29 December 2015 – Cinco Días
Property development is becoming a business opportunity for companies in the real estate sector once again, following the severe crisis that began in 2008. Even for the least conventional players, such as Drago Capital, an investment fund that normally acquires other kinds of assets like office buildings and commercial premises.
The fund has started to develop a new urbanisation, dubbed Ocean Hills, in the vicinity of Estepona (Málaga) on the Costa del Sol. It represents its first major project targeted at the second home market and the development comprises 62 apartments.
Drago Capital identified the business opportunity in an unfinished development, which it acquired in December 2014, and which it has completely redesigned.
In total, the initial investment amounted to €8 million, which was sourced mainly from a number of family offices, according to the managers of the fund.
Type of apartments
The managers ruled out a development on the beachfront and instead, consider that more value can be obtained inland. The homes are located next to the Monte Selwo park, in a natural environment and with views of the Mediterranean Sea.
62 modern homes will be constructed with a maximum of two bedrooms and all with spacious terraces. Construction will centred around four, three-storey blocks of flats. The marketing of Ocean Hills will be targeted primarily at overseas buyers, mainly in the North of Europe and in the UK. The first part of this urbanisation has already been sold in its entirety to a group of Norwegian citizens.
The development is being constructed on a plot of land measuring 7,000 m2 and there may be an opportunity to construct new buildings on two adjoining plots, which would add another 7,000 m2.
The contract for the construction work has already been awarded to Avintia, which will complete the construction of the homes and resume the work that was suspended before Drago Capital’s purchase. The homes are expected to be finished by the end of 2016.
Drago Capital considers that the market for second homes, with the characteristics found in this development, has returned and it regards this investment as a good opportunity. Moreover, its managers consider that the Costa del Sol area in general, and both Marbella and Estepona specifically, represent places with significant demand.
Original story: Cinco Días (by A. Simón)
Translation: Carmel Drake