The bursting of Spain’s property bubble has claimed another victim with developer Reyal Urbis filing for insolvency.
That comes after it failed to renegotiate its more than three and a half billion euros of debt with its creditors. They include Santander, BBVA, Bankia and Banco Popula.
The insolvency petition now goes to court and a judge will decide its fate.
This takes Reyal Urbis closer to becoming Spain’s second-largest ever bankruptcy. The biggest was property and construction group Martinsa Fadesa, which defaulted on seven billion euros of debt in 2008.
At the end of 2011, Reyal Urbis owned some 888 finished homes in a country where over one million homes lie empty. The company also had eight million square metres of land for development and 237,000 square metres of commercial property, including offices, shopping centres, industrial property and hotels.
Dozens of developers have collapsed in Spain, where property prices have fallen around 40 percent since their 2007 peak. With the country locked in a deep recession, analysts expect prices to fall further still.
Spain’s banks were crippled by the property market bust, eventually requiring the state to agree a European bailout for its lenders of almost 40 billion euros last year.
Indebted property firms have asked banks for debt relief but patience is wearing thin among lenders saddled with soured property assets.