International property services group REAG has announced the launch of a new debt advisory services department in Italy with plans to expand the business to other European markets in the future.

International property services group REAG has announced the launch of a new debt advisory services department in Italy with plans to expand the business to other European markets in the future.

The company, which is part of the Milwaukee-based American Appraisal group, has hired Unicredit Credit Management Immobiliare’s former managing director Diego Bortot to lead the new business unit, which will be based in Milan and will focus on advising clients on debt restructuring and loan servicing.

‘This is a huge market which offers great potential,’ LEO Civelli, CEO of REAG, commented during a presentation at the EXPO REAL fair. ‘We are starting this business in Italy because the Italian debt servicing market is less competitive and we feel that it can be a testing ground for our new venture,’ he added. Italy reported as little as €40 mln in real estate loan sales so far this year, compared to nearly €6 bn in Spain during the same period.

Meanwhile, the volume of impaired loans in Italy has reached €300 bn and non-performing loans currently exceed €170 bn. ‘They are expected to reach €200 bn by the end of the year, against an unsustainable time frame for recovering credits. In this respect Italy actually ranks as number 21 among developed countries in terms of time needed to recover credits,’ said Diego Bortot, new managing director of Reag Debt Advisory Services.

‘This scenario has a negative impact on the entire Italian economic system. Our new business unit will be addressing the vast market of NPLs, focussing on those with underlying property and leaning towards the corporate segment of large property portfolios,’ added Civelli.

Bortot, an economist and real estate financial expert, was previously managing director of Unicredit Credit Management Immobiliare and subsequently covered assignments in the real estate arena for parent company Unicredit Credit Management Bank.