The Management Company for Assets Proceeding from the Restructuring of the Banking Sector (Sareb) has exceeded its annual retail channel property sales target, having sold 10,900 units as of this year's third quarter close. Making the announcement today in her appearance before the Senate Committee on Economic Affairs and Competitiveness was Belén Romana, president of Sareb.
Sareb's president pointed out that asset disinvestment volume in the retail channel during the first nine months of the year surpassed the 10,800-unit target set for the whole year. This amounts to a rate of 40 properties sold per day, far above the daily figure of 25 in 2013. Romana, who appeared before the High Chamber of the Spanish Senate to detail advancements in Sareb's activity conducted in the first half of the year, expressed satisfaction with the commercial effort and dynamism seen over the past nine months.
Sareb's president also reiterated the company's commitment to likewise meet the debt amortisation target set at 3,000 million euros, up by 50% over 2013. Fulfilment of this objective means that the company will have managed to cancel 10% of the total amount of assumed Spanish government-backed debt as of year-end 2014.
In the first half of the year, Sareb achieved 429 million euros in Ebidta, which amounts to a 23% increase with respect to the same period in the previous year. Income totalled 1,696 million euros, doubling last year's figure. During her presentation, Belén Romana emphasised that this strong cash flow generation has enabled Sareb to pay interest totalling nearly 100 million euros per month to the financial institutions that transferred assets to the company.
Advanced business model
"Today Sareb enjoys a more advanced business model with a focus on value creation, which enables the company to increase asset value prior to sale," Romana pointed out. Along these lines, Sareb's president explained that the company is engaged in initiatives which include finalisation of property promotions and urban land transformation and is working to drive forward over the medium term a more professionalised rental model.
Among the initiatives carried out over the first half of the year, Romana highlighted resumed efforts dedicated to 33 property promotions up until June, an activity that will facilitate the marketing of 680 residential properties in the short term. She also pointed out that a total of 5,751 proposals from the business community in the sector were handled in the first six months of the year alone. Added to last year's total of 8,000 proposals processed, this figure is indicative of business dynamism.
Romana also stated during her presentation that Sareb's business is being conducted in a "much more competitive environment, with a market that is showing signs of gradual recovery".
At the Senate gathering, Sareb's president also cited the project implemented to select, through a competitive and audited tendering process, the servicers to be in charge of the company's portfolio beginning in 2015, once the contracts signed in 2012 with the financial institutions that transferred assets to Sareb expire.
This project, coupled with the accounting regulations soon to be published by the Bank of Spain, constitute the two aspects that remain to be defined in mapping out the company's DNA. Once resolved, "Sareb will have successfully concluded the first phase of its existence, consisting of the creation of the company itself and start-up of operations. On the verge of coming to a close, this period is proving to be as demanding as it is complex and exciting".
Agreements with autonomous communities
Additionally, Belén Romana highlighted the initiative launched to temporarily transfer to Spain's autonomous communities a portfolio of 2,000 homes that will be allocated to affordable rent schemes. In July, Sareb signed the first agreement with Catalonia and the company is currently engaged in advanced negotiations with the regional government of Aragon.