EUROPE NEWS: First the investors, then the advisors

The hottest market in Europe – Spain – has attracted hoards of firms and investors. Indeed, there are rumors of Spain-specific private real estate funds being launched. So it is no surprise that advisors are following clients to the country.
Situs, a global provider of commercial real estate advice and loan services, is a case in point. Last month, the company announced the appointment of Fernando Salazar Lacalle as managing director and country head of its new office in Madrid.
Situs said its southern European expansion followed “strong demand” for loan servicing and debt advisory services as a result of “increased activity in the region from international investors”.
Indeed, in July, the company revealed it had formed a joint venture with debt collection group Lindorff to service Spain’s nonperforming debt market extending to all debt classes – real estate as well as consumer debt, residential mortgages, and small and medum sized enterprises. Unsurprisingly, its new hire has a banking background. He built up the real estate loan businesses for Commerzbank’s subsidiary Eurohypo, whose €4.4 billion portfolio was sold off in June this year to JPMorgan and Lone Star Funds.
And it is little wonder the firm is excited by the scale of opportunity. The size of the market in Spain is significant. Various estimates have been given, but Spain’s financial supervisory authority has said the overall volume of nonperforming loans amounts to €190 billion.


Germany: distressed deals
to rise ‘slightly’
A new report suggests the ‘wind has shifted again’ as it predicts a modest rise in distressed real estate
The number of distressed real estate loans in Germany will see a modest year-on-year increase, according to a research report by Corestate Capital and the Real Estate Management Institute (REMI) of the EBS Universität für Wirtschaft und Recht. In their paper, called the Survey on Real Estate and Distressed Real Estate Debt in Germany, the pair found that while in 2012 market participants were expecting a “major clean up and sell-off of nonperforming loans, and in 2013, experts no longer diagnosed a dire need to sell true to the maxim ‘extend and pretend’. Now the “wind has shifted again” said the latest report issued last month. “We are expecting to see the number of distressed transactions to slightly go up again,” it said having asked 31 senior executives from the banking sector about their plans, including chief executive officers, board members, and managing directors of from private commercial banks, state banks, and mortgage credit banks. Taken together, their financial institutes account for roughly 97 percent of all assets held by German commercial real estate financiers.