Meridia Takes €83.5-Million Loan to Build Project in Barcelona’s 22@

21 November 2019 – A socimi controlled by Meridia has arranged an up to €83.5-million syndicated loan with CaixaBank and Santander to build the future headquarters of Everis in Barcelona’s 22@ district.

The firm’s real estate vehicle, Meridia III, requested the loan, which will be guaranteed by the plot of land located at Avenida Nova Icària 213, as well any future construction on the site. The loan will last until seven years after the end of construction.

Original Story: Expansión – Marisa Anglés

Adaptation/Translation: Richard D. K. Turner

Aliseda Offering Finalist Land With Just a 5% Down-Payment

6 November 2019 – Aliseda, the real estate company controlled by Blackstone and Santander, has launched a new campaign aimed at both local developers and individuals looking to build new homes but currently, lack access to the necessary financing. The firm announced that it would allow potential buyers to buy land with just a 5% deposit from now until the end of the year.

After that point, those buyers would have 12 months to raise the rest of the cost of the land and finalise their purchase by the end of 2020. Investors would lose their 5% down-payment if they are unable to raise the rest of the funds.

The developer is currently listing 2,115 plots of land on its website. That land bank represents about 30% of Aliseda’s entire portfolio of finalist land, worth an estimated 300 million euros. The firm expects potential buyers to reserve 15% -20% of that by the end of the year.

Original Story: El Confidencial – Ruth Ugalde

Adaptation/Translation: Richard D. K. Turner

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

The Student Hotel Raises €90-Million in Financing for New Investments

14 October 2019 The Netherlands-based student hotel group The Student Hotel (TSH) announced that it had obtained €90-million in bank financing Santander, Sabadell and HSBC. TSH will use the funds to build two new hotels in Madrid and Barcelona as well as to refinance its existing debts in Spain. The investments are part of a €2-billion investment strategy that the group plans to implement over the next five years in Europe.

TSH is currently working on three projects in Spain: Madrid La Imprenta (340 rooms), Barcelona Provençals (300 rooms) and the TSH San Sebastian (328 rooms).

Original Story: Hosteltur

Adaptation/Translation: Richard D. K. Turner

Santander Studying €12-Billion Sale of NPAs

20 August 2019

Banco Santander is considering a potential sale of a €12-billion portfolio of real estate loans by the end of the summer.

The bank is looking to improve its capital ratios in Spain, which are still weighed upon by assets the bank took over from Banco Popular, in spite of a €30 billion sale of assets to Blackstone in 2017, Project Quasar.  On Tuesday, the bank reported that its NPL ratio stood at 7%, above rival banks such as BBVA Spain (-4.9%) and CaixaBank (-4.6%).

Original Story: El Confidencial – Jorge Zuloaga

Adaptation/Translation: Richard D. K. Turner

Spain’s Banks Continue to Suffer from High Levels of Exposure to Non-Performing Real Estate Assets

13 August 2019

Spain’s largest financial institutions still have more than 37 billion euros worth of non-performing real estate assets on their books, not counting non-performing loans, even after a series of major disinvestments over the past two years. The bank with the most significant exposure, Santander, sold €30 billion in assets to Blackstone; while BBVA sold another €13 billion to Cerberus. CaixaBank unloaded a €12.8 billion portfolio to Lone Star as Banc Sabadell sold assets totalling €10.1 billion to Cerberus and Oaktree.

EU banking regulators are pressuring the banks to quickly reduce their exposure even further, setting a high bar for the expected pace of disinvestment over the coming years.

Santander still has €10.132 billion in foreclosed assets, over 16% more than the bank with the second-highest exposure: Sabadell (€8.732 billion). Santander’s exposure to land is especially high, with a portfolio with a gross value of €4.37 billion. Thus, the bank recently created a company to prepare the portfolio for an eventual sale. The new company, Landmark Iberia, has 400,000 square meters of developable land for sale.

Original Story: El Confidencial – Jorge Zuloaga

Adaptation/Translation: Richard D. K. Turner

Insur Refinances €100 Million in Outstanding Debts

20 July 2019 – Richard D. K. Turner

Inmobiliaria del Sur (Insur) took advantage of favorable market conditions to refinance its outstanding debt this week. The firm refinanced 100 million euros of debt, equal to 60% of its total net liabilities, at significantly better conditions, freeing up over 35 million euros over the next five years. Insur owns rental properties, including offices, commercial premises and car parks.

Insur Patrimonial arranged the refinancing in an operation involving a total of 11 banks, led by Santander. Those banks include Caixabank, BBVA, Unicaja, Sabadell, Bankinter and Novo Banco. In addition to the €100 million, the firm also borrowed another €10 million to acquire an office building in Seville for redevelopment into a hotel to be leased to Hotusa.

Original Story: El Confidencial – Carlos Pizá de Silva

Photo: F. Ruso

The FROB Recorded a €382M Provision Against its Stake in Sareb in 2018

20 May 2019 – El Confidencial

The Spanish Fund for Orderly Banking Restructuring (FROB) presented its accounts for 2018 this week revealing that it decided to recognise a €382 million provision against its stake in Sareb last year.

In this way, the FROB has now written off 92.3% of its initial investment in the entity chaired by Jaime Echegoyen (pictured above), up from 75% in 2017. If the rest of the investor entities, namely all of the large Spanish banks with the exception of BBVA, do the same, then they will have to recognise losses of around €450 million.

In absolute terms, the FROB’s stake in Sareb is now worth €169 million compared with its initial investment of €2.192 billion. The FROB is Sareb’s largest shareholder with a 45.9% stake, followed by Santander (22.3%), CaixaBank (12.2%), Sabadell (6.6%) and Kutxabank (2.5%).

As the bad bank’s largest shareholder, the FROB typically sets the tone of the provisions for the other entities. Last year, after the FROB increased its cumulative provision to 75%, other shareholders such as CaixaBank and Sabadell recognised extraordinary provisions in their accounts for Q2. This year, the average provisioning rate is expected to increase from around 70% to 90%.

Sareb closed 2018 with losses of €878 million (up by 55%) due to the strong competition in the institutional market and the real estate crisis that still affects much of the country. The bad bank sold 21,152 properties last year and its income from property management soared by 19% to €1.4 billion, but its income from the loan portfolio fell by 16% to €2.2 billion and so total income fell by 5% to €3.7 billion.

The outlook for the bad bank for the next few years is not great and many experts forecast that not even a single euro will be recovered from Sareb.

Original story: El Confidencial (by Jorge Zuloaga)

Translation/Summary: Carmel Drake

S&P Encourages Spain’s Banks to Divest More Property & NPLs

18 April 2019 – Ya Encontré

Spain’s banks got rid of €90 billion in foreclosed assets and doubtful loans last year, almost doubling the transaction volume recorded in 2017 (€52 billion) and setting a new annual record. But they still have a lot of homes left to sell and Standard&Poors is encouraging them to divest more of those properties, with a view to restoring their pre-crisis risk levels of 4% within two years.

According to the ratings agency, the banks still hold properties worth €80 billion, representing one of the highest stocks in Europe and accounting for 7% of the balance sheets of the domestic financial sector. In this context, S&P considers that the banks still need to get rid of another €30 billion in assets, at least, if they are to properly clean up their accounts.

The active buyside players in the market include many overseas investors and funds, such as Lone Star, TPG, Apollo, Blackstone, Bain Capital and Cerberus, which have played an important role in reducing the stock of major financial institutions, such as Santander, BBVA, CaixaBank and Banco Sabadell.

S&P is not alone in its stance. Both the European Central Bank (ECB) and the International Monetary Fund (IMF) are also urging Spain’s banks to divest the last of their property portfolios as quickly as possible to ensure financial stability ahead of the next recession.

Original story: Ya Encontré

Translation/Summary: Carmel Drake

Blackstone Prepares a Series of Portfolio Sales Following its 6-Year Spending Spree

27 March 2019 – El Confidencial

The US fund Blackstone, which has been so busy on the buy side in recent years, is getting ready to put the for sale sign up, over some of its assets at least. It is preparing the sale of several portfolios, including the Socimi Corona, the homes of Fidere and also some of the former assets of Popular that it acquired from Santander.

Several sources have confirmed that the US fund is currently designing portfolios for sale in order to rotate some of the €20 billion in property that it now owns in Spain. Most of the portfolios are expected to be small, between €50 million and €300 million, although the fund is reportedly also working on some larger deals that could reach €600 million. The plan is to put the portfolios on the market before the summer.

Blackstone’s target market includes pension funds and insurance companies, which operate with lower costs of capital and which, therefore, can afford to pay more. It already trialled that strategy with the sale of Hispania’s offices to Zurich, to great success. But Blackstone will also target other funds looking to grow or complement their existing investments.

Despite this vendor activity, the US giant is still committed to buying assets in Spain. It simply wants to rotate its most mature assets, given that it started making investments in the country in 2013.

Original story: El Confidencial (by R. Ugalde and J. Zuloaga)

Translation: Carmel Drake