US-based asset manager Cerberus Capital Management has announced that it has closed the acquisition of a majority of Spanish banking group BBVA’s real estate business in Spain.
Under the transaction Cerberus has taken an 80% stake in the business, while BBVA will hold the remaining 20% stake.
The platform, which has been rebranded as Divarian, is believed to include 78,000 residential-focused property assets with a gross book value of about €13 bn, plus approximately 400 professionals required to manage it. The specialist staff comes from what was formerly BBVA’s real estate division, Anida.
Although the transaction details were not disclosed, press reports put the deal value at some €4 bn.
The deal, known as Project Marina, was first announced in November last year.
'We are excited to officially launch Divarian in partnership with BBVA,' said Lee Millstein, president of Cerberus Global Investments and global head of real estate for Cerberus. 'This transaction further demonstrates our commitment to long-term investing across the Spanish economy.'
David Teitelbaum, head of European advisory offices for Cerberus, added, 'Spain is a market in which we are firmly engaged. We have committed over €10 bn in aggregate transaction value in the country over the past year and remain confident that Spain offers attractive growth opportunities.'
In a statement, BBVA said that the transaction marks a milestone in the group strategy as it eliminates almost entirely its exposure to the real estate market. 'It significantly reduces our exposure to a non-core business, and it allows us to strengthen our transformation process,' said BBVA CEO Carlos Torres Vila.
For 2018 BBVA expects losses from the non-core real estate business line to be 80% lower than 2017, when it posted a negative result of €501 mln.
Spanish exposure
Earlier this year Cerberus also announced the acquisition of a majority stake in Inmoglaciar, one of Spain’s largest residential real estate developers with a track record spanning more than 35 years.
The firm, which was founded by the Moreno family, currently has over 2,000 homes under construction and 1,100 homes set for sale next year. The company focuses on the cities of Madrid, Barcelona, Zaragoza and Granada.
Other key investments in Spain by the US group include the purchase of Haya Real Estate, Spain’s largest independent servicer with over €40 bn in assets under management as well as Gescobro, a secured and unsecured debt collection company.
In connection to the closing of the transaction, Cerberus' Haya Real Estate has entered into an agreement to service certain real estate assets of BBVA.
Real estate sell-off
The operation largely concludes BBVA's real estate disposal programme. Over the past two years the banking giant completed the sale of a portfolio of almost 3,500 units known in the market as Project Buffalo; the sale of a 14-office building portfolio referred to as Project Boston; the sale of Barcelona's Puig Tower; the sale of the Jaipur development loan portfolio, a loan portfolio from real estate developers; as well as the sale of its 27% stake in Metrovacesa and 25% interest in Testa and the sale of Project Sintra, one of the biggest property development loan portfolios in the Spanish market.
