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Sareb Expands Its Holiday Rental Operation

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In a continuing effort to generate revenue with its portfolio of languishing real estate assets, Spain’s bad bank is turning to holiday rentals.

Sareb announced an agreement this week with holiday rental agency Pierre & Vacances to lease four residential complexes in Alicante, Tarragona and Mallorca. The resorts covered in the agreement include Poniente Benidorm, in Alicante; Marina Torredembarra in Tarragona; and Portomar and Vistalegre in Mallorca. The rental firm will manage the assets and funnel revenues to the bad bank.

Sareb expects to offer more apartments for rent in the future. Pierre & Vacances already manages 240 og Sareb´s apartments. The company manages holiday rentals in France, Italy, Germany and Belgium, in addition to Spain.

The new deal will allow Sareb to “generate revenue” and benefit from Spain’s increasing tourism, Sareb’s Jaime Echegoyen told the media. Sareb has already announced plans to invest €2.5 million in improving holiday properties in its portfolio, presumably hoping that the assets will also increase in value.

Sareb’s asset management arm reportedly generated €68 million in 2013 from rental properties.

Meanwhile, Sareb has reportedly narrowed the list of potential companies to manage clusters of €50 billion of assets to eight companies, the newspaper Expansion reports. The bad bank received 46 bids, but is reportedly focusing on international funds that have recently purchased real estate service companies, including Blackstone, Cerberus and Apollo, the paper reports.

The winning bidders will take over the servicing and marketing of the properties. Sareb is expected to choose winners for the 10 clusters in September.

Sareb has reportedly also put a portfolio of more than 100 loans valued at more than €1 billion on the market. The loan portfolio, named the Kaplan Project, primarily focuses on non-performing loans backed by residential assets in Madrid, Catalonia and Andalusia.

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