Tag: Alquiler Seguro

Quid Pro Quo Launches a €3.5M Capital Increase to Grow its Portfolio

18 June 2019 – Eje Prime

Quid Pro Quo has launched a €3.5 million capital increase to continue investing. The increase will be carried out through the issue and launch into circulation of almost 3.5 million shares with a nominal value of €1 each, according to the Official Gazette of the Mercantile Registry (Borme).

The Socimi owned by Alquiler Seguro will use the funds to continue growing its portfolio. Historically, the company has invested in rental homes costing less than €100,000, mostly in Madrid, but also in Barcelona, Valencia, Alicante, Málaga and Álava.

If the capital increase goes ahead, its total share capital will amount to €12.5 million.

Original story: Eje Prime (by M. C. P.)

Translation/Summary: Carmel Drake

Spain’s Real Estate Sector Condemns the Government’s New Rental Act

1 March 2019 – Ok Diario

The real estate sector has expressed its widespread disapproval of the Royal Decree Law approved by the Government on Friday containing urgent measures for the housing and rental sectors.

Investment funds, real estate experts and rental associations alike have all condemned the new law as discriminatory, restrictive and short-termist.

Claudio Boada, Head Consultant at Blackstone España, said that the new legislation will undoubtedly result in more upwards pressure on prices and a reduction in supply, whilst sources at Fotocasa criticised the lack of tax incentives for landlords who rent their homes at affordable prices.

If this royal decree is ratified, then “rental contracts will have been subject to three different sets of rules in less than three months”, observed Gustavo Rossi from Alquiler Seguro, which is both confusing and unsustainable.

Original story: Ok Diario 

Summary translation by: Carmel Drake

Spain’s Banks Are Queueing Up to Finance Rental Housing

4 July 2018 – El Economista

One of the major challenges facing Spain in the residential market is the organisation of the rental home segment in light of the fragmentation that exists and the boom that is currently underway. There is currently a great deal of demand, but there is also a distinct lack of supply, and the new Housing Plan approved by the Government is not proving sufficient to incentivise the supply with the granting of aid to property developers that build rental housing. In light of this situation, we ask ourselves whether the opportunity that currently exists in Spain to organise the rental market is being taken advantage of?

“I think that the professionals and investors who have launched portfolios thanks to the creation of Socimis are taking good advantage of the opportunity, but I believe that some important players are simply not supporting the sector, such as the Public Administrations. Both nationally and locally, but above all locally, they are failing miserably and this is generating price tensions due to a lack of supply”, explains José Luis Ruiz Bartolomé, Director General of the consultancy firm Chamberí Asset Management.

Along the same lines, José María Cervera, Corporate CEO of Renta Corporación agrees and states that the public sector has been left on the sidelines. “Private capital has taken the initiative in this new segment of the market because it has seen a business opportunity and is looking for returns. And the public sector is going to have to enter, but now the arbitrage and those who are institutionalising it are in the private sector, and so they are going to place more rental properties on the market”.

For all of these reasons, during 2018, we are observing the creation of a new industry. Given that in Spain there are 18.5 million households, according to the latest figure from the Active Population Survey (EPA), and of those, 22% are rental homes, there are 4.7 million rental homes in total. Of that portfolio, only 5% are owned by institutional companies; the remaining 95% are owned by individuals.

“The Public Administration has done something important, which is to reorganise the real estate sector and separate property promotion and development activities, by creating Socimis that operate under a special framework. That has brought us closer to a situation that is more similar to those seen in other European countries. Now, we will have to see how the different players that are emerging in this market position themselves, and in two or three years, we will see the consolidation of this sector, which means that the Public Administrations will have to continue refining their regulations so that the sector can develop and be brought into line with those of other European countries”, says Nicolás Díaz-Saldaña, CEO at Témpore (Socimi of Sareb).

Nevertheless, not all of the experts in the sector concur. David Botín, Director of Real Estate Development at the ACR Group, says that this opportunity is not being leveraged. “It is possible that we are seeing the beginnings of a new rental market, but to date, just 22% of our households are renting and that supply is being provided almost exclusively by individuals. As such, it is very hard to fathom how we will reach the percentages seen in other countries such as Germany, where rental properties account for 48.3% of the market or the United Kingdom (36.6%). It is really hard to increase the stock in Spain because there are 19 million homes, and so a 1% increase means placing 190,000 more homes on the rental market, and that would take between three and four years (…). At that rate, nothing is going to happen quickly. No market works if there is no equilibrium between supply and demand. We need a large and varied supply for this market to work effectively”, he adds.

It is true that, historically, Spain has been a country of property owners, but the cultural and socio-economic changes that have been happening in recent years are drawing some new business lines, where the rental market is taking centre stage and is starting to become institutionalised. The new players in this market are: on the one hand, the Socimis, which are listed companies that serve as investment vehicles with tax benefits. The largest of them is Testa, which will debut on the stock market soon and which is owned by Santander, BBVA, Acciona and Merlin Properties. There are also others such as Azora, Vivenio (Renta Corporación), Témpore (Sareb) and Fidere, amongst the largest. Within this market, we can also include the servicers, which although they do not own properties, manage them, such as Solvia (Sabadell), Anticipa (Blackstone), Haya (Cerberus), Altamira (Apollo and Santander). And then, there are companies owned by the banks, such as Building Center (Caixabank) and other types of companies such as Alquiler Seguro, family offices, etc.

Therefore, now that the new players required to institutionalise this market are starting to be created, the next step is to develop a portfolio of assets. “We are going to need to reach agreements with property developers to build homes for rental (…), and at Sareb, we are going to use some of the land that we have for the co-development of rental homes (…)”, says Nicolás Saldaña.

That is a formula that is starting to spark interest. According to the experts, property developers have always been reluctant to enter the rental market, because they didn’t see it as their business, but in the end, the market trend has changed and whilst the sale and purchase segment will continue to exist, so too will the rental sector and property developers will have to participate (…).

The rental segment is a market that has always existed in the hands of individuals, but now, it is being professionalised, thanks to the arrival of overseas capital. “Investors have contributed many things, besides capital. They have contributed methodologies, rigour, professionalism (…). The banks were not open to this business before, they only financed promotion, but that has changed. For six months now, everyone has been wanting a piece of the pie and now there is a queue of financial institutions wanting to finance this type of business (…)”. Says José María Cervera (…).

Investing in residential properties is profitable. The gross return from investing in rental homes has increased to 7.3% from 6.3% a year ago, due to the strength of demand for rental properties, according to the real estate portfolio Idealista (…).

Original story: El Economista (by Luzmelia Torres)

Translation: Carmel Drake

Alquiler Seguro Finalises MAB Debut of its Rental Home Socimi Worth €9M

4 July 2018 – Eje Prime

The Alternative Investment Market (MAB) is going to welcome another new Socimi into the fold very soon. Alquiler Seguro, owned by the Enacom group, is going to debut its rental home Socimi, Quid Pro Quo (QPQ). The company has obtained the green light from the MAB’s Coordination and Incorporations Committee, according to a statement issued by the Spanish Stock Exchange and Markets (BME).

The company owns 37 assets, all of which are located in Madrid except for one that is situated in Barcelona, and it is worth €9 million in total. The aim of the manager’s Socimi is to buy homes in “the main provincial capitals and their metropolitan areas”, taking advantage of the high current demand for rental homes in the main areas of the country.

Alquiler Seguro is managing the rentals of QDQ’s homes. Of the homes that it operates, 34 are located in the city of Madrid, two in Torrejón de Ardoz and Alcorcón, and one in Barcelona.

The Socimi has indicated that it has a new asset acquisition plan for the next few years, with the aim of “continuing to grow in an organised fashion”, with a maximum indebtedness ratio equivalent to 50% of the value of its portfolio, and future capital increases to finance its investment needs.

The holding company that owns QDQ is Enacom, which owns other companies in the group such as Ivermax, which specialises in advising and managing residential assets for investors; FIM Ibérica, which manages cases involving tenants in arrears; and the technological firm Anexia.

Original story: Eje Prime

Translation: Carmel Drake

Spain’s Residential Rental Sector Continues to Thrive

6 January 2018 – Cinco Días

The current rental market in Spain has nothing or very little to do with the one that existed in the noughties (2000-2009), when being a tenant was almost equivalent to being a second-class citizen, as Gustavo Rossi, President of Alquiler Seguro, recalls. A study compiled by Idealista maintains that whilst in 2000, homes offered for rent represented just 9% of the market, by the end of 2017, Madrid was the third-placed city in the ranking of places with the most rental homes in Europe, whilst Barcelona was ranked sixth.

That increase in supply has been driven by an exponential growth in demand for rental homes and by the boom in tourist rentals. During the first few years of the crisis, demand switched to the rental market, above all due to necessity. Faced with the impossibility of buying a home due to the high prices or the closure of the credit tap by the banks, or even both factors, families had to resort to renting as their plan B.

Nevertheless, and as the economic and employment recovery has been gaining momentum, although the majority of those who rent still aspire to become homeowners, increasingly more households are opting to lease regardless of their economic capacity or solvency level. They are the new tenants by conviction. “The impact that the no-credit-generation (those who are not willing to get into debt and who prefer to pay to use a home) is having on the market is considerable”, explains Rossi.

One way or another, the percentage of households that rent their homes has gone from just 11% in 2001 to almost double that figure, more than 20% in 2017, according to figures from the sector. That progression is even more marked in the large cities since it is estimated that in Madrid and Barcelona, more than 30% of families rent their homes, which brings Spain closer to the European parameters, where the average number of rental homes exceeds that 30% threshold (…).

Sources at Fotocasa are convinced that this year (2018) there will be a lot of talk about the rental market once again. “The high returns that investors are seeking, the boom in tourist apartments and the change in mentality (towards renting) are going to continue putting upward pressure on rental prices, above all in the large cities”, says the firm’s Head of Research, Beatriz Toribio. In this sense, the table published by the Bank of Spain comparing yields on rental homes with those on the stock market (Ibex 35) and fixed income securities leaves little room for doubt. The latest data reveals a gross profit from rental properties of 4.2% p.a., which soars to 10.9% if we add the gain that can be obtained when a property is sold (capital appreciation) (…).

The experts offer two pieces of advice. Before choosing between traditional rental and tourist lets, investors should analyse all of the variables because it is not always more attractive for a property to be let for very short stays (refer to the comparative graph). And the Administrations are demanding that investors bet more on the rental segment, in the form of direct subsidies and tax reliefs, to encourage owners to put empty homes onto the market and that will allow them to reach maturity. “The rental market is here to stay”, says Eduard Mendiluce, CEO at Anticipa Real Estate.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Renta Corporación’s Socimi Rembrandt Acquires 156 Rental Homes

17 October 2017 – Cinco Días

Renta Corporación has just completed its second operation for its Socimi Rembrandt Activos Residenciales. Moreover, the deal is the entity’s largest transaction to date. Specifically, it has invested €50 million in rental homes.

The Socimi, which is managed by Renta Corporación and controlled in terms of its share capital by the Dutch pension fund APG, has completed the acquisition of a residential complex comprising three buildings, spanning a total surface area of 20,114 m2, in Aravaca (Madrid).

The vehicle, which is managed by Renta Corporación, has purchased 156 homes with an average surface area of 102 m2 each, along with 168 parking spaces. This real estate asset currently has an occupancy rate of 51.3% and the Socimi plans to make the asset fully operational over the next few months.

This is the second operation undertaken by the Socimi, which was created at the end of April. In June, it acquired two residential complexes on the outskirts of Madrid, in the municipalities of Navalcarnero and Rivas Vaciamadrid, for just over €25 million. Both properties have a combined surface area of 20,891 m2 and contain 335 rental homes.

Renta Corporación entered the Socimi segment this year (…) as the manager and minority shareholder of Rembrandt. The Socimis’ residential sector is less developed in Spain than those of offices, hotels and shopping centres, where Merlin, Hispania, Lar España, Colonial and Axiare rule the roost.

In the rental home sector, the key players are Testa Residencial, the Socimis established by the fund Blackstone, and several smaller entities such as Alquiler Seguro, VBare and Vitruvio. Rembrandt, which is under the obligation to make its debut on the stock market within two years, is a new line of business that is allowing the listed real estate company Renta Corporación to expand its market.

Whilst the management company brings its knowledge of the Spanish market to the table, APG contributes its enormous financial muscle. The experts forecast that this rental homes segment will continue to grow in Spain, where there is increasingly more demand from tenants.

Original story: Cinco Días (by A. Simón)

Translation: Carmel Drake

Can Spain’s Rental Price Hikes Be Contained?

6 February 2017 – El País

(…) A strong increase in demand and a shortage of supply have led to increases in rental prices, which soared by 15.9% in Spain last year, according to Idealista. Barcelona and Madrid recorded historical rises, with increases of 16.5% and 15.6%, respectively.

No-one in the sector is talking about a bubble, but rather about an imbalance between supply and demand. Nevertheless, this mismatch has raised alarm bells in the two hardest hit cities. The Town Halls of Madrid and Barcelona have asked the Government to change the Law governing Urban Leases (LAU) in order to regulate prices and prevent disproportionate increases.

And the Government of Cataluña has gone even further: it is going to punish landlords who charge expensive rents. The regional government is going to establish a rental price reference index in the Spring, which will establish orientative prices per square metre, based on the size of the home, age of the building, characteristics of the home and its location. Work will be performed on the mathematical formula over the next two months.

Carrot and stick

The tool will reward or penalise ownera through the tax system, in the form of the Property Tax (IBI), in the autonomous section of the Income Tax Return (IRPF) and in renovation work. Moreover, empty home owners may even avoid fines if they rent their properties out in line with the “benchmark price”. “If the rent is lower than the reference index, then the incentive will be positive and if the rent is higher, then the incentive will be negative”, explain sources in the Housing Department at the Universitat Rovira i Virgili (URV) – which (…) at the guidance of its director, Sergio Nasarre, has coordinated the working group whose conclusions form the basis of the Generalitat’s new initiative.

The rental market is gaining weight in Spain. “It has gone from accounting for 17.9% of the market in 2001 to 22.3% in 2015”, said José Peral, Director of Sales and Marketing at Solvia, who notes that the rental sector is undergoing a seismic change. Moreover, we are seeing “market convergence towards average volumes and prices that are more aligned with those observed in other European countries”, said David Calzada, CEO at the Socimi Vbare. Calzada expects prices to continue to rise in Madrid and Barcelona, at a sustained, albeit more contained rate. Oscar Bellette, CEO at Inveriplus, forecasts that rental prices will rise by 7% in both cities this year.

Despite this, the creators of the index consider that Spain still has the smallest residential rental market in Western Europe. Moreover, “it is dysfunctional, expensive and poor quality in nature; 46% of homes are rented on the black market and more than 3.5 million homes are empty”, says Nasarre. (…).

The Catalan method, the first of its kind in Spain, is based on a methodology that has worked in Berlin for years, where 95% of rents are open-ended. The index fulfils its objective in the German capital: indexed rents rise by between 2.7% and 3% per year, whilst those not subject to the index increase by between 5% and 10%, p.a., says Jutta Hartmann, from the Berlin Tenants’ Association. (…).

Nevertheless, the initiative is generating a lot of questions and concerns amongst agents in the sector in Spain. “It is a useless and counterproductive measure, which will lead to an increase in black market activity and in the number of empty homes”, says Sergi Gargallo, Director General at Alquiler Seguro. (…).

Nevertheless, all of the agents agree that the market will benefit from professionalization, thanks to the arrival of companies such as Socimis. “In Spain, 3.8 million primary residence homes are rented out and 97% of those are owned by individuals”, says José Peral, at Solvia.

Original story: El País (by Sandra López Letón)

Translation: Carmel Drake

Alquiler Seguro’s Socimi Makes Its First Purchases

23 January 2017 – El Mundo

The Socimi Quid Pro Quo Alquiler Seguro Socimi, constituted last September by the company Alquiler Seguro, has just announced its first capital increase and the completion of its first home purchases.

QPQ Alquiler Seguro Socimi was the first Socimi constituted in Spain to specialise in rental homes.

Antonio Carroza, CEO at Alquiler Seguro, explains that during 2017, the new company is going to focus on “securing investors to undertake several capital increases and to continue buying properties”. According to Carroza, at the end of the year, the company will decide “whether to debut on the MAB or on the main stock market”.

The Socimi’s aims are ambitious. According to comments made by company’s Chairman, Gustavo Rossi, to this newspaper in July, “the business plan involves raising €500 million over a five year period and for the company to own around 6,000 homes”.

Original story: El Mundo

Translation: Carmel Drake

Landlords Demand Revival Of Express Evictions For Rental Homes

6 December 2016 – Cinco Días

The u-turn made by Mariano Rajoy’s first Government regarding housing policy was accompanied by several draft legislative changes. In this way, in 2012 the Ministry of Development decided to stop financing the construction of subsidised homes (VPO) for ownership, to focus instead on boosting the rental sector (Spain is one of the countries with the lowest percentage of households living in rental properties in Europe) and the renovation of homes.

To this end, in 2013, it undertook a comprehensive reform of the Urban Leasing Law (LAU), which provided for the speeding up of the periods for processing evictions, amongst other things, with the aim of making it possible for owners to recover their homes sooner once judges order tenants to leave properties due to non-payment.

Nevertheless, in the opinion of some operators in the sector, the results, more than three years later, are quite disappointing given that the processes that culminate in the eviction of delinquent tenants are still taking between eight and nine months on average. That is now the main concern for many landlords.

“In a market in which demand clearly exceeds supply, the most urgent thing is to provide more legal security for the owners of homes that are susceptible to being rented out and to implement new incentives that favour both landlords and tenants who fulfil all their obligations”, said David Caraballa, Commercial Director at the brokerage company Alquiler Seguro.

In this sense, that company is demanding three specific measures: the approval of new incentives for leasing in the form of IPRF exemptions; the regulation of tourist rentals; and the creation of specific courts to handle cases involving non-payments and evictions.

In the case of tax incentives, Alquiler Seguro explains that during the last legislature, not only were incentives increased to encourage more owners to lease their properties, but also the fiscal pressures that they have to bear have increased, given that some of the benefits that they used to enjoy (such as from leasing homes to people younger than 35 years old) have disappeared. In this regard, they consider that it is very important that these exemptions be recovered and that progress be made in this vein so that leasing a home is attractive from a tax point of view, like acquiring a property used to be.

The second aspect that requires urgent reform, in Alquiler Seguro’s opinion, is the tourist rental sector. “There is a legal vacuum and a disparity in the rules between those autonomous regions that have decided to introduce regulations, which means that we have clients who admit that it is more profitable for them to rent their properties to tourists than as regular homes”, explained Caraballo. In this sense, the firm is in favour of emulating actions such as the one carried out in New York, where the minimum period for renting a tourist flat has now been set at one month.

In terms of the third aspect, Sergio Lusilla, Managing Partner at Pluslegal Abogados, says that although the timeframes for resolving evictions have been reduced (before the reform of the LAU such cases could take more than two years), the current average of 8-9 months could be reduced to just three with an increase in human resources dedicated to the activity.

“I think that a term of three months would be reasonable for both parties. On the one hand, the owner would recover his home without having to wait as long to put it up for rent again, and, on the other hand, it would give social services sufficient time to analyse the case of the tenant who is unable to pay the rent and take a decision in that regard”, said Lusilla.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Risk Of A Bubble In The Rental Home Market?

4 November 2016 – El Mundo

The rental sector stopped being the bad guy the movie about the residential market a long time ago. Following the burst of the real estate bubble in 2008,  this option for accessing a home (so vilified in previous decades and so closely linked to numerous prejudices in a country where the ownership culture was deeply entrenched) quickly became an attractive an option. Its popularity has been so great that rental housing now accounts for more than 20% of the residential stock and that figure is on the rise. So much so, there are now concerns in the sector about the risk of a bubble.

The EU office for statistics, Eurostat, states that the percentage of the Spanish population living in rental homes now amounts to 21.8% and Spain’s National Institute for Statistics (INE), in its Continuous Household Survey for 2015, said that the figure amounts to 22.7% – the percentage is even higher in major cities such as Madrid and Barcelona -. If we look at this with some perspective, we see that the number of tenants has soared since 2007, when they accounted for just 6% or 7% of all dwellings.

Although perhaps most importantly, beyond the numbers, is the change in attitude towards renting. Nowadays, the hackneyed expression that renting is throwing money down the drain is no longer heard, and Spain is becoming more European in this sense. Currently, the national percentage of renters in Spain is higher than in Norway (17.2%) and is getting close to the levels seen in Portugal (25.1%), Greece (26%), Italy (26.9%), Belgium (28.6%) and Sweden (30.7%). Nevertheless, it is still a long way below the level in Switzerland, where more than half of inhabitants rent their homes (55.5%) and Germany (47.5%) (…).

Meanwhile, Servihabitat has published the first indicator that points to a boom. According to a study by the servicer’s investigation and market analysis platform, the average rental price is expected rise by more than 10% in 2016. Moreover, in the provinces of Málaga, Barcelona, Gerona and Alicante and in the uniprovincial communities of the Balearic Islands and Madrid, rental price increases are expected to exceed the average.

One of the most qualified people to talk about this situation in the rental segment is the firm Alquiler Seguro, which was established in 2007 and which nowadays brokers and manages tens of thousands of rental contracts all over Spain. The President of the company, Gustavo Rossi, acknowledges that the risk of a bubble does exist, above all, in the major cities and in the most touristy areas. “In those enclaves, the supply is insufficient for the demand that exists and, therefore, we see bull markets, with rental prices on the rise. If demand continues to grow and supply continues to stagnate, then we may see a price bubble”, he warned. Nevertheless, he points out that this possible bubble “would not be anything like the one seen with owned properties, when the construction sector stopped focusing on housing needs and took decisions based purely on speculation targets.

Antidotes to avoid the boom

To avoid the threat of a boom, Rossi advocates reactivating the supply, both from individuals as well as from property developers and investors. “The first step would be to put closed housing on the market and regulate the high flow of tourist homes”, he suggests. Similarly, he argues that “we should advance more in the professionalization of the sector to allow owners to lose their fear of renting. He also supports the need for Local Governments to commit to the rental sector “by creating specific courts to rapidly resolve conflicts and boost tax benefits for both owners and tenants, preferably via the income tax framework, and at the same time bring those rents that are submerged in the black market up to the surface”.

The forecasts for rental price increases are starting to cause problems, especially for renters. Currently, good tenants (those who pay on time), so sought after in recent years, are no longer the treasures they once were because the demand for quality is increasing. Some landlords, aware that rental prices are rising, are becoming increasingly less flexible and harsh with their current tenants, for example, when it comes to signing tacit contract renewals or granting ad hoc requests. (…).

In terms of prices, Servihabitat estimates that the average rental cost in Spain amounts to €540 for a home measuring 80m2 to 90m2, with significant variations depending on the autonomous region. In this way, the most expensive average rents are charged in the Balearic Islands (€980/month), the Community of Madrid (€940), Ceuta (€880) and País Vasco (€840), whereas the cheapest rents are paid in Galicia (€280), Extremadura (€370) and Castilla-La Mancha (€380). The servicer also identifies the trend in rental prices, which it describes as increasing in every autonomous region with the exception of Extremadura, Castilla-La Mancha, Navarra, Asturias and Ceuta and Melilla, where prices are stable. (…).

Original story: El Mundo

Translation: Carmel Drake