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Hypo Alpe-Adria-Bank, Which Has The Largest Holdings In Southeast Europe, Has Signed A Contract To Dispose Schloss Velden Hotel, A 105-room Grandiose Resource With Roots Stretching Back More Than 400 Years
An Austria-based bank nationalized during the depression has taken step 1 toward selling a 6 bn. real-estate portfolio with the sale of an unprecedented castle-hotel on an Alpine lake.
Hypo Alpe-Adria-Bank, that has intensive holdings in southeast Europe, has agreed a contract to sell Schloss Velden hotel, a 105-room top quality resort with roots stretching back more than 400 years. The new owner, Italian hotelier Ugo Barchiesi, announces he plans to continue to operate the hotel as a five-star resort with a spotlight on treatments, and he will expand its spa.
The cost of the deal was not divulged, but hotel gurus guess it was in the sixty million range, significantly less than the hundred million the bank and its partner had invested in the property. The purchaser and seller have a contract not to make public the cost.
The move by Hypo Alpe-Adria is the most recent sign EU banks are starting to unload troubled real-estate assets. In the years immediately following the global industrial collapse, they were hesitant to do so , because that would suggest recording high losses.
However recently, some Western european banks have shown more of an eagerness to dispose of agitated loans and grabbed real estate as they have stabilized their balance sheets and as commercial-property values have risen. Countless European banks, including Barclays Capital and Anglo Irish Bank, have started to dispose of U.S. Assets.
Hypo Alpe-Adria was nationalized by the state of Austria in December 2009 in a bailout costing 5.5 bln. BayernLB, a public-sector German bank that itself was agitated, held a majority stake of 67%. BayernLB lost more than 3.7 billion when it gave the bank over for one.
The bank is unloading its real estate portfolio as part of a broad restructuring effort.It is similar things with Croatia real estate.
"The exposure of the group to property is obviously higher than for any analogous peer," expounded Gottwald Kranebitter, who was chosen Manager last year with the task of restructuring the troubled bank, that has about forty bn. in total assets.
In February, the bank established a real estate subsidiary to take on the job of selling its 6 bln portfolio, about 30 percent of which is composed of property holdings and the rest of which is loans and leasing exposure. The majority of this portfolio is in southeast Europe, and about a 3rd is related to tourism, including hostels, camping sites and other hospitality framework.
Mr. Kranebitter related in an interview the bank intends to close on sales of about a hundred properties this year and will be taking a look at chances for selling complete portfolios. He did not want to discuss pricing or to explain which loans or properties would go on the block.
"There's no fire sale. There are no 'haircut ' sales. We sell at the costs that we think in a way that increasingly permits us to close transactions," he claimed.
Lots of the investments and loans "had an inherent hopeful component which simply didn't work out," he revealed.
Schloss Velden, a luxury resort on Lake Worth in Austria, has a spa, restaurant, beach club and jetty. It's also got forty five flats, with 21 still for sale. The area is legendary for its casinos and provided the setting for a couple of popular German-language TV shows.
The bank acquired the hotel in 2004 from an individual and added a new wing with more rooms and a spa, and some home units. The investment was partially intended to help tourism in the area near the bank's headquarters, claims Christoph Harle, M. D of Jones Lang LaSalle Hostels.
Hypo Alpe-Adria's sale of Schloss Velden comes as the Austrian property market is enjoying a period of relative stability, compared with other nations.
According to Statistical data Austria, an official agency, luxury-hotel overnight stays contracted only a little in 2009 and grew 4.1% to 44.1 million in 2010.
"The hotel itself is truly lovely," Mr. Harle announced. "It's a pleasant hotel. It's just a question of how are you going to make it work financially."
Besides focusing on a new medical anti aging spa idea, the new owners want "to stimulate the wonderful place with artists, famous Italian football players, fashion and parties," Mr. Barchiesi announces, adding it's like Sleeping Beauty and should be woken up.
The majority of Hypo Alpe-Adria's real-estate holdings are in Croatia and Slovenia.
According to a brief by Jones Lang LaSalle on the Zagreb, Croatia, office market, demand remains feeble due to the depression. Nevertheless there was a slight uptick in investments this year, as well as more interest from foreign speculators expecting market conditions will improve when Croatia gains membership to the European Union, negotiations for which are anticipated to conclude this year as reported The Wall Street Journal.
Mr. Kranebitter recognized the property loans and investments were mostly made of 2004 to 2007 by the bank as hopeful gambles the real-estate market would keep growing in value. Property values in most markets haven't recovered to those levels.
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