Year: 2019

Property Developers are Building 18,000+ Homes in Andalucía

18 March 2019 – ABC Sevilla

The real estate market in Andalucía is booming, and in a good way. According to the latest figures from the Ministry of Development, 12,363 permits were granted in 2017 for the construction of new homes, compared with the record before the burst of the bubble of 156,483 in 2006. Construction activity is responding to real demand in the market and is featuring some new players that are planning to build thousands of new homes in the region over the next three years.

Two markets

The investors, which include international funds and local property developers alike, differentiate between two markets – the eastern (Málaga) and the western (Sevilla) – the former accounts for 70% of new developments.

Aedas Homes currently leads the regional ranking by number of homes planned and investments forecast in the autonomous region. The property developer controlled by the US fund Castlelake plans to invest almost €1.3 billion in the region in the construction of 5,150 homes, primarily in the provinces of Málaga (2,600 homes) and Sevilla (1,800).

It is followed by Neinor Homes, which owns a portfolio of 29 plots for the construction of 3,628 homes; Metrovacesa, which has 2,300 homes in its Andalucían portfolio at various stages of completion; and Vía Célere, controlled by another US fund Värde, which is building 1,975 homes across 21 developments.

Meanwhile, ASG Homes has buildable land in Andalucía for the construction of 1,700 homes; Habitat Inmobiliaria, owned by the US investment fund Bain Capital, is working on the construction of 15 developments containing 1,621 homes; and the Sevillan property developer Insur is working on 17 residential developments comprising 1,136 homes at various stages of completion.

Finally, Q21 Real Estate, the property developer created from the alliance of the US fund Baupost and the owners of the former Pinar group, is also constructing almost 500 homes in the region, bringing the total number of homes under construction to more than 18,000.

Original story: ABC Sevilla (by Encarna Freire)

Translation: Carmel Drake

The Government Puts the Eurocis Complex in Central Madrid up for Sale for c. €196M

16 March 2019 – Crónica Global

The Spanish Government has authorised the sale by public auction of a set of offices, storerooms and garages in central Madrid, known as the Eurocis complex. The complex, which comprises 94 registered assets spanning an office surface area of 45,937 m2, plus 396 parking spaces, 1 commercial premise and seven underground storerooms, is located in the Salamanca district in the block bordered by Calles María de Molina, Núñez de Balboa, General Oraá and Castelló.

The asking price is €196 million and candidates have two months to submit their offers in closed envelopes. Until last year, the complex used to house several departments of the Ministry of Finance, but its urban planning classification means that it could be used for private purposes in the future. The future buyer is expected to completely renovate the building and convert it into modern offices or a large shopping centre.

Original story: Crónica Global 

Translation/Summary: Carmel Drake

Social Housing is in Very Short Supply in Málaga

17 March 2019 – Diario Sur

Social housing is in very short supply in Málaga. More than 27,000 families are registered on the waiting list for VPO properties, to purchase or rent, of whom 18,723 have been waiting for at least five years. 4,768 new families were added to the register last year alone. But only two out of every 100 families ever receive the good news that they have been selected to be awarded a home. Over the last few years, just 345 homes have been handed over.

Why are VPO homes not being constructed? There are several reasons, but one of the main ones is the lack of funding from the State and the Junta de Andalucía for public and private property developers. The most recent housing plans have focused on subsidising rental payments and undertaking renovation work rather than on the construction of new homes.

The Town Hall of Málaga has projects in the pipeline for the construction of 1,001 public housing units on land to the west of the extension of the Teatinos campus. The European Investment Bank (EIB) is willing to finance half of those homes, worth around €120 million, but the cost of that loan alone would have to be passed on to tenants in the form of rentals of €255 per month, which when combined with the cost of the financing the remaining 50% would not be affordable. Seven out of ten people waiting for a VPO home for rent earn less than €537 per month.

77% of applicants for a VPO home would prefer to rent, given that the option of buying is becoming increasingly less affordable. 72% of the applicants are aged under 35 years old. Public housing policies all but disappeared during the crisis and rents have risen significantly since then, hence the rise in the number of applicants on the register. In fact, the real demand for VPO homes is much higher as many families do not even bother to register given the limited chances they have of being awarded a property.

Across the province, according to data from the local council, 8,457 people are registered on the waiting list for a VPO home, with 1,613 in Torremolinos, 1,365 in Marbella and 1,359 in Estepona. Nevertheless, just 247 families have been awarded a home in any of the Málagan municipalities over the last seven years.

Original story: Diario Sur (by Jesús Hinojosa)

Translation/Summary: Carmel Drake

Brexit Deters Brits from Buying Homes in Andalucía

17 March 2019 – ABC Sevilla

The residential market in Andalucían is booming, despite the slowdown in demand from British buyers. The regional market is split into two clear segments – the market for second-hand homes for holiday use along the Costa del Sol, centred around Marbella and Estepona – and the market for primary residences across the rest of the autonomous region, where Málaga, Córdoba and Sevilla stand out with the most activity.

In the former, despite the decrease in demand from British purchasers due to Brexit, there has been a notable increase in buyers from the north of Europe, especially from Belgium and the Nordic countries.

In the latter, the local population, which primarily comprises families aged between 45 and 55 years old, with savings and stable incomes, is driving demand. For example, house sales in Córdoba grew by 16% in 2018, according to INE.

Original story: ABC Sevilla (by E. Freire)

Translation/Summary: Carmel Drake

Telefónica to Sell an Historic Office Building in Barcelona for c. €110M

15 March 2019 – Expansión

Telefónica is putting one of its oldest buildings in Barcelona up for sale. The property, constructed in 1928, is located in Plaza Catalunya on Calle Fontanella and has a surface area of 8,530 m2 distributed over eleven above-ground floors and a basement.

The asking price stands at around €110 million and Telefónica, which occupies the whole building, is expected to continue as the tenant following the operation, in a deal known as a sale & leaseback.

The lower three floors of the building are currently occupied by Movistar Centre, an initiative from Telefónica, similar to a flagship store, which allows the public to try out the latest mobile phone technology.

According to the initial plans, Telefónica could close the sale of this property during the first half of this year, or early during the second half. Potential buyers include funds, Socimis and other investors.

Original story: Expansión (by Rebeca Arroyo & Ignacio del Castillo)

Translation/Summary: Carmel Drake

Aquila Capital to Invest €250M in 1,300 New Flats in Barcelona

16 March 2019 – Expansión

Aquila Capital is planning to invest €250 million in two large developments comprising 650 flats each in Barcelona through its German fund manager AQ Acentor. Specifically, the new homes are going to be constructed in Viladecans and La Marina del Prat Vermell.

Original story: Expansión

Translation/Summary: Carmel Drake

Traffic Restrictions in ‘Madrid Central’ Drive up Parking Space Prices

16 March 2019 – El País

The Town Hall of Madrid, led by Manuela Carmena, introduced new traffic restrictions in the city centre (Madrid Central) in November last year on a provisional basis. As of Saturday 16 March, fines are now being levied on vehicles that enter the area illegally.

Only those vehicles owned by people who own or lease a parking space within the designated area may access the area, regardless of the environmental label assigned to their vehicles, if they are not residents. As such, parking spaces are in demand and so their prices have soared in the last 4 months.

In fact, prices have risen by between 20% and 30% following the imposition of the traffic restrictions. For a parking space that used to cost €20,000, vendors are now asking €25,000, and for a space costing €40,000 previously, vendors are now asking between €45,000 and €48,000, according to Daniel Lucía, founder of the company ParkingYa!, created twenty years ago and which sells more than 250 parking spaces per year.

According to Pisos.com, the average price of a parking space in the Centro district is now €52,100. In the Spanish capital in general, the average price amounts to €21,300. Moreover, even though the prices of parking spaces rose by between 10% and 20% across Spain in 2018, they are still 30% cheaper than in the years before the real estate bubble, when parking spaces in Centro and Salamanca were sold for €90,000 or €100,000.

These assets generated stable returns of 6.2% across Spain in 2018, compared with 5.5% in 2017, according to Idealista. In Madrid, the yield was 3.4%, although that figure varied by district. Location is key, as that typically determines the ease with which a space can be leased. Parking spaces in the city centre are always less profitable (generating less than 4%) than those on the outskirts but they are safer investments as are rarely unoccupied.

Original story: El País (by Sandra López Letón)

Translation/Summary: Carmel Drake

The Student Hotel to Invest €110M in 2 New Mixed-Use Student Halls/Hotels

15 March 2019 – Eje Prime

The Student Hotel is going to invest €110 million in order to open two new mixed-use student halls/hotels over the next few years in Madrid and Barcelona.

The first, located in a former print house at number 28 Cuesta de San Vicente in Madrid is expected to open in September 2020 following a €60 million purchase and renovation project. Once completed, that property will have approximately 340 rooms, a parking lot, a coworking office space and common areas including a lounge bar overlooking the Royal Palace.

The second, located on Calle Provençals in Barcelona, in the heart of the 22@ district, is scheduled to open in January 2021, following a €50 million investment. It will comprise around 300 bedrooms, a coworking office, common areas as well as a cocktail bar on the rooftop.

TSH is launching a new operating model for these properties, which combines short term lets with accommodation for students. The mixed-use aspect of these building means that between 45% and 50% of them will be used for student residences and the rest for hotel purposes, which will offset the seasonality of the two models.

Besides the two openings described above, TSH is also considering opening other hotels in Valencia, Málaga, Sevilla and País Vasco, in Bilbao and San Sebastián.

Original story: Eje Prime (by Marta Casado Pla)

Translation/Summary: Carmel Drake

Sareb Hires DC Advisory to Overhaul its Servicer Contracts

15 March 2019 – El Confidencial

Sareb is determined to change track. The entity chaired by Jaime Echegoyen  (pictured below) has taken the decision to cut back the contracts that it currently has with its servicers (Haya, Altamira, Solvia and Servihabitat), in an overhaul of the work that is currently carried out by those platforms.

The timing is perfect, given that Haya’s contract is due to expire at the end of this year and the rest of the agreements mature in 2021. To this end, the bad bank has engaged the advisory firm DC Advisory (previously Montalbán) to help it redefine the servicers’ contracts. The business generates commissions of around €100 million per year.

Sareb is keen not to renew the existing contracts with lower commissions but rather to design a completely different model with new conditions and perimeters. The options range from assuming more of the work itself in-house to organising the out-sourcing of the portfolios by region.

The pressure is on for Sareb to divest its assets given that the entity itself has an expiry date and the current climate is ideal for undertaking operations.

Original story: El Confidencial (by R. Ugalde & J. Zuloaga)

Translation: Carmel Drake

Xior Buys Campus Diagonal Hall of Residence from Life for €25M

13 March 2019 – Idealista

The Belgian student hall operator Xior has reached an agreement with Life, the firm specialising in the development of rental assets, to take control of the UPC Campus Diagonal-Besòs hall of residence project. The deal still needs to be approved by the Town Hall of Barcelona and has involved an investment of more than €25 million.

Once completed, the hall of residence will have a surface area of 6,000 m2, distributed over eight floors, with capacity for 300 beds. Life has invested €14 million in the project, which has a land concession for the next 50 years (until 2067) and which is expected to open in time for the 2019-2020 academic year.

The building will be equipped with common areas, such as a music room, a gym, a cafeteria, a restaurant and bicycle parking. It will have plenty of natural light, be surrounded by garden areas and it will have a swimming pool.

Original story: Idealista (by Custodio Pareja)

Translation: Carmel Drake