16/06/2014 – El Mundo
The Management Company For Assets Arising from the Banking Sector Reorganization, commonly known as Sareb by its acronym in Spanish, has not only become the largest home seller but also still contributes significantly to re-establishing the market with its “Crossover Project“, including 80 plots scattered around 16 regions ready for 7.200 apartments (6.600 developable square meters valued at €332 million).
These plots are said to lay the foundation formed by apartments debugged from the “boom” excess and therefore dictating the pace of the market. Above all, having in mind the average price per square meter in this portfolio, €500, as well as future discounts of up to 36%, around 30% if a lot of €100 million worth purchased and 6% in case of cash payment.
At the moment, Sareb advised by Aguirre Newman is believed to have sold around twenty of these plots by now. The bad bank transferred 17 plots (jointly 72.641 built square meters and another 106.412 developable) to Castlelake for €80 million (€55 million if a proportioned 24% discount applied) and the rest, valued at €30 million, sold through the retail channel.
The purchase cost Castlelake 750 €/m2 per house and 520 €/m2 per developable sqm on average. The portfolio is ready to carry altogether 1200 dwellings in Madrid (three plots), Barcelona (seventeen) and Alicante (one plot). Out of the entirety of the transferred developable square meters, 17.039 – for about 200 homes – are located in the capital.
Mean cost per square meter of a new dwelling built on one of the plots posts 2.100 €/m2. Carolina Roca, CEO of Roca Grupo Inmobiliario explains “houses bring expenses which are independent from economic cycles: 20-25% of the total is the land, 15% management, 40% construction execution and 20-25% is the margin of developer´s profit. This implies that to built 100 dwellings with a garage and a storage room worth €150.000 plus VAT, the plot´s total cost cannot cross 350 €/developable square meter. Roca reminds that during the bubble inflation the total expense reached 50% of the final price on non-subisidized houses.
One of Sareb´s executives asures the bad bank “seeks dynamic market but at prices affordable for wider public”. Furthermore, Carlos Fernández del Viso claims the huge land operation positions the company as the agent who triggers the market again, as it did in 2013 with its first residential and loan transactions.
Original article: El Mundo (by Jorge Salido Cobo)
Translation: AURA REE