Sareb is looking for a partner to help it with the urban management of a mega-portfolio of land that currently does not have permits to build. To do this, it has launched a contest in which it has invited 12 companies to participate, including consultants, servicers real estate and a construction company. The idea of the bad bank is to choose one of those companies to be in charge of the entire process, with the aim that these lands, which have the capacity to build around 12,000 homes, have the character of finalist in the coming years, according to sources of the real estate sector.
To the contest, the Society for the Management of Assets from Bank Restructuring (Sareb) has invited the consulting firms Savills Aguirre Newman, CBRE, EY and JLL to become your partner in management. Also to servicers Altamira (owned by DoBank and Santander) already Servihabitat (Lone Star and Apollo), as well as a small more technological consultancy called Almar Consulting and the construction group Level.
He has also invited LandCo, the manager recently launched by Santander precisely to manage land worth 4,000 million euros from the bank. In this way, the entity chaired by Ana Botín created a company specialized in an underdeveloped business in Spain. It so happens that the bank is also a shareholder in Sareb, with 22% of the capital, although the largest percentage belongs to the FROB (45%).
Sareb now wants to establish a model similar to LandCo with part of its land portfolio that is not a finalist. For this reason, it has launched this initiative called Neo project. It is that for several years, your partner works to advance the urban process in multiple municipalities throughout Spain to requalify the plots and be able to build. The idea of the entity is that its new ally has experience in this type of highly specialized task and that it be able to reach the entire national territory.
In recent years this portfolio has been managed by Haya and Solvia. It consists of around 300 parcels, as advanced in February by the media specialized in the real estate sector Brainsre News. The objective of the entity chaired by Jaime Echegoyen is to have the proposals of those interested in this month of March. Sareb declined to comment.
Mainly, the portfolio to manage consists of residential land, although there would also be some tertiary, according to the sources consulted. They are initially distributed in 48 provinces (although the perimeter may vary), mainly in about 190 municipalities in secondary locations of the Mediterranean arc (from Catalonia to Almería), Andalusia, Castilla y León, Castilla-La Mancha and Asturias. Both in Madrid and in Barcelona the presence is scarce.
The land management work involves several years of work, due to the slowness of the urban processes. For this reason, it is difficult to calculate how long it will take the entity to achieve the requalifications. In this portfolio managed by Sareb, according to the sources consulted, there are lands that could obtain the status of finalist in one or two years, but the range can be extended in other cases for more than five years. In any case, the foundational goal of the bad bank is to achieve the liquidation of all its assets from the bank until 2027.
Currently, 16.6% of the value of the entity’s assets are land, which represents 2,338 million euros, according to the results report for the first half of 2020. Of all the properties in its portfolio, 15.7% are finalists and 21.4% are in development (without permits).
With this type of specialized work of obtaining urban licenses, the entity would achieve that the land portfolio is revalued once they are considered finalists, where it can already be built. It is still to be decided, according to sources, whether at that time Sareb would transfer them to a third party to make cash or could promote real estate development.
The Neo Project is within the strategy launched two years ago to recover some services assigned in the management contracts to its servicers –Renegotiating the agreements with Haya, Altamira, Solvia and Servihabitat– such as the maintenance of real estate or improving the judicialization of delinquent loans.
In recent months, the bad bank has started a turn from its initial presence as a financial institution that managed assets from the bank towards becoming a real estate company. To spearhead this strategy, the entity chaired by Jaime Echegoyen signed last year Javier García del Río, former CEO of Solvia. In this direction, Sareb created in 2019 the residential developer Árqura with assets worth 811 million euros and the capacity to build 17,095 homes. In this case, it joined the promoter Aelca (controlled by Värde Partners), with which it formed what is known as FAB (Banking Assets Fund), an investment fund in which Sareb controls 90%.
Likewise, it created the Socimi Tempore, in which on this occasion it was associated with the US fund TPG (which has 75% of the capital). This listed company controls a portfolio of more than 300 million in rental housing.
Last year it also awarded Haya a contract to manage 3,300 rental properties, of which 1,800 are homes.