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Aelca to Invest €200M Per Year in Land Purchases

28 February 2018 – Expansión

Aelca is moving forward with firm steps and already forms part of the new generation of listed property developers controlled by funds or, in its case, is on the verge of making its stock market debut. The firm constituted in 2012 by Javier Gómez and José Juan Martín, now the joint CEOs of the group, closed last year with a profit before tax (PAT) of €25.5 million, up by 154% YoY, and revenues of €132.2 million, up by 27%. And, it is preparing to continue growing through purchases.

“In 2018, we are going to have a production capacity, both in terms of construction work as well as pre-sales, of around 6,300 homes and, in 2019, we should reach cruising speed, with the delivery of around 2,000 or 2,500 homes. We have been working on and handing over developments since 2014, and growing at sustainable rates”, explains Javier Gómez to Expansión.

Specifically, the company sold 1,118 units in 2017 and handed over almost 500 homes. This year, pre-sales are expected to exceed 1,600 homes and revenues are expected to amount to around €160 million or €170 million.

Aelca wrote a new chapter in its history in the middle of 2016 when the US fund Värde purchased a 75% stake in the property developer from Avintia for €50 million and gave a boost to the business. “Investment in the company over the last 18 months since then has been significant, with more than €400 million spent on land purchases. Over the next few years, we plan to invest between €150 million and €200 million per year in land”, explains the director.

After several capital increases, Värde currently controls 80% of Aelca, whilst the remaining 20% remains in the hands of the founders.

In terms of the stock market debut, Gómez acknowledges that going public is a natural exit for the funds and expects that it could be an option in 2019. For the director, although Aelca is already the right size to list, the group’s plans involve continuing to grow and taking advantage of opportunities.

Gómez acknowledges that to debut on the stock market after its competitors may be a risk, but adds “we have a history of deliveries, a strong track record and a set of results that support us”.

Madrid and Andalucía

Specifically, the group has purchased land in Dos Hermanas (Sevilla), mostly from CaixaBank, for a mega-project involving 2,100 homes.

Moreover, like its rivals such as Neinor, Aelca is looking at the possibility of buying up non-finalist land and is analysing operations worth between €50 million and €70 million. “We are analysing the option of acquiring land under development, at the most advanced stage possible, in Madrid and Andalucía”, he explains.

Currently, Aelca has a land portfolio spanning 1.3 million m2, worth more than €1 billion and with capacity to launch around 13,000 homes.

The company has six regional offices in País Vasco, Cataluña, Madrid, Málaga and the Comunidad Valenciana and is not planning to expand its footprint at this stage. “There are still great opportunities in those locations”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake