Tag: demand

GMP Puts Huawei’s Offices in Castellana Norte Up For Sale

28 May 2019 – Eje Prime

The real estate group GMP has put the headquarters of the Chinese company Huawei in Madrid up for sale. The technology giant has occupied the offices, which span 21,000 m2, since Q1 2017. The premises are located in the Castellana Norte Business Park in Las Tablas, close to the headquarters of other groups such as Mediaset and Nokia.

The Castellana Norte Business Park has become one of the most important urban renovations projects in the Spanish capital. It offers office space measuring more than 1 million m2, with capacity for over 200,000 people.

GMP, which is owned by the Montoro family and the Singapore sovereign fund, specialises in the management of offices and retail parks. It owns 18 work centres in Madrid and generated revenues of €106.7 million in 2018, up by 8% YoY.

The office market in the Spanish capital is one of the most attractive for international operators thanks to the combination of low prices (€33/m2/month) and availability (10.5%).

GMP’s decision to sell the property was taken before the US named the Chinese company as a threat to national security and vetoed it from all business with US companies.

Original story: Eje Prime (by Marta Casado Pla & Marc Vidal Ordeig)

Translation/Summary: Carmel Drake

BNP Paribas: Office Rentals Soar in Barcelona during Q1 2019

23 May 2019 – La Vanguardia

The office market in Barcelona broke historical records in terms of space leased and rental prices during the first quarter of the year, according to a report from the consultancy firm BNP Paribas Real Estate.

According to the data, 152,300 m2 of office space was leased during Q1 2019, up by 65% with respect to the same period in 2018, boosted by a 60% increase in demand for large spaces (those measuring over 3,000 m2).

According to David Alonso, Head of Research at BNP, the office market in Barcelona was traditionally dominated by SMEs demanding spaces measuring less than 1,000 m2. Nevertheless, since 2015, that trend has changed with the arrival of technological companies requiring larger offices, and since 2017, with the entry of coworking companies – the latter leased 22% of the space let during Q1 2019.

As such, 91 new contracts were signed during the first quarter of 2019, with the 22@ district as the main driver, accounting for 30 of the operations and 40% (60,900 m2) of the space.

Nevertheless, the two largest operations were closed in more secondary areas: the rental of 18,000 m2 in Sant Joan Despí by Gallina Blanca and the rental of 17,209 m2 on Gran Vía in Barcelona by La Caixa.

All of this activity drove up rents with prices in prime areas, such as the best buildings on the upper end of La Diagonal, reaching €27/m2/month, and some operations even reaching €30/m2/month, whereby exceeding the maximum recorded in 2008 (€27.5/m2/month).

Original story: La Vanguardia (by Rosa Salvador)

Translation/Summary: Carmel Drake

Investors Purchase the Site of the Former ‘Cervezas Victoria’ Factory in Málaga

20 May 2019 – Diario Sur

The growing demand for land in Málaga has reactivated an operation involving the site that used to be home to the former Cervezas Victoria factory, situated alongside the Azucarera-Intelhorce highway to the west of the city centre.

Thirteen years ago, the Town Hall approved the urbanisation of those plots, which were divided into four blocks in order to house offices, businesses, warehouses and parking lots. The urbanisation work was completed but the economic crisis hit before the plots could be occupied. They ended up in the hands of the banks, specifically, Unicaja, which has now managed to offload most of them onto entrepreneurs who are keen to develop the area.

According to sources familiar with the operation, local and German investors have teamed up to acquire the plots, which are crying out to be transformed into a new business centre. The plots span a surface area of 50,137 m2 in total and the investors have spent €7 million to date buying up the land.

Original story: Diario Sur (by Jesús Hinojosa)

Translation/Summary: 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

INE: House Sales Rose by 3.7% YoY in Q1 2019

14 May 2019 – Idealista

According to data from INE, 133,989 homes were sold in Spain between January and March 2019, which represents a YoY increase of 3.7%. It also represents the best quarterly sales figure since the spring of 2008.

Nevertheless, it is worth noting that the volume of monthly sales actually decreased during the quarter from 47,000 in January, to 43,700 in February and 42,700 in March. Second-hand properties accounted for most house sales during the period, specifically 81.1% in March, although the volume of new build transactions did grow by 14.4% during the quarter.

By autonomous region

Andalucía, Cataluña and Madrid continued to lead the ranking in terms of the regions with the most transactions signed, with 8,915, 6,904 and 6,233 units sold, respectively.

Despite the strong results, Fernando Encinar, Head of Research at Idealista urges caution in light of the new Royal Decrees published in recent months. They are generating uncertainty in the market and so are slowing down growth – families and investors alike are deciding not to use their savings to buy a home and rent it out, in the short term at least, and that trend may become more widespread over the coming months.

Original story: Idealista

Translation/Summary: Carmel Drake

Global Geopolitics Fuels Demand for Luxury Homes in Madrid

12 May 2019 – El Confidencial

Wealthy investors and families from China, Russia, Venezuela and Mexico are particularly active in the luxury home segment in Madrid, in particular in the districts of Salamanca, Chamberí, Retiro and Moncloa-Aravaca.

According to the College of Property Registrars, foreigners accounted for 6.7% of all residential purchases over €500,000 in the Community of Madrid in 2017, a figure that rose to 8.4% in 2018.

There are several pull-factors motivating these buyers including tax exemptions, golden visas (thanks to Law 14/2013), (relative) legal certainty, low rates of crime and affordable prices, compared to Miami and other European capitals. The language, climate and excellent transport infrastructure also play their role, as do the world-class universities and business schools in the Spanish capital.

A number of push-factors are also evident, which is where the geopolitical developments come into play. The political and economic crisis in Venezuela, the election of Andrés Manuel López Obrador as the President of Mexico in December, the political uncertainty in Cataluña and even the on-going Brexit saga, are all important reasons for wealthy buyers to turn their backs on their home countries in favour of Madrid when it comes to buying a property.

To date, since they were introduced in 2014, 2,948 golden visas have been granted for the purchase of luxury homes, with half going to Chinese citizens (1,476) and a fifth going to Russians (621).

Moreover, according to official statistics from Spain’s National Institute for Statistics, the number of Mexican residents in Spain has risen from just over 20,000 in 2014 to more than 25,200 by the end of 2018, of whom one third live in Madrid.

Meanwhile, the number of Venezuelan residents has increased from just over 32,000 five years ago to 57,120 in 2018. Nevertheless, in both cases, the real number of arrivals is higher since many move to Spain through family links making them entitled to Spanish passports.

Original story: El Confidencial (by Marcos García)

Translation/Summary: Carmel Drake

Investment Funds Seek Land for Student Residences in Sevilla, Málaga & Granada

13 May 2019 – ABC de Sevilla

According to CBRE Spain, many investment funds are searching for land in Sevilla, Málaga and Granada on which to build new halls of residence for students. Ideally, they want plots that are located close to the university campuses or in well-connected areas of those cities.

Specialist student residence companies are also in the market for land, such as the company Syllabus by Urbania, which is actively looking for new plots in Sevilla and Granada.

The British firm Amro is already working on two projects, in Granada and Sevilla, and is now searching for land in Málaga, as well as in Salamanca, Alicante, Bilbao and Barcelona.

Similarly, Greystar, which is building a 322-bed hall of residence in Málaga, also wants to expand its footprint in Sevilla and Granada.

Lack of beds for students

In Spain, there are 1.5 million students, of which around 600,000 do not live in their home towns or cities. Nevertheless, there are less than 100,000 beds available for students and they are primarily located in Madrid, Barcelona, Salamanca, Granada, Valencia, Málaga and Sevilla. Moreover, most of the existing supply is obsolete. The need to expand and renew the stock is clear.

Original story: ABC de Sevilla (by María Jesús Pereira)

Translation: Carmel Drake

Co-living Brand Quarters Expands Into Spain and Portugal

25 March 2019 – Press Release

The MEDICI LIVING Group, the leading co-living provider in Europe and the U.S, is expanding into Spain and Portugal. It has therefore appointed Nicolas Dugerdil (pictured below) as Director Expansion Iberia. Based in Barcelona, he will be spearheading the group’s expansion and roll-out of the QUARTERS co-living brand in the region. He will identify locations and secure buildings, with an initial focus on Madrid, Barcelona and Lisbon. Other cities are to follow once a foothold has been established.

Dugerdil moves over to MEDICI LIVING from the Spanish Inditex Group where he most recently held the position of Expansion Director for Uterqüe, managing the fast-growing premium fashion brand’s entire real estate portfolio and leading its international development. Between 2013 and 2016, as Expansion Manager for Switzerland, Dugerdil built up Inditex’s network of stores in the country, and between 2012 and 2013 was part of the core team rolling-out the global Radio Frequency Identification project, a technology that has had a huge impact on the retail sector. He holds an MBA from the IESE Business School.

“We want to become the WeWork of co-living in the coming years. Iberia is another important step on this journey,” says MEDICI LIVING founder and CEO Gunther Schmidt. “Home prices in both Spain and Portugal have been rising steadily in major cities over the last few years, so that affordable housing for young professionals has become scarce. With our QUARTERS concept, we will be offering just the right community and living space to fill the current supply gap.”

The company has ambitious plans for Iberia. Up to 20 percent of the roll-out funding provided by CORESTATE Capital is to be invested in Spain and Portugal adding up to 1,200 co-living beds in these two countries.

The QUARTERS brand, with its high-end furnishings and a comprehensive digital concept, is specifically targeted at young professionals from the millennial generation. The brand’s rollout across Europe has accelerated since the end of last year when MEDICI LIVING and Frankfurt-listed CORESTATE Capital Holding, one of the region’s largest real estate investment managers, agreed on a cooperation to invest €1bn of equity and debt in the coliving sector over the next three to five years.

The programme marks the largest planned investment in the history of the young asset class worldwide. A similar cooperation was agreed with the W5 Group, the family office of Ralph Winter, which aims to invest $300m in the US. MEDICI LIVING expects the addition of at least 7,300 further rooms to its portfolio until 2023. The company currently operates 1,800.

Original story: Press Release

Edited by: Carmel Drake

CBRE: Logistics Leasing Rose by 100% in Valencia but Fell by 67% in Madrid in Q1 2019

15 April 2019 – Eje Prime

According to a report published by CBRE, logistics leasing amounted to 464,000 m2 during the first quarter of 2019, distributed primarily across the centre of Spain, Cataluña, Valencia, Zaragoza, Sevilla and Bilbao.

In the central region, 73,700 m2 of space was leased, down by 67% with respect to Q1 2018; and in Cataluña, 215,700 m2 was leased, up by 18% YoY. Meanwhile, in Valencia, 160,000 m2 of space was leased, twice as much as during the same period in 2018. Logistics leasing in Sevilla, Zaragoza and Bilbao amounted to 9,500 m2, 3,600 m2 and 1,500 m2, respectively.

In addition, €191 million was invested in the logistics sector during the first quarter of 2019, with the logistics company Columbus and the property developer Pulsar accounting for 60% of that total.

Original story: Eje Prime

Translation/Summary: Carmel Drake

Bank of Spain Warns of Mismatch Between Housing Supply and Demand

11 April 2019 – El Confidencial

According to the Bank of Spain, there is a mismatch between the homes that buyers are demanding and those that are available for sale. Indeed, that is one of the main conclusions of the latest report published by the supervisory body entitled the “Recent evolution of the housing market in Spain”.

According to the report, one of the key characteristics of the Spanish property market is its high degree of heterogeneity by region, type of home (new and second-hand) and buyer nationality. “The characteristics of the homes demanded do not necessarily match with the available supply, in certain places, and may differ in terms of size, quality and location”.

In addition, the Bank of Spain warns about the difficulties that young people are facing when it comes to affording a home, as a result of their precarious working conditions. Their situation is further compounded by changes made in recent years regarding tax breaks (the removal of them) for buying a home and the growth of the rental sector.

The Bank’s analysis focuses on Madrid and Barcelona, which are both very close to the peaks of the boom in terms of rental prices. Meanwhile, house prices are currently around their 2006 levels.

Nevertheless, according to the report, it does now seem easier to obtain a mortgage or at least one with more favourable terms for the borrower. Interest rates have decreased and lending periods (mortgage terms) have increased. Approval criteria and general financing conditions have also been relaxed.

Original story: El Confidencial (by E.S.)

Translation/Summary: Carmel Drake