held by its own bank in Spain. They were purchased by Oaktree, which forced the entity chaired by Antonio Rodríguez Pina to recognise a provision amounting to €68 million.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Speculation Returns To The Market For Land In Madrid & Along The Coast

11 April 2016 – ABC

During the years of the crisis, investors regarded land as one of the least attractive assets. In fact, in the face of scarce demand and the paralysis in the construction sector, land values fell to historic lows. (…).

Sales of urban land, the substratum of real estate developments, are growing again after nine years of consecutive decreases. And they are doing so at a healthy – and on occasion, vertiginous – rate in certain areas of the country where the housing market has already started its recovery, such as the more illustrious areas of major cities, including the north of Madrid and established areas along the coast (Málaga, Palma de Mallorca and the Canary Islands). So much so that a warning is now spreading amongst analysts and agents in the sector: the scarcity of developable land – which does not require land planning approval – in certain areas, and renewed interest from investors is generating a new “overheating” in the price of transactions, something not seen since the burst of the real estate bubble.

The latest “Market Trends” report prepared by Solvia, the real estate arm of Banco Sabadell, warns that the expectation of a strong recovery in value is incubating operations of a speculative nature. “The fact that the supply of well-located land is scarce in areas with demand, that there is widespread liquidity in the market and that there is fierce competition to acquire assets, means that land purchases are being made for speculative purposes, in certain specific cases, for subsequent resale at significantly higher prices”.

In this sense, the study, which does not cite who is behind such transactions, highlights the cases of the Madrilenian neighbourhoods of Valdebebas and Montecarmelo. In the case of the latter, the price of land has risen by between 40% and 60% to €2,400/m2.

Montecarmelo and Valdebebas

Fernando Rodríguez de Acuña, Director General of Operations at the consultancy firm RR de Acuña y Asociados distinguishes between three players in the race for land: the financial entities and large investors, who have put their assets up for sale “in stages” and the small and medium-sized funds, which are more prone to speculative operations given that they seek high short-term yields. The confluence of these players has given rise to a situation in which both the activity and value of these real estate assets have increased significantly, if we exclude the statistical effect of operations carried out by financial entities foreclosing unpaid debt. Thus, the number of transactions carried out by operators in the sector (developers, funds and cooperatives) increased by 37% in 2015 compared with the year before and by 60% in terms of transaction volume. (…).

According to the experts, two operations in particular have caused prices in the land market in the Spanish capital to sky-rocket: firstly, the sale of 14 plots containing more than 93,000 m2 of buildable space, by the Valdebebas Compensation Board to the property developer Pryconsa for more than €55 million and secondly, the acquisition of a plot of land in Montecarmelo by Cogesa, which belongs to the Dragados group, for more than €20 million. (…).

Original story: ABC (by Luis M. Ontoso)

Translation: Carmel Drake