Month: August 2015

‘Housers’: Spain’s First RE Crowdfunding Platform Is Launched

20 August 2015 – Cinco Días

Crowdfunding is breaking into the Spanish real estate market; and small investors seem to be thriving in a space that was, until now, controlled by large fortunes and stratospheric projects. It is now possible to make an investment with just €500 in your pocket, through Housers, which describes itself as “the first online real estate crowdfunding platform in Spain”.

With the aim of creating a property investment fund opene to everyone, and based on the success that such platforms have been having in countries such as the USA and UK, Antonio Brusola and Álvaro Luna decided to launch a project that already has 800 users and is only one month old.

The platform, which has been adapted to reflect the new Crowdfunding Law that was ratified in April 2015, is aimed primarily at the purchase of homes. With a minimum investment of €500 in four different projects or €2,000 in just one, individuals can buy a stake in a home and receive monthly rental income, plus a capital gain when the property is sold. Similarly, the funds may be used to finance short-term real estate projects, such as construction and the renovation of buildings, in order to achieve “low risk investment products that generate high returns from rental and sale”, explains the company.

Housers offers homes and retail premises on its website for the moment, but the company is also looking to acquire industrial warehouses, depending on “how each asset performs in the market”. “Homes have the most upside potential, but retail premises have lower maintenance costs. They are two quite different products”, says Brusola, one of the co-founders. That is why the company expects to generate gross returns of more than 7% p.a. and that its properties will appreciate in value by 35% by the time they are sold.

“We try to purchase between 10% and 20% below the market price, so that we can sell them for 35% more with just a small increase”, says Brusola. He also confirms that the security of the investment is “quite high because it is a physical product and the loss is very limited”. “It is always possible that prices will not increase – for example, there could be a 10% decrease in house prices over the next few years, however, the rental income from the property will offset that potential decrease”, he says.

With this initiative, Housers expects to purchase more than 1,500 homes and obtain €300 million from around 10,000 investors in three years. In addition, the company is considering a capital increase in October, a month after the final launch of the platform, in September. And even though the idea was first floated in December last year and the web went live a month ago, the new Law resulted in delays to the project, which had to be adapted to the reflect the new processes required.

The new legislation establishes investment limits of €3,000 per project and a maximum investment of €10,000 in a 12 month period for non-accredited investors. Moreover, it forces platforms to collaborate with payment entities, or with the Bank of Spain, to ensure that segregated accounts are used and investors do not deposit their money directly in the platforms. For this reason, Housers has joined forces with LemonWay, a European payment entity that operates internationally, which affords it access to overseas investors, especially in the USA, UK and Germany, countries in which this property crowdfunding formula is more developed.

Original story: Cinco Días (by Asun Infante & Alfonso Simón Ruiz)

Translation: Carmel Drake

Grupo Insur Buys 2 Residential Plots From Sareb

20 August 2015 – Málaga Hoy

Grupo Insur, has acquired 2 residential plots of land in Marbella, through its subsidiary IDS Residencial Los Monteros, whereby expanding its presence in the capital of the Costa del Sol.

The plots of land are located in the ‘Urbanización Altos de los Monteros’ (pictured above), which is known for having a low building density, but lots of villas. It is located in the north east of a prestigious enclave, surrounded by the Río Real and Santa Clara golf courses, as well as by green areas. The maximum permitted buildability of these plots exceeds 50,000 m2 (covered area) and the permitted building type is “Mediterranean town” (i.e. attractive, white-washed, low-rise houses).

Grupo Insur has plans to develop an attractive residential project on these plots, aimed primarily at the international market. The first developments are expected to begin in 2016.

In addition, the group is currently promoting and constructing four developments in Marbella – three in the popular Urbanización Los Naranjos de Marbella containing 67 homes; and a fourth, containing 44 homes, in La Cerquilla de Banús, known as Alminar de Marbella.

Original story: Málaga Hoy

Translation: Carmel Drake

La Caixa’s Social Housing Stock Comprises 30,000 Homes

19 August 2015 – Expansión

La Caixa’s stock of social housing comprises 30,047 homes, located all over Spain. The entity’s first initiatives in the social housing sphere began ten years ago, and according to the President of CaixaBank, Isidro Fainé (pictured above), it is a line of business that he expects will increase.

“Our commitment to social housing, which is a clear example of our commitment to people, has proliferated in recent years and will continue to strengthen”, he said.

Through its programs ‘Alquiler Solidario’, ‘Alquiler Social’ and ‘Vivienda Asequible’, La Caixa makes 27,420 homes available to groups with fewer resources.

The ‘Vivienda Asequible’ (‘Affordable Housing’) initiative was launched in 2005 and facilitates access to new homes for young people, elderly people and families, who all pay rent that is substantially below market prices.

The ‘Alquiler Solidario’ (‘Subsidised Rental’) and ‘Alquiler Social’ (‘Social Housing Rental’) plans, which were launched four years ago, are targeted at groups at risk of social exclusion. The ‘Obra Social’ (or ‘Social Works’ program) finances half of those rental contracts, which range between €150 and €500 per month.

Social Housing Fund

Meanwhile, CaixaBank has allocated 2,627 homes to the Social Housing Fund to date. Its supply exceeds the amount assigned to it by the central Government (1,085 homes) by 142%, according to a statement issued by the entity yesterday.

Original story: Expansión (by D. C.)

Translation: Carmel Drake

Bank of Spain: NPL Ratio Falls Below 11%

The NPL ratio has recorded 10 consecutive months of decreases to fall below 11% for the first time in more than two years.

The NPL ratio of loans granted by banks, savings banks and cooperatives to individuals and companies decreased in June to 10.998% from 11.42% in May. As such, it completed 10 consecutive months of decreases and has now returned to a level last seen in April 2013.

According to provisional data published by the Bank of Spain, out of the total loan balance granted by financial institutions (€1.35 billion), the defaulted balance decreased by €4,843 million in June, to €149,308 million (€154,151 million in May). Nevertheless, the indebtedness of families and companies, i.e. the total loan portfolio, increased by 0.546%.

If we set aside the impact of recent changes in the methodology, then the NPL ratio amounted to 11.2% in June; however, that still represents a decrease compared with the previous month (11.6%), since the loan balance decreased from €1.325 billion to €1.332 billion. Nevertheless, financial institutions are still maintaining their provisions, although they have decreased them slightly with respect to the previous month, to €89,529 million. In May, that “cushion” amounted to €91,836 million.

Meanwhile, the Bank of Spain has created a new section in the Statistical Bulletin, called the pro-memorandum to facilitate the monitoring of the NPL ratio in a way that is homogeneous with its past performance. (…).

Jaime Díez, analyst at XTB, expects this downward trend in the NPL ratio to “continue”, since it is still a long way off the historical lows reached before the outbreak of the crisis.

Original story: Expansión

Translation: Carmel Drake

Lone Star Buys 4 Shopping Centres In Portugal For €500M

19 August 2015 – Expansión

The US fund Lone Star has purchased four Dolce Vita shopping centres in Portugal from the Spanish real estate company Inmobiliaria Chamartín for €500 million, according to the Portuguese newspaper Público.

The shopping centres are located in Porto, Vila Real, Coimbra and Lisbon. Lone Star became the largest real estate developer in Spain as a result of its purchase of Neinor from Kutxabank. Although the consideration paid in this latest transaction has not been disclosed, market sources told Público that the price was around €500 million.

Real estate bubble

The assets acquired by the US fund, some of which are in the development phase, were purchased by Inmobiliaria Chamartín in 2006 from the Amorim Group, which is controlled by the businessman Américo Amorim. The burst of the real estate bubble made Chamartín’s financial situation more difficult, and its creditors forced it to sell various assets in recent years. The company still owns a few buildings in Libson and Sintra, but it may have to sell those too over the coming months.

Lone Star’s investment in Portugal strengthens the recovery of the country’s real estate market, which, according to the consultancy Worx, has receivd investment of more than €1,000 million during the first half of this year; that figure comes close to the €1,200 million that was invested in 2006, before the start of the crisis.

Spain

The US fund, whose chief executive in Spain and Portgual is Juan Pepa, has been very active in the Iberian Peninsula’s real estate market in recent months. After acquiring Neinor for €930 million, the fund invested a further €300 million to purchase land from developers and banks. In addition, Lone Star has said that it has plans to invest a further €1,000 million this year to buy more land in Spain.

Original story: Expansión

Translation: Carmel Drake

JLL: Global Inv’t In Hotel RE Reached €38,590M In H1 2015

18 August 2015 – Cinco Días

Hotels have become a very desirable haven for investors. Private and sovereign funds and hotel chains are all committed to boosting these purchases. In fact, according to a report by the real estate consultancy JLL, a “new historical high” was reached during the first half of 2015, as acquisitions amounted to €37,590 million.

“All indications show that 2015 is going to be a record year for hotel transactions at the global level”, says JLL in a statement, “driven by significant overseas investment”. During the first half of 2015, the largest volume of transactions was recorded on the American continent, with €21,490 million changing hands in total – that figure reflected an increase of no less than 73% YoY. Next in the ranking was EMEA (Europe, the Middle East and Africa), with an increase of 55% to €13,430 million.

The consultancy had predicted that the volume of transactions in the hotel sector would amount to €60,870 million in 2015. “We have already reached 60% of that figure during the first half of the year, and so if the level of activity continues into the second half of the year, then we may actually exceed our original forecast”, say JLL.

“The clear improvement in the main hotel markets in Europe and USA, the general economic recovery and the availability of debt with interest rates at historical lows are some of the drivers behind the increase in the level of investment at the global level in 2015, strengthening the trend that began in 2013”, explains Carlos Ortega, Vice-President of the JLL Hotels & Hospitality Group.

Although US private equity firms continue to be the main source of capital, the number of transactions involving investors from mainland China and the Middle East increased significantly during the first half of 2015 – their contribution to the global hotel real estate sector amounted to €8,775 million, compared with €2,060 million a year earlier.

The major transactions closed so far this year have involved several sovereign funds, such as the Abu Dhabi Investment Authority, which acquired the Grand Hyatt in Hong Kong, the Reinaissance Harbour in the same city, and the Edition in New York. The largest sale was closed by the hotel chain Hilton, which sold the Walforf Astoria in Manhattan for €1,745 million.

These investors are looking for trophy businesses, in other words, iconic buildings in large cities that guarantee high returns and have secure customer bases. “Europe, with Paris and London as the major capital cities, continues to be one of the best destinations for agreements involving trophy assets, and hence is where the Middle Eastern sovereign funds continue to show most interest”, says Ortega.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

CESCE: The Construction Sector Will Grow By 3% In 2015

18 August 2015 – Expansión

The construction sector will grow by 3% in 2015 and building work will begin on 45,000 new homes, according to the Sector Report prepared by CESCE, the company responsible for the Integrated Management of Commercial Risk and Credit Services.

This increase represents a turnaround for the construction sector with respect to the previous seven years, which have seen nothing but decreases.

In this sense, CESCE’s analysis predicts that the highest growth will be seen in the renovation and maintenance segment (3.9%), followed by non-residential construction (3.2%), residential construction (2.8%), and finally, by civil engineering, with a rise of 1.8%.

The company states that the production value of the construction sector amounted to €97,972 million in 2014, and that this figure is expected to increase to €100,900 million in 2015.

In total, 58,776 construction permits were granted in 2014, an increase of 0.06% with respect to 2013 – although minute, that rise was significant, as it was the first time the number of permits had increased after seven years of consecutive decreases. Nevertheless, the figure is still a long way below the peaks recorded in 2006, when 911,000 permits were granted in a single year.

According to CESCE, the adjustment in prices has resulted in a prolongation of the good times in the wholesale real estate market, but the improvement has been slow to impact retail sales and even slower to affect the construction market itself.

In 2014, the sale of homes increased by 21.6% YoY, to 365,593 units, with rises reported in all of the autonomous regions, in particular in Ceuta and Melilla, Madrid and Navarra, which recorded annual increases of 44%, 31% and 31%, respectively.

In 2014, the construction of 46,795 new homes was completed, a decrease of 93% since 2007, when 641,419 properties were finished. The figure in 2014 was 28% lower than in 2013, and represented the minimum of the historical series, which was created in 2000.

Nevertheless, the rental market in Spain has been strengthened by the economic crisis, since it has gone from being practically residual to accounting for 20% of Spain’s households (compared with 80% of homes that are occupied by their owners).

This percentage is still a long way below the average rate of rented homes in the rest of Europe (38%) and Germany (60%), although analysis of the data indicates that there has been a structural change in Spain both in terms of the market, as well as in terms of society’s mindset.

Original story: Expansión

Translation: Carmel Drake

Notaries: Sales Of Second-Hand Homes Reactivate RE Market

18 August 2015 – Cinco Días

The General Council of Notaries has published its report for the real estate market in Q2 2015 – it shows an improvement in sales and a recovery in prices. Specifically, the notaries’ information, which is based on deeds included in the registries, shows that 37,641 homes were sold in Spain in June 2015, an increase of 19.4% YoY (14.4% if we correct for the effects of seasonality), of which 30,008 were flats and 7,633 were houses, with those segments experiencing YoY rises of 15.7% and 14.5%, respectively.

The most striking data to emerge from the statistics prepared by the notaries is the significant volume of second-hand home sales, compared with the lack of new home sales. 83% of the properties sold during the quarter were used homes. The strong demand (in the second-hand segment) meant that prices stopped falling at the end of Q1 2015 and actually rose for three consecutive months (by 1.9%, 1.2% and 0.4%, respectively), but by significantly less than the figures reported by INE for the period from January to March.

Exactly the opposite happened in the case of new builds. Sales in June amounted to just 3,558 (9.4% of the total), which undoubtedly compromises the Government’s plans to reduce the huge stock of unsold new homes (which stands at 535,734 properties, according to the most recent data from the Ministry of Development) and may force it to use some of those homes for other purposes, such as for social housing, in line with the demands being made by certain social organisations. (…).

The weak demand for new homes has had an inevitable impact on prices, which have continued to fall. In June, they dropped by 1.8% YoY and with the exception of April 2015 (when they rose by 5.3%), they continued to decrease throughout the quarter. The decrease in the price of new homes and the incipient rise in second-hand prices has meant that the general index, which measures the evolution in the prices of all types of homes, recorded a 0.3% decrease in June. That figure contrasts with the information provided by INE in its House Price Index for Q1 2015 (which reported an average increase of 1.5% during the first quarter) and then only a partial improvement.

In this context, the General Council of Notaries states that these figures “continue to show that the Spanish real estate market is stabilising and sales are recovering”. The recovery of the mortgage sector, which began in the first half of 2015, is going to play a key role in the consolidation of this trend. Mortgages granted for the purchase of properties increased by 32.4% YoY in June (to 17,508 loans), due to both an increase in the volume of mortgages granted to purchase homes (+32.4%), as well as a rise in the number of mortgages granted for the acquisition of other properties (+39.7%).

Meanwhile, the average amount loaned for property purchases was €130,343 (+5.2%). The average amount loaned to acquire a home was €121,445 (+4.6%), whilst the average mortgage for the purchase of other types of properties was €221,620 (+5.1%).

Finally, house sales increased in every autonomous region during Q2 2015, with Madrid and Cataluña leading the rise. (…).

Original story: Cinco Días (by Carlos Molina)

Translation: Carmel Drake

Altamira Completes Migration Of 28,000 Properties From Sareb

18 August 2015 – Expansión

Altamira has successfully completed the migration of 28,000 properties, which were originally transferred to the bad bank from Catalunya Caixa, Caja 3 and BMN.

In a statement, the company said that this operation has been carried out in three phases and has now been completed successfully, in accordance with the timetable agreed with Sareb.

The new properties incorporated into the platform carry ‘Sareb’s Seal of Assurance’ and expand Altamira’s offering, especially along the Mediterranean Coast.

The company has started to market the properties through its website. 30% of the homes are located in the province of Barcelona and the city of Barcelona itself accounts for 4% of all the residential properties for sale. With this operation, cities such as Zaragoza, Valencia, Sevilla, Málaga, Alicante, Murcia and Madrid “significantly” increase their respective supplies.

Following this migration, Altamira will have assets under management amounting to €55,000 million, making it “one of the leading companies in the sector in terms of size, with clear strengths in terms of its independence and its multi-client platform”, according to the company.

This operation strengthens Altamira’s strategy, which is based on diversification and growth. Until the end of 2014, the bulk of the company’s assets under management had originally come from Banco Santander, although it was also managing products from three other clients in the SME and financial asset segments, in which Altamira specialises.

In order to provide a better service, Altamira has developed a new technologically-operational multi-client platform, focused on the integrated real estate market and built around the company’s website, which has the capacity to manage a variety of assets, ranging from land, to new developments and second-hand properties.

Original story: Expansión

Translation: Carmel Drake

Bank Of Spain: Unemployment May Drop To 20% By Q4 2016

18 August 2015 – El Economista

The Governor of the Bank of Spain, Luis María Linde, believes that the unemployment rate may decrease to around 20% by the end of 2016, if the trend observed over the last 18 months continues.

That was the prediction he made today (Tuesday) during his appearance before the Congressional Budget Committee, where he gave an update on the progress of the draft bill for the General State Budget (‘Presupuestos Generales del Estado’ or PGE) for 2016.

According to Linde “the greater flexibility that companies now have to adjust their workforces, to reflect changing macro-economic and competitive environments, has enabled the creation of new jobs”.

“If the trend observed over the last year and a half continues, then the increase in employment may bring the rate of unemployment down to 20% by the fourth quarter of 2016”, he added. According to the Government’s forecasts, the unemployment rate should fall to 19.7% by the end of next year.

Temporary contracts remain stable

Moreover, he rejected accusations from the opposition party that the labour reform passed in 2012 has lead to an increase in job insecurity, stating that the proportion of permanent and temporary contracts over the total is practically the same as it was four or five years ago. (…).

Approval of the Government’s forecasts

Linde thinks that the forecasts made by the Government in its draft bill for the PGE for 2016 are “feasible”, even though they differ from those published by the supervisory body itself.

The Government has indicated that the macroeconomic projections in the accounts for next year reflect a “prolongation of the current phase of expansion”, which is “feasible, in the current context”.

Specifically, Mariano Rajoy’s Government believes that the economy will grow by 3.3% this year and by 3% next year, with a recovery in inflation of around 1.1%, which will take the nominal GDP rate to 4%.

The Greek rescue “will bring stability”

The Governor of the Bank of Spain said that the third Greek rescue plan is the most “complex and demanding” of those agreed hitherto between Greece, the European authorities and the IMF, but he believes that its implementation will only serve to strengthen the euro zone and stability in the region. (…).

Original story: El Economista

Translation: Carmel Drake