Countdown to Los Berrocales: Investment of €4.4bn Over 20 Years

18 February 2019 – Eje Prime

More millions for Los Berrocales. Joaquín Gómez, manager of the Los Berrocales Compensation Board, expects investment of up to €4.4 billion from the owners and future housing developers over 20 years. That amount will be added to the €200 million that has already been invested by the owners in pipelines, collectors, infrastructures, service roads and earth movement work.

The proposal that has been reached with the owners of Los Berrocales is that the neighbourhood will be constructed in phases. First, phases I and III, which are expected to involve the construction of 10,000 homes over 10 years. The rest of the construction work will be carried out in the following decade. Up to 100,000 homes from the plan, located in Los Cerros and Valdecarros, will be suspended due to the requests filed for compensation against the Town Hall, according to reports from Cinco Días.

Nevertheless, the approval of the agreement does not mean that the construction work is going to begin immediately. In fact, Gómez expects that construction of the homes could begin in 2022 or 2023. For now, there are no threats of suspensions for political reasons given that Ahora Madrid, Ciudadanos and the PP are all in favour of the project. The position of Pepu Hernández, the likely socialist candidate, if he is elected mayor, remains to be seen.

The owners of the 8.3 million m2 of land include Habitat, Pryconsa, Santander, Caixabank and Liberbank. Another of the major landowners is the Town Hall of Madrid, which holds almost 8% of the plots.

Original story: Eje Prime 

Translation: Carmel Drake

Ciudadanos Blocks the PP’s House Building Plans for Alcobendas

24 November 2017 – El Confidencial

Ciudadanos has decided to block one of the most important urban planning operations left to be developed in the Community of Madrid, specifically, in the town of Alcobendas (114,000 residents). On Friday, the PP, which has a minority government, submitted a new attempt to the Urban Planning committee to approve the partial plan for Los Carriles, a new neighbourhood where the plan is to build 8,600 homes. The PP, with 12 councillors, who have been trying to get this project off the ground for years, do not have support from the majority opposition parties – PSOE, IU, UPYD and Sí se Puede—, which comprise another 12 councillors.

The decision lies in the hands of Ciudadanos (three councillors). Previously, those party members supported the PP’s plans (…) but they decided to vote against the project in the meeting on Friday and will do so again in the plenary session on Tuesday. (…). This new block puts in limbo the development of 2,172,909 m2 of land (5% of the surface area of Alcobendas) and business of around €2 billion.

The owners of the affected land include the town hall, the Archdiocese of Madrid and several landowners from the municipality, such as the Serrano Alberca family and the company San José del Taller de Nazaret, which owns 320,691 m2 of land, making it the largest individual landowner in this sought-after development.

A lot of money and a lot of interests have been buried in Los Carriles for 14 years now, waiting for the various political parties to reach an agreement. The initial idea for this development arose under the Socialist Government of José Caballero, who, in 2003, backed by the IU, started the first version of the project, which included 14,000 homes, 50% of which were due to be social housing properties. Nevertheless, that project never received the blessing of the regional Government, led at the time by Esperanza Aguirre.

Four years later, the PP took over the town hall once again and started a new plan, but with 40% fewer homes (8,600 in total). (…). But, even though the PP had an absolute majority in Alcobendas and in the Community of Madrid for many years, the project never ended up being finalised. (…) until September 2016 when the PP found an unexpected ally, the only councillor from Izquierda Unida.

The plenary for this month was called to approve the partial plan, which increased the number of social housing properties to 3,870. But the Madrilenian management of the IU did not support its councillor and he had to back down in the end. It was then that Ciudadanos called the project an “urban planning outrage”. “We do not support it. There is no sufficient demand for 9,000 homes. We do not want to build up Alcobendas to the hilt” (…).

In the face of the block, the PP decided to create a working group to try to reach an agreement, focusing in particular on Ciudadanos, its investiture partner.

In the end, after much too-ing and fro-ing, the agreement was signed between Ciudadanos and PP (…). The PP says that it has started to fulfil the agreement (…) but Ciudadanos does not see it like that (…) and has accused the PP of cheating them. “The matter has reached the Assembly of Madrid this week and, there, the Director General of Urban Planning in the Community of Madrid has explained that the partial plan does not comply with the law (…).

As a result, Los Carriles is going to continue in a dry ditch. Moreover, Sí se Puede and environmental groups say that the planned development is going to harm the ecosystem in Valdelatas, where there are a lot of oak trees and a sizeable population of wild boars. The project includes plans to build 800 luxury homes next to the regional park, a protected space. Without forgetting that the plan’s mobility study reveals that the new neighbourhood will add 156,932 daily journeys to the municipality, of which more than 95,000 would be in private vehicles. That would collapse the area even further (the exit to the north of Madrid from the A-1) which already suffers from serious traffic problems.

Original story: El Confidencial (by David Fernández and Ruth Ugalde)

Translation: Carmel Drake

Town Planning Paralysis In Madrid: 60,000 New Homes On Hold

2 February 2017 – El Economista

Paralysis is the word that best defines town planning in Madrid at the moment. And, the people who are ultimately paying the price for these stoppages in the capital are its citizens. The shortage of supply is pushing up land prices, which is, in turn, driving up house prices, forcing many families out of the city centre.

That is the scenario that Madrid is currently facing.  Construction of more than 60,000 homes has been suspended, in the north and south of the city alike, projects as iconic as Operación Chamartín with 17,000 homes, Valdebebas with 1,000 homes, Residencial Metropolitan with 400 homes, Berrocales with 22,000 homes and Operación Campamento with 11,000 homes, are being affected. And these are just a few of the most high profile examples that are still waiting to receive the green light from the Town Hall of Madrid.

The paralysis of these projects has created a lack of supply in terms of housing, which is forcing people to move to towns on the outskirts of Madrid. For example, in the north of the capital, buyers are moving towards Alcobendas and San Sebastián, and in the south they are moving towards Rivas. “These towns are aware of the significant demand that they are generating and in the end, that is causing prices there to rise. In fact, the supply has almost run out in Rivas”, explains Ignacio Ortiz de Andrés, analyst at Foro Consultores.

According to the politician Bosco Labrado, spokesman for the Ciudadanos Party and President of the Committee for Town Planning at the Town Hall of Madrid, “in order to resolve town planning in Madrid, we at Ciudadanos propose obtaining consensus between all of the political forces and agents that participate in town planning – we demand greater legal certainty, updates and modifications to the General Town Plan – which is the tool that we use nowadays, but which is out of date – and finally, support for more public-private collaborations, which have already worked well, such as the renovation of the Beurko neighbourhood in Vizcaya, and efforts to try and strengthen them”.

Affordable (subsidised) housing is particularly scarce. If we look at the south of Madrid, demand has been forced out to towns on the outskirts due to the lack of supply. “If someone is looking for a subsidised homes for between €160,000 and €200,000 with three bedrooms, there is currently nothing available in Madrid. In the south, all construction work at Los Berrocales, where most of the land is owned by the Town Hall, has been suspended and demand has moved to Rivas”, said Juan José Perucho, CEO at the Ibosa Group.

And Los Berrocales is not the only area where work has been suspended. The situation is the same with Operación Campamento, owned by the Ministry of Defence (…). In short, in both the north and south of Madrid, the Town Hall has put the brakes on and Madrid’s housing supply is becoming increasingly limited.

Original story: El Economista (by Luzmelia Torres)

Translation: Carmel Drake

Cifuentes Presents New Land Act For Community Of Madrid

25 October 2016 – Expansión

Yesterday, the President of the Community of Madrid, Cristina Cifuentes (pictured above), submitted the draft bill for the new Law governing Urban Planning and Land in the Community of Madrid, an initiative long demanded by the Madrilenian real estate sector. The bill aims to clarify and organise the management of urban planning in the region, whereby replacing the existing regional Land Act, which dates back to 2001.

During its 15 years of life, the existing text has been partially modified 15 times, which, as the Ministry of the Environment, Local Administration and Land Planning itself admits, has ended up making it “difficult to understand and interpret”.

“Circumstances have changed considerably over the last 15 years and so the content of the Land Act has been completely distorted”, acknowledged Cifuentes yesterday during the presentation of the new draft bill. “This new law has been put together as a single piece of legislation to give coherence to the urban planning rules”, she added.

The regional Government plans to submit the Draft Bill to the Assembly before the end of the year and, according to Cifuentes, it hopes to obtain “the maximum consensus and support possible”. It is something that seems almost impossible, taking into account that eight months ago both the PSOE and Podemos left the technical and political tables that have been managing the text presented yesterday.

This was not helped either by the fact that Ciudadanos decided to put “an end” to these working tables in a unilateral way “to look for a new consensus”, according to an announcement last week from its spokesman in the Assembly, Ignacio Aguado. The orange party’s idea is to look for maximum political support to approve the law, and so it is advocating that the work of these tables be transferred to the specific report about the Land Act, which already exists in the Assembly.

“We want a Law that represents the consensus of all of the political groups and not another piece of steam roller legislation from the PP”, said Aguado. “Ciudadanos is going to fight to ensure that there is real citizen participation and genuine transparency in the way that urban plans are prepared. We want to put an end to the current opacity”, said the spokesman. (…).

New elements

In addition to the goal of making urban planning “more agile and transparent”, the Draft Bill presented yesterday by Cifuentes includes some important innovations. The most notable is its commitment to urban renovation and regeneration, compared with the model of expansionist urban planning under the previous legislation.

In this sense, one of the most innovative aspects is the fact that cities in the region will have the opportunity to undertake the renovation of large areas without the need to modify their General Plans. (…).

The new text retains the categories of urban land – buildable and non-buildable, but eliminates the category of unsectorised buildable land, which becomes non-buildable common land. Nothing can be built on this kind of land, under any circumstances, unless its classification is changed in the general plan upon request by the town halls themselves. “The aim is to achieve a more sustainable urban planning approach that avoids unnecessary urban planning developments”, say sources at the Ministry.

Other novelties include the creation of a Simplified General Urban Plan, designed for towns with fewer than 5,000 inhabitants and budgets of less than €6 million. Those towns may choose to adopt this framework, which is more flexible and agile than an ordinary plan, provided that the work focuses on historical centres and does not include any new developments. This framework may be applied to almost half of the 179 municipalities in the region.

Original story: Expansión (byLuis M. De Ciria and Carlota G. Velloso)

Translation: Carmel Drake

Zaragoza’s New TorreVillage Outlet Will Create 1,000 Jobs

25 October 2016 – Expansión

The new TorreVillage outlet, which is being driven by the owners of Pikolin, will create 1,000 jobs over six years

TorreVillage, the outdoor shopping outlet that is due to be built in Zaragoza, has finally been given the green light after a year and a half of debate. The concerns of Zaragoza en Común (ZEC), the political party that now leads the Town Hall in the Aragonese capital, have been set at bay by an alternative proposal, which has been backed by votes from the opposition parties: PP, PSOE and Ciudadanos.

The project involves an investment of €60 million and the property developers expect to create more than 1,000 direct jobs during the first six years of activity. The initiative is being drive by Iberebro, the real estate company owned by the Solans family, which also owns Pikolin. The outlet will be constructed on a site that has, until now, housed the central headquarters of that company, which is moving to the Zaragoza Logistics Platform (Plaza).

The shopping outlet will comprise a fashion village, an international centre for business innovation, a restaurant and concert area, an area for large format retail stores and 2,000 free parking spaces. It will house approximately 90 stores from leading brands, offering discounts of between 30% and 70% and its goal is to complete with the villages already in operation in Madrid, Barcelona and Toulouse.

The goal is to attract visitors from Aragón, País Vasco, La Rioja, Navarra, Soria, Lérida and the south of France, as well as to capture some of the traffic travelling to the Pyrenees from Madrid and the Community of Valencia. In this way, it seeks to benefit from the geostrategic location of Zaragoza, by adopting a similar philosophy to the one followed by the developers of the Puerto Venecia shopping centre, also located in the Aragonese capital, which opened in 2012 and which is one of the largest shopping centres in Europe.

Original story: Expansión (by Marcos Español)

Translation: Carmel Drake

Madrid’s Town Hall Votes Against Operación Chamartín

19 May 2016 – Expansión

The Town Hall of Madrid has taken another step in its crusade against Operación Chamartín, promoted by Distrito Castellana Norte (DCN) – jointly owned by BBVA and San José – and has thereby buried the private initiative for the extension of La Castellana, backed by the previous PP regional government.

The latest chapter in the battle to control the development of the area in the north of the capital was written yesterday with the Committee for Sustainable Urban Development’s rejection of Operación Chamartín. Specifically, the Committee ruled out the project with votes from Ahora Madrid and the PSOE, its partner at the Town Hall.

By contrast, councillors from the PP and Ciudadanos parties, who are in favour of the project, voted against the proposal to deny the definitive approval of the Partial Interior Reform Plan promoted by DCN, included on the Committee’s agenda for the day.

The plans for Operación Chamartín were submitted at the beginning of 2015 by the previous Town Hall, the Community of Madrid and the Ministry of Development together with the development company, but it was not debated in the municipal Plenary because of the upcoming elections.

During the Committee’s debate, the PP councillor José Luis Martínez Almeida warned about the “criminal liabilities” that the Government team may incur for not basing its decisions on reports and for seeking to substitute a global agreement for the development of the north of Madrid with a 16-page plan.

Meanwhile, the Ciudadanos councillor Bosco Labrado asked the Government’s team to look for a real solution for DCN’s project.

By contrast, the PSOE councillor Mercedes González congratulated the Government’s team on the new proposal for the north of Madrid and asked that the minutes reflect that his political party vindicates Eduardo Manglada and all of the other people who have contributed to changing the city. He mentioned Eduardo Leira – the husband of the mayoress – and Enrique Bardají, amongst others.

The Committee’s rejection of DCN’s project, which still needs to go through the Plenary, comes a week after Manuela Carmena’s town planning team presented its own alternative for the development of the north of the capital, known as Madrid Puerta Norte, at a public meeting. .

The alternative project

These plans, amongst other things, drastically reduce the number of homes to be constructed, down from around 17,800 to 4,600, and cut the buildable surface area from 3,270,053 sqm, planned by DCN, to 1,750,197 sqm.

The Town Hall’s proposal, which was presented by the mayoress herself and by a representative from the Sustainable Urban Planning Department, José Manuel Calvo, has not been agreed with the Ministry of Development or the Community of Madrid, which together with the Town Hall own 82% of the affected land, or with BBVA and San José, the promoters of the plan and owners of the management rights over the land.

In order to understand the Town Hall’s plans at first hand, the Ministry of Development has called a meeting for this Friday to which it has invited the mayoress of the capital, the President of the Community of Madrid, Cristina Cifuentes, contacts from the property developer DCN, and representatives from BBVA and the construction firm San José.

Sources at DCN declined to comment on the plans presented by the Town Hall as they are waiting to be provided with further information.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Cifuentes Abolishes Madrid’s 3-Storey Land Act

11 December 2015 – Expansión

On Thursday, the Plenary Assembly of Madrid abolished the section of the Land Act that prohibits the construction of buildings of more than three storeys, thanks to support from members of the PP and Ciudadanos and despite the opposition votes by members of Podemos and the PSOE.

Enrique Veloso, one of Ciudadanos’s members, who defended the draft Law for the modification of the Land Act in the Community of Madrid, said that the now abolished law “has done a lot of damage to town planning”. He criticised the fact that this restriction to construct only three storey properties was applied in a blanket fashion across all towns, without taking into account the characteristics of each municipality.

Ramón Espinar, member of Podemos, said that this partial reform of the Land Act “has circumvented the agreement” that existed between all of the parliamentary groups to draft a new Land Act. He added that the current PP is “the same as ever” and he criticised its rejection of a comprehensive reform of the aforementioned law, which “understood that land was being preyed upon as a resource”.

The socialist member Rafael Montoya declared that his party’s town planning model is “compatible with the interests of residents and is respectful of the environment”, and he confirmed that the abolition of the three-storey restriction “would not help to generate consensus”. He advocated a comprehensive reform of the current Land Act and he criticised Ciudadanos’s collaboration with the PP, stressing that both parties “form part of the same right (wing)”.

The PP member Diego Lozano accused Podemos and PSOE of abandoning the motion for the reformation of the Land Act and said that they do not understand “the urgency” of the need for a comprehensive modification of the law that was approved eight years ago.

Original story: Expansión

Translation: Carmel Drake

International Funds Encouraged By Decline In Podemos Support

4 November 2015 – El Confidencial

An air of tranquillity has returned to the offices of the large international funds following the uncertainty that was unleashed on 24 May. Then, the success of groups linked to Podemos in the municipal elections caused many institutional investors to rethink their positions in our country, they slammed on the brakes and chose to move cautiously, as they awaited developments.

This attitude affected the rhythm of several sectors that were enjoying a real boom at the time, including the real estate sector, where large buyers were responsible for driving the recovery. The electoral calendar meant that they had no choice, with the upcoming regional elections in Cataluña (which Junts Pel Sí was trying to hijack as a referendum on independence) and the general elections scheduled for the end of the year, the second half of the year was set to be very quiet. But the latest election polls are changing everything.

The decline of the group led by Pablo Iglesias and the growing expectations surrounding the alliance between PP and Ciudadanos has given the large international funds reason for hope. The results of the opinion polls are showing them that our country’s politics will continue in line with the reforms undertaken in recent years and, above all, that it will not fall into the hands of a leftist coalition involving a Government seeking to resemble the Greek Syriza party.

As one source in the sector explains “now that Podemos is becoming weaker, our concern regarding the country’s political risk has decreased siginficantly – any scenario involving stability is welcome. In other words, the change in the perspective of the international funds has not been driven so much by the rise of PP-Ciudadanos, but rather because the decline in support for Podemos significantly reduces the risk of instability”.

In fact, to say that overseas investors have a preference for one party or another is, in the opinion of the professionals in the sector, completely incorrect. “Investors are not saying ‘I want this party or that party to win’, overseas investment in real estate has been the same under the PSOE and the PP. The good news now is that Ciudadanos is no longer regarded as a risk”.

Several investors specialising in the real estate sector acknowledge that this change of perspective is being felt by the day, a domino effect that has been accelerating with the wave of polls in recent weeks, all of which are marked by the common denominator of the decline of Podemos with respect to the rising trend that started with the European elections and peaked with the municipal elections, and the consolidation of Ciudadanos as the great emerging force.

Tensions continue in Cataluña

(…). The only exception to this rule is Cataluña, “where the separatist tensions mean that there is a great deal of uncertainty”, says one M&A expert. “I have decided to delay any decisions until next year, it only means waiting a few more months. What difference does that make?”.

Just as there is a general feeling of calm amongst the large international investors regarding Spain in general, their views regarding the future of Cataluña are divided. Many are convinced that independence is a utopia that will never actually happen, but there are others that regard it as a credible option, in which case they prefer to wait and see.

The direct consequence of these fears, besides the delay in terms of closing operations, is the downward pressure on the prices of those operations already underway. Similarly, the return of confidence is a revulsive in favour of the vendors, which still have almost two months to reach agreements (before year-end), but now with the factor of economic stability in their favour. Provided that is, that the opinion polls are correct.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Opposition Parties Force Carmena To Reduce Business IBI

1 October 2015 – Expansión

The opposition parties in the Town Hall of Madrid (namely, the Partido Popular, PSOE and Ciudadanos) have put paid to the plans of the mayoress, Manuela Carmena, to increase the IBI rate for businesses and companies to 10%. In fact, they forced an agreement for it to be decreased by 2%. (Earlier in the week), all of the political parties, including Ahora Madrid, approved a 7% reduction in the residential IBI rate, and now, the opposition parties have forced a 2% decrease in the business rate.

The agreement by the plenary session represents an overall decrease of 100% for residential properties, as well as for the vast majority of non-residential properties. The 7% reduction in the property tax, will decrease the tax from its current rate of 0.548% to 0.51%.

Moreover, the majority – the result of the vote went against Ahora Madrid – approved a commitment to continue to reduce the rate of IBI for residential properties to 0.4%, the minimum rate set by law, “respecting the payment of expenses approved by the government, as well as sustainability”.

Meanwhile, the PP congratulated itself after some of the proposals it had presented to the plenary session were approved, including: zero taxes for entrepreneurs for the first two years (…).

In the same way, it indicated that large companies should not have to pay taxes for having “larger” buildings since “the rate of IBI is progressive and so it does not make sense for smaller clinics to pay a lower rate of IBI than public hospitals”.

Begoña Villacís, from Ciudadanos, said that the Town Hall should have a “single discourse” regarding the payment of debt, and the tourist tax. Moreover, she said that her party proposes a reduction in taxes and that the Town Hall should support the cadastral review plan.

The socialist Ransés Pérez Boga pointed out that on 22 July the plenary session approved a decrease in the rate of IBI, after it had been proposed by his party. He advocated a decrease in the rate of business IBI “to maintain the social progressive nature of the tax charge”. In his judgement, the reduction will allow companies to retain their employees.

Original story: Expansión (by Mercedes Serraller).

Translation: Carmel Drake