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A number of large international investors in distressed real estate are eyeing deals in Spain, raising hopes of a turning point in the market following the creation of a bad bank vehicle to clean up the consequences of a decade-long building bubble.
A planned sale by Sareb, the Spanish state-organised bad bank, of a portfolio of property homes, mostly in the regions of Andalucia and Valencia, has attracted interest from a host of private equity buyers. These are understood to include the US funds Apollo, Lone Star and Blackstone.
“It seems like the moment when it starts to happen,” said a person close to one of the buyers. “The flow of deals has been zero so far, but this should be the opening of the doors for a lot of transactions”.
Further on it says that investment bankers in Spain have noticed a big increase in the number of investors looking at Spanish property this year – something I have also noticed.
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I don’t think there is any chance of that.
You can rest assured that if any big funds buy portfolios it will be with deep discounts (around 80pc) and then they will try to liquidate as quickly as possible (that’s how they work and time is just as important as price to them > they want to get out fast). If anything it means a flood of cheap property on the market pushing prices further down. The opposite of a bubble.
So it’s an interesting question. What happens to prices if the big vulture funds start buying? My answer is lower prices.
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There does seem to be a fair old push of Spanish properties going on this year, take a look at this article that was pointed out to some of us 😉
http://www.spanishpropertyinsight.com/investors/
Never been keen on that old saying ‘cherry-pick’, it’s what all the agents were using in the boom days, next it will be ‘you cannot lose’ please no more of those old chestnuts 🙄
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Thanks Angie. Not a red indian but I did have a (much missed) grinning dog. I’m lurking in the background, mainly because I’ve got an ultra-pessimistic view of the Spanish property market. I find it hard to believe people are trying to talk the market up when the government seems to issue a stream of market-killing ideas. The government should be making it easy for northern Europeans to come to Spain because they will spend money on builders, in restaurants, on food and fuel and garden furniture and…
Frankly it’s like the government is run by the Florida Real Estate Association as a way of funnelling people that way. -
Grinningdog, well said, your analysis is spot on about the ‘talking up’ of an ever increasing glut of a property market that’s beset with poor exchange rates for Brits.
It won’t be long before loads of ‘inspection trips’ will be the norm again, then leading the unwary to the agents’ in house or chosen lawyers, followed by quotes like ‘cherry picking the best plots’ ‘you cannot lose’ ‘all our Directors and Managers are buying here’. Unfortunately people have short memories and the agents and developers will be swigging champers again in Banus for the number of sales they’ve made this week, and the worse thing of all, Spain has still not regulated it’s property market, still allows the con-men to flourish with impunity, and punters will be in negative equity because their properties have to rise 20% just to break even. Oh and don’t forget the ‘disclaimers’ in the small print so there’s no comeback if anyone believes the spiel 🙄 Bah Humbug 😡
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