Contract Link

Posted November 1, 2010 By admin

Hypo Alpe-Adria-Bank, Which Has Extensive Companies In Southeast Europe, Has Subscribed A Contract To Dispose Schloss Velden Hotel, A 105-room Luxury Resort With Roots Stretching Back More Than 400 Years

An Austria-based bank nationalized in the depression has taken the 1st step toward selling a 6 billion real estate portfolio with the sale of a historic castle-hotel on an Alpine lake.

Hypo Alpe-Adria-Bank, that has extensive holdings in southeast Europe, has agreed a contract to sell Schloss Velden hotel, a 105-room luxury resort with roots stretching back more than 400 years. The new owner, Italian hotelier Ugo Barchiesi, says he intends to continue to operate the hotel as a five-star resort with attention on treatments, and that he will expand its spa.

The cost of the deal was not revealed, but hotel gurus guess it was in the sixty million range, significantly less than the 100 million the bank and its partner had invested in the property. The purchaser and seller have an understanding not to make public the price .

The move by Hypo Alpe-Adria is the latest sign European banks are beginning to unload distressed real estate assets. In the years quickly following the worldwide commercial collapse, they were reluctant to do therefore because that would imply recording high losses.

in the last few months, some Western european banks have shown more of an eagerness to lose disturbed loans and snatched 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 begun to lose 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 troubled, held a majority stake of 67%. BayernLB lost more than 3.7 bln when it gave the bank over for one.

The bank is selling off its real-estate portfolio as an element 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 job of restructuring the turbulent bank, that has about 40 billion in total assets.

In February, the bank established a property subsidiary to take on the job of selling its 6 bill portfolio, about thirty percent of which consists of property holdings and the remainder of which is loans and leasing exposure. Almost all of this portfolio is in southeast Europe, and about a third is related to tourism, including hostels, camping sites and other hospitality framework.

Mr. Kranebitter announced in an interview that the bank hopes to close on sales of roughly one hundred properties this year and will be looking at chances for selling entire portfolios. He refused to discuss pricing or to specify which loans or properties would go on the block.

“There’s no fire sale. There aren’t any ‘haircut ‘ sales. We sell at the costs that we expect in a way that increasingly permits us to close transactions,” he claimed.

Lots of the investments and loans “had an inherent speculative part which simply didn’t work out,” he said.

Schloss Velden, a luxury resort on Lake Worth in Austria, has a spa, cafe, beach club and jetty. It also has forty five residences, with 21 still for sale. The area is known for its casinos and provided the setting for 2 popular German-language TV shows.

The bank purchased the hotel in 2004 from an individual and added a new wing with more rooms and a spa, and some residential units. The investment was partially intended to help tourism in the area near the bank’s headquarters, says Christoph Harle, MD 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 countries.

According to Stats Austria, an official agency, luxury-hotel overnite stays contracted only slightly in 2009 and grew 4.1% to 44.1 million in 2010.

“The hotel itself is actually lovely,” Mr. Harle announced. “It’s a nice hotel. It’s just an issue of how are you about to make it work financially.”

Besides targeting a new medical anti aging spa idea, the new owners desire “to enliven the amazing place with artists, famous Italian football players, fashion and parties,” Mr. Barchiesi announces, adding that it’s like Sleeping Beauty and needs to be woken up.

Almost all 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 because of the depression. However , there has been 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 EU Union, negotiations for which are expected to conclude this year as reported The Wall Street Journal.

Mr. Kranebitter recognized that the property loans and investments were predominantly made of 2004 to 2007 by the bank as speculative 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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