Spain’s La Caixa has sold the majority share of its property unit to one of the largest private equity investment companies in the world.
In a deal, reportedly worth 185 million euros, the Barcelona based bank has handed its property firm Servihabitat Gestion Inmobiliaria over to US private investment company TPG (formerly Texas Pacific Group).
The Texas-based buyout firm is now set to hold a 51% stake in Servihabitat however it is understood this will not include the financial group’s 12,000 property holdings, which will remain in the hands of La Caixa.
Although as part of the deal La Caixa – the third-largest financial group in Spain according to assets and the largest by retail branches – has reportedly agreed to continue to use Servihabitat for all its servicing needs for 10 years.
It marks the US investment company’s first venture into Spain’s ailing property sector, coming after the Barcelona bank selected the offer over a rival bid by Bridgepoint Capital Ltd.
The deal also makes Servihabitat Gestión Inmobiliaria the latest in a line of Spanish financial groups to sell its property firm to U.S. investors in recent months as the country continues to grapple with the impact of the economic crisis which has seen property prices fall an estimated 30% to 40% over the last five years.
Similar recent deals include Bankia selling its real estate business to U.S. fund Cerberus Capital Management, and Catalunya Caixa selling its property arm to U.S. funds Kennedy Wilson and Varde Partners.
Potential foreign investors are now flocking to the country looking for bargains, in the hope that property prices are close to bottoming out.
View full article in Terra Meridiana