Tag: capacity

Metrovacesa Negotiates with Funds to Build New Offices

23 May 2018 – Expansión

Metrovacesa, the property developer in which Santander and BBVA hold stakes, wrote a new chapter in its history on 6 February with its return to the stock market after five years away and with an ambitious growth plan in its sights. Following a lacklustre debut on the stock market and with a land portfolio worth €2.6 billion, the company is now preparing to show the market that it is capable of fulfilling its planned targets for the hand over of homes and generation of returns from its portfolio of non-residential land.

In this sense, Metrovacesa is holding negotiations with international funds in order to create joint ventures to promote offices. “We are holding advanced conversations and we hope to close several joint ventures before the end of the year”, explains the CEO, Jorge Pérez de Leza (pictured above), in an interview with Expansión.

The proposed model involves creating joint ventures in which the financial partner will control 75%, whilst the remaining 25% will remain in the hands of Metrovacesa: “That would allow us to sell land at prices close to the GAV (gross asset value) or higher and to retain a stake in each project”.

Metrovacesa currently owns tertiary land spanning more than 1.3 million m2, which has an approximate value of €684 million.

In addition to the joint ventures with financial partners, the company is planning to sign more turnkey projects, like the one sealed last year with Axiare for the sale of a building under construction located at number 40 Calle Josefa Valcárcel in Madrid, which will be handed over at the end of 2018, for €30 million.

“The aim of the company was to launch 36,000 m2 through turnkey projects and joint ventures in 2018, and we are going to exceed that figure”, said the CEO. In parallel, the firm is continuing to sell tertiary land. In April, it reached an agreement with the property developer La Llave de Oro to sell a plot in the 22@ district of Barcelona for €22 million and it is negotiating other operations worth €14 million, which will allow it to exceed the objective for 2018. With these operations, the company is generating cash, whilst it prepares the launch of its primary business: the development of homes.

Advantage

Pérez de Leza reveals that the company will launch between 3,500 and 4,000 units in 2018, which will allow it to advance in its goal of reaching cruising speed in 2021. According to its initial plans, it will hand over 520 units in 2018 and then 700 and 3,500 units in 2019 and 2020, respectively: “That will allow us to be on track to break even by the end of the year and follow a positive path next year”.

In the opinion of the director, one of the property developer’s competitive advantages is its land portfolio, which has capacity for the construction of 37,500 homes. “We can fulfil our delivery objectives for the next eight years without having to buy any land. That means we can take things calmly compared to our competitors”, he said.

Pérez de Leza also defends the group’s commitment to diversify its portfolio: “There is no buildable land left in Madrid, Barcelona and Costa del Sol. If you want to carry out significant deliveries (of new homes), you need to open yourself up to other markets”. And he also reveals that the firm has received offers to sell non-developable land that it has ruled out until the urban planning permits have been obtained. “Land management is an added-value strategy, we have a team ready to do it and we can obtain higher margins. Selling now would mean losing euros along the way”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Neinor Homes Buys “Non-Finalist” Land for €194M

9 May 2018 – Expansión 

Despite recording losses of €8 million during the first quarter of the year, the property developer is maintaining its objective of closing the year in profit.

Neinor Homes closed the first quarter of the year flat in financial terms, with sales of €19 million and net losses of €7.9 million, but it is preparing to crank up the pace with the handover of 1,000 homes during the course of the year, primarily during the last six months, which will allow it to close the year in the black.

Moreover, in order to maintain the pace of deliveries from 2022 onwards, the firm has closed agreements to purchase “non-finalist land” (plots without building permits) for €194 million, on which it will be able to build 1,400 homes. “This land has very advanced planning in place and is without risk. The payment will only be made for these plots if all of the licences are granted within the planned timeframe”, explained Neinor.

These purchase agreements follow the €7.5 million invested in three finalist plots acquired during the first quarter of the year for another 120 homes. With these plots, the firm now owns a portfolio of land with capacity for 14,000 homes. In terms of Capex, Neinor is planning to spend €430 million on its construction projects, which implies 1% less than budgeted.

The property developer’s CEO, Juan Velayos (pictured above), says that this year is going to be “significant” in terms of revenues and he adds that, of the 1,000 home handovers scheduled for 2018, 90% have already been pre-sold. “The rest, which are the best units, will be sold once they have been handed over”, he said.

Pre-sales

Following the punishment from analysts in February, when Neinor announced a reduction in its delivery targets to 1,000 units in 2018 compared with 1,374 planned initially and to 2,000 in 2019 from 3,000 planned originally, the property developer now wants to reassure the market. It confirmed that the 31 developments that are going to be handed over in 2019 are already underway and have received their licences. “We have very high visibility over our revenues”, added the director. Specifically, Neinor’s order book includes almost 2,500 pre-sold homes, which corresponds to sales of around €828 million.

Velayos said that, with the projects underway, the company is going to reverse the weight of the different businesses and revenues will now be generated by the delivery of homes.

Neinor’s shares (…) ended trading yesterday down by 2.31% to €16 per share.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Aedas Homes Acquired Developable Land in Madrid for 2,000 Homes in 2017

2 April 2018 – Inmodiario

Aedas Homes, a key player in the new cycle of the residential property development market, which made its stock market debut in October last year, exceeded its objectives in terms of the acquisition of 100% developable land in 2017. In fact, last year, the company invested €123.1 million in the purchase of land with the potential for the construction of 3,172 homes, up by 27% compared to the forecast set out in its Strategic Business Plan.

Specifically, 66% of the land acquired by the property developer in 2017 was located in the Community of Madrid, one of the areas that is seeing the highest demand for new housing, along with Cataluña. This significant stockpile of raw material has allowed the property developer to protect itself against the shortage of developable land in the Madrid region, a dearth that is causing major inflationary tensions in the market.

The plots acquired by Aedas Homes in Madrid have the potential for the construction of 2,093 homes, which, added to the land that the property developer already owned, means it now has a portfolio of land with the capacity to build 4,300 homes across the region.

Completion of the first developments

The Community of Madrid is one of the main focuses for the property developer. The firm has now sold more than 1,000 homes across Spain and is on course to achieve its objective of 1,500 operations at the national level in 2018. The high rate of transactions has been reflected in the sale of entire developments in Madrid, such as Terrazas de los Fresnos, in Boadilla del Monte, and Phase I of Escalonia, in Las Rozas –Escalonia II is now being marketed.

Raw material without any regulatory or political uncertainty

The land acquired by the property developer led by David Martínez in Madrid, along with the entirety of Aedas Homes’ land portfolio, is completely developable, which removes any kind of regulatory or political uncertainty. In other words, the property developer remains at the margin of the land transformation process (from not suitable to its conversion into “developable”), which involves some administrative activities that take a long time and which, therefore, delay the processing of urban development plans.

The company has a total land bank spanning more than 1.5 million m2 ready for development and with the capacity to house almost 13,000 homes, which represents 84% of the units that it plans to hand over between now and 2023. Many experts rate its land portfolio as the best in the market “We are committed to quality and not quantity”, say sources at Aedas Homes.

Original story: Inmodiario

Translation: Carmel Drake

Deloitte: Residential Property Developers Set Their Sights on Consolidation

1 March 2018 – Expansión

The residential sector is on a roll. After years of significant declines in property development activity in Spain, the housing industry recorded its best year since the crisis in 2017, with a total of 500,000 transactions, of which almost 85,000 involved new homes, although the evolution of house sales is still light years away from the levels seen in 2007.

In this context, prices also recovered, recording an increase of 6.6% between 2014 and the third quarter of 2017, albeit with significant differences by province. This recovery in prices came after a cumulative decrease of 27.3% between 2008 and 2014, according to data reflected by Deloitte in its report The Residential Development Handbook. According to that analysis, there are currently 2,150 developments underway, with 114,000 homes being built. Of the total new developments, almost 80% are located in just 10 provinces.

This recovery is happening in the context of a favourable macroeconomic evolution with GDP growth of 3.1% in 2017, a reduction in unemployment and a favourable demographic makeup: Spain has 21 million citizens aged between 25 and 55 years, who may become potential buyers.

Moreover, financing is working in favour of house sales as the banks have opened the credit tap once again, although with greater demands on borrowers and more rigorous controls.

Alberto Valls, Partner responsible for Real Estate at Deloitte, explains that there is “growing unmet demand, which extends beyond the 10 main provinces”. In this sense, sources at the Deloitte have identified 272 hotspots where both demand and prices are growing, unemployment is decreasing and the market dynamics are favourable. “One third of those hotspots are not being covered by any property developers”, explains Gonzalo Gallego, Partner at Deloitte in the Financial Advisory Real Estate team.

These hotspots are located in 158 areas of the country. Specifically, Madrid and Barcelona account for more than 35% of them. In this context, funds such as Castlelake, Cerberus, Blackstone and Värde saw an opportunity in the wake of the recovery and have set up shop in the country. Others, such as Lone Star, have already completed their cycles, and with the sale of its entire stake in Neinor, which has been listed for less than a year, has collected its gains.

For Valls, the Spanish market continues to offer opportunities for investors to create value. “They are continuing to invest through alternative structures: alliances in projects, purchases of property developers and development of platforms for their subsequent debuts on the stock market”, he says.

The Partner responsible for Real Estate at Deloitte also recalls that, despite the creation of new players, the residential market in Spain is “highly fragmented”. And he predicts: “The market for real estate property developers is going to become more concentrated”.

Specifically, the five largest property developers in Spain account for just 6% of the market in terms of units handed over and 12% of the units under development. If we compare those figures with other more mature markets, the Top 5 British property developers account for 39% of the total units handed over, whilst the top five French developers account for 42%, according to data from Deloitte.

Large listed companies

Placing the focus on the large listed property developers, Metrovacesa, Aedas and Neinor, which have a combined stock market capitalisation of €5.2 billion, together, they own a portfolio of land with capacity for the development of 61,500 homes. Their French counterparts Nexity and Kaufman Broad, which have a combined market value of €3.3 billion, own land for the development of 72,100 homes. Meanwhile, the eight largest property developers in the UK, including Persimmon, Taylor Wimpey and Barratt, which have a combined market capitalisation of €37 billion, have potential land for around 300,000 homes.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Junta de Andalucía Puts 33,000 m2 of Land Up For Sale in Córdoba

4 February 2018 – La Vanguardia

The Junta de Andalucía’s Ministry of Development and Housing has launched its first regional land sale of the year in the province of Córdoba, comprising 15 residential and industrial plots, which span 32,989 m2 in total and with an asking price of €5.8 million.

In this regard and in statements to Europa Press, the delegate for Housing and Development at the Junta in Córdoba, Josefina Vioque, said that “with this initiative, we are continuing our strategy of selling some of the land owned by the Agency for Housing and Rehabilitation in Andalucía (AVRA), which obtained such good results in 2017, with the award of almost 22,000 m2”.

The objective, according to Vioque, is “to generate revenues that allow us to strengthen the promotion of our activities of a social nature in terms of housing, especially the promotion of subsidised housing”.

This new tender for the sale of regional land includes seven plots classified as industrial and tertiary, measuring 10,871 m2, and eight units classified as residential, with capacity for 238 homes.

Of the latter, four are reserved for the construction of 188 social housing properties, on a surface area of 17,374 m2, whilst the other four, spanning 4,743 m2, have capacity for 50 private homes.

According to the delegate, the industrial plots are located in the municipalities of Adamuz, Cabra, El Carpio and Córdoba, whilst the social housing plots are located in the provincial capital and in Rute, and the private housing plots are also located in the capital and in the municipality of Obejo.

The tender, which will be open for the presentation of proposals until 1 March, and which will be resolved after the envelopes are opened, scheduled for 12 March, at AVRA’s central headquarters in Sevilla, also includes nine retail premises and 19 parking spaces in Córdoba, Lucena and Rute.

According to Vioque, “the drive to manage AVRA’s owned properties has become a priority since the start of this legislature, give our aim to put these assets on the market at the service of business initiatives, to promote economic development and the generation of employment in the construction sector, one of the hardest hit during the crisis”.

Josefina Vioque said that “with this initiative, the Junta also seeks to reactivate the construction of VPO homes, to facilitate access to housing for families in most need, since these operations are going to allow us to resume, once again, the promotion of these types of subsidised homes, which are more affordable for people with fewer resources”.

Land sold in 2017

This tender follows others carried out during 2017, which saw the award of a total surface area of 21,946 m2  and the generation of revenues amounting to €6 million (…).

Original story: La Vanguardia

Translation: Carmel Drake

Insur to Invest €70M in Office Complex in South of Madrid

31 January 2018 – Eje Prime

Insur is committed to the world of work. The Andalucían group is going to invest €70 million in the south of Madrid to build an office complex that will have a total surface area of 30,000 m2. The project will involve the construction of two buildings alongside Madrid Río.

The company chaired by Ricardo Pumar plans to inaugurate the complex at the end of 2019. The Madrid Río area, where the offices are going to be built, is one of the most sought-after by the real estate sector at the moment. This is evidenced by the Operación Calderón, which will constitute one of the most important real estate operations in recent times in Madrid when it is completed in June.

Insur’s development in the Spanish capital is going to be undertaken through an alliance with two financial partners, in which the group holds a 50% stake. This investment in prime offices will also strengthen the company’s real estate arm, which is looking to diversify both by geography and by segment.

Indeed, this week, the property developer announced the segregation of its property development and real estate businesses. In this sense, Insur has opened a new line of business with its inclusion in the hotel sector, where it already owns three buildings under development, including one establishment in Zahara de los Atunes (Cádiz), which will have 500 rooms. The other two properties will be located in Córdoba and Sevilla and will be operated by Hotusa.

Moreover, the real estate company is looking for opportunities to build out-of-town retail spaces in Spain to expand its real estate portfolio, which is currently worth €294 million.

The objective of Grupo Insur for 2018 is to strengthen its real estate arm, without forgetting about the residential sector. In fact, in that segment, it is going to invest between €75 million and €80 million until 2020 buying up developable land. Currently, the property developer has 2,039 homes under construction and owns a land portfolio with the capacity to build another 2,652 more residential properties.

Original story: Eje Prime

Translation: Carmel Drake

Quabit’s President, Félix Abánades, Increases his Stake in the Property Developer to 28.6%

15 December 2017 – Valencia Plaza

The President of Quabit, Félix Abánades (pictured below), has increased his stake in the real estate company to 28.6% from the 21% that he had held until now, as the largest shareholder, following the materialisation of a land swap for shares. In this way, Abánades holds an almost 30% stake in Quabit, the threshold above which the law would oblige him to launch a takeover bid for 100% of the company.

The President of the firm has already expressed his intention to sell his shares on the market to move away from that legal limit. “Nevertheless, I will sell a few shares as possible, given that I trust in the company’s capacity to push up its share price”, said Abánades recently, talking to Europa Press. In any case, he will retain at least a 20% stake in the company.

The President of Quabit, through his construction company Rayet, is one of six investors with which the real estate company recently closed land purchases in exchange for shares. The operations materialised through a series of non-monetary capital increases, which amounted to €47.7 million in total, and which were approved in November by an Extraordinary Shareholders’ Meeting.

The largest of these operations was precisely the one closed with the construction company owned by Abánades, which transferred developable residential land located in the Corredor de Henares to Quabit for €30.14 million. The plots span a surface area of 131,000 m2 and have capacity for the construction of 1,053 homes. Specifically, in exchange for transferring these plots, Abánades received 15.77 million new shares in Quabit, taking his stake in the company to 26.65 million shares, equivalent to 28.639% of the share capital, according to the registers of Spain’s National Securities and Exchange Commission (CNMV).

Moreover, all of these operation form part of the active land purchase investment policy that the real estate company has carried out this year and which has caused it to almost double the objectives set out in its strategic plan. In this way, Quabit plans to develop 7,880 new homes between now and 2022, compared to the 4,100 forecast initially.

Abánades is currently the only significant shareholder of Quabit, together with Sareb, which holds a 5.52% stake that it foreclosed from an investor. Nevertheless, the company said that with the aforementioned land exchange operations, other minority interest shareholders now own stakes in its share capital.

Original story: Valencia Plaza

Translation: Carmel Drake

Alibaba Signs Lease for its New HQ in Spain

14 December 2017 – Eje Prime

The Chinese giant Alibaba is shaking up the office market in Madrid as the year-end approaches. The Asian e-commerce group has been negotiating for several months to open offices in Madrid from where to lead its operations in the Spanish market. In the end, it has signed a rental agreement for its Spanish headquarters at number 4 Avenida Europa, in Alcobendas, a building owned by the real estate group Gosa. Until now, the technology firm Paypal also had its headquarters in the building (…).

Alibaba will move its Spanish team to the new offices in Alcobendas, which measure approximately 1,000 m2, in the middle of February, according to sources close to the operation. At the moment, the Asian giant’s employees are managing the firm’s Spanish operations from a co-working office. Alibaba has declined to comment on the planned move.

Alibaba’s arrival at number 4 Avenida Europa comes just months after Paypal’s departure from the same building. Currently, that US firm shares offices with Google and Intel in Torre Picasso, as revealed by Eje Prime.

The property that will house Alibaba’s new offices is also home to the headquarters of the cosmetics group Clarins and the Chinese firm Ansteel. Commscope is another company that had its headquarters located in the building until the middle of 2017, but in July it decided to move to number 19 on the same street.

Alcobendas has become one of the hubs of business excellence in Madrid. Indra, VASS, Emerson, Televent, Acciona, Bankinter, Europcar, Canon and Toyota are just some of the multinational companies that have chosen to locate their offices in the Madrilenian town.

Alibaba’s new office, which the company has been anticipating since February, has the capacity to accommodate the almost forty people that make up its Spanish workforce. The team is led by Estela Ye, who was promoted to General Manager of the company in Spain in March.

The office market in Madrid

Leasing of office space during the third quarter of the year in Madrid amounted to 93,173 m2, which represented an increase of 2% with respect to the same period in 2016, although, according to a report from Aguirre Newman, 16 fewer operations were closed (96).

One of the most active areas in the capital was the Other Business District (RDN), which accounted for 31% of the total space leased. Nevertheless, the report highlights that leasing in the Central Business District (27% of the total) and in the OUT area (23%), saw the most significant increases, more than doubling their figures with respect to the same period in 2016.

In terms of rents, the maximum recorded during Q3 was €36/m2/month, whilst the average rent in the CBD area was €28.96/m2/month. In the Decentralised area, the average rent amounted to €12.71/m2/month.

Original story: Eje Prime (by A. Pijuán)

Translation: Carmel Drake

Inv’t In Industrial & Logistics Land In Valencia Already Exceeds 2016 Total

30 October 2017 – El Economista

Demand for industrial and logistics land is growing fast in the province of Valencia. Sale and purchase operations involving this type of land have already exceeded the total volume of space (in square metres) sold during 2016 as a whole, by 30% at least, when operations spanning 585,000 m2 of space were signed – 130% more than during the previous year.

Information from specialist consultants and other data provided by public managers indicates that more than 750,000 m2 of land has been acquired, with a significant percentage of the operations being closed in Ribaroja, Cheste and Sagunto –almost half of the square metres purchased are located in Parc Sagunt, which has experienced a boom since the arrival, in December, of Mercadona, which plans to construct its largest logistics platform there (…).

This increase in demand comes in response to a combination of factors, including: the consolidation of the economic recovery, supported both by internal demand and the export of products and services, which has boosted projects to expand production capacity and storage by industrial groups; the positive outlook for the next few years; improvements in terms of the access to and conditions of financing; projects to improve the communications network – above all, the railways; the growing interest from investors – corporate and institutional, in particular – looking for options to generate higher returns than those found in the financial and securities markets; and the growing demand for modern, high-quality, large assets, in good locations, which have been underserved in recent years due to the total stoppage of new development projects in this field, as a result of the economic crisis (…).

Aguirre Newman adds another element that has benefitted the Valencian market: “The shortage of supply in the main markets in Spain – Madrid and Barcelona – has boosted interest in secondary markets, in particular, in Zaragoza, Valencia and Sevilla”. And this trend could be reinforced in the coming months due to the instability in Cataluña, which is leading to the departure of companies and the suspension of investments.

This confluence of factors has contributed to an increase in the presence of investment funds, Socimis and specialist property developers as the main players participating in sale and purchase operations, above all in the last year and a half (…).

In terms of rental prices, in the prime areas of Valencia, maximums amount to €4.25/m2/month in the Centre Axis of Ribaroja, whilst in the Southern Axis (…), rents have stabilised at €4/m2/month.

In terms of the profitability of logistics rental spaces, whilst in Madrid and Barcelona, yields amount to between 5% and 6%, in the areas with the highest demand in the Community of Madrid, they range between 7% and 9%, according to the consultants (…).

Meanwhile, the Port Authority of Valencia (APV) expects that the Logistics Activity Area (ZAL) will become operational during the first half of 2018, after two decades of delays (…).

Original story: El Economista (by Olivia Fontanillo)

Translation: Carmel Drake

Elektro3 Opens State-Of-The-Art Logistics Centre In Tarragona

13 October 2017 – Mis Naves

Elektro3 is opening a new logistics centre in Vilaseca-Salou with a total surface area of 15,500 m2, of which 8,000 m2 is going to be used exclusively as a warehouse. The centre currently has capacity for 14,000 pallets and 12,500 bins.

The company, whose main operations involve the import and distribution of hardware products, is continuing its expansion process. The main improvements are expected in the storage, preparation and shipment of orders with refurbished industrial machinery and a new rail guidance system.

In turn, the centre has seven loading bays, which allows it to receive and ship all of the company’s products anywhere on the peninsula within 24 hours.

With these new facilities, Elektro3 is expected to be able to reach its objective of managing 8,500 product references, thanks to the implementation of a specialist framework of warehouse management systems. Also, a new 600 m2 showroom has been created inside the new platform, with an area specialising in the display of all products relating to lighting.

Original story: Mis Naves

Translation: Carmel Drake