Popular Instructs Aliseda To Sell €4,000M Property Portfolio

21 January 2016 – Expansión

(…) Following on from Banco Popular’s announcement yesterday that it plans to divest assets worth €8,000 million…. Aliseda, the company ultimately responsible for handling the sale of the real estate assets sitting on Popular’s balance sheet…has been given a mandate to find a buyer for a portfolio of properties with a book value of €4,000 million. The market price of the portfolio has not been revealed.

Aliseda is owned jointly by Banco Popular (which holds 49% of its share capital) and the investment fund Värde, which controls the remaining 51%. During its first round of contacts to identify parties potentially interested in purchasing the property portfolio, the heads of Aliseda have identified half a dozen investment funds that may put forward bids.

In addition to this block sale of properties, Popular’s plans for the divestment of its non-productive assets this year include the sale of another €4,000 million of properties and loans.

The aim is to significantly reduce the non-productive part of its balance sheet. If the forecasts that the entity plans to announce next week at its 2015 results presentation are fulfilled, then Popular will succeed in reducing its problem portfolio by 25% by the end of this year. Such an acheivement would not only lighten the load on its balance sheet, it would also represent the clear implementation of one of the recommendations that the European supervisory authorities are making, with more emphasis on the European banks. That recommendation urges banks to take advantage of the provisioning efforts made in recent years and to sell non-productive assets that are weighing down on their accounts, particularly those that have associated maintenance and financing costs, as they are also penalising their income statements.

In order to put the objective that Popular is setting itself into context, it should be noted that the bank sold properties worth €1,000 million and non-productive assets amounting to €1,500 million during the first nine months of last year (the most recently available public data). Market sources consider that the combination of sales that Popular wants to carry out will have a neutral effect on the income statement, from the perspective of direct revenues, given that the discounts on the net value of the properties included in the portfolio that it wants to sell over the coming weeks will likely be offset by the net revenues that it will obtain from the sale of the other assets to be sold.

Nevertheless, overall, the operation should result in cost savings for Popular amounting to more than €200 million, according to market sources, given that the associated maintenance and operating costs will disappear and there will be no need to make new provisions for the assets sold. Moreover, and, above all, the bank will make significant savings in terms of the financing costs associated with its assets. (…).

Original story: Expansión (by Salvador Arancibia)

Translation: Carmel Drake

CaixaBank Considers Selling 1,000 Homes To Overseas Funds

11 March 2015 – Expansión

‘Project Eurostars’ / The Catalan group is sounding out investors to assess their interest in the portfolio, which mainly comprises homes on Spanish coast.

The Spanish bank wants to widen the ‘drain’ through which it is offloading property from its balance sheet. As well as leveraging on the intense activity in their sales networks, financial institutions are looking to take advantage of the interest shown by overseas funds by packaging up batches of homes. One of the first groups to join this trend is CaixaBank, which has been sounding out the market in recent weeks regarding the sale of a portfolio of 1,000 homes known as Project Eurostars; Expansión has had access to the corresponding sales prospectus.

The group chaired by Isidro Fainé (pictured above) has handed over the management of this transaction, whose information was first distributed to funds at the end of February, to the real estate consultant JLL. According to the timeline proposed initially, investors should have submitted their non-binding offers yesterday and the process should close by the end of the month.

The Eurostars portfolio comprises 1,091 real estate assets, with an estimated combined value of €103 million. The majority of the portfolio is made up of 807 homes, primarily located on the Mediterranean coast, with an average value of €122,000. The portfolio also includes 250 parking spaces, 26 store-rooms and 5 shops.

The homes are concentrated in Barcelona, Tarragona, Valencia, Alicante, Granada, Cádiz, Navarra and Tenerife.

In the information that has been distributed, the advisor JLL highlights two key features that it hopes will appeal to foreign investors: the improvement in the real estate market, with an 18% increase in (the volume of) house sales between 2013 and 2014; together with “the positive economic outlook and increasing volume of investment”, with investors allocating €23,000 million to Spanish property in 2014.

The homes to be sold are currently held on the balance sheet of the Building Centre, a subsidiary of CaixaBank, after being foreclosed.

The group sold 13,794 properties in 2014, i.e. 27% more than in 2013 and the volume of foreclosed assets increased by 12%, to reach almost €15,000 million in gross terms.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake