Metrovacesa Negotiates with Funds to Build New Offices

23 May 2018 – Expansión

Metrovacesa, the property developer in which Santander and BBVA hold stakes, wrote a new chapter in its history on 6 February with its return to the stock market after five years away and with an ambitious growth plan in its sights. Following a lacklustre debut on the stock market and with a land portfolio worth €2.6 billion, the company is now preparing to show the market that it is capable of fulfilling its planned targets for the hand over of homes and generation of returns from its portfolio of non-residential land.

In this sense, Metrovacesa is holding negotiations with international funds in order to create joint ventures to promote offices. “We are holding advanced conversations and we hope to close several joint ventures before the end of the year”, explains the CEO, Jorge Pérez de Leza (pictured above), in an interview with Expansión.

The proposed model involves creating joint ventures in which the financial partner will control 75%, whilst the remaining 25% will remain in the hands of Metrovacesa: “That would allow us to sell land at prices close to the GAV (gross asset value) or higher and to retain a stake in each project”.

Metrovacesa currently owns tertiary land spanning more than 1.3 million m2, which has an approximate value of €684 million.

In addition to the joint ventures with financial partners, the company is planning to sign more turnkey projects, like the one sealed last year with Axiare for the sale of a building under construction located at number 40 Calle Josefa Valcárcel in Madrid, which will be handed over at the end of 2018, for €30 million.

“The aim of the company was to launch 36,000 m2 through turnkey projects and joint ventures in 2018, and we are going to exceed that figure”, said the CEO. In parallel, the firm is continuing to sell tertiary land. In April, it reached an agreement with the property developer La Llave de Oro to sell a plot in the 22@ district of Barcelona for €22 million and it is negotiating other operations worth €14 million, which will allow it to exceed the objective for 2018. With these operations, the company is generating cash, whilst it prepares the launch of its primary business: the development of homes.


Pérez de Leza reveals that the company will launch between 3,500 and 4,000 units in 2018, which will allow it to advance in its goal of reaching cruising speed in 2021. According to its initial plans, it will hand over 520 units in 2018 and then 700 and 3,500 units in 2019 and 2020, respectively: “That will allow us to be on track to break even by the end of the year and follow a positive path next year”.

In the opinion of the director, one of the property developer’s competitive advantages is its land portfolio, which has capacity for the construction of 37,500 homes. “We can fulfil our delivery objectives for the next eight years without having to buy any land. That means we can take things calmly compared to our competitors”, he said.

Pérez de Leza also defends the group’s commitment to diversify its portfolio: “There is no buildable land left in Madrid, Barcelona and Costa del Sol. If you want to carry out significant deliveries (of new homes), you need to open yourself up to other markets”. And he also reveals that the firm has received offers to sell non-developable land that it has ruled out until the urban planning permits have been obtained. “Land management is an added-value strategy, we have a team ready to do it and we can obtain higher margins. Selling now would mean losing euros along the way”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake