Political Paralysis Affects The RE Sector

6 February 2016 – Expansion

The political paralysis is also affecting one of the sectors which is more vigorously climbing out from the deep hole in which the crisis left it. BBVA determines that the uncertainty generated by the parliamentary negotiations is undermining  recovery in housing activity since, although residential demand evolves positively, a lower growth in sales and mortgage granting has been observed.
 However, the research department of the financial entity stated that in the absence of data from December, 2015 will be closed with around 400,000 homes sold, 8% more than in 2014, as recorded by Efe. In the first eleven months of the year, the accumulated housing sales growth was of a 10.6% Y-O-Y and already in November the number of transactions lost vigor since, according to data from the General Council of Notaries, about 35,000 properties were sold, 2.5% less than a month earlier. Thus, BBVA holds that in recent months the sales appear to have stuck around 35,000, breaking the monthly growth they had shown in previous months.

Possible acceleration. However, given the good performance observed in the fundamentals of demand for housing, this impasse could be transient. Thus, the progressive reduction of uncertainty in the coming months could bring a further acceleration in housing sales, says the entity. Therefore, according to the Labour Force Survey in the fourth quarter of 2015, employment grew 0.8% per quarter, so that the year ended with 525,100 more employments than in 2014. Membership data also revealed an increase in employment in December and a reduction in the unemployment rate up to 20.9%, three points under the previous year.  The atmosphere of political uncertainty, added to the volatility of financial markets have also been reflected in a reduction in the consumer confidence in January, but yet it is at all-time highs. 
As well as in sales, in November, mortgage granting decreased in comparison with the month of October. According to the Notaries, signed loans decreased by 5.6% compared with October. After that reduction observed in October, visas rose sharply in November with a 29.9% increase. There has also been noticed an increase in cement consumption, in the data of the construction labor market or in the confidence of entrepreneurs.

Original story: Expansion

Translation: Aura Ree

Popular Sells Banco de Andalucía’s HQ In Sevilla For €25M

18 February 2016 – Expansion

New real estate fever is making a large number of transactions boom in Andalusia, especially assets on sale for years. According to EXPANSIÓN, the latest major deal has been featured by Banco Popular, to close a sale agreement of the historic headquarters of Banco Andalucía in Sevilla for EUR 25 million.

The Andalusian company was taken over by Popular, which already had a 80% capital stake in 2009. The remaining stake was largely in the hands of Solis family. 
Two years after this move, the bank chaired by Ángel Ron cleared out the building, located in the heart of Seville. Specifically, it is located at Calle Fernández y González 4 y 6.

The asset has 7,000 square meters distributed in basement, ground floor and six more floors in height. The project of the new owner is opening a hotel, as well as marketing  other street level premises. 
According to sources close to the deal, the purchase has been mediated by Drago Capital on behalf of a company whose identity has not been given. This firm was founded by Oleguer Pujol and Luis Iglesias, currently under investigation for tax fraud and money laundering due to its relationship with the plot of the Catalonian president´s family. One of its most important transaction was the purchase of Santander branch network for 2,000 million.

Original story: Expansion (by Lydia Velasco)

Translation: Aura Ree

The Price Of Luxury Apartments Will Increase By 5% In Madrid

17 February 2016 – El Economista

These property transactions went up by 60% in January.

The price of luxury housing will rise between 4% and 5% on average in Madrid this year, according to forecasts of Engel & Völkers real estate company, specializing in the sale of luxury properties These increases will not lead the industry to a new bubble, as this possibility goes away thanks to the gradual recovery of the sector, Paloma Perez, general director of Engel & Völkers´ Metropolitan Market Center in Madrid.

Moreover, these forecasts are made taking into account the current situation of political uncertainty affecting real estate and which during the last quarter of 2015 hit the market with a 3% cut in domestic sales. In this regard, Pérez is optimistic and ensures that transactions in Madrid increased by 60% in January. Thus, he ensures that the Spanish capital has consolidated its privileged position in the luxury sector market, becoming the third most attractive city for investors in Europe, only behind Berlin and Dublin.

In addition to strong demand from foreign buyers, domestic investors are taking a larger role in the market, as there is a saver´s profile searching for product “once prices have bottomed out”.

Although uncertainty has not stopped this sector, Perez acknowledges that a lower growth rate than that expected. Therefore, and due to the emerging supply shortage in certain areas, she stressed the need for clear urban planning approaches by the City of Madrid. Real Estate development is back, but there is a significant available land shortage, so use changes will be the alternative, and for that we also need a clear and long-term legislation to provide security to investors.

Original story: El Economista (Alba Brualla)

Translation: Aura Ree

CBRE Acquires ABC Serrano Shopping Center

17 February 2016 – Cinco Días

CBRE Global Investment Partners- in joint venture with IBA Capital Partners, has acquired the iconic shopping centre ABC Serrano and a commercial building in Calle Preciados from Zambal Spain Socimi.

CBRE Global Investment Partners will keep IBA Capital Partners as a partner and manager of the two assets, with the aim of current works to continue uninterruptedly, says the former in a notice.

The company is developing a Shopping centre repositioning project of ABC Serrano, as well as a complete remodeling of the building at Preciados, to transform them into reference shopping centres in two of the main areas of Madrid.

ABC Serrano shopping center, located in the heart of Madrid’s Golden Mile, has a gross lettable area of 14.000 m² and will offer an integrated mix with fashion shops, restaurants and entertainment.

ABC Serrano, located at Madrid´s Calle Serrano 61, was sold by Reyal Urbis Real Estate company in November 2013 to Iba Capital Partners fund manager.

The transaction, which responds to the liquidity problems of the Real Estate Company chaired by Rafael Santamaría which is in administration process, closed at the time of selling  Unedisa – publisher of El Mundo, Marca and Expansion, for EUR 96.6 million.

The Shopping Centre has different stores, including a Mercadona supermarket, dining options and a gym.

The building is located at Calle Preciados 9, has a total area of around 2,400 m² and will become a flag ship store.

As noted by the CEO of CBRE Global Investment Partners, Jeremy Plummer, the company had the unique opportunity to access two top-level business assets in Madrid and take advantage of the market recovery through its repositioning.

For their part, the managing partners of IBA Capital Partners, Jesús Valderrama and Thierry Julienne, weep that with this transaction, IBA develops in the Spanish property market a strategic alliance in the sector by the hand of one of the largest real estate assets managers at the international level.

CBRE Global Investors is a real estate management company with 89,000 million in assets under management at December 31, 2015.

Original story: Cinco Días

Translation: Aura Ree

Spain’s Bank Sold €15,800M In Non-Core Assets In 2015

18 February 2016 – Cinco Días

Spanish banks sold non-core assets amounting to €15,800 million in 2015. Spain accounts for 17% of transactions in Europe. Sabadell, Bankia, CaixaBank and SAREB were those most active. The sales pace will go on in 2017.

Investors keep betting on the purchase of non-core assets sold by European banks, with UK on the lead. In total, these sales in Europe accumulated a record of EUR 104,000 million over the past year, the highest level since 2008 according to the European Debt Sales report prepared by KPMG.

Spanish financial institutions divested some EUR 15,800 million, representing 17% of total asset portfolio transactions considered non-core carried out in the continent. Despite these sales, the financial sector still has some 238,000 million in non-performing assets (including doubtful and foreclosed), according to June Data from International Financial Analysts (AFI).

Sabadell, Bankia, CaixaBank and SAREB are so far the Spanish entities making the greater efforts to clean up their balance sheet through divestments of non-core asset portfolios. Bankia and Sabadell remain, however, the hottest sellers in the Spanish market, with one third of the transactions. As a novelty, BBVA has made its first sales over the past year, which brought its first market secured portfolio, an operation called Proyecto Liceo. And BMN with two projects, Neptuno and Pampa.

United Kingdom was the country with the highest sales activity during past year. Debt portfolio divestments totaled EUR 39,000 million. KPMG´s report, one of the most active companies in this type of transaction keeps that Spain has embarked on a path of deleveraging and economic recovery which makes it an interesting country for investors, this way competing closer to UK and Ireland – the latter with sales of EUR 25,000 million over last year. The same applies to Italy, where the amount of transactions totaled 13,300 million, largely from sales of real estate assets owned by its banks. Divestments in UK and Ireland are related to assets included in their “bad banks”. As an example, the study notes that the British entity managing problematic assets in the UK sold through Granite Project a portfolio of EUR 18,000 million to Cerberus Fund.

Despite strong sales, investors keep their interest in Europe in general and particularly in Spain, especially in the purchase of loan portfolios. Ongoing projects in the continent total 44,000 million. The report also reveals that the pace of this activity will go on in 2017, partly due to access to funding at very low interest rates.

The partner responsible for the sale of KPMG´s Corporate Finance portfolios in Spain, Carlos Rubí, stressed that Spain and Italy, “are increasingly active and attracting the investor´s appetite at the expense of UK and Ireland.”

Original story: Cinco Días (by A. Gonzalo)

Translation: Aura Ree

Real Estate Investment Reached 10.300 Million In 2015, Lower Than That Of 2007

15 February 2016 – La Vanguardia

The investment in the tertiary real estate sector in Spain reached EUR 10,300 million in 2015, an amount surpassed only in the past decade by the 10,800 million registered in 2007, according to a report by Cushman & Wakefield.

The last quarter of 2015 saw unremembered business volumes with 3,800 million invested, well above the quarterly average for the last years, resulting in a growth of 61% over the previous quarter and 33% over the same period of 2014 .

The major players in the market were the SOCIMIs, which reached 68% of the investment in the fourth quarter.

Nearly 83% of the investment is concentrated in offices and commercial sectors, with the office sector the one capturing the most investment with nearly 69% and EUR 2,600 million.
A percentage that contrasts with the 48% registered in the previous quarter.

The commercial sector was second with 600 million, 33% lower than the previous quarter. Activity in the industrial sector increased again after the downturn of the third quarter and captured 6% of the total investment.

In addition, in 2015 there has been a decline in large transactions. While in 2014 the weight of transactions over 100 million represented more than two thirds of the amount invested, in 2015 it only reached half of that amount.

Last year, the activity of domestic investors increased its relative weight, representing 60% of the total volume and much of the foreign investment came from the traditional Europe, approximately 15%.

In 2015 yields have continued to fall in almost all sectors. However, this yield drop has been slowing in the industrial sector.

By 2016, the consulting firm expects that investment in commercial assets goes back to show high activity, since they are trading large transactions as that of El Corte Ingles and the placing on the market of more shopping centers, which is expected to be closed between the short and medium term.

The office sector is expected to remain strong, but it is foreseeable that the levels seen in the fourth quarter of 2015 are reduced.

Original story: La Vanguardia

Translation: Aura Ree

Solvia Will Market Over 6,000 Neinor Homes Properties Valued At 400 Million

15 February 2016 – Expansion

The agreement will mean an increase in sales of these properties for Neinor Homes.

Solvia has reached an agreement with Neinor Homes to market a portfolio of 6,200 properties of this residential developer valued in EUR 400 million and consists mainly of residential assets acquired from financial institutions, the company said.

Specifically, 60% of the properties in the portfolio are homes and, to a lesser extent, are business premises (17%), land (13%), offices (6%) and other assets such as warehouses, garages, lumbers, etc. Likewise, 80% of the assets are located in Andalusia, Madrid and the Basque Country.

The contract will mean for Neinor Homes an increase in the sales of these properties, while allowing Solvia to increase the market share of the company in the regions where these assets are located.

Solvia accumulates over 50,000 properties sold since 2011, through its multi-channel marketing model and its open and territorial structure platform that allows the company to maximize the value in the marketing of assets.

Original story: Expansion (by Europa Press)

Translation: Aura Ree

The Price Of Housing Rose 6.6% In 2015, According To Registrars

15 February 2016 – Expansion

The price of housing rose 6.6% in 2015, with an increase in sales of 11.2%, to reach 354,538 transactions throughout the year, according to the Real Estate Registration Statistics corresponding to the fourth quarter of last year.

With respect to the third quarter, the value of property increased by 0.9%. This way, the registrars point out that the cumulative decrease in prices since the peak levels of 2007, reaching 28.4% continues to “soften”.

Meanwhile, the home sales inscribed in the property registries in the fourth quarter of the year reached 84,031 transactions, representing an increase by 7.9% over the same quarter of last year.

With respect to the previous three months, transactions fell by 9.4%, showing the traditional seasonality of registrations made in the last quarter of the year, the report adds.

Again, the distinction between new and second-hand homes explains the evolution of housing sales. Thus, second-hand home transactions increased by 39.7% year-on-year, while the number in new homes fell by 36.9%.

For its part, foreign demand reached 14.4% of total sales in the fourth quarter of 2015, with a year-on-year result of 13.2%, which is above the 12,000 quarterly sales and exceeds the 46,000 sales of 2015.

Original story: Expansion

Translation: Aura Ree

Solvia Will Create A Network Of 35 Real Estate Agencies

15 February 2016 – Expansion

Banco Sabadell property sold properties for 1.657 million in 2015, year in which it made a 24 million profit.


Solvia just closed the most important financial year since becoming the real estate subsidiary of Banco Sabadell. After integrating in record time the management of an asset portfolio from SAREB for a gross value of EUR 13,000 million, the company has doubled in size and rocketed both its income and benefits for its staff. Thus, assets under management have grown from EUR 15,000 million to 28,000 million, with a total of 140,000 sites operated throughout Spain, of which 66,400 assets are homes. 
The server is now preparing to take a new step in its growth strategy: to launch this year a network of real estate agents in order to capture private home sales market. This means that the company will now market homes that neither belong to the bank or to SAREB nor to promoters to which Sabadell has financed. 
The first Solvia street real estate office has just opened in Alicante as a pilot. However, the intention of the company is to extend the initiative and open 35 more agencies throughout 2016, as Javier Garcia del Rio – director general of the servicer, explains 
The plan of the real estate company is that its chain of agencies focus, in the first phase in Valencia, Catalonia, Balearic Islands, Andalusia and Madrid, the most populated areas and where Solvia has more business experience. “The goal of the agencies network of is not to sell homes already existing in our portfolio, but accessing the individual market, which is much larger and the fastest growing” he says.

Results

In total, the volume of sales mediated by Solvia in 2015 amounted to EUR 1.657 billion, exceeding by 20% the initial budget, which corresponds to the end customer´s sale price. This figure is 43% higher than that of 2014; but excluding SAREB portfolios – which did not compute through all the year, the increase was 17%. If transactions are calculated based on the gross value, sales totaled EUR 2,954 million. The goal for this year is to sell properties for 2,000 million in terms of the final sales price. 
Thanks to the commissions generated by these transactions and fees in management concept Solvia charges its customers and asset owners -Sabadell, SAREB and some international investment fund which has assigned to them their portfolios in Spain, the company invoiced 121 million in 2015. Earnings before taxes (EBT) reached 24 million- a 117% increase over the budget-, making Solvia a profitable subsidiary of Sabadell. The goal is a benefit exceeding 50 million in 2016.

The staff doubles 

Solvia increased its staff by 87% last year, going from 243 to 453 workers. 56% are located in Alicante, where the corporate headquarters and the core business of the company are, and also has employees in Madrid (20% of the total) and Barcelona (16%). 
35% of Solvia sales come from the network of independent real estate agents (APIs) it works with; 17% are contacts made by branches of Banco Sabadell, and the remaining 48% are direct sales made by the servicer through their website, participation in fairs and own agents.

The development, Key     

Another big Solvia´s business legs Solvia is housing development on behalf of Sabadell Bank on the best sites it has on its balance sheet. Since 2014, it totals 64 developments with more than 2,600 finished, in progress or planned homes. “With the direct development we allow the bank to maximize the value of their assets,” he explains. 
According to Garcia del Rio, unlike other bank real estate platforms, Solvia has an industrial and non-financial profile. In this regard, it promotes very little credit – only some portfolios coming from Ceiss- and its vocation is not to disappear once all the real estate bank load has been sold, but to expand its business to be a permanent real estate agent in the market. 
In this line, it is already negotiating with several funds in order to manage its assets and wants to grow in consultancy and sale of properties to family offices and all kind of investors in the middle segment of thye market Thus, in 2015 the retail sales of Solvia fell to 64% and the remaining 36% were operations with investors.

Original story: Expansion (by Sergi Saborit)

Translation: Aura Ree

The Hotel Industry Warns That A Moratorium Could Discourage Investment In Madrid

13 February 2016 – Expansion

City occupancy Level audit ordered by the mayoress, Manuela Carmena, threatens to jeopardize the recovery of the sector and drive away investors.


The hotel industry stands up for the potential of Madrid as a tourist destination and warns that if the occupation audit ordered a few days ago by the city council derives in a moratorium, it will drive away foreign investment.

The industry welcomes the initiative of the Mayoress, Manuela Carmena, provided it is addressed to make sense of hotel supply growth, which is experiencing a boom of new projects in the last months after several years in dry dock. 
This is precisely what chains and investors reproached Ada Colau, its counterpart in Barcelona, when she decreed the suspension of ongoing projects last summer.
But if the audit is a prior step towards a moratorium similar to that of Barcelona, the opinion is also unanimous. It will suddenly dissipate the interest of domestic and foreign investors after a record year in which Madrid beats Barcelona as top destination in the urban segment, with EUR 589 million in transactions. 
This interest is still held at the start of 2016 although investment growth usually lowers in the first months of the year “Madrid is still a preferred investment objective, ahead of Malaga, Valencia, Seville, Bilbao and Barcelona, where having a hotel means having a treasure, but behind holidays hotels, where there is a genuine investment fever,” says Miguel Vazquez, partner in charge of hotels at Irea consulting company. “The investment market is not as it ended in 2015 but not for a lack of interest, but lack of product,” agrees Inmaculada Ranera, CEO of Christie & Co. However, there are factors that cast uncertainty. On the one hand, the political context and the formation of the new government. And, secondly, the give and take between the city of Madrid and Dalian Wanda on the rehabilitation of Edificio España.

In the sector they suggest that the decision of the Chinese investor, who has hired JLL to find a buyer for the property, could not be definitive but a simple negotiating tactic, although they admit it has created legal uncertainty. 
At the moment, the risk is limited and most investors are still looking for good deals, although more carefully. The roadmap established by Carmena and her team once the report on their hands could nonetheless reverse this situation. In the sector it is believed that a moratorium would paralyze the recovery of Madrid as a destination. And above all, they argue that it would be an illogical measure. 
”Colau had it on her political program, but Carmena did not have it”, said Miguel Casas, Head of CBRE Hotels. 
Madrid – hotel company heads say, does not have the pressure suffered by Barcelona due to the boom in tourist apartments and what it needs is more international visitors. In Barcelona these represent 80% of the total; in Madrid, they are below 50% -. According to Luis Arsuaga, executive vice president of JLL Hotels, “if revenues per room or tariffs came down, it would make sense to think about it but, on the contrary, the occupation is getting better and better.” 
Regulation

In this line, say hotel companies, more hotel space and foreign brands, a coordinated tourism promotion between City Hall and Community and – above all, the illegal supply to be regulated and not to limit the private sector is what is really needed. According to Irea, there are 22 ongoing projects totaling 6,000 hotel places and an economic impact of EUR 145 millioN which could be affected by a sudden moratorium like that of Barcelona. Among them, for example, projects to convert the former headquarters of Caja Madrid and the building that houses Café Berlin into a hotel; or the expansion of Asturias Hotel. 
Moreover, according to these estimates, each hotel place in Madrid generates 24,155 direct and indirect Euros and 22 jobs are created per 100 spaces. Since 2008, the number of stays increased by 2.5 million, which has resulted in an impact of EUR 380 million. 
Apart from the withdrawal of the investment, a moratorium would “create a bubble like the one Barcelona is living, soaring the value of operating hotels and tourist accommodation,” says Bruno Hallé, Magma HC partner.

Original story: Expansion (by Yovanna Blanco)

Translation: Aura Ree