Spain's Banco Popular plans to sell its property management business to two U.S. investment firms as a means to strengthen its capital.
Popular will sell the property management unit to Kennedy Wilson and Varde Partners in a deal reportedly worth 800 million euros ($1.1 billion), according to Reuters.
Following the collapse of the Spanish property market, many banks have been disposing of assets to raise money. However, some may be reluctant to sell the property they own to avoid major price cuts for buyers, analysts say.
In this deal, Popular would raise funds by selling the management platform, while keeping the bank's properties on its books.
Popular will keep a minority stake in the business, which services bad loans and repossessed property, Reuters reports.
Popular's property management unit, known as Aliseda, manages approximately 15.8 billion euros of properties and loans, according to Reuters.
U.S. firms Kennedy Wilson and Varde Partners have partnered before to purchase a similar business in Spain from nationalized Catalunya Banc.
Last July, Kennedy Wilson purchased 16 Irish commercial properties for €306 million from defunct developer Treasury Holdings.
Source: World Property Journal