Realia’s Profits Rose Almost 7-Fold In 2016 To €115.7M

28 February 2017 – Expansión

Realia recorded a net profit of €115.7 million in 2016, compared with €17.2 million in 2015, which represents an almost seven-fold increase in earnings, according to a report submitted yesterday by the real estate company to Spain’s National Securities and Exchange Commission (CNMV).

Sources at Realia explained that this evolution in profit reflects the impact of a series of extraordinary items, including a positive variation in the value of its real estate investments, amounting to €49.2 million.

In addition, the company recorded a positive impact of €113 million, due to discounts associated with the refinancing of the residential debt and loan acquired by Inversora Carso from the bad bank Sareb.

During 2016, the group generated total revenues of €97.2 million, up by 2.4% compared to 2015, driven by an increase in revenues from promotions and land (+€7.1 million) and despite a decrease in rental income (-€4.8 million) after the Los Cubos building in Madrid was vacated – that property is now up for sale.

Meanwhile, the gross operating income (EBITDA) amounted to €41.8 million in 2016, compared with €40.5 million in 2015, which represents an increase of 3.3%.

Original story: Expansión

Translation: Carmel Drake

Another RE Chain Is Born: Visasur Creates Azzahar Hoteles

27 February 2017 – Preferente

Azzahar Hoteles is the new chain from the Visasur Group, created in collaboration with Némesis Capital & Investment. It owns two hotels in Sevilla and Valencia, according to an announcement made by the Andalucían company. The hotel chain emerged in January when Visasur Inmobiliaria and Némesis Capital became the main investors in the consultancy firm CR Business by acquiring a 70% stake in the share capital, split 40% and 30%, respectively.

Following the acquisition, the consultancy firm was renamed Azzahar Hoteles, a brand that “is committed to urban and business tourism”, explained the CEO of the Sevillan group, Nicolás Álvarez. “The new hotel brand is planning an ambitious growth process, with forecasts that it will be managing seven new properties by 2021, containing more than 500 rooms”, according to sources at the company.

Nevertheless, for the time being, the chain has just two hotel properties: one in Sevilla, Hotel Doña Manuela, and the other in Valencia, Hotel Táctica de Paterna, according to several sources.

The Visasur Group is a family business that focuses on the development of real estate projects, whilst Némesis Capital & Investment is a strategic and financial consultancy firm. After acquiring 70% of CR Business, both companies have created the new Andalucían hotel brand Azzahar Hoteles.

Original story: Preferente

Translation: Carmel Drake

Lucas Fox: Luxury Home Sales Soared By 31% In 2016

27 February 2017 – Expansión

Luxury homes enjoyed a buoyant 2016. Sales soared by 31% thanks to the boost from foreign investors, above all in cities such as Barcelona, where the purchase of high-end residences increased by 69%, according to the latest report from the real estate company Lucas Fox, which specialises in high-end homes. In Madrid, the increase amounted to 12%.

The study attributes this mini-boom to the declining demand for properties in London following the Brexit referendum. That “has caused citizens from outside the EU to be more interested in Madrid and Barcelona, and the trend is set to continue in 2017”.

Foreign investors will continue to be the main driver behind Spain’s luxury residential sector. They now account for 65% of the market, according to the real estate company. The remaining 35% are Spaniards.

Buyers from the UK and Ireland accounted for 11% of overseas purchasers in 2016, whilst French buyers accounted for 5%. Purchasers from the Middle East were the cohort that grew by the most, to account for 8% of all luxury residential property purchases. Scandinavian buyers accounted for 6%.

In terms of buyer motivation, 30% acquired a property as a primary residence and 43% as a second home. It is worth remembering that 75 million tourists visited Spain last year, a historical record. There was also a considerable increase in the number of buyers who purchased properties for investment purposes (22% of all purchases by overseas buyers). Finally, 3% bought because they were looking to obtain a Golden Visa, in other words, the permit to reside in Spain that is granted to real estate investors from outside the EU.

In fact, Lucas Fox estimates that demand for Spanish properties from buyers outside the EU, including from the USA and the Middle East, “will cause the current bullish trend to continue throughout 2017, thanks to the Golden Visa program”.

During the first three quarters of 2016, foreigner buyers spent just over €47 million on new build and recently renovated properties, which represents a YoY increase of 9%. The apartments that are most in demand are those located in classic buildings in prime areas, measuring between 150 m2 and 200 m2 and worth between €1 million and €1.5 million.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Amazon Negotiates Rental Of 13,000 m2 Office Space In Barcelona

27 February 2017 – Expansión

The distribution giant Amazon is preparing to make its debut in the 22@ technological district of Barcelona. The company is negotiating the rental of 13,000 m2 of office space in the future Luxa building, which is being promoted by the Castellví group. If the agreement is signed, it will represent the latest chapter in the company’s recent offensive to expand its presence in Cataluña.

Sources close to the negotiations indicate that the agreement between the two parties may be signed within the next three weeks. Meanwhile, spokespeople for Amazon and Castellví have declined to comment on the information.

The Luxa building is going to be split into two units: the main section will have a surface area of 9,920 m2, whilst the second building will add another 6,494 m2 of space. Between the two, there will be almost 17,000 m2 of office space, which means that Amazon will occupy 75% of the total.

The likely arrival of Amazon in 22@, which was revealed by the website Ejeprime, confirms the boom times that the area is enjoying. Another recent high-profile operation involved the technology company Schibsted, which last week announced its plans to move into an office building promoted by the real estate firm Colonial.

In recent months, Amazon has made a strong commitment to Cataluña. The company led by Jeff Bezos will open a 60,000 m2 logistics centre in El Prat de Llobregat (Barcelona) in the autumn, following a €200 million investment. And a few months ago, the giant inaugurated another logistics centre, measuring 28,000 m2, in Castellbisbal (Barcelona). Meanwhile, at the beginning of last year, the firm opened a collection point in el Eixample.

Original story: Expansión

Translation: Carmel Drake

Värde Buys Vía Célere To Become Spain’s Largest Residential Property Developer

27 February 2017 – Real Estate Press

Värde Partners has purchased Vía Célere, the real estate company owned until now by the President of Asprima, Juan Antonio Gómez Pintado (pictured above). The operation was closed on Friday, however, the consideration paid has not been revealed. Gómez Pintado will manage the fund’s real estate activity in Spain. As a result of this deal, Värde has consolidated its position as the largest residential property developer in Spain.

Vía Célere currently has two property developments underway and owns land for the development of around 1,000 homes, in Madrid and Barcelona. It also owns several developments overseas, specifically, in Brazil, Bulgaria and Poland.

Vía Ágora, which owns Vía Célere and the property development companies that operate outside of Spain, recorded revenues of €83.4 million in 2015, with a net profit of €6.12 million, according to the latest accounts filed. The group’s property development activity in Spain accounted for €49 million of this revenue, with a profit of €3.5 million.

Värde already controls the property developers Dos Puntos and Aelca, along with 40% of La Finca, and with this new acquisition, it is fulfilling the objective of reaching the size that ensures a high rate of sales growth (…). The fund also manages the servicer Aliseda.

In addition to Värde, the funds Lone Star and Castlelake have also made strong commitments to the Spanish residential real estate market in recent times.

Original story: Real Estate Press

Translation: Carmel Drake

Will 2017 Be The Year Of Mergers Between The Socimis?

24 February 2017 – Expansión

The Socimi boom continues unabated. Ores – the listed real estate investment vehicle owned by Bankinter and Sonae Sierra – debuted on the Madrid stock market on Wednesday, and in doing so became the thirty-first company of its kind to have its shares traded on the MAB (Alternative Investment Market). Moreover, all indications are that this phenomenon is going to continue to grow.

An attractive tax regime and capital appetite for real estate assets has led to a flood of Socimis debuting on the stock market in recent years.

Heading up the list of Socimis, by size, are Merlin – the only real estate company whose shares are traded on the Ibex – Hispania, Lar España and Axiare. These four companies, which debuted on the Madrid stock exchange between March and June 2014 with €2,560 million to invest, now own a combined portfolio worth more than €10,500 million.

In addition to these Socimis, there are around thirty other companies that have joined the MAB in recent years. Following the tsunami that the real estate sector has experienced in just three years, the question now is: What will happen next?

Limitations

According to a report prepared by CBRE, “In 2016, the number of Socimis is expected to continue growing. Nevertheless, given that an increasing number of Socimis are competing in a somewhat limited market, it is likely that 2017 will be a year in which there is pressure for them to increase in terms of size and specialisation, with the aim of obtaining competitive advantages, driving merger and acquisition activity, and selling off non-strategic portfolios of assets between Socimis”.

In this sense, it is expected that existing investment vehicles owned by family offices and private banking will be converted into Socimis. The experts at CBRE point out that pooling assets into existing investment vehicles, in return for ownership stakes in them, generates value growth for investors. (…).

The analysts also point out that the Socimis are likely to move towards more specialisation in the future. In this sense, Hispania is planning to focus its activity on hotels, whilst it divests its residential business and rotates its offices. (…).

Merlin – the largest real estate company in Spain and one of the ten largest Socimis in Europe – decided to sell off its portfolio of hotel assets to Foncière des Regions for €535 million to focus on its significant office portfolio, which has just grown thanks to the Socimi’s acquisition of the iconic Torre Gloriés building, also known as Torre Agbar (pictured above), in Barcelona, for €142 million.

Meanwhile, Axiare is focusing above all on offices, whilst Lar España is centring its attention on shopping centres.

Investment

Operations such as Merlin’s purchase of Torre Agbar on 12 January and Axiare’s acquisition of the headquarters of Capgemini and PSA last month reflect the fact that, after the record investment figure recorded in 2016 – €14,000 million, a figure hitherto unseen in Spain – the real estate market is still very attractive.

“We expect 2017 to also be a very active year for the Spanish investment market (…)”, say sources at CBRE (….) thanks to the more attractive returns being offered by the real estate sector compared to other sectors, the outlook for economic growth across Europe and the continuous improvements in financing (…).

Original story: Expansión (by R.Arroyo and R.Ruiz)

Translation: Carmel Drake

Fotocasa: Rental Prices Rose by 1.7% In January

24 February 2017 – Expansión

The price of rental housing in Spain rose by 1.7% in January to €7.61/m2/month, according to data from the real estate portal Fotocasa. This figure represented the most pronounced monthly increase since December 2007, when prices rose by 1.8% with respect to the previous month.

In addition, the price of rental properties increased by 7.9% YoY with respect to the same month in 2016. This data also represents a record, in line with the monthly one, given that it represents the largest YoY rise since 2007.

“The rental market is experiencing significant tensions in terms of prices as a result of greater pressure on demand, given that despite the reopening of the credit tap by banking institutions, many Spaniards are unable to access financing and are being forced to seek refuge in rental properties as their only means of accessing a home”, said Beatriz Toribio, Head of Research at Fotocasa.

Ten autonomous regions saw increases in their rental prices, with rises ranging from 1.7% in Cataluña to 0.2% in the Community of Valencia. By contrast, seven autonomous regions saw decreases in their rental prices in January. The decreases ranged from -0.4% in Castilla y León to -1.5% in La Rioja.

Barcelona is the most expensive city

The most expensive city to rent a home in January was Barcelona at €15.25/m2/month after prices rose there by 13% YoY. It was followed by Ibiza (€13.81/m2/month), Sant Cugat del Vallès (€13.47/m2/month), San Sebastián (€13.15/m2/month) and Sitges (€13.06/m2/month).

At the other end of the spectrum were Lucena in Córdoba (€3.35/m2/month), Fuensalida in Toledo (€3.40 /m2) and Almendralejo en Badajoz (€3.42/m2/month), as the cheapest towns in Spain to rent a home.

Original story: Expansión

Translation: Carmel Drake

Ministry Of Development: House Prices Rose By 1.5% In 2016

24 February 2017 – ABC

The average price of private (unsubsidised) housing amounted to €1,512/m2 in the fourth quarter of 2016, representing a YoY increase of 1.5%. As such, the indicator recorded seven consecutive months of rises, according to data published yesterday by the Ministry of Development.

According to the same source, prices rose by 0.8% in Q4 compared to the third quarter of 2016.

Nevertheless, house prices are still well below their peaks of the first quarter of 2008 (-28% lower). On the other hand, prices have now recorded a cumulative increase of 3.4% since their minimum values, recorded in the third quarter of 2014.

In real terms (excluding inflation), between October and December last year, house prices in Spain rose by 0.5% with respect to the same quarter in 2015 (to record nine consecutive quarters of increases), according to the Ministry of Development, which added that we are now seeing a slowdown in the growth rate in real terms due to an increase in CPI.

In the case of new homes (those aged less than five years old), prices rose by 1.5%, to an average of €1,764.2/m2. The price of houses aged more than five years old also rose, by the same percentage, to an average price of €1,503.6/m2.

Meanwhile, house prices rose in nine of Spain’s autonomous regions led by Madrid (4.8%), Cataluña (4.4%) and the Canary Islands (3.8%). The most significant decreases were recorded in Navarra (2.8%), Murcia (2.6%), Castilla y León (1.5%) and Asturias (1.3%).

In towns with more than 25,000 inhabitants, the highest absolute house prices were recorded in San Sebastián (€3,059.8/m2), Barcelona (€2,822.1/m2), Sant Cugat del Vallès (Barcelona) (€2,779.2/m2), Ibiza (€2,772.4/m2), Getxo (Vizcaya) (€2,681.9/m2), Santa Eulalia del Río (Ibiza) (€2,640.7/m2) and Madrid (€2,628.6/m2).

In smaller towns, the most expensive homes were sold in Ontinyent (Valencia) (€522.7/m2), Elda (Alicante) (€540.6/m2), Alcoy (Alicante) (€552/m2), Jumilla (Murcia) (€552.9/m2), Villena (Alicante) (€560.4/m2) and Novelda (Alicante)(€573.8/m2).

Finally, the average price of social housing amounted to €1,124.30/m2 during the fourth quarter of 2016, representing a rise of 2.6% with respect to the same period in the previous year.

Original story: ABC

Translation: Carmel Drake

Airbnb, HomeAway & Wimdu Outperform Traditional Long-Term Lets

23 February 2017 – El Confidencial

Traditional rental agreements (…), which are governed in Spain by the Urban Rental Act (LAU) and which allow a tenant to live in a home for an extended period of time, are starting to become scarce in some very specific areas of large cities such as Madrid and Barcelona. They are falling victim to the unstoppable progress of so-called tourist apartments or short-stay lets (available on a daily, weekly or monthly basis), which have grown like wildfire in recent years, thanks to the development of platforms such as Airbnb, HomeAway, Wimdu, Niumba, Rentalia and Booking.

Users consider that these assets offer a much more flexible and economic alternative than the product offered by the hotel sector. Meanwhile, homeowners have found a business niche and are generating extra income both from their own homes and from properties acquired as investments. Moreover, their yields are ranging between 4% and 8%, which is well above those offered by other traditional investment products at the moment, including traditional rental properties.

To give us an idea of the volumes being handled by these types of platforms, Airbnb has 13,000 online adverts in the city of Madrid, whilst Idealista has 8,700 adverts for rental homes. In Barcelona, the online platform has 20,000 adverts compared with 6,400 on the real estate portal.

Nevertheless, the problem is limited to very specific locations, such as Malasaña and Chueca in Madrid and Las Ramblas and El L’Eixample in Barcelona. There it is almost impossible to find a long-term rental home. As such, the few products that do come onto the market are leased in a matter of hours and at much higher prices than they were just a couple of years ago. (…).

Rental prices in Malasaña now rarely fall below €800 for a one-bedroom flat measuring just 40m2, but on average, homes there cost between €1,200 and €1,300 per month. On the real estate portal Idealista, there are a few 60m2 flats for rent, for which the owners are asking €2,700/month and even €3,500/month for luxury properties.

Emergence of individual investors

Airbnb defends the “home-sharing” concept, saying that it does not remove available housing from the market because people who live in these homes are still around, they are just sharing their primary residences. Some of these people are using the money to pay for their housing costs”, says the platform. “Studies have been carried out in several cities around the world, showing that the number of homes advertised on Airbnb for exclusively professional use is too low to have any impact on the housing market”.

Nevertheless, the high returns offered by tourist apartments have led many individuals and small-time investors to buy homes in these areas, to subsequently sell them or rent them to tourists. Specifically, individual investors are behind 3 out of every 10 house sales in Madrid, according to data from Tecnocasa. (…).

A very localised phenomenon

What is happening in Malasaña is also being seen on some other very specific streets both in Madrid and Barcelona, where rental prices have really soared. According to Urban Data Analytics, rental prices have risen by more than 20% in neighbourhoods such as Sant Andreu and Sants-Montjuïc, and by 15% in areas such as Gràcia, where prices decreased slightly during the crisis. (…).

According to Bankinter, in its latest report about the Spanish residential sector, these price increases will not last forever. “In our opinion, these double-digit increases, which are driven by a shortage of supply and the boom in tourist rentals, will not last in the long term, nor will they spread to the market as a whole, especially if new legislation is introduced to limit the number of tourist homes a given owner may rent out”.

Sources at Airbnb insist that “The increases in house and rental prices are due to normal factors at play in the real estate market, including: the high demand to live in cities, the appeal of real estate as investment property, the lack of space to build new developments…also, the pressure on house prices is not just being seen in Barcelona, it is happening in all of the large cities around the world (….). House prices were rising before Airbnb ever existed (…)”.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Intu Wants To Open Europe’s Largest Shopping Centre In Alcobendas

23 February 2017 – Mis Locales

The Spanish capital could soon become home to the largest shopping centre in Europe. The company Intu is working on a new mega-project.

The goal of the British company is to construct the largest shopping centre in Europe. The exact location will be in the Escobares I sector of Alcobendas and it will cover a surface area of 500,000 m2. It will be larger than all of the shopping and leisure centres constructed to date and will take over from Puerto Venecia (located in Zaragoza) as the largest shopping centre on the continent (it has a surface area of 206,000 m2).

Intu is currently engaged in tough negotiations with the owners of the land, including Sareb, and in turn, with the property developer, Levitt-Bosch Aymerich. The multi-national is demanding that ownership of the site be transferred, but it is only intending to make the payment once the property has been constructed. This proposal is causing problems and no agreement has yet been reached regarding the form of payment or the sales price.

Intu is one of the largest shopping centre managers in Europe. In Spain, besides Puerto Venecia, it also operates Intu Asturia in Oviedo and four others, in conjunction with Eurofunds.

Original story: Mis Locales

Translation: Carmel Drake