Wednesday, 5 October 2011

Spain Regions Race to Sell $1.3 Billion Property This Year

 

Catalonia and Andalusia, two of Spain’s largest and most indebted regions, are trying to sell $1.3 billion of real estate by the end of the year as the country tries to slash its budget deficit and keep borrowing costs from ballooning. “We put the cream of the crop in the portfolios to ensure the sales are completed,” Jacint Boixasa, director of assets for Catalonia, said in interview in Barcelona. “Our target is to sell 550 million euros ($742 million) of real estate by year- end, which is relatively little time.” Spanish regions, which control more than a third of public spending, will play a pivotal role in the nation’s effort to cut its deficit to 6 percent of gross domestic product this year from 9.2 percent in 2010 as the country tries to avoid following Greece, Ireland and Portugal in requiring a bailout. In August, Moody’s Investors Service put Spain’s credit rating on review for a downgrade, citing the worsening finances in the regions. Catalonia is trying to find buyers for 37 properties including the Barcelona stock market on Paseo de Gracia, Spain’s fourth-most expensive commercial street, as well as the Catalan Agriculture Ministry on Gran Via. Jones Lang LaSalle and Madrid- based real-estate consultant Aguirre Newman are advising the government on the sales. Andalusia hired BNP Paribas SA to help raise at least 400 million euros selling 76 properties including the cultural department in Granada and youth centers in Malaga, according to the region’s treasury department. The government will pay around 30 million euros a year to lease the buildings after the sale

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