Bad moment in the real estate market will lower the sale price of the Sareb promoter

However, this bad situation in the markets did not prevent them from continuing their activities, albeit with record results, but they set a price for these companies. In this context, Sareb is preparing to make one of its biggest divestments to maintain its authority to sell all assets confiscated after the bubble burst in 2008. Arqura Housesa development company that, although expandable, owns a large amount of land for the construction of approximately 15,000 homes.

The sales process continues and will continue. Deloitte responsible for advising Sareb, as announced by El Periódico de España of the group Prensa Ibérica. The price the semi-public corporation expects to get for Árqura is very different from the price some potential investors would be willing to pay, while waiting for the “big four” to determine whether there is interest in the market.

Price is a stumbling block in operation

Taking into account the land available to Árqura and Sareb’s willingness to include more, the assets are worth around 1,000 or 1,200 million euros. However, as the prices reflect, it will not be easy or impossible for someone to buy them at this price, as the market does not believe in these values. This discount will be requested by potential buyers of Árqura.. Because? Otherwise, it would be cheaper for the investor to buy shares of listed companies than to buy Sareb’s backer. In addition, such large-volume transactions are often also add a discount for the deal what it means for the seller to get rid of a large lot in a single transaction.

Real estate sources point out that the Sareb backer could be worth around €700 or €800m on the market, while others lower expectations further, with around €500 or €600m, up to half of Sareb’s claims. Because the ‘bad bank’ only wants to get rid of half the companyoperation could be around 350 or 400 millioneven less.

An asset that the organization headed by Javier Torres has to arouse more interest in the market, propose a deferred payment. In this way, the buyer will have to make the payment not all at once, but over several years, making it easier to dispose of all the capital.

What assets does Árqura have?

Árqura Homes has land to build about 15,000 homes, but not all of them are ready to start construction. Sareb states 30% of portfolio is managed land, which needs an urban treatment. This administrative phase requires the cooperation of governments, communities and municipalities, as well as a substantial payment for urbanization work.

32% of Árqura’s assets housing projects continue, both in inception and under construction. These will not be included in the operation as they will be sold at a very small discount compared to the amount to be obtained from the sale after delivery.

The remaining 38% of the portfolio is finalist plots.in other words, it was prepared to request building permits and start construction on municipal buildings. These are the ones with the most value for developers because they can have them deployed in less than a year and a half. These are the ones that arouse the most interest among investors.

Which companies can buy Árqura?

A feature of this operation is that Sareb’s intention is to keep it as the buyer’s partner only 49 percent and to condition it heavily. The companies that might show the most interest in this portfolio are developers or mutual funds who will develop the land themselves.

A priori, Four biggest supporters in Spain excluded. Because? Via Célere does not invest heavily to purchase land, Metrovacesa has its own land to develop in the coming years, and Aedas Homes and Neinor Homes are focusing on purchasing finalist land to build recently. needs an urban treatment. In addition, some of these are out of growth cycles and their shareholders will not support such a large investment.

Pools will include recently created boosters such as Culmia and Habitat.are owned by North American funds Oaktree and Bain Capital, respectively. These companies are in the growth phase and acquiring such a portfolio guarantees having the raw material to work for for years to come. Whether they are participating in the competition or not, it will be an excellent thermometer to find out if they really want to continue investing in Spain.

In addition to developers, some mutual funds may also be interested in this portfolio of land. Árqura has no employees and all management of the company has been transferred to Aelca, a developer that Sareb has an option to buy. So if a mutual fund wants to enter the Spanish market, it can do so without its own team and continue to develop the entire land as it has been before. In any case, there would be one fund with an opportunistic risk-return profileSince it is an investment that carries both urbanization and promotion risks, it will seek annual returns of 15% or over 20%.