Tag: construction sector

Málaga Leads the Construction Sector in Andalucía with an Occupancy Rate of 88%

10 May 2019 – Expansión

Málaga is leading the ranking of house sales in Andalucía with 32,438 transactions and a market share of 32%, almost doubling that of its nearest rival, Sevilla (17.4%).

According to the participants of the round table organised by the Association of Property Developers and Construction Companies in Málaga (pictured above), the province is currently the driving force behind the construction sector and is home to some of the highest employment rates in the country (88.5%). That means that the sector now employs 62,700 people of the 70,200 surveyed in the Active Population Survey (EPA) when just five years ago, that figure amounted to just 57%.

In terms of the challenges facing the sector, the most important ones are rising rental prices and the generation of buildable land. In this context, the General Secretary for Housing at the Junta de Andalucía, Alicia Martínez, took advantage of the round table event to announce a new housing plan called ‘Plan Vive Andalucía’, which includes a greater commitment to affordable housing, the reactivation of obsolete urban areas and the promotion of R&D in the sector, amongst other initiatives.

Original story: Expansión (by Juan A. Gómez)

Translation: Carmel Drake

Spain Needs 150,000 New Homes Per Year But the Market is Capable of Delivering Only 75,000

16 May 2019 – El Confidencial

According to the experts, on the basis of the rate of formation of new households and for a healthy residential market, Spain needs to produce between 120,000 and 150,000 new homes per year. Those figures are a far cry from the 650,000 units that were constructed in 2007, just before the outbreak of the real estate crisis. Nevertheless, the latest data reveals that even 150,000 homes is too ambitious a target, at least for the next few years.

That is according to the latest Real Estate Pulsometer, compiled by the Cátedra Inmobiliaria in collaboration with the University of Málaga, which estimates that 70,400 new homes will be finished by the end of this year and 77,100 by the end of next year. In other words, half the number needed. The reason? According to José Antonio Pérez, Director General of the Cátedra Inmobiliaria, “In simple terms, the sector does not have sufficient manpower to build that many homes. There are sufficient numbers of qualified people – such as architects and surveyors -, but there is a distinct lack of basic labour, such as workmen and builders”.

Tens of thousands of jobs were destroyed in the construction sector during the crisis. At the height of the boom, the sector and its related segments employed almost 2 million people, but by 2017 (latest available data), that figure barely exceeded 800,000. In other words, almost 60% of the workers had disappeared. Most have either left the country (many were foreigners) or reinvented themselves in other sectors and are reluctant to return to construction now.

Employment in the construction sector has recovered slightly over the last three years, with almost half a million people working in the sector. But that figure is not sufficient to build the homes that the country needs, which means delays and higher construction costs.

Lack of bank financing

The situation is compounded by the lack of available land and the shortage of bank financing to launch those 150,000 homes. The banks are willing to finance just 65,000 homes per year, according to Juan Antonio Gómez-Pintado, President of Asprima (the Association of Property Developers of Madrid). Several alternative financing funds are trying to cover the gap but they are not enough.

It is also true that stagnant salaries and problems of affordability for young people are other factors at play against the construction of so many homes.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

BBVA Research: The New Rental Decree & AJD Law Will Dissuade Investment in Housing

15 April 2019 – Expansión

BBVA Research is predicting a slowdown in the increase in residential investment this year and next, with forecast growth of 4.6% in 2019 and 4.3% in 2020, after the sector closed 2018 with growth of 6.9%.

According to the Spain Watch report compiled by the research house, the main driver behind the expected slowdown is the regulatory changes that “are affecting the sector and increasing legal uncertainty for landlords, which are reducing the incentives to entry for large investors and making purchases in regions with exposure to the tourist sector less attractive”.

The legal uncertainty first emerged at the end of 2018 when changes were made to the rental law and to who is responsible for paying Stamp Duty (AJD). Previously it was the purchaser; now it is the lender bank. That has resulted in a deceleration in residential sales, which may only be temporary, but at this stage is too early to say.

Meanwhile, BBVA Research has revised down its forecasts for the construction sector for this year and next, with increases of 4.8% and 4.7%, respectively, in light of the above.

Original story: Expansión

Translation/Summary: Carmel Drake

Eurostat: Spain’s Construction Sector Grew by 6.1% in September

19 November 2018 – Eje Prime

The construction sector in Spain is growing. In September, activity in the sector rose by 6.1%, which represents the second largest increase of the year so far, according to provisional data published today by the European statistics agency Eurostat.

The largest increase in 2018 was recorded in March, when construction activity soared by 20.4%. In monthly terms, construction output in Spain also continued to rise in September, with an increase of 1.6%.

That figure is above the number registered for the Eurozone as a whole, where the sector grew by 2% in September compared with the previous month. In YoY terms, the increase was 4.6% and, like in Spain, it constituted the second highest rise of the year, after January (6.6%).

Meanwhile, in the European Union as a whole, construction activity grew in month-on-month terms in September by 1.7%, compared with a fall of half a percentage point recorded in August. With respect to the same period a year earlier, the sector grew by 4.2%.

The largest increases were recorded in Hungary, where construction soared by 25.8%; Slovenia, with a rise of 25.7%; and Poland, with growth of 20.2%. By contrast, the largest decreases were recorded in Bulgaria (-4%), Sweden (-1.5%) and Romania (-1%).

Original story: Eje Prime 

Translation: Carmel Drake

Everis & AXA Sign The Largest Office Rental in Madrid Since 2013

17 May 2018 – Eje Prime

Everis and AXA have signed the largest office rental contract in Madrid since 2013. AXA’s real estate manager is going to lease almost all of Edificio Novus, located in the north of the Spanish capital, to the consultancy firm, which will occupy 37,800 m2, according to a statement issued by the insurance group.

Located close to Barajas airport, the building has six floors and spans a total surface area of 42,000 m2. It is also home to Hilti, the company that supplies technology to the construction sector. Everis is going to employ up to 4,000 people on the site, whereby centralising its workers in the capital into one building.

The asset has been owned by AXA Real Assets since 2015. Over the last three years, that group has renovated the common areas and has promoted the name Novus, the building’s new brand name since it passed into the hands of the multinational.

In addition to this contract, Everis already closed a rental contract with GMP for more than 5,000 m2 of space in the building at number 77 Paseo de la Castellana. A priori, the headquarters of the consultancy in Spain will be located there, with offices for directors and the most corporate areas of the company (…).

Original story: Eje Prime

Translation: Carmel Drake

Socimi Vbare Hires Former PwC Director as its New CFO

7 May 2018 – Eje Prime

Vbare is strengthening its leadership team. The Socimi has recruited Alberto García, former director of the audit firm PwC, as its new CFO, according to a statement issued by the group.

García de Novales has extensive experience in the real estate sector given that, as well as having performed financial audits of companies in the sector for many years, he has also formed part of the finance team at the Socimi Autonomy Spain Real Estate since September 2015.

Prior to his incorporation into that company and since the beginning of his professional career, in 2009, García de Novales was a member of PwC’s audit division in the construction and real estate sector, working in both the Madrid and Luxembourg offices.

In recent months, Vbare has carried out a capital increase amounting to €7 million and in 2017 it recorded profits of €2.2 million. Vbare is currently immersed in a new capital increase process with the aim of expanding its existing portfolio in the future.

Original story: Eje Prime 

Translation: Carmel Drake

Non-Ibex Property Developers Also Shine: Quabit, Insur & Montebalito

5 January 2018 – El Confidencial

The real estate sector is starting to show green shoots and that is being reflected in the Spanish stock exchange. In 2017 alone, 19 companies made their debuts on the Alternative Investment Market, taking the total number to 47. Beyond the five large Socimis (Merlin, Colonial, Hispania, Axiare and Lar), there are alternative real estate companies that have experienced positive growth and that represent good investment options.

Quabit Inmobiliaria could summarise its 2017 in two ideas: financial support from large firms and capital increases. And, at the end of December, the company closed a capital increase amounting to €29 million, most of which (77%) was subscribed by Cobas Asset Management (Francisco Paramés’ management firm) and Kairos Investment. In total, it saw its share price rise by 16% during 2017 and experts believe that its share price will reach €2.40.

“In addition to the push that it has been given by the fact that large funds are including its stock within their portfolios, the listed company owns a significant number of properties as it heads into 2018. Moreover, its debt has decreased, and so it can afford to invest more. In addition, another positive factor is the performance of house prices, above all in Barcelona and Madrid, where it has its greatest presence”, explains an analyst at XTB Manuel Pinto.

Another real estate firm to watch is Montebalito, which saw its share price rise by 43% in 2017. “In general, we expected more from this stock. Nevertheless, it managed to close the year with a gain, thanks to the sale of a property in Berlin for €10 million, a deal that allowed it to clean up its balance sheet”, said Pinto.

Nevertheless, its performance could have been greater if it had not been for the depreciation of the currencies in Brazil, the Dominican Republic and Colombia, countries where the listed firm owns a significant number of assets.

All of this data is being supported by the boom in the real estate sector, which has managed to increase in value by more than 360% since 2012, according to the latest report from ‘Bolsas y Mercados Españoles’ (BME). “All of Spain’s real estate companies are very healthy, mortgages are rising, the sector is cyclical…In general, all indicators are still positive for these companies to continue growing during 2018”, says an analyst at Orey iTrade Roberto Berzal.

Moreover, Inmobiliaria del Sur has also joined the party, given that it managed to increase its share price by 35% (in 2017). “This company is improving its turnover and income, above all in the construction sector. Nevertheless, results from the last quarter mean that we are being cautious with the stock and waiting for its performance over the medium term”.

Original story: El Confidencial (by C. Alba)

Translation: Carmel Drake

Ministry of Development: Building Permits up by 26% in YTD Sept

30 November 2017 – Eje Prime

Permits for the construction of new homes are soaring. The number of permits granted by the Colleges of Technical Architects for the construction of homes amounted to 60,695 during the first nine months of the year, up by 26.8% compared to the same period in 2016, according to data from the Ministry of Development.

In September alone, the number of permits amounted to 6,718, up by 35.2% compared to the 4,968 granted during the ninth month of last year. If we also include the permits granted for extensions, renovations and restorations, the total figure between January and September amounts to 82,262, up by 19.5% compared to a year earlier.

In September, the total number of permits amounted to 9,038 compared to the 7,378 granted during the same month last year, according to the same source.

Original story: Eje Prime

Translation: Carmel Drake

Employment In The Real Estate Sector Rose By 6.4% In October

3 November 2017 – Eje Prime

The real estate sector is continuing its role as a driver of the growth of employment in Spain. According to data from the Social Security office, in October, real estate activity registered a total of 130,850 affiliated workers, 63 more than in September. That figure represents a YoY increase of 6.4%, with 7,921 more professionals now active in the sector.

Including October, real estate activity has now recorded four consecutive months above the threshold of 130,000 jobs. This hopeful figure for growth contrasts with the just over 118,000 workers that were registered in the segment less than two years ago, in January 2016. Last year, during one month, March, the figure actually fell below that threshold, to an annual minimum of 117,986.

Nevertheless, the sector has been recovering its strength, month after month, and the real estate business made its debut in 2017 with 124,053 affiliated workers registered for Social Security purposes. Since January, the MoM growth rate has stood at around 1%, with around 1,000 new jobs being created each month, until the summer, when the rate of increase stagnated.

The strong performance in terms of employment in the real estate sector goes hand in hand with the recovery of the job market in general right across the country. In October, the Social Security office registered 17 million affiliated workers, which represents an improvement of 3.9% on the total employment figures recorded in the same month in 2016. The growth rate of employment in the real estate sector (6.4%) clearly shows that it is moving at a faster pace than the economy in general.

If we add employment in real estate activity with employment in the construction sector (the construction of buildings, specialist construction work and civil engineering), then the sector recorded an average of 1.27 million affiliated workers in October, up by 6.7% compared to the same month last year.

Unemployment rose by 56,884 people in October

The number of registered unemployed people at the Public Employment Services’ offices rose by 56,884 in October compared to the previous month. Nevertheless, the increase was well below the average rise in the unemployment figure in October over the last eight years, which amounts to 90,000 people.

In YoY terms, unemployment in Spain fell by 7.9% in the tenth month of the year, bringing the total number of unemployed people to 3.46 million. By economic sector, registered unemployment decreased above all in the construction sector, whilst it increased in the agriculture, industry and services sectors.

Original story: Eje Prime

Translation: Carmel Drake

Euroval: RE Activity Is Still “A Long Way” Below The Boom Levels

7 June 2017 – Expansión

The real estate appraisal company Euroval has said that real estate activity in Spain is still “a long way” below the levels reached a decade ago.

Specifically, based on data from a simulation that it has performed, Euroval highlights that real estate activity in Spain currently represents a quarter of the level achieved during the real estate boom.

According to the appraisal company, the recent economic crisis “is still taking its toll” on activity in the Spanish real estate sector. In fact, it has highlighted that the number of mortgages granted, the volume of construction revenues and expenses and the number of transactions carried out are still way behind the figures recorded 10 years ago.

By region, whilst in Andalucía, Murcia, the Community of Valencia and Cantabria, for example, real estate activity was operating at 100% in 2004, it is now performing at 13%. Moreover, the autonomous regions that are improving their activity in this sector compared to 2004 are the Balearic Islands (45%), País Vasco (28%) and Navarra and Extremadura (22% in both).

According to Euroval, “there are no known cases of economic sectors in any country representing a similar percentage of GDP as the real estate sector did in Spain at the time of its greatest rise, after which it suffered losses of more than 80% in less than a decade.

The appraisal company considers that the volume of residential appraisals and the supply of housing are the “key” indicators that reflect this decrease. Specifically, in 2006, around 1.3 million appraisals were performed, compared with 625,000 last year.

In 2016, the autonomous region with the highest volume of appraisals was Andalucía, with 129,200. It was followed by Cataluña, with 120,400; Madrid, with 85,300; and the Community of Valencia, with 76,700.

In terms of the housing supply, Euroval’s conclusions highlight the “anomalous behaviour” in terms of housing demand in Spain, given that “despite the significant decrease in prices”, there is still “weak demand in light of the uncertainty surrounding the economy and employment”.

The data from the appraisal company also indicates that this “weak” growth has been concentrated in primary homes above all, which have increased from 15 million units in 2004 to 18 million last year.

The evolution of finished homes used to amount to around 536,600 properties, almost double the number started that year, whilst in 2016, the figures were 50,351 and 34,351 units, respectively. Euroval predicts that the market will tend towards growth over the next two years.

Original story: Expansión 

Translation: Carmel Drake