Tag: WiZink

Orion & Wizink Abandon Their Plans to Build a Macro Shopping Centre in Sevilla

Although the project received the green light in January, the opening of the Lagoh shopping centre in 2019 and the rise of e-commerce have forced a rethink.

The impact of the coronavirus pandemic on retail has led to the definitive abandonment of the plans by the investment fund Orion and Wizink to build the Sevilla Park macro-shopping centre. The firms had been planning a large investment in the project, of up to €300 million, according to ABC Sevilla.

The idea to build this 150,000-square-metre shopping centre was originally conceived by the French fund Orion – Neinor’s largest shareholder – and the cultural promoter Octagon – which manages the former Palacio de Deportes in Madrid (currently the Wizink Center) – back in 2014. It was called Sevilla Park and was going to house a large auditorium with capacity for 20,000 people on a site owned by the port of Sevilla and the CLH group.

Santander Wants To Sell RE Assets Worth €6,000M In 1 Year

30 October 2017 – Voz Pópuli

Banco Santander does not want to stand idly by following the sale of Banco Popular’s real estate. After the completion of that operation (the largest ever real estate transfer in Spain), the entity chaired by Ana Botín wants to continue accelerating its real estate clean up. In this way, it plans to reduce its real estate exposure by more than €6,000 million over the next year.

That would mean that Santander’s real estate balance would decrease by half, given that it currently amounts to around €12,300 million in gross terms (excluding provisions).

According to the bank’s CEO, José Antonio Álvarez, speaking at the results presentation, the objective is for the entity’s real estate exposure “to be immaterial” by the end of 2018.

This immateriality means having a net balance of between €1,000 million and €2,000 million left on the balance sheet within 14 months, besides the rental properties, explained the banker. That, in turn, means selling around €6,000 million (in gross terms) and leaving around €6,000 million on the balance sheet.

The numbers

In this way, Santander España’s net exposure to the real estate market is €5,900 million. The entity has an average coverage ratio of 52% over these assets, which means that their gross value is €12,300 million.

Of those €5,900 million, €3,372 million are foreclosed assets, €1,203 million are rental properties and €1,325 million are delinquent real estate loans.

In August, Santander agreed to transfer almost €30,000 million (in gross terms) of Popular’s property to Blackstone. Specifically, the bank sold 51% of a new real estate company, for €5,100 million and retained ownership of the remaining stake.

In terms of the rest of the real estate assets on its balance sheet, Santander could undertake similar operations, although it will also continue to analyse sales through the retail network and the option of putting properties on the market through Socimis. Both the Spanish bank and its competitors are under pressure from the ECB to get rid of the real estate on their balance sheets as soon as possible.

Meanwhile, Santander is negotiating with Värde Partners, owner of 51% of WiZink, to repurchase Banco Popular’s customer card business and to sell it Barclays and Citi’s business in return.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Banco Popular Records Losses Of €137M In Q1

8 May 2017 – La Vanguardia

Banco Popular recorded losses of €137 million during the first quarter of 2017, its first set of accounts to be published since Emilio Saracho (pictured above) took the helm. And it is clear that he has not escaped from the fallout of the property sector, the evil that tormented his predecessor Ángel Ron. In fact, the loss in Q1 is primarily explained by a €496 million provision against the entity’s real estate portfolio.

Compared to the previous year, the panorama is completely different. During the first quarter of 2016, Popular recorded a profit of €94 million. The need to clean up and strengthen the balance sheet means that the numbers have gone into the red, but the new provisions increase the coverage ratio to 45.2%, with €570 million in non-performing assets and raise the default rate to 51.4%, according to figures published by the entity on Friday.

The bank is going through a difficult time, it registered losses of almost €3,500 million last year. To stay afloat, on Friday, the entity ruled out selling assets “in an indiscriminate way”, given that it will take the decisions that it considers appropriate “always taking into account the value that may be generated for the shareholders”, according to the bank’s CEO, Ignacio Sánchez-Asiaín.

Popular is looking to sell both WiZink and Totalbank if it receives good offers for them and has said that the bank is holding “advanced conversations” for the sale of its non-strategic assets.

Similarly, the director revealed that Project Sunrise, which had been driven by Ron and which sought to place the entity’s real estate assets into a type of bad bank, has been “completely abandoned”. “If we don’t have to recognise any extraordinary provisions, of course, we expect to generate profits this year”, he added.

Popular lost €800 million in deposits in February due to the relevant events that marked the transformation of the entity and reductions in its rating by the credit rating agencies.

Nevertheless, the bank is “succeeding” in recovering deposits and specified that in this sense there is a monthly volatility, which means that Popular is not “worried” by what has happened over the last few months.

The accounts reflect gains of €180 million in the retail business, where the bank specialises in SMEs. The volume of loans granted decreased by 5.6% to €100,859 million, with a default ratio that rose to 14.91%, compared to 12.68% a year before. (…).

Meanwhile, the real estate activity recorded losses of €317 million. Property sales amounted to €459 million, with an 18.5% increase in retail sales, at the same time as the sale of real estate loans reached €402 million.

As the end of the quarter, the capital ratio amounted to 11.91%, above the requirement of 11.375%.

Original story: La Vanguardia

Translation: Carmel Drake

Popular Engages Deutsche To Sell RE Assets Worth €4,000M

13 July 2016 – Expansión

Banco Popular has almost oiled the machinery that it will use to remove between €3,500 million and €4,000 million in property from its balance sheet. The entity chaired by Ángel Ron (pictured above) has engaged Deutsche Bank and EY to create a real estate company, which will be opened up to investors, in order to deconsolidate its assets, according to financial sources.

The plans are already well underway, although the complexity involved means that they will probably be delayed until the end of the year.

For the time being, Popular and its two advisors will focus on defining the perimeter of the assets to be transferred to the company and in creating the ideal structure. To this end, the bank will write to Spain’s National Securities Market Commission (CNMV) to obtain the necessary authorisations.

The plan being carried out by the entity is very similar to the one conducted by Santander, and to a lesser extent by BBVA, with Metrovacesa, when it reduced its stake and transferred its assets in order to deconsolidate them from their balance sheets. That forms part of the merger plan with Merlin Properties. Popular also owns a stake in Metrovacesa, and so has followed the process closely.

In theory, all of the assets to be transferred to the new company will be foreclosed: land, homes and work in progress properties. The new company will have its own management team, which will operate independently of the bank chaired by Ron.

Popular owned €16,132 million in foreclosed assets at the end of 2015. Of those, €4,352 million related to finished buildings; €6,685 million was land; €1,436 million comprised homes proceeding from (unpaid) mortgages; €398 million related to buildings under construction; and €3,255 million corresponded to other assets.

Problematic assets

In addition to these foreclosed assets, Popular held doubtful loans to property developers, which took its total exposure to problem assets to €34,000 million, making it the financial group with the largest real estate inheritance in the financial sector at the end of 2015.

That situation movitvated the €2,500 million macro capital increase that the entity completed last month. One of the main objectives was to increase the coverage of the problem assets from its current level of 38% to 50%, in line with the rest of the sector. The low coverage ratio was one of the impediments facing the entity in its efforts to undertake large sales of real estate assets.

The bank’s strategic plan involves reducing the volume of problem assets by €15,000 million between now and 2018, to €19,000 million.

In addition to its large operations, such as the one it is working on with Deutsche Bank and EY, Popular is also promoting the sale of properties through its commercial network and its real estate manager, Aliseda. That company is controlled by Värde Partners and Kennedy Wilson, which together own a 51% stake in the share capital, and Popular, which holds the remaining 49% stake.

Investors

Värde Partners is one of the major investors who will be invited to participate in the company. In addition to Aliseda, the US fund has joined forces with the bank in its credit card business, WiZink, in which it acquired a 51% stake. Värde also recently launched its own property developer, Dospuntos, which has an ambitious investment plan amounting to €2,000 million. Even so, the project will also be opened up to other international and domestic investors.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake