Tag: Cuatro Caminos

Construction to Begin as Cuatro Caminos Receives Approval, Five Years On

20 July 2019 – Richard D. K. Turner

The City Council of Madrid will give its final approval for the plan to develop the Cuatro Caminos project.  Grupo Ibosa and 443 families purchased the land from Madrid Metro, for 88.3 million euros, in November 2014.

The site acquired by the cooperative, Residencial Metropolitan, has an area of ​​3.7 hectares, where the two groups plan to build a residential development, along with more than 17,000 square meters of parks and gardens.

The municipality’s approval will allow construction of more than 400 homes, 60 of which would be officially protected (subsidised), while transferring sufficient land for 70 more homes to the city council.

Original Story: El Confidencial – E. Sanz

Photo: Salvador Fenoll.

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

Dazia Teams Up With British Fund Chenavari To Promote Growth

10 October 2017 – Expansión

Vía Célere was one of the pioneers in seeking foreign finance to accelerate its growth, but the explosion of the real estate market in Spain means that its formula is now being copied right across the sector. The latest example, in the form of Dazia Capital, has demonstrated it once again. The real estate group specialising in the residential segment has teamed up with the British fund Chenavari with the aim of obtaining a financial boost for the construction of its developments.

In an operation advised by Montalbán, the two entities have agreed to participate together in the construction of a new housing development in Madrid with a market value of €30 million, according to sources at the companies.

The project, located just a stone’s throw from Cuatro Caminos, will contain around 90 homes, as well as parking spaces and green spaces with a swimming pool and will occupy around 8,000 m2. According to the terms of the agreement, Chenavari will hold a majority stake of around 85%, whilst Dazia Capital will retain the remaining 15% and will be responsible for managing the development, as well as for constructing and marketing it.

The model that Dazia has chosen to finance its growth is not new. In the past, the company resorted to a similar structure, although in that case, its partner was a family office. Now, it is leaping into a more significant alliance, with a fund that specialises in taking advantage of investment opportunities in the credit market.

“The agreement reached with the Chenavari group will allow Dazia to increase its real estate investments, accelerating the rate of growth and the expansion of the residential market”, says Daniel Mazín, CEO of the Spanish company. “This market demands a lot of capital”, he added.

“It makes sense that real estate groups are allowing funds to enter their projects as they grow because it is the quickest way of obtaining returns from the investments that they have made in land”, explains a director in the sector.

Dazia is currently constructing 500 homes in Madrid and the Costa del Sol, with a combined market value of €180 million.

In the last quarter, the group acquired four new assets in Madrid and expanded the focus of its activity to include Valencia and Alicante, ahead of the surge in new housing in Spain.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Merlin Begins Its New Journey As Spain’s Largest RE Company

2 November 2016 – Cinco Días

On Monday, Merlin Properties consummated the latest stage in the process to create Spain’s new real estate giant. Trading of the Socimi’s new shares began on the Ibex 35 after it completed the absorption of Metrovacesa’s real estate assets, giving rise to a company with a market capitalisation of around €4,810 million, according to Bloomberg.

The 146.7 million new shares in the Socimi – or listed real estate investment company –, following the exchange of Metrovacesa shares, began trading on the stock exchanges in Madrid, Barcelona, Valencia and Bilbaoon Monday.

To complete the exchange, Merlin had to hand over those 146.7 million shares with a nominal value of one euro to Metrovacesa’s shareholders. Those shares were launched with an issue premium of €10.40, in other words, with a total value of €1,526 million.

This operation was first announced back in June, when the Socimi chaired by Ismael Clemente (pictured above) reported that it was going to absorb the real estate business of Metrovacesa – owner of offices, shopping centres and other real estate assets that are rented out – which was controlled at the time by Santander (70%), BBVA (21%) and Popular (9%).

During trading on Monday, Merlin’s share price fell by 0.58% to €10.24.

By virtue of this agreement, another jointly owned company emerged, in the form of Testa Residencial, which will be converted into a Socimi and listed on the stock market in the future, and which owns the companies’ rental homes. In this case, the aforementioned financial entities will control around 65% of the new companies and the former shareholders of the Socimi will be minority shareholders, although one of Merlin’s directors, Miguel Oñate, will serve as the CEO.

As a result of this operation, the bank chaired by Ana Patricia Botín, now holds a 21.95% stake in Merlin and a 46.21% stake in Testa Residencial.

The exponential growth of Merlin

Similarly, the former real estate company, created in 1918 to develop the neighbourhood of Cuatro Caminos following the arrival of the Metropolitan Railway in Madrid, will continue to operate another company called Metrovacesa Promoción y Suelo, which will be responsible for the future construction of homes.

Merlin, created in 2014, attracted confidence from international investors from the get go. Upon constitution, it acquired the Árbol portfolio, containing more than 1,000 BBVA branches, which had previously been owned by several funds and family offices.

The strategy of the Socimi’s managers was to grow rapidly, benefitting from investor confidence and the recovery in the sector. In 2015, it seized the opportunity to buy Sacyr’s real estate subsidiary Testa for €1,800 million. As such, it added several iconic buildings in Barcelona and Madrid to its portfolio, including one of the four towers to the north of the Castellana. Following that decision, it received the blessing from its investors to carry out a €1,034 million capital increase and it immediately followed that with the clean up of its liabilities, with a syndicated loan from ten entities amounting to €1,700 million and the issue of bonds amounting to €850 million (in April).

With the integration of Metrovacesa complete, the new Merlin now controls assets worth €9,600 million, and whereby becomes one of the largest 10 Socimis in Europe and the second largest owner of shopping centres in Spain.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Carmena’s Team Dismisses Proposals For Cuatro Caminos

19 May 2016 – Expansión

The Town Hall of Madrid has rejected plans for the old engine sheds in Cuatro Caminos presented by the Metropolitan Residential Cooperative because it considers that they breach the General Urban Development Plan.

The Town Hall explained that the proposal must be redirected legally because, otherwise, “it would infringe the legally established rules”. It also warned that the reason for the breach of the General Plan is due to Metro’s refusal to modify the level of the engine sheds, on the basis that such a change would make it impossible to access to them from the current tunnel under Calle Reina Victoria.

According to the Town Hall, the Partial Plan and the proposed development deviate from the objectives and conditions established, given that the engine sheds would remain at their current level, even though the General Plan requires them to be placed underground. “There are alternatives and we hope that this project will be sorted out soon so as to fulfil the expectations of the cooperative members”, said a representative from the Government’s Sustainable Urban Development Department, José Manuel Calvo.

Sources from the cooperative consulted by Expansión expressed their surprise and indignation because, after more than a year of meetings with technicians and managers from the Town Hall, they are now reporting a “very serious legal problem”, which has not been mentioned until now. “We understand that this is more about the political battle between the Town Hall and the Community (of Madrid)”, say the sources, who lament the fact that the hostages in this battle are 450 families.

The same sources also warn that they are considering taking legal action against those responsible for this situation and that they do not rule out bringing criminal charges or filing an administrative appeal against the Town Hall.

Meanwhile, the Town Hall explained that, with this decision, it is seeking to eliminate the “serious legal uncertainties” that would result from a breach of the General Urban Development Plan and whereby provide the cooperative members with “greater legal guarantees”.

Original story: Expansión

Translation: Carmel Drake

Demand For Off-Plan Homes Rises From The Ashes

8 May 2015 – El Confidencial

We can see cranes and bulldozers on the horizon in Spain once more. And although players in the real estate sector would rather talk about prudence than euphoria, stabilisation than recovery, the outlook is very encouraging.

Mortgage lending is increasing, more new homes are being built and more homes (in general) are also being sold. And, although the second-hand market is still winning hands down – even though the statistics are distorted by the foreclosures of homes by banks – demand for new builds is returning once more. Thus, purchasing a home off-plan, a practice that became almost anecdotal during the crisis, is returning to the fore once again, seven years after the real estate bubble burst.

There are several advantages to purchasing off-plan. You buy a new home that, for the most part, does not need any work doing to it. Some developers even allow future owners to adapt homes to their needs and likes – to convert a 4-bedroom home into a 3-bedroom property with a larger living room, for example – but, undoubtedly, the main advantage is that purchasers are not obliged to make a major outlay (of cash) in one go, but rather, they make small contributions until the keys are handed over, and those amounts are then deducted from the final price of the home. The main drawback is that new builds are not yet finished, which means they are not available immediately. And construction work can last for between 18 and 24 months.

Recently, several dozen people queued up overnight to reserve one of 62 homes that Solvia will soon build in Barcelona. It will be the real estate platform’s first development in the regional capital. (….) “There was a great deal of interest because it was a well-located product, with great features and reasonable, attractive prices”, said Augusto Monte, Director of Sales and Transactions at Solvia. “Clearly, it was an exceptional case and you cannot make wider generalisations about what happened with this development”. Nevertheless, Monte acknowledges that the fear of buying off-plan has declined in recent months.

(…) Other recent examples include the actions of housing cooperatives – for example, the plot of land in Raimundo Fernández-Villaverde or the old engine sheds at Cuatro Caminos – which obtained 100% of the partners in record time to sign up to purchase homes that will not be built for another two years.

Property developers, banks and servicers are conscious of this change and have come to the largest real estate fair in Spain (SIMA) with this type of product. Thus, for example, Solvia has a 75-home development of Alcalá de Henares. Between July and September last year, 64% of the development had already been purchased. And it is not the only one.

“We still notice considerable uncertainty amongst prospective buyers. Many of them come to the stand to ask us when the construction work will to begin. They are quite afraid that the building work will get delayed or that it will not happen at all”, says Inmaculada López-Gasco, sales manager at Magnum & Partners, which started to sell 63 homes in San Sebastián de los Reyes in April. “We have already sold 16 – i.e. 25% – and we will have the licence to start the construction work in June. We hope that sales will accelerate once the bulldozers start work.

(…)

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Cooperatives Queue Up To Buy A Plot That The Treasury Purchased 30 Years Ago

16 February 2015 – El Confidencial

All eyes are focused on one plot of land in Madrid. A plot of land, which the Treasury purchased from a group of nuns for 800 million pesetas in 1985, could now, three decades later, be sold for several million euros. It is one of the largest and rarest gems left in Madrid and many of the large housing cooperatives have already expressed interest. These same cooperatives were responsible for some of the most talked about transactions in the country last year; and this deal would allow them to offer hundreds of low cost homes in the centre of Madrid, just a few metres from the Paseo de la Castellana, something that was unthinkable a few years ago.

The plot measures just over 15,000 square metres and is located at the intersection of Calles Padre Damián and Fray Bernardino Sahagún, very close to the Castellana and ten minutes away from the Santiago Bernabeu stadium and the Torres KIO. It is owned by State Heritage (Patrimonio del Estado), which in turn reports to the Treasury (Ministerio de Hacienda). The land has its own history…it used to house a convent, which was demolished shortly after the plot was acquired by the Government. Three decades later…., the plot may come back onto the market in a perfect transaction for the public coffers, thanks to the increase in land values during the intervening period.

Nevertheless, before the plot is auctioned, some administrative hurdles will need to be overcome to change its intended use. The State Heritage department has proposed a one-off amendment to the General Urban Plan for Madrid because, for this land to be attractive in the market, and for the Treasury to obtain the maximum price for its sale, its use must be residential; currently it may only be used for the collective services of the Public Administration. (…)

This one-off amendment is awaiting provisional approval by the Town Hall of Madrid and definitive approval by the Community of Madrid, according to sources from the Treasury who say that until this happens, the plot will not be put up for sale. (…)

(…)

Under the spotlight of the management cooperatives

“The size of the plot, its location, its environment, its intended suitability for construction, its scope, the potential appeal of the project that could be developed makes this plot of land a clear target that is going to generate a lot of interest”, said Leopoldo Morena, the CEO of the Ibosa Group, the cooperative manager that was responsible for one of the most important land transactions in the capital last year, when it was awarded ownership of Metro de Madrid’s depots in Cuatro Caminos for €88 million. That project, Residencial Metropolitan, which will bring more than 400 homes onto the market, with prices upwards of €2,600 per square metre, has almost all been sold (95%).

Nevertheless, the operation of the year was, without a doubt, the sale of a plot of land on Calle Raimundo Fernández Villaverde by the Ministry of Defence in a bid that was won by the cooperative manager Domo. Its offer for €111 million exceeded those made by Ferrovial, Pryconsa and Construcciones Amenabar; all of the homes in the development have already been sold. The sales price of the 355 homes was expected to start at €3,300 per square mete.

These two transactions boosted the market in 2014. According to data from the real estate consultant Irea, transactions involving land in Spain amounted to €346 million last year, which represented just 4% of the total investment in the market. A low percentage, however, in 2013, there weren’t any transactions involving land above five million euro, the threshold that Irea uses to prepare its analysis of investment in Spain (and so the deals closed in 2014 did represent a move in the right direction).

“Transactions such as the one in Calle Raimundo Fernández Villaverde, the Metro de Madrid and more recently, Amenabar’s purchase of various plots of land from Sareb, without financing, were unthinkable a few years ago”, explains Mikel Echavarren, the CEO at Irea.

In his opinion, the main players that may sign land-related transactions in Spain this year will continue to be domestic companies, developers and cooperatives, which are capable of financing their land purchases with their own funds: “There are scarcely six companies in Spain at the moment with sufficient financial capacity to finance land purchases”….

The role of international investment funds in the direct purchase of land will be practically zero, but they will be involved in the acquisition of portfolios of debt that contain land or residential developments as underlying collateral.

The plot of land in Madrid has also attracted interest from prospective house buyers, as evidenced by the fact that some managers have received requests from more than 2,000 interested parties. And it is no wonder: if the land falls back into the hands of cooperatives, they may build homes right in the centre of Madrid at very competitive prices, especially compared with those in private developments, such as the one that will start soon in Calle Juan Bravo, 3, where the prices of the luxury homes that are going to be built on the site may reach €9,000 per square metre, significantly higher than the less than €4,000 per sqm being charged by both the Ibosa Group and Domo Gestora for their recent acquisitions in Madrid.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake