Spain Needs 150,000 New Homes Per Year But the Market is Capable of Delivering Only 75,000

16 May 2019 – El Confidencial

According to the experts, on the basis of the rate of formation of new households and for a healthy residential market, Spain needs to produce between 120,000 and 150,000 new homes per year. Those figures are a far cry from the 650,000 units that were constructed in 2007, just before the outbreak of the real estate crisis. Nevertheless, the latest data reveals that even 150,000 homes is too ambitious a target, at least for the next few years.

That is according to the latest Real Estate Pulsometer, compiled by the Cátedra Inmobiliaria in collaboration with the University of Málaga, which estimates that 70,400 new homes will be finished by the end of this year and 77,100 by the end of next year. In other words, half the number needed. The reason? According to José Antonio Pérez, Director General of the Cátedra Inmobiliaria, “In simple terms, the sector does not have sufficient manpower to build that many homes. There are sufficient numbers of qualified people – such as architects and surveyors -, but there is a distinct lack of basic labour, such as workmen and builders”.

Tens of thousands of jobs were destroyed in the construction sector during the crisis. At the height of the boom, the sector and its related segments employed almost 2 million people, but by 2017 (latest available data), that figure barely exceeded 800,000. In other words, almost 60% of the workers had disappeared. Most have either left the country (many were foreigners) or reinvented themselves in other sectors and are reluctant to return to construction now.

Employment in the construction sector has recovered slightly over the last three years, with almost half a million people working in the sector. But that figure is not sufficient to build the homes that the country needs, which means delays and higher construction costs.

Lack of bank financing

The situation is compounded by the lack of available land and the shortage of bank financing to launch those 150,000 homes. The banks are willing to finance just 65,000 homes per year, according to Juan Antonio Gómez-Pintado, President of Asprima (the Association of Property Developers of Madrid). Several alternative financing funds are trying to cover the gap but they are not enough.

It is also true that stagnant salaries and problems of affordability for young people are other factors at play against the construction of so many homes.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

British Fund Buys Modoo Shopping Centre in Oviedo from Alpha Real Capital

22 January 2018 – Eje Prime

The shopping centre that Calatrava designed for the heart of the Palacio de Congresos in Oviedo has a buyer. Modoo, owned until now by Alpha Real Capital, has been acquired by a British investment fund. Created by the famous architect Santiago Calatrava, this complex is located in the Buenavista neighbourhood of the Asturian capital.

The sale and purchase negotiations have also resulted in the arrival of a new manager for Modoo in the form of Estabona Management, which has already announced its plans to renovate the shopping centre, as well as to add a cinema and include more spaces. The operation, led by Estabona, was signed on 31 December 2017, the last day of the period set to agree a sale, according to reports from La Nueva España.

Located in the upper area of Oviedo, inside the city’s Palacio de Congresos, the complex was acquired by Alpha Real Capital in 2014, when it purchased the property from the Dutch firm Multi Development.

Estabona, which already has a presence in Spain in the Albacete Imginalia shopping centre, has proposed a renovation plan for Modoo. The shopping centre has a surface area of 40,000 m2 and is home to renowned retailers such as Primark and El Corte Inglés. This will not be the first space restructuring that has been requested for the shopping centre, given that Alpha Real Estate and its former managers, JLL, tried to incorporate a cinema and make significant changes to the land in the past, but that construction project never got off the ground.

Original story: Eje Prime

Translation: Carmel Drake

Lladó Buys Uría y Menéndez’s Future HQ From Hispania

16 May 2017 – El Confidencial

In the same way that Amancio Ortega is using the juicy dividend that he receives from Inditex to build his real estate empire, another successful home-grown businessman, José Lladó, President and majority shareholder of Técnicas Reunidas, is also investing the bulk of the money that he receives from his infrastructure group into iconic buildings.

Last year, Lladó reportedly received €29 million and he has used those funds to acquire the new headquarters of the law firm Uría y Menéndez. As circumstances would have it, that was the only building that Hispania had left out of the sales mandate that it awarded to CBRE and JLL, when it appointed them to find a buyer for its entire office portfolio. Sources at the Socimi have declined to comment.

According to three sources in the market, the reason is that the Lladó family has put a juicy offer on the table that limits the yield on its investment to 3.5%. It is a classic move by this kind of family office, which tend to prioritise the best assets and tenants possible, even if that means securing lower returns, given that their strategies are typically aimed at acquiring good properties, with stable and guaranteed returns.

Uría y Menéndez is the second largest law firm in Spain by turnover and last October, it signed a 17-year lease contract for the building located on Calle Suero de Quiñones 42 in Madrid, and it is obliged to fulfil at least half of that term.

Currently, Hispania is immersed in the comprehensive renovation of the property, in a project worth €5 million, which is expected to be completed at the end of this year. The law firm will rename the new headquarters, which will be complementary to the property it already owns at nearby Príncipe de Vergara, 187, as the “Aurelio Menéndez Building”: its new design is the handiwork of architect Rafael de la Hoz.

This acquisition follows the pattern applied by Lladó last year, involving investing areas on the rise, where the value of the asset itself promises to increase significantly over the coming years. On that occasion, the owner of Técnicas Reunidas purchased a building on Calle Marqués de la Ensenada 2, located just a few metres from Plaza de Colón, for €6 million.

In the summer of 2014, it made another significant acquisition on Paseo de Recoletos, 15 from Vía Célere, the property that houses Catalunya Caixa’s headquarters in Madrid, for almost €20 million, to join the neighbour at number 33 on the same thoroughfare, which is also owned by Lladó. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Neinor To Build 20-Storey Residential Tower Next To Manzanares River

23 January 2017 – El Mundo

A new and unique tower is about to appear on the Madrid skyline. The property developer Neinor Homes is going to build it and it will be located on the banks of the Manzanares River, in an area that, following the transformation resulting from the Madrid Río initiative, has become one of the most attractive and dynamic in the capital.

Since June 2015, when we found out that the property developer, whose main shareholder is the US investment fund Lone Star, had closed an operation to purchase three plots of land, including this one, located at number 33, Calle Maestro Arbós, and that it had planning permission to construct a 20-storey residential tower, everyone has been very interested in finding out more about the plans. (…).

Now, two weeks before the properties in the development go up for sale (on 8 February), El Mundo has had access to the Riverside Homes dossier, the development that Neinor plans to build in Madrid Rio and for which it requested a construction permit at the end of November (…).

It is a unique residential complex, designed by the architect Julio Touza Rodríguez, and will be distributed over two buildings. The undisputed protagonist will be the 20-storey 72m tall tower, which will be accompanied by another 3-storey block measuring 12m tall. In total, the properties will have a combined above ground surface area of 6,400 m2 and another 3,870 m2 of space underground. They will house 51 two-, three- and four-bedroom homes (with surface areas of between 107 m2 and 160 m2), many storage rooms and 102 parking spaces. (…).

The homes

The price of the homes, which will be equipped with the highest quality materials and the latest innovations, will start at €370,000 for the two bedroom homes, increasing to €445,000 for the three-bedroom properties and up to €600,000 for the four-bedrooms apartments. Those amounts, which exclude VAT (10%), include two parking spaces per property and a storeroom.

In addition to these standard flats, the plans includes three penthouses, with 50 m2 terraces, located on the 16th, 18th and 19th floors, whose prices will range between €900,000 and just over €1,000,000. Given the characteristics of the development, its location and the views that these homes are going to enjoy thanks to their dual north-south orientation, the properties look set to become some of the most unique and exclusive in the capital. (…).

The tower will have a large communal garden terrace on the 11th floor, known as the Mirador del Río. (…). At street level, it will have a large garden with a swimming pool and space for urban allotments, whilst the top three floors will house a gym and other communal spaces. (…).

A lot of demand

Even though the features of the development have not been revealed yet (….), Neinor has a list of more than 750 people who are interested in acquiring the homes at Riverside Homes. “Most of the interested parties (70%) are people from the area, but we have also received a lot of interest from other people in the capital (…)”, said Ignacio Llona, Director of the Central Territory at Neinor Homes.

Original story: El Mundo (by Luis M. De Ciria)

Translation: Carmel Drake

Who’s Who In The Cinco Torres?

13 January 2017 – Cinco Días

The future Torre Caleido, whose plans were unveiled on Tuesday by Inmobiliaria Espacio (Grupo Villar Mir), will add 70,000 m2 of real estate space in the area known as the Cuatro Torres complex. As such, there will be five skyscrapers at the top of the Paseo de la Castellana from 2019, which means that Madrid’s skyline will change once again. In total, the five towers will supply around 300,000 m2 of space to companies.

Although when the plans were first presented for these skyscrapers in Madrid, many people had their doubts regarding their success, the reality is that the four towers are almost fully occupied now and the two main tenants for the fifth tower have already been confirmed.

Caleido will have 70,000 m2 of space in total and, unlike the neighbouring towers, will be used for social purposes on land granted by the Town Hall of Madrid to Grupo Villar Mir for 75 years. (…).

The new IE University campus will occupy 48,000 m2. And the lower platform will be home to a Quirón Salud clinic, covering 11,000 m2 and dedicated to preventative and sports medicine. The tower will also house a retail and restaurant area, which will come as a real blessing for the employees who work in the area, given that they have barely any services at the moment. The retail space has not been leased yet. In addition, Grupo Villar Mir is looking for possible partners with whom it can undertake the work, which will begin within the next few months.

The history of the four towers, on the plot of land that used to house Real Madrid’s former Ciudad Deportiva at the northern end of the Paseo de la Castellana, began commercially in 2008, when the first skyscrapers were completed.

One of them is the current Torre Cepsa…designed by Norman Foster, which was initially intended to house the headquarters of Repsol, but the oil and gas company sold it to Bankia for €815 million before the real estate bubble burst. The now nationalised bank, in turn, leased the building to Cepsa, with the option to buy it…and that company, in turn, sold it in 2016 to Pontegadea, the family office owned by Amancio Ortega for €490 million. (…).

At the end of 2015, Torrespacio, designed by Henry N. Cobb and promoted by Inmobiliaria Espacio, was also sold to the Philippine wine group Emperador for €558 million. (…). It has an occupancy rate of 86%.

Prior to that, Torre PwC also changed hands. (…). It houses the 5-star Eurostars Madrid Tower Hotel and the offices of the consultancy firm PwC, which moved in to occupy the upper floors in 2011. (…). It is 236 m tall, has a surface area of 50,000 m2 and was designed by the architects Carlos Rubio Carvajal and Enrique Álvarez-Sala.

Torre Cristal, the tallest building in Spain at 250 m2 tall, is the only tower that has not changed hands since it was built – it is owned by Mutua Madrileña (…). Designed by César Pelli, the skyscraper was conceived to house several tenants and currently has an 85% occupancy rate. The consultancy firm KPMG now occupies one third of the property, after moving there last year from Azca. Other tenants include MasterCard, Red Hat, Cerner, Commerzbank, Seat, Agbar and ThyssenKrupp, amongst others.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake