Summit Notebook

Exclusive outtakes from industry leaders

High level tourism wins some wealthy fans

October 6, 2010

While wealthy clients remain ultra-cautious about real estate, some are being tempted to snap up trophy properties that promise to throw off a healthy amount of cash.

On the fringes of the Reuters Global Private Banking Summit, Banco Santander executives said they had been involved in six to eight large real estate transactions including the sale of a Miami marina in this year.

In another deal, a Mexican client snapped up a chunk of distressed commercial real estate in Spain from a seller seeking to cut leverage. The properties were returning more than 6 percent in cash flows, a healthy spread over the buyer’s 4 percent borrowing costs.

More recently Santander private banking unit Banif assisted a client in the sale of the Valderrama golf course in Spain to Australian golfing legend Greg Norman.

Valderrama was the site of the first ever Ryder Cup to be held outside the United States or the UK in 1997, when Europe’s top golfers defeated their U.S archrivals.

Diversified cash flows were the major attraction of this type of property, said a Banif executive, citing membership fees to the golf club and rentals of the club’s real estate and subscriptions to related services.

 “There is still demand for high level tourism,” he said.

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