Vulture funds circle the Spanish real estate sector

Acute liquidity problems in the Spanish real estate sector are attracting the attention of international vulture funds that specialise in purchasing distressed real estate assets for a song.

According to the Spanish press, legal and financial consultants in Barcelona and Madrid report a surge in interest from vulture funds on the lookout for cashed-strapped developers to swoop on.

And it is not just something one reads about in the press. I have also been contacted by various organisations on the hunt for debt-laden developers who won’t make it through Spain’s property smash up. They can smell blood.

History shows that fortunes can be made by cash buyers in a distressed property market, and distress is something the Spanish property market has in spades right now. I know of some investors who did extremely well out of Spain’s last property crisis, back in the early ‘90s, and I see no reason why it will be any different this time round.

But timing is everything, and I still think it’s too soon to pounce. Give it 6 months.

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