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

Strong Pound Makes Spanish Property More Attractive To UK Buyers

26 January 2015 – Murcia Today

Tourism in Spain could also benefit from the weakness of the euro.

Following the announcement on Thursday that the European Central Bank is to inject at least 1.1 trillion euros into the economy of the Eurozone, the reaction on the international currency markets has been to invest in sterling and the US dollar, pushing the UK pound to its highest level against the euro for seven years.

By midday on Friday, one pound was worth 1.34 euros, although it dropped back to 1.31 by close of trading on Friday, meaning that pound-holders’ purchasing power in Spain has increased by 5% since 1 January and by 12% since April last year. At the same time, the euro fell to its lowest rate in eleven years against the dollar.

How the ECB’s “quantitative easing” policy will affect the Spanish economy as a whole will become clear over the next two years, but in the short term, the relative strength of the pound could have two very important consequences.

One of these is that over a short period of time, property in Spain has suddenly become significantly cheaper for buyers from the UK, and it is not unreasonable to imagine that demand may suddenly increase from British buyers in a market which, at least on the Mediterranean coast, already relies heavily on buyers from outside Spain. Coupled with low interest rates, the greater value of the pound means that for most UK nationals, property in Spain is now more affordable than it has been for many years.

At the same time, in a week in which some of the final figures for 2014 in Spain’s tourist sector have been made public, the greater purchasing power of UK residents could lead to further increases in tourist spending by visitors to Spain from the UK after record numbers of foreign visitors came here last year. Flight prices may come down slightly in response to falling fuel costs, and for those whose disposable income is in sterling, visiting Spain and other Eurozone countries is now less of a strain on the pocket than it was a year ago.

It is also good news for those looking to buy property for the first time: Euribor dropped to a record low making borrowing cheaper than ever.

Of course, on the face of it, the fall in the euro is not necessarily good news for Spain, but if the ECB’s intention is to stimulate economic growth in the Eurozone, then the property and tourist sectors of the Spanish economy may be among the first to benefit.

Original story: Murcia Today

Edited by: Carmel Drake