BANKING

Funds are now the main sellers in property auctions

Funds are now the main sellers in property auctions

Funds that have acquired Greek bond portfolios are the main drivers of property auctions, taking over from banks, with over 70% of assets scheduled to go under the hammer within 2022 via the e-auction platform having various funds as their sellers.

Data from the online platform of notaries reveal that the landscape has change concerning the sellers at auctions in favor of the special-purpose vehicles with various exotic names (Cairo, Galaxy, Sunrise, Vega, Pillar, Mexico, Orion etc.), pointing to securitizations and sales of bad loans by banks in recent years.

Data compiled by Kathimerini, based on the processing by the iMEDd Lab, show that funds are behind 70.7% of the online property auctions planned for 2022 in Greece. There are over 9,900 auctions listed on the platform for the entire 2022, and the list is growing every week.

Until recently, banks were behind up to 84% of auctions, but their share has now gone down to just 22.2% for this year. Another 7%, approximately, concerns private owners or other corporations.

The dominance of funds also changes the policy in the domain of auctions, which will constitute a vital instrument for “Hercules” to meet its targets. This is the state mechanism that has guaranteed a significant share of the revenues from the securitizations that banks have implemented.

Kathimerini understands that the business plans funds have submitted to the state for it to supply state collateral for the securitizations provides for 40%-50% of the takings of funds to come from real estate asset liquidation. That makes auctions a priority for the new owners of the bad loans in order for the business plans to be executed and the state collateral activation to be averted.

Contrary to banks’ policy in recent years, with lenders pressuring borrowers by buying back 80%-90% of the assets the banks themselves had put up for auction, the funds seek the genuine resale of those properties to third parties.

The funds only buy back certain properties that are particularly popular for commercial purposes and can secure even higher prices later on. However, their main strategy is far from buying back the assets they auction, as they prefer to collect as much money as possible from the first stage and achieve their targets.