Property and land assets purchased at knock-down prices are to be sold on to investors over a 15-year period. :: SUR
Last week, Spain’s so-called ‘bad bank’, which was set up in December 2012 to take over toxic property and land assets from the country’s troubled financial institutions in order to ‘cleanse’ their books, started promoting its first batch of properties.
The new state-run bank, ‘Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria’, known by its acronym SAREB, began its operation by putting 13,000 properties, once belonging to rescued lender Bankia, on the market.
In total, by the end of last year, SAREB had taken on 37 billion euros worth of assets from four nationalised banks. In exchange, the banks received EU rescue funds as well as bonds.
These assets, purchased at knock-down prices are to be sold on to investors over a 15-year period, offering a minimum return of 14 per cent.
SAREB chiefs have, so far, been coy about discussing the bank’s sales strategies and declined to speak to this newspaper on the issue earlier this week. There have also been criticisms over the organisation’s business plan which was drafted before it received an injection of capital from healthier financial corporations.
“There are clear flaws in the plans for this bank, which is supposed to miraculously clear up the stock of real estate assets,” one Marbella-based estate agent, who wished to remain anonymous, tells SUR in English.
“For instance, the properties put up for sale last week are all still being handled by Bankia and are being marketed under the umbrella of ‘Bankia Habitat’.
“It seems like it’s getting off to a shaky start - just like the ‘bad bank’ of Ireland did in 2009.”
However, in response to such criticism, a SAREB spokeswoman says of the business plan: “It is being adjusted because of the evolution of the portfolio, as we now have all the details about what it contains.”
In a joint statement on the issue, which was released on the day SAREB officially launched last week, the European Central Bank, the European Commission and the International Monetary Fund (IMF), said: “It is of the utmost importance that this plan is kept both robust and credible, based on updated information.”
In a separate report, also issued last week, the IMF affirmed that, “The program remains on track: the clean-up of undercapitalised banks has reached an advanced stage, and key reforms of Spain’s financial sector framework have been either adopted or designed.
“This clean-up is a major achievement that should strengthen confidence in the system and improve its ability to support the real economy.”
SAREB is likely to reduce prices further, according to some analysts, because unlike other banks it is able to offer financing on properties - and this provides a degree of flexibility.
One of the real estate developments on the ‘bad bank’s’ books, since being handed over by Caixa Catalunya, one of the four rescued lenders, is the Hacienda del Álamo Golf Resort, an extensive luxury development in Murcia.
So, is John Green, owner of Hacienda Golf Properties, an independent estate agency that sells and manages properties on Hacienda del Álamo, confident that the SAREB initiative will attract buyers?
Speaking to SUR in English, he says: “So far all SAREB has done is kill sales; we have lost a number of sales since the rejection of outstanding offers from SAREB on December 15th, so the question is dependent on the management of the sales process and the availability of information – which, so far, is none.
“However, we are optimistic despite the performance to date, and the final arbiter will be the client.
“If the prices are good and SAREB ‘gets out of the way’ of agents who know what they are doing, then we, hopefully, will see a positive result.”