Leading RE Experts Warn About The Lack Of Credit

21 October 2016 – Expansión

The difficulties involved in accessing bank financing for certain real estate projects are weighing down on the development of the sector. Experts from leading companies in the market, such as BNP Paribas and Axa, have criticised the banks’ excessive zeal when it comes to lending in a discussion about opportunities in Spain at the Barcelona Meeting Point (BMP) real estate fair.

An Economist from the Real Estate division at BNP Paribas, Ramiro J. Rodríguez, said that financial institutions are continuing with standards that they imposed during the economic crisis. “The limitations are so high that business opportunities are being missed”, said the expert.

His market diagnosis was shared by the Director of Acquisitions and Development at Axa, Esther Escapa-Castro, who said that “the banks are not prepared and for that reason they are missing out on major operations”. On the other hand, the expert warned that the economic recovery has not happened at the same speed as the upturn in the (real estate) market, and so she warned of future problems in terms of profitability.

The CEO of Neinor Homes, Juan Velayos, was more forceful in his statement. “The banks are still very exposed to the real estate sector and they remain cautious, but they must start opening up the financing tap because, at the end of the day, that is bread and butter of their business”, he said.

The discussion between the experts revealed that Spain is still an attractive market for investment for the sector, although the number of opportunities has decreased. “Over the last year, it has become more difficult to find attractive operations, whilst deals in other countries have become more interesting, such as in Italy for example”, said the Director of Benson Elliot Capital Management, Gregg Gilbert. The Director explained that, in the case of his company, it sees its future primarily in the hotel market, in key locations such as Barcelona, Madrid and the Balearic Islands.

Meanwhile, the Partner Director of Valid Real Estate Strategies, Christopher Hütwwohl, said that the Spanish market is still competitive compared with other European countries. “We are concerned about the political situation, but we trust that it will be resolved quickly”, said the executive.

Original story: Expansión (by Gabriel Trindade)

Translation: Carmel Drake

Experts Recommend Structuring The Rental Market

23 October 2015 – Expansión

The rental market is on the rise in Spain – compared with the market for house sales and purchases, which is only just beginning to recover – but there is no structured supply. Covering this gap would make for an interesting business opportunity over the next few years, according to views shared yesterday by experts at Barcelona Meeting Point (BMP).

Looking towards Europe is not the solution, given the differences, for example, between Spain and Germany. For example, in the largest European economy, at least three companies have packages of more than 100,000 homes for rent. By contrast, in Spain, after two years of operations, (the largest player) Blackstone has accumulated just 10,000 homes.

“There is no volume”, said the CFO of Servihabitat, Feliu Formosa, who thinks that “rental housing that does exist is scattered, in such a way that makes its more difficult to manage”.

The decline in interest rates and the fact that house prices are low means that now is an ideal time for companies to buy properties to them lease out.

“Homes are cheap for executing this strategy”, said the President of CBRE España, Adolfo Ramírez-Escudero, who argued that there are economic, social, labour and entry cost reasons to believe that the rental segment is no longer going to be just a token market in comparison with the market for house sales and purchases.

More profitability

There are more incentives for companies to develop this segment of the market. The main one is the improvement in yields.

According to the Director General of Morgan Stanley in London, Javier García-Carranza, the greatest returns should not come from the appreciation (of property prices) in the market – that would make the rental market a “cyclical business” – but rather from the provision of more value added services and improvements in capital costs.

According to the sources consulted, between 15% and 17% of the population are now chosing to rent (rather than buy), whilst at the beginning of the century, that figure amounted to just 10%.

Original story: Expansión (by A. Zanón)

Translation: Carmel Drake

RE Experts: Spain’s RE Sector Is Back In Fashion

22 October 2015 – Cinco Días

A wave of optimism is in the air at the Barcelona Meeting Point trade fair.

Senior executives from Colonial, Merlin Properties and Grupo Lar appeared optimistic on Wednesday, regarding the growth of the real estate sector in Spain, based on the comments they made during a session entitled ‘Spain: Back in fashion’ at the real estate trade fair Barcelona Meeting Point (BMP), which is being held until Sunday at the Montjuïc de Fira centre in Barcelona.

The President of Grupo Lar, Luis Pereda and the founding partner of Merlin Properties, Ismael Clemente, were in agreement that prices in Spain are starting to increase, but that they are still below the levels seen in other European countries, which is attracting international investors.

The CEO of Colonial, Pere Viñolas, spoke about the “positive outlook” for an increase in yields associated with these price increases, although he qualified this by saying that the results of the operations that we are now beginning to see will not have an impact on income statements until 2016.

Pereda said that the decrease in rental prices in Spain has been more marked than in other countries, but that the recovery will be too, because rental contracts are shorter term here (around three or four years).

Clemente confirmed that Spain is now in a very promising phase of the real estate cycle. “We have five to seven strong years ahead of us”, although there will be risks, such as the evolution of world (economic) growth and political influences. (…).

During the event to open the trade fair, which this year brings together 280 companies from fifteen countries and almost 40 international investment funds, the Secretary of State for the Economy, Álvaro Nadal, warned that “political uncertainty” may scare off investors from Spain. (…).

With just two months to go until the general election and with the Catalan sovereign debate still raging, the Government’s representative for the Economy said that, if we can guarantee that the improvement in competitiveness, economic growth, creation of employment and consolidation of the public accounts are all going to continue in Spain “without any disruptions” then we “will be reasonably certain that investors” will continue to support the country.

By contrast, added Nadal, “if the future looks like it holds other things, then they are less likely to want to invest”.

That was the message that Nadal wanted to send to the business people in the real estate sector, who are convinced that, for the time being at least, the political tension is not affecting business and that national and international investors are clear in their desire to back Spanish real estate.

“In Barcelona, half of our buyers are from overseas and we have not detected even the slightest interest from them in political matters. It seems that people are either certain that nothing is going to happen or that whatever happens, it will not impact their investment”, explained the CEO of the Catalan property developer Vertix, Elena Massot. (…).

Other participants of BMP also agreed that the expansion of the sector is now a reality, after several years of severe crisis, but that the recovery is going to be slow and uneven. (…).

This recovery will be more intense in the major capitals, where the prices of some properties have already started to rise, but it could still take a while to reach areas where there is less demand, which means a Spanish real estate market that is moving at “two speeds”.

The Property Developers’ Association of Barcelona (APCE) estimates that construction will begin on between 6,000 and 6,500 new homes in Cataluña in 2015. That figure is notably higher than those recorded seen in recent years, but it is still a long way off the data for 2006.

The turning point happened in 2013, when construction began on just 3,036 homes across the whole autonomous region. In 2006, the peak year for construction, construction began on a whopping 126,000 homes. (…).

Original story: Cinco Días

Translation: Carmel Drake

Russian & Chinese Investors Clinch RE Market Recovery

3/11/2014 – Expansion

According to organizators of the Barcelona Meeting Point (BMP), the attendance of international investment funds, above all coming from China and Russia, has clinched the long-awaited recovery of the real estate sector in Spain.

 The BMP 2014 has closed its doors with a new visitor record and great satisfaction among its exhibitors, said the president of the real estate fair, Enrique Lacalle.

In a statement, he admitted both the number of investors and the sales contributed to a feeling of huge success. Also, low property prices and the interest from outside of Spain, obviously did as well.

In this sense, Mr. Lacalle assured there have been most real estate transactions sealed during the Wide Public and the Professional Exhibition sections over the past years, as participants ‘made more contacts in five days than in six months’.

Apart from the enormous satisfaction of exhibitors and experts from the sector, large international investment funds and developers claimed the fair contributed significantly to the hotel occupancy in Barcelona.


Original article: Expansión 

Translation: AURA REE

BMP Exhibitors Confirm a More Than 30% Rise in New House Sales

3/11/2014 – Expansion

Barcelona Meeting Point (BMP) real estate exhibition reflects the reality in the sector. Thus, foreign funds are extremely keen on buying the Spanish property and their coming in such large numbers confirms the bet. Although the fair’s area intended for developer and real estate agencies stands saw many small investors taking advantage of rock-bottom prices, it seems that lending has not returned strong enough to become particularly visible in sales performance sheets.

The exhibition area was similar to the previous years’ in terms of presence of some real estate firms. Many of them grew if compared to 2013, for example Vertix, Elix, Getsa, Iberhogar, Comprarcasa and Tecnocasa, but none of them reached the pre-crisis size. The biggest exhibitors unchangeably represented Núñez i Navarro, Corp, La Llave de Oro, Vertix and Getsa.

Large majority of the developers, building renovation companies and intermediatory agencies see eye in eye when it comes to a 30% rise in new home sales in regard to the previous year. Director of Barcelona-based property manager Amat, Guifre Homedes assured the percentage was even higher: ‘buyers looking for an apartment at price ranging from €500.000 and €750.000 are back, usually motivated by finding a better flat. Until now they feared the uncertain economic situation‘.

Other firms, Elix and Corp confirm the increase in sales and the latter foresees doubling its 2013 sales in 2015 by selling new housing developments in Barcelona.

The predominant purchasers are private investors aiming at investment and with no need of financing. First-time exhibitor Aubert Aubert Associés assured that its latest block of flats in the city sold-out to 60% of national buyers who ‘did not need mortgages’.

Engel & Völkers confirms huge influx of foreign agencies from all around the world searching for second homes for their citizens. As usual, the British bought most but also non-resident Chinese showed some interest in the property, ‘the volume was not significant’ though.


Original article: Expansión (by Marisa Anglés)

Translation: AURA REE

Fifteen Prominent Funds Eyeing Madrid, Catalonia & Sareb Properties

31/10/2014 – Expansion

Real estate exhibition Barcelona Meeting Point attracted between 15 and 20 big-name international funds willing to invest in the Spanish property. Representatives of the Community of Madrid, Catalonia and the bad bank, Sareb, went forward to answer their questions.

The capital met the investors in the morning, and the turn of Generalitat and Jaime Echegoyen, Sareb’s CEO, came in the afternoon.

Madrid’s delegate Enrique Ruiz Escudero said the session was ‘very good’ as assets offered by the region (office buildings, industrial, residential and technology land)  enjoyed ‘a considerable interest’.

The greatest popularity earned downtown office units which could be renovated and later on destined for touristic use. Also, funds made a petition to public administation to give more time for analysis before demanding offers.

Bank of America Merill Lynch, Benson Elliot, Deka, Red Storm, Orion, Shaftesbury, TPG or GE Capital Real Estate are only few of the 14 grandeur funds that turned up at the private meeting with the Community of Madrid.

It is expected that Sareb will gather an audience compound of funds like Oaktree, GreenOak, Grove Internacional Partners, Credit Suisse or lawyers office Greenberg Traurig.

Also, around fifteen funds confirmed participation in the meeting with local Catalonian Government. Its representatives will present the properties to be tendered in December, among which noteworthy are: the Barcelona Stock Exchange Market building at 19 Paseo de Gracia street, Barcelona, up for sale at €88.9 million, representing the real estate crown jewel of Generalitat.

Apart from this appealing unit, two other certainly deserve attention: the Torre Munoz skyscraper at 105 Paseo de Gracia and the headquarters of the Employment and Industrial Relations department located at 148-150 Sepulveda street. Both buildings are worth €79.3 million.

The local authorities hope to earn some €168 million for the three properties and potential buyers ought to deposit a 5% value of each before November 14th.


Original article: Expansión 

Translation: AURA REE

Credit Suisse, Deka & Oaktree Return to RE Sector of Spain

22/10/2014 – Expansion

Large international mutual funds flock to Spain. From being avoided like the plague since the real estate bubble burst, this Spanish property market returned to investment target maps of investors.

Only several of them attended last year’s property exhibition Barcelona Meeting Point (BMP). But this year, the fair will reunite also those who were missing. Most of big international funds have already confirmed participation in the event to be held from October 29th to November 2nd.

To name few that are going to turn up, Bank of America Merrill Lynch, Credit Suisse, Deka, GE Capital Real Estate, Greenberg Traurig, Grove International Partners, Oaktree Capital Management, Red Storm Capital, Shuman Capital, TPG Capital and Värde Partners.

Those who attended the exhibition in 2013 and will return this year are executives representing: Benson Elliot, Cerberus Iberia Advisors, Europa Capital, GreenOak, Orion Capital Managers, Shaftesbury, Stam Europe and HSBC.

It is predicted that the 2014 total investment volume will level out to the pre-recession levels. According to Aguirre Newman, in the first nine months of the ongoing year, €10.4 billion was spent on the Spanish real estate, juxtaposed with the €9 billion amount invested throughout 2013.


Original article: Expansión (by Marisa Anglés)

Translation: AURA REE

Lacalle: ‘I Am Afraid of a New Housing Bubble’

20/10/2014 – Expansion

The president of real estate exhibition Barcelona Meeting Point (BMP), Enrique Lacalle, celebrates return of foreign property investors and highlights that all companies that disappeared five years ago have now ‘jumped back in as Spain became fashionable’. But he also calls for prudence: ‘I am alarmed at the possibility of relapsing’.

Lacalle, well experienced in the real estate sector, recommends ‘learning from the past mistakes’. To begin with, the international investors came back focused on very specific type of properties, namely from ‘the prime group’. But as this kind of units for sale fall short, ‘they are buying properties which are not necessarily good at pretty high prices’. ‘It is just a feeling, nothing scientific, but I am afraid that a new housing bubble might occur’, the president admits.

‘I am truly pleased with the return of the international investors, I simply ask for cautiousness at the product choice and for great advising job from Spanish realtors as we should avoid the same mistakes as we have committed the last time’, he clarifies.

Likewise, he calls for ‘not listing properties which might leave a bad taste afterwards’.

The BMP, held from 29th of October to 2nd of November in Barcelona, has been already noted down in agendas of many large foreign investment groups.

Lacalle says that even though the Russian and the Chinese are gaining ground in real estate sales in Spain, predominant buyers come from the European countries.

This year, the Barcelona Meeting Point event will host 265 exhibitors having their stands on a 20.000 square meter area. ‘Really important transactions will be sealed during the subsequent Barcelona Funds Meeting‘, informed Mr. Lacalle.

Asked about his opinion on the Catalonian independence movement, Mr. Lacalle replies: ‘they are not serious on that, if they were, they would not come up’.


Original article: Expansión (by Marisa Ángles)

Translation: AURA REE