9 April 2018 – Cinco Días
Metrovacesa, Aedas, Neinor, Vía Célere, Aelca… they are the everyday names of the new players that are reviving the house building sector following the real estate crisis. They are the companies that have stolen the limelight thanks to their ambitious plans and the return of these kinds of businesses to the stock market. But there is a quieter successor that is silently gathering a giant portfolio of land and with some ambitious plans of its own in the residential development sector. The company in question is ASG Homes, backed by the British fund manager ASG Capital Management and its subsidiary ASG Iberia.
Recently, the initiative has been baptised ASG Homes, the brand that will reach out to potential homebuyers. That will be the logo that clients will see when they visit one of the developments. Behind the brand is the ASG Iberia team, which in recent years has been acquiring a collection of plots in different provinces across Spain to accumulate 500,000 m2 of land in total, one of the largest portfolios in the country.
“We are the great dark horse”, recognises Víctor Pérez Arias, CEO of ASG Homes for Spain and Portugal. The current portfolio of land gives the company the possibility of building 5,000 homes. “The aspiration is to double our existing capacity”, he adds. That means investing more over the coming months to accumulate a portfolio with the potential for the construction of 10,000 homes. To date, the company has invested €400 million of its own funds to obtain its current land portfolio.
The property developer focuses on operations involving the purchase of debt with real estate collateral and on complex situations to reduce the prices it pays. Precisely for those reasons, the company rules out competitive tenders for acquiring land.
Currently, its plots are located in Valencia, Alicante, Málaga, Costa del Sol, Madrid, Salamanca and Sevilla. Specifically, in the Andalucían capital, the company is already planning to build 1,100 homes. So far, it has not entered the market in Barcelona, above all because prices are high in the city, but it does not rule out future opportunities.
Based on data provided by the companies, ASG is positioned in fifth place in the ranking of property developers planning to build the most homes, with around 2,000 units in the pipeline. It comes in behind only Neinor, Metrovacesa, Aelca and Amenabar.
Moreover, this year, the property developer plans to sell 1,500 new homes and hand over 500 homes to its clients. The market is looking at all of these new companies with a magnifying glass, above all of those that are listed on the stock market, to check whether they are capable of fulfilling their plans. Pérez Arias says that the company is already handing over its first developments in Alicante.
In Spain, these types of international funds have starred in the recovery of the house building sector, either through the creation of new property developers, such as in the case of ASG, or by refloating companies with problems.
The new property developers include Neinor, backed initially by Lone Star, after it purchased Kutxabank’s real estate business for €935 million. It was the first property developer to debut on the stock market in more than a decade and its main shareholder has already collected its profits after selling all of its share on the market.
It was followed on the stock market by Aedas Homes, backed by Castlelake. The 100-year old Metrovacesa also returned to the stock exchange, in that case, led by Santander and BBVA. Moreover, the fund Värde has two property developers that are currently sounding out the same path (Aelca and Vía Célere). In turn, Baupost has created Q21 Real Estate. Cerberus has also acquired the historical Inmoglacier and in the same vein, Bain Capital has purchased Habitat. Another example is the alliance between Gestilar and Morgan Stanley.
Original story: Cinco Días (by Alfonso Simón Ruiz)
Translation: Carmel Drake