Drago Real Estate Partners has picked Aguirre Newman for the sale of a portfolio of Santander bank branches across Spain. The fund, which is managed by Spanish private equity firm Drago Capital, is putting 428 bank branches on the market over three years after acquiring the assets as part of a larger portfolio deal.
Drago Real Estate Partners has picked Aguirre Newman for the sale of a portfolio of Santander bank branches across Spain. The fund, which is managed by Spanish private equity firm Drago Capital, is putting 428 bank branches on the market over three years after acquiring the assets as part of a larger portfolio deal.
Drago Real Estate Partners, which is invested by Sun Capital Partners and insurer Pearl Group, bought 1,200 bank premises of Santander back in 2007 for over EUR 2 bn, reflecting a low yield of less than 5%. The transaction was the first of a series of sale-and-leasebacks by the Spanish financial institutions aimed at propping up their financial position.
Despite the low yield secured at the time, rental levels have developed positively against inflation in the past four years, leading to an improvement in the portfolio's net yield.
The branches are leased to Santander with 25-year rental agreements starting in 2007. They will be sold individually or packaged in small portfolios mostly targeted at local and private investors and high networth individuals. Around 45% of the assets are located in regional capitals, including seven assets in Navarra.
Francisco Gasset, director of private investment at Aguirre Newman and manager of the sale process, said that the operation was designed to offer diversified products, providing inflation-protection for savings.
Drago Real Estate Partners is for now retaining the rest of the portfolio bought in 2007.
