Banks’ distressed loan and asset sales are picking up in Spain and Germany, driven by strong investor appetite for non-performing loans in the UK and Ireland.
Hypo Real Estate’s bad bank, FMS Wertmanagement, has sold Project Rebound, a German real estate owned (REO) portfolio worth around €300m, to Cerberus Capital Management.
It was sold at a big discount to reflect the mixed quality of the granular assets, which are spread across the country. Mount Kellett Capital Management was the runner up.
Cerberus is also said to be buying Royal Bank of Scotland’s Project Monsoon: 10 Kaufland- anchored retail schemes with €331m of debt secured against them. The deal has yet to close.
REOs are assets held by banks, sometimes when the keys have been taken back and sometimes when a loan has been enforced. Irish bad bank NAMA is reviewing options for €1.6bn of exposure to Germany.
“It doesn’t want to be the last one in the queue to put product in the market; it wants to capture demand,” a source said. “It takes six to nine months to put something like this together.”
Private equity firms are focusing their attention in Spain on Sareb, which is selling its first portfolio, Project Bull, and has received non-binding bids from the likes of Apollo Global Management for the mainly residential REO portfolio.
But Lone Star is tipped as the likely winner, as it made an offer to Sareb through reverse enquiry before the deal was brought to market.
Sareb is also seeking a sales adviser for a separate €500m-600m loan portfolio sale. Hedge fund Centerbridge Partners has bought the Actua servicing platform in Spain.