Cerberus closes two megadeals with BBVA & Santander

Cerberus Capital Management L.P. («Cerberus») has reached an agreement with BBVA and Santander for the acquisition of two property portfolios which, combined, are valued at over €5bn.

As SpanishREIT.com published in November, BBVA had already agreed to sell 80% of its Spanish real estate business to a subsidiary of Cerberus Capital Management, a U.S. private equity firm, for €4 billion through a joint venture deal.

BBVA announced that the deal has successfully been closed and it will transfer its real estate business in Spain to Cerberus Capital Management, L.P. whilst retaining a 20 percent stake. With this sale, the 2nd largest Spanish bank has eliminated almost entirely its exposure to the property market. According to BBVA’s CEO Carlos Torres Vila it “significantly reduces” their “exposure to a non-core business” and allows the financial group to boost its transformation process.

The Madrid-based bank estimates that this divestment will not have a significant impact on the Group’s net attributable profit nor on its fully loaded CET1 capital ratio. Last year BBVA’s Non-Core Real Estate division suffered losses of -€501 million. Going forward this impact is expected to be negligible. BBVA expects the impact of this business unit to be negligible starting 2019.

BBVA has been actively divesting over the last 2 years with transaction such as the sale of Project Buffalo (a portfolio of almost 3,500 units); Project Boston (the sale of a 14-office building portfolio); the sale of the Puig Tower in Barcelona; the sale to Metrovacesa Suelo y Promoción of 108 residential plots; the sale of the Jaipur Portfolio, a developer-loan portfolio as well as the sale of its 27% stake in Metrovacesa and the sale of its 25% stake in Testa. Most recently, the bank has sold its office building on nº1 Gran Via in Bilbao.

In a different transaction, Cerberus has also acquired a residential portfolio from Santander for over €1.5Billion of foreclosed properties. The portfolio is comprised of 35,700 properties and will be managed by Haya Real Estate. This divestment is expected to be fully completed by the end of 2018 or in Q1 of 2019.

Clifford Chance’s Madrid team, led by Carlos Portocarrero and Andrés Berral, advised Spanish bank BBVA on the sale while Cerberus instructed Linklaters and JLL.

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