Spain’s ‘bad bank’ Sareb eyeing sale of REIT

SAREB is negotiating the sale of their Spanish REIT, Tempore Properties SOCIMI, S.A. , and is said to be in conversations with 5 potential buyers.

Spain’s so-called bad bank, Sareb, was set up in 2012 to absorb over €50bn in property assets from nationalised financial institutions and banks that required medium-term financial aid. The entity posted a loss of €565M for 2017, its fifth consecutive annual loss, citing the sale of assets at a loss and the high costs of maintaining its portfolio. Sareb’s Executive Chairman, Jaime Echegoyen noted, “despite revenues being slightly down on last year, we have managed to increase our margins, sell more properties, and improve our year-end result”.

According to Nicolás Díaz Saldaña, CEO of the company, «Témpore is the third largest residential landlord in Spain, after Blackstone and the Azora Group, so it is logical that there are several investors studying the opportunity». The deadline for submitting offers has been set for the end of November.

Témpore plans to double its size to reach €325M through a capital increase of c. €150M enabling the vehicle to acquire an additional 1,769 properties, of which 850 are income producing homes. This transaction follows the ROFO agreement signed between Sareb and the Spanish REIT. According to the CEO, this will be SAREB’s last non-monetary contribution to the REIT and will seek financing elsewhere «either banking or bond issues».