Over 20,000 properties of all types are expected to come on the market in the coming years, either through direct sales or auctions, with an obvious impact on prices.
This concerns properties that constitute collateral in nonperforming loan portfolios that have been or will be sold in the coming months to investment funds and groups such as Apollo Global Management, Bain Capital and Centerbridge Partners; some of them have already hit the market.
Bain Capital made its first sales in July and it has already collected €35 million through the sale of significant buildings. The US-based private investment firm acquired the Amoeba NPL portfolio for €430 million, including some 2,300 properties as collateral. At this stage Bain is proceeding with the second phase of property sales to institutional or private investors.
Apollo is also active in the market with its first sales after buying out the Jupiter portfolio for €337 million. This NPL package concerned requirements of €1 billion and is estimated to include over 1,700 properties from mortgages that add up to more than half a billion euros. A large share of those assets (about 40%) concerns residences; another part concerns commercial properties, while there are also dozens of hotel assets.
Sources say that for the time being the process of retrieving the obligations is ongoing, with the majority of borrowers choosing the path of auctions. In this context it is estimated that more than 1,000 properties will go under the hammer in the coming months. The process will likely begin in April or May, with several hundred property auctions scheduled for then.
The other option debtors are offered by the funds concerns sale by consent: In this case the borrower accepts the sale of their property in order to service their debt. A third alternative regards the repayment of the debt following some kind of write-off, which means the debtor retains the collateral – i.e. their home – in their ownership.
Meanwhile property market professionals note the start of the sale process for over 70 properties held by Alpha Bank, that were also transferred to Apollo as part of Project Jupiter. These are assets the bank itself had retrieved and included in the portfolio so that it was more attractive to the buying investor. These assets, with an estimated value of more than €50 million, have already been conceded for sale to major property service companies, and include residential properties, offices and a few hotels. This is not a mass sale, as each property is being sold individually, as was also the case with the assets sold by Bain Capital.
Bain, along with Apollo Global Management and Fortress are also looking to land Project Neptune, which concerns Alpha Bank NPLs with property collateral. This portfolio, with an accounting value of €1.8 billion (the loans belong to 1,10 small and medium-sized enterprises), includes 4,000 properties as collateral valued at approximately €1.1 billion. Some 30% of them are commercial assets (offices and stores), another 20% are industrial properties, while the package also contains hotels, plots of land and logistics facilities.
In the coming weeks the market further expects to see the first few properties from the Symbol portfolio that National Bank recently sold to the consortium of Centerbridge Partners LLP and Elliott Advisors (UK) Limited for €250 million. This portfolio consists of 12,800 NPLs with 8,300 properties as collateral and will be managed by Cepal Hellas.
National will also decide in the coming weeks about the sale of the other loan portfolio with property collateral, Project Icon, which accounts for some 6,000 assets adding up to €1.1 billion. These are mainly commercial properties as well as hotel units and industrial plants. Just over a quarter (27%) are located in Athens and another 23% are in northern Greece.
That portfolio concerns delayed loans totaling €1.52 billion in capital terms, while the total requirements (including interest) of the bank come to €2.52 billion. The package to go up for sale includes 7,300 delayed loans taken out by very small to medium-sized enterprises.
Project Icon is split into two parts: The first concerns the loans of 137 SMEs that owe capital of €959 million, and the second comprises €564 million in loans taken out by small and very small enterprises. The non-binding offers were submitted on October 15, from which Apollo, Centerbridge, Fortress and the Elliott-Bain consortium have been short-listed. According to the timetable, the binding bids will be tabled by mid-December.
Original Story: Ekathimerini | Nikos Roussanglou
Photo: FreeImages.com/Takis Kolokotronis
Edition: Prime Yield