Two leading developers in Catalonia, Restaura SL (part of the Restaura Group) and Strength, have been forced to seek court protection from their creditors.
Restaura SL, specialises in buying, refurbishing and reselling residential buildings in prime city locations, primarily in Barcelona. It has bought and refurbished some of Barcelona’s landmark historic buildings, for example on the corner of Paseo de Gracia and Gran Via. Many of its clients are international investors.
The company, which has debts of 237 million Euros spread between half a dozen banks and savings banks, is part of the Restaura Group, which has debts of 1.6 billion Euros. According to the Spanish press, industry sources are not ruling out insolvency proceedings for other parts of the Restaura Group, including the parent company.
Restaura SL has been brought down by the credit crunch and a collapse in the market. Due to a lack of financing on offer to buyers, it was unable to close crucial sales in recent months.
Restaura SL is also a victim of its own ambition, having expanded too quickly during the boom. Restaura, which has offices all over Spain, has also opended office in France, Germany and Poland.
The real estate developer Strength has also filed for administration to seek protection from its creditors, with more than 100 million Euros in debts. Strenght specialises in building holiday homes around Catalonia, and blames Barclays Bank for triggering the company’s insolvency proceedings.