Neinor Invests €275 Million Up to September and Accelerates the Pace of Development

31 October 2017

The company has available land valued at 1.4 billion euros, enough to build 12,000 homes.

Neinor Homes accelerated the pace of its investments and pre-sales in the third quarter of 2017. In the first nine months of the year, the developer acquired 24 plots of land to develop more than 3,000 homes for 275 million euros, of which 103 million euros were invested just in the third quarter.

The company, which went public on March 29, finalised sales worth 169.4 million euros, in line with forecasts, and closed September with a net loss  of 6.1 million euros and a positive gross operating profit of five hundred thousand euros.

So far this year, Neinor has delivered five developments with a total of 185 homes, which has allowed it to generate revenues of 39 million euros. The rest of the proceeds came from its servicing business (21 million euros), through a contract that it has with Kutxabank for the management of the bank’s real estate assets, and especially the legacy assets, for 109 million, through the divestment of assets acquired as part of the agreement reached in 2014 with the financial entity.

The developer, led by Juan Velayos, has 71 developments in production, including some 5,500 homes, of which 2,000 units are in the construction phase, and will not reach cruising speed before 2020 when it expects to deliver between 3,500 and 4,000 homes annually.

Neinor executed pre-sales for 370 homes in the third quarter, totalling 1,080 pre-sold homes for the year, worth 368 million euros. The company’s total accumulated pre-sales reached €697 million with 2,101 homes.

Arrival in Portugal

The CEO of Neinor, Juan Velayos, explained that with the last quarter’s investments, the company had completed 100% of the purchases projected in its strategic plan for the whole of this year and 42% of its objectives for 2018. The company continues to analyse opportunities and has a pipeline worth 300 million euros.

Velayos announced that the company is studying investments in new markets such as, among others, Portugal. “The Portuguese market fits in with our strategy, the macroeconomic environment is propitious, there is limited supply and real demand, and the next step is to identify if land is available that can be bought at the prices we want, without forgetting the time factor. Licensing takes more time in Portugal than it does in Spain. ”

Taking advantage of opportunities in Catalonia

As for Catalonia, Velayos has indicated that Neinor’s exposure in the region is limited. Thus, although 16% of its total number of homes – some 30 developments and 1,900 homes – are in this area, of which, 1,500 homes are already in production, and more than 900 have been pre-sold.

In this way, only 4% of the value of its assets in Catalonia have not been taken up. “Catalonia has been a good play during these last two years even though there was already some political uncertainty; I am much more optimistic than just a few weeks ago. I think that common sense in Catalonia is going to recover,” he added.

Regarding the purchase of land in Catalonia to launch new developments, the CEO of Neinor explained that the firm is studying some operations in the region and that if they fit with their strategy, they will take advantage of them. “If windows of opportunity are opened, we are going to take advantage of them, Catalonia is an engine of the Spanish economy, and it continues to be so despite the circumstances,” he assured.

New board member

The company has altered the composition of its board of directors after the reduction in Lone Star’s participation, which sold 27% of the developer promoter in an accelerated operation, last September.

Thus, Neinor has announced the departure of proprietary director Dominique Cressot, Lone Star’s representative, and the appointment of Alberto Prieto as independent director. Thus, the number of independent directors now amounts to four out of a total of seven.

Prieto is currently Managing Director for Real Estate at BDO Spain and has extensive experience in the residential land market developed over more than 20 years at Knight Frank, of which he was CEO, and at BDO.

Original Story: Expansión – Rebeca Arroyo

Translation: Richard Turner

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