Centricus Rethinks its Potential Acquisition of Haya Real Estate

2 December 2019 – Softbank’s Centricus investment fund is rethinking its expected acquisition of Haya Real Estate from Cerberus. The US firm originally valued Haya at one billion euros, though it dropped its asking price due to doubts regarding Haya’s contract with Sareb.

Despite Haya’s success in renewing its management contract with the bad bank, Haya’s revenues could still be reduced by 50%. Sareb also reduced the agreed-upon fixed fees and payments in return for variable payments. At the same time, Softbank as recently needed to inject large amounts of funds to save its investment in the troubled WeWork.

Original Story: Eje Prime

Adaptation/Translation: Richard D. K. Turner

Spain’s Ministry of Development Looks to Acquire Land from Sareb

25 November 2019 – Spain’s Ministry of Development (Ministerio de Fomento) is looking to create a partnership with the bad bank Sareb to help it achieve its goals under the Plan 20,000 housing policy. The government hopes to build 20,000 affordable rental homes to alleviate a lack of residential housing on the market and is considering buying land for the new developments from Sareb.

Original Story: El Economista – Alba Brualla & Rubén Esteller

Adaptation/Translation: Richard D. K. Turner

Sareb Chooses Haya Real Estate to Manage €8.4-Billion Real Estate Portfolio

5 November 2019 – Sareb announced that it has opted to renew its management contract with Haya Real Estate. Haya had already been acting as a servicer for a portfolio of loans and real estate worth €8.4 billion (net book value as of 12/31/18). The new contract will last for 30 months.

The contract is part of Sareb’s new business strategy whose ultimate goal is to “preserve or improve the value of its assets.” DC Advisory advised Sareb on the deal.

Original Story: Cinco Dias – A. Simón

Adaptation/Translation: Richard D. K. Turner

Sareb Close to Awarding €8-Billion Contract to Service Real Estate Portfolio

21 October 2019 – Sareb has chosen two finalists to vie for the management contract for €8 billion in loans and real estate: Haya Real Estate, controlled by Cerberus, and Servihabitat, by Lone Star. The bad bank expects to award the contract, which is the largest currently on the market, within the next few weeks. The existing contract, with Haya RE, is set is expire, which led Sareb to seek to reduce its costs.

Sareb opted in the spring of this year to place the contract on the market again, to lower its associated costs. Principally, the firm is looking to pay less in management fees, while paying more for successful sales and placements. Until now, the bad bank has been paying roughly €100 million per year in fees.

Four other groups had been vying for the contract: DoValue’s Altamira AM, Intrum’s Solvia, Finsolutia, and Hypoges. However, three other contracts, currently with Solvia, Altamira and Servihabitat, are set to expire in 2021.

At the same time as Sareb is looking to reduce its fees, the contract, known as the Project Esparta, includes the bad bank taking on more responsibility for the assets. The change has reduced the size of the portfolio in play from about €11 billion (at net book value) to roughly €8 billion now. The new servicer’s activities will be limited to selling or renting any properties, while Sareb will take on many of Haya RE’s previous duties.

Original Story: El Confidencial – Jorge Zuloaga & Ruth Ugalde

Photo: EFE / Emilio Naranjo

Adaptation/Translation: Richard D. K. Turner

Cerberus Nears Sale of Haya Real Estate to Centricus

10 September 2019

The US-fund Cerberus is near to completing its planned sale of its servicer, Haya Real Estate. Centricus, a London-based fund backed by Softbank, is considered the leading contender to acquire the asset. Both firms declined to comment.

Market sources believe that the firms may finalise the transaction in the coming days. The amount of the sale partly depends on Haya’s renegotiation of its contract with Sareb. Cerberus had initially planned a stock market listing for its servicer, but doubts regarding that renegotiation led the US fund to shelve those plans.

The US fund then opted to sell the service, and in the early summer, Cerberus received three competing offers for Haya, estimated to be around ​​700 million euros, from doBank, Centerbridge and Centricus.

Original Story: La Información  – Pepe Bravo

Adaptation/Translation: Richard D. K. Turner

TPG Reaches Deal on Preferential Access to €175 Million of Sareb’s Assets

20 August 2019

TPG, which recently acquired Témpore Properties, has signed an agreement with Sareb maintaining its partnership with the state company.  Témpore will thus maintain a right of refusal for over 175 million euros in assets owned by the Sareb.

Original Story: La Información – Lucía Gómez

Adaptation/Translation: Richard D. K. Turner

Sareb Opens Bidding to Other Servicers After Low Bids from Haya, Solvia, Altamira and Servihabitat

30 July 2019

Sareb has notified the four servicers that manage its €34 billion in real estate loans and assets that it will open up bidding on its management contracts to other potential bidders, after having received a round of offers that it considered insufficient. Haya Real Estate (Cerberus), Servihabitat (Lone Star), Solvia (Intrum) and Altamira (doValue) have been servicing the bad bank’s assets until now. Sareb mandated DC Advisory to manage the process as the bank looks to reduce the size of the commissions it has been paying to the four firms.

DC Advisory and Sareb have reportedly been in contact with smaller, specialised firms such as Hipoges, Finsolutia and Copernicus. The decision is a message to the four current servicers, letting them know that they may lose out on future contracts unless they improve their bids. Sareb is considering dividing some sections of its portfolio by geographical location, reducing the number of managers in each and streamlining its operations.

The process – known as the Project Esparta – sent shudders through the servicing sector and was a factor in the postponement of Haya Real Estate’s IPO last year.  Haya currently has the largest mandate, servicing 37% of the bad bank’s assets (2014). Altamira, in turn, manages 29%, while Servihabitat has 19% and Solvia 15%.

Original Story: El Confidencial – Jorge Zuloaga

Adaptation/Translation: Richard D. Turner

Real Estate Investment Cycle Undergoes Change in Profile

20 July 2019 – Richard D. K. Turner

The real estate investment cycle in Spain is beginning to change as the funds that first acquired land and homes for rent from Sareb and the banking sector start to finally unload those initial acquisitions.

The new investors are generally conservative investment funds looking for large portfolios of long-term rental properties in Spain. These more conservative funds, such as the Dutch fund APG and AXA IM, seek returns of between 3.5% and 5%. The capital entering the market is often being deployed by insurers and pension funds, which look for stable, long-term income flows from their investments.

Another changing aspect of the market is the increased interest in turn-key projects. Such a structure allows investment funds to accelerate their business plans and improve results. Aedas Homes and Metrovacesa are considered two of the major players in the market.

Original Story: El País – Inmaculada de la Vega

 

Sareb Sells 75% of Témpore to TPG

5 July 2019

Sareb reached an agreement to sell 75% of Témpore, a socimi that focuses on rental apartments, to the US fund TPG, for 246.75 million euros. The bank bad held onto a 24.12% stake in the socimi to take advantage of any potential future upside. At the same time, however, Sareb emphasised its commitment to a long-term policy of divestment.

Sareb created Témpore at the end of 2017 and the socimi debuted on Spain’s MAB in early 2018. The firm currently controls 2,249 apartments and garages, making it the third largest player in the sector after Blackstone and Azora. Of this portfolio, 834 flats are in Madrid and another 269 in Barcelona and the rest distributed by other fourteen provinces.

Original Story: Europa Press

Adaptation/Translation: Richard D. K. Turner

 

Sareb to Use FABs to Aid in Divestment Strategy

5 July 2019 – Richard D. K. Turner

Sareb and Värde Partners have joined together to create Árqura Homes, with the goal of building 17,000 new homes. The joint-venture is the first of a series of invetsments that will employ a financial instrument called a FAB. This financial instrument was designed six years ago to facilitate the sale of non-performing bank assets. The structure confers specific tax benefits, primarily reduced taxes on the sale of such assets.

Sareb is currently planning a number of such vehicles for selling different types of assets, including hotels, shopping centres, offices and homes.

Original Story: El Confidencial – Ruth Ugalde