Hypo Alpe-Adria-Bank Starts Selling Off Its Real Estate Portfolio

An Austrian bank with a €6 billion real estate portfolio is selling a 4-century-old luxury hotel on an Alpine Lake. Although the figures were not disclosed, it has been confirmed that the now-nationalized Hypo Alpe-Adria-Bank has sold the 105-room Schloss Velden Hotel to Italian hotelier Ugo Barchiesi. The latter plans to run this like a five-star hotel while focusing on medical and spa treatments.

The bank had bought the hotel during the real estate crash for some €100 million. Experts are suggesting that the bank would not have got more than €60 million for it. The Hypo Alde-Adria’s move is a signal that European banks are looking at getting rid of distressed real estate assets acquired during the recession. Earlier, they were unwilling to sell the properties because it would mean enduring big losses. In Austria particularly, the economy is somewhat stable now. This may have prompted the bank to sell the luxury hotel.

CEO George Kranebitter has been working on restructuring the bank, and selling off its real estate holdings is one of the steps. The troubled bank has total assets of €40 billion. Kranebitter said that there would be no fire sales, but that the bank was looking at selling off at least 100 properties this year. Kranebitter added that the loans and investments in property were part speculative and made between 2004 and 2007. The market has yet to recover to pre-recession levels.

The Schloss Volden luxury hotel stands on the banks of Lake Worth and includes a spa, a restaurant, a beach club and a marina. The new owner, Barchiesi likened it to a Sleeping Beauty that must be woken up.

Via: The Wall Street Journal

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