Madrileños Are Willing To Invest More In Homes

14 July 2016 – Expansión

The average amount that Madrileños are willing to pay to acquire a property in the Community of Madrid currently stands at €306,000, which represents an increase of 28%  compared to 2015, according a study, ‘Demand for housing in Spain’, compiled by Casaktua, based on more than 1,100 interviews.

The study also found that the average price Madrileños are willing to pay to rent a property is €584/month, which represents a 10% increase compared to last year, when the figure amounted to €532/month.

According to the document, “(On average), Madrileños have saved 37% of the cost of the property they want to buy, showing that few expect to be able to obtain financing for 100% of their properties when it comes to buying a home”. Nationally, average savings amount to 35%.

On the other hand, the study reveals that “the average budget that Madrileños allocate to the purchase or rental of a home has increased by 19% in the last twelve months, above the average (increase) for Spain as a whole (12%).

In addition, “the number of Madrileños (renters and owners) who are thinking about moving home in the short and medium term, has increased by three percentage points in the last year (from 48% to 51%)” says the report.

On the other hand, “73% of the residents of the Community of Madrid who want to move home started looking less than two and a half years ago” and the main reasons Spaniards wish to move home are “the number of bedrooms in the home and the area in which it is located”.

Meanwhile, the Consumer Price Index (CPI) in the Community of Madrid increased by 0.5% in June with respect to the previous month, whereas prices decreased by -0.8% compared with the same period last year, according to data published on Wednesday by the National Statistics Institute (INE).

At the national level, CPI rose by 0.5% in June with respect to the previous month and increased its YoY growth rate by two tenths to -0.8%, as the price of electricity, petrol and organised trips all rose. In this way, CPI recorded two consecutive months of YoY increases.

Original story: Expansión (by Roberto Bécares)

Translation: Carmel Drake

Deutsche Bank, Banca March & Two Funds Launch the Biggest Socimi

The offices of BBVA in Spain will be listed on the stock market. The fund Tree Inversiones Inmobiliarias, hold by clients of Deutsche Bank, Banca March and by opportunistic funds Area (bound up with Apollo) and Europa Capital finalize launching one of the biggest Socimi (Spanish counterpart of a REIT company) on the exchange market in Spain. The investment vehicle manages between 900 and 1.000 branches of the bank chaired by Francisco González on terms of sale & leaseback contract and will dispose of top capital oequal to 800 million Euros, an amount that could be beaten down only by Gowex on MAB (the Spanish Alternative Stock Market).

Tree Inversiones was set up in 2009 by the two banks and the two funds in order to acquire the BBVA´s offices in a transaction known as the “Proyecto Arbol” (Tree Project). They made a down payment of 1.500 million Euros for 948 subsidaries and a year later they added to the poll 150 more premises and two other buildings for 350 millions. Since that time Tree Inversiones occasionally sold a part of the offices.

The idea to launch the interest part to the stock market now originates from the company´s need to refresh the shareholding by finding new investors. Tree Inversiones wishes to have a liquidity line to be able to separate from the two funds: Area and Europa Capital. (…)

The fiscal profits that both the company and its investors can draw are other reasons for bringing the Socimi to the MAB. (…)

The Strategy

The company foresees getting rid of the property of BBVA step by step, as it used to do by now, and make its investment portfolio over by buying new assets throughout the country. BBVA pledged tenancy of the more than 1.000 premises for time period of between 20 and 30 years.

 Tree Inversiones Inmobiliarias´s outflow on the market is already quite advanced and the Socimi could have a chance for the opening ringing of the bell by the end of January. The company has created a website containing information for the future shareholders. The operation´s advisory firm is EY and the liquidity provider will be Renta 4.

The release to the stock market will be conducted via listing of a small shareholding in the enterprise. To do so, the company enlarged its capital by 2.000 million Euros at the end of 2013 destined for the free float of less than 1%. It is predicted that the proportion will change once Area and Europa Capital have gone away.

The launch to the market is being led by the managers of Tree Inversiones Inmobiliarias: the Magic Real Estate company. (…) This way the same managers that have been involved in the Proyecto Arbol support its debiut on the stock market. In Spain, Magic Real Estate also advises Blackstone, Deutsche Bank and Pimco, among other international investors.

Source: Expansión