Category: Residential

Vbare Invests €100M To Expand Rental Home Portfolio

17 May 2017 – Expansión

The Socimi Vbare is currently analysing the possible purchase of new rental homes worth €100 million. In addition to expanding its business portfolio, the firm wants to expand the geographical reach of its activity, currently centred on Madrid, to include other cities.

The firm plans to close these operations in the short term provided it manages to raise the necessary funds. It is currently working to secure financing from domestic and overseas institutional investors, according to a statement issued by the company, whose shares are traded on the MAB.

Vbare believes that the Spanish residential market “will continue to attract the attention of large investors in the market and will consolidate itself as one of the priority investment focuses of 2017”.

To this end, the Socimi ratified its intention to raise funds in order to “take advantage of the investment opportunities that will arise in the Spanish market over the next three to five years”.

Vbare has just published its results for the first quarter of the year, which saw it record a net profit of €1.19 million, down by 8.8% compared to a year earlier. The rental income from its housing portfolio increased six-fold to €260,000.

Original story: Expansión

Translation: Carmel Drake

Twice As Many Housing Permits Were Granted In Málaga In Q1 2017

16 May 2017 – La Opinión de Málaga

The province of Málaga has seen a sharp rise in the number of building permits granted for the construction of new homes during the first quarter of the year with respect to last year and as such, it is recording its best start to the year since the crisis, providing further evidence of the recovery that began in the sector a few years ago.

Specifically, 1,397 housing permits were granted by Málaga’s College of Architects during the first quarter of the year, more than double (631) the figure recorded during the same period in 2016 (a rise of 121% to be precise). To find the highest number of permits granted in the province during the first quarter in recent years, we have to go back to 2008, when almost 4,900 were granted, a year that also marked the start of the recession.

The number of permits dipped to a historical minimum in Málaga in 2014 (when only 798 were granted in the whole year) and since then the heat of the general economic recovery has boosted the figures. In total, 2,454 permits were granted in 2015 and 3,041 in 2016. The data for the start of 2017, which was published at the beginning of May by the College of Architects, confirms the upward trend, and augurs a further increase this year, provided nothing out of the ordinary happens. In fact, during the first quarter, more housing permits have been granted than in the years 2012 (1,134), 2013 (904) and 2014 (798) in total, which were veritable years of drought in the sector. Nevertheless, the number is still a long way below the pre-recession figures (for example, in 2007, more than 27,000 permits were granted). (…).

The college of architects believe that the objective for the province should be to grow year on year to reach an annual volume of around 20,000 housing permits by 2020, which would be sufficient to meet the natural demand of the Malagan population, as well as to supply buyers from further afield, be they domestic or foreign, in search of a second holiday home. (…).

Returning to the data for the start of 2017, the statistics from the College of Architects reveal that the housing permits granted between January and March were primarily concentrated in the towns of Málaga capital (369), Estepona (238) and Rincón de la Victoria (235). Those three towns accounted for 60% of the permits granted in the province during the first quarter of the year. Behind them came the following towns: Fuengirola (127), Mijas (100), Ojén (76), Manilva (67) and Marbella (52). (…).

The number of finished homes rises

In terms of the number of finished homes, the figures for the first quarter of 2017 also show an increase. The College of Architects notes that between January and March, 504 properties were finished in Málaga, representing a significant increase of 84% compared to the first quarter in 2016. The finished home statistics dipped to historical lows in 2015 (when only 1,134 homes were completed during the entire year) and have increased only slightly since then (1,235 in 2016). (…).

Original story: La Opinión de Málaga (by José Vicente Rodríguez)

Translation: Carmel Drake

 

INE: House Sales Exceeded 40,000 In March

16 May 2017 – Cinco Días

Last week, Spain’s National Institute of Statistics (INE) published data relating to house purchases in March, which revealed that the number of transactions recorded in the property registers amounted to 40,461 during the month. Such a high figure had not seen since February 2011, six years ago; it represents an increase of 26.9% with respect to the number recorded a year ago.

In general, and despite some apathy at the start of 2017, the fact is that March was a good month from the perspective of real estate activity, given that 168,448 properties changed hands, a figure that represents an increase of 17.7% with respect to the same period in 2016.

By type of property, INE highlighted that 89.8% of house sales involved free (unsubsidised) homes and 10.2% were social housing properties. Sales of the former increased by 27.6%, whilst sales of the latter rose by 21.5%.

In addition, 18.2% of the homes sold in March were new build properties and the remaining 81.8% were second-hand. One of the most noteworthy statistics is how month on month, the number of operations involving new build properties is beginning to show greater strength than in the past because the construction and sale of developments that were started two years ago when the market showed its first signs of having bottomed out, are now bearing fruit.

In this way, during March, the number of new build transactions increased by 21.2%, when not so long ago, they were recording negative figures, and the number of second-hand transactions consolidated themselves for another month with an improvement of 28.3% with respect to March 2016.

In the classification by autonomous region, INE’s statistics, which are prepared using data from the property registers, revealed that house sales grew in every autonomous region, with the exception of the Canary Islands, where they decreased by 3.5% YoY. Moreover, it is worth mentioning that the increase in the volume of transactions exceeded 30% in 10 of Spain’s autonomous regions. (…).

The reactions from the real estate portals to this data were not as expected. Fernando Encinar, Head of Research at Idealista, explained that “the data from the month of March exceeded 40,000 operations, which represents a milestone in terms of the normalisation of the market. Although this process is happening at two speeds, the fact that more transactions were signed in March than a year ago in every autonomous region (with the exception of the Canary Islands) is a sign that the markets are moving closer to their natural equilibrium”.

Meanwhile, Beatriz Toribio, Head of Research at Fotocasa, said that (…) “the more than 40,000 transactions that were closed in March brings us back to the levels of 2011 and shows that the pace that is building in the sector. This improvement is having an effect on prices, which have been recording YoY increases for seven consecutive months”. (…).

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

UNIQ Residential Hits The Ground Running

13 May 2017 – Press Release

Two and a half years after the creation of UNIQ Residential, its first project is in the process of being handed over in the heart of Barcelona.

RS257 (www.rs257barcelona.com), a project in the “Mayfair” equivalent of Barcelona located between the prime streets Paseo de Gracia, Diagonal and Rambla Catalunya was always going to be in high demand due to its location, but in addition, the thought that the UNIQ team has put into efficient layouts, flexibility of design and sustainability make this one of the most emblematic residential projects of 2017 in Spain.

The building had a protected facade originally designed by Robert Terradas, a Catalan rationalist architect who developed the original building in 1958, which OAB, the award-winning architectural office of Carlos Ferrater, managed to further enhance by keeping the original spirit, but creating bespoke windows which allow the apartments to have 14m of uninhibited light entering the living spaces.

RS257 is a project with 15 units, including 3 penthouses with unparalleled views of Barcelona overlooking the Tibidabo mountain, and the main streets of the Eixample district. The ground floor unit of RS257 is currently under negotiations to be let to an exciting global retailer and the project has received the first LEED silver certificate for a multi-residential building in Barcelona.

While UNIQ Residential is young as a company, the team has a vast experience in development projects. Its creation was the result of merging an executive team that over 40 years had developed over 100 projects in their prior life, with Urban Input, a boutique real estate asset management firm focused on commercial real estate for institutional investors and Mario Chisholm, a real estate investor who had spent his time in London previously, often focusing on the Spanish market.

“We are extremely excited by the completion of this unique project” says Mario Chisholm, one of the co-founders and board members of UNIQ, “We knew we were buying in a great location, but the success has exceeded expectations as we bought the building before the perception of Spain had changed, in early 2014. Since then, the economy has strengthened, banks are lending again and demand is strong for well-designed and well-delivered products in good locations. We are also thrilled about the progress UNIQ has made since its inception; the integration of the different teams has been incredible and the positivity, energy and drive UNIQ has to deliver future projects sets out an exciting future.”

Other than RS257, UNIQ is developing another 4 prime residential developments in Madrid and Barcelona. Keep an eye out, more to come soon!

About UNIQ Residential

UNIQ Residential is an urban developer founded in 2014 with a strategy and purpose to respond to a more informed flat buyer by focussing on the quality of projects through design. UNIQ’s management team has a breadth of experience in all areas of real estate development, from conception to completion and have been working together for 20 years, building over 100 developments. Currently, UNIQ has 6 live developments in Barcelona and Madrid and is looking to expand further across Spain.

Original story: Press Release

Edited by: Carmel Drake

 

The Real Estate Recovery Cools Off In Valencia

12 May 2017 – Las Provincias

The recovery will have to wait. The signs of reactivation that were seen in the real estate development sector in the Community of Valencia in 2015 cooled off again in 2016. Although the number of operations involving land purchases grew by 38% last year, from 511 to 826, the fact is that they involved smaller spaces. This means that the surface area sold to property developers decreased by 10.6% from 2.3 million m2 to 2 million m2, according to data from the Ministry of Development.

The only exceptions were in the tourist areas to the south of Alicante and in the city of Valencia. “The area to the south of Alicante is still the most active place, with significant property development activity (c. 2,000 homes under construction), led by a significant recovery in purchases by non-residents. The typical buyer at this initial stage of the recovery can afford to acquire a home with own funds or with a significant down payment, representing more than 40% of the property value”, said the Director of Sales and Marketing at Solvia (Banc de Sabadell), José Peral.

In 2015, demand for buildable residential land increased along the Alicante coast, primarily in the coastal tourist towns that spark the most interest in the international market, such as Xàbia, Dénia, Benidorm, Calpe and Orihuela-Costa. Thus, in some of these areas and, in particular, in the latter, the supply of available land decreased considerably and transaction prices increased, which is why some property developers have started to move to the northern coast of Alicante, for example, to Finestrat.

Nevertheless, this trend, which started in the south of Alicante is now moving to other areas. For example, the new build market in the city of Valencia did an about-turn in 2016 after several years of inactivity, according to Peral. Currently, a great deal of activity is being undertaken: a lot of projects are already underway, building permits have been granted for others, and others still are in the pre-sales process.

This situation explains the focus being placed on these markets by the new players arriving in the Community of Valencia, such as the fund Neinor Homes, which is constructing its first projects in the Valencian neighbourhood of Malilla and in Playa de San Juan de Alicante.

In terms of the capital’s metropolitan area, there has been a slight uptake in demand for buildable residential plots of land in towns with more than 20,000 inhabitants. It is also worth noting the number of transactions involving plots of land (…) for family homes, involving small and medium-sized local property developers.

Original story: Las Provincias (by A. Castillote and Á. Mohorte)

Translation: Carmel Drake

Socimi Optimum III Will Debut On Stock Market On 16 May

11 May 2017 – Expansión

A new listed real estate investment company (Socimi) will debut on the Spanish stock market next week. The company in question is Optimum III, specialising in value-added residential assets (i.e. those requiring active management to maximise their value).

The company will debut on the MAB with a reference value of €10 per share, taking the total valuation of the company to €54.03 million. The bell will ring on 16 May.

The new Socimi is the thirty-third to debut on the MAB (four others are listed on the main stock market). Its portfolio comprises six buildings, five in Barcelona and one in Madrid, all acquired within the last three months. The properties include Diagonal 333, in Barcelona, purchased in January for €12.8 million; and General Moscardó 7, in Madrid, bought in February for €14.86 million.

The Socimi’s most recent purchase involved the building on Juan de Garay 5-7, in Barcelona, which it acquired for €1.7 million on 13 April.

The company is managed by BMB, as disclosed by Expansión. That company, which is headquartered in Barcelona, has accumulated eight funds since it was founded in 2006. The firm led by Josep Borrel also manages another Socimi that is already listed on the stock market, Optimum Real Estate.

Optimum III’s main shareholder is the American investment fund Bluemountain, which owns 83.287% of its share capital. The firm Itzarri EPSV holds another 9.2541% stake, whilst another 15 shareholders own less than 5% each.

The new Socimi has set itself an investment period of 12 months, beginning on 1 March, and the aim of liquidating its assets no later than the seven years after its debut on the stock market.

Its investment target comprises value-added assets, ranging between €2 million and €20 million per property, with an average price of around €2,500/m2. Including construction work, the investment undertaken by Optimum Re Spain will reach a total of €80 million between own funds and debt.

Arcano Valores has been the placer and registered advisor to Optimum III, which will trade under the code YOVA, whilst BNP Paribas is acting as the liquidity provider.

Original story: Expansión (by Rocío Ruiz and José Orihuel)

Translation: Carmel Drake

Experts Rule Out Risk Of RE Bubble In The Short Term

10 May 2017 – El Confidencial

The fact that the Spanish real estate market is enjoying happier times is more than clear. And all of the players in the sector are aware of the fact: property developers, consultants, construction companies…Nevertheless, the “overheating” that some say is threatening certain segments of the market, is falling well short of a full-blown real estate bubble, for the time being at least. At least that is according to the speakers who participated in the “Real Estate Investment Opportunities” day organised by El Confidencial and Colonial.

Real Estate Market Forum

Indeed, Juan José Brugera, President of Colonial – which is currently evaluating its transformation into a Socimi – stated that the market is “a long way from a bubble. What we are seeing is the launch of projects”. In this sense, he pointed to the German market by way of example. “It is very stable. (…) What you have to do is take a risk and invest. With this stability in terms of value, your investment will be rewarded”.

In his opinion, “a bubble is something else. It is an excessive value, but, one of the characteristics of the European property sector is that financing is very tight in terms of size and type. I don’t see a bubble, what I see is a more professional management of the assets, where the ability to generate value is what will determine prices, provided the markets are not affected by global circumstances”.

The CEO of the consultancy firm JLL in Spain, Enrique Losantos, also rules out the risk of a bubble. “Given current prices, you could be forgiven for thinking that the market is overheating, but the fact is, there is still a long way to go, especially for those investors who know how to extract value from the portfolios of assets that are coming onto the market and which should be invested in and managed to adapt them to the demands of the current market. These players will be able to obtain returns, even in the double digits (…)”.

Who will control the large rental stock?

Meanwhile, Ignacio de la Torre, Chief Economist at Arcano, said that “there is not a bubble at the moment, but if we continue at this rate, there will be one”, especially in the residential market. He highlighted the significant interest that certain assets have sparked in Spain, such as, for example, rental homes, especially amongst institutional investors. “When everything was clogged up, it seemed like Spain was going to go bankrupt, but then investors with large risk appetites entered the market to inject liquidity and the economy started to work again. Now, those hedge funds are starting to recycle the assets they bought and as the market for rental homes increases, so institutional investors are entering the segment, which is what is happening in other countries too. In the future, insurance companies and pension funds are expected to become the owners of the large stock of rental housing in Spain. (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Tinsa: House Prices Rose By 6.1% YoY In Large Cities In April

10 May 2017 – Expansión

House prices are continuing to rise sharply, boosted by an acceleration in the large cities and in the Balearic and Canary Islands, according to the latest estimates from the appraisal company Tinsa. Specifically, the price per square metre of properties rose by 2% in April with respect to the same month last year, according to figures published yesterday.

Although those figures are seven-tenths lower than those registered in March for the country as a whole, we cannot speak of a slowdown, given that the general trend over the last few years has been increasingly bullish. Moreover, the data also reveals a growing acceleration in several key markets, such as the large cities, where prices rose by 6.1%, and the Balearic and Canary Islands, where property prices rose by 4%.

In this way, the rise in house prices in Spain’s provincial capitals and large cities has accelerated by six-tenths with respect to the same month last year, to reach its highest rate since the outbreak of the crisis. This increase is being spearheaded by some of the prime areas of Madrid and Barcelona, where supply is constrained and demand is rocketing. Nevertheless, over the last few months, the price rises have been spreading to more and more neighbourhoods, given the strong buyer pressure in the most sought-after areas.

Meanwhile, property prices in the Balearic and Canary Islands are rising at a rate of 4%, driven by two main factors. On the one hand, the high level of demand from overseas buyers. On the other hand, the purchase of homes as investments, given that owners can rent them out easily for short-stays for most of the year, which raises their yields. Prices in these regions have fallen by 27.8% since 2007, i.e. by one-third less than the average.

On the other hand, this situation contrasts with the weakness in house prices along the Mediterranean Coast, in metropolitan areas and small towns, where there the stock of homes for sale is greater and demand is lower. (…).

Two speeds

(…). By way of illustration, house prices in the Mediterranean region are still 46% lower than their peak levels of 2007. (…).

In metropolitan areas, prices are still falling, with a decrease in property prices of 2.6%. That data also represents a slowdown of more than two points with respect to last month and is a kick in the teeth for a market that has seen its price plummet by 45.9% since the real estate bubble burst. The reason is precisely due to the fact that the crash in the market made house prices in the centre of large cities more affordable, which meant that most buyers did not have to move tens of kilometres away to buy a home.

Original story: Expansión (by P. Cerezal)

Translation: Carmel Drake

BBVA: Housing Market Makes A Strong Start To 2017

10 May 2017 – Europa Press

BBVA’s latest report highlights the “positive” evolution of the real estate market at the beginning of 2017, given that house purchases are still being “backed” by mortgage financing, construction is continuing to grow and house sales are maintaining their upwards trend.

At least that is according to the “Real Estate Observatory of Spain”, compiled by BBVA Research, the financial entity’s research service and BBVA’s Real Estate area, which states that the recent review of the macroeconomic scenario by BBVA, which forecasts GDP growth of 3% this year, introduces “an upwards bias into the forecasts for 2017”.

In this sense, the entity highlights that house sales maintained their growth rate, supported by the “strong performance” in terms of employment and mortgage loans, whilst construction activity also “remained dynamic”.

According to data from the General Council of Notaries, during the first two months of 2017, 72,371 homes were sold, up by 13.9% compared to a year ago, but in line with the average for 2016 as a whole.

Amongst the factors that BBVA points to as reasons for the improvement in the real estate sector, are the labour market in Spain, which “has continued to improve”, as reflected by Social Security sign-on data, such as the Active Population Survey (EPA). According to the EPA, the number of people in employment grew by 0.6% during the first quarter of the year.

In addition, credit conditions remain “favourable” for households. Interest rates are at minimum levels: the mortgage rate for new operations remains at around 2.2%; meanwhile, the 12-month Euribor rate hit a new minimum in April, closing at -0.119%.

The mortgage market supports residential demand

Moreover, the mortgage market is continuing to drive residential demand. New loans to buy a home rose by 23.5% YoY during the first quarter, excluding refinancings, according to data from the Bank of Spain.

In turn, during the first two months of 2017, almost 12,800 housing permits were granted (20.3% YoY).

Finally, BBVA highlights that the dynamics in the market for land “are still positive”, given that during the first two months of the year, the number of transactions involving land rose by 12.8% YoY, which represents an increase in the traded surface area of 8.8% in one year.

Original story: Europa Press 

Translation: Carmel Drake

The CNMV Approves Housers As A RE Platform

9 May 2017 – Cinco Días

Housers markets itself as “the leading real estate investment platform”, which allows users to invest in property in the best areas of large cities for as little as €50. It pays rental income to its users and allows them to benefit from the appreciation in real estate prices when the property they invest in ends up being sold.

It is the largest platform in the sector, with more than 42,000 users, of which around 40% have already invested. Since it began life in April 2015, its users have invested more than €22 million. And, following extensive negotiations with the CNMV, the platform has now received approval from the supervisor chaired by Sebastián Albella. (…).

Sources familiar with the situation say that, since the beginning, Housers has been in contact with the supervisor, chaired in theory by Elvira Rodríguez, and then its conversations intensified with Sebastián Albella. In this way, the problem with Housers was that it joined together fund-raising activity with the promotion of that activity, and that was not permitted by law.

Sources close to the entity explain that the platform has spun off both activities. (…).

As such, Housers Global Properties will now be called Housers Global Properties PFP SL. In an email sent out to its users, the firm explained that since it began operations in April 2015, it has managed to finance 92 properties: 73 in Madrid, 9 in Barcelona, 7 in Valencia, 1 in Marbella and 2 in Palma de Mallorca.

Housers generates a return, known as a dividend, which varies by project, but the historical average amounts to around 3.6%. On the firm’s website, it advertises a return of 6.6% from investing in Zurbano. In addition to the rental income, investors benefit from rises in property prices, amounting to more than 12%, on average.

Sources close to the platform highlight that its mantra is to obtain certainty around its investments, which is why it has to buy homes in central areas, as a way of saving. Its core cities are Madrid, Barcelona, Valencia and Palma de Mallorca. Housers mainly invests in housing and retail premises for rent, as well as in properties for renovation and subsequent sale. (…).

How does the platform earn money? Housers charges a 10% commission on the dividends it pays out, as well as on the proceeds from its property sales. (…).

Original story: Cinco Días

Translation: Carmel Drake