Tag: city centres

Leroy Merlin Will Arrive in Madrid’s Centre in 2018 after an Investment of Nearly €5 million

25 June 2017 – Expansión

The company will open a store on Madrid’s retail ‘golden mile’, taking over a space that was vacated by Cortefiel.

Leroy Merlin will land in Madrid’s centre in the first quarter of 2018, after investing nearly five million euros in a 2,500-square-meter commercial area that will generate 100 jobs, according to a statement by the company.

The DIY retail chain is thus following in the footsteps of other multinationals such as Ikea and Media Markt, which have been opting to create presences in the centres of major cities.

The company’s first urban store in Madrid will be located on Raimundo Fernández Villaverde 43-45, taking advantage of the fashion company Cortefiel’s sale of one of its flagship stores, on Madrid’s golden mile.

Leroy Merlin Spain’s director of development, Juan Sevillano, highlighted the importance of the opening. “This store in the city centre follows on the heels of another announcement, a few weeks ago, of a new store in the centre of Barcelona and the recently opened store in Vigo, which is also located in the centre of the city,” he noted, regarding the company’s decision to position itself in city centres.

“This strategy is the result of Leroy Merlin’s constant attention to the changing needs of its consumers, who are demanding closer geographical proximity,” he explained.

Leroy Merlin plans to continue opening stores in city centres after opening the stores in Madrid and Barcelona. “The company intends to look for other locations in the centres of other major Spanish cities,” Sevillano stressed.

Job creation

The new store will create approximately 70 direct and 30 indirect jobs and will specialise in projects and decoration, offering its consumers more than 10,000 items for sale.

Leroy Merlin Madrid will join the other nine points of sale that the company currently has in the region. This inauguration is part of the firm’s 2017-2021 expansion plan, in which it expects to open 31 stores in Spain, in an investment of more than 608 million euros.

The French multinational closed 2016 with an increase in net profits of 5.02%, to 93.18 million euros. Leroy Merlin also set a new sales record in the year, reaching 1,931 million euros, 8.6% more than in 2015.

Original Story: Expansión / Europa Press

Translation: Richard Turner

Fitch Warns Of RE Bubble In The Centres Of Spain’s Large Cities

25 October 2017 – El Mundo

The ratings agency Fitch is warning that a real estate bubble is now visible in the centre of Spain’s large cities, although it does not anticipate a widespread bubble in house prices across the country as a whole in the short term, due to the high volume of stock that still needs to be absorbed and the restrictions facing people wanting to access a home.

Those were the findings of analysis performed for the Housing Sector in Spain report published by the entity, which explains that bubbles involving these types of localised assets are now very evident: the strong demand and limited supply of housing in the country’s main cities are leading to extreme price increases that are becoming increasingly “unsustainable”.

According to the agency, in the central neighbourhoods of Madrid and Barcelona alone, prices have recorded an annual increase of between 15% and 35%.

For Fitch, this demand is being influenced by quantitative easing, purchases by foreigners and investment decisions, given that investors are looking to benefit from the appreciation in asset prices and rental yields. Nevertheless, the agency forecasts that these “ingredients” will not influence the overall real estate market in the short term.

Similarly, the ratings agency asserts that it is “highly unlikely” that the problems in the real estate market are correlated with the economic recovery in general and it forecasts that the average discounts being applied to sell foreclosed homes are going to continue to be very high and stable over the next few years.

This situation will continue for as long as the banking sector continues to have an excess stock of housing and for as long as buyers insist on significant discounts to acquire foreclosed homes, said the ratings agency.

According to data from the company, the discount on the sale of foreclosed homes is still “high”, up to 60% on average, compared to the initial valuation, whilst discounts can range from between 50% to 75%.

In this sense, the dispersion of the discounts on the sale of foreclosed properties is decreasing. In fact, the gap between the range of discounts decreased to 25 percentage points at the end of 2016 from 35 percentage points during the period comprising 2010 and 2011. Nevertheless, it says that this reduction is not widespread.

Problems accessing housing

On the other hand, Fitch explains that access to housing will continue to be complicated because the velocity of the house price index is exceeding wage variations.

In this way, the families’ capacity to save is increasingly reduced, also due to the labour market that favours temporary contracts over permanent ones, which makes it hard for would-be buyers to save enough to make the initial down payment of 20% necessary to buy a home.

The report also underlines that access to housing over the long-term may be limited by the gradual elimination of monetary stimuli in the market and the likely scenario of higher interest rates.

Original story: El Mundo

Translation: Carmel Drake