Aguirre Newman hired to sell Bankia's Kio tower

Beleaguered Spanish property lender Bankia has appointed Aguirre Newman to divest its flagship Kio office tower in Madrid as part of a major property sell-off aimed at strengthening its finances.

The lender, which was created in 2010 from a merger of seven shaky savings banks, has reportedly collected non-binding bids of around EUR 180 mln for the asset from investors including listed property firm Realia, opportunistic investor Drago Capital as well as Tishman Speyer from the US.

Located on Plaza de Castilla, the 114-metre high tower offers 30,000 m² of space over 26 storeys which would be leased back by the Spanish bank. According to Spanish press reports, Bankia also plans to sell and lease back EUR 400 mln of properties involving a mix of bank branches and other buildings. The package is being divested at a yield of 8 to 9%. The lender is also rumoured to be considering a sale of shares in listed Spanish real estate companies Metrovacesa and Realia.

The banking industry is at the heart of the storm that is sweeping Spain. Brought to its knees by the collapse in the country’s property market, the sector is facing tough funding rules that require lenders to take an extra EUR 30 bn in provisions to cover potential losses on the EUR 123 bn of performing real estate loans. This would come on top of EUR 50 bn worth of provisions the banks were ordered to take last February.