24.03.2021 Real estate: Hera Holding, alongside banks to bring companies out of the crisis
A real estate developer who begins to have difficulty in completing an initiative, paying suppliers and loan instalments with the bank. But instead of going through the different steps of the classification of ‘impaired’ operations (Past due, Utp and, finally, Npl, with all that it entails, it is joined by a specialized company that helps it to get out of the crisis, to complete the work and honour what is due.
All this, adding value and requalifying the property. This is the role that banks recognize in Hera Holding, a company that supports them in the management of impaired loans, a phenomenon which, moreover, will return to growth in 2021 due to the crisis.
“Where there is a real estate development project behind the loan, there is room to intervene and recover value in favour of the asset. On the initiative of their creditors, real estate development companies find a competent and reliable partner with whom to share a goal: to complete an initiative, adding value to it, with the aim of creating added value for the area as well”, explains its chairman, Oscar Pittini to Adnkronos.
Added value because, he continues, “leaving an operation at 40%, 50% or even 70% can mean abandoning a property in the city, which decays and becomes subject to vandalism. And then, even more important as it is our mission, we also help the entrepreneurial fabric in that area: architects, plumbers or electricians, for example, have an advantage in working in that initiative, because their earnings are always made and spent in the area. We help the related industries, so that they can create even greater serenity within the community “, explains Pittini.
Another important aspect, emphasizes the chairman of Hera Holding, is that of energy requalification. “The initiatives that we are involved in are mainly related to real estate developments that have stopped or that have been progressing slowly for too long and which, therefore, suffer from a technological gap due to the natural evolution of technology and consequent energy savings. A step up is necessary and in doing so – continues Pittini – we bring the property to have an energy class that makes it more resalable in the future, having a more ample market”.
Hence, continues Pittini, the birth of the Hera Zest Npe Fund, a fund that aims to expand the operations carried out by involving more players, with a collection that is going forward and aims to reach 250 million Euro. The roadmap expects it to close in September, but the first investments are already planned in the second quarter for February. “Having carried out several operations that have created added value for the area – explains the chairman – we thought it was time to become promoters for the creation of a fund that had the same mission, but on a large scale”. As Pittini is keen to reiterate, “the fund’s mission will not be that of intervening on a loan purchase operation and then collecting it even at an attractive price, but it will be to add new liquidity to the operation, to complete it in a time span of about 4 or 5 years, with a good result shared with the area, a fundamental element for us, involving social partners, institutions, associations and, most importantly, small and medium-sized enterprises “.
The fund, continues Pittini, “will therefore have this mission: not to acquire a credit and collect it, but to buy it, add value to it, share it with the developer until the property is sold. Certainly the operation will have to have an economic margin, but it will have to have it with different ethics and timing from what is on the market today”. Hera Holding closed the previous operations, explains the president, “recovering on average 85% of the old loans and 100% of the new loans necessary to add value to the initiative”.
The chairman of Hera Holding explains how “the fund has a profit perspective, with a prospect of between 7% and 9% of return on capital. But it is not true that when there is a good return there must necessarily be someone on the other side who has suffered because a very aggressive speculation has been made. A less aggressive speculation can be made, perhaps longer in time, but where however everyone will be satisfied with the results”. Precisely because the fund has this mission and these underlying ethics, concludes Pittini, “we are turning to the institutional funders of our country: they can wait much longer and look toward the effective relaunch of the initiative”.
Interview accorded to ADNKronos on 16th March 2021.