The ‘bad bank’ set up to handle the so-called toxic assets amassed as a result of the economic crisis and property market crash in Spain is about to make its first moves to clear the backlog.
Part of the reason the domestic property market in the country has been reporting such a conflicting picture of what is going on is down to the huge numbers of repossessed properties sitting on the lenders’ books.
Spain’s Sareb, the so-called ‘bad bank’ set up last year to take on billions of pounds worth of toxic assets from the banking sector, is now planning its first sale in order to test the attractiveness of the Spanish property market for investors.
Known as Project Bull, the project will be run by business services firm KPMG and will include auctions of homes and unfinished buildings in the south and east of Spain, most likely in Andalusia and Valencia.
Lee Tyrrell-Hendry, a credit strategist at Royal Bank of Scotland Group Plc in London, said: “Success on the first sale would be a signal to other investors that there’s an opportunity here, but this is a big hurdle.
“Investors are looking for yield and Spain is one of the few areas you can get it, but that is because there are still huge risks and the economic outlook is still weak.”
Sareb could take as long as 15 years to finish the job it has been set, according to some experts. However, the historically low prices for Spanish property are already attracting significant interest from overseas buyers, although many seem to be waiting to see if the market has in fact ‘bottomed out’.
The creation of Sareb was part of the conditions set out in order to agree the county’s bailout from the European Financial Stability Facility.
If you want to send money from UK to Spain, compare the market for currency exchange rates, as those available through specialist companies can be far more attractive than those offered by the banks.