Tag: Arganzuela

Anticipa: House Prices in Madrid & Barcelona Return to their Peaks of the Real Estate Boom

11 November 2018 – El Confidencial

The (real estate) recovery is really heating up. House prices in Madrid are on the verge of returning to their peaks of 2007. What seemed impossible, is now becoming a reality. That is according to a report from Anticipa Real Estate, which forecasts two-digit increases in house prices in the Spanish capital this year and next. Specifically, it predicts that homes will become more expensive by 10.2% in 2018 and by 11.5% in 2019, rises that are twice as high as the percentages that experts consider to be sustainable.

House prices have already been growing at rates of 10% during the last two quarters, according to the Repeated Sales House Price Index, prepared in accordance with the Case & Shiller methodology from the United States applied to Spain, which analyses repeat sales of the same homes. In other words, they are rising at double-digit percentages reminiscent of those recorded at the height of the real estate boom a decade ago.

Despite that, both property developers and banks are insisting that the market is very different to the one seen more than ten years ago and they categorically rule out that we are facing a similar situation to then. On the one hand, access to financing remains very restricted for solvent clients, whilst the recovery in prices is very uneven across the country. Whilst in the cities (and in certain neighbourhoods), prices are skyrocketing, in others, prices are still decreasing.

Although on average, by the end of 2019, house prices in Spain will be 15% below the peaks recorded in 2007, according to the report from Anticipa Real Estate, there are some hot spot areas where those prices have already been exceeded. In Cataluña, another of the hot spots in the Spanish market, increases of around 9% are expected next year and that despite the delicate political situation in Cataluña, which has had a direct negative impact on the real estate market – in Barcelona -, which, until a year ago, was performing extremely well in terms of transactions and prices.

Madrid stands out from the rest of Spain, with an evolution in terms of residential prices that has caused the first alarm bells to start sounding. In certain neighbourhoods, such as Chamartín, Chamberí and Salamanca, second-hand homes now cost the same as they did ten or twelve years ago, whilst in others such as Arganzuela, Centro, Moncloa and Tetúan, prices are close to exceeding those levels. In others, where prices are still well below their peaks of the bubble, the market is rising at rates of 20%, rapidly reducing the gap with respect to 2008.

They are peripheral areas of the city towards which price rises are moving like an oil slick. And that is because prices, both to the purchase and rental markets in the centre of the city have reached such prohibitive levels that much of the demand is moving en masse to more affordable areas, resulting in significant upward pressure on prices.

According to the latest data from Tinsa, in Vicálvaro, Ciudad Lineal and Villaverde, house prices have risen by more than 20% in the last year, compared with rises of 8.5% in Chamartín and 13% in the district of Salamanca. Meanwhile, the municipalities of Barcelona, such as L’Hospitalet de Llobregat, Castelldefels, Esplugues de Llobregat and Sabadell, are experiencing a similar phenonemon with increases of more than 15% (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Tinsa: House Prices Rose by 15.6% YoY in Madrid in Q3

9 October 2018 – ABC

Whilst most Spanish provincial capitals have reached what the experts define as “a turning point” with the stabilisation of house prices, Madrid is still the most dynamic city in the whole country. It is leading the house price rises once again with increases of 15.6% in Q3 with respect to the third quarter of last year. That rise in value reflects the tensions that demand for homes in the Spanish capital is exerting on certain areas. The scarce supply of new build homes is not helping to balance a panorama where the pressure on house prices is now moving towards the peripheral neighbourhoods. Some areas are recording price increases of more than 20%, well above those seen even in the traditionally most sought-after districts. All of the districts, without exception, have seen an increase in their price per square metre. Of the 21, only three saw price rises in the single-digits – Usera, Chamartín and Villa de Vallecas-. In this context, the average price in the Spanish capital now amounts to €2,876/m2.

That is according to the latest local market report on finished housing – new and second hand – published by the appraisal company Tinsa at the end of the third quarter. In it, Madrid ranks as the third most expensive provincial capital to buy a home after Barcelona (€3,383/m2) and San Sebastián (€3,151/m2), both with more discrete YoY growth rates. Despite the warning that the consecutive increases generate, a priori, the capital is still a long way from the maximums that it reached in the third quarter of 2007 (27.6% lower), which marked the start of the crisis. The real estate situation has changed little since the middle of the year, although the trends that some experts, such as Pedro Soria, Commercial Director at Tinsa, were indicating in June have been confirmed: high prices in the city centre are pushing buyers to focus outside of the M-30.

The furore to purchase properties is still defined by a striking fact: it only takes 2.6 months to sell a property in Madrid at the moment. That period is still the lowest in Spain, even though it increased by one tenth with respect to the second quarter. Even with property developer activity below what the sector considers healthy for the real estate sector, demand for second-hand products is extremely high. And it is not exactly a favourable scenario for buyers. One piece of evidence that a major problem is starting to emerge in terms of access to housing in the capital is in the financial effort that families are having to make to live in Madrid. This has exceeded what is considered to be the “sustainable” limit. Those that have purchased a home in the last quarter are having to spend 26.1% of their gross household income (before taxes and other deductions) to service the first year of their mortgages. The national average stands at 17.2%. The experts consider that the red line, which has always recommended spending no more than one quarter of a household’s income on the mortgage, is now being passed. In districts such as Arganzuela, which has become one of the most attractive areas of the capital, household’s financial efforts now amount to 27.6% and the figure reaches 41.5% in the case of Salamanca neighbourhood. Once again, house prices in that area are the most expensive in Spain, at €4,762/m2. Chamberi is ranked in third place, after the Barcelona neighbourhood of Sarrià-Sant Gervasi, with €4,521/m2 (…).

The most expensive municipalities

The municipalities that generate the most interest include Pozuelo de Alarcón, which registers the highest price of €3,017/m2, followed by Alcobendas, at €2,847/m2 and Majadahonda, at €2,537/m2. By contrast, the municipalities of Arroyomolinos and Aranjuez registered the lowest prices: €1,337/m2 and €1,446/m2, respectively, of those analysed by the appraisal company (…).

Original story: ABC (by Adrián Delgado)

Translation: Carmel Drake

Atlético De Madrid Wants To Sell Operación Calderón Land For €3,300/m2

10 November 2017 – Cinco Días

Atlético de Madrid is looking to shake up the real estate sector with a record-breaking operation. The club is heating up the housing market with an operation to sell the plots on the site of its former Vicente Calderón stadium, through which it wants to achieve much higher prices than are currently being paid for land in the surrounding area.

The club, chaired by Enrique Cerezo and controlled by Miguel Ángel Gil, has engaged the consultancy firm CBRE to sell the plots of land, and the first round of offers have already been received. Atlético has already been sounding out potential buyers regarding a land asking price of €3,300/m2, according to four companies in the real estate sector, which would represent a record in this part of the Spanish capital.

That high land value would mean that the houses built on the site would have to be sold for approximately €6,000/m2, according to the calculations performed by several sources. That figure is equivalent to other more expensive areas in the capital and represents almost twice the current sales price of new build homes in the district of Arganzuela, where the stadium is located. According to the appraisal company Tinsa, new homes in this neighbourhood are currently being sold for prices ranging between €3,000/m2 and €4,000/m2, based on data as at 2017.

Specifically, Atlético is selling three plots of land, which have a total surface area of 63,076 m2, of which 57,094 m2 corresponds to residential use and the remaining 5,892 m2 to commercial use. Around 500 homes are expected to be built on the site. If the club manages to find a buyer willing to pay €3,300/m2, it will receive proceeds of €210 million. If the price ends up being €3,000/m2, the purchaser will have to spend around €190 million.

This urban planning operation is linked to the club’s change of stadium after it moved this season from its former pitch next to the Manzanares River to the new Wanda Metropolitan (…). Moreover, the football team needs to sell these plots to repay Inbursa – owned by the magnate Carlos Slim – for a €160 million loan that it was granted to build its new stadium.

The so-called Operación Mahou-Calderón, which also includes the adjacent plots on the site of the former brewery headquarters- but which are not included in the sale now being undertaken by Atlético – was approved by the municipal plenary in September. The buildability of that environment has decreased from 175,000 m2 to 147,000 m2 with respect to Ana Botella’s plan dated 2014.

Sources in the sector explain that CBRE has already received at least five offers during the first phase of the process, which is expected to close at the beginning of 2018. For the time being, it is not known whether any of these bids exceeds the figure of €3,000/m2 that Atleti is looking for (…).

Sources at the real estate consultancy firm Knight Frank calculate that the price of land in this neighbourhood amounts to a maximum of between €2,400/m2 and €2,800/m2. They explain that recent similar purchases in the district of Arganzuela, in the Méndez Álvaro area, for example, were closed for a price of between €2,000/m2 and €2,220/m2.

However, some experts in the residential market do believe that the €3,000/m2 threshold may be broken due to the high purchase pressure currently in play, primarily due to interest from international funds. They also consider that these plots are very attractive, located as they are in the Madrid Río area, and so they expect the degree of interest in them to be high.

Meanwhile, on the other side of the river, in the Usera area, Neinor Homes is marketing quite an exclusive development called Riverside at prices that exceed €4,000/m2, according to the portal Fotocasa, and the penthouses are going for €6,000/m2.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Operación Calderón: More Social Housing But No Skyscrapers

4 July 2016 – Expansión

The buildability ratio has been reduced by 16% / The new proposals reflect a lower buildability ratio, with an average building height of eight storeys, and a larger transfer of land to the town hall, which will be dedicated in tis entirety to social housing.

Operación Calderón is back on the public agenda once again. The Town Hall of Madrid, together with the owners of the land – Atlético de Madrid football club and the beer company Mahou San Miguel – have agreed new plans for the site, which include reducing the buildability ratio by 16%, decreasing the average height of the buildings, and transferring more land to the Town Hall, which will be used for the construction of social housing. The plan must be presented to the Town Hall before it is approved.

“We have managed to launch a project that has gone through a difficult period, thanks to a better system of working. This has included listening, collaboration and the capacity to yield and seek the common good”, said the mayoress of Madrid, Manuela Carmena.

According to the new proposal, the total buildability area has been decreased from 175,000 sqm to 147,000 sqm, i.e. 16.15% less, and the average height of the buildings has been reduced from 20 storeys to eight.

Of the total buildability, around 129,000 sqm will be dedicated to homes. The representative of the Town Hall of Madrid’s Sustainable Urban Development department, José Manuel Calvo, explained that all of the 10% of the land transferred to the Town Hall will be reserved for social housing, which will allow it to “carry out the social housing policies supported by the city’s Government”.

The new plans also increase the size of the green spaces from 54,600 sqm to 79,900 sqm, and of the new facilities from 10,00 sqm to 12,800 sqm. The Town Hall has explained that the plans reflect “most” of the demands made by the neighbourhood associations of Arganzuela and will be subjected to a process of “public consultation for citizens and entities to offer their suggestions”.

Costs

In terms of placing the M-30 underground, the Town Hall will bear the cost of the integration of this stretch by offering “alternative solutions with much lower costs”. The Town Hall plans to cover part of the motorway, which would cost between €50 million and €60 million, compared with the projected cost of €140 million or €150 million associated with the previous plans.

The presentation of the agreement – which had initially been planed for 22 June, but which was postponed until after the elections – was attended by the President of Atlético de Madrid, Enrique Cerezo and the Director of Mahou San Miguel’s land business unit, Paloma Boceta. Cerezo said that next season will be Atlético’s last playing at the Calderón, before the club moves to La Peineta. “We have been working on this project for ten years. I hope that we will be able to close the deal some time soon, so as to to enjoy our new stadium and so that Madrid can benefit from a wonderful area in the centre of the city”, he added.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Princeton Acquires c/Mazarredo 7, Next To Google Campus

9 March 2016 – Noticias CBRE

The British family office Princeton has closed the acquisition of the building on Calle Mazarredo 7, in Madrid, in a deal advised by CBRE, the world leading real estate consultancy and services company. The property, situated in a strategic location next to the headquarters of the Google Campus, has a surface area of 4,000 m2 spread across 5 floors.

It is a unique, listed building next to the Manzanares River, located in the new technological area of Madrid that has become fashionable thanks to the arrival of the Google Campus. The building will be leased to companies who want to be located in the area of influence around the technology giant’s headquarters.

Princeton is the investment vehicle of the Lee family, the former owners of the company Imry Property Holdings, which was listed on the London Stock Exchange for more than 25 years. Since the sale of the company, the Lee family has undertaken significant investments in Europe, the UK and the USA, often in partnership with major institutional investors. In April 2015, it acquired a building measuring 10,600 m2 on Calle Fomento, 2, in the Plaza de Santo Domingo, close to Gran Vía, which shows this investor’s commitment to the Spanish market. Following that operation, its purchase of the building on Calle Mazarredo, 7, next to the Google Campus in Madrid, constitutes Princeton’s second acquisition in Spain.

In this way, we are beginning to see the impact of the Google Campus on the area. The headquarters of the technology firm opened its doors last June in the Madrilenian district of Arganzuela, with the aim of becoming a meeting point for entrepreneurs and creatives, and in response to the growing demand in the city for shared work spaces. According to Paloma Relinque, the National Director for Capital Market Foreign Investments at CBRE, “the arrival of the Google Campus is generating an environment of entrepreneurship and a technological meeting point that is impacting the whole area. Demand is very high and it is unlikely that the Campus will be sufficiently large to satisfy it, which means there will be entrepreneurs looking for co-working spaces in the surrounding area”.

Original story: Noticias CBRE

Translation: Carmel Drake