Investors and key players in Real Estate met in Milan for the sixth “Quo Vadis Italia?” summit organized by the international law firm DLA Piper. The event examines current political and economic trends and their repercussions on the performance of the real estate sector, and outlines the outlook for the sector.
The participants at the round table "NPLs and similar – anything new to expect?” moderated by Giacomo Liberti, Managing Director of Lazard, with Prelios Group CEO Riccardo Serrini, were Mirja Cartia (ReStar), Giorgio Tito Baroero (Unicredit), Gaudenzio Bonaldo Gregori (Pillarstone Italy), Alessandro Gatto (JP Morgan) and Salvatore Ruoppolo (Intrum Italy).
“NPLs are no longer an emergency for Italian banks: today they account for a net 1.7% of total loans. We are witnessing the last of the major sales chiefly sustained by GACS securitization, where Prelios retains its leadership position with 60-70% of closed transactions,” said Riccardo Serrini. “UTPs on the other hand are for now still at a nominal value of around 80 billion, and, unlike NPLs, have not shown a downward trend. This is for two reasons: one, because priority has been given to NPLs; two, because UTPs, which refer to companies that are still active, involve greater management complexities than NPLs and do not have the advantages of GACS. Prelios is currently managing 13 GACS securitizations. The oldest go back about three years. The main covenants are positive and aligned with the initial business plans. The indicators that measure the performance of a GACS transaction are the (Net/Gross) Cumulative Collection Ratio, overall total receipts with respect to the servicer’s business plan, and the NPV Profitability Ratio, the target value reached with respect to the business plan for the individual position.
Work to enhance the value of the almost 100 million square meters of real estate collateral, in agreement with procedures or the debtors, is essential to keep these results positive.”
Commenting on the performance and outlook of the secondary market, Riccardo Serrini added: “2018 was the year of the great NPL sales: more than 50 billion euro. But only 2% went on the secondary market. This year, secondary-market transaction volumes will be much higher. What we need is a transparent, efficient market free from information asymmetries. This is why the Prelios Group has launched the BlinkS digital marketplace for loan portfolio trading. BlinkS puts buyers and sellers into contact and provides all the information required to assess portfolios, thereby benefiting not only the stakeholders involved but the entire country system. Today, the BlinkS platform has 9 portfolios under management, for an overall value of approximately 740 million euro. It is the first Italian marketplace and one of the very first in Europe in this sector. Digital platforms are attracting great attention from both the EU and regulators, starting with the ECB, who see these initiatives as a winning driver for the development of an effective and efficient secondary market.”