Sareb Picks Haya, Servihabitat, Altamira to Service Its €41.6 Bn Worth of Assets

19/12/2014 – Expansion

The bad bank of Spain moves on to outsourcing its major loan and property portfolio management and awards Cerberus, Apollo and TPG with the remaining three lucrative contracts, including 126.000 real estate assets valued jointly at some 41.2 billion euros.

The portfolios, forming Ibero Project, have been specifically given to Haya Real Estate (Spanish arm of Cerberus), Servihabitat (controlled by TPG) and Altamira (85%-owned by Apollo).

The winners will administer and sell the soured assets transferred to Sareb by various banks.

Full management will be ceded on Januay 1st 2015 for a term of five to seven years. Likewise, Sareb will receive around 600 million euros as a warranty for the asset management.

About a month ago, Solvia (Banco Sabadell) was awarded one of the four contracts, compound of 42.900 assets worth 7 billion euros in total.


Original story: Expansión

Translation: AURA REE

Social Institutions of Catalonia Set Up a Rental Property Management Firm

18/12/2014 – El Periodico

Catalan social entities united in Taula del Tercer Sector (local Third-Sector Committee) established a different sort of real estate company, called Fundació Hàbitat 3. The unit will manage social housing leasing to low-income families.

Although the idea is not well-known in Spain, it is widely practised in other countries like the Netherlands (controlling all social homes) or France (60%).

The apartments will be granted to administrations and entites for people in need of social assistance. Entites will take care of the process, while in case of the public administrations, Hàbitat 3 can take on the responsability. Duration of the contracts will vary.

The Committee disposes of a supportive data proving that Catalonia needs 230.000 social rental homes to respond to the crisis-boosted demand. The entities say there are 450.000 empty properties, 100.000 belonging to banks, 80.000 completely new and 270.000 of private owners.

Hàbitat 3 will be chaired by Catalonia’s leading housing authority, Carme Trilla, with Xavier Mauri as the Director. Currently, there are no dwelling units on the list but it seems clear where they should come from.

The biggest share of empty homes is in hands of banks, especially in the areas of Terrassa (3.000 homes). The number causes headaches to local adinistrations. In fact, many fined the banks for holding vacant properties.

The rental prices will be set in line with the family situation of the applicants, selected by social workers with knowledge of the zones. Ideally, it would be of 100 – 150 euros.

Barcelona owns a very narrow stock of social and private units which would be suitable for the program.

When it comes to the REO properties, the request is crystal clear: the company demands occupation for the thousands of homes as thousands of people lose their houses being unable to pay.  But in case of the private owners it would be reasonable to ask who would cede their dwellings for 200 euros per month? Probably, no one. That is why the Committee is going to talk with owners who cannot rent their housing units.

The organization will pay the difference between the social rent and the final amount paid to the private owner which will be higher than the one paid to banks.


Original story: El Periódico (by Toni Sust)

Translation: AURA REE

Evictions Bounce Back in Third Quarter Going 7.3% Up YoY

15/12/2014 – El Confidencial

Evictions from all kinds of properties increased by 7.3% year-on-year in the third quarter and marked 13.341 lawsuits, according to data by the General Council of Judiciary. Mortgage-caused evictions represented 43.4% of the total, by 22.1% more from Q3 2013, and 51.3% derived from the Law of Urban Rent, going up 4.2%, while the remaining 5.2% corresponded to other reasons.

By Spanish regions, Catalonia concentrated 22.2% of all cases, followed by the Valencian Community (16.4%), Andalusia (15.8%) and Madrid (11.6%). The report also includes the number of eviction applications received by notification and seizure service units, however, the figures only ‘allow to track the change but they do not represent absolute values‘. Moreover, the fact that the application was sent does not mean the eviction has been carried out.

On this basis, the number of applications to evict someone registered in the third quarter of 2014 was 13.342, down 6.1% from the same period last year. Of these, 8.851 were executed, up 23.1% from Q3 2013.

Mortgage Evictions Decline

On the other hand, the third quarter of 2014 saw 16.767 home seizures, meaning a 1.4% decrease from 2013. By regions, the biggest number of evictions was noted down in Andalusia, 3.783 lawsuits or 22.6% of Spain’s total. The community is followed by Catalonia, accounting for 18.3% of all, the Valencian Community for 15.5% and Madrid for 10%.

Looking closely at the year-over-year change, we see bumper rises in Extremadura (up 46.6%) and the Balearic Islands (up 45.2%), as well as in Aragon (up 31.3%), Murcia (21%) and Asturias (17%).

Claims for Unfair Firing Levelling Out to 2010 Figures

As per the report, lawsuits based on unlawful dissmissals showed 25.571 cases, down 18.3% from the last year. The number posts the lowest since the fourth quarter of 2010.

Madrid registered the highest unjustified dissmissal rates, 5.503 cases or 20% of the total. Next positioned Catalonia (17.1%), Andalusia (16%) and Valencia (10.2%).

Also, Bankruptcy Trails Go Down

Likewise, the statistics reveal that the number of insolvency processes run in the third quarter of 2014 was 1.843, down 21.6% from the same period a year earlier.

Moreover, 336 companies reached arrangements with creditors and 962 fell into a liquidation phase, meaning by 25.5% less than in Q3 2013.

When it comes to the Spanish regions, Madrid received most bankruptcy applications (376 or 20.4% of all), then Catalonia (19.3%), Andalusia (13.6%) and the Valencian Community (11.8%).

Moreover, there were 144.262 payment proceedings, jumping by 14.5% higher than in Q3 2013. Around 18.7% of them were registered in Andalusia, 16.8% in Catalonia, 15.9% in Madrid and 11.7% in the Valencian Community.

Original story: El Confidencial

Translation: AURA REE

Banks Return to the Real Estate Market of Spain

11/12/2014 – Expansion

From being avoided like the plague, Spanish real estate started to invoke apetitte again. Spanish banks still want to offload the property they have repossessed after the real estate bubble burst, which made them lose millions and haunts them with default hitting more than 55 percent (56.27 percent in case of CaixaBank). However, now, confident about the economic reactivation and better outlook for the property market, they support developers which survived the recession. Slowly and for only some projects, they lend and buy assets which before they could sell to vulture funds only.

‘If you are a professional developer with a financially stable company, you will carry on. Spain will continue to be a country abundant in real estate deals and the market will revive. Banks will start lending again, more rationally though’, explained Joan Carles Amaro, Financial Management and Control professor at Esade business school.

The Exposure

So think the entities. Banco Sabadell has already announced return of loans to developers. The first half of the year data compiled by the Bank of Spain shows that banks lent 161 billion euros to developers during that time. Still, the number posts far away from the 2009 volume (€32o billion). The entity’s CEO Joan Bertran calculates that from now on, the sector may destine for new housing construction 5.5 billion euros each year.

Currently, Sabadell finances around 1.000 new dwelling units of real estate developers, a figure that went up after the summer. Of these, 400 have been financed in the last quarter of the year.

Not only do the banks lend more but also propose their own development projects. Santander, BBVA and Sabadell have ongoing plans including building of 8.000 homes on the real-estate-owned land in their balances, in areas of Madrid, Catalonia, the Valencian Community, the Basque Country and Andalusia. Specifically, Sabadell has 1.500 houses under construction now inside its own property developments managed by Solvia. Of these, 640 are already finished and almost all sold-out, located in Alcala de Henares, Barcelona, Cordoba, Seville and Alicante (Playa de San Juan beach).

Apart from approving more loan applications, the entities keep assets which they were unable to sell before, neither to the vulture funds, nor at scandalously low prices. Now they believe the assets will gain on value and they will sell them with profits.

Thanks to this increased trust and favorable look at the industry, highly indebted developers like Grupo Sanjose could restructure their debt in exchange for real estate assets.

Similarly, Santander raised its exposure to the sector by buying a 19.07% stake in Metrovacesa from Bankia for 100 million  euros. The company is specialized in tertiary asset lease.

Property Sales

In their struggle to sell the REO units off and reduce as much as possible the number of new repossessed properties, the banks managed to transfer 40.000 properties in the first half of the year, up 10 percent from H1 2013. They sold more homes, at lower discounts and at more considerable prices, earning around 4.5 billion euros, 20 percent more than in 2013.


The odds are high that in short-term the sales will increase due to the decisions of the banks to shift management of their REO, as well as the risk, onto opportunistic funds specialized in this field.


Original story: Expansión (by G. Martínez & S. Saborit)

Translation: AURA REE

Major Banks’ REO Sales Up 22%, Homes Average at €149.000

4/12/2014 – Cinco Dias

Over the last year, a genuine revolution has been watched in real estate-owned property sales by Spanish banks due to two fundamental factors: transfers of internal servicers to large international investors and establishment of Sareb (the bad bank of Spain) which considerably boosted the speed of offloading the repossessed assets.

Thus, from January to September 2013, the biggest banks traded their properties directly, sold five times more than Sareb. This year’s nine-month period, though, saw most of the servicers in hands of funds, whereas the bad bank positioned as the sales leader.

The two phenomena were joined by progressively shrinking prices which enforced higher provisions from banks. All these were translated into a 22% jump in sales of six biggest entities of the country that sold more than 68.000 properties in total. To compare, a year earlier they managed to market 55.000.

Three banks clearly monopolize the business: CaixaBank, BBVA and Sabadell, accounting for 77% of all sales. Interestingly, the two last refused to sell their servicers to ‘outsource asset management to professionals’.

CaixaBank did convey 51% of its Servihabitat to fund Texan Pacific Group (TPG), which now ranks first in sales with 20.093 transactions, still having 9.983 dwellings in its balance returnin it €964 million, as well as 10.110 REO units of financed developers.

Moreover, the Catalan entity placed a bet on rentals which represent 43% of its real estate activity. It leases 6.384 properties for €742 million. Together with the bank’s trading activity, the business is worth €3.96 billion.

Ranking the second, BBVA and its servicer Anida have sealed 16.049 deals in the first three quarters of the year, up 10.2% from 2013. Although not disclosed, discunts applied are said to cause a loss of €598 million (€844 million during the same period in 2013). In terms of year-to-date sales, 8.221 properties left its balance and the rest corresponded to developer units.

The success of Banco Sabadell owes to the recent merit of its Solvia which signed an asset management contract with Sareb, including all REO properties of Bankia. This Catalan entity marketed 10.819 houses, both own and developer’s, earning €1.88 billion, at an average price of €173.400 per unit.

The increased mean value is due to better over-€100.000 property sales representing 42% of all deals (showing 26% in September 2013). ‘New homes sell at a good pace’, the bank admitted.

Other leading Spanish banks opted for sharing their servicers, like Banco Popular that sold 51% of Aliseda to a joint venture of Kennedy Wilson and Värde Partners. This entity boosted its REO sales by five in the nine months of 2014, precisely 5.148 properties for €989 million in total. One unit stood at €192.113 on average.

Santander, which transferred Altamira to fund Apollo, managed to convey only 8.300 houses but the truth is the bank sold majority of its REO in the previous years and now it earns most – €1.4 billion in total.

Finally, Bankia which outsourced management of its assets to Haya Real Estate (set up by Cerberus) totalled its sales at 7.663 units for a joint value of €864,5 million, including both own properties and those found in the balance of the bad bank.


Original story: Cinco Días (by Juande Portillo)

Translation: AURA REE

Goldman Sachs Pays €355 Mn For a 38-Building Portfolio of Bankia

2/12/2014 – El Economista

Bankia announced a sale of a portfolio consisting of 38 real estate assets (blocks of apartments, shops, logistic warehouses) to Goldman Sachs offering €355 million for them.

In a statement, the entity explained the deal precisely included 27 apartment blocks of a total area of 125.000 square meters and encompassing 1.336 homes, 1.565 parking spaces, 584 storage rooms and 48 retail units attached to these properties.

The Retail Buildings

Apart from the residential buildings, also nine commercial units fell into hands of the U.S. fund. Altogether, they have a 18.000 square meter area, and two logistic warehouses cover 10.521 square meters.

Additionally, the deal conveys assets formerly belonging to a real estate fund of the bank, as well as some unique properties.


Original article: El Economista

Translation: AURA REE

Bankia Slashes Prices by 50% & Lists 5.000 Foreclosed Homes at Less Than €80.000 Each

27/11/2014 – Expansion

Bankia has just put up for grabs a selection of 5.000 dwellings across Spain at prices slashed by 50% and asking for less than €80.000 per unit.

The new campaign, including 6.000 properties in total, will be valid until December 31st.

Called the ‘Year-End Apartherapy’ (‘Pisoterapia fin del año‘), the offer may be consulted in Bankia branches network, as well as on the web of Haya Real Estate (, Spain’s leader in property management services that also trades REO assets of Bankia.

The property package is 100% made up from resales, of diverse type and representing both urban and coastal units, and including all large regional capitals, bedroom towns and little villages.

By regions, the Valencian Community concentrates 1.906 properties, followed by Catalonia (1.400), Andalusia (793) and Madrid (598).

Among the listed REO supply, one may find such gems as a two-bed, two-bath dwelling on the Barraca street in Valencia city which asks €80.000, half of its original value (€160.000).

In the province of Valencia, noteworthy are the following: a four-bedroom unit at a price trimmed from €145.400 to €80.000 in Torrent, a three-bed apartment in Pobla de Vallbona which now stands at €72.000 from previous list price of €114.200, or the one in Gandia, with three bedrooms and two bathrooms available from €52.500 and not €85.500 like before.

Alicante as a province offers, for example, a two-bed apartment in Algorfa priced €41.000, and €55.900 prior to the cut.

Skimming through Bankia’s bargains in Catalonia, a single-bed, two-bath duplex in Canet de Mar (Barcelona) certainly calls one’s attention as its current, €74.000 price is much more affordable than the previous list of €119.900.

Further on, also a detached, two-bed home in Castellet i la Gornal (Barcelona) costs significantly less as its asking price has shrank from €100.000 to €69.000.

In sun-drenched Andalusia, a three-bedroom dwelling in the city of Estepona (Malaga) worth €92.000 is available for €50.000 until December 31st.

In Madrid-nearby Fuenlabrada one may acquire a three-bedroom apartment whose price was slashed from €106.000 down to €80.000.


Original article: Expansión 

Translation: AURA REE

Investment in Tertiary Assets Set to Soar Up 162%

18/11/2014 – El Economista

Spain’s housing sector revives as investment returns to the pre-recession levels. Tertiary asset sales are expected to amount to €8.4 billion in 2014, outperforming the €3.2 billion score from 2013 by 162%, Aguirre Newman portends.

Year-to-date, closed transactions total at €6.2 billion, of which €2.3 billion was spent on retail and €1.6 billion on offices.

The deals were sealed in 2014 because investment funds have been eyeing the Spanish market for several years. First, there arrived the opportunistic investors, striving at bargains and profits flowing from price recovery.

According to experts who attended the meeting organized by the Federation of Real Estate Advisors (Jornada de la Asociación de Consultoras Inmobiliarias, ACI), up to 300 companies arrived in Spain with an intention to invest. However, many left empty-handed as they had not managed to meet buying targets, explained Andres Escarpentes, CEO of JJL.

The REO Assets

Only several of the funds stayed, mostly because they had acquired a platform for REO asset management and together with that an access to detailed analysis on the market development.

Also, one shall not forget about the impetus the freshly listed Socimis (REITs in Spain) gave to the market, accounting for 34% of the entire YTD investment. However, specialists are afraid that any of them might fail to meet objectives.

Speaking of the residential segment, Alberto Prieto, general director at Knight Frank, specified that some areas start to run out of quality products and, as a consquence, pull the prices up.

Finally, Adolfo Ramirez Escudero, president of CBRE, forecasted that in 2015 the sector will spot new debt providers in more ‘normal circumstances’.


Original article: El Economista (by Alba Brualla)

Translation: AURA REE

16.6% of REO Assets to Remain ‘Toxic’ For Next Two Years

18/11/2014 – El Economista

Neither good score given at the ECB’s stress test, nor economical recovery can guarantee easier years for the Spanish banks. Their toxic real estate load, still far from being digested, is said to represent 16.6% of all damaged assets in their balance sheets after two years pass.

The outlook given by Analistas Financieros Internacionales (AFI) is even more pessimistic (18.7%) for the end of 2014. This will not permit the sector to turn the page or to relax the debt collection efforts.

Net defaulting inflow has screeched but new credit, as AFI forecasts, will be not enough to pick the financed stock up and dilute the damaged transactions volume over the outstanding loan.

According to Spain’s central bank, non-performing loans hit highest at the end of 2013 amounting to €191.78 billion and from that point on, decreasing to a nearly €178.69 billion in August (the latest data available). The downward path is marked by less non-payment reporting, better REO property and portfolio sales, once the latter product healthier. However, the load corresponds to an insolvency rate before the supervisory entity ruled reclassification of a €27 billion worth of toxic assets in summer 2013.

Default Rate at 10%

Default in Spanish banks persistently hits over 13% and experts from AFI fear the rate will continue to show around 10% throughout the next two years. If the repossessed property deriving from totally delinquent loans added up, the rate would jump to 16.6%. Green sprouts of upgrade first will root in companies, for which the firm foresees a drop in insolvency from 11.8 to 7.8%, as well as in consumer credit supposed to decline from 11.6 to 8.4%. The least is expected from the housing sector with index falling from 5.5% to 5.2%.

Both default level and the necessity to increase profitability, urge the sector to offer better-priced loans. AFI specialists say a sufficient flow will not be seen before 2016. Banks are more optimistic and state it will in 2o15.

The advance will be progressive and conditioned by customers and product lines. A mere 0.2% refinement is expected in the two years. Efforts turn in case of financing SMEs and consumers where average rates calculated by the Bank of Spain showed 4.54 and 9.87% APR in September respectively, and 3.10% for mortgages. Also, AFI claims new loan approvals will exceed repayments still this year, however it will not happen with mortgages in less than two years.

Deposits at 0.7%

Good news for the banks is that deposits cheapen and post 0.7% but margins’ capability narrows. The situation offers some room to improve balance reporting, above all in 2015, thanks to potential savings on the REO portfolio price adjustment liability, currently repaid 1.64%.

Still, Return on Equity (ROE) is bound to grow 7% within two years, when the bankers expect it to get back to normal (i.e. above 4.2% registered in 2013), although much below the 15% from the pre-recession times.


Original article: El Economista (by E. C.)

Translation: AURA REE

Sareb Sells Off Portfolios in Struggle to Meet 2014 Targets

14/11/2014 – Expansion

The end of the year will undoubtedly be very busy for Sareb, the bad bank of Spain. The company has put up for sale at least six larg-volume loan and REO asset portfolios worth €1 billion, aiming at boosting its 2014 sales.

Sareb markets all kinds of properties and credits, ranging from office buildings in the north of Madrid, through outstanding and non-performing loans, hotel- and holiday apartment-backed credits, to subsidized housing units as loan collaterals.

Sources close to the entity explain that the portoflios are tailor-made responses to the demand and their preparation takes almost half a year. They also assure the end of the year is the perfect moment to put them up for grabs as many funds still would fancy have a Spanish real estate purchase under their belts before 2014 ends.

Additionally, Sareb is urged to improve its balance sheets in the second half of the year. In the first six months of 2014, the bad bank obtained a €429 million ebitda (up 23% year-on-year), just shy of the €1.2 billion total outcome from 2013.

Moreover, the Bank of Spain could oblige Sareb to prove its loan portfolio healthier at the end of 2014, like it did in 2013, due to new accounting changes the central bank forges for the next year.

Better pace of the huge transactions nearing their closing could help the bad bank to meet the original business plan targets and dodge underperformance this year. Also, for 2014, Sareb foresaw repayment of €3 billion owed to the State.

In such a context, the latest portfolio placed on the market was Project Olivia, including €250 million in outstanding developer loans with residential and commercial assets as collaterals.

Another sale enjoying significant interest is Project Meridian, a €130 million worth of hotel-backed credits.

Together with these two, Sareb disposes of a non-performing loan portfolio called Project Aneto, including credits tied to finished housing and land and valued at €400 million.

But not just that, Spain’s bad bank has got two ongoing operations more. Firstly, Project Agatha, encompassing €200 million in debt and over 3.000 subsidized flats. Secondly, launched in 2013 Project Corona which regained attention in the last weeks. This portfolio includes four office buildings situated in the north of Madrid.


Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE