Community of Madrid Sells Seven Plots of Land

20 August 2019

The government of the Community of Madrid sold seven plots of land for 7.2 million euros in July. That single sale was more than was sold in the entire last four years. Obras de Madrid had only managed to sell land worth €2.9 million in land over the last three years. This year’s buyers included Mercadona, a company that builds funeral homes, logistics and real estate firms. The regional government is looking to raise more funds through the sale of another 18 plots of land.

Mercadona acquired the most expensive asset, paying €2.541 million for a 4,200-square-meter plot of land, located in the neighbourhood of Ciudad Jardín, in Arroyomolinos.

Original Story: El Confidencial – David Fernández

Adaptation/Translation: Richard D. K. Turner

Madrid’s New Town Hall Approves a 400-Home Residential Complex in Cuatro Caminos

20 June 2019 – Somos Chamberí

During its first week in office, the newly elected Town Hall of Madrid has approved plans for the construction of more than 400 homes above the old train depots in Cuatro Caminos.

The previous municipal government had prepared all of the necessary paperwork but its legislature ended before the plans could be presented for approval.

Now, the Community of Madrid must give the green light to the project, known as Residencial Metropolitan, which will include six buildings, including a 31-storey tower that will change the skyline of Chamberí forever.

Original story: Somos Chamberí (by Diego Casado)

Translation/Summary: Carmel Drake

Madrid’s Regional Government Gives Green Light to Operación Madrid Nuevo Norte

19 May 2019 – El Mundo

According to information obtained by El Mundo, the Community of Madrid is going to send its Environmental Assessment Report regarding Operación Chamartín to the Town Hall of Madrid on Monday, which will leave the path clear for the municipal plenary to vote on the plan before the local elections are held on Sunday 26 May.

The urban development project, which is now known by its new name, Madrid Nuevo Norte, will see the construction of 10,500 homes at the northern end of Paseo de la Castellana, together with the development of offices, retail areas, green spaces and three new metro stations.

The only requirement stipulated in the definitive report issued by the Community of Madrid is that agreements be made upfront about who is going to pay for the public building works, including the Canal de Isabel II installations, the construction of the three new metro stations and the preparation of the surrounding roads.

According to the protocol of execution signed a month ago by the Town Hall of Madrid, Adif – the public entity that owns the land – and Distrito Castellana Norte (DCN) – the private company that is promoting the development – the three leading players will share the cost of developing the aforementioned infrastructures, whereby ensuring that local taxpayers do not have to foot the bill.

Original story: El Mundo (by Marta Belver & Isabel F. Lantigua)

Translation/Summary: Carmel Drake

Ministry of Development: Real Estate Activity is Non-Existent in 40+ Spanish Municipalities

21 April 2019 – El Confidencial

There is barely any real estate activity in more than 100 Spanish municipalities with more than 10,000 inhabitants. In 42, not a single building permit to construct a new home was issued in 2018. Not one. And in another 100, fewer than five permits were issued, whilst in 200, fewer than ten permits were issued.

That is according to data from the Ministry of Development, which reveals the extent of the disparity between the booming areas of Madrid, Barcelona, the Costa del Sol and the islands, amongst others, and the complete dearth of activity in other parts of the country.

Asturias and Murcia are the autonomous regions that are suffering the most where construction activity has been all but suspended. The driving factors are multiple, but a lack of demand is key. Moreover, even where there is buyer interest, there is not enough buildable land to develop, construction costs are high, financing is hard to come by and qualified labour is scarce.

Even at the national level, although 100,000 new home permits were issued last year, that figure is still eight times lower than it was in 2006, when 865,561 new build permits were awarded. And although the experts agree that a healthy market will never see a return to the pre-crisis figures, the volume of new home construction is still well below the 150,000-200,000 benchmark that property developers consider sustainable.

By contrast, in certain parts of the Community of Madrid, lots more building permits were granted last year than during the height of the boom, for example, in Tres Cantos (657 in 2018 compared with 6 in 2006) and Rivas Vaciamadrid (1,345 compared with 831 twelve years ago). There was also a lot of activity in Boadilla del Monte, San Sebastián de los Reyes and Alcobendas. Beyond the capital, more new build permits were granted last year than in 2006 in Pamplona, Lasarte and Santiago de Compostela, amongst others.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

Town Hall of Madrid Approves Legislation to Close 10,000+ VUTs

27 March 2019 – El País

On Wednesday, the Town Hall of Madrid approved a special plan to regulate the licences required to operate tourist apartments (“viviendas de uso turístico” or VUTs).

To obtain a licence, a VUT must now have a separate access from the other homes in the building, which means, in practice, that 95% of the establishments of this kind in Madrid will have to close. More than 10,000 VUTs will be affected, according to municipal calculations. The legislation applies to those properties defined as VUT by the Community of Madrid, which are effectively those that are leased for 90 days or more per year.

The new legislation, which was supported by Ahora Madrid and the PSOE, will enter into force within the next few days. Non-compliance will trigger a process to cease the activity in that property, like in the case of a bar operating without a licence, rather than the imposition of a fine.

It was in January 2018 that the Town Hall of Madrid established that VUTs – homes that are leased for three months or more – represent an economic activity and, therefore, require a licence. At the same time, a moratorium was declared on the granting of licences whilst the new legislation was drafted, which has now been approved.

The impact on the more than 40,000 reservations that have been made in accommodation of this kind for the Gay Pride celebrations in July 2019 is far from clear.

Original story: El País (by Gloria Rodríguez-Pina)

Translation/Summary: Carmel Drake

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

Pryconsa Draws a Roadmap to Build 1,300 New Homes by 2020

17 January 2019 – Eje Prime

Pryconsa is remaining strong in its commitment to the Spanish residential market. The property developer is planning to build at least 1,285 homes by 2020, located across the Community of Madrid as well as in the municipalities of Cáceres and Valladolid, according to sources at the company speaking to Eje Prime.

During the course of this year, the company is going to launch fourteen developments, containing a total of 727 homes, located in different parts of the Community of Madrid (such as Alcalá de Henares, the Puerto Hierro area, Torrejón de Ardoz, Boadilla del Monte and Vicálvaro), as well as in Cáceres and Valladolid.

On the other hand, in 2020, Pryconsa is going to start work on the construction of 558 homes, spread across six developments and located in the city of Madrid and the surrounding areas (Alcalá de Henares, Vicálvaro and Carabanchel). Nevertheless, as the group explains, “it is most likely that during this year, the number of projects started will increase”.

In addition, the company has the objective of handing over 561 new homes in 2019, 1,196 in 2020 and another 1,107 in 2021. For now, Pryconsa has the intention of focusing on the centre of the country, although it does not rule out entering other cities soon. “It will all depend on the situation and on the opportunities in the market, but that will happen from 2021 onwards”, say the sources.

Currently, Pryconsa has its headquarters in Madrid and operates delegations in Valladolid, Sevilla, Ayamonte and Valencia. The company, which has a workforce of 500, recently settled in the Mediterranean city, to open a Prygesa office, one of its firms specialising in the development of homes.

More than fifty years in the Spanish real estate sector

Founded in 1965, Pryconsa is a company that spans the entire construction cycle: from the purchase of land to the construction of assets and their sale. Besides the residential sector, the group also works in other segments, and is present in the hotel, retail and office sectors through its Socimi Saint Croix Holding Immobilier.

The Socimi, constituted in December 2011, is the owner of six hotels, twelve office buildings, thirteen retail premises and one logistics centre, most of which are located in the Community of Madrid, the group’s main area of operation.

Led by Marco Colomer, Pryconsa is one of the great survivors of the real estate crisis that Spain suffered from 2007. Nowadays, the company continues to be one of the largest residential property developers in the country, with more than 54,000 assets delivered by the end of 2018.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

Approval Granted for Socimi Arrienda Rental’s Debut on the MAB

21 December 2018 – La Vanguardia

The Coordination and Incorporations Committee of the Alternative Investment Market (MAB) has issued a favourable report ahead of the stock market debut of Arrienda Rental Properties Socimi, with a reference value of €2.74 per share, after the company was valued at €56.4 million.

The MAB has reported that the stock trading code for Arrienda Rental will be YARP and that it will be governed by the fixing system, with prices being fixed twice in each session, at 12 noon and 16h.

Arrienda Rental is a real estate company that has adopted the Socimi framework and which is dedicated to the acquisition and development of urban properties for their rental.

The Socimi owns 239 assets, all of which are located in the Community of Madrid: 2 hotels (Clement Barajas and Täch), 3 plots of land, 4 offices, 18 retail premises, 40 homes and 172 garages.

Before its stock market debut, the Socimi had 51 shareholders, including Francisco García Rubio, who owns 21% of the capital.

Arrienda Rental has 4 managing directors who are also owners, namely: José García Sánchez, Luis Miguel Gutiérrez Abella, Víctor García Rodríguez and Juan Francisco García Muñoz.

Arrienda’s valuation has been performed by the appraisal company Gesvalt.

Original story: La Vanguardia

Translation: Carmel Drake

Avintia & Gesurbe Boost Locare: €55M & 3 New Projects in Madrid

13 December 2018 – Eje Prime

Locare is searching for its place in the Spanish rental market. The real estate investment manager, in which Grupo Avintia and Gesurbe hold stakes, has launched the development of its first 405 homes in different locations across the Community of Madrid. The combined investment for the projects will exceed €55 million, according to comments made by Andrés Horcajada, founder and CEO of Locare, speaking to Eje Prime.

Specifically, the company is building 171 homes in Torrelodones (which will be finished during the second quarter of 2019), 110 in Villalba and 124 in Móstoles. The last two developments will enter into operation during 2020, following an average construction period of between 12 and 18 months. Together, the plots span a constructed surface area of 37,000 m2.

“We want to end 2019 with 1,100 homes under development, not only in the Community of Madrid, but also in other parts of the country”, explained the executive. Pamplona, Ibiza and Zaragoza are the cities that Locare currently has it its sights for its next projects, with the aim of investing €65 million.

The company, created in 2016, undertakes all of the phases of the real estate cycle, from raising capital to operating assets. Locare also takes care of searching for plots for social housing units, a requirement shared by all of the plots that the manager acquires.

“We do not buy properties that are already constructed, given that for us build to rent is fundamental”, explained Horcajada. The director added that this business model allows “investors to take advantage of the first phases of the real estate cycle and for the resulting product to be designed specifically for the rental market”.

Tectum is Locare’s ally 

Locare has teamed up with the capital manager Tectum Real Estate to attract investors to finance its projects. “Tectum allows us to group together Spanish family offices primarily and it is the company through which we relate directly with them and we deal with their demands”, explained the CEO of the company.

Besides Tectum, the company led by Horcajada also collaborates with the construction firm Avintia as an industrial partner, although the director explains that they do not have an exclusive contract with them when it comes to carrying out construction projects.

On the other hand, Locare has launched new technology into the world with another strategic collaborator, the proptech Mitula. “Through this platform, we are undertaking data analysis, both of the demand as well as of the supply of each one of the locations in which we are launching”, explained the executive.

In terms of the company’s long-term plans, Horcajada confirmed that the debut on the stock market “is not a plan that features amongst the desires of investors”. Similarly, the director explains that Locare will focus especially on the Spanish residential rental market, for which it predicts a promising future. “Housing is going to be increasingly configured for use (rental) and not for ownership, like in other European companies”, concludes the executive.

Locare is a real estate investment manager dedicated to residential rental. Although both Grupo Avintia and Gesurbe have been linked to this market niche for more than eight years, Locare was created as an independent platform in 2016.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

Madrid Nuevo Norte’s New Offices will be Home to 125,000+ Employees

22 October 2018 – Eje Prime

Madrid Nuevo Norte, the focus of the recently announced new homes, is also going to be home to a business centre. Offices are going to be built in the financial epicentre of the Spanish capital to house 125,472 employees in total. Moreover, the district is going to be home to the tallest building in Spain, with up to seventy floors.

The project is going to house the Chamartín Business Centre, where almost all of the properties for businesses are going to be located. They will house two thirds of the 1.5 million m2 that are going to be dedicated to offices in Madrid Nuevo Norte, according to reports from Cinco Días.

The volume of business in terms of office development will exceed €10 billion; in the case of house building, that figure will reach €3.0 billion. The project’s economic report shows a range of profitability from the real estate business in the new district of between 11.2% and 16.4%.

After several adjustments, Madrid Nuevo Norte has decreased its total buildability by 21%, down from 3.37 million m2 per the initial plan to 2.66 million m2. Similarly, the district has been divided into four areas: Chamartín station, the business district, Fuencarral-San Roque-Tres Olivos and Fuencarral-Las Tablas. Each one will have its own timetable and urbanisation costs.

The project is going to be financed almost in its entirety by the landowners, which will disburse an average of €1.2 billion. With the aim of covering the urbanisation costs, the Town Hall of Madrid will spend €307.89 million, which will be added to €24.78 million from the Community of Madrid and €220.49 million from Adif, the concessionaire of the rights.

Original story: Eje Prime

Translation: Carmel Drake