The Creation of Companies Collapses by 70% in April, with Construction Leading the Decline

Although 2,711 companies were created during the month, that figure represented a historical collapse, with Cataluña and Madrid leading the decline.

Although 2,711 companies were created in Spain during the month of April, that figure represented a historical collapse in the number of companies incorporated in a month, with Cataluña and Madrid leading the decreases.

The number is 70% lower than during the same month last year, and 67% lower than in March, according to the Study on Business Demography carried out by Informa D&B, Cesce’s subsidiary company.

Construction Growth Plummeted by 8% in March, by Even More than GDP

Spain’s Gross Domestic Product (GDP) registered a fall of 5.2% in March with respect to the previous quarter, the largest in the historical series, which began in 1970. The data only includes the first 15 days of the lockdown in March, but already construction sank by 8.1%.

The country’s Gross Domestic Product (GDP) registered a fall of 5.2% in the period January to March compared to the previous quarter, the largest in the historical series, which began in 1970.

The data, according to the Quarterly National Accounts for Spain published by the National Institute of Statistics (INE), includes only the first 15 days of the lockdown in March. Nevertheless, construction growth sank by 8.1%, by more than GDP, which worsened the cooling that the sector was already experiencing. Meanwhile, real estate activity registered a decrease of 2.7%.

The Unemployment Rate Rose to 14% in March with a Notable Increase in the Construction Sector

The number of unemployed people rose by 121,000 during the first quarter, which means an increase of 3.79%, taking the total number out of work to 3,313,000.

The unemployment rate stood at 14.4% in the first quarter of the year, which is 63 hundredths more than in the previous quarter. The number of employed people decreased by 285,600 to March with respect to the previous three months, which represents a fall of 1.43% and means that the total number of employed people fell to 19,681,300, according to data from the Active Population Survey (EPA), prepared by the National Institute of Statistics (INE).

The number of unemployed people rose by 121,000 during the quarter, which means an increase of 3.79%, taking the total number out of work to 3,313,000. By sector, in the industrial sector, employment increased by 5,600 people. By contrast, it decreased in services, with 275,900 fewer people employed; in agriculture, by 9,100, and in construction, by 6,200.

Construction, the Sector that is Losing the Most Companies and Jobs due to Coronavirus

In March, the construction sector registered a 12.4% monthly drop in the number of companies registered for Social Security purposes, which represented the largest decline of any sector, and which was accompanied by the destruction of 147,701 jobs.

To date, construction is the sector of the Spanish economy that has suffered the greatest losses in terms of companies and jobs due to the Covid-19 coronavirus crisis.

According to data from the Ministry of Employment and Social Security, the construction sector has been the hardest hit in terms of the Spanish labour market, with the greatest losses during the month of March. In this way, between February and March, the number of construction companies registered for Social Security purposes fell by 12.4% compared to an average fall in the wider economy of 6.5%. “In absolute terms, 16,216 companies out of a total of the 131,069 that were registered for Social Security purposes in February ceased to be registered during the month of March,” explains Antonio Ramudo, Data Scientist at Brainsre.

The same goes for employment. During the month of March alone (the lockdown and State of Emergency were introduced on Saturday 14 March), more than 147,000 construction jobs were lost. “If we talk about workers, the construction sector saw a decrease of 16.8% between February and March 2020. In absolute terms, it went from having 881,014 Social Security-affiliated workers to having 733,313 in just one month. As such, 147,701 jobs were destroyed. That represents a 16% decrease compared to the previous year ”, according to the analyst from Brainsre.

The construction sector is not the only one within the real estate market to be hit, albeit to a lesser extent, by the coronavirus crisis. Other companies linked to real estate activities, such as those dedicated to the sale and rental of real estate properties, agents, managers and administrators of real estate have also been affected; they saw a monthly drop of 2.3%. Nevertheless, that was one of the most moderate falls in the Spanish job market where the average reduction between February and March was 6.5%. In absolute terms, 836 companies and almost 3,789 workers ceased being registered for Social Security purposes last month.

Decreases in other sectors

Apart from the direct impact on the construction sector and real estate activities, other sectors linked to real estate have also been affected by the Covid-19 crisis. In this way, the hotel/hospitality industry registered an 11.6% drop in the creation of new companies during March, in other words, it lost more than 20,000 companies and almost 185,000 employees.

Transport and storage suffered a 7.7% decrease in March, with the loss of more than 5,000 companies and more than 35,000 employees. In commerce, the decrease in March was 4.9% with the loss of more than 14,000 companies and more than 86,000 employees.

SMEs and medium-sized companies, the most affected

Within the construction sector, which has gone from having more than 130,000 registered companies for Social Security purposes to having less than 115,000 in a month, the most affected companies have been small and medium-sized companies (those with fewer than 250 workers). There has been a special incidence of companies with between 3 and 250 employees, which have suffered a decrease of between 15% and 21% in their Social Security enrolments, for both companies and workers, accounting for 85% of the jobs lost in the construction sector in March.

In the real estate business, which has gone from having 35,862 registered companies for Social Security purposes to having less than 35,026 in a month, the most affected companies have also been small and medium-sized companies (those with fewer than 250 workers). There has also been a special incidence of companies with between 3 and 250 employees, which have suffered a decrease of between 4% and 10% in their Social Security enrolments, with those companies employing between 50 and 250 workers being the most severely affected.

The same has happened with employment, where companies with between 3 and 250 workers have also been those that have seen the most jobs destroyed during the first month of the coronavirus crisis in Spain, with between 4% and 7% of employees no longer registered.

Andalucía loses 26% of its business fabric

By region, the autonomous community that has seen the greatest impact due to the decline in the number of construction companies has been Andalucía, which has lost 26% of its companies in a month, and 31% of its jobs, with 5,550 fewer companies and 45,198 fewer workers in March.

Other communities severely affected by the Covid-19 crisis include Extremadura, with 22% fewer companies and 28% fewer workers; Castilla La Mancha, where the number of companies has decreased by 19% and the number of workers by 21%; Murcia, with 15% fewer companies and 17% fewer workers; and the Canary Islands, with 13% fewer companies and 17% fewer workers.

In absolute terms, Andalucía is also the region that has lost the most companies and workers in March 2020, having gone from having 20,975 registered companies for Social Security purposes in February to having 15,425 in March and from having 143,808 construction employees registered for Social Security purposes in February to having 98,610 in March.

At the provincial level, 25 provinces have seen a fall of more than 10% of the number of companies registered for Social Security purposes.

That ranking is mainly led by provinces in Andalucía such as Jaén, Córdoba, Granada, Huelva and Sevilla, all of which have been affected by a loss of more than 28% of the companies of this sector. In absolute terms, Madrid is the province that lost the most construction companies in March, 1,703 to be precise; it was followed by Malaga and Seville with 1,337 and 1,293 companies, respectively.

By number of workers, nationwide, the drop amounted to 17% in March compared to the previous month. The five most affected provinces in the sector were again all Andalucían: Cádiz (39%), Jaén (-37%), Córdoba (-35%), Huelva (-35%), Sevilla (-34%).

The least affected cities were Guipúzcoa, Lugo and León. However, in absolute terms, Madrid was the province that lost the most construction jobs in March: 18,108 to be precise; followed by Sevilla and Malaga, which lost 11,504 and 11,465 positions, respectively.

More than 300 Projects and 9,275 Homes under Construction: the New Home Market in País Vasco

The País Vasco was ranked fifth in the list of regions with the most new homes under construction last month when building activity was ordered to cease. That activity has resumed this week.

At the end of March, when the Spanish Executive ordered the cessation of all non-essential economic activity, there were 4,809 developments and 131,471 homes under construction across Spain. Of that figure, the País Vasco was ranked fifth in the list of regions with the most new homes under construction on that date, with a total of 309 projects and 9,275 homes, according to data compiled by the Brainsre Big Data real estate platform.

Of the more than 9,200 new homes that were being built in the region, 48% correspond to major developments comprising more than 50 units, specifically, a total of 49 projects and 4,467 units.

Of the 9,275 new build homes under construction in the País Vasco, more than half were started in 2019, representing 53% of the total, equivalent to 4,908 units. Meanwhile, work began on 35% of the homes in 2018 and on the remaining 12%, or 1,163 units, during the first three months of this year.

The stoppage caused by Covid-19, which was in force for 14 days, has put some of the delivery deadlines set by the property developers at risk. In fact, 40% of the homes under construction were expected to be completed this year, equivalent to almost 3,700 units. “That percentage will certainly decrease in favour of 2021. A total of 340 homes distributed across 15 sites in the País Vasco were scheduled for completion during April 2020. It is looking increasingly unlikely that these, and many others, will be handing over the keys on time” explains Antonio Ramudo, Brainsre Data Scientist. Likewise, the development of 4,665 homes was scheduled to be completed next year and almost 920 in 2022.

By type, 71% of the homes on standby are made up of multi-family homes, which correspond to more than 6,580 units. Meanwhile, 4% corresponds to single-family homes and 21% to social housing properties.

Vizcaya, the region worst affected by the shutdown

Of the more than 9,270 new-build homes in País Vasco, Vizcaya is the worst affected province since 53% of the total supply is located there, equivalent to more than 4,950 homes and 134 developments. Meanwhile, Guipúzcoa is home to 33% of the supply with more than 3,070 homes and Álava to 13% with 1,247 units.

The developments are concentrated in and around the provincial capitals. The Greater Bilbao area is home to 3,790 units across 79 developments, and if we take into account “the adjoining municipalities that make up the larger metropolitan area, that figure rises to 4,450 new homes, whose construction has been suspended for two weeks due to Covid-19,” says Ramudo.

In second place is Donostia and its metropolitan area with almost 1,400 homes, although the province has a lower concentration of units around the capital. In this sense, there is a significant supply in municipalities such as Zarautz, with 371 homes across six developments and Irún, with 251 units across ten sites.

As for the capital, there are 836 homes under construction in Vitoria. And Laudio is also worth noting in the province, with 212 units. up to 71 of País Vasco’s 251 municipalities (27% of the total) have had new residential construction projects suspended.

Neinor and Amenabar, the worst affected by the shutdown

By property developer, the companies Neinor Homes and Amenabar, both with headquarters in the País Vasco, are the entities the most new homes in their portfolios, with 915 and 769 units in progress, respectively. However, it is worth mentioning some of the smaller scale property developers, which have also seen the suspension of significant construction volumes, such as the Arrasate group, with 570 homes; Sukia, with 456 units and Jaureguizar, with 455.

The third most affected property developer in the region is the Basque Government itself, which, through Visesa, a public company for the promotion of public housing, had 773 units paralysed. It is also worth highlighting the fact that the ten property developers with the highest volume of homes under construction in the País Vasco are all Basque, something that is not repeated in any other autonomous region in the country.

The most high-profile building project affected in the País Vasco is Bolueta Homes, promoted by Neinor, which comprises 328 units. Located in the municipality of Bilbao, opposite the estuary, work began on its development in 2019. In addition, the same firm has been working on 122 units in Leioa since last year under the name Rivera Homes.

Meanwhile, Amenabar is working on three developments, each comprising more than 100 units. Two of them are located in the Greater Bilbao area: one is phase 3 of Ibai Barria next to the Barakaldo River, comprising 120 units, and another comprises a 112-unit protected home development in Bilbao. The third project is also a sheltered housing initiative, comprising 120 units, in Zarautz, which has an estimated completion date of September 2020.

On the other hand, the regional government has concentrated its current development activity in the Greater Bilbao area, where it has 629 units under construction. One of its developments in Barakaldo, comprising 72 units, had an expected completion date of April this year.

Gazeley Acquires 42,200 sqm Site in Pinto (Madrid)

7 January 2020 –

Gazeley, a leading investor and developer of logistics warehouses and distribution parks, today announces that it has acquired a 42,200 sqm site near Madrid, with plans to build a 19,000 sqm warehouse, G-Park Pinto.

The acquisition represents Gazeley’s fourth investment in Spain since re-opening its office in Madrid last year, and will target logistics, distribution and e-commerce companies in need of a last-mile logistics hub. Construction is expected to begin in 2020.

The warehouse will be built with a highly flexible design, allowing it to be adapted to the specific needs of a future customer. It will also have a BREEAM Very Good certification, reflecting Gazeley’s commitment to developing sustainable spaces across Europe, and smart LED lighting.

The area is a well-known logistics hub located around 20 minutes from Madrid. It has access to the A-4 (Madrid-Córdoba) and A-42 (Madrid-Toledo) highways, the M-50 and M-45 Madrid ring roads and has direct access to R-4 (Madrid-Ocaña Toll).

Savills Aguirre Newman is advising Gazeley on leasing.

Original story: 

Translation/Summary: Carmel Drake

ASG Homes Negotiates the Sale of 1,000 Rental Homes to Institutional Investors

19 June 2019 – Expansión

ASG Homes, the property development arm of the European manager ASG, is following in the footsteps of many of the major property developers in Spain by putting up for sale 1,000 rental homes.

The announcement comes in response to interest from institutional investors in acquiring and managing portfolios of rental homes, given the booming demand in the rental market.

Specifically, ASG Homes is negotiating the sale of 3 of its developments in San Sebastián, Madrid and Sevilla, which will be worth €200 million once finished, with investment funds, Socimis and family offices.

ASG Homes had planned to hold onto the properties and manage them itself but the strong interest from investors has resulted in a change of tack. In this way, the company is emulating the strategies of several listed property developers, such as Metrovacesa and Aedas Homes.

In total, ASG Homes has a landbank spanning 500,000 m2 with the capacity to build 5,000 homes distributed across Madrid, Alicante, Estepona, Marbella, Salamanca, Barcelona, Sevilla and Valencia. It launched its business in Spain in 2013 and invests not only in the residential sector, but also in the hotel, shopping centre and office segments.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

Temprano Capital Partners Acquires a New Site for a Student Residence in Madrid

17 June 2019 – Press Release

The new project, which forms part of the Temprano Student Living (TSL) initiative, will provide 10,000 m2 of premium accommodation for more than 400 students. This project represents Temprano Capital Partners first scheme in Madrid and its eleventh Student Residence development in the Iberian Peninsula.

Temprano Capital Partners has just acquired a new site in Getafe, Madrid. It is the firm’s first student residence project to be developed in Spain’s capital and the eleventh in Temprano Student Living (TSL) Iberian’s  pipeline.

The first TSL project to complete was TSL Marques de Pombal in Lisbon, which opened its doors to students in January 2018 and won the award for “Best in Class for Property Innovation and Sustainability at the Class” given by The Class of 2020 annual awards for its good work in innovation and sustainability.

By adding this new student residence in Madrid, TSL will increase the number of beds in its portfolio to more than 4,000. The city of Madrid has the largest number of students in Spain followed by Barcelona, Valencia and Bilbao, respectively. More than 300,000 students are enrolled in the region in the 2018-2019 academic year, of which 196,400 attend public universities with the remainder at various private educational institutions around Madrid.

The large student population in Madrid includes a large contingency from other regions of Spain (approximately 80,000 according to internal research) and approximately 24,000 international students principally Europeans and from the Americas.

The recently acquired site is located at Calle Ramón Rubial 37, Getafe, which is an 8-minute walk from the main campus of the Carlos III University and a 10-minute walk from the railway station Las Margaritas Universidad.

It is envisaged that the student residence will provide some 400 beds in a combination of cluster, studio and twin room configurations, within a building spanning just over 10,000 m2. The residence will provide other services and amenities, such as a gymnasium, lounge club area, audio visual / cinema rooms, library, study rooms and areas created for group work, dinner party rooms and onsite catering and restaurant facilities. The residence will offer rentals to be fully inclusive with 24/7 concierge service. Rooms will provide kitchens, individual bathrooms, Smart TVs, in addition to desks for in room study needs. High speed Wi-Fi will be provided throughout the project.

Original story: Press Release

Edited by: Carmel Drake

Mercadona Buys Another 136,000 m2 of Land in Parc Sagunt for €16.6M

13 June 2019 – Valencia Plaza

Mercadona is continuing to buy up land in Parc Sagunt (Valencia). The supermarket company has formalised the purchase of 6 more plots of land spanning 136,000 m2 on the industrial and logistics park for €16.6 million.

The aim of this purchase is to expand the logistics facilities that the company led by Juan Roig is currently building on the largest plot in the complex, which spans more than 350,000 m2.

The latest plots to be acquired are located next to the other plots that the supermarket giant purchased in 2017 and will house auxiliary services.

Original story: Valencia Plaza (by Xavi Moret)

Translation/Summary: Carmel Drake

Hard Rock to Open a 504-Room Hotel in Barcelona

15 May 2019 – Expansión

The Hard Rock International group has reached an agreement with the fund manager ASG to open a hotel in San Adriá de Besós on a plot of land acquired by the real estate firm.

The luxury establishment, which will be known as the Hard Rock Hotel Barcelona will have 504 rooms, will open in 2022 and will involve an investment of €200 million. The hotel will span a surface area of more than 30,000 m2 and will have two restaurants, a sports bar, terraces and a rooftop swimming pool and bar.

This is the second agreement that the two companies have signed to develop a hotel project in Spain, after they reached a similar deal last year to open a 4-star establishment in Madrid, in the Atocha neighbourhood.

Original story: Expansión (by Rocío Ruiz)

Translation/Summary: Carmel Drake