Neinor & Vía Célere Lead the Ranking of Forecast House Deliveries for 2019

28 January 2019 – Cinco Días

Year after year, the new major players in the house construction sector are seeing the numbers in their growth plans increase. During 2019, the largest property developers created since 2015, and some of those reborn from the ashes during this latest upwards cycle, are expected to approach their cruising speed, above all, the listed companies Neinor, Aedas and Metrovacesa, which have been called to lead the residential construction sector together with Vía Célere. Even so, the sector is still very fragmented with lots of small companies.

Neinor Homes and Vía Célere have become the two entities with the largest number of home deliveries this year. In both cases, 2,000 clients will receive the keys to their homes, according to figures provided to Cinco Días by around twenty property developers. In these forecasts, the companies have detailed three concepts for their plans for 2019: homes that they will launch onto the market, homes that they will start work on and forecast deliveries.

Neinor Homes, created in 2015, and led by Juan Velayos (…) expects to start work on 3,000 homes this year, coming close to the cruising speed that it defined during its IPO, and it will start to market another 2,000 units.

Meanwhile, Vía Célere, controlled by the US fund Värde Partners, is in the middle of integrating the assets of Aelca, the other property developer owned by Värde, which has now emptied its portfolio (…). It is the only one of the large players that is not yet listed on the stock market; its plans in that regard were postponed last year.

The listed firm Aedas, also created in 2017 with land from another US fund, in that case, Castlelake, is also perceiving an upwards turn in its numbers. This year, it will hand over 1,055 homes, start marketing 2,500 homes and start building 3,000 homes, just two years after first appearing on the stage, with David Martínez as its CEO.

Meanwhile, Metrovacesa, the other large listed company, controlled by Santander (and in which BBVA holds a minority stake), clearly leads the business plans, with up to 4,500 homes to be newly marketed and whose construction will be launched. This one-hundred-year-old real estate company, which was cleaned up by the banks following the crisis, launched its new project in 2017 with Jorge Pérez de Leza, from Grupo Lar, as the CEO.

In terms of those entities backed by funds, the rescued firm Habitat also stands out, reactivated last year by Bain Capital, and which is planning to market 3,000 homes this year. Similarly, Cerberus took control of Inmoglacier in 2017 (…). That firm declined to provide its forecasts to this newspaper, but it is also set to play a significant role, given that it has become one of the real estate arms of the US fund, one of the most active in the purchase of assets from the banks and which also owns Haya Real Estate as its servicer.

The group of twenty-odd companies consulted will hand over almost 16,000 homes this year, will start work on 34,000 units and will begin marketing another 30,000 properties. These figures reflect the enormous fragmentation in the sector, which in the last 12 months has started 103,000 homes in total, according to figures from the Ministry of Development as at October 2018.

Small specialist property developers still carry a lot of weight, unlike in other countries where large players exist. Moreover, even though the rate of residential construction has taken off since 2014, it is still well below the peak of 2006 when 865,000 building permits were granted.

In terms of the new players also boosted by the international funds, they include other developers with a high rate of house sales: AQ Acentor (owned by the German fund Aquila), which is going to put 1,700 homes up for sale; Kronos Homes (backed by several European and US investors), which will market another 1,600 homes; and ASG Homes (backed by the British firm ActivumSG), which plans to add another 1,000 homes.

In terms of the survivors of the crisis, Amenabar stands out, the Gipuzkoan company, which expects to start work on 3,608 homes next year and to hand over 1,245 units. Another of the stalwarts is the Madrilenian firm Pryconsa, owned by the Colomer family, which has already reached a high number in terms of house starts: 1,285. In more modest terms, other important firms include the Basque entity Inbisa and the new entity Áurea Homes, the residential subsidiary of the Navarran construction group ACR (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

German Fund Manager Aquila Capital Launches its own Property Developer in Spain

1 August 2018 – El Economista

The German fund manager, Aquila Capital, is demonstrating its commitment to Spanish property by launching a new property developer called AQ Acentor.

Until now, the firm has worked in Spain by delegating its development activities and in partnership with other real estate companies such as Inmoglacier, with which it has undertaken several projects. “The strategic partnership with the property developer has been positive and has resulted in the construction of three successful real estate developments, which have contributed to Aquila Capital’s expansion plans in the Spanish market under its own brand, AQ Acentor”, explains Sven Schoel, CEO of the German manager in Spain.

Aquila has been operating in Spain since 2014, focusing its business on the real estate sector, with projects worth more than €800 million. With the creation of this new brand, the firm has incorporated a management team to boost growth through in-house development.

AQ Acentor has been created with more than 3,000 new homes under construction, of which around 500 will be handed over during the course of this year. Currently, the firm is working on residential projects in metropolitan areas, primarily in Madrid, Barcelona, Málaga and Valencia.

“The company has a multidisciplinary team comprising more than 40 professionals located in offices in Madrid, Barcelona and Málaga”, explain sources at the firm.

“The creation of AQ Acentor responds to our firm commitment to the Spanish market and is backed by a pipeline amounting to €1 billion over the next five years”, specifies Schoel.

The manager is also present in the logistics market in Spain, one of the other real estate segments that is experiencing a boom, besides the residential segment. In that case, it has launched an investment plan amounting to between €350 million and €400 million for the Iberian Peninsula and Italy.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Aquila Wants to Invest €800M in Logistics & Residential Assets in Spain

6 April 2018 – Eje Prime

Aquila Capital is displaying its charms in the Spanish market. The investment fund, which has already invested more than €500 million in Spain, is going to allocate another €800 million to the purchase of logistics and residential assets over the coming years. Moreover, as sources from the company explained, Aquila Capital plans to spend some of its investment on new residential developments.

Aquila’s new plan of attack focuses on the entire European market but is looking very closely at Spain and its real estate market given that it is now fully recovered having survived one of the worst economic crises of recent times. The fund is going to launch three funds specialising in different types of assets, with the first dedicated to logistics properties.

That fund will be the one that looks at more markets, above all those in the south of Europe. Aquila is going to raise between €200 million and €250 million from institutional investors and will have a gearing ratio of 50%, which means that the total investment capacity allocated to countries such as Spain, Portugal and Italy will amount to €500 million.

Aquila, which has operated in Spain since 2012 through an office located on Paseo de la Castellana (in Torre Europa) in Madrid, is going to allocate the assets that it buys (which must be core or core plus) through this fund to short-term rentals.

Moreover, the group is preparing two other funds, both of which will specialise in the residential business. The first is going to specialise in the purchase of residential rental properties in cities such as Madrid, Barcelona and Málaga. The second is going to focus on the construction of residential projects.

For those two funds, Aquila has set the challenge of raising between €200 million and €300 million to buy new residential buildings in association with property developers and to purchase assets that are already rented out. To carry out these plans, the group has doubled its workforce in Spain, which has gone from 17 people to a team of 30 professionals over the last year.

Projects in progress 

Aquila Capital’s interest in Spain is nothing new. At the end of last year, the company acquired six plots of land in Málaga and Huelva, which represented the German group’s first foray into Andalucía.

That transaction comprised almost 120,000 m2 of land on which around 1,300 homes will be constructed, according to El Economista. Specifically, the acquired portfolio constitutes six plots of land located in the centre of Málaga, Estepona, Rincón de la Victoria and Huelva.

With this acquisition, the asset manager is continuing its expansion in the Spanish market, where it is currently building more than 1,500 homes, as well as two hotels in Madrid, through alliances with local partners. Aquila Capital is currently managing thirteen real estate projects in Spain with a total investment volume of more than €500 million.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Property Developers Start Buying Land Without Building Permits

11 October 2017 – Real Estate Press

Overseas real estate funds, with a major presence in the Spanish real estate market, are owners of large portfolios of land as well as of debt secured by land as collateral, and many are operating in association with Spanish property developers.

The estimates for this year indicate that 80,000 new homes will be built in total.

The funds Blackstone, Cerberus, Kennedy Wilson, TPG, Värde Partners and Apollo started to acquire servicers, created by the banks, when the real estate sector began to recover. Other funds, such as Lone Star, Centerbridge, HMC, Eurostone, Aquila, Oaktree, Castlelake, Värde and Pimco, have been backing residential development. In this way, they have become the new residential property developers that need land as their raw material.

Now, unlike in prior years, no one wants to risk buying land that still needs some kind of building permit approval to turn it into buildable land, due to the risks involved, and that is why the price of buildable land is rising.

Funds were able to acquire land in areas with high demand for housing, such as Madrid, País Vasco, Barcelona, the Costa del Sol and the Alicante coast, at low prices before residential activity started to recover. But over the last year, land prices have also been recovering in other large capital cities, such as Valencia, Zaragoza, Sevilla and Málaga.

Nevertheless, the potential that these entities see in the residential development segment has allowed them to reduce the urban planning risk in more mature markets, such as Madrid and Barcelona, until now, and start to place their focus on plots that still have not received building permit approval. Moreover, there is no shortage of people who are demanding that the administrations adopt their expansive urban planning policies once again.

Original story: Real Estate Press

Translation: Carmel Drake

Large Funds Thrash It Out To Buy Residential Land

9 October 2017 – El Periodico

The 10 largest property developers in the country are in a position to start work on the construction of around 20,000 new homes in 2018. That volume of output is possible thanks to the collection of buildable urban land that they have managed to accumulate over the last year. The large Spanish property developers – many of which are owned, at least in part, by investment funds – as well as overseas funds themselves, are competing, at an almost frenetic pace, to acquire plots of land on which they will be able to build without modifying the classification (to residential use).

“Overseas investors are very present in the new Spanish real estate landscape, be it as owners, debt holders, servicers or property developers investing together with other local property developers, both in the renovation of existing buildings and the construction of new ones, as well as in the rental sector and through the constitution of Socimis”, says Samuel Población, Director of Residential and Land at the real estate consultancy firm CBRE. The consultancy indicates that at the end of 2016, the large property developers in Spain owned €8,000 million in assets for construction.

80,000 homes in 2017

The real estate sector is expecting the output of new homes to reach 80,000 units in 2017. That figure is still below the short-term goals. “We should be producing 150,000 homes (per year), although we will not achieve pace that for another three years”, says Juan Velayos, CEO at Neinor Homes, one of the real estate companies – whose main shareholders are investment funds – that has purchased the most land over the last two years. “We set ourselves a land investment target of €380 million for 2017 and 2018, but we have already covered most of that budget this year”, he adds. His firm is currently working on the construction of 5,000 homes in Spain and hopes to achieve a completion rate of 3,500 units per year.

The funds Blackstone, Cerberus, Kennedy Wilson, TPG, Värde Partners and Apollo started to acquired the commercial and management platforms that the banks had created (the servicers) when the real estate sector started to recover in 2013. In parallel, the overseas funds Lone Star, Centerbridge, HMC, Eurostone, Aquila, Oaktree, Castlelake, Värde and Pimco are strongly backing residential development. In this way, they have become the new house builders. And they cannot build if they don’t own land.

The problem is that, for various reasons, the administrations are not producing raw material. “No reclassifications (of land) are being performed, because someone will always get hurt”, says Lluis Marsà, President of the Association of Property Developers and Constructors (APCE). “We do not take the risk of buying non-buildable land that has to be transformed because the production costs are rising, the risk soars”, says Velayos.

Nevertheless, that situation has the benefit that agents in the sector are adjusting output to the maximum in order to maintain returns despite the new quality standards for homes, which are higher than in the past. “One of the positive effects of the profound transformation of the sector, with the arrival of new players, is the greater degree of control over the finances and execution periods that we are seeing”, says Población.

Investors adding value

The profile of funds has evolved quickly from opportunistic to value added (…). The focus of these firms is to acquire plots in areas where demand for housing is high, such as Madrid, País Vasco, Barcelona, the Costa del Sol and the Alicante coast. But during 2017, there has also been a positive recovery in land operations in other large capitals such as Valencia, Zaragoza, Sevilla and Málaga (…).

Original story: El Periodico (by Max Jiménez Botías)

Translation: Carmel Drake

Sareb Emulates The Funds By Teaming Up With Local Developers

23 November 2015 – El Confidencial

Two years after its creation, Sareb has decided to change its strategy and instead of selling large portfolios of land to opportunistic funds, it will now develop these plots of land itself and whereby benefit from the resulting margins.

Aware that the bulk of the large operations have now been completed, the President of the entity, Jaime Echegoyen, has decided to adopt a retail sale strategy, in which one of the main growth drivers will be the formation of partnerships with local developers, to jointly develop the greatest possible volume of land.

For these co-investment agreements, Sareb will provide the land, whilst the local partners, which specialise in the business, will take care of the construction and development of the homes, in projects that would be very difficult for them to aspire to if they had to purchase the land, since many domestic companies are still unable to make that kind of financial commitment.

Sareb hopes to lay the first stone in this new initiative in Andalucía, where it is currently finalising an agreement with a local property developer. And it will soon add other projects in Madrid, where the entity owns various plots on which it is looking to develop several promotions through this kind of co-investment formula.

On the trail of the large funds

These types of agreements between Spanish property developers, who know the business, and financial institutions, have been one of the main drivers behind the emerging recovery seen over the course of the last year, above all in Madrid and Barcelona, which have enabled international funds to now be financing the development of 10,000 homes.

For example, Castlelake, which acquired around twenty plots of land from Sareb in two different operations – the Crossover portfolio and 76,100 m2 of land in Boadilla del Monte – have a total surface area large enough for the development of 1,200 homes. It is working together with its local partner, Aelca, on this project.

Other examples of partnerships between international funds and local property developers include: Renta Corporación and Kennedy Wilson, Momentum Real Estate and Harbert Management, Uniq and Bream Real Estate, and InmoGlaciar and the German fund Aquila.

To become a partner of reference for domestic companies, Sareb has the experience and position of having more than 17,000 debtor companies, with which it is trying to negotiate solutions, such as “daciones en pago” and other conversion formulae. In fact, between January and June this year, it managed 5,413 proposals from property developers, around 30 proposals per day, according to its half yearly report.

During this period, the entity led by Jaime Echegoyen also completed six real estate developments, resumed another 11 and approved the development of 13 plots of land, where it plans to build another 780 homes.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake