Santander agrees to sell real estate unit to US fund

Spain’s biggest lender, Banco Santander, has signed an agreement in principle with US fund manager Apollo Global Management to sell its Altamira unit, the platform that handles loan recoveries in Spain and oversees its real estate assets.

In a statement filed with the National Securities Commission (CNMV) on Thursday, Santander said the real estate assets and credit portfolio will remain on its balance sheet. Both will continue to be managed by the platform. It said the agreement in principle is the result of a bidding process, during which a large number of investors expressed an interest in the platform.

Full details of the agreement are expected to be finalized in the coming weeks, at which point the terms of the deal, including the price, will be published.

According to market sources the deal is expected to be worth around 700 million euros, most of which will be capital gains for the bank.

Apollo recently reached an agreement with nationalized Spanish lender Novagalicia to acquire its EVO Banco unit and its branch network for 60 million euros in cash.

A number of other Spanish lenders have sold their real estate operations of late. Nationalized lender Bankia sold its Hábitat unit to hedge fund Cerberus for 90 million euros, while CaixaBank sold 51-percent of its real estate division to TPG. Banco Popular is in talks to sell its Aliseda unit.