Month: July 2016

INE: Unemployment Falls By 216,700 To 20% In Q2

29 July 2016 – Cinco Días

The number of people employed in Spain rose by 271,400 during Q2, up by 1.51%, according to the Labour Force Survey (EPA), published by INE yesterday. In terms of the creation of employment, it was the weakest second quarter since 2013 (411,800 more people were employed during the same quarter in 2015, and 402,400 more in Q2 2014). In seasonality-adjusted terms, the QoQ variation amounted to 0.29%, the lowest figure in the second quarter since 2013.

In terms of unemployment, the number of people on the dole decreased by 216,700 during the second quarter of the year to 4,574,700, down by 4.5%. The unemployment rate now stands at 20%, one point below its level in the previous quarter. In addition, that figure represents the lowest level since Q3 2010, when the rate stood at 19.59%. The unemployment rate also saw its lowest decrease in Q2 since 2012: during the second quarter of 2015, unemployment decreased by 295,600, in Q2 2014, it fell by 301,400 and in Q2 2013, it dropped by 230,900. During the second quarter of 2012, unemployment fell by 63,100. In seasonality-adjusted terms, the QoQ variation amounted to -1.90%.

Employment increased this quarter in: services (227,300 more), construction (45,600) and industry (15,700), and decreased in agriculture (17,200 less). In the last year, employment has increased in: services (439,100 more) and agriculture (19,800), but has fallen in construction (15,700 less) and industry (8,800).

By autonomous region, the highest increases in employment during the quarter were seen in the regions that receive lots of tourists, such as the Balearic Islands (56,000 more people were employed), Cataluña (53,700) and Murcia (28,400). The number of employed people decreased in the Canary Islands (11,900 less) and Navarra (4,200).

Quality of employment

The total number of wage earners increased by 252,700 during the second quarter (and by 425,500 with respect to the previous year), of which 86,400 signed permanent contracts and 166,300 signed temporary contracts. The temporary rate rose by 68 hundredths to 25.72%.

The number of self-employed workers rose by 15,700.

The number of full time workers increased by 301,100 and the number of part-time workers decreased by 29,300.

Households with every member unemployed

The number of households where all of the members are unemployed decreased by 117,100 during the second quarter of 2016, to 1,493,800, of which 361,000 were single-occupancy households.

At the opposite end of the spectrum, the number of households where all of the active members are employed rose by 151,800 to 9,662,200, of which 1,833,400 were single-occupancy households.

Original story: Cinco Días (by C. Castelló)

Translation: Carmel Drake

INE: Fixed Rate Mortgages Enjoy Unparalleled Popularity

29 July 2016 – Cinco Días

The mortgage market is not only on track to recovery, it is proving unstoppable. The enormous and increasingly attractive mortgages being offered by the banks to secure new clients are encouraging homebuyers. And that is being reflected in the figures. According to the property registers, the signing of new mortgages for the acquisition of a home recorded a significant YoY increase of 34.1% in May, to reach 26,579 contracts, an increase that was ten basis points higher than the rise recorded in April (24.6%) and twenty points higher than the increase in March. With the YoY rise in May, mortgages recorded 24 consecutive months of increases.

And the data reveal another important fact to keep in mind. It seems that the firm commitment of the financial institutions to fixed rate mortgages is working, with increasingly more clients choosing that option. 80.4% of the mortgages constituted in May had variable rates, compared with 19.6% that had fixed rates. Just a month before, in April, variable rate mortgages accounted for 85.2% of the total, whilst fixed rate mortgages represented 14.8%. But the increase in fixed-rate loans is unquestionable if we compare the latest figures with those from just a year ago. In May 2015, when 19,732 new mortgages were constituted, 92.8% of them were variable rate and 7.2% were fixed rate. In other words, the proportion of new fixed rate mortgages has almost tripled in one year.

And, in recent months, the financial institutions have shown a greater predilection for fixed-rate mortgages, given the low interest rate environment in which they are operating. And, what’s more, the battle to win clients is still very much alive and kicking, with some entities now offering interest rates of less than 2%. There are several examples: BBVA is offering 15-year fixed rate mortgages at 1.90%. Bankinter is offering 1.80% on its 15-year mortgages and 1.60% on its 10-year products. Meanwhile, Activobank’s promotional mortgage to celebrate its anniversary establishes a rate of just 1.50% over 10 years. (…).

With just two days left of trading before the end of July, the average Euribor rate currently sits at -0.057%, compared with -0.028% in June. Thus, the decrease in Euribor has doubled in just a month. (…).

According to the provisional data for May, provided by INE yesterday, which comes from public deeds signed in the previous months, the 26,579 mortgages that were constituted during the month represent an increase of 12.6% compared with the 23,607 signed a month earlier.

The value of those mortgages amounted to €2,776.9 million, up by 33.1% compared to a year ago and 8.6% higher than in April. The average mortgage loan amounted to €104,480, which represents a reduction of 0.8% compared to May 2015 and 3.6% compared to a month earlier. (…).

Original story: Cinco Días (by M. Calavia)

Translation: Carmel Drake

Ministry Of Development: Housing Permits Rise By 49.8%

29 July 2016 – El Economista

The number of new permits authorised to build homes in Spain amounted to 28,662 between January and May 2016, representing an increase of 49.8% compared with the same period last year (19,132 units).

In this way, permits for the construction of homes are continuing their positive trend in 2016, after recording two consecutive years of increases in 2014 and 2015, according to data from the Ministry of Development published on Thursday.

Of the total figure, 21,497 permits corresponded to blocks of flats (representing a YoY increase of 58.2%) and 7,160 related to family homes, i.e. a YoY increase of 29.4%.

In addition, five permits were requested for other types of buildings not intended for use as family homes, compared with 12 such permits during the first five months of 2015.

This overall increase during the first five months of 2016 comes after the consolidation in 2015 of the recovery in the number of permits granted (with an improvement of 42.5%), which had begun in 2014, when seven years of consecutive decreases were broken by a rise of 1.7% (to 34,873 units).

This real estate market indicator reached its historical low in 2013 (34,288 units), a figure that represented a 96% decrease from the peak recorded in 2006, when 865,561 permits were granted.

Original story: El Economista

Translation: Carmel Drake

Emilio Cuatrecasa Launches Rural Hotel Chain In El Ampurdán

28 July 2016 – Expansión

Emilio Cuatrecasa has launched a proposal to make the most of the beautiful landscape in El Ampurdán and the Costa Brava.

Yesterday, the lawyer and businessman announced the launch of a new hotel chain, which will specialise in managing small high-end hotels located in the region of Baix Empordà, which groups together idyllic landscapes in the imaginary triangle bordered by the towns of Sant Feliu de Guíxols, Girona and Torroella de Montgrí, in the central part of the Costa Brava.

Through his holding company Emesa Corporación, Cuatrecasas has just acquired Palau de Ullastret, a farmhouse with large arches rising above the medieval walls of this inland town, close to La Bisbal d’Empordà, famous for the archaeological remains of its Iberian settlement.

Emesa plans to invest €7 million – a figure that include the purchase price – in transforming this historical building into a luxury hotel, whose opening date is yet to be determined. The small palace, which will undergo an extensive restoration, is located on a 2,500 sqm estate, known locally as Can Romaguera.

The project represents the cornerstone of a much more ambitious initiative, which involves weaving a network of ten luxury hotels over the next three years, in this coastal region, dotted with hundreds of farmhouses and ancient buildings.

The new chain owned by Cuatrecasas does not have a name yet and will be forged through the purchase of new unique properties, as well as the integration of hotels already in operation that will be adapted to the philosophy of the project. “With this initiative, we are trying to professionalise hotel activity in El Ampurdán, which is currently very fragmented and in the hands of individuals”, explained Ferran Forrellad, CEO of Emesa.

According to the director, the project has been inspired by regions such as Tuscany in Italy, “where there is more organisation and, therefore, much greater international promotion and awareness of the region”.

The new chain will focus on offering rest and comfort to its clients with facilities and rooms equipped with the latest technology and with a modern design, but “without the interferences of a hotel service”. Thus, gastronomic, health and gym services will only be offered on-demand and will be subcontracted to specialist companies.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

Wimpey Protects Its Homes In Spain From Brexit

28 July 2016 – Expansión

The British real estate company has refinanced its property developments on the coast through the issue of bonds amounting to €100 million.

One of the consequences of the UK referendum, held on 23 June in which Britons voted in favour of Brexit (to exit the European Union), may be a decrease in the volume of house purchases on the Spanish coast by citizens of the United Kingdom, as a result of the depreciation in the pound against the euro and fears about future restrictions over the free movement of people between the two countries.

Taylor Wimpey, the real estate company that has property developments in Andalucía, Alicante and the Baleric Islands, aimed mainly at British buyers, has decided to protect itself against those risks through a debt issue in euros to “hedge its investments in Spain”.

On 28 June, just five days after the referendum, the company completed a private placement of bonds amounting to €100 million with institutional investors, secured by its Spanish assets. The securities pay annual interest of 2.02% and are due to mature in June 2023.

According to market sources, this operation seeks to refinance in euros Taylor Wimpey’s debt associated with its assets in Spain, which amount to €168 million. By having the assets and debt of its Spanish subsidiary denominated in the same currency, the group’s balance sheet is more stable in the face of possible fluctuations in exchange rates in the future.

Currently, Taylor Wimpey has several property developments underway along the Spanish coast, where it has already committed to sell 399 homes.

During the first half of 2016, the firm completed the sale of 53 homes in Spain, at an average price of €342,000. Interestingly, one of these property buyers was Pete Redfern, the CEO of Taylor Wimpey. The chief executive of the group acquired two houses from the Spanish subsidiary, one for €278,000 and the other for €350,250. According to the company, the first home was sold at market price, whilst the other was purchased by Redfern taking advantage of the discount plan offered to employees “under the same terms offered to all other staff”.

Taylor Wimpey’s revenue in Spain between January and June amounted to GBP 14.8 million (€17.6 million), generating an operating profit of GBP 0.3 million. “We hope to continue making progress in the Spanish market during the rest of the year, given the strength of our order book” said the group. “Looking further ahead, we remain cautiously optimistic, given the potential implications of the macroeconomic environment in Europe”.

The company, which besides its business on the Spanish coast, is heavily focused on the United Kingdom, recorded revenues of GBP 1,457 million during H1 2016, up by 9.1%. At the results presentation yesterday, Redfern said that Brexit had not yet affected the group’s sales in the British market.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Catella Advises Sale Of 2 Retail Premises In Burgos & Cádiz

28 July 2016 – Press Release

The international real estate consultancy Catella has advised a Spanish investment vehicle on the sale of two retail premises, located in Burgos and Cádiz, and leased to Massimo Dutti, Lefties and Desigual.

The premises in Burgos are located on Calle Vitoria, 17, but are also accessible from Calle de la Puebla, 24-26. The asset is located on the best shopping street in the city, home to high profile tenants such as Zara and El Corte Inglés. It has a total surface area of 1,929 sqm, distributed over the ground floor, mezzanine level and basement. And it is leased to the Inditex Group for use by its commercial brands Massimo Dutti and Lefties.

The premises in Cádiz are located on Calle Columela, 23 (pictured above), the main shopping street in the city, alongside brands such as Mango, Zara and Massimo Dutti. The property has a total surface area of 225 sqm distributed over the ground and first floor. It is leased to the fashion chain Desigual, which is going to introduce its new concept soon.

According to Pablo Carvajal, Director of Capital Markets at Catella, “given the absence of products with attractive returns in the prime markets of Madrid and Barcelona, investors are now showing more interest in the best shopping streets in other cities, where they are finding high yields and first-rate tenants”.

About Catella

Catella is a listed international real estate consultancy and a leader in the Europen market. Catella adds value by combining its extensive knowledge of local markets with its own investment bank approach and its great capacity to generate investment opportunities.

Original story: Press Release

Translation: Carmel Drake

Realia Multiplies Profits By 9x To €130M In H1

28 July 2016 – Expansión

Realia generated net profit attributable to the parent company amounting to €130 million during the first half of the year, which represents an increase of almost 9x with respect to the €14.9 million registered in the same period last year.

This strong increase in earnings comes even though gross operating profits (EBITDA) rose to a lesser extent, by 3%, to €19.7 million, and operating income fell by 1% to €49.6 million.

In a statement to Spain’s National Securities and Exchange Commission (CNMV), the company explained that the net result reflects a positive impact of €113 million thanks to discounts associated with the refinancing process.

Specifically, €72 million came from the refinancing of residential debt, and a further €41 million was financed by a shareholder loan acquired by Inversora Carso from Sareb.

Without these items, to which a positive impact of €9.3 million can also be added, arising from the variation in the value of real estate investments, the net attributable profit would be €11.1 million, compared with €6 million in the same period in 2015.

Realia’s real estate assest have a combined surface area of 404,807 sqm, whilst the occupancy rate of its assets amounts to 91.8%, up from 90.6% in the first half of 2015.

The slight decline in half yearly income was due to a 6% decrease in contributions from the real estate business, which fell by €2.6 million, due to the empty Los Cubos building.

Debt

The company also recognised net financial debt amounting to €890 million at the end of H1 2016, down by 18% compared with the end of H1 2015.

Realia reduced its gross financial bank debt by €762 million to €927 million as at 30 June 2016, down by 45% compared with the same period last year.

The net financial result amounted to €109.1 million, after applying the discounts amounting to €113 million, explained the company in information sent to the market supervisor.

Original story: Expansión

Translation: Carmel Drake

Hispania Multiplies Its Profits By 11x To €120M In H1

28 July 2016 – Expansión

The Socimi Hispania generated an attributable profit of €120 million during the first half of 2016, which represents an eleven-fold increase in earnings compared with the same period last year.

These “solid” results reflect the “excellent progress” of the firm’s hotel portfolio, improvements in the occupancy rates of its office buildings and the continuous appreciation of its residential portfolio.

Net operating income increased eight-fold, to €48.2 million. The recurrent gross operating profit (EBITDA) amounted to €39.3 million, compared with a negative EBITDA of €124 million in the same period in 2015.

The net turnover figure stood at €60.18 million, i.e. six times higher than in H1 2015, when it amounted to €10.6 million. By segment, €48 million (+1.375%) of the Socimi’s turnover corresponded to hotels; €9.1 million (+68%) to offices; and €3 million (+55%) to residential assets.

Hotel success

According to the Socimi, its hotel portfolio has performed “very positively” during the first half of the year, driven, primarily, by its hotels in the Canary Islands.

The firm’s share price rose by 1% on the stock market yesterday to €11.50.

Original story: Expansión

Translation: Carmel Drake

Engel & Völkers’ Sales In Spain Soared By 45% In H1

28 July 2016 – Expansión

The German real estate company Engel & Völkers, which specialises in the sale of luxury assets, increased its (global) turnover by 41% during the first half of the year. In Spain, its revenues soared by 45.1%, to reach €690.9 million. This growth was driven by operations in both the sales and rental markets.

The company, which plans to open nine new outlets in Spain, attributed this “good progress” to strong demand for premium properties in holiday areas such as Mallorca, a fundamental market where its business grew by 79% during H1, as well as in large cities, where it has a presence through the Metropolitan Market (MMC).

At the global level, the group increased its revenues from commission by 26.2%, to €229.4 million.

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

ECI Invests €70M In New Logistics Centre In Tarragona

28 July 2016 – Expansión

El Corte Inglés has inaugurated a new logistics platform in La Bisbal del Penedès (Tarragona) to strengthen its service in Cataluña and the rest of the Mediterranean area. It has invested almost €70 million in the site.

According to a statement issued by the company on Wednesday, the new centre is located on a plot of land measuring more than 230,000 sqm, but the first phase occupies just 45,000 sqm.

The aim of this platform is to complement the group’s warehouse and distribution centre in Montornès del Vallès (Barcelona), operational since the end of the 1970s and with a 200,000 sqm extension.

The company has indicated that the centre in La Bisbal del Penedès has capacity to grow in the future in order to improve service and distribution, not only in Catalunya, but also in Aragón, Levante, Murcia and the Balearic Islands.

With this inauguration, El Corte Inglés now employs almost one thousand workers in the logistics and distribution segment in Cataluña.

Besides its logistics centres in Cataluña, the group also owns a platform measuring more than 500,000 sqm in Valdemoro (Madrid), which has around 3,000 employees and warehouses more than 15 million product units.

Original story: Expansión

Translation: Carmel Drake