It’s not just money worries in Spain now, excess property seems to be an issue and not just for agencies.
Two of Spain’s largest regions, Catalonia and Andalusia are trying to sell $1.3 billion of property by the end of the year as the country tries to slash its budget deficit and spiralling borrowing costs.
In an interview in Barcelona, Jacint Boixasa, director of assets for Catalonia, said “We put the cream of the crop in the portfolios to ensure the sales are completed,”. “Our target is to sell 550 million euros ($742 million) of real estate by year- end, which is relatively little time.”
Spain is keen to avoid the need for a bailout, the likes of which we saw in Greece, Ireland and Portugal, and is planning to cut the nations deficit from 9.2% in 2010 to 6% of GDP. Spain’s credit rating was put on review in August in response to financial problems in the regions.
The authorities in Catalonia are attempting to sell 37 properties one of which is the Barcelona stock market on one of Spain’s most expensive commercial streets, Paseo de Garcia. The government are being advised on the sales by Aguirre Newman, real-estate consultants in Madrid.
BNP Paribas SA were hired in Andalusia to assist in raising up-to 400 millions Euros from selling 76 properties. These include youth centers in Malaga and the cultural department in Granada. Following a sale the government will then lease the buildings at a cost of around 30 million Euros per year, which seems a bit stupid to me!
Off topic a bit I know but my suggestion to the Spanish government would be to cut 10% off unemployment payments, now, today. If you don’t live in Spain you probably don’t know how much “dole” you can get here. The usual is somewhere around 80% of your previous salary. So if you were paid 1000 euros per month (for at least 3 months) you will receive around 800 Euros per month in benefits. So imagine how much is paid out every month! It’s astounding! Where is the encouragement to get back to work? There isn’t any! Many people, I’m sure, get their money and sit on the beach all day because they have no motivation to look for work.*
Cut the money, save some cash and give people a reason to look for work! 2 birds, 1 stone.