Spain’s government-created “bad bank”, SAREB, has offloaded NPLs since its creation in 2012, following the example of Irish equivalent NAMA (National Asset Management Agency), founded three years earlier and London’s UKAR (UK Asset Resolution), created in 2010.

Spain’s SAREB and its peers in Dublin and London differed not only in terms of their approach and timing – but crucially where their exposure lay; SAREB was purely Spanish, while NAMA received NPLs linked to real estate in the likes of Paris. Furthermore, SAREB held more smaller NPLs than Ireland’s NAMA, which, unlike SAREB, had greater control over the selection of the assets it took on.

The ability to act quickly and decisively was a major factor in the successful handling of both banks’ NPLs and the numerous - mainly private equity - investors who swooped early to cherry-pick from bank balance sheets. Cerberus, Fortress and Lone Star have been particularly active over the past decade, while Blackstone’s 2017 deal saw around €30 billion (gross book value) of real estate properties and loans offloaded by Spain’s Banco Popular.

“What we have seen, particularly in Spain, is that private equity players have been highly adept in creating turnaround stories,” says Portes. “As the cycle matured, assets have then been traded on.”

But, despite high demand, seeking out assets is far from straightforward, says Michael Kavanau, EMEA debt advisory at JLL.

“It’s equally tricky to find real estate opportunities within NPLs – the best deals are as hard to dig out as typical equity real estate opportunities are.

“It’s still a vast, opaque market - there’ll always opportunities there, but they may be hiding behind less attractive assets.”

Yet with investors on the lookout, deals are still happening, including those coming from primary buyers. Alternative investments specialist Värde Partners has been active, working with Italian credit manager Guber Banca on the buyout of €734 million of real estate NPLs and a separate €1.4 billion portfolio across Italy, a country where securitization via the GACS scheme, designed to incentivize domestic banks to sell their NPLs into securitisation vehicles, began in 2016.