European Banks Seen Selling $74 Billion of Property Debt in 2015Sharon Smyth and Neil Callanan
European banks and asset managers will sell as much as 70 billion euros ($74 billion) of real estate debt and foreclosed assets this year as they continue to strengthen their balance sheets.
More than 12 billion euros of property loans were sold in the first quarter, about 50 percent less then the previous period, New York-based broker Cushman & Wakefield Inc. said in a report on Monday.
Debt sales will be driven by Italian lenders and Ireland’s bad bank, the National Asset Management Agency, according to the report. Dublin-based Permanent TSB Group Holdings Plc, which has to cover capital shortfalls highlighted by the European Central Bank’s asset quality review last year, was the biggest seller of property loans in the first quarter, Cushman & Wakefield said.
“Although completed transaction volumes are slightly down on those recorded for 2014, there are plenty of large transactions being prepared for the market, which will boost activity in the second half of the year,” Federico Montero, head of loan sales for Cushman & Wakefield’s EMEA corporate finance group, said in a statement. “As predicted, we have already seen a noticeable uplift in the number of sales coming from Italy, which was the third-most active European country in the first quarter.”
More than 1 billion euros of transactions were closed in Italy in the first three months, more than 2 1/2 times the volume recorded in 2014, according to the report.
With fewer “mega-deals” completed in the three months to March 31, five investors accounted for 69 percent of all transactions in the period, according to the report.