Breaking News, World News and Taiwan News.

Hard sell ahead for Spanish bad bank

LONDON -- Spain's “bad bank” will struggle to find buyers for swathes of empty land, unfinished housing projects and doubtful loans left over from a property crash, hindering Madrid's attempts to overcome the wider economic crisis.

Real estate consultants predict that almost two-thirds of assets that the government's newly created bad bank is due to take over from commercial banks will fail to attract investors, at least in the short term and possibly ever.

Spain is setting up the bad bank, known by the acronym SAREB, under a plan to cleanse the banking system of toxic property assets. SAREB aims eventually to buy up to 90 billion euros (US$117 billion) of the assets at deep discounts and then sell them to investors over 15 years.

Buyers are likely to snap up the likes of prime holiday homes and completed properties, commercial and residential, which already have tenants. But that leaves a majority of assets that will be much harder to shift.

Between 60 and 65 percent of the foreclosed property and bad loans to be hived off by the banks will relate to undeveloped land and half-built projects, according to forecasts compiled for Reuters by real estate consultants Jones Lang LaSalle and CBRE.

CBRE gave the higher figure for this category which investors will probably shun, put off by high risks and costs such as having to rip down abandoned shells of buildings that no one would ever want to occupy.

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
 Beijing launches anti-dumping probe into European solar silicon products 
Spain's “bad bank” will struggle to find buyers for swathes of empty land, unfinished housing projects and doubtful loans left over from a property crash, hindering Madrid's attempts to overcome the wider economic crisis.



Enlarge Photo

WSJA
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   Terms of Use  |   Sitemap
  chinapost search