20 May 2016 – Expansión
After the slump of 2013 and 2014, the Spanish construction company ACR, which specialises in the construction and development of residential housing, has experienced significant growth thanks to the recovery of the real estate market in Spain. “The residential construction segment has clearly improved”, said Michel Elizalde (pictured above), the CEO of the company, which saw its turnover soar by 45% in 2016, to reach €130 million.
The fruits of 2015 (€100 million in new contracts) have contributed to increase the size of the portfolio to €125 million, of which only 10% comes from abroad. Spain, unlike the trend in other construction companies, has offset the irregular nature of the business overseas. ACR is withdrawing from France and is analysing Colombia very carefully, where it is starting to feel the lack of projects due to the difficult economic situation, driven by the unfavourable exchange rate versus the euro, the decrease in the price of oil and in fall in prices of raw materials. “Our international expansion is costing us more than we expected it would when we launched the initiative in 2011”, acknowledges Elizalde. ACR will continue to analyse opportunities in Colombia, but it will abandon the French market, due to the barriers to entry against foreign groups and the different culture there in terms of contracting suppliers.
ACR performs most of its work for third parties, and the remainder relates to developments in different cities, primarily, in Madrid and Barcelona. Currently, the group has around 1,900 homes under construction. According to ACR, the factor that has most contributed to the mobilisation of the Spanish residential market has been the entry of new investors, primarily investment funds, which require the support of groups with experience in construction to develop their projects. “In addition, there was pent-up demand, which is now flourishing, although we are still a long way off the production speeds of 100,000 homes per year”.
ACR, with a controlled debt of €26 million, expects its turnover to reach €140 million this year, on the basis of its performance during the first four months of the year. “We are evolving from a real estate construction firm into a project management partner”, said the CEO of ACR.
Elizalde gave the example of his firm’s agreement with the fund Allegra to develop two housing complexes in Madrid.
Original story: Expansión (by C.Morán)
Translation: Carmel Drake