land Market News: Spanish Real Estate Intelligence

Domo Activos's Socimi Approves €15M Capital Increase to Buy Land

12 December 2017 - Eje Prime

Domo Activos is getting down to work with its growth plan. The largest property developer Socimi, which is aimed at medium-sized investors, has approved a €15 million capital increase at an Extraordinary Shareholders' Meeting. The funds will be used to purchase land in Spain for the construction of new homes.

The company has already identified purchase opportunities in a number of cities in Spain, according to José Luis Alba, the company’s Area Director, speaking to Eje Prime. “We will focus these acquisitions on Madrid, Málaga and Valencia in the first instance, but we are also searching for plots in Sevilla, Córdoba, Granada and Zaragoza”.

The Socimi’s capital increase will be undertaken through the issue and launch into circulation of a maximum of 7.5 million shares, granting a nominal value of €2 to each one of them.

Currently, the first project promoted by Domo Activos is the development being constructed in Madrid, in the Ensanche de Vallecas. This building will have eighty homes allocated for rent.

Original story: Eje Prime

Translation: Carmel Drake

Argia's Bankruptcy Leads to Oviedo's Largest Ever Land Auction

10 December 2017 - El Comercio

The bankruptcy of the property developer owned by the businessman Blas Herrero, Argia Inversiones Inmobiliarias, and the lack of interest in most of its assets from its banker, Liberbank, have made way for the city’s largest-ever auction of private land. In total, 159 lots worth more than €30 million will go under the hammer, ranging from buildable estates in Cerdeño, to buildable land in Prados de la Fuente, to around fifty finished homes also in Prados de la Fuente.

In reality, the investments are very recent. Herrero did not seek to obtain any returns from the land and housing sectors in Spain until 2005 when he took control of Inverural Capital and turned it into Argia Inversiones Inmobiliarias. After a few years of activity, the company stopped filing its annual accounts – in 2009 – and went off the radar.

In Oviedo, the firm had promoted one of the largest plots of land in Prados de la Fuente, under the commercial name Galana Residencial. The work on that group of buildings…did not go well…The first buyers reported problems with the finishes, as well as humidity in the garages and the poor quality of the padel court.

Eight years after the homes were handed over, 51 apartments in different parts of the development are now going on the market, with appraisal values ranging from €155,484 for a first floor 3-bedroom property to €250,000 for homes that are bigger and higher up (…).

House prices in the city of Oviedo in Q3 2017 amounted to €1,264/m2, according to the appraisal company Tinsa. In YoY terms, they rose by 1.5%, but the number of transactions was still very low and, in 2016, prices fell by 0.8% in YoY terms. Since the middle of 2008, each homeowner in Oviedo has lost 37% of his/her property value, on average (…).

Volatility and low returns are two of the factors that have ended up causing the Asturian businessman Blas Herrero to surrender his real estate ambitions just ten years after launching them and after more than five years of unremarkable activity. In 2015, Argia Inversiones Inmobiliarias filed for voluntary creditors’ bankruptcy. The liquidation plan…was approved in January.

A peaceful end is anticipated with the voluntary auction that is due to be held on 20 December. The 159 lots, which will be bid for independently, include some mortgage charges in favour of Liberbank, who has most at stake in terms of the success of these disposals (…).

Prices and lots

The data is not encouraging. In the last year – between July 2016 and June this year – 633 homes were sold across the whole of Asturias (…). The figures indicate that the crisis is still on-going. A decade ago, the General Council of Notaries recorded three times as many real estate transactions per year. Moreover, some of the lots are far from the reach of most (…). Specifically, three plots from the special plan are together worth €10.5 million (…).

Original story: El Comercio (by Gonzalo Díaz-Rubín)

Translation: Carmel Drake

Aedas Homes Exceeds its Forecasts for 2017

11 December 2017 - El Mundo

During the eleven months to November, the property developer Aedas Homes, which made its debut on the stock market in October, doubled its land purchase target for the development of housing that it had set for the entire year 2017, according to a presentation submitted to Spain’s National Securities and Exchange Commission (CNMV).

By the end of November, Aedas Homes had acquired land for the development of 865 homes, more than double (108% more) the forecast for year as a whole (416). Moreover, the property developer intends to incorporate land for an additional 130 homes before the end of the year.

In general terms, Aedas Homes has already exceeded its forecasts for 2017, and, according to the company, it expects to see some solid results, taking into account that prices have risen by 7%.

Until November, the property developer had launched 35 projects, above the forecast for the year as a whole (34). Aedas had also exceeded the planned number of homes under construction, with 758, compared to the forecast for the year as a whole of 583.

In terms of pre-sold homes, the total number at the end of the eleventh month of the year amounted to 832, very close to the planned number of 845.

Minimal impact of Catalan crisis

Meanwhile, according to the property developer, the impact of the Catalan crisis has been “minimal”. The company says that pre-sales in Cataluña “are continuing to grow” and that the projects launched in the region “already have 50% of their units pre-sold”.

Cataluña is the third largest market for Aedas Homes, after Madrid and the Costa del Sol. At the end of November, seven of the 35 developments that the company had underway in Spain were located in Cataluña. The developments in the Catalan region comprise 355 homes, a number that exceeds the forecasts for the year as a whole in the autonomous region, which amounts to 322 units.

Currently, Aedas Homes has 16% of its land portfolio in Cataluña, comprising a surface area of 1.5 million m2, with a value of €1.37 billion. In this way, it has sufficient land to build 2,245 homes in the region, out of its current portfolio capacity (for the country as a whole) of 13,044 homes.

Original story: El Mundo 

Translation: Carmel Drake