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Juan Velayos: “Spain Needs to Create a Large Rental Player”

22 October 2018 – Eje Prime

Neinor Homes is going to reach “cruising speed” in 2019. The listed property developer is working to close the year with the delivery of almost 1,000 homes, half the number planned for next year. In the growth plan for the real estate company for the next few years, its CEO, Juan Velayos, does not rule out selling entire developments to a large rental home manager, a type of player that “Spain needs to create”, assured the director at a breakfast meeting held yesterday in Barcelona.

Velayos recognises that, for the time being, there are not any real estate companies specialising in rental “with such a large volume that would allow them to offer us an attractive margin, but we would be delighted to negotiate with any of them”.

The possibility of expanding its portfolio of clients through agreements with large asset managers could prove attractive for one of the property developers with the largest land bank in Spain and which forecasts starting to hand over 4,000 homes per year from 2020 onwards.

In total, the listed company has buildable land on which to construct 13,500 homes spread over 180 developments all over the country. The external valuation of this portfolio amounts to €1.813 billion, according to sources at Neinor.

“The company has already started to hand over homes and generate a positive cash flow and result”, highlights Velayos. The property developer currently has cranes at sixty developments, which will introduce 5,000 homes onto the market. Following the latest purchases of land in Bilbao, Sevilla and Madrid, “we have the land bank covered until 2021”, confirms the director.

In financial terms, Neinor recorded revenues of €78.9 million during the six months to June. That figure reflects a lot of activity in the marketing area. As at 30 September, the property developer had pre-sold 3,000 of the 7,000 homes that it had on the market, resulting in revenues of more than €1 billion for the company controlled by the Israeli fund Adar Capital.

“We will reach cruising speed in 2019”.  

Velayos trusts that the increase in productivity this year will allow Neinor to reach “cruising speed in 2019”. Next year, the listed company will have more than 120 developments underway, with a percentage of pre-sales that already exceeds 75%.

On this roadmap to lead the Spanish residential segment, Neinor trusts “wholeheartedly” in Cataluña, confirmed Velayos. It represents the firm’s current “star” location, as proven by the fact that 50% of the 5,000 homes that the property developer currently has under construction in Spain are located in this region and, primarily, in the metropolitan area of Barcelona.

“We are working on quite a few operations in the first ring”, said the director. In terms of the profile of the property developer’s buyers in Cataluña, young couples stand out, accounting for 39% of its customers, ahead of families with children (33%). In this sense, it is worth noting that 15% of its clients are investors, a percentage that exceeds Neinor’s average at the national level (11%).

Regarding the moratorium that Ada Colau is planning to launch in Barcelona, and which will oblige 30% of all new developments to be reserved for social housing, Velayos is clear: “That measure will not affect us because we won’t buy land in Barcelona” (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake