Sareb has completed H1 with an income of EUR 1,710 million, up 21% on H1 2016, according to provisional closing figures.
The sales boost from sales campaigns and active loan management, along with the recovery of the Spanish real estate market, explain this surge in business. Most of this improvement was due to income produced through property management and sales, registering EUR 535 million, up almost 40% year-on-year.
There was a 13% increase in income from the property development loan portfolio taken on by Sareb from the financial institutions that received government funding and underwent restructuring, and this remains the company’s main source of income, amounting to EUR 1,165 million at the end of June. The company also obtained EUR 10 million in additional income.
Improvement in real estate business and successful sales campaigns drove property sales up by 70%, equating to 9,740 units in H1, according to provisional closing figures. There was a significant uptick in income obtained from collaborations with borrowers, known as Sales Growth Plans (PDVs). Through these agreements and the sale of loan collateral, the company was able to sell 4,180 units from borrowers’ balance sheets, up almost 75% y-o-y.
Between January and June, Sareb divested 5,560 properties, a 68% increase. Close to two thirds of these properties were residential. According to provisional figures, 550 plots of land were sold.
During H1, Sareb launched seven successful sales campaigns, selling 880 properties via these campaigns, totalling close to EUR 114 million.
We would also note the strong new-build activity. With regards to plots of land under development and projects approved for development on its own land, Sareb is currently developing 4,326 homes, 1,131 of which have already been sold or reserved.
Sareb’s Executive Chairman, Jaime Echegoyen, said: “Improvement in the economy and real estate sector, along with the company’s sales strategy and the support of Sareb’s four servicers, have driven business and increased the rate of divestment.”
Main debt sales in H1 2017
Among the main debt sales, we would highlight the divestment of a loan portfolio known as ‘Project Amanda’, with a par value of EUR 91.7 million. The collateral for this loan portfolio was mainly comprised of completed residential developments (94%), with serviced development land accounting for the rest. The majority of these developments were located in Catalonia and Madrid, although there were also some in Andalusia, the Balearic Islands and the Community of Valencia.
‘Project Olive’ was also sold between January and June, which comprised debt sales with a par value of EUR 84.2 million, with the collateral comprising homes in Catalonia, the Community of Madrid and the Community of Valencia.
Other major debt sales completed by Sareb during H1 included the divestment of a loan portfolio known as ‘Project Gordon’, with a par value of EUR 79 million. On this occasion, the debt was secured with collateral comprising plots of serviced development land in Villajoyosa (Alicante).
Challenges for the second half of the year
In recent months, the company has also been drawing up a series of initiatives that will allow it to capitalise on the upturn in the economy, and increase its rate of divestment. Sareb’s loan sales platform is a standout feature of this plan, and was launched as a pilot project by the company in July, involving a group of investors. Sareb hopes to have the platform fully up and running by the start of 2018.
Sareb has also begun to create its new Socimi, Témpore Properties, which Sareb will use to manage some of its rental properties. The real estate consultancy firm CBRE is currently in the process of analysing and valuing the portfolio of this investment vehicle, which is expected to list on the MAB (Alternative Stock Exchange) before next year.