Spain’s Large Property Developers Own Land to Build 100,000 Homes

5 February 2018 – Expansión

Metrovacesa, Aedas, Neinor, Vía Célere, Aelca, Quabit, Realia and Insur own land spanning more than 15 million m2, which they want to use to take advantage of the new real estate cycle.

The upturn in the residential sector is consolidating and the large property developers want to take advantage of the new cycle to obtain returns from the portfolio of land they have accumulated in recent years. The new generation of property developers Metrovacesa, Aedas, Neinor, Vía Célere and Aelca, and some of the listed survivors of the crisis, such as Quabit, Realia and Insur, now own land spanning more than 15 million m2 with the capacity to build more than 100,000 homes over the next few years.

Metrovacesa, controlled by Santander and BBVA is the property developer with the largest portfolio of land on its books. Following a capital increase amounting to €1.108 billion last June, undertaken through the transfer of assets from its main shareholders, the firm owns 6 million m2 of land, with the capacity to build 37,500 homes. As at 30 September, the firm owned a portfolio of residential land with a gross value of €1.9 billion, of which €1.3 billion corresponded to developable land.

Currently, the company has 51 projects under development to build 2,263 homes and it plans to reach cruising speed in 2021, with the delivery of between 4,500 and 5,000 units per year.

Stock market debuts

Metrovacesa, which plans to debut on the Madrilenian stock market tomorrow (Monday) with a market capitalisation of €2.5 billion, says in its IPO brochure that it does not need to acquire additional land to fulfil its annual house building objectives for the next eight years.

The next firm by volume of land is Aedas. That company, in which the US fund Castlelake holds a stake, owns land spanning 1.5 million m2 with capacity for 13,270 homes. The property developer, which started to trade on the main stock market in October, invested €124 million in land purchases in 2017 alone for the construction of 3,159 homes.

The strategy of the firm led by David Martínez involves reaching its cruising speed in 2022, when it expects to record revenues of more than €1.0 billion and handover more than 3,000 homes per year.

The other listed property developer, Neinor, which was the first to make its debut on the stock market in March 2017, owns land spanning 1.3 million m2, worth €1.3 billion and with the capacity for more than 12,000 homes, according to the most recent public information as at 30 September.

Specifically, during the first nine months of last year, that property developer acquired 24 developable plots for the construction of more than 3,000 homes for €275 million.

The firm led by Juan Velayos will launch 2,500 homes during 2018, will begin construction on another 5,000 units and will hand over more than 1,000 homes this year. In 2020, Neinor expects to reach its cruising speed and hand over between 3,500 and 4,000 homes per year.

Some of the most active property developers in the purchase of land and launch of new developments also include Vía Célere and Aelca, both of which have plans to debut on the stock market soon. Vía Célere owns land spanning 1.43 million m2, with capacity for 12,200 homes. The company chaired by Juan Antonio Gómez-Pintado invested €227 million in land last year.

The other property developer controlled by Värde, Aelca, owns a portfolio of developable land spanning 1.28 million m2 for 12,566 homes. The firm expects to launch 49 new developments in 2018 and will have 86 residential projects underway at different stages of completion.

Meanwhile, the listed property developers that survived the crisis, Quabit and Insur, own land with the capacity for 6,720 and 4,691 homes, respectively. Quabit plans to invest €670 million in the purchase of land until 2022, when it will reach cruising speed with the hand over of 3,000 homes per year, whilst Insur will invest €80 million in purchases until 2020 in order to hand over 600 homes per year.

In terms of the residential business of Realia, the firm controlled by Carlos Slim owns a land portfolio spanning 1.85 million m2, of which 25% is developable (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake