Valencia Protects Residential Use of 2,250 Buildings in the Special Plan for Ciutat Vella

26 July 2018 – Inmodiario

The Special Protection Plan (PEP) for Ciutat Vella, in Valencia, is going to protect more than 2,250 properties that constitute the predominantly residential area in which “the compatibility of hotel use and residential use is not admissible. The professional use of tourist apartments is not permitted in any of them”.

That is according to the Councillor for Sustainable Urban Development, Vicent Sarrià, who was speaking at an information session aimed at local residents to share with them the document that is currently in its public consultation phase. Sarrià highlighted that it is the first plan that has involved active participation workshops, in which different groups from the district have intervened.

“One of the most important of the many challenges that the PEP for Ciutat Vella was meant to respond to was to maintain the residential fabric and recover the population, limiting the “tertiarisation” of the district and containing the expansion of tourist apartments”, said Sarrià, who explained that whilst the plan was being drafted and processed, “the granting of new licences was suspended, which stopped new requests in their tracks; that situation will continue until the definitive approval of the plan”.

Moreover, he added that the PEP “has responded by protecting the residential use of the majority of the buildings in the Carme neighbourhood, and most of the El Pilar (Velluters), Mercat and Seu Xerea districts”.

In this vein, he recalled that with the plan in force, “any residential building was susceptible to being converted into a hotel or tourist apartments”. “By contrast”, he continued, “the PEP removes that urban planning compatibility, except for in the Sant Francesc area, prohibiting its implementation and whereby ensuring the maintenance of its existing use and with it, the population of the historical centre” (…).

Original story: Inmodiario 

Translation: Carmel Drake

Airbnb Unveils New Tool to Help Town Hall of Barcelona Crack Down on Illegal Operators

28 May 2018 – Eje Prime

A new approach in the collaboration between Airbnb and the Town Hall of Barcelona. The US company has announced the launch of a new technological tool that will provide the City Council with access to data about its hosts, such as their full name, DNI and address.

That will allow the authorities to identify those flats that do not comply with local regulations. Currently, the Town Hall is reviewing a list of potential illegal operators, as part of a procedure established by the law agreed between it and Airbnb.

Through this new tool, Airbnb’s hosts will indicate whether their accommodation should be registered by law or not, and they will give their consent for some of their personal data to be shared with the Town Hall of Barcelona. This measure, which will facilitate the work of the City Hall to eliminate potential illegal operators, will enter into force on Friday 1 June.

“By working together, Airbnb and the Town Hall of Barcelona can help more local families to share their homes, comply with the law and generate new sources of income to strengthen our neighbourhoods”, said Arnaldo Muñoz, Director General of Airbnb in Spain, in a statement.

Since last summer, collaboration between the US group and the Town Hall has resulted in the withdrawal of more than 2,500 adverts and the introduction of a limit of one advert per host for apartments located in Ciutat Vella.

Original story: Eje Prime

Translation: Carmel Drake

Lucas Fox Triples Presence in Valencia to meet Demand from International Clients

31 January 2018 – Eje Prime

Lucas Fox has multiplied its network in Valencia by three. The real estate agency has opened the doors of its third office in the regional capital. Located in the Ciutat Vella neighbourhood, the company’s newest branch is located at number 42 Calle del Mar.

The objective of the multinational firm with this opening is to be closer to vendor clients to increase its portfolio in Ciutat Vella, in order to respond to demand from international clients in pursuit of the Spanish sun.

Currently, Lucas Fox’s delegation in Valencia employs a team of twenty professionals, including five architects. In 2017, the real estate firm launched a portal for prime transactions as one of the new drivers of its growth. It is also considering expanding into other regions of Spain, including Madrid.

Original story: Eje Prime

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

Tinsa: House Prices Fell by 1.7% in Barcelona & Rose by 4.5% in Madrid in Q4

30 December 2017 – Expansión

The real estate market is continuing on the path to recovery, but it has encountered an unexpected obstacle: “the process” (‘el procés’ in Catalan). In fact, the instability generated by the independentist challenge in Cataluña caused a slow down in the rate of growth that had been seen in both Cataluña and Barcelona until September, when the Catalan capital was leading the reactivation of the sector.

The path that Madrid and Barcelona had been following together diverged in the last quarter of 2017 when house prices in Barcelona decreased by 1.7% compared to the previous quarter, whilst in the Spanish capital, they rose by 4.5%, according to the Local Markets Index compiled by the appraisal company Tinsa. That figure represents the first decrease in the Catalan capital since Q2 2016.

“The political situation had a negative impact on house prices in Barcelona during the final quarter (of 2017)”, explained Jorge Ripoll, Director of Research at Tinsa. According to his explanations, “we are seeing a build-up of demand, primarily amongst investors, which has now started to spread to other buyer profiles”.

The quarterly decrease in Barcelona was concentrated in some of the districts that have some of the highest prices, such as Ciutat Vella (which saw a decrease of 5.8%), Les Corts (-5.5%) and Sarrià-Sant Gervasi (-1.1%); and they were not offset by the increases recorded in other neighbourhoods, such as Nou Barris (4.6%) and Sants-Montjüic (4.2%). Meanwhile, the growth in Madrid was boosted by significant increases in the districts of Chamartín (8.4%), La Latina (7.9%) and Carabanchel (6.9%).

This data means that Madrid outperformed Barcelona in terms of cumulative growth over the course of the year. In this way, the Spanish capital went from a YoY increase of 15.5% in Q3 to 17.1% in Q4, the highest of any of the provincial capitals. By contrast, the YoY increase in Barcelona moderated from 20.6% in Q3 to 14.8% in Q4, making it the second-placed municipality. In the Spanish capital, the most significant YoY increases were recorded in the following districts: Centro (21.1%), Salamanca and Retiro (both 17.6%); whilst in the Catalan city, prices soared in Sants-Montjüic (26.5%) and Sant Martí (24%).

The pull of the country’s two largest cities meant that house prices in Spain rose by 4.2% last year, accelerating significantly with respect to the 0.6% recorded in 2016 to reach an average price of €1,264/m2. This represents “moderate growth” according to Ripoll, who highlights that 2017 marked “the start of the recovery”.

Besides Madrid and Barcelona, the cities that recorded the highest price rises were Palma de Mallorca (13.7%), Pamplona (12.5%), Burgos (8.8%) and Vitoria (8.2%). In total, 30 of the 49 provincial capitals analysed in the study recorded positive growth. They also included important urban nuclei such as San Sebastián (6.1%), Sevilla (5.9%), Alicante (5.7%), Málaga (4.5%) and Valencia (3.9%). Of the 19 provincial capitals that recorded negative figures, the most notable decreases were recorded in Bilbao (-3.5%), Vigo (-0.6%) and Zaragoza (-0.8%), although Ciudad Real (-12.6%) recorded the worst result.

The decrease in house prices in Barcelona during the fourth quarter means that the Catalan capital was knocked off of its podium by San Sebastián as the most expensive town in Spain per square metre. In this way, the average house price in the Donostiarra city amounts to €3,231/m2. Meanwhile, the average house price in Barcelona amounts to €3,129/m2, and so, the sizeable gap – of approximately 20% – was maintained with respect to Madrid, where appraisers estimate that the average house price amounts to €2,601/m2 (…).

In terms of the effects that the Catalan crisis may have on the performance of the sector over the medium-term, Ripoll highlights that if the uncertainty experienced over the last quarter is prolonged, the negative evolution in Barcelona “may become endemic and result in a contraction”. Moreover, “we cannot rule out that” that phenomenon “will affect the rest of Spain” (…).

In this way, the average price of €1,264/m2 represents a return to the levels last seen in Q3 2013 and means that prices have decreased by 38.3% on average with respect to the historical maximum reached in 2007 (…).

Original story: Expansión (by Ignacio Bolea)

Translation: Carmel Drake

Barcelona From The Sky: 123 Cranes At Work In The Catalan Capital

7 November 2017 – Eje Prime

Cranes and new projects are drawing a new real estate business in Spain once again. According to the study Barcelona from the sky, compiled by the real estate consultancy CBRE, the Catalan capital has 187 projects underway, requiring 123 cranes altogether. Of the total number, 75% are dedicated to residential projects and 17% to tertiary projects, whilst 8% of the cranes are being used for other kinds of projects, according to the report.

By sector, the residential market is the most active in Barcelona with 107 new build projects and 34 refurbishment projects currently underway or due to start imminently. In total, the Catalan capital is currently decorated with 77 cranes working on the construction of new residential developments, led by the largest Spanish property developers, such as Neinor and Aedas, as well as some more local players, such as La Llave de Oro and Nuñez I Navarro.

Cuitat Vella and Eixample are the districts where the most refurbishment projects are being carried out, due to the age of the housing stock there. There are eight projects (24% of the total) and eleven projects (32%) underway in those neighbourhoods, respectively. Many of these renovation projects, especially those closest to the city’s nerve centre, such as along Passeig de Gràcia and Plaça Catalunya, are high standing affairs, such as the refurbishment of Casa Burés, located at number 2 Calle Girona.

In terms of new build homes, the districts of Sarria-Sant Gervassi, Horta-Guinardo, Eixample and Sant Andreu are leading the ranking, with 18, 15, 12 and 11 new build projects, respectively (…).

The tertiary sector is also building 

(…). In the office segment, there are twelve projects underway after several years of little construction activity due to the economic crisis, in general, and in the office sector, in particular.

“The greatest number of projects, both new build and renovations, are concentrated in the 22@ area, in the district of Sant Martí, where key projects include the future Parc Glòries and the Luxa Business Park, amongst others”, according to the study (…).

Several projects are also underway in the Sants-Montjüic area, including the construction of the Campus Administratiu, which the Generalitat de Catalunya will occupy and Can Batlló, very close to Plaça Cerdà. In addition, construction work is expected to start at the beginning of 2018 on the construction of the remaining two towers that form part of the Barcelona Fira District project, owned by Iberdrola (…).

In the retail segment, four renovation projects are underway in the Catalan capital, whilst one new space is being constructed, with the development of the Finestrelles shopping centre in Esplugues de Llobregat, which will open its doors at the end of 2018. This project is being executed by the Belgian property developer Equilis and has a gross leasable area of 25,700 m2.

Moreover, renovations are being carried out on several of the city’s main shopping streets, such as Las Ramblas, Fontanella and Paseo de Gracia, as well as in some of the large retail spaces such as the Glòries Shopping Centre.

Hotels and others 

“More than two years have now passed since the implementation of the hotel moratorium, which has negatively affected the number of hotel developments”, says CBRE’s study. Nevertheless, the construction of new hotels has not stopped in Barcelona, given that some players obtained their building permits in time. There are currently fourteen projects underway, with six cranes working on them in total (…).

According to CBRE, a small number of the projects currently being carried out in the city do not form part of the residential or tertiary sectors. Fifteen projects are underway at the moment involving twenty cranes to build or renovate parks, churches, schools, gyms, infrastructure work and nursing homes.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Barcelona’s Town Hall Buys 2 Buildings In Ciutat Vella For €6.5M

17 July 2017 – Eje Prime

Ada Colau’s Town Hall is continuing to grow its real estate portfolio for social housing purposes. The Town Hall of Barcelona has completed the purchase of two residential properties at numbers 7 and 11 on Calle Lancaster for €6.5 million, according to sources close to the operation. According to the same sources, the municipal Government will pay above the market price when it fully closes the operation.

Both assets had attracted attention from an international real estate fund, which had already signed  a “contrato de arras” to carry out the transaction, for which it was going to pay €5 million. However, according to sources involved in the operation, the Town Hall of Barcelona was negotiating in parallel with the owner of the property and ended up agreeing the purchase price of €6.5 million. The Town Hall has not made any statement about the deal.

The purchase of this building forms part of the acquisition policy that Ada Colau’s team has been working on in recent months. In order to avoid the eviction of residents, the Town Hall has purchased at least four buildings across Barcelona, which may otherwise have fallen into the hands of real estate investment funds, had it had not disrupted the process.

At the beginning of last year, the Town Hall of Barcelona purchased the building located at number 44 on Paseo de Joan de Borbí, in the Ciutat Villa district. The acquisition of that building, which was owned by the General Treasury for Social Security, involved an investment of €3.6 million by the Town Hall and the property was allocated for social housing. The acquisition of these types of buildings is one of the solutions that Colau’s team is adopting to increase the stock of social housing assets.

This year has been one of the most active for the Town Hall in terms of these types of acquisitions. The Town Hall announced the purchase of number 37 on Calle Leiva, located in the Sants neighbourhood for €2.7 million. The procedure was the same as that followed with the property in Calle Lancaster: in this case, an investment fund named Vauras Investment was willing to acquire the property from a financial entity (Anida, owned by BBVA).

The Town Hall made use of its right to sound out and withdraw, with the aim of avoiding the eviction of the property’s tenants. The residents had been working on an intense protest campaign for months, which had resonated across the whole city. In the last two years, Colau’s government has purchased 167 homes for €17.5 million (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Airbnb Pulls 1,000 Listings From Barcelona In The Wake Of Fraud Claims

10 July 2017 – El País

On Tuesday, Airbnb, the short-term home rental site, announced that it has taken down 1,000 listings in Barcelona’s downtown district of Ciutat Vella over the last week. The move comes just days after news emerged about cases of fraud involving homes listed on the popular vacation rental website.

It is also a follow-up to a pledge made by company officials in February, when they said they would introduce a one-host, one-home policy in a part of the city that is under increasing pressure from high levels of tourism. The gesture, meant to reduce the supply of short-term rentals in the area, was also viewed as an olive branch for Barcelona city authorities, who have been critical of Airbnb’s practices.

Back then, Mayor Ada Colau dismissed the gesture as “a joke” and said that what the city wants is for Airbnb to pull all the illegal listings from its site. Local authorities note that tourist apartments require a special license to operate as such, known as HUT under its Catalan acronym.

Now, Airbnb has released an open letter to Barcelona City Hall entitled: “Here’s why City Hall is wrong to turn its back on local families who share their homes.”

“Airbnb wants to be regulated in Barcelona, and we have zero tolerance for bad actors,” states the message. “We want to work with City Hall to clamp down on business operators who break the rules, while protecting local families who share their homes to boost their income and support their families.”

The letter is signed by Sergio Vinay, of the company’s public policy department, which is in charge of negotiating with local and regional authorities.

“In Barcelona, this guiding principle hits a roadblock. Unlike other major cities across the world, Barcelona has no rules for local families who occasionally share their homes,” the letter goes on to say. These rules are currently being worked out at the regional level.

“In the absence of such a collaboration, Airbnb has already taken steps to tackle issues facing Barcelona,” says Vinay in the letter. “In the last week alone, Airbnb has removed more than 1,000 listings that could affect long-term housing availability, as part of our ‘One Host, One Home’ policy. For context, that’s almost double the number of tourist dwellings that have ceased to operate following City Hall action.”

Vinay also takes issue with City Hall urban planning official Janet Sanz, who has been critical of Airbnb: “Janet Sanz is wrong to say that City Hall ‘is not fighting home sharing’ or local families who share their homes. It is – and by choosing to promote a campaign of fear and confusion over workable solutions, it’s local families who stand to lose most.”

The San Francisco-based firm claims that the average Airbnb host in Barcelona is a homeowner who makes an extra income of €5,500 a year on average for “sharing their home” around 70 nights a year. “More than two-thirds of hosts say they share their primary residence and almost a quarter say that sharing their home has helped them avoid eviction or foreclosure.”

Last month, it emerged that a Barcelona woman had rented out her apartment to a long-term tenant, who then illegally listed it on Airbnb and began subletting it. Unable to reach her tenant, the woman was forced to rent out her own place through Airbnb, at which time she changed the lock and reported the case to the authorities.

Original story: El País (by Clara Blanchar)

Translation: Carmel Drake

Optimum RE Debuts On MAB With A €50M Residential Portfolio

28 September 2016 – Idealista

Optimum Re Spain is set to debut on the Alternative Investment Market (MAB) today (28 September). (…).

According to its market entry document, Optimum currently owns a portfolio of 14 residential buildings located in prime areas, which also receive high numbers of tourist visits. 13 of the buildings are located in Barcelona and the other one is in Madrid. The Socimi has also signed a purchase commitment to add another property to its portfolio on 31 October, located in the Catalan capital. These buildings comprise 186 flats in total and 30 commercial premises.

The document also reveals that the Socimi has paid €57 million net for those 14 properties, although their market value is estimated to amount to €108.4 million, using prices per sqm from specialist online portals such as Idealista as the benchmark. Moreover, their average occupancy rate is 75%.

The company’s strategy is to acquire entire residential buildings and then to sell them off subsequently, flat by flat, to obtain greater profits. “The company’s aim is to offer profitable investments with controlled risk and an absolute return based on a rising market driven by economic recovery: rental income and capital appreciation are being generated on the basis of selective acquisition and active management of the residential properties in Barcelona and Madrid”, said sources at the company.

The company added that, “we are diversifying our property portfolio, focusing on central areas, with a special emphasis on prime areas such as Sarriá, Eixample and Ciutat Vella in Barcelona. Similarly, we invset in mid-range areas with high demand and in tourist areas, such as the popular Gracia area in Barcelona”.

The company also admitted that its main business involves buildings, which are leased out partially or in their entirety, and that it has a limited exposure to commercial premises. “Optimum’s approach involves seeking out purchase transactions at below market prices, obtaining discounts of approximately 20%, acquiring entire buildings and, after making an investment to optimise the homes and after leasing them for 3-4 years, selling them flat by flat in order to increase the sales price”, it added.

Who are its shareholders?

This Socimi is backed by several companies, such as BMB Investment Management, Anangu Grup, Orca Invest, Finicon and Body of Knowledge, along with more than fifty minority shareholders.

And those companies are in turn owned by Catalan investors and businessmen, such as for example, the Gallardo family, owner of the pharmaceutical firm Almirall, and Ángel Javier Mirallas, Head of Prosegur in Cataluña and Chairman of the Brazilian Chamber of Commerce in the autonomous region. Other shareholders include: Joan Plensa, a relative of the Catalan sculptor Jaume Plensa, and Marc Sabe Richer, Director of Fujitsu in the UK. Josep Borrell Daniel is the Chairman and CEO of Optimum Re Spain – he is a professional investor who leads the firm BMB Investment Management.

With Optimum’s debut on the MAB, there are now 24 listed Socimis in Spain, with the Socimi Keka expected to join the ranks soon. That company manages a portfolio of commercial premises and garages in Madrid, Barcelona and Sevilla, worth €14 million and is owned by two members of the Borbón family.

Original story: Idealista

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