Tag: toxic property

Moonlake Capital Launches a Vehicle to Invest €600M in NPLs

27 May 2019 – Eje Prime

Moonlake Capital is going to launch a vehicle to invest €600 million in large portfolios of non-performing loans in Madrid, Barcelona, the Costa del Sol, the Balearic Islands, Valencia and Sevilla.

The new vehicle will operate as a servicer for the fund and so will manage and divest the portfolio of properties that the banks were left with after their owners were unable to keep up the repayments on their mortgages.

As such, the investment group created in 2016 and headquartered in Madrid will enter the market to compete with the likes of Servihabitat, Altamira, Solvia and Haya Real Estate, amongst others.

In parallel, Moonlake is also planning to create a joint venture with an as yet unidentified investor to develop a 2.5 million m2 project in Málaga’s technology park, involving the construction of 5,000 homes, 110,000 m2 of industrial warehouses and 30,000 m2 of commercial premises.

Original story: Eje Prime (by Marta Casado Pla)

Translation/Summary: Carmel Drake

Sabadell Delays Completion of ‘Solvia Desarrollos Inmobiliarios’ Sale until May

28 February 2019 – El Confidencial

Banco Sabadell is finalising the sale of land from Solvia Desarrollos Inmobiliarios (SDIn) to complete its real estate divestment process with prices of between €900 million and €1.1 billion. The process began with more than 20 funds and property developers expressing interest. Analysts forecast that the Catalan entity will record gains of more than €200 million.

To this end, the bank chaired by Josep Oliu (pictured above, left), has already prepared a timetable. The entity has delayed the deadlines because it has taken longer than expected to receive some of the signed confidentiality agreements (NDAs). Now, the interested parties will have until 30 March to analyse SDIn and submit non-binding offers. The deadline for the subsequent period for the submission of binding offers will be 17 May.

In this way, Sabadell will have the second half of May to accept the winning bid, and then receive the corresponding authorisations to complete the divestment before July (…).

Analysts expect that the operation will be executed in the region of €1 billion, with a discount of 30% on the net asset value. Even so, that would result in capital gains from profits of more than €200 million, according to a report by Alantra, to which this newspaper has had access. In this way, the maximum quality capital ratio (CET1 fully loaded) would move towards 12%, approaching the 12.5% that the bank has set itself as a target for 2020 in its strategic plan. In December, the ratio amounted to 11.1%, well below the 12.8% from the previous year following the sale of toxic property and the problems with the integration with TSB.

The land has been valued at €1.3 billion by Savills Aguirre Newman and by the property developer SDIn itself (…).

Candidates include funds and property developers. Market sources point to Cerberus, Oaktree and Neinor homes as some of the leading contenders. The operation will require the buyer to become one of the largest real estate players in Spain (…).

In December, Banco Sabadell agreed the sale of its property developer Solvia to the Nordic fund Intrum for €300 million. Intrum is listed on the Stockholm stock exchange and is the owner of Lindorff and Aktua in Spain (…).

Original story: El Confidencial (by Óscar Giménez)

Translation: Carmel Drake

Blackstone will be the Landlord of 25,000 Rental Homes by the End of 2019

31 January 2019 – Voz Pópuli

Blackstone, one of the largest investment companies in the world, expects to end the year with 25,000 rental homes under management in Spain.

Eduard Mendiluce (pictured above, left), the man from Blackstone who leads the US giant’s real estate emporium in Spain, has explained that the firm believes in the Spanish market, as it has done since 2014, and will end 2019 managing 10,000 more rental homes that it currently owns (15,000).

“We continue to believe in the fundamentals of the residential sector in Spain”, said Mendiluce at a conference about the real estate sector organised by Iese in Madrid. “Spain was one of the countries that suffered the most during the real estate crisis of 2008; prices are still 30% below their maximums”, he said.

The CEO of Aliseda and Anticipa explained that the US fund’s strategy in Spain in terms of real estate involves renting or buying and selling second-hand homes worth between €120,000 and €150,000. “When you have more than 200 homes under management in a given municipality, the business becomes profitable”, he explained.

Blackstone has invested almost €26 billion in the Spanish market over the last five years. In March 2014, it purchased 40,000 problem mortgages from Catalunya Caixa for €3.6 billion.

Since then, it has purchased: Banco Popular’s toxic property, together with Santander, for more than €5 billion; the Socimi Hispania for €2 billion; and 50.01% of the rental home Socimi Testa for €947 million. Last year, it bought Cirsa, a leading company in the gaming industry in Europe in a deal worth €2 billion.

In terms of the criticisms directed at the rental policies of Blackstone and other funds from certain sectors, Mendiluce has highlighted that in Spain, the funds own just 3% of the total rental housing stock, and that the rest is in the hands of individuals.

“I think that it is difficult to manipulate prices when you only account for a small percentage (of the market)”, he said. “I firmly believe that if there has been very concentrated price inflation in a handful of towns, then that has been due to a lack of supply”, and he pointed out that Spain has the lowest percentage of social housing in Europe.

Fashionable market

Juan José Brugera, President of the real estate company Colonial, was very optimistic about the real estate sector in Spain.

“We are in an expansive phase of the cycle, we are facing lower growth, but growth is growth, and it’s strong in Spain”, he said at the conference organised by Iese. “In the rental cycle, we are still in the growth phase, we have potential for rental growth that we believe ensures a strong performance over the next two or three years” he said.

“The Spanish market is fashionable at the moment, we predict expansive behaviour”, he said. “I have a positive vision, the stock market is behaving a bit strangely, but I think that is due to certain turbulences, both external and internal, that are generating uncertainty”.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Spain’s Banks Plan to Sell Real Estate Worth €12.5bn+ over the Next 2 Years

19 November 2018 – El Economista

The banks have set themselves the deadline of 2020 to reduce the property that remains on their balance sheets to an absolute minimum. On the basis of the strategic plans set out by Bankia, Liberbank, Ibercaja and the portfolio of commercial premises put up for sale by Santander, the entities are planning to divest at least €12.5 billion in non-performing assets over the next 24 months.

At this stage, we do not yet know which objectives CaixaBank will set itself in this regard; the entity will unveil its new strategic plan in London on 27 November. Meanwhile, the entity led by Ana Botín has delayed the presentation of its new objectives to the beginning of next year, as it awaits the evolution of the outcome of the elections held in Brazil in October. The exit of the United Kingdom from the European Union, which must take place in March, is also important for the group.

Spain’s entities have accelerated the divestment of their real estate in a frantic fashion over the last 15 months. This summer, Banco Sabadell sold four portfolios of non-performing assets for a combined gross value of €12.2 billion. Those operations allowed the entity to fulfil in one fell swoop the objective that it had set itself in its Strategic Plan 2018-2020 to reduce its non-performing assets by €2 billion per year.

At the end of the third quarter of this year, the entity led by Josep Oliu held €13.62 billion in toxic property left on its balance sheet, nevertheless, once the sales undertaken this summer have been completed, that exposure will be reduced by almost half to €7.67 billion, most of which comprises doubtful loans. The exposure of foreclosed assets has been reduced to around €1.2 billion.

Orderly reduction

With respect to Bankia, in its Strategic Plan to 2020, the entity projected an annual reduction in non-performing assets of €2.9 billion, which would result in the clean-up of €8.7 billion over three years. The bank chaired by José Ignacio Goirigolzarri has divested €2.4 billion during the first three quarters of this year, according to its latest accounts at the end of September, which means that it needs to sell only another €500 million during the final quarter (…).

In the same way, Liberbank closed the third quarter of the year with gross non-performing assets amounting to €3.6 billion, 25% less than it held a year ago. The bank has set itself the objective of leaving €1.7 billion on its balance sheet by the end of 2020, in other words, €1.9 billion less than it currently has.

Finally, Ibercaja, which also unveiled its objectives to 2020 in March, announced its plans to reduce its toxic assets by 50% in three years, which would mean decreasing the balance by around €1.85 billion.

15 months of sales

Santander fired the starting gun on this race with the sale of 50% of Popular’s property to Blackstone, in an operation announced in August last year. Since then, the largest sale by the bank was a portfolio of flats and garages to Cerberus in September, for a purchase price of around €1.535 billion. Thus, the bank still has a second portfolio of foreclosed assets up for sale with a gross value of around €2.4 billion (…).

The most active investment funds to purchase portfolios over the last few months have been Cerberus, Blackstone and Lone Star. Between then three of them, they have made acquisitions of foreclosed assets and doubtful loans from the Spanish banks and Sareb amounting to €48 billion (…).

Original story: El Economista (by Eva Díaz)

Translation: Carmel Drake

Project Apple: Apollo Bids Hard for Santander’s Last Real Estate Portfolio

30 July 2018 – El Confidencial

Project Apple, the name chosen for the €5 billion real estate portfolio that Banco Santander has put up for sale, is entering the home stretch. The entity chaired by Ana Botín has asked the interested funds to submit their definitive offers this week, according to sources close to the operation.

As this newspaper revealed, the firms that have expressed their interest in the operation include the giants Lone Star, Cerberus, Blackstone and Apollo, although, the latter two are regarded as the favourites, given that they have significant recent history with the Cantabrian bank’s property.

Just one year ago, Blackstone was awarded project Quasar, the €30 billion portfolio of gross toxic assets that Santander sold (following its acquisition of Banco Popular). Meanwhile, Apollo owns 85% of Altamira, the real estate asset manager that the financial entity created and which is currently administering the €5 billion portfolio up for sale.

Having been left out of all of the major real estate processes involving the banks, Apollo has decided to bid hard for Apple, according to the same sources, a move that has been launched in parallel to the possible sale of  (its stake in) Altamira, the manager that would lose some of its appeal if another fund were to manage to acquire this portfolio.

In addition, the firm led in Spain by Andrés Rubio has just reached an agreement with Santander to modify Altamira’s management contract and to refinance the servicer’s debt, in a deal that has allowed the fund to distribute a dividend of €200 million.

For Santander, the sale of Project Apple will mean completing the divestment of all of its real estate exposure, a move that took a giant leap forward last year with the transfer of the Quasar portfolio to Blackstone.

Nevertheless, and precisely because it has already cleaned up the bulk of its balance sheet, the entity does not have any need to sell and, therefore, if the bids come in below its expectations, it may decide not to transfer the portfolio after all, at least not through this process.

After the Cantabrian bank, BBVA reached an agreement with Cerberus to sell it 80% of its toxic property, whose gross value amounts to €13 billion, in an operation that is expected to be completed later this year.

More recently, CaixaBank reached an agreement with Lone Star to sell it 100% of Servihabitat and the majority of a portfolio of properties worth €6.7 billion; and Banco Sabadell made a deal to transfer €12.3 billion in toxic assets to Cerberus (€9.1 billion), Deutsche Bank (€2.3 billion) and Axactor (€900 million).

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake