Málaga Capital Attracts Attention from Top Real Estate Investors

10 April 2018 – Diario Sur

“We are in love with Málaga”. Just like that, without any qualms, Juan Velayos, CEO of Neinor Homes declared his love for the city. (…). Neinor is one of the large real estate giants to have emerged during this new cycle in the housing market. Fed by international investment funds, the property developer is building tens of thousands of homes all over the country. And Málaga is one of the jewels in its crown. “Our forecast sales for the province amount to €850 million”, announced Velayos today at a real estate meeting organised by the Association of Construction Companies and Property Developers (ACP) in the auditorium of the Museo Picasso.

The most striking aspect is that 40% of those forecast sales correspond to Málaga capital, where Neinor starred in a macro-operation last year when it purchased land from Unicaja, as a result of which it is going to be able to build almost 1,000 homes. Velayos highlighted the great appeal of the city for investors and property developers, in part due to the tourist boom and in part because “things are being done significantly better here than in other places” in terms of the processing of urban development plans. (…). The other experts participating in the forum were in agreement with Velayos: Málaga capital is starting to become an entity in its own right in the real estate market, whereas previously it was always in the shadow of the Costa del Sol brand.

In this way, the Regional Director of CaixaBank in Andalucía, Juan Ignacio Zafra, highlighted that the city “is enjoying a unique time”, adding that the western coast “continues and will continue to operate well” and that the eastern coast “has enormous potential capacity” still to be developed.

The Commercial Director of Tinsa, Pedro Soria, stressed that Málaga is the Mediterranean capital where homes are sold the quickest, after Barcelona. And the Director of Capital markets at Savills Aguirre Newman, Pablo Méndez, revealed that the office market in the city also has significant potential, given that Madrid and Barcelona – until now the only two cities that have operated as proper markets in the tertiary sector – are showing signs of depletion and investors are on the hunt for new opportunities. “Very few cities have an office stock of the size of Málaga: around 600,000 m2. But the stock is old, with a significant shortage of buildings that fulfil current requirements in terms of sustainability, energy efficiency and comfort”, he explained. “Monthly rents average around €12/m2, which is insufficient for investors, but we are now seeing maximum rents of €18/m2/month in the centre. When the average rent reaches €14/m2/month, we will start to see new office building projects, which is what we need”, he added, warning, as an aside, about the need to reserve tertiary land in attractive areas of the city.

The Secretary-General of the ACP, Violeta Aragón, highlighted the good times that the real estate sector is enjoying in the province, although she ruled out any risk of a bubble. (…). “The growth percentages may seem exorbitant, but the reality is that we are starting from levels well below those seen ten years ago”, she explained, providing some examples: last year 3,800 new home permits were granted, compared with 40,000 in 2008; and the average price per square metre amounted to €1,479/m2 last year, compared with the peak of €2,415/m2 in 2008.

Original story: Diario Sur (by Nuria Triguero)

Translation: Carmel Drake