Non-performing loan sales have changed the game in the real estate market
Banks and credit acquiring companies have currently over six thousand properties with a value close to €2.5 billion on the market.
To be more specific, according to data gathered and analysed by WiRE FS, the aforementioned companies have currently 6.200 properties available for sale, with a total asking price of€1.885 billion. There are also approximately €700 million-worth of properties pending to be processed and put up for sale.
Property disposals is one of the most popular ways in order for these companies to generate income from non-performing loans secured by real estate collateral. In Cyprus, out of a total of€18.3 billion of non-performing loans, €6.3 billion are owned by KEDIPES, €4.9 billion by credit acquiring companies (taking into account the Helix 2 portfolios (a) and (b) sold by the Bank of Cyprus to PIMCO, which stand at €916 and €535 million respectively), €3.2 billion by Alpha Bank Greece through a subsidiary, and around €4 billion still remain within the banking system.
From the data analysed by WiRE FS, it appears that REMU (Real Estate Management Unit), set up by the Bank of Cyprus, is currently the largest real estate management platform, having 3.285 properties listed on its website with a total asking price of €1.260 billion. The Bank of Cyprus was the first to set up an internal real estate management platform, due to the large volume of properties acquired by the bank through debt-to-asset swaps. In total, the value of properties owned by the bank stands at €1.457 billion.
Altamira also has a significant amount of properties available for sale, managing the non-performing loans and properties of KEDIPES, the successor entity of the former Co-operative Bank. Even though Altamira has 1.535 properties for sale, their total asking price is merely €265 million. “The difference in the type of loans granted by the Bank of Cyprus and the Co-operative Bank before 2013 is reflected today in the value of their available properties for sale. Properties for sale by the Bank of Cyprus have a higher value and vary in types, while the properties available by the Co-operative bank, mainly land and residential, have lower value,” explains Niki Tsivitanou, Director at WiRE FS.
Hellenic Bank currently has 815 properties available for sale with a total asking price of €145 million. According to the latest data released by the bank, its balance sheet includes 1.099 properties worth €213 million.
Gordian Holdings currently has a total of 345 properties available, in different types and selling prices. It must be pointed out that Gordian Holdings acquired loans – mainly business loans – worth €2.8 billion from the Bank of Cyprus in 2018. The total asking price of the properties the company currently has available for sale stands at €161 million.
AstroBank also has properties for sale. The WiRE FS research found that the bank has 193 available properties with a total asking price of €54 million. It should be noted that AstroBank came to an agreement with Qualco Group for the management of its non-performing loans, which stood at €548 million at the tail end of 2019. The total value of properties in AstroBank’s portfolio amounts to €160 million.
“We believe that in the upcoming period, properties linked with the portfolio of non-performing loans (project Marina) Bain Capital acquired from the National Bank of Greece (Cyprus) will be placed on the market. At the same time, the volume of available properties for sale from Alpha Bank’s portfolio will increase. Both portfolios are being managed by Altamira/doValue,” Niki Tsivitanou added by way of explaining that the management of these properties is crucial for banks and credit acquiring companies, as well as the real estate sector in general.