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Project Apple: Apollo Bids Hard for Santander’s Last Real Estate Portfolio

Posted by: In: Real Estate 01 Aug 2018 Comments: 0 Tags: , , , , , , , , , , ,
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30 July 2018 – El Confidencial

Project Apple, the name chosen for the €5 billion real estate portfolio that Banco Santander has put up for sale, is entering the home stretch. The entity chaired by Ana Botín has asked the interested funds to submit their definitive offers this week, according to sources close to the operation.

As this newspaper revealed, the firms that have expressed their interest in the operation include the giants Lone Star, Cerberus, Blackstone and Apollo, although, the latter two are regarded as the favourites, given that they have significant recent history with the Cantabrian bank’s property.

Just one year ago, Blackstone was awarded project Quasar, the €30 billion portfolio of gross toxic assets that Santander sold (following its acquisition of Banco Popular). Meanwhile, Apollo owns 85% of Altamira, the real estate asset manager that the financial entity created and which is currently administering the €5 billion portfolio up for sale.

Having been left out of all of the major real estate processes involving the banks, Apollo has decided to bid hard for Apple, according to the same sources, a move that has been launched in parallel to the possible sale of (its stake in) Altamira, the manager that would lose some of its appeal if another fund were to manage to acquire this portfolio.

In addition, the firm led in Spain by Andrés Rubio has just reached an agreement with Santander to modify Altamira’s management contract and to refinance the servicer’s debt, in a deal that has allowed the fund to distribute a dividend of €200 million.

For Santander, the sale of Project Apple will mean completing the divestment of all of its real estate exposure, a move that took a giant leap forward last year with the transfer of the Quasar portfolio to Blackstone.

Nevertheless, and precisely because it has already cleaned up the bulk of its balance sheet, the entity does not have any need to sell and, therefore, if the bids come in below its expectations, it may decide not to transfer the portfolio after all, at least not through this process.

After the Cantabrian bank, BBVA reached an agreement with Cerberus to sell it 80% of its toxic property, whose gross value amounts to €13 billion, in an operation that is expected to be completed later this year.

More recently, CaixaBank reached an agreement with Lone Star to sell it 100% of Servihabitat and the majority of a portfolio of properties worth €6.7 billion; and Banco Sabadell made a deal to transfer €12.3 billion in toxic assets to Cerberus (€9.1 billion), Deutsche Bank (€2.3 billion) and Axactor (€900 million).

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

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