Categories: Market Watch

Spanish Real Estate Company Reyal Urbis Files for Insolvency

Spanish property firm Reyal Urbis has filed for insolvency today after a failed attempt at renegotiating its debts to its creditors, thus becoming the latest company to crack under the pressure of the country’s real estate market dire circumstances. The company’s debt at the end of September 2012 was of 3.6 billion euros, its insolvency meaning it might become Spain’s second-largest bankruptcy, following Martinsa Fadesa, whose 2008 debt totaled 7 billion euros.

Construction magnate Rafael Santamaria (pictured) holds the majority stake of 70% in Reyal Urbis, the firm owing money to creditors such as Santander, BBVA, Bankia and Banco Popular. The real estate company’s portfolio was valued at 4.2 billion euros in June 2012. Reyal Urbis will continue to operate as stipulated by insolvency laws in Spain, if a judge approves its petition. The company plans to keep Santamaria as leader. The real estate magnate stated he still hoped the firm would be able to strike a deal with creditors. 

Reyal Urbis had until February 23 to either reach a debt restructuring agreement with the banks or file for insolvency. The early petition might be the result of their proposal of 3.6 billion euros was rejected by creditors according to sources quoted by Reuters. Spain’s stock market regulator also suspended the trading of Reyal’s shares on Tuesday, after the stock had recorded a 99% decrease since June 2007, closing at 0.124 euros yesterday.

Other than money to creditors, Reyal Urbis also owed almost 900 finished homes at the end of 2011. The firm also has 8 million square meters of development land and another 237,000 of commercial property comprising of offices, shopping centers, industrial property and hotels.

Reyal Urbis adds to the list of dozens of real estate companies which have gone belly up in Spain as house prices fell 40% since peak year 2007. As the country still struggles with depression, prices are expected to continue to drop.

Alina Popescu

Alina Popescu, PR consultant & Founder of Mirror Communications, Marketing and Public Relations Agency has been working in the Marketing and PR field for over 6 years and has been running her own agency for almost two years now. She is a Romanian native, and a close friend of Pamil Visions. You can contact Alina at apopescu [at] pamil-visions [dot] net or follow her on Twitter

Recent Posts

Print Advertising Does it Matter for Real Estate Agencies

Advertising is an essential component of a solid marketing strategy, and since marketing is about…

2 days ago

Miami Real Estate Posts 10th-Highest Total Home Sales Month in History

Miami-Dade County real estate posted its 10th-highest total existing home sales month in history and…

2 days ago

Mortgage applications rise amid strong demand for ARMs

Mortgage applications surprisingly jumped 8% last week compared to the previous seven day period, boosted…

2 days ago

How Real Estate Agents can Automate Their Social Media Accounts

According to the National Association of Realtors, highlights indicate that existing and pending home sales have…

2 days ago

Home affordability crumbles, causing demand to finally pull back

Ballooning mortgage costs, driven by skyrocketing prices and interest rates, have made mortgages less affordable…

2 days ago

How to Make the Most of Local Real Estate Marketing

One of the main reasons why new real estate agents fail is because they are…

2 days ago