Sareb’s Board Suspends the Sale of its Socimi Témpore to Launch a ‘Transparent Process’

19 December 2018 – El Independiente

The sale of Tempore Properties, the Socimi owned by the Company for the Management of Assets proceeding from the Restructuring of the Banking System (Sareb), was almost a done deal, but the plug has been pulled at the final hurdle. Sareb and the investment fund TPG were in the midst of closing the final details of the operation when the Board of the so-called “bad bank” decided to reject the offer. To the bewilderment of the US group, the directors of Sareb have demanded the launch of an ordered and transparent sale process, according to sources familiar with the events speaking to El Independiente.

Tempore, which has just carried out a non-monetary capital increase for €150 million and which will soon manage 3,300 real estate assets worth €325 million, received several offers at the end of November. The bid from TPG was successful over the others, but the process did not have all of the guarantees, and so the members of Sareb’s Board of Directors took the decision to block the transaction.

“It makes sense, especially taking into account the legal problems that could be generated if a government agency participates in exclusive processes”, indicated sources in the sector. “The directors have to be increasingly careful with the operations that they approve or they may incur serious faults”, added another.

In this way, the entity that it seemed was going to become the new owner of the Socimi, TPG, is the shareholder of companies such as Spotify, Airbnb, Burger King, Lenovo, Ducati and Grohe, amongst others.

Sareb, in which the State owns a 45% stake, wanted to close the operation before the end of the year and improve the appearance of its accounts, which are set to report losses, for another year. Now, however, that operation will have to wait until 2019.

The Tempore portfolio being sold by Sareb is concentrated (80%) in the metropolitan areas of Spain’s major capitals, with the remaining assets located in geographical areas with significant demand in the rental market, such as Valencia, Sevilla, Zaragoza, Málaga and Almería.

Azora is responsible for the management of the portfolio, specifically for the administration and sale of the assets. The Socimi is led by the Director of Rentals at Sareb, Nicolás Díaz Saldaña. Before joining the bad bank, Saldaña led the international team at Metrovacesa during the toughest period of the real estate crisis (…).

Several sources in the financial sector have indicated that Sareb must maximise the cleanliness of the operations that it participates in, especially after some institutions have been called out for irregular sales.

The Bank of Spain took Sareb to task over some suspicious activity following an inspection, according to a report to which El Independiente has had access.

Original story: El Independiente (by Ana Antón)

Translation: Carmel Drake

Sareb Sells its Socimi & its 3,300-Asset Portfolio to TPG

4 December 2018 – El Independiente

Sareb, the Company for the Management of Assets proceeding from the Restructuring of the Banking System, is closing the final details of the sale of its Socimi Tempore Properties to the private equity fund TPG.

The company, which is in the middle of a non-monetary capital increase amounting to €150 million and which will soon manage 3,300 real estate assets worth €325 million, received several offers at the end of November, including from the fund Apollo. In the end, the proposal from TPG has proved victorious, according to sources speaking to El Independiente.

The US group TPG, which has USD 94 billion in assets under management, is the shareholder of companies such as Spotify, Airbnb, Burger King, Lenovo, Ducati, Saxo Bank and Grohe, amongst others.

The so-called bad bank, in which the State holds a 45% stake, hopes to close this operation before the end of the year, in order to improve the appearance of its accounts, which will again feature losses.

The Tempore portfolio sold by Sareb is concentrated (80%) in the metropolitan areas of the major capitals, with the remainder located in regions with significant demand in the rental market, such as Valencia, Sevilla, Zaragoza, Málaga and Almería.

Azora is responsible for the management of the portfolio – it performs the administration and marketing activities for the assets directly. The company is led by the Director of Rentals at Sareb, Nicolás Díaz Saldaña. Before his arrival at Sareb, Saldaña was at the helm of the international department at Metrovacesa during the most complicated period of the real estate crisis.

Sareb is selling its Socimi at a time when these types of companies are in the Government’s spotlight, in light of the insistence of Podemos to toughen up the beneficial tax regime that has facilitated the expansion of the vehicles in recent years.

The Bank of Spain has also started to monitor the Socimis as a potential focus of instability for the financial sector and links the rise of these vehicles to the sharp increases in the prices of offices and commercial premises.

Original story: El Independiente (by Ana Antón)

Translation: Carmel Drake

Sareb Quarantines its €30bn Mega-Portfolio Entrusted to Goldmans For The Time Being

11 June 2018 – El Confidencial

The most important operation in Sareb’s history is going to have to wait. Despite the wishes of Goldman Sachs, the bank charged with leading the sale of €30 million in toxic assets, to formally launch the process before the end of June, the entity chaired by Jaime Echegoyen would rather be cautious and have everything locked down, and well locked down, before it gives the final green light to an operation of this magnitude.

Particularly, when its largest shareholders, the State through the FROB, has just experienced an unexpected change of Government. Although sources at Sareb insist that a firm date has not yet been set for this sale and that all of the work carried out to date has been preliminary, during the conversations that Goldmans held with interested funds before the vote of no confidence (in the Spanish parliament), it was understood that the process would begin this month, according to several sources in the know.

Nevertheless, the change in the political panorama, which has resulted in Pedro Sánchez’s appointment as President and Nadia Calviño as the Minister for the Economy, lends itself to prudence, to avoiding any rushed decisions and to allowing time for the new Government to analyse this operation. Above all, when one of the objectives of the PSOE’s economics team has, for months, been to conduct a thorough audit of Sareb to understand the real extent of the public debt as a whole, according to Voz Pópuli.

The sale of the portfolio entrusted to Goldman would allow Sareb to decimate its liabilities in one fell swoop and generate two years worth of revenues in a single operation. The question is at what cost, in other words, what losses would such a divestment generate, given that all of these sales are being undertaken at discounts that the bad bank is finding very difficult to bear.

In fact, in order to play in this league of major operations, Sareb has been analysing for months all kinds of formulae to reduce its losses. One way of mitigating the losses and achieving better offers is to share the ownership of the capital of the new company to which these toxic assets would be transferred, like Santander and BBVA have done in similar cases.

Another lever that has already been analysed is to take advantage of the FAB (Banking Assets Fund) – that Sareb created in its early stages, because that would provide the operation with tax incentives, or associate it with the servicing contract, which has been in the hands of Haya until now.

That “servicer”, which is controlled by Cerberus, manages all of the toxic property that Bankia transferred to Sareb, whose deficit was the largest, in absolute numbers, of the bank rescue, another important argument why the new Government wants to understand in detail the design and consequences of the Goldman operation before giving it the green light, or not.

What is happening with Ebro and the property development plans?

(…) In terms of the entity’s other two star projects: the search for a partner to promote €800 million in residential assets and the sale of a €10 billion portfolio baptised Ebro.

The former has two finalists, Aelca and Aedas, and looks to be on schedule for a winner to be selected ahead of the summer (…).

In the case of Ebro, Sareb’s decision to not go ahead with this portfolio responds to, amongst other reasons, the fact that some of the perimeter proceeded from Haya assets, which are the ones that make up the entire Goldman portfolio, and so a decision was taken to desist from this project to give priority to the Goldman deal.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Aena: Countdown to the Real Estate Megaplan

1 March 2018 – Expansión

Business / Aena is going to market 2.7 million m2 of land in Barajas over 40 years and 1.8 million m2 of land in El Prat over 20 years.

The starting gun has been fired for Aena’s real estate megaplan. The President of the firm, Jaime García-Legaz, confirmed the details of the project yesterday to analysts. It forms one of the pillars of the new strategy that the group is preparing for the period 2018-2021, which will be published within the next few weeks. Aena is going to launch a tender to hire an investment bank to design the process and determine the capex required and the formula to maximise the value. The airport manager, which spent €1.4 million in 2017 on the development of its plans for the project, will kick off in Madrid and Barcelona, where it owns the majority of its plots.

In Barajas (Madrid), it is going to market 2.7 million m2 of land over 40 years for a mixture of uses. According to its estimates, the maximum development potential is 3.6 million m2. Meanwhile, in El Prat (Barcelona), the term will last for 20 years and will span 1.8 million m2 of land, also for various uses, and including the construction of loading and logistics areas. According to the first estimates in the market, the capex associated with this project is going to amount to several hundreds of millions of euros per year.

“Real estate development is one of the main strands of the strategic plan together with the internationalisation of Aena and the dividend policy”, confirmed García-Legaz yesterday. On Tuesday, to coincide with the results announcement, the group announced the distribution of a dividend amounting to €6.50 gross per share, 80% of its profits in 2017, up by 69.7% compared to the previous year. “The Board considered what was appropriate, taking into account the increase in cash generation and the leverage level; and it is applicable to 2017”, he said. And for the future? “The policy will be reviewed with the new roadmap, but the Board’s philosophy involves returning to shareholders all of the free cash flow that is not required for operations overseas or capex over the next few years”, he said. The State is the primary shareholder of Aena with a 51% stake.

The K Factor

Meanwhile, the results for 2017 include a difference amounting to €57.8 million between the maximum annual revenue per passenger set by Dora – the airport framework applicable until 2021 – and actual revenues. That adjustment, known as the K factor, is going to have to be incorporated into the review of the tariffs for 2019. As a result, “the airport charges could be flat” when the forecast was a decrease of 2.2%. This year, Aena forecasts that air traffic is going to continue to rise, with growth of 5.5%.

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake

Aena Submits The Only Bid To Manage ‘Ghost’ Airport In Murcia

31 October 2017 – Expansión

Yesterday, Aena came to the rescue of the international airport for the Region of Murcia with a multi-million euro offer to take over its operation, management and conservation for a period of 25 years. This ghost infrastructure was planned before the crisis by the regional government and a consortium of companies led by Sacyr, at a cost of €270 million. Nevertheless, the outbreak of the crisis submerged the installation into a tsunami of financial and legal problems, which prevented it from being opened even after the construction work had been completed, in 2012.

Five years later, in April, the regional executive opened a tender process, with a budget of €600 million. Aena, in which the Spanish State holds a 51% stake, was the only company that expressed interest in managing the infrastructure and it formalised its offer yesterday. Sources close to the bid say that the amount offered by Aena falls well below the tender price.

In all likelihood, the airport manager’s plan will involve moving operations from the San Javier military airport, 30 km away, to Corvera. The new president of Aena, Jaime García-Legaz, who has only been in the job for two weeks, has focused on the need to secure the management of the Murcian airport. “We are going to make an offer to win that is profitable for Aena”, he said last week in meetings held with the group’s personnel (…). García-Legaz is Murcian, but the offer had already been prepared by his predecessor, José Manuel Vargas.

Currently, 400 employees work at San Javier airport, of whom 72 form part of the workforce, which would be affected by the move. The managers themselves have reviewed the facilities in recent weeks to check that everything is in order so as to start the operation in the most agile way possible.

Some sources say that the first flights could begin next summer (2018). “The main objective should be to secure Iberia or another major airline to turn the airport into a key infrastructure hub”, they add.

The arrival of one or more large companies is key if the reduction in passenger numbers at the Murcian airport is to be plugged. Since 2007, traffic volumes have fallen by half, from 2 million users to 1 million in 2016, proceeding from low-cost airlines such as Easyjet, Ryanair and Norwegian. And that decrease has happened despite the recent investment of €70 million made by Aena to construct a second runway. The airport has a single domestic route, connecting with Madrid, and 19 international routes, primarily to/from the United Kingdom. 92% of users are foreigners visiting the region for tourist purposes.

By contrast, the aerodrome in Alicante – 90km away – has seen its user number increase from 9 million to 12 million during the same period. Corvera is now adding capacity to manage a visitor flow of 3.5 million each year. If Aena does end up winning the contract to manage the installation, Corvera would become the 47th airport that the group manages in the country. The company has the capacity to welcome 330 million travellers, 30% more than the 230 million that used its airports in 2016.

Sources at Aena highlight that the airport in Murcia would generate profits for the group (…).

The Region of Murcia’s Ministry of Development will convene a meeting on Friday to analyse Aena’s offer and proceed to award the contract to manage the airport “as soon as possible”.

Original story: Expansión (by Víctor Martínez)

Translation: Carmel Drake

New Housing Plan Will Include Aid For Renters & Evicted Families

14 December 2016 – El Mundo

On Tuesday 13 December, the Minister for Development, Íñigo de la Serna (pictured above), said that the future Housing Plan 2018-2021, which his department is currently working on, will seek to continue to support rental housing through a specific program of aid, and will add other assistance for families evicted from their habitual residences.

De la Serna emphasised that the draft plan includes financing for a program of aid for families evicted from their habitual residences that find themselves in vulnerable situations, through the constitution of social funds for rental housing.

Similarly, he expressed his intention for the new housing plan to continue to offer support for rental housing thanks to a specific program.

The Ministry of Development has already started the process to approve this new housing plan and to this end, it has invited the Autonomous Regions to a conference, which will be held on Thursday 15 December, where some of the overarching premises are expected to be discussed.

The Minister for Development recalled that last Friday, the Council of Ministers approved an extension of the Housing Plan 2013-2016 to ensure that its beneficiaries will not lose their aid from 1 January 2017 onwards.

In terms of the sale of social housing to vulture funds, De la Serna reminded the Podemos party Senator María Pilar Garrido that the Government will not carry out any sale in this sense because the duties in terms of housing are assumed by the Autonomous Regions.

“We have to comply with the law and not encroach on the regional duties that are not our responsibility”, he added.

He also said that the State can only influence the regulation of economic planning, specifically, the definition of safeguarding actions and the regulation of financing structures through the contribution of state resources.

Based on this, he explained that the Government approves the state housing plans, which are then managed through agreements with the different autonomous regions.

Original story: El Mundo

Translation: Carmel Drake

Atxa Buys Podavines Building In Donostia For €10M

10 November 2016 – Diario Vasco

The Podavines de Amara building in San Sebastián-Donostia was sold on Tuesday to a property developer who is going to convert the property into (unsubsidised) housing. The Department for Social Security organised an auction for the land…and just one bidder participated, Atxa, S.A., who will pay the starting price of €9,959,000. The proceeds will be paid to the Department for Social Security, which will use the funds to finance pensions payments, according to sources at the Government’s Sub-delegation in Guipúzcoa.

The Department for Social Security carried out the public auction of this property on Tuesday and the building was awarded to the company Atxa S.A., which, given that it was the only firm to submit a bid, logically offered the minimum tender price of €9,959,000. The State’s Central Administration will conduct checks over the next few day to ensure that the company does not have any debts with the Department for Social Security and will proceed to formalise the award of the property, according to sources at the Government’s Sub-delegation in Guipúzcoa.

This building, located at the intersection of Calle José María Salaberria, Paseo de Errondo and Avenida Carlos I, has been unoccupied for the last year and a half. Its previous tenant, the Department for Social Security, moved to new facilities in Riberas de Loiola at the beginning of February last year. The building is 43 years ago and the urban planning classification for the land is residential. The property comprises a ground floor plus four other above ground floors and three basement floors. Its total above ground surface area amounts to 9,534m2 (it has a useful constructed surface area of 8,351 m2, according to registry and cadastral data) and a further 1,560 m2 under ground. In reality, the building has three entrances (on Podavina 1 and 3 and on Avenida de Carlos I, 34-36-38) (…).

The company that has purchased the plot clearly considers that the land has significant potential to be used for unsubsidised housing. Diario Vasco has made contact with the company but its spokesperson was not able to specify timeframes or clarify whether the property will be demolished or renovated for the new residential project. (…).

Original story: Diario Vasco

Translation: Carmel Drake

Sareb Unlikely To Meet Its Property Sales Goal In 2015

14 July 2015 – Expansión

The President of Sareb acknowledged today that the bad bank will probably need the entire 15-year period originally granted to it, to sell all of its assets.

Speaking at a briefing organised by Europa Press and Servihabitat this morning, Jaime Echegoyen recognised that it will be hard for Sareb to meet the goal it had set for 2015 of selling 15,000 properties to individuals. During the first half of the year, the bad bank only sold 5,400 homes, i.e. 33% fewer than during the same period in 2014.

Sareb’s President insisted that the entity is selling its assets slowly (on purpose) to protect the capital of its investors. 51% of the bad bank’s capital is owned by private investors – all of the major banks except for BBVA, insurance companies and other entities – and the remaining 49% is held by the State.

Echegoyen has said that Sareb will probably need the entire 15-year period originally granted to the entity to sell all of its assets. “I would go as far as to say that we will end up needing all of the time originally granted to us. We are planning to use up the entire period, but if we manage to sell all of the assets sooner, then we will”, he said.

Carmena and Colau

The head of the bad bank also said that he wants to hear the proposals that the mayoresses of Madrid and Barcelona, Manuela Carmena and Ada Colau, respectively, are going to make. Echegoyen confirmed that he is meeting Carmena tomorrow and Colau next Friday and that his position ahead of those meetings is to be “flexible and listen carefully”.

Echegoyen also repeated the message he delivered to Congress’s Economic Committee last week, saying that Sareb has made 2,000 (social housing) homes available in several autonomous communities, and he reaffirmed that he hopes to sign more agreements in more regions soon.

Original story: Expansión

Translation: Carmel Drake