Sareb to speed up distressed property sales
Sareb has announced that it will speed up its sale of distressed Spanish property, in what is an ambitious new timetable for liquidation. The bad bank is hoping to sell almost 42,000 housing units in the next five years. This is about half of the properties in its €50 billion (£42.5 billion approximately) portfolio.
However, falling house prices and a desire among buyers for modern properties in prime locations could hamper these plans for swift sale. Already the value of assets is being slashed by Sareb to clear their books, but attracting investors is proving to be no easy task.
Nonetheless, the bad bank is adamant that it is important to begin selling properties at the earliest possible opportunity. This will help to create a pricing floor for other investors, kick-starting a broader recovery in the housing market.
Interested parties won't have to wait long to get their hands on distressed real estate either, with Luis de Guindos, Spain's finance minister, declaring that Sareb is aiming to sell properties worth €1.5 billion. What's more, the country's financial reforms are on track, which bodes well for the implementation of future plans.
At the beginning of March the International Monetary Fund (IMF) declared: "The clean-up of undercapitalised banks has reached an advanced stage, and key reforms of Spain's financial sector have been either adopted or designed." Sareb has also been praised for its receipt of distressed real estate assets from the country's weakest banks. The bad bank has also finalised agreements with participating banks to manage the transfer of assets.
However, the IMF has acknowledged that the reform of Spain's financial system will continue to require "vigilant oversight" to ensure risks remain controlled, such as the impact of the pending Cypriot bailout. The IMF is confident that banks have properly prepared provisions to "cushion" the outcome on rising unemployment and non-performing loan ratios, but Spain is not out of the woods just yet.
However, falling house prices and a desire among buyers for modern properties in prime locations could hamper these plans for swift sale. Already the value of assets is being slashed by Sareb to clear their books, but attracting investors is proving to be no easy task.
Nonetheless, the bad bank is adamant that it is important to begin selling properties at the earliest possible opportunity. This will help to create a pricing floor for other investors, kick-starting a broader recovery in the housing market.
Interested parties won't have to wait long to get their hands on distressed real estate either, with Luis de Guindos, Spain's finance minister, declaring that Sareb is aiming to sell properties worth €1.5 billion. What's more, the country's financial reforms are on track, which bodes well for the implementation of future plans.
At the beginning of March the International Monetary Fund (IMF) declared: "The clean-up of undercapitalised banks has reached an advanced stage, and key reforms of Spain's financial sector have been either adopted or designed." Sareb has also been praised for its receipt of distressed real estate assets from the country's weakest banks. The bad bank has also finalised agreements with participating banks to manage the transfer of assets.
However, the IMF has acknowledged that the reform of Spain's financial system will continue to require "vigilant oversight" to ensure risks remain controlled, such as the impact of the pending Cypriot bailout. The IMF is confident that banks have properly prepared provisions to "cushion" the outcome on rising unemployment and non-performing loan ratios, but Spain is not out of the woods just yet.
PUBLISHED : 26TH MARCH 2013
