Tag: canary islands

INE: House Prices Rose By 6.3% In Q1 2016

10 June 2016 – Expansión

The recovery of the real estate market is picking up strength, so much so that both house prices and the volume of transactions are growing at their highest rates since the burst of the real estate bubble. Specifically, house prices rose by 6.3% during the first quarter of the year, compared with the same period last year; meanwhile, the number of acquisitions increased by 29% in April. All of those figures come from data published by INE yesterday.

House prices, which first started to rise again two years ago, increased significantly during the first quarter of the year. In this way, whilst prices increased by 4.2% during Q4 2015, that rate of growth accelerated by another 2.1 percentage points in the subsequent three months. As such, they have reached their highest rate of growth since Q3 2007, when the real estate market had just started to slow down, but the bubble had not yet burst.

With these figures, it seems that the real estate market has now entered a new phase in its recovery. Although the volume of transactions began to recover a few years ago, prices continued to hit new lows; now, however, it seems like prices are starting to recover too, and with increasing strength, in line with the increase in operation volumes.

Madrid led the price rises during Q1 2016, with an increase of 9.7%, followed by the Balearic Islands (8.8%) and Cataluña (8.6%). That is because those regions include areas with high demand from foreigners and also because, that is where the stock of unsold homes has been more limited. Amongst these regions, the increase in Madrid was particularly strong, given that prices rose by 2.9% with respect to the previous quarter, double the average rate of growth across the country (1.5%) and the highest growth rate seen in any of the autonomous regions.

Conversely, the increase was much more moderate in Castilla-La Mancha, where prices rose by 1.5% with respect to the previous year. Castilla y León and Extremadura (1.7% in both cases) recorded similar increases. Nevertheless, these statistics do not take the shine off of the real estate recovery, given that prices rose at a higher rate than last quarter in every autonomous region. (…).

Finally, the price of second-hand homes rose by 6.4% with respect to 2015 and so outperformed new home prices by 0.3 percentage points (6.1%).

Transactions

This increase in prices is fuelling the increase in demand, given that the volume of house purchases grew at a rate of 29%, the maximum rate since records of these statistics began back in 2007. Moreover, INE published this data on the same day that the Ministry of Development confirmed that the volume of acquisitions had increased by 20.7% during Q1 2016, with respect to the same period in 2015. Although the methodologies are different, it seems that growth had already become strong during the first three months of the year, before shooting up in April.

The volume of second-hand homes sold rose by 32.3%, whilst the number of new homes sold increased by 17.6%. By region, the highest increase was recorded in the Balearic Islands (61.7%), whilst the lowest rise was seen in the Canary Islands (2%).

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake

Sareb Puts 564 Unfinished Developments Up For Sale

30 May 2016 – El Diario

Sareb, better known as the bad bank, has put 564 residential housing developments up for sale. The majority of the portfolio contains properties in the initial stages of development or work in progress and most of them are located in Cataluña, the Community of Valencia, Andalucía and the Canary Islands.

Initially, Sareb will release 140 unfinished residential developments onto the market and will thereby supply almost 5,000 homes and a few tertiary use buildings.

Most of the unfinished developments to be sold during this first phase are located in Andalucía and Cataluña, with 28 buildings each, as well as in the Canary Islands, with 26; whilst by province, the supply is most abundant in Barcelona, Las Palmas, Alicante, Cádiz, La Coruña and Madrid.

In this way, the Canary Islands, with 1,166 homes; Andalucía, with 1,057; and the Community of Valencia, with 838, together account for more than half of the properties that will come onto the market at the start of this operation.

The General Business Director at Sareb, Alfredo Guitart, considers that “having overcome the crisis”, now is the time to provide a commercial outlet for these developments.

“In this way, the sale represents an investment opportunity for local property developers, who are very familiar with their environment and have the capacity to finish the construction work and bring the properties onto the market successfully”, said Guitart.

The company also resumed 68 developments between 2013 and 2015 and expects to finalise 20 developments, where work had been suspended, before the end of 2016.

Original story: El Diario

Translation: Carmel Drake

Tinsa: House Prices Rose By 2.2% In Q1 2016

14 April 2016 – 20 Minutos

House prices rose by 2.2% during the first three months of the year. According to Tinsa, the price of flats and houses increased by 0.8% in March with respect to the same month last year.

The appraisal company considers that the average price of homes in Spain is following a “moderate” positive trend for the time being – in other words, it is increasing moderately -. The cumulative decrease since the peaks of 2007 amounts to 41%, according to Tinsa’s IMIE General and Large Markets Index.

By geographic region, the Balearic and Canary Islands, and Mediterranean Coast recorded YoY price increases of 4.3% in March in both cases. Prices rose less sharply in metropolitan areas, with a YoY increase of 2.8%. By contrast, house prices decreased in March in other towns (-1.6%) and in capital and other major cities (-0.3%).

On a cumulative basis since January, the largest increase in house prices were recorded in the Balearic and Canary Islands, with growth of 5.1%. They were followed by price rises in other towns (+3.4%), the Mediterranean Coast (+3.1%), metropolitan areas (+2.2%) and capitals and other major cities (+0.6%).

Since the peaks of 2007, house prices have decreased by 41%. The Mediterranean Coast is the area where prices have decreased by the most (-46.5%), followed by capitals and other major cities (-45.1%), metropolitan areas (-43.8%), other towns (-36.1%) and the Balearic and Canary Islands (-29.1%).

Original story: 20 Minutos

Translation: Carmel Drake

Hispania To Purchase 4 Dunas Hotels In Canary Islands For €75M

12 April 2016 – Expansión

The Socimi in which George Soros holds a stake has taken over the mortgage debt of the company that owns the hotels, which it has purchased from several financial institutions at a discount.

Hispania will invest €75 million on the purchase of four hotels on the island of Gran Canaria from the company Dunas Hotels & Resort, in order to strengthen the portfolio of assets of this type that it already owns in the Canary Islands, according to a statement made by the company. (…)

Dunas Hotels & Resort has filed for bankruptcy and so Hispania must wait until the creditors of the company have approved the agreement to exit the bankruptcy process and the company can be capitalised.

With this operation, Hispania will acquire four 4-star and 3-star hotels, containing 1,183 rooms in total. The Socimi will subsequently make an investment of €9 million to reposition the hotels through improvements.

The current partners of Dunas Hotels & Resorts will continue to operate the hotels through a variable lease contract for an initial term of ten years.

According to Hispania, the four hotels recorded an “exceptional” year in 2015, which is expected to continue in 2016.

With this investment, the Socimi will complement and reinforce the portfolio of holiday assets that it owns in the Canary Islands and will strengthen its presence on the island of Gran Canaria, where it already owns the 484-room Hotel Barceló Margaritas.

House purchases in Madrid

Meanwhile, Hispania has acquired a complex of 91 homes in Madrid, located in the north east of the capital, for €16 million.

Specifically, the asset comprises ninety-one 1-bed and 2-bed homes, which have a combined surface area of 6,296 m2 and 146 parking spaces.

Original story: Expansión

Translation: Carmel Drake

JLL: Hotel Investment Exceeded €2,650M In 2015

12 January 2016 – Expansión

2015 was a record year for investment in the hotel sector, driven primarily by Spanish buyers. The Canary Islands and Madrid were the stars in terms of location. Last year, 143 hotels were sold in Spain worth €2,650 million, which represents an increase of 65.6% compared with 2006, the previous record-breaking year; and more than double the investment volume recorded in 2014 – €1,180 million.

Spain was the third most popular European country for investors, behind the UK and Germany, according to a report by the consultancy firm JLL Hotels & Hospitality Group. And Spanish investors returned to the spotlight, thanks to the improvement in the domestic economy. In 2015, 74% of total investment was made by domestic buyers, compared with 58% a year earlier.

In this regard, the Socimis were the great discovery of the year. Merlin and Hispania, the two largest Socimis by market capitalisation, spent €965 million on hotels, whereby accounting for 36.4% of the total volume invested in Spain.

In terms of Spanish investors, the Socimis and investment funds were followed by Spain’s hotel chains, which accounted for 13.5% of total investment. The Catalan hotel chains H10 and Hotusa were the most active in 2015. They were followed by private investors, such as family offices, which accounted for 8.9%.

In the meantime, overseas investors accounted for 26% of total investment in Spain, with buyers from France being the most active – Accor’s acquisition of four Novotel hotels was a key deal – behind those from Germany – IFA paid €48 million for two properties in the Canary Islands – and Hong Kong – Mandarin purchased the Ritz in Madrid, together with the Saudi group Olayan-.

By type of investor, the funds increased their weight significantly during the year, specifically, up from 30.4% to 53.6% of the total. Hotel groups and private investors lost steam, in contrast to the real estate companies, which recorded a slight rise.

The Canary Islands accounted for 29.6% of total investment, benefiting from the upturn that Spain’s tourism industry is experiencing at the moment due to (political) instability in other competing countries in the Mediterranean. 31 hotels were sold there in total, primarily as a result of the partnership between Meliá and Starwood Capital, as well as due to the creation of Bay, the first pure hotel Socimi, by Barceló and Hispania.

Recovery

Madrid was the second most popular destination, accounting for 23.5% of total investment. The price paid for the Ritz hotel – €778,000 per room – was the highest recorded in Spain. Half of the operations involved five-star hotels and 43% involved four-star hotels.

Occupancy rates have improved in the Spanish capital, but the average price there continues to fall below its pre-crisis levels.

In the Balearic Islands, hotels worth more than €445 million were sold – 16.8% of the total – , above Barcelona, where 14 transactions worth €340 million were signed – accounting for 14% – above all, involving four-star properties. Despite the moratorium imposed by the mayoress Ada Colau, the Catalan city is the country’s leader in terms of profitability and the outlook there is positive.

Another trend in 2015 was the sale of hotel portfolios. 78 of the 143 hotels that changed hands belonged to a larger batch. This year, more operations of this type are expected, albeit smaller in value; and overseas Socimis and investors are expected to play a more active role. According to JLL, investment in 2016 could reach similar levels to those seen last year.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Tinsa: House Prices Rose By 0.2% In Madrid In Q3

5 November 2015 – El Economista

According to Tinsa, house prices increased by 0.7% during the third quarter of the year with respect to the same period last year in the Community of Madrid, having increased by 1.5% between January and September. Meanwhile, prices in the city (of Madrid) rose by 0.2% during the same period.

According to Tinsa Research’s general index, it takes an average of 7.7 months to sell a home in the Community of Madrid.

The city of Madrid, where average house prices amount to €2,044/m2, is the “most liquid” regional capital of the five large cities analysed, with an average sales period of 6.1 months.

It is followed by Barcelona, where it takes an average of 6.5 months to sell a home.

In terms of the number of building permits granted, the city of Madrid experienced a slight decrease during the first quarter of 2.6% (1,130 permits) with respect to the same period a year earlier.

By contrast, the level of activity in the second-hand home market increased by 18.7% YoY in the second quarter, to 7,678 operations.

According to the data published by Tinsa, in October, the average price of new and second-hand homes in Spain recorded its first YoY increase for more than seven and a half years, with a rise of 0.8% with respect to the same period in the previous year.

From the peaks recorded before the burst of the real estate bubble, average house prices in Spain have experienced a cumulative decrease of 41%.

During October, the Mediterranean Coast, and the Balearic and Canary Islands were the main drivers of house price growth, registering increases of between 3.6% and 4.2% YoY, respectively.

The group comprising the Balearic and Canary Islands recorded the best YoY increase of any region in October, with a rise of 4.2%, followed by the Mediterranean Coast, with an increase of 3.2%.

The regional capitals and major cities experienced an increase of 0.6% and only the metropolitan areas and small towns recorded slight YoY decreases of -0.6% and -0.2%, respectively.

Since the start of the year, average house prices in Spain have increased by 0.4%, and prices have risen by the most in the Mediterranean Coast, and in regional capitals and major cities.

From the peak prices of 2007, prices have fallen by the most in the Mediterranean Coast, with a cumulative decline of 46.7%.

Metropolitan areas, and regional capitals and major cities, have recorded a similar cumulative decrease since 2007, of 44.4% and 44.5%, respectively.

Average house prices in Spain recorded their first YoY decrease in March 2008 and have continued on a downward trend since then.

The rate of decrease began to slow in the second quarter of 2013 and the General Index has remained stable over the last year.

Although the YoY data recorded in October represents a turning point, Tinsa believes that the stabilisation of prices still needs to be consolidated.

Thus, the evolution of average house prices over the coming months will depend on the behaviour of the economy and the labour market, where a considerable amount of uncertainty still exists.

Original story: El Economista

Translation: Carmel Drake

Foreigners Spent €463M On Canary Island Homes In H1 2015

3 November 2015 – ABC

The real estate market is being revived slowly, but surely in the Canary Islands. Most of this growth is due to foreign residents in the autonomous region, which have spent more than €460 million so far this year buying homes in the region. To put this amount into context, that figure is the highest seen in the last eight years. In fact, for example, it more than doubles the figures recorded in 2009, when the economic crisis had already taken hold in Spain.

The demand for apartments and homes is recovering but at a slow rate. According to statistics published by the Ministry of Development, in 2015, and specifically in the six months to June 2015,  9,560 homes were bought and sold in the Canary Islands: 4,909 in the province of Las Palmas and the remainder, 4,451 in the province of Santa Cruz de Tenerife. This reflects an increase compared with the fewer than 9,000 homes that were sold during the same period in 2014, the fewer than 7,600 that were sold in H1 2013 and the 7,650 that were sold in H1 2012. A positive trend for the Canary Islands’ economy, which is strengthened by the fact that the size of these real estate operations is also on the rise.

Data from the Department led by Ana Pastor reveals not only that the volume of transactions signed (by buyers of all nationalities) between April and June (almost €588 million) is the highest quarterly figure since Q3 2010, but also that the volume signed during the first half of 2015 (almost €1,100 million) represents the highest figure since H1 2010. Between January and June, house sales in the autonomous region amounted to €1,069.4 million, of which almost €545.5 million related to operations in the province of Las Palmas and around €524 million to transactions in the province of Santa Cruz de Tenerife.

The bulletin from the Ministry of Development also showed that the recovery in the real estate market in the autonomous region has reached an important segment of the market, i.e. that comprising foreigners. Overseas residents in the region were behind house purchases amounting to almost €462.3 million between January and June. These operations totalled just under €210 million during the first quarter of the year and just over €252.5 million during the second quarter. The last time this figure exceeded €252.5 million was in Q3 2007, i.e., just before the onset of the subprime mortgage crisis, when it reached €261.3 million. If we take this latest half year data as a benchmark, the €462.3 million spent represents the highest figure spent by foreign residents in the last eight years, i.e. since H1 2007, the year that marked the end of the boom and the beginning of the long years of hardship. (…).

These statistics also show that foreigners living in the autonomous region prefer to buy second-hand homes. More than €417 million of the €462.3 million spent by foreigners, i.e. more than 90%, was spent on second-hand apartments and homes. (…).

Land sales not increasing

However, another indicator clearly shows that the recovery of the real estate sector is not happening as quickly in the Canary Islands as in the rest of the country: sales of land. The latest data from Spain’s National Institute of Statistics (INE) show that whilst during the 8 months to August, 48,905 plots of land were sold in Spain, up by 10.5% compared with the same period in 2014; the comparable figure amounted to less than 1.5% in the Canary Islands, where just 1,257 plots were sold between January and August, an increase of just 19 (plots) compared with the previous year. At the height of the boom, 5,800 plots were sold in the autonomous region during the same period in 2007.

Original story: ABC

Translation: Carmel Drake

Tinsa: House Prices Fell By 2% In July

5 August 2015 – Expansión

According to Tinsa, house prices in July have recorded a cumulative decrease of 41% since 2007.

The decline in house prices moderated to 2% in July, the smallest YoY decrease since May 2008, but recorded a cumulative decrease of 41.5% from the peak figures registered during the last quarter of 2007, according to the Local Markets Index (IMIE) published by Tinsa yesterday.

This data from the appraisal company shows that the residential market is continuing to stabilise, a process that began during the second half of 2013.

The best figures were recorded on the Mediterranean Coast, where the average price increased by 2.8%.

Overall, the residential market showed signs of recovery in almost all areas, with a slight fall of just 0.5% between the end of 2014 and July 2015. Moreover, in three of the five areas analysed, the evolution in prices was positive during the first seven months of the year.

On the Mediterranean Coast, where prices decreased by 47.6% on average during the crisis, prices have increased by 3.8% on average since the end of 2014.

Meanwhile, in the provincial capitals and major cities, as well as in the Balearic and Canary Islands, prices have increased by several tenths so far in 2015: by 0.2% and 0.9%, respectively.

However, with the exception of the Mediterranean Coast, prices have decreased over the last twelve months in the majority of regions.

Average prices in provincial capitals and major cities and in other municipalities in July were 1.8% below their levels in July 2014, on average.

The decrease was more acute in metropolitan areas, which recorded a YoY drop of 4%, and in the Balearic and Canary Islands, where prices decreased by 4.8% compared with a year earlier.

Since 2007, house prices have recorded a cumulative decrease of 41.5% on average in Spain.

The greatest decreases have been registered on the Mediterranean Coast, with a 47.6% decrease, followed by the metropolitan areas and provincial capitals and major cities, which all recorded cumulative declines of 45.1%.

By contrast, the smallest cumulative decreases have been recorded in the Balearic and Canary Islands, with a decline of 30.5% and in other municipalities, where prices have fallen by 36.4%, on average.

Original story: Expansión

Translation: Carmel Drake

Hispania Acquires 2 Hotels In Canary Islands For €105M

19 June 2015 – Hispania Press Release

Hispania Activos Inmobiliarios, S.A., through its 100% subsidiary company Hispania Real SOCIMI, S.A.U., has acquired the Gran Hotel Atlantis Bahía Real (pictured above) and the Suite Hotel Atlantis Fuerteventura Resort, both located in the Canary Islands. The Gran Hotel Atlantis Bahía Real is a 5* GL hotel and is the landmark hotel in Fuerteventura. It falls into the category of trophy assets within Hispania’s portfolio, along with the Hotel Guadalmina Golf in Marbella.

These two acquisitions provide new flow to Hispania’s investment in vacation hotels, which is being developed along with Grupo Barceló, and it strengthens its presence in the Canary Islands, a key market in the company’s resort hotel strategy.

The €105 million price implies a 10.5x multiple of GOP during the last twelve months to March 2015. Based on the results as of March 2015, the Gross Yield of this investment stands at 8.5%, whilst the Net Yield is 8.0%. The amount paid for both hotels has been fully disbursed using Hispania’s own funds.

Grupo Atlantis will continue as the operator of both hotels, which are very well maintained, under a rental contract with a variable component that includes a minimum guaranteed fixed rent. The agreements reached with Grupo Atlantis include diverse incentive schemes linked to the results obtained by the operator as a result of the management of the hotels.

Gran Hotel Atlantis Bahía Real

The Gran Hotel Atlantis Bahía Real is a 5* GL hotel with 242 room –inaugurated in 2003. It provides direct access to the beach and is located just a few minutes away from the Natural Park of Las Dunas de Corralejo, which was recently named one of the best beaches in Spain. This is the landmark hotel in Fuerteventura and one of the most prominent ones within the 5* GL category in the Canary Islands as a whole.

Suite Hotel Atlantis Fuerteventura Resort

The Suite Hotel Atlantis Fuerteventura Resort is a 4* hotel with 383 room, also located in the North of Fuerteventura Island, in Corralejo. It has 3 restaurants, 7 bars, a spa, 7 outdoor swimming pools, 3 tennis courts and garden areas, all of which is distributed across a surface area of approximately 50,400 square metres.

Original story: Hispania Press Release

Edited by: Carmel Drake

Hispania’s Hotel Socimi Evaluates Potential New Partners

14 May 2015 – Cinco Días

Bay, the hotel vehicle created by Hispania and Barceló, wants to strengthen its growth. The Socimi, which specialises in the Spanish holiday hotel segment, is seeking to expand its assets and obtain a critical mass with which to debut, first on the MAB, and then on the main stock exchange.

The head of the hotel sector for Hispania, Javier Arús, has acknowledged that the Socimi is interested in continuing its purchase of assets in the Canary Islands, the Balearic Islands and on the coast. For the time being, the vehicle owns 11 hotels and 3,946 rooms, expandable to 2,151 more, as the result of an agreement with Barceló, which has required an investment of €421 million. According to Arús, this amount (of total investment) will have to increase to €1,000 million to ensure the appropriate “critical mass” for floatation on the stock exchange.

A few weeks ago, Hispania revealed that it had secured €545 million to invest in assets after completing a capital increase, which involved the accelerated placement of 27.53 million shares. This financial muscle will allow it to make the upcoming purchases amounting to €200 million that it announced recently. Within the hotel sector, Hispania announced in November that it was in the advanced stages of studying a transaction amounting to €40 million involving a hotel asset in the Canary Islands with 700 rooms.

At a conference about hotel investment in Spain organised by Garrigues and Cehat (la ‘Confederación Española de Hoteles y Alojamientos Turísticos’ or the ‘Spanish Confederation of Hotels and Tourist Accommodation’, Arús said that Bay is (currently) analysing the entry of family hotel groups, either through cash or hotel assets. “There is a huge opportunity to grow in (terms of the number of) rooms”, said the executive, who pointed to the possible scaling up of Bay’s model within the Spanish holiday segment.

The investment vehicle created by Hispania and Barceló expects to own assets managed by different operators, not just the Mallorcan group. In fact, Arús revealed that Barceló is not expected to operate the next few hotels that the Socimi acquires.

As well as creating the Socimi with Barceló last year (and taking a 80.5% controlling stake), Hispania purchased the Hotel Melia Jardines del Teide for €36 million, two NH hotels in Madrid for €42.15 million and the Hotel Guadalmina in Marbella for €21.5 million, as well as a hotel from the Vincci chain. The company has not ruled out transferring these assets to Bay during the second half of this year.

Original story: Cinco Días (by L.S.)

Translation: Carmel Drake