22 January 2018 – Expansión
Spain’s large property developers are warning that the shortage of land and the slow pace at which licences are being processed will lead to a rise in house prices.
Following the start of the concentration of the large Socimis, with the takeover of Axiare by Colonial as the main exponent, the real estate sector is looking to other companies in the sector to star in the new corporate operations, namely, property developers led by investment funds.
With a land portfolio spanning almost 5 million m2 and more than 10,000 homes under construction, Neinor Homes, Aedas, Vía Célere and Aelca are the leading property developers to have emerged from this current real estate cycle. With the first two listed on the stock market and the second two with plans to that end, their directors say that the commitment from large investment funds and the creation of new property developers is positive, despite the competition. “Competition motivates and helps us. It improves processes, which leads to a better purchase experience for the end customer”, explains Javier Gómez (pictured above, top right (on the left)), CEO and founding partner at Aelca, speaking at the New Housing Industry conference, organised by Expansión and its supplement magazine ‘Su Vivienda’ (Your Home), both part of the El Mundo group.
Although companies and funds, such as Harbert, Patrizia and ASG, have their own growth plans in the residential market, the shortage of available land for all of them implies that they will have to form alliances between them. “We are in a privileged position. We hold land on our balance sheet for the development of our business plan over the next five years. Having said that, we are obliged to analyse operations that add value for our shareholders, including corporate operations”, said Sergio Gálvez, Director of Business Development at Aedas.
In this context of corporate operations, Vía Célere, which is preparing to debut on the stock market in 2018, and Aelca, have something in common, which, nevertheless, also pushes them apart: their largest shareholder is the US fund manager Värde Partners. “There has been a lot of talk about whether Aelca and Vía Célere could work together, but the structure of and funds and the assets they own are different and that could lead to conflict. We would need to resolve that first”, said Juan Antonio Gómez-Pintado (pictured above, top left), founder and CEO of Vía Célere.
“We think that Spain is a market that is going to be consolidated, where there is space for between five and ten large players and where size is a significant advantage”, reveals Juan Velayos (pictured above, bottom left), who, nevertheless, recognises that it is difficult in his case, since his firm does not have a single controlling shareholder, following the gradual departure of its founder, Lone Star, from the company’s share capital over the last few months.
Original story: Expansión (by Rocío Ruiz and Jesús de las Casas)
Translation: Carmel Drake