Cerberus Capital Management is acquiring the bulk of the residential-focused real estate assets held by Spanish banking group BBVA.
BBVA said it had reduced its exposure to non-core real estate assets in Spain 'almost entirely' by forming a joint venture with the US private equity firm.
Under a transaction agreement, BBVA will sell an 80% stake in the joint venture to Cerberus for about €4 bn.
The agreement covers 78,000 property assets with a gross book value of about €13 bn, plus the necessary assets and employees required to manage it. The business as a whole has been valued at about €5 bn.
The definite price of the 80% stake will be determined by the final volume of transferred assets, which could still vary due to any sales carried out prior to the closing of deal and other factors, the vendor said.
'We appreciate the trust that BBVA has placed in Cerberus as its partner, with this innovative approach for optimising the future value of this important real estate business,' said John Snow, former US treasury secretary and chairman of Cerberus Capital Management. 'This important transaction shows our commitment to offering tailored solutions for our partners and underscores our confidence in Spain’s continued growth, where we plan to make significant additional investments.'
BBVA add that it will have the lowest relative real estate exposure among the major Spanish financial institutions 'once all regulatory authorisations are granted and the transaction is completed – expected for the second half of 2018.'
