28 February 2018 – El Confidencial
Valencia is running out of urban land that’s ready to develop. The municipal area is running out of batches of “finalist” land after several years of paralysis in the development of new urban planning spaces. The recovery in demand and the credit granted to the sector over the last year have attracted investors and property developers interested in positioning themselves in an urban market. And that of the third capital city of Spain is proving appealing, since prices there are still well below the saturation point that they are experiencing in Barcelona and, above all, in Madrid. Many of the local real estate businessmen from the boom era have filed for liquidation, and so now it is listed property companies, managers backed by large international and domestic funds and new industrial firms with surplus cash, that have taken over the batten to launch new residential projects.
In total, the city has 60 new build projects in process and being marketed, and the forecast is for another 15-20 developments to come onto the market during the course of the year, according to a sector report compiled by the consultancy firm CBRE, which was presented by the Director of the office in Valencia, José Ángel Sospedra, and the Director of New Build properties in Spain, Carlos de Almeida. Interest from property developers has been concentrated in the few neighbourhoods in which there is “finalist” land to be completed: Patraix, Nou Campanar, Malilla Norte and Quatre Carreres. They are areas that were processed during the real estate boom whose development was cut short by the economic crisis and whose plots ended up in the hands of the banks, for the most part, which, in turn, have been placing them with third parties and which have now ended up in the hands of companies such as Neinor, Aedas, Aelca and Q21.
Almost all of the plots are being processed, which is why CBRE expects that within three to five years, the buildable plots for new build properties will have run out. “Due to the current scarcity of available urban land in the city of Valencia, house prices are expected to increase in the medium term. During 2018, demand will focus on developments located inside the city where land is still available, such as Benicalap, Patraix and Moreres. And for the first time since 2008, we will see interest return to the city’s natural areas of expansion and its metropolitan areas, given that the stock of urban land in the city of Valencia will run out within the next 3 or 4 years”, said the bulletin.
Last year alone, the number of transactions increased by 26%, with more than 8,000 homes sold. That figure will grow over the next two years because that is when the new build flats and houses that property developers started to market and promote last year are going to be notarised (…).
The consequence of this phenomenon, in addition to greater interest in areas that are further away from the old town, in settlements in the metropolitan area, is that property developers are starting to become interested in non-finalist areas pending development, such as the PAI del Grao (…) and the undeveloped plots of Fuente de San Luis, close to the new Hospital La Fe (…).
Original story: El Confidencial (by Víctor Romero)
Translation: Carmel Drake