MSREI pulls out of EUR 700m Santander buy - report

Morgan Stanley Real Estate Investing has reportedly terminated talks with bank Santander regarding the purchase of a EUR 700 mln distressed property loan portfolio securitised against Spanish residential assets.

According to a news report in Property Week, the real estate arm of the US bank has pulled the plug on the deal as a result of rising uncertainty over the health of the Spanish economy and finances.

Morgan Stanley entered negotiations on the portfolio in February this year after pulling out of another, much larger portfolio of loans and assets being marketed by Santander. The EUR 3 bn package was put on the market by Spain's largest bank in November last year and received bids of between 60 and 70% discount to par value.

Santander has become one of the country's largest property owners since the onset of the credit crisis in 2008. It has taken control of over EUR 8 bn of real estate in the past three years, including EUR 826 mln of assets in the first half of 2011.