Tag: Centro

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

Aedas Puts 142 More Homes Up For Sale in its Largest Development in Sevilla

7 September 2018 – Eje Prime

Aedas Homes is starting its second round of sales in Sevilla. The property developer has just released 142 new properties on the market, located in the 1,046-unit residential complex that the company is building in the Andalucían capital.

After finding buyers for 70% of the 142 homes that comprise the first building, Aedas has now placed the properties from the second block on the market. The residential assets have a surface area of 80 m2 each on average and are on the market for, approximately, €122,800.

These 100-odd homes form part of the largest housing development that has ever been built in Spain. The large residential project, which is called Jardines Hacienda Rosario, will house 1,046 apartments distributed over seven blocks and will have more than 33,000 m2 of common areas.

Aedas Homes is continuing its commitment to Andalucía, but it is also present in other parts of the country. Currently, the company has a portfolio of buildable land amounting to more than 1.5 million m2. With that surface area, the company has the capacity to build almost 14,00 homes in the six areas of the country in which it operates: Centro, Andalucía, Costa del Sol, Cataluña, Levante and the Balearic Islands.

Original story: Eje Prime

Translation: Carmel Drake

Excem Socimi Residencial Launches Homiii, a Brand Specialising in Shared Rental Homes for Millennials

17 April 2018 – La Vanguardia

Excem Socimi Residencial, which, in less than two years of life, has accumulated an asset value of €30 million, with share capital of €12 million, has launched the brand Homiii for the professional rental of shared homes to millennial students and young professionals.

Excem’s Socimi estimates a (stock market) debut value of €1.40 per share, which would represent an appreciation of 40% for current shareholders. Its latest capital increase, in March, amounting to €4.1 million was backed by 40 investors in total.

Homiii (www.homiii.com) purchases properties for residential use, in particular, those that are characterised by their location – in the most central areas of cities -, their quality – they must be renovated, decorated and furnished – and their design – the firm prizes comfort and functionality -.

This professional rental management company has concentrated its efforts in Madrid during the first phase. After just 20 months, it has acquired 40 flats, with a combined surface area of more than 7,000 m2 and 252 rooms under management for the academic year 2018-2019, located in the neighbourhoods of Moncloa, Chamberí, Centro and Salamanca.

The CEO of Homiii and Head of Excem Socimi Residencial, Antonio Mochón, explains that they are “very satisfied” with the results achieved so far. “We have created a business from nothing, and, to date, we have incorporated 40 highly qualified investors who have contributed funding worth more than €12 million”, he said.

Moreover, he highlighted that the firm has dealt with “more than 400 clients and earned a satisfaction rate of 80% for the quality of the homes and the value added”. “Young people feel part of the Homiii community because we offer them a lot more than they are initially looking for. We specialise in adding value to investors and clients, in a market where there is more demand than qualified and professional supply”, he said.

The objective is to exceed 3,000 rooms in some of the main cities in Spain such as Madrid, Barcelona, Sevilla, Valencia, Bilbao, Málaga and Santiago de Compostela. The strategic plan for the business model is to close 2019 with investment of €70 million and to reach €300 million over the coming years through expansion across Spain.

Monchón indicates that one of his challenges has been to achieve security for investors: “a gross yield of 6%, a share price increase of 40%, a default rate of 0% and a commercial occupancy rate of 100%”.

“We understand our business project as a very specialist business model, and for that reason, we are managing to add value to our shareholders and offer professionalised management to our clients. We have achieved great stability in terms of the generation of rents and security for investors”, he explained.

Original story: La Vanguardia

Translation: Carmel Drake

Fotocasa: Rental Prices Rose by 8.9% in 2017

15 January 2018 – Eje Prime

House prices are continuing to soar in both the purchase and rental markets. According to the latest report compiled by Fotocasa, rental prices rose by 8.9% on average last year, which represents the highest rise in the historical series, prepared since 2007.

Eleven years ago, this market recorded an increase in rental prices of 3.3%, according to the real estate platform. With the latest increase, rental prices have now registered three consecutive years of rises, although not all of the autonomous regions evolved in the same way.

Until the end of 2017, the only autonomous region to record rental price rises of more than 10% was Cataluña, whereas a year before, Madrid and the Balearic Islands also formed part of that group, according to Cinco Días.

The study, which also analyses the districts of Madrid and Barcelona, shows that in 2017, neighbourhoods such as Ciutat Vella and l’Eixample, in Barcelona, and Centro in Madrid, closed the year with decreases.

Original story: Eje Prime 

Translation: Carmel Drake

Lennar’s Socimi Al Breck Sells its first 4 Assets for €3.5M

5 January 2018 – Eje Prime

One of the largest real estate companies in the United States of America is doing business in Spain. Lennar Corporation has sold four properties through one of its Spanish Socimis, Al Breck, for €3.49 million, according to a statement issued by the company. The firm has carried out the transaction through the company Rialto Capital Management, an investment vehicle, headquartered in Luxembourg that Lennar uses to carry out real estate operations in Europe and the only one that has a stable structure in Spain.

The company disposed of the properties in December, whereby generating a profit of €1.79 million. The firm, which has a loan linked to the assets, will have to assume a financial cost of approximately €1.2 million in this regard.

Lennar Corporation debuted on the Alternative Investment Market (MAB) with Al Breck at the end of November 2016 (although it began its activity in Spain in December 2014), with a stock of almost 639 rental homes located in the centre of Madrid. The Socimi formed its asset portfolio by purchasing a batch of properties from Segurfondo Inversión in December 2014.

Specifically, the Socimi’s assets are located throughout the centre of the Spanish capital (in the following districts: Centro, Salamanca, Chamberí and Chueca), as well as in La Moreleja and areas close to Alcobendas and Torrejón de Ardoz. It also owns retail premises and offices. According to its IPO brochure, the market value of its asset portfolio amounted to €110.52 million (in November 2016).

The Socimi made its stock market debut with a business plan that seeks to generate value from its portfolio, in other words, by selling all of its homes within a five-year period, which ends in December 2020. The company has now started this divestment process with the sale of these four assets.

Al Breck’s strategy

Specifically, the company’s business plan involves investing in improvements to its homes, “to increase returns and improve their occupancy rates to stable levels, implementing an aggressive rental strategy that includes, where necessary, decreasing rents and making concessions to tenants to improve cash flow conditions”.

Subsequently, according to the group’s IPO brochure, “having improved the occupancy rates, the aim is to keep them stable and initiate a progressive increase in rental prices, to reflect the improvements made to the properties and market rates”.

Finally, the Socimi plans “to optimise the value of the portfolio, selling assets either individually or in batches, when demand and prices so favour it and having completed the minimum ownership period of three years”, according to details provided in the brochure.

At the end of last year, the company also launched a second Socimi, Ceres Real Estate Socimi. Although for the time being, the activity of that entity is very limited (it does not have any assets in its portfolio), the sole administrator of the company is Rialto Capital (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

E&V: 800+ Luxury Homes Were Sold In Madrid In 2016

29 March 2017 – El Economista

The luxury real estate sector seems to have been the least affected by the real estate bubble and the serious economic crisis that has hit the country over the last few years. In this sense, premium housing in Madrid has reached a historical high with the number of real estate transactions at maximum levels. During 2016, more than 800 homes costing more than €1,500,000 were sold in the capital. That represents an increase of 60% compared to the previous year.

This data has emerged from the latest report compiled by the prestigious luxury real estate agency Engel & Völkers. The report also states that house prices in Madrid have increased exponentially with respect to previous years.

According to data provided by this luxury real estate agency, in 2016, the vast majority of luxury homes in Madrid, almost 720, cost between €1.5 million and €4 million. A small percentage of the premium homes sold in the capital had a purchase price of more than €6 million. In fact, in some areas of the capital, a luxury home now costs more than €15,000/m2.

Good times for luxury homes

These are good times for luxury homes in Madrid. The current trend, according to the experts, is to construct new build properties, to the detriment of second-hand homes. Nevertheless, this increase in the number of luxury homes sold in the capital in 2016 could be explained by an increase in real estate renovations in the city’s most prestigious neighbourhoods. The high demand for homes in premium areas and the limited supply available also means that prices in certain areas of Madrid are soaring.

The Madrilenian neighbourhoods with the highest demand for luxury homes include El Viso in the Chamartín district and some neighbourhoods in the districts of Salamanca, Retiro and Centro.

In terms of new builds, developers are moving to the outskirts of the capital, given that there is no land left in the city on which to build new and exclusive developments. Boadilla del Monte, Villaviciosa de Odón, Las Rozas and Pozuelo have become the most appealing areas for the construction of exclusive new build homes.

Original story: El Economista (by María Sempere)

Translation: Carmel Drake

Al Breck’s Socimi Debuts On The MAB With 300 Rental Homes

30 November 2016 – Cuatro.com

The Socimi RREF II Al Breck will debut on the MAB today (Wednesday 30 November) at a price of €5.40 per share.

The fund Al Breck will debut its new Socimi on the Alternative Investment Market (MAB) today, Wednesday 30 November. The Socimi was constituted with a stock of around 300 rental homes, located in the centre of Madrid. The fund acquired the properties from the Spanish fund Segurfondo Investion in December 2014.

The firm, known as RREF II Al Breck Socimi, will debut on the stock market at a price of €5.40 per share, which represents a company valuation of €28.8 million, according to the BME.

Specifically, the new Socimi owns a stock of 293 homes located in the centre of Madrid (in the following neighbourhoods: Centro, Salamanca, Chamberí and Chueca), as well as in La Moraleja (Alcobendas) and in towns close to Alcobendas and Torrejón de Ardoz. It also owns twelve retail premises and one office.

According to the prospectus for the IPO, the market value of this portfolio of assets, calculated by an independent firm, amounts to €110.52 million.

On the other side, the company’s debt amounts to €70.03 million, and comprises a participative loan granted by the parent fund, i.e. a liability equivalent to 63% of the value of the portfolio. In addition, all of the homes are mortgaged in favour of Banco de Sabadell, the entity that financed their acquisition.

The Socimi will debut on the stock market with a business plan that involves generating value from its portfolio, in other words, forecasts selling all of the homes within a five-year period, which will end in December 2020.

Aggressive strategy

Specifically, the plan involves investing in improvements in the homes “to increase returns and improve occupancy rates to stable levels, implementing an aggressive rental strategy that includes, where necessary, lowering rents and making concessions to tenants to improve their cash flows”.

Subsequently, “once the occupancy rates have increased, we will ensure they remain stable and start to progressively increase rental income, in accordance with the improvements made at the properties and market prices”.

Finally, the Socimi expects “to optimise the value of the portfolio by selling the assets either individually or in batches, when demand and price make such a decision worthwhile and only after the minimum holding period of three years (applicable to all Socimis) has been exceeded”, according to the prospectus.

Original story: Cuatro.com

Translation: Carmel Drake

ST: New House Prices Rise By 4% In MAD & BCN

30 June 2016 – El País

According to ST Sociedad de Tasación, the average price of new homes grew by 4% YoY in June in the cities of Madrid and Barcelona. They were the two provincial capitals with the highest new home price rises in the last year. These price increases, which are not being seen in other capital, have been driven by the shortage of new home stock, explain sources at ST. “Our analysis of this data and of the increasing trend observed since June 2015 allows us to predict that Barcelona and Madrid are going to act as the drivers of the recovery process for new house prices, albeit at a slow pace”.

Barcelona is the provincial capital that recorded the highest new house prices, with an average of €3,390/sqm. Prices grew there by 2.2% during the first half of 2016. The YoY price increase in Barcelona was 4.1%, the highest of all of Spain’s provincial capitals.

By district, Gracia recorded the highest increase in new house prices, with a rise of 7.72%. It was followed by the neighbourhoods of Sarria-Sant Gervasi, with 6.94% and Sant Marti, with 6.38%. At the other end of the spectrum, the districts with the lowest YoY price increases were Ciutat Vella (1.33%), Sant Andreu (1.93%) and Nou Barris (2.33%).

And not only did the district of Sarria-Sant Gervasi in Barcelona record one of the highest price rises, it also registered the highest average price per constructed square metre, at €5,672/sqm. The districts of Les Corts and L’Eixample were ranked in second and third place, respectively, in terms of average prices, with values of €4,610/sqm and €4,511/sqm. By contrast, the districts with the lowest average prices were Nou Barris (€2,721/sqm), Sants-Montjuic (€3,024/sqm) and Sant Andreu (€3,062/sqm).

In Madrid, a new home costs €2,886/sqm on average

In the case of Madrid, new house prices have grown by 4% with respect to the previous year and by 2.1% during the first half of 2016. That takes the average price of new homes in Madrid to €2,886/sqm.

The ranking for the YoY variation in new house prices is headed by Ciudad Lineal, which saw growth of 5.8%. It was followed by Barajas, with 5.7% and Arganzuela, with 5.4%. At the other end of the spectrum, the neighbourhoods with the lowest YoY price variations were Hortaleza (0.8%) and La Latina (1%), followed by Tetuán (1.8%).

In terms of the average price of new homes, Salamanca was once again the most expensive district in the capital, with an average price of €4,799/sqm, followed by Chamberí (€4,626/sqm) and the Centre (€3,939/sqm). By contrast, the neighbourhoods of Vicálvaro, Villaverde and Villa de Vallecas registered the lowest average new home prices, of €1,856/sqm, €1,883/sqm and €2,203/sqm, respectively.

Original story: El País (by S.L.L.)

Translation: Carmel Drake

Residential Investment: Which Are The Most Profitable Districts?

30 May 2016 – Expansión

Madrid and Barcelona are pulling the real estate wagon. The recovery is happening at two speeds, at least. On the one hand, house prices are rising in the large cities, where sales volumes are also increasing significantly, rental prices are growing, non-residential investment is on the up and there is a shortage of land available for sale.

Most of this improvement in due to underlying macroeconomic trends, but not all of it. The impact of private investors is playing a crucial role in the strengthening of the two large real estate regions, whose central areas are the most sought-after by investors, both businesses and individuals, and Spaniards and foreigners alike.

The prime districts of the Madrid and Barcelona offer the highest rental yields for those looking to buy homes as investments. If we also include the appreciation that these properties are experiencing in terms of price, then the total return on these homes exceeds the 10% threshold.

That is according to a report about rental yields, by district in Madrid and Barcelona, prepared by Fotocasa.

The analysis of the Madrilenian capital concludes that the districts that spark the most interest for rented housing are: Centro, Carabanchel, Tetuán, Puente de Vallecas and Latina. They currently offer an average yield of 6%, almost one percentage point higher than the average return in Spain, which stands at 5.3%. The yields offered from rents in these districts range from 4.9% in Centro to 7.4% in Puente de Vallecas.

In Barcelona, the gross yield from buying a home and putting it up for rent (excluding capital gains) is 5.3%, in line with the national average. The districts that are most sought-after by investors in Barcelona are: L’Eixample, Sant Martí, Ciutat Vella and Gràcia, which are currently generating an average return of 4.7%, i.e. 1.3 points below the yield being offered by an average home in the most sought-after areas of Madrid. In any case, the prime returns range between 4.2% in L’Eixample and 5.3% in Ciutat Vella. (…).

Double-digit price rises

In terms of prices, nine of the 10 districts in the Catalan capital recorded double digit increases in 2015. “Within the last few months, we have seen unheard of increases in rental prices in the city of Barcelona. Whilst historically, the Madrilenian district of Salamanca was the most expensive place to rent a home in Spain, now that ranking is led by the Catalan district of Ciutat Vella, after prices there rose by more than 20% YoY. In fact, Ciutad Vella is currently 11% more expensive than the Madrileñian district of Salamanca”, said Beatriz Toribio.

“The high demand for rental housing in the most central areas of the city, and the limited supply of homes, are combining to cause rental prices in Barcelona to rise to record breaking levels. They are even causing rental prices in less central areas, such as Sant Martí and the district of Horta Guinardó, to see double-digit YoY increases in rental prices”, added Toribio.

The most sought after rental properties in Madrid are smaller than the most sought after properties for purchase. Whilst to buy, the average home measures 80 sqm and has two or three bedrooms; to lease, the average home has a surface area of 57 sqm and two bedrooms. The same thing is happening in Barcelona: the average home to buy measures 80 sqm, and has between two and three bedrooms. Nevertheless, to rent the average house size is 60 sqm with two bedrooms.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

House Prices Rise By 10%+ In Most Exclusive Neighbourhoods

5 April 2016 – Expansión

Changing trend / Madrid and Barcelona are leading the recovery in the residential market, with house price increases of 9.2% and 7.5%, respectively during Q1 2016. The appraisal value of homes is now on the rise in every district of both cities.

(…). According to statistics from the appraisal company Tinsa, the value of residential properties increased by 1.4% during the first three months of 2016, with Barcelona and Madrid leading the charge.

The average appraisal value of (unsubsidised) homes per m2 in Barcelona amounts to €2,551/m2, which is 19% more expensive than the average in Madrid (€2,142/m2). This gap between the two cities has a simple explanation: not only have house prices been rising significantly faster in Barcelona than in Madrid, but also the Catalan capital has a higher population density than Madrid, which affects supply and demand, resulting in a higher degree of concentration. Moreover, barely any new residential properties are being constructed in Barcelona. (…).

The evolution of house prices in Madrid and Barcelona varies by neighbourhood. House prices rose in all 10 districts of the Catalan capital during Q1 2016, without exception and, for the first time, they also increased in all 21 Madrilenian districts. That has not happened since the real estate bubble burst.

The ranking

The highest price increases were concentrated in Barcelona. The two districts where average prices rose by the most were Les Corts (13.5%) and Sants-Montjuïc (12.2%). They were followed by the district of Salamanca, Madrid’s main real estate district, with an increase of 11.8%.

With an average price of €3,597/m2 and despite the heterogeneity of the neighbourhoods that comprise it, Salamanca is the district with the second highest prices of all of those analysed by Tinsa, behind only Sarrà-Sant Gervasi, which has an average price of €3,671/m2 (5.8% higher than in 2014). (…)

According to calculations from the consultancy firm Knight Frank, prices are going to rise by between 5% and 10% in prime areas in 2016, especially in five areas of the Madrilenian capital, namely Salamanca, Jerónimos, Chamberí, Justicia and El Viso. (…).

In Madrid, the most expensive districts after Salamanca are Chamberí (€3,444/m2 for subsidised homes, up by 5.4% compared with Q1 2015), Retiro (€3,270/m2, up by 4.3%), Chamartín (€3,312/m2, up by 1.7%) and the Centro, which has exceeded the €3,000/m2 threshold once again (€3,014/m2, up by 3.7%). All of the others sit below this psychological barrier, such as for example Moncloa-Aravaca (€2,793/m2 and 6.9%) and Arganzuela (€2,697/m2 and 8.5%).

The cheapest areas

The cheapest areas in Madrid are Villaverde (€1,232/m2), followed by Puente de Vallecas (€1,307/m2), Usera (€1,398/m2) and Carabanchel (€1,531/m2).

Average house prices will increase significantly in the Madrilenian capital during 2016, according to predictions by real estate analysts.

In Barcelona, Nou Barris is the district where house prices are lowest (€1,752/m2), followed by Horta Guinardó (€2,007/m2) and Sant Andreu (€2,105/m2). They are the only three places in Barcelona where prices are lower than the average price in Madrid (€2,142/m2), however, as is always the case in a market as fragmented as the housing sector, each area has its own micro-market. (…).

In any case, the forecasts are promising, in general terms. “In terms of both the number of transactions and prices, there has been a certain rebound effect following the collapse of the market that had not been seen for many decades. Now we need to wait for the stabilisation of the market, for similar data to that seen last year”, says Jorge Ripoll, Director of Research Services at Tinsa.

For the upwards trend to be maintained, the growth forecasts must be met and the labour market must improve. The other factors are already working on autopilot, at least in Madrid and Barcelona.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake