Spain’s BBVA sells 80% of real es­tate busi­ness

The Star Malaysia - StarBiz - - Foreign News -

MADRID: Spain’s BBVA said it had agreed to sell 80% of its real es­tate busi­ness to US fund Cer­berus for four bil­lion eu­ros (US$5bil), one of the largest such deals as in­vestor en­thu­si­asm for Span­ish prop­erty re­turns.

The real es­tate as­sets in­cluded in the pack­age have a gross book value of some 13 bil­lion eu­ros, Spain’s sec­ond largest bank said in a state­ment to the mar­ket reg­u­la­tor.

The deal is the largest since San­tander sold con­trol of prop­erty worth 10 bil­lion eu­ros to US in­vestor Black­stone Group in Au­gust.

A burst prop­erty bub­ble in 2008 sent Spain’s econ­omy in to a tail­spin that lasted nearly five years, put mil­lions out of work, sent pub­lic debt soar­ing and prompted a more-than 40-bil­lion-euro bailout for its banks.

The econ­omy re­turned to growth in 2013 and has out­per­formed the rest of Europe since then, help­ing restart res­i­den­tial con­struc­tion as house prices turn around and prompt­ing for­eign in­vestors to re­turn to the mar­ket.

BBVA said it would re­tain con­trol of 20% of the real es­tate port­fo­lio, which it said would be ex­clu­sively man­aged by Cer­berus’s Haya Real Es­tate.

The deal is ex­pected to be closed in the sec­ond half of 2018 and while it wasn’t seen hav­ing a sig­nif­i­cant im­pact on the bank’s prof­its it would have a slightly pos­i­tive im­pact on the fully loaded core tier 1 cap­i­tal ra­tio (CET1), it said.

On Tues­day, Bank Of Nova Sco­tia agreed to buy BBVA’s stake in BBVA Chile for US$2.2bil.

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