ARCHIVED - Stock market values of Spanish real estate giants have plummeted

Stock market values of 6 major Spanish real estate giants have fallen by 87% since the construction bubble burst

A lot of column inches have been written in the last couple of years about the effects of the property downturn on the construction sector, as well as the businesses supplying raw materials right across the spectrum of construction related businesses.

And there have been many casualties, right through from the small self-employed plumber to the giants of the sector, such as Reyal Urbis which entered voluntary insolvency proceedings after failing to reach an agreement with banks to refinance its 3.6 billion euro debt. This is the second largest insolvency in Spanish corporate history, following the vast debt of Martinsa-Fadesa, who left 7.2 billion euros unpaid.

Shares of Reyal Urbis were suspended at €0.124 per share, the price of shares in the company having fallen by 98.6% of its stock value since 2007.

With a raw financial debt of €3,600 million (€3.6 billions) and an equity deficit of €1,724 million (€1.72 billion), the company, chaired by Rafael Santamaría, has become the first major headache for the Sareb, who are left with a 1.3 billion euro debt.

A report in the Economista last week highlighted just how serious the losses are which have been faced by other major players in the real estate sector, 2012 closing in a dramatic way for the major real estate companies whose total market value has been reduced by 87.8% since the beginning of the crisis in 2008.

“And it is still on the decline,” the experts believe, the Reyal-Urbis insolvency a symptom of an industry paralyzed by lack of credit and refinancing or undergoing processes of exclusion or take-over.
Although the popular media have tended to focus on the impact of the property downturn at a residential level, worrying about the decline in house values for residential buyers, the real drama of the Spanish property crisis is being played out in the banks and stock market, with the true giants of the industry dealing in losses of billions of euros. The real danger for the industry is yet to come, the risk being that banks will simply refuse to re-finance those clinging to the brink and with vast property and asset portfolios, which are proving difficult to shift in the current marketplace. Who will follow Reyal Urbis?
The big losers:

Metrovacesa, which is immersed in a process of delisting involving 6 banks which now own 95.6% of the business, having been forced to take shares as an exchange for debt four years ago (Santander , ( Banesto will transfer to Sabadell following take-over), BBVA, Banco Sabadell and Banco Popular buying outstanding shares to delist the business:  BFA-Bankia is unable to participate as it has been nationalised, but will keep hold of its shares.) Shares were suspended at 0.83 euros, having once been worth 54 euros each in 2006.The company is struggling to sell stocks to reduce its 5.1 billion euros of debt, although reports assets of 7.32 billion euros.

Renta Corporation has dropped by 95%

Colonial has paid dearly for having its own “bad bank,” namely Asentia which is the division in which the parent group has marginalized its residential businesses.  In five years their stock market value has fallen by 93%, with a market capitalization of €206 million, compared to over €3,000 million in 2008.  Colonial is clear about the situation and is advertising Astentia for sale.

Quabit has fallen by 89.6%, dropping from €606 million in 2008 to €36 million in 2012.
For Realia, with refinancing looming (27th March), the results of 2012 were more important than ever before and they hurt more than ever before, the end result of a market value loss of 88.9% and the company value registering €200 million, which is a far cry from the €1,800 million (€1.8 billion) it boasted in the good years.
Serious figures.

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