# Of Estate Agents Grow With A Vengeance In The Community Of Madrid

19 September 2017 – Real Estate Press

The resurgence of real estate activity in Spain, and in particular, in the Community of Madrid, has given rise to a significant increase in the number of companies in the sector, which have grown by 18.5% since 2014. Currently, the Community of Madrid has 31,384 real estate companies and 33,616 real estate related premises. In other words, one for every 192 inhabitants.

So far this year, 41,641 homes have been sold in Madrid, up by 17% compared to a year ago, and up by 30% compared to two years ago. Moreover, prices rose by 10.9% in the second quarter of 2017 with respect to the previous year. In addition, rental prices have risen by 11% over the last year.

Jaime Cabrero, President of the Official College of Real Estate Agents in Madrid, says that “Normally, when the sales market is strong, the rental market is weaker, and vice versa, but now both sectors are booming”. He added that “Naturally, we are seeing an increase in (the number of) real estate companies (…); there are 33,616 estate agent premises”, which is a high number of establishments dedicated to real estate activity.

According to figures from the Central Directory of Companies, compiled by Spain’s National Institute of Statistics (INE), over the last three years, the number of estate agent premises has risen by 5,377. The increase in the number of companies, many of which have more than one branch, amounts to 4,912. Logically, this activity has an impact on employment. During the second half of 2017, the sector provided work to 29,300 people, according to the INE’s Active Population Survey, 8,800 more than in 2014 and the highest figure for the last decade.

In fact, the real estate activity category includes all companies dedicated to the sale, purchase or rental of all kinds of properties, including “lessors, agents and brokers”, as well as other key services, such as appraisal. The category also includes companies dedicated to construction, which then carry out the maintenance and rental of buildings, as well as managers of real estate properties. The sub-category containing the latter – “real estate activities on behalf of third parties” – grew by 1,773 companies between 2014 and 2017, to exceed 10,000 in total.

Original story: Real Estate Press

Translation: Carmel Drake

Bankia Sold 4,135 Properties In H1 2015 For €262M

17 July 2015 – Expansión

Bankia sold 4,135 properties during the first six months of 2015, i.e. more than double the number it sold during the same period in 2014 (1,919). Half of the sales were made directly through branches and the other half were closed through intermediaries. These properties form part of Bankia’s stock and have nothing to do with the assets that the bank transferred to Sareb after receiving public aid.

The sales generated revenues of €262 million, up 82% on the year before. 92% of the sales relate to residential properties. The remaining 8% include the sale of retail premises, whose sales volumes increased 6-fold compared with the previous year.

At the end of the first quarter, Bankia had foreclosed properties on its balance sheet amounting to €4,213 million – this amount had barely changed since the end of 2014.

Original story: Expansión (by M. Romani)

Translation: Carmel Drake

Vulture Funds Bid For Martinsa’s Debt

4 March 2015 – Expansión

Some new players may be joining Martinsa Fadesa’s liquidation process. The decision taken by the real estate company’s Board of Directors on Monday to approve the liquidation plan has attracted investment funds in to the fold, interested in buying up some of its debt.

“The liquidation process appeals to investors that want to buy cheap and are willing to wait a long time (to recover their investments) and obtain a significant profit in return”, explains Mercadeuda, a company that specialises in connecting holders of debt with potential buyers.

However, the offers that Martinsa’s creditors will receive will be very aggressive. “I do not think they will offer to pay more than 10% of the nominal (value of the debt). In fact, the most reasonable offers will likely range be between 3% and 5%”, says Rubén Barriocanal, Investment Manager at Mercadeuda.

Martinsa Fadesa has assets worth €2,392 million and debt of almost €7,000 million, according to information filed with the CNMV. Of that liability, around €712 million is senior debt, according to the most recently presented bankruptcy report. More than €3,600 million comprises ordinary loans and around €1,750 million are equity loans.

The company’s principal creditors include Sareb, CaixaBank, Popular and Abanca. “The banks hold senior debt, and therefore they would not be particularly interested in selling. Instead, the offers from these investors, with high-risk profiles, are targeted at the holders of ordinary loans, such as suppliers.

For now, the movements between debt holders seem to be limited. “The only funds that are exchanging debt on the secondary market are minority and the amounts involved are modest. Some of them are the same players who bought stakes of less than €10 million three and a half years ago”, explain the financial sources.

The main brokers in this transactions include Bank of America and Citi.

Original story: Expansión (by R. Ruiz and D. Badía)

Translation: Carmel Drake