Carlos Slim buys distressed property portfolio in Spain
The richest man in the world, Carlos Slim, has given the Spanish property market a boost, by buying one of Caixabank's distressed real estate portfolios. On Tuesday (December 18th), it was revealed that the Mexican magnate, under the Spanish subsidiary of Inmobiliaria Carso, will acquire some 439 property units for approximately £358 million. Gross capital gains of £1.6 million are expected to be booked by the lender.
This is good news for Spain, indicating a possible change of fortunes in their quest to sell off distressed assets. Thus far, banks have had to significantly reduce the price of such properties in a bid to attract buyers. Caixabank's sale is the first step in clearing distressed assets off Spanish books. However, the bank has signed a sale and lease back deal with Inmobiliaria Carso, which gives them an option to buy back the property units.
Nevertheless, the sale hasn't exactly come out of the blue. Caixabank owns 20 per cent in Mexican financial group Inbursa, which is controlled by Mr Slim. The tycoon in turn is a minority shareholder in the lender, making the deal mutually beneficial.
There is confidence that the real estate deal will be the first of many distressed property sales. Bankers in Madrid said earlier this week that more deals in the sector are already in the pipeline for early next year, Reuters reported. However, distressed real estate is still selling at a massive discount. Anticipating such a situation, all banks have already made provisions for losses on toxic real estate loans or foreclosed properties.
Across the board, it seems the property market in Spain could be picking up. The Global Property Guide reported that confidence is returning to the Costa del Sol, with house builder Taylor Wimpey Espana recording a 74 per cent increase in sales so far this year. They explained that of their three specialist regions - Mallorca, Costa Blanca and Costa del Sol - the latter has been performing the best.
This is good news for Spain, indicating a possible change of fortunes in their quest to sell off distressed assets. Thus far, banks have had to significantly reduce the price of such properties in a bid to attract buyers. Caixabank's sale is the first step in clearing distressed assets off Spanish books. However, the bank has signed a sale and lease back deal with Inmobiliaria Carso, which gives them an option to buy back the property units.
Nevertheless, the sale hasn't exactly come out of the blue. Caixabank owns 20 per cent in Mexican financial group Inbursa, which is controlled by Mr Slim. The tycoon in turn is a minority shareholder in the lender, making the deal mutually beneficial.
There is confidence that the real estate deal will be the first of many distressed property sales. Bankers in Madrid said earlier this week that more deals in the sector are already in the pipeline for early next year, Reuters reported. However, distressed real estate is still selling at a massive discount. Anticipating such a situation, all banks have already made provisions for losses on toxic real estate loans or foreclosed properties.
Across the board, it seems the property market in Spain could be picking up. The Global Property Guide reported that confidence is returning to the Costa del Sol, with house builder Taylor Wimpey Espana recording a 74 per cent increase in sales so far this year. They explained that of their three specialist regions - Mallorca, Costa Blanca and Costa del Sol - the latter has been performing the best.
PUBLISHED : 21ST DECEMBER 2012
