Tag: change of use

Brownfields Enters Spain with AC Realty to Buy & Rehabilitate Contaminated Plots

19 February 2019 – El Economista

The infrastructure fund Brownfields is arriving in Spain with a new business for the country, which involves the purchase of contaminated land with the objective of rehabilitating the plots and giving them a new lease of life.

For its first operations, the international group is teaming up with the local firm AC Realty and Management, with which it is already working on three projects in Madrid. They will involve an investment of around €120 million, according to explanations provided by José María Carpio, CEO and founder of AC Realty and Management, together with Francisco Alba, speaking to El Economista.

The two directors launched the real estate service boutique a year and a half ago, and now they are backing this market with the creation of a new division specialising in contaminated assets, which is going to be led by Pedro Flores.

“Two of the operations that we are working on with Brownfields are going to be logistics projects, whilst the third will likely be a mixed office-residential development”, explains Carpio, who says that they are working with a minimum land transaction price of €5 million, “given that smaller figures do not justify all of the investment that is necessary for these types of projects. We have to manage a very intensive process involving decontamination, administrative and change of use processes (…).

The projects being launched by Brownfields and AC Realty provide a solution to one of the main problems that investors complain about: the lack of available land for construction. In Madrid alone, more than 130 contaminated plots have been detected, which could be given a new use, according to the inventory compiled by the Community of Madrid (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Sevilla’s Town Hall to Reclassify La Gavidia Police Station for Tertiary Use

18 July 2018 – Diario de Sevilla

The Urban Planning Department has sent the Ministry of the Environment the necessary documentation for the regional entity to prepare the mandatory report about the area surrounding La Gavidia. With this step, the process has been started to change the use of the former police station, which will become a tertiary use asset, as approved by the Town Hall.

The manager for Urban Planning, Ignacio Pozuelo, explained this morning that the change in La Gavidia’s classification will allow it to be used for a number of purposes, including for small and medium-sized businesses, offices, hotels, recreational use, cinemas, gym and public services.

The ownership and management of the venue are open to three formulae. They may both be public or private. The second option would involve the sale of the rationalist-style building. A third option would involve ceding only the management of the property to a private entity.

The environmental report is expected to be completed by the end of 2018. Once it has been approved by the Regional Government, the PGOU will have to be modified to reflect the new classification, a long and complex process that will coincide with the local elections in 2019 and the start of the new mandate.

The current General Plan for Urban Planning (PGOU) classified Las Gavidia police station as a Service of Public and Social Interest (SIPS). Zoido’s majority government began the steps to change that classification into a large retail space. The elections in 2015 and the loss of the mayoral office by the PP put a halt to the process. Espadas’s team is now looking to classify the property for tertiary use, which would allow for it to be used in any of the ways mentioned above.

Original story: Diario de Sevilla (by Diego J. Géniz)

Translation: Carmel Drake

Telefónica Negotiates Sale of HQ in Gijón for €12M

14 December 2017 – Eje Prime

Telefónica is pushing ahead with its real estate divestment strategy. The Spanish telecommunications company is currently finalising the sale of the copper network centre that it owns in the shopping district of Gijón, for which it expects to receive around €12 million. The multinational company will continue to occupy the building, located between Calle Corrida and Plaza del Carmen, under a compulsory 7-year rental contract, which may be extended subsequently on an annual basis for up to five years.

The sale of this asset forms part of the divestment plan that Grupo Telefónica has launched for its non-strategic properties and to close its copper network centres. Behind this building, which is located in the shopping district of Gijón and which serves 3,000 homes, is going to be an investment group already known in the city. Not in vain, it is going to be the same company that acquired another historical building in the city, the headquarters of Banco Urquijo, according to El Comercio.

The new owners will receive an annual rental income of €600,000, although they will have to wait for a few years to really generate a return from this asset, and undertake the change of use, likely to for retail purposes, once Telefónica has turned off the light in this historical building, which was constructed in 1932.

Original story: Eje Prime

Translation: Carmel Drake

Irea’s Warning: Carmena’s Policies Will Drive Up House Prices

29 March 2016 – El Economista

The shortage of land in Madrid and the blocks against several major urban development projects have brought a familiar face back to the Spanish capital, in the form of: speculation. This situation has not gone unnoticed by the opportunistic funds, who have unpacked their bags as they plan to stay in Spain for a while.

According to Mikel Echavarran, the CEO of the real estate consultancy Irea, “within a couple of years, we are going to have a serious problem in terms of the availability of good land in Madrid for the development of homes and, therefore, we can expect to see inflation”.

As well as the shortage of land, we are also seeing blocks imposed against most of the major urban planning developments in the capital. “These projects still require a push and the Town Hall is not up to the job”, says the CEO, who warns that with its new policies, the Town Hall led by Manuela Carmena (Ahora Madrid) “is going to cause exactly the opposite of what it seeks; house prices are going to increase”. Echavarran forecasts that developable land prices will rise “by at least 10% over the next two years, and in some cases by even more”.

Some players are already speculating

“Housing developments inside the M30 are almost anecdotal” and the funds are aware of this situation, which is why some are already speculating with land, although not in an obvious way. “They have purchased land to develop some of it and sell the rest”, explains Echavarren.

That was a common practice during the boom years. Developers used to buy up large plots of land, develop one phase and wait for that phase to push up the value of the remaining land. With the sale of that remaining land alone, they would recover all of their investment.

According to the CEO, another tactic being employed in the development sector is the purchase of office buildings for conversion into residential use. “Financing is available for end buyers with very good conditions and also to developers looking to convert properties into homes for buyers of a certain level”.

And it is not only changes of use that are being financed, developments themselves are also being funded. “If you purchase land, the bank will only give you financing when you have received sufficient pre-sales, normally around 30%”, explains the CEO of Irea. “Once you have made the 30% pre-sales, the bank gives you 100% of what you have left and may even lend you up to 50% of the cost of the land. As such, you are really well funded, for between 60% and 75% of the final sales price”, says Echavarren, who adds “if I were managing an opportunistic fund, I would recommend buying land in Madrid”.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake