Kronos & King Street Buy Land in Madrid from Sareb

27 December 2017 – El Confidencial

The scarcity of land that is starting to be seen in cities such as Madrid and Barcelona, and the increase in property prices there, is forcing property developers to sign partnerships with international funds and expand their areas of operation outside of the large capitals, towards peripheral towns and dormitory cities.

One example of this growing trend is the recent deal signed by Kronos Homes, a high standing real estate company that has just joined forces with King Street to buy two important blocks of land from Sareb in the belt around Madrid. Specifically, they have acquired 128,000 m2 of land in Colmenar Viejo, a town located 30km to the north of the capital, where it plans to build 200 homes, according to a statement issued by the property developer.

Moreover, according to sources consulted by El Confidencial, it has also agreed to acquire 230,000 m2 of land in Torrejón, which is located 20km to the northeast of the capital. Both of these operations have been advised by Cuatrecasas and Almar Consulting.

Given their location, these acquisitions contrast with the steps that Kronos has taken in Madrid to date, where it has limited its activity to the centre of the capital. Moreover, they represent the first sales of land under management, for development over five or six years, that Sareb has made to a fund like King Street, according to the same sources.

A property developer born out of the recovery

Kronos Homes is a property developer created at the beginning of this real estate cycle to focus on exclusive homes, many of them accompanied by the stamp of famous architects such as Rafael de la Hoz and Joaquín Torres.

The latter has put his signature on the development of 82 homes that the property developer is currently building in the exclusive Madrilenian district of Puerta de Hierro, whose prices range between €488,000 and €1.4 million. Meanwhile, Kronos is working on a less elitist development in Cuatro Vientos, to the south of the capital, where it plans to build 2-, 3- and 4-bedroom homes.

With the acquisitions in Colmenar and Torrejón de Ardoz, Kronos is pushing ahead with its objective of acquiring a land portfolio for the construction of 4,500 homes over three years. Last March, the company said it already owned land worth €200 million, with capacity for the construction of 3,000 homes, and that it planned to invest another €100 million acquiring more plots.

Since it started operations in 2014, the company has closed several operations both with Sareb, as well as with financial institutions and has participated in the acquisition of non-performing loans backed by residential assets of interest.

Meanwhile, King Street is an international investment giant, which, in Spain, has been behind important debt operations, such as the one linked to Realia and the deal involving the radial highways. Currently, it is a shareholder of Neinor, in which it owns a 3.5% stake.

Original story: El Confidencial (by R. Ugalde & C. Hernanz)

Translation: Carmel Drake

Servicers, Banks & Sareb Fuel Madrid With New Homes

15 April 2016 – El Mundo

The four servicers, Altamira Asset Management (which was created by Banco Santander), Servihabitat (La Caixa), Solvia (Banco Sabadell) and Anida (BBVA) currently have a portfolio of 2,277 new homes up for sale (or about to come on the market) in the Community of Madrid alone. This supply is spread across 30 residential projects (10 in the capital), all launched in 2015 and 2016. These high figures make these companies the main sellers of new homes, along with cooperatives, investment funds and a small group of private property developers.

The three large independent servicer platforms (Altamira, Servihabitat and Solvia) have managed to accumulate a juicy showcase of new homes thanks to the fact that they are selling products from the main financial entities, in other words, the major land owners; and from Sareb, which took ownership of the real estate assets previously owned by the banks that received state intervention. In other words, these platforms own the majority of the country’s new homes. All of these projects are characterised by having been studied in detail in accordance with three key parameters: locations in demand, prices that reflect the market and homes and common areas tailored to suit buyers.

In terms of their ways of working, each servicer is different, although their modus operandi involves the complete management of property developments, on behalf of their clients and themselves. Their activities range from the submission of projects to after-sales services, as well as the search for developers and construction companies (if they don’t have in-house teams), requests for permits and the sale of properties. A comprehensive service that they offer by themselves and in partnership with other firms. In return, these companies generate profits through commissions, from both the construction and sales processes.

As such, the servicers (some of which are owned by funds) are rising up as major players in the new build market, where traditional property developers are unable to get started due, in particular, to a lack of financing. (…).

Why are the servicers turning their hand to the sale of new homes?

“This business, which focuses on satisfying the needs of its users, is and will be long-lasting and profitable”, says Fernando López, Commercial Director at Altamira, who is convinced that the residential market is taking off again after seven years of almost no activity. “During that time”, he says “pockets of unsatisfied demand has been growing”. (…).

In total, Altamira has 217 developments under construction across the whole of Spain – many of which are sold out – and it expects to hand over almost 8,000 homes between now and 2018, figures that make it the largest property manager in Spain and one of the largest in Europe.

Juan Carlos Álvarez, Director General of Servihabitat’s Real Estate Business, also extols this product. (…). Only one of the six developments that his company put up for sale in Madrid in 2015 has units still for sale (in Cuatro Vientos, where apartments are going for as little as €212,000). It will put another six projects on the market soon.

According to Francisco Moreno, Director of Business Development at Altamira, the new developments “respond to and better satisfy the real needs of potential buyers in terms of design, quality and price”. He adds, “Now, most homes have three bedrooms, and there is also demand for four bedroom properties”. These types of homes dominate the supply of the servicers and banks in the Community of Madrid, which include high-rise flats and detached houses with asking prices from €120,000.


Francisco Pérez, Director of Promotion and Development at Solvia says that “all of his company’s developments offer customisation options to future owners. They also offer large common areas, green spaces and most have a swimming pool”. Meanwhile, Solvia does not predict any aggressive rise in prices, but rather a slight increase of 3.3% in 2016. (…).

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake