Private equity firm Lone Star is negotiating the purchase of Spanish property company Vallehermoso from construction group Sacyr for €1 plus debt.
Private equity firm Lone Star is negotiating the purchase of Spanish property company Vallehermoso from construction group Sacyr for €1 plus debt.
According to website El Confidencial, builder Sacryr has been in talks with the private equity group for months to sell the real estate subsidiary, which has a debt load of €1.21 bn.
The credit facility was refinanced in 2010 and is currently due in mid 2015. Bad bank Sareb is the lender behind most of the loans.
Vallehermoso posted a gross operating loss of €1.3 mln and a net loss of €9 mln in the first three months of the year. Its real estate assets were valued at €1.4 bn per year-end 2012.
The deal is an indication that Spain's attractive pricing is prompting foreign investors to look back at the market for opportunities.
According to Businessweek, bad bank Sareb is preparing its first sale, known as Project Bull, to test the beleaguered property market’s ability to attract investors.
Sareb has hired KPMG to market a pool of homes located in the south and east of Spain, in Andalusia and Valencia, as well as unfinished buildings. Bids are due by July 18 on the real estate, which could be worth about €200 mln.
'There's consensus that Spain is getting interesting again, and this is the time to seriously make a move, because investors might be surprised how quick things will go when recovery starts,’ Roger Cooke told PropertyEU last week. ‘The bravest will end up reaping the rewards of the market.’
So far, Spain’s investment arena has been dominated by the local family offices and other opportunistic investors while institutional money has either disappeared or remains on the sidelines.
According to data from Cushman & Wakefield, Spain saw as little as €63 mln of deals in the office sector so far this year, while first-quarter retail investment came in at a historic low of €11 mln.
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