Empty hunting lodge a tale of boom and bust in Spanish property

Spanish developer Luis Gonzalez Chozas used to boast of the nobility of the horses at his 600-hectare hunting estate in the lee of the San Pedro Hills, one of the best for boar and deer in the region.

Now, just two years after he lost the property to the bank, wild sheep roam at will and with no hunting, the deer population has multiplied more than fivefold, said Fabian Vinagre, the caretaker of the estate near Caceres, 300 kilometres west of Madrid.

Visitors are rare these days, hosted by Sareb, Spain's bad bank, which is trying to sell the property before the animals complete their takeover.

The story of the farm, called Herb-of-Grace and the Moor, describes the arc of a property boom and bust that saw Spain record the fastest growth since its return to democracy in 1978, and then drove the country to take a €41 billion (HK$430.5 billion) bailout for its banks amid a five-year economic slump.

The property is one of at least 40 country estates Sareb has taken over from lenders, and is among 200,000 assets linked to real estate worth €50.4 billion it must dispose of within 15 years to repair the economy.

"We're well aware that these properties can degrade rapidly so we want to return them to productive use as quickly as possible," said Alvaro Escribano, Sareb's land planning manager. "For every moment that this land stays in our hands it loses value."

Sareb is on a mission to sell soured property assets that it absorbed from eight lenders including the Bankia group that took state aid as the government cleaned up its banking system with European bailout funds. Investor interest is growing as Sareb's efforts to offload shopping malls, housing, office buildings and loans to developers help set reference prices for sales, said Sergio Amelio, head of operations in Madrid at HipoGes, a distressed-asset management company that administers about €2.3 billion.