BBVA flogs real estate to U.S. fund

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BBVA Bank

SPAIN’S second largest bank BBVA said on Wednesday it has agreed to sell 80 per cent of its real estate business to U.S. fund Cerberus for €4 billion, showing how investor enthusiasm for Spanish property is reviving.

The burst property bubble in 2008 sent the country into a downturn that lasted nearly five years, causing mass unemployment and prompting a more-than 40-billion-euro bailout for the country’s banks.

Spanish economy returned to growth in 2013 and has outperformed the rest of Europe since then, helping to revive residential construction as house prices pick up, which has started to attract foreign investors back into the market.

The BBVA real estate assets included in the deal have a gross book value of some €13 billion, the bank said in a statement.

BBVA said the whole portfolio was valued at €5 billion, with the price involving a discount of 61.5 per cent, in line with its coverage ratio for its foreclosed assets.

The deal is the largest since Santander sold control of property worth €30 billion to U.S. investor Blackstone Group in August.

Santander sold its portfolio at a net value of €10 billion after a discount of around 66 per cent.

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