The Prelios Group, Italy's leading player in alternative asset management and value-added real estate services, has signed a commercial agreement with Reviva (www.vivacizzazioneaste.com), the first Italian start-up to specialize in property auction optimization, with a view to raising the value of the auctions followed by Prelios for the NPL portfolios it manages as part of its credit servicing activities.
“We want to maximize the recovery value of the properties sold at auction in as short a time as possible, and we have always promoted participation at court auctions through a network of specialized real estate agents,” said Mauro Cavagna, Prelios Chief Technology & Process Officer. “At the approximately 2,000 auction sessions per month, our allotment rate is 10 percentage points higher than the national average, but we believe we can do even better. In this area, we are looking ahead to assimilate Reviva's consolidated and innovative digital process.”
The start-up led by Giulio Licenza and Ivano De Natale is the first player and game changer in auction optimization. Through experiential marketing and predictive models, it has enabled servicers, banks and NPL investors to raise the allotment of auctioned properties by 41% and so increase prices by 21%, cutting sale time by 18%.
“Reviva convinced us with its digital native approach and ability to combine storytelling and experiential marketing in the world of court auctions,” added Mauro Cavagna. “Besides pursuing high credit recovery performance, Prelios also has a social objective, to generate a positive impact on the banking system, on court workloads and, ultimately, on GDP.”
Auctions with no bids are proliferating, to the detriment to the entire credit chain – from the debtor to the bank, as well as the servicer – and leading to a gradual reduction in the starting price for properties. This can create a situation where, even if a property sells after several attempts, the value is not sufficient to recover the initial debt.
Reviva analyses of property auction data show that properties put up for auction lose an average 29% of their value every year due to the absence of bids and, overall, that 3.4 billion €/year are lost through price reductions.
“Prelios is one of the most important players on the market and its consolidated expertise in real estate and management of distressed loans, together with Reviva's powerfully innovative and disruptive approach, has the potential to create high-impact synergies in secured credit recovery. We believe this partnership is a winner for tangible improvements in the performance of the portfolios on which we are collaborating,” said Giulio Licenza from REVIVA.