26 January 2017 – Cinco Días
The fund Castlelake is backing the same market as the funds Lone Star and Värde Partners by resuming construction of new homes. Between the three of them, the US entities have now invested almost €5,000 million in the sector. The latest player to join the party has created the company Aedas Homes, with a land portfolio worth €1,000 million and the capacity to construct 12,000 homes. (…).
Castlelake has been purchasing land in Spain since 2013, when the property crisis was more acute and few international investors were interested in the real estate sector in Spain. In the end, the fund has created an independent company to construct its homes, into which it has placed 1,350 million m2 of land. 90% of those plots are ready to be built on (with permits) and the firm’s strategy is to continue buying.
For this operation, the fund has been advised by Merlin Properties, which is listed on the Ibex 35. The heads of the fund were looking for a recent real estate success story that did not present any conflict of interest – the Socimi is not involved in the residential sector –and so they asked its directors for help. Moreover, of the 45 people that work for the new company Aedas, seven come from the Socimi, specifically, from the former Testa (acquired by Merlin in 2015), given that they had experience in residential development at the now extinct Vallehermoso.
Castlelake is a firm from Minneapolis that manages €8,600 million in assets around the world. (…).
The new real estate company’s plans
Aedas – the name has Latin roots, stemming from the word to build – will construct homes in seven provinces: Madrid, Barcelona, Alicante, Valencia, the Balearic Islands, Málaga and Sevilla. “We are committed to the areas where there is clear residential demand”, said David Martínez Montero (pictured above), Director General at Aedas. Martínez Montero previously led the Operación Chamartín project between 2013 and 2016, the Valdebebas Compensation Board and the Cuatro Torres project in Madrid.
The new company is going to launch 14 developments to construct 1,000 homes, with the aim of finishing them by the end of the year and handing them over between 2018 and 2019. These homes will be located in Madrid (capital, Boadilla and Las Rozas); Barcelona (Hospitalet, Sabadell and Vilanova i la Geltrú); Sevilla (in the capital and in Dos Hermanas); Valencia (capital and Denia); and Estepona (Málaga).
Aedas is not proposing a pre-determined rate of investment or committing to building a specific number of homes per year. “It will depend on how the market absorbs our first 1,000 homes. We are not going to make the same mistakes as in the past”, said Martínez Montero. The company’s strategy involves tackling the primary residential market with urban products for middle class buyers, a segment where demand exists. (…). The directors of the company believe that there is a need for new builds given that hardly any new homes have been built in the last decade.
The arrival of the funds
It is the same theory that the other funds that have burst onto the residential scene are applying. The first was Neinor Homes, owned by the Texan firm Lone Star, with the plan to invest €2,000 million in land and building homes. That company was created from the business purchased from Kutxabank (…).
The next to emerge was Dospuntos, created by Värde Partners, from the ashes of the San José Group’s real estate division, which plans to invest €2,000 million between now and 2021. (…).
Original story: Cinco Días (by Alfonso Simón Ruiz)
Translation: Carmel Drake