Aedas Revolutionises the Property Development Sector by Building 500 Turnkey Homes for Ares

12 April 2019 – El Confidencial

Aedas Homes has decided to launch a new line of business by building complete housing developments for other companies. In this way, the listed property developer hopes to generate value from its production over-capacity; it anticipates recording revenues of around €70 million from the initiative.

In this vein, the company led by David Martínez has reached an agreement with the fund Ares to build 500 homes in its name in three different locations: Torrejón de Ardoz, Alcalá de Henares and El Cañaveral (all in Madrid).

This is the largest turnkey project in the sector since the outbreak of the real estate crisis, a decade ago and as such, represents a real milestone.

The three largest listed property developers in Spain, Neinor, Aedas and Metrovacesa, are all living by the famous mantra “reinvent yourself or die”. As such, they are expanding their operations as they seek to actually generate the high turnover figures that they promised when they made their stock market debuts.

With this latest announcement, Aedas is sending a clear message to its competitors. It has over-capacity in its production model, which means that it can handle turnkey projects on a large scale, as well as deliver the roadmap that it is already committed to.

With the additional 500 homes from this project, Aedas Homes could end the year with more than 3,000 units launched, compared with the 2,580 initially planned for the year.

Meanwhile, Ares Capital is immersed in its commitment to the Spanish real estate market, with a particular focus on the residential segment, with homes both for sale and for rent.

Original story: El Confidencial (by Ruth Ugalde)

Translation/Summary: Carmel Drake

Aedas Negotiates the Construction of 500 Rental Homes in Madrid

1 March 2019 – Expansión

Aedas wants to benefit from the investor appetite for residential rental assets as an alternative source of income and cash generation. The property developer is negotiating the construction and delivery of four turnkey developments comprising 500 homes for an institutional investor.

The homes, which are going to be constructed in Madrid and two adjoining municipalities will be dedicated to rental housing. “We are assessing the possibility of doing the same in Barcelona, Sevilla and Alicante”, explained David Martínez, CEO of Aedas Homes (pictured above), speaking to Expansión (…).

In 2018, the company invested €112 million in land on which to build 2,600 homes; and it also has options to purchase more land for an additional 400 units.

“The plan for this year involves buying land for at least 1,000 homes (an investment of around €50 million), but we do not rule out increasing that target if opportunities present themselves”, he said (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Aedas Purchases Land in Granada for 750 Homes

1 February 2019 – Eje Prime

Aedas Homes is expanding its portfolio. The property developer, which specialises in the new build residential market, is strengthening its presence in Granada capital with the acquisition of land for the construction of more than 750 homes in total. The company is thereby adding new assets to its land bank in the city, where it made its debut at the beginning of 2018.

The property developer is going to undertake residential projects in two sectors located in the north and west of Granada. Sergio Gálvez (pictured above), Director of Strategy and Investment at Aedas Homes, highlights that the company has closed these operations after years analysing the evolution of the residential market in Granada.

The new plots of land acquired by Aedas Homes are located in the Ferrocarril Oeste sector. Besides these plots, the company owns land in the Borde Norte N3 sector, an area located on the northern face of the urban nucleus of Granada.

The CEO of Aedas Homes is David Martínez. The company owns a portfolio of land spanning more than 1.5 million m2 for the construction of more than 14,500 homes in key areas of the country, both from an economic and real estate perspective: Madrid and the Central area, Cataluña, Levante and the Balearic Islands, Andalucía and the Costa del Sol.

Original story: Eje Prime

Translation: Carmel Drake

Neinor & Vía Célere Lead the Ranking of Forecast House Deliveries for 2019

28 January 2019 – Cinco Días

Year after year, the new major players in the house construction sector are seeing the numbers in their growth plans increase. During 2019, the largest property developers created since 2015, and some of those reborn from the ashes during this latest upwards cycle, are expected to approach their cruising speed, above all, the listed companies Neinor, Aedas and Metrovacesa, which have been called to lead the residential construction sector together with Vía Célere. Even so, the sector is still very fragmented with lots of small companies.

Neinor Homes and Vía Célere have become the two entities with the largest number of home deliveries this year. In both cases, 2,000 clients will receive the keys to their homes, according to figures provided to Cinco Días by around twenty property developers. In these forecasts, the companies have detailed three concepts for their plans for 2019: homes that they will launch onto the market, homes that they will start work on and forecast deliveries.

Neinor Homes, created in 2015, and led by Juan Velayos (…) expects to start work on 3,000 homes this year, coming close to the cruising speed that it defined during its IPO, and it will start to market another 2,000 units.

Meanwhile, Vía Célere, controlled by the US fund Värde Partners, is in the middle of integrating the assets of Aelca, the other property developer owned by Värde, which has now emptied its portfolio (…). It is the only one of the large players that is not yet listed on the stock market; its plans in that regard were postponed last year.

The listed firm Aedas, also created in 2017 with land from another US fund, in that case, Castlelake, is also perceiving an upwards turn in its numbers. This year, it will hand over 1,055 homes, start marketing 2,500 homes and start building 3,000 homes, just two years after first appearing on the stage, with David Martínez as its CEO.

Meanwhile, Metrovacesa, the other large listed company, controlled by Santander (and in which BBVA holds a minority stake), clearly leads the business plans, with up to 4,500 homes to be newly marketed and whose construction will be launched. This one-hundred-year-old real estate company, which was cleaned up by the banks following the crisis, launched its new project in 2017 with Jorge Pérez de Leza, from Grupo Lar, as the CEO.

In terms of those entities backed by funds, the rescued firm Habitat also stands out, reactivated last year by Bain Capital, and which is planning to market 3,000 homes this year. Similarly, Cerberus took control of Inmoglacier in 2017 (…). That firm declined to provide its forecasts to this newspaper, but it is also set to play a significant role, given that it has become one of the real estate arms of the US fund, one of the most active in the purchase of assets from the banks and which also owns Haya Real Estate as its servicer.

The group of twenty-odd companies consulted will hand over almost 16,000 homes this year, will start work on 34,000 units and will begin marketing another 30,000 properties. These figures reflect the enormous fragmentation in the sector, which in the last 12 months has started 103,000 homes in total, according to figures from the Ministry of Development as at October 2018.

Small specialist property developers still carry a lot of weight, unlike in other countries where large players exist. Moreover, even though the rate of residential construction has taken off since 2014, it is still well below the peak of 2006 when 865,000 building permits were granted.

In terms of the new players also boosted by the international funds, they include other developers with a high rate of house sales: AQ Acentor (owned by the German fund Aquila), which is going to put 1,700 homes up for sale; Kronos Homes (backed by several European and US investors), which will market another 1,600 homes; and ASG Homes (backed by the British firm ActivumSG), which plans to add another 1,000 homes.

In terms of the survivors of the crisis, Amenabar stands out, the Gipuzkoan company, which expects to start work on 3,608 homes next year and to hand over 1,245 units. Another of the stalwarts is the Madrilenian firm Pryconsa, owned by the Colomer family, which has already reached a high number in terms of house starts: 1,285. In more modest terms, other important firms include the Basque entity Inbisa and the new entity Áurea Homes, the residential subsidiary of the Navarran construction group ACR (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Aedas will Collaborate with Socimis to Build Rental Homes

21 October 2018 – La Vanguardia

The property developerAedas Homes has started negotiations with several Socimis to offer them “turnkey” projects for rental homes that they will be able to manage, and has ruled out, at least for the time being, turning itself into a listed real estate investment company (Socimi).

The CEO of Aedas Homes, David Martínez, explained to Efe that the intention of these negotiations is to allocate some of the residential land that it owns to building “turnkey” homes for rental, although the firm is continuing with the development and sale of its own homes in most cases.

“We cannot launch two developments at the same time because they would cannibalise each other, but we can launch one for sale by us and the other for rental by a Socimi”, explained Martínez by way of example for the areas in which his firm has land for two neighbouring plots for development.

What Martínez did rule out is the possibility of Aedas Homes becoming a listed real estate investment company (Socimi), at least for the time being.

“In the future, we can explore the possibilities, but, that is not something that interests at the moment, because our objective is to grow as a property developer”, he highlighted.

Moreover, the firm has no plans to explore other segments of the real estate market or venture overseas.

“Residential is a sufficiently large niche, which requires specialisation, primarily in the areas of high demand”, said the senior executive at Aedas, who also acknowledged that his company is interested in buying land from large owners such as, for example, Sareb.

Moreover, and when asked about the Government’s announcement to promote a stock of 20,000 new homes for social rental, Martínez said that “any initiative is welcome”.

In this regard, he said that “it is clear that this country needs homes, for ownership and rental”, and that “although rental prices are rising well above expectations, that is a clear sign that there is a housing deficit”.

The CEO of the property developer estimates that overseas demand amounts to 30,000 homes per year, which is “quite stable”, with British buyers “still the strongest, despite Brexit”, but there has also been a rise in acquisitions by Belgians, Dutch, Nordics and Russians.

In terms of reserving 30% of homes in new developments for social rental, an initiative approved by the Town Hall of Barcelona, Martínez does not think that the Generalitat of Cataluña will approve it and that, if it were to, “it would generate uncertainty and so would not be a good decision”.

What he does ask Town Halls is for them to speed up the granting of licences and changes to urban plans to allow an increase in density in Spain’s cities.

By way of example, he explained demolishing a block of low-rise homes, rehousing the residents and building taller developments, which would avoid the “expansive growth” of cities and the consequent problems that this causes for mobility.

In addition, he indicated that one of the challenges facing Aedas is to increase its industrialised construction of homes, building most of a home in a factory, for example. This method is not very widespread in Spain yet but his firm has been promoting it in six of the developments that it currently has underway.

Original story: La Vanguardia

Translation: Carmel Drake

Aedas Homes has a Landbank Covering 4+ years of Visibility

8 October 2018 – Nasdaq

Aedas Homes, a leading property developer in the new real estate cycle in Spain, already has enough land in its portfolio to cover deliveries until 2022, as well as a significant part of 2023, thereby confirming the delivery targets set out in its IPO prospectus. The company’s landbank (close to 90% is classified as ready-to-build) will allow it to develop up to 14,521 homes in Spain’s key residential markets and is considered by analysts to be the best in the country.

So far in 2018, the publicly traded company, with CEO David Martínez at the helm, has completed the construction of 222 homes scheduled for delivery this year, 190 of which have already been sold.  As of August 31, the company had 6,287 active units, 55% more than in December 2017, and of those, 1,623 were already under construction. These figures reflect the strength of the property developer’s operating capacity during its first year.

In 2019, the developer plans to deliver almost five times as many homes, with a delivery target of 1,055 residential units; 1,071 homes are currently under construction and 761 have been sold. In 2020, Aedas Homes will deliver 1,986 homes and reach its cruising speed in terms of launches (3,000). The plan for 2021 is to deliver 2,438 homes and begin 2,471 new projects. 2022 will mark the moment when the developer reaches its cruising speed in terms of deliveries, with plans to put 3,063 homes in the hands of customers and launch another 3,000. In 2023, the number of homes being delivered will reach 3,326.

Martínez highlighted the company’s strict compliance with the goals announced at its IPO, noting that the company returned a profit one year ahead of schedule. Specifically, the property developer earned €3.7 million during the first half of 2018, making it the first of the new large developers in Spain to become profitable, and doing so only eight months after being listed on the Madrid stock market.

“We designed a realistic business plan, meaning that we will reach our targets in the coming years: by 2020, for example, we will have delivered more than 3,200 homes. Right now, we have almost 6,300 active units across 117 developments which gives us the visibility we need in terms of our objectives,” Martínez explained.

About Aedas Homes

The property developer Aedas Homes became a listed company on 20 October 2017 in Madrid, with a market capitalization of over €1.5 billion. Aedas is an industry leader at the national level and aims to play an important role in the new cycle of the Spanish real estate sector, which must be marked by professionalism and an adherence to rigorous standards.

Aedas Homes has a fully permitted residential landbank with more than 1.5 million buildable square metres (the highest quality landbank in Spain, according to analysts). This will permit the development of 14,500 residential units in the key markets, and their surrounding areas (both in terms of real estate and finance) where Aedas operates: the Centre, Cataluña, the East & Mallorca, Andalucía and the Costa del Sol.

Original story: Nasdaq 

Edited by: Carmel Drake

David Martínez: “Aedas Has Land on which to Build Homes for the next 4 Years”

8 September 2018 – Expansión

Aedas, the property developer in which the US fund Castlelake holds a stake, is continuing to push ahead and take on new challenges. As the first anniversary of its debut on the stock market approaches and with its business plan on track, the company is considering starting to buy plots of land that still require urban planning approval to anticipate possible price rises and improve margins, as well as to launch projects to sell to specialists companies in the rental sector, such as Socimis.

“We have a land bank spanning more than 1.5 million m2, which will allow us to build more than 14,000 homes. That gives us four years of visibility with respect to our business plan”, explains David Martínez, CEO of the company.

Aedas became the second largest property developer, after Neinor, to make its debut on the stock market after ten years of drought following the burst of the real estate bubble. It was followed shortly after by Metrovacesa, and several other companies are lining up to take the plunge, including Vía Célere and Aelca.

Aedas is sticking to the objectives announced in the listing brochure and unlike its rivals is not contemplating a reduction in its initial forecasts. “Our objective is to hand over more than 200 homes this year, more than 1,000 homes in 2019 and to exceed 2,000 homes in 2020. In total, by the end of 2020, we will have handed over more than 3,200 homes and we already have 114 developments underway, with more than 4,000 homes in different phases of development, which gives us a great deal of visibility over the objectives. We designed a realistic business plan and we will fulfil the forecasts for 2018, 2019 and 2020”, said the director.

Investment in land

The CEO of Aedas explains that during the first half of 2018, Aedas invested almost €100 million and purchased land for 1,905 homes, almost doubling the planned investment figure for the entire year. In addition, the company signed a corporate financing line for €150 million to continue expanding its land bank.

“We have detected interesting opportunities that fit with our investment criteria that are not going to be available in six months time. For that reason, we decided to bring forward our investment plan. Recently, we formalised a loan amounting to €150 million to provide us with sufficient financial resources to continue bringing forward the purchases planned in the business plan between now and 2023”, he explained.

At this point, Martínez opened the door to the possibility of purchasing non-finalist land. “There is a lot of land classified as “urbanisable” that still requires urban planning. Given that we now have land to cover our requirements for the next four years and we are not in any hurry, nor do we need to buy finalist land, we are considering land in areas with demand that has the partial plans approved but that still require some urban planning management”, he revealed.

Martínez highlighted that a significant percentage of the €150 million resulting from the loan formalised a few weeks ago will be used to buy non-finalist land. “With the economic recovery, new property developers are emerging who need to buy finalist land to get to work. For this reason, in some places, the prices of some plots of finalist land now exceed our expectations. We want to take advantage to buy land at more affordable prices even if that requires more management subsequently (…).

Rental

Similarly, the property developer is exploring other business opportunities, such as the sale of homes to Socimis and other vehicles specialising in the rental market. “One of the challenges involves supplying homes to young people. Aedas is exploring formulae that allow the construction of homes for rent, basically developing projects that we can sell to companies that specialise in rental. We have a very extensive and urban land bank”.

The director anticipates a “long” upwards cycle. “We are at the beginning of a cycle and notwithstanding the fact that we may see some adjustments in prices in certain specific towns, in general, it is going to last”, he predicted.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Aedas Expands into Torrejón de Ardoz (Madrid) with 100 New Homes

2 July 2018 – Eje Prime

Aedas Homes is extending its tentacles in Madrid and has reached Torrejón de Ardoz with its first residential project. The listed property developer is going to develop 100 homes in that municipality, which will constitute the Lángara urbanisation.

The homes, which include ground floor garden flats and penthouses with two, three and four bedrooms, have already gone on the market with prices starting at €165,000. The promotion will have a garden, a swimming pool, a gym, a children’s play area and a lounge bar in the common areas.

Lángara is designed for both first-time buyers and those looking to reposition themselves on the property ladder, according to Aedas. With more than 1.5 million m2 of buildable land in its portfolio, the property developer still has space to develop around 14,000 homes in Madrid, Cataluña, Sevilla, Costa del Sol, Levante and the Balearic Islands.

The plans of Aedas, in which the US fund Castlelake holds a stake, include reaching a handover rate that exceeds the number of homes under construction by 2022. The company led by David Martínez wants to achieve the break-even point after launching more than 2,000 homes this year: 2,500 in 2019 and peaking with 3,000 homes in 2020 and 2021.

Original story: Eje Prime

Translation: Carmel Drake

Aedas Acquires a 15,000 m2 Buildable Plot in Valencia

21 May 2018 – Eje Prime

Aedas Homes wants to cause a storm in Valencia and already has plans to build 500 homes in the city, which is famed for its firecrackers and fireworks. Now, the listed property developer is increasing its portfolio of buildable land in the Mediterranean city with the acquisition of 15,000 m2 of land in the Patraix area, split into two plots.

The real estate company in which Castlelake holds a stake could have invested between €5 million and €6 million in these plots, after paying between €350 and €400 per square metre acquired in this operation, according to València Plaza.

The company, which has declined to confirm or deny the information, is whereby adding its fifth project in Valencia, where it already has developments underway in the Quatre Carreres and Nou Campanar districts. Moreover, the property developer recently acquired a plot in Mislata, a town in the capital’s metropolitan area, where it will start building homes next year.

With these operations, Aedas is looking to rival Neinor Homes to become the property developer king of Valencia, a region where, traditionally, investment in the real estate sector always grows early when the Spanish economy is enjoying an upward cycle.

Also in the Community of Valencia, the property developer led by David Martínez has six more projects underway in Alicante, split between the coastal towns of Denia and Jávea and the capital.

Currently, Aedas Homes owns more than 1.5 million m2 of land, almost all of which is buildable. On that surface area, the property developer plans to build up to 13,000 homes in Madrid, Sevilla, Costa del Sol, Cataluña, Levante and the Balearic Islands. Similarly, the company is preparing for its developer break-even point, given that in 2022 it will hand over more homes than it builds.

Original story: Eje Prime

Translation: Carmel Drake

Aedas Homes Acquired Developable Land in Madrid for 2,000 Homes in 2017

2 April 2018 – Inmodiario

Aedas Homes, a key player in the new cycle of the residential property development market, which made its stock market debut in October last year, exceeded its objectives in terms of the acquisition of 100% developable land in 2017. In fact, last year, the company invested €123.1 million in the purchase of land with the potential for the construction of 3,172 homes, up by 27% compared to the forecast set out in its Strategic Business Plan.

Specifically, 66% of the land acquired by the property developer in 2017 was located in the Community of Madrid, one of the areas that is seeing the highest demand for new housing, along with Cataluña. This significant stockpile of raw material has allowed the property developer to protect itself against the shortage of developable land in the Madrid region, a dearth that is causing major inflationary tensions in the market.

The plots acquired by Aedas Homes in Madrid have the potential for the construction of 2,093 homes, which, added to the land that the property developer already owned, means it now has a portfolio of land with the capacity to build 4,300 homes across the region.

Completion of the first developments

The Community of Madrid is one of the main focuses for the property developer. The firm has now sold more than 1,000 homes across Spain and is on course to achieve its objective of 1,500 operations at the national level in 2018. The high rate of transactions has been reflected in the sale of entire developments in Madrid, such as Terrazas de los Fresnos, in Boadilla del Monte, and Phase I of Escalonia, in Las Rozas –Escalonia II is now being marketed.

Raw material without any regulatory or political uncertainty

The land acquired by the property developer led by David Martínez in Madrid, along with the entirety of Aedas Homes’ land portfolio, is completely developable, which removes any kind of regulatory or political uncertainty. In other words, the property developer remains at the margin of the land transformation process (from not suitable to its conversion into “developable”), which involves some administrative activities that take a long time and which, therefore, delay the processing of urban development plans.

The company has a total land bank spanning more than 1.5 million m2 ready for development and with the capacity to house almost 13,000 homes, which represents 84% of the units that it plans to hand over between now and 2023. Many experts rate its land portfolio as the best in the market “We are committed to quality and not quantity”, say sources at Aedas Homes.

Original story: Inmodiario

Translation: Carmel Drake