Millenium Acquires Plot of Land in Sotogrande for €33.2 Million

6 January 2020 Millenium Hotels Real Estate I has acquired beachfront land, including two golf courses, in the area around Sotogrande, Cádiz, for 33.2 million euros. The asset includes a 90,000-m2 plot of land in the Hacienda de San Roque estate, along with the companies Alcaidesa Holding and Alcaidesa Golf. Between them, those firms control an urban plot of land with 50,000 m2 of land for residential and hotel use, two golf courses and a clubhouse.

The socimi intends to develop a 5-star resort with almost 400 rooms (150 in the main building and the rest in 53 villas). The new development will also have several swimming pools, a gym, spa, sports areas, meeting rooms, restaurants and two 18-hole golf courses (Alcaidesa Link and Heathland Golf).

Millenium Hotels Real Estate I ha adquirido terrenos frente al mar, incluidos dos campos de golf, en los alrededores de Sotogrande, Cádiz, por 33,2 millones de euros. El activo incluye un terreno de 90,000 m2 en la finca Hacienda de San Roque, junto con las compañías Alcaidesa Holding y Alcaidesa Golf. Entre ellas, esas empresas controlan una parcela urbana con 50,000 m2 de terreno para uso residencial y hotelero, dos campos de golf y una casa club.

La socimi tiene la intención de desarrollar un complejo de 5 estrellas con casi 400 habitaciones (150 en el edificio principal y el resto en 53 villas). El nuevo desarrollo también tendrá varias piscinas, un gimnasio, spa, áreas deportivas, salas de reuniones, restaurantes y dos campos de golf de 18 hoyos (Alcaidesa Link y Heathland Golf).

Original Story: La Vanguardia – P. R. D.

Translation/Summary: Richard D. Turner

Fitch Points to Real Estate Bubble in Central Madrid and Barcelona

24 October 2017

The Spanish property market and the sharp increases in housing prices in the principal Spanish cities have already triggered alarms

The Spanish real estate market and the sharp price increases recorded in major Spanish cities are triggering alarms. The rating agency Fitch was the first voice to take a position on a question that has been looming for several months: is the market just frothy or are we facing a full-blown bubble?

Fitch’s opinion on the matter is clear. The agency is warning of a bubble in the centre of Spain’s principal cities, though it adds that it does not foresee a generalised bubble in house prices in the country in the short term, due to the high ‘stock’ that must still be absorbed and the restrictions to the purchase of homes.

Just to get an idea, recent data from the valuation firm Tinsa shows how housing prices increased by 20.6% in Barcelona and 15.5% in the capital of Spain in just the last 12 months. These percentages hark back to number last seen in Spain’s pre-crisis boom years.

An analysis of the housing sector in Spain, published on Tuesday by the company, explains that bubbles in specific types of highly localised assets are already evident. Fitch highlights how high demand and limited supply in the housing market in the country’s principal cities are causing severe increases in prices, which are increasingly “unsustainable.”

As noted, annual growth in housing prices of between 15% and 35% have been limited to prime neighbourhoods in Madrid and Barcelona. Fitch believes that this demand has been underscored by quantitative easing, buying by foreigners and investment decisions, as investors look to benefit from asset appreciation and rental yields. However, the ratings agency does not believe that all this mix of  “ingredients” will influence the general real estate market in the short term.

Fitch says it is “highly unlikely” that problems in the real estate market are correlated with the economic recovery

Similarly, the agency asserts that it is “highly unlikely” that the problems in the real estate market are correlated with the economic recovery in general, and foresees that the average sale discounts of foreclosed homes will remain high and stable over the next few years.

This situation will continue as long as the banking sector continues to unload its excess of stock of houses and while buyers insist on deep discounts when acquiring foreclosed homes, the rating agency emphasised.

According to Fitch data, discounts on the sale of foreclosed flats remains “high”, up to 60% on average in relation to the initial valuation, with a range of between 50% and 75%. The dispersion of discounts on the sale of foreclosed properties is shrinking. In fact, the gap between discounts from one end to the other has been reduced to 25 percentage points at the end of 2016, from 35 percentage points in the period between 2010 and 2011. However, the agency advises out that the correction is not generalised.

Difficulties accessing housing

On the other hand, Fitch explains that access to housing will continue to be complicated because the increase in the housing price index exceeds wage adjustments.

Thus, the capacity of families to acquire property is decreasing, also due to a labour market that favours temporary rather than indefinite contracts, leading to difficulties in making the initial 20% deposit required to purchase a home.

It also underlines that access to housing in the long term may be limited due to the gradual elimination of monetary stimuli in the market and the likelihood of higher interest rates.

Original Story: El Confidencial

Translation: Richard Turner

New Permits for Construction Up by 26% to August

31 October 2017

New approvals reach 53,977 units and point to three consecutive years of growth

New construction permits authorised for residential use in Spain stood at 53,977 units in the first eight months of 2017, an increase of 26% compared to the same period in 2016 period (42,869 units). Thus, the increase in permits to build homes maintain its upwards trend in 2017, consolidating three consecutive years of growth, according to data from the Ministry of Development.

Of the total number of approvals granted up to August 2017, 40,773 were for apartment blocks (with a year-on-year rise of 28.4%), and 13,178 were for single-family homes, an annual increase of 18.6%. In addition, 26 permits were requested for other types of buildings not intended for family homes.

In 2016, approvals increased by 28.9% after rising by 42.5% in 2015, consolidating the recovery that began in 2014, a year in which brought seven consecutive years of negative growth to an end with an increase of 1.7%. The real estate market indicator reached a historic low in 2013 (34,288 units), down from the maximum reached in 2006 (865,561 permits), a collapse of 96%.

Original Story: El País – Agência Servimedia

Translation: Richard Turner