Tag: economic growth

Unemployment to Fall to Pre-Crisis Levels in Madrid

3 December 2019 – The Community of Madrid has had a series of years of growth above the average for Spain as a whole. According to the forecasts by BBVA Research, Madrid had the highest regional growth in 2018 and will continue to do so in 2019 ad 2020. Thus, in 2020, unemployment in Madrid is expected to fall to pre-crisis levels, which, until now, had only been done in the Balearic Islands and the Canary Islands.

BBVA Research stated that GDP in the Community of Madrid is expected to grow by 2.6% this year, a significant reduction in the pace of growth compared with last year (3.7%). The regional average for the country as a whole, however, only reached 1.9%. Next year, growth in Madrid is expected to fall to 2.2%, compared to the Spanish economy at 1.6%.

Original Story: Expansión – Pablo Cerezal

Adaptation/Translation: Richard D. K. Turner

Tinsa: Madrid, Pamplona & Alicante Led Spain’s House Price Rises in Q3

1 October 2018 – Eje Prime

Madrid, Pamplona and Alicante. Those three cities led the ranking in house price rises in Spain during the third quarter of 2018. The Spanish capital topped the podium with price rises in the residential market of 15.6%, although six other large cities in the country also recorded double-digit increases, according to data from the IMIE report compiled by Tinsa.

Along with the Spanish capital, Pamplona and  Alicante saw their house prices soar between June and September, with increases of 14.2% and 13.2%, respectively. Moreover, Palma (de Mallorca) continued to be one of the most expensive markets, after recording a price rise of 12.8% during the period. Meanwhile, in Málaga, house prices rose by 12.5%, Valencia recorded an increase of 12% and Murcia saw a rise of 11.1%.

The report reflects the boom in the provincial capitals, which were key drivers behind the 4.9% increase in new and second-hand house prices in Spain during the third quarter, to €1,317/m2.

With this new increase, house prices in Spain have been rising since the third quarter of 2016. Nevertheless, sources at Tinsa recall that “although the normalisation of the residential market is a general trend, there are still significant differences by region.

By autonomous region, Madrid is the region where house prices rose by the most in the last 12 months, with a rise of 13% in Q3. It was followed by La Rioja, with an increase of 11.8%; the Balearic Islands, with a rise of 9.9%; and Navarra, with growth of 8.7%.

Original story: Eje Prime

Translation: Carmel Drake

Inbisa & Activ Group Invest €20M+ to Renovate Burgos Este Shopping Centre

15 March 2018 – Eje Prime

Inbisa and Activ Group have joined forces to spice up the commercial market in frosty Burgos. The property development arm of the Spanish real estate group and the Hispano-German firm are going to invest €20 million in the renovation of the Burgos Este shopping centre, located in the town of Villafría, very close to the city.

As joint partners in the project, Inbisa and Activ Group plan to inaugurate the site at the end of 2019. On a plot measuring 46,500 m2 and a constructed surface area of 26,000 m2, the Burgos Este shopping centre is going to become one of the largest spaces in the retail market in the province of Castilla y Leon.

The new shopping centre in the capital of Burgos aspires to become “an opportunity for economic growth for the whole city”, according to Manuel Balcells, Director General of Inbisa Inmobiliaria. “For our company, it represents a key piece in the puzzle to strengthen the development of commercial spaces”, said the executive.

In the residential area, the company closed 2017 having promoted more than 1,600 homes across different areas of the country, of which 223 were handed over. Inbisa Inmobiliaria’s residential development division ended last year with a turnover of €150 million.

Original story: Eje Prime

Translation: Carmel Drake

Via Célere Expands in Portugal Building 60 Homes in Porto

27 February 2018 – Eje Prime

The developer began operations Portugal last September with the launch of its first venture in Lisbon, where it is building a development of 276 homes.

Vía Célere now intends to expand its footprint in the Portuguese real estate market. This time the developer headed to the north of mainland Portugal, setting its sights on the city of Porto. The Spanish real estate company will build 60 homes on land that it had previously acquired through a merger.

The company, chaired by Juan Antonio Gómez-Pintado (pictured above), will launch the development on a 6,144-square-meter site that was incorporated into Vía Célere after its merger with Dospuntos. The project will be implemented in Lordelo do Ouro, a neighbourhood that is four kilometres from the city centre, according to El Economista.

The Vía Célere development in Porto reinforces the commitment, not only of Gómez-Pintado’s real estate firm but also of Spanish real estate developers in Portugal. “It is the right time to move forward with the development of new projects in Portugal. Because of its sustained economic growth and the growing confidence and purchasing power of its consumers, in an environment of greater access to finance and low-interest rates, the Portuguese market is an excellent opportunity for real estate investment,” via Célere’s chief executive stated during a presentation of the project in Lisbon.

The Lisbon development will begin construction during the second semester of this year and will be divided into four phases. In the first phase, a residential area encompassing 15,800 buildable square meters will be built, together with up to 120 multi-family homes. The land for this project also originated with Via Célere’s merger with Dospuntos.

Original story: Eje Prime

Translation: Richard Turner

Savills Aguirre Newman: Inv’t in Logistics Assets Exceeded €1.5bn in 2017

15 February 2018 – Expansión

Real estate investment in logistics assets exceeded €1.5 billion in 2017, up by 86% compared to the previous year. That figure includes the corporate operation involving Logicor.

The boom in e-commerce, combined with their attractive returns, have placed logistics assets in the spotlight for real estate investors. In this way, last year, the purchase of these types of properties reached a record-breaking €1.5 billion, according to the consultancy firm Savills Aguirre Newman.

That disbursement represents an increase of 86% compared to the previous year and is the highest figure ever recorded for these types of properties in the Spanish market. Nevertheless, the amount does include the corporate operation carried out by Blackstone. The US fund divested its logistics subsidiary, owner of 147 million m2 of space across 17 countries (including in Spain) to China Investment for €12.25 billion.

In the last three months of the year alone, investment in these types of assets exceeded €200 million.

Unlike other types of properties, such as offices, interest in these assets extends beyond Madrid and Barcelona. “The consolidation of economic growth and the gradual improvement in the fundamentals of the logistics market (demand, availability and rental prices) has continued to drive investment in the sector, which, due to the shortage of supply in Madrid and Barcelona, has shifted its interest to secondary markets, such as Zaragoza and Valencia”, say sources at the consultancy firm.

The large operations of the year included P3’s purchase of GreenOak’s portfolio for €243 million.

In fact, the high degree of interest has caused many investors to back the purchase of plots of logistics land for their subsequent development. “Operations involving logistics land, for the development of turnkey and at-risk projects, have become one of the cornerstones of the market. The high demand for space, combined with the shortage of finished products suitable for the requirements of specific demand, is generating a lot of interest in this product”, explain sources at Savills Aguirre Newman.

The boom in operations has already had an impact on the returns offered by these types of properties. “The initial rate of return for the most prime assets was below 6%, but during the course of the year, for some specific operations, the rate amounted to 5.5%, which means that the gentle upwards trend already observed in previous years is being maintained”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Mazabi Acquires the ‘Dávila’ Office Building in Santander

22 January 2018 – Press Release

Mazabi Gestión de Patrimonios is continuing to invest in the office segment with the acquisition of Edificio Dávila.

The building is located on General Dávila, 87, in the city of Santander (Cantabria), and has a surface area of 9,585 m2. The property is located in the centre of the Cantabrian capital, approximately 1km away from the Town Hall, and is surrounded by green spaces and public areas in the upper district of the city. It is well connected and has 126 private parking spaces. Constructed in 2013 in a modern and contemporaneous style, the building is characterised by its glass façade and regular shaped floors, with wonderful natural light and views from its upper levels.

The offices are currently leased in their entirety to the Government of Cantabria under an initial 35-year contract and over a concession period of 52 years. They house a number of the regional Government’s social and IT services.

Mazabi manages assets worth more than €1 billion and has investments in 14 countries. With a team of 22 professionals located in Madrid, Bilbao and Málaga, Mazabi considers that investment in Spain continues to be attractive due to the on-going economic growth and the historical influx of tourism (…).

Original story: Press Release

Translation: Carmel Drake

Junta de Andalucía Sells 45,000 m2 of Land in Jaén for €3.8M

8 January 2018 – La Vanguardia

The four offers that were submitted relating to the sale of the properties owned by the Junta de Andalucía, which the Ministry of Development and Housing convened in 2017 through the Agency for Housing and Rehabilitation in Andalucía (AVRA), have allowed it to award plots with a total surface area of 45,780 m2 for a value of €3.89 million in the province of Jaén.

The Minister for Development and Housing, Felipe López, stressed that most of the public land that has been sold in the province has been assigned for industrial use. “This is allowing us to contribute to boosting the economy and to creating jobs in the towns in which the plots are located, through the companies that are opening facilities on those plots”, he said on Monday in a statement.

He underlined the importance of this initiative, promoted by the Junta, with the aim of placing public assets at the disposal of the business community to boost the development of new projects and business initiatives that foster economic activity and employment.

The industrial plots sold in the province of Jaén during 2017 are mainly located in the towns of Alcalá la Real, whose Los Llanos del Mazuelo industrial estate recorded a significant increase in activity last year, and Martos, on the Cañada de la Fuente industrial estate.

Plots were also disposed of in the ZI-2 production area of Torredonjimeno, on the industrial estate on the Carretera de Los Arquillos, in Villacarrillo; in Los Rubiales (Linares) and on the Los Retiros industrial estate, in Huelma.

Moreover, other premises, parking spaces and storerooms were awarded in several towns in the province of Jaén, including in Andújar, Cazorla and Jaén, which generated revenues amounting to €385,061.

Most of the plots of land sold were owned by the Agency for Housing and Rehabilitation in Andalucía, which, according to López took the decision to make land sales one of its strategic lines at the beginning of this legislature, after that activity had slowed down in previous years, during the toughest period of the crisis.

By contrast, some of the awarded plots belonged to the Junta de Andalucía, which engaged AVRA to manage its assets.

The Board said that the decision to recover this activity was taken in light of the fact that the markets are starting to show signs of recovery in terms of real estate activity and “with the aim of obtaining revenues to allow us to resume other activities pertinent to the Agency, such as the promotion of social housing for families with housing needs and scarce or no possibilities of accessing a home in the private rental market” (…).

The land sale activity resumed by AVRA at the beginning of this legislature has permitted the award of almost 300,000 m2 of land allocated to different uses for a total amount of €50.7 million over the last 3 years (…).

Original story: La Vanguardia

Translation: Carmel Drake

Bankinter: House Prices Will Rise By 3%-4% In 2017 & 2018

20 February 2017 – Idealista

The rise in house prices is starting to run out of steam and will become more moderate over the next two years. That is according to forecasts from Bankinter, which explains, in a report about the real estate sector, that the limitation on the upwards potential is the consequence of several factors.

On the one hand, prices are now reaching their pre-crisis levels in many areas, primarily in prime locations and, on the other hand, the financial effort that families are having to make to acquire a home is starting to increase once more.

As a result, the capacity of families to access the residential market will be limited if prices rise at disproportionate rate. In this way, Bankinter estimates that house prices will grow by between 3% and 4% in 2017 and 2018. Moreover, the entity insists that, despite the moderation in price increases, the residential market will continue to rise.

One of the reasons is the shortage of supply, given that the number of finished homes is still at historical lows (40,000 homes were completed in 2016) and the fact that that figure cannot cover the normalised demand of around 200,000 new homes per year. “The combination of the scarcity of supply and the increase in house sales (which exceeded 400,000 operations in 2016) will continue to put upwards pressure on prices”, said the bank, which insists that, in this context, prices will continue to rise.

On the other hand, the report highlights the appeal of large cities, primarily Madrid and Barcelona, which are registering YoY price increases of between 4% and 7% and which have now recorded increases for eight quarters in a row. By contrast, average prices are still adjusting downwards slightly in YoY terms in other cities such as Bilbao and Sevilla.

Another factor that is also affecting prices is the increase in rental prices, which are also being driven upwards by the evolution of leases in the large cities, where, like in the case of the purchase market, there is a shortage of supply and high demand.

Demand for 500,000 homes.

The financial institution predicts that residential demand will continue to rise. “The upwards trend will continue for the next few years. We expect growth of almost 10% in 2017 and for demand to reach 500,000 homes by 2018”, explains the report.

But what is behind this increase? As sources in the sector have been commenting for several months, the drivers of demand are economic growth and the creation of employment, as well as the fact that housing is becoming more attractive as an investment opportunity and that financing conditions are still accessible.

Nevertheless, and this is where the experts are focusing, none of these drivers are reducing the effort that families are having to make to buy a home.

“The effort (that families are having to make) has risen again to 6.6 years of annual household income (compared to 6.2 years at the end of 2014) and there is no scope for improvement in terms of financing conditions. Finally, Sareb’s marketing of discounted homes located in areas characterised by oversupply will continue to limit the increase in average prices”, said Bankinter. (…).

Original story: Idealista

Translation: Carmel Drake

BBVA Research: House Prices Will Continue To Rise

5 September 2016 – El País

House prices have not bottomed out yet and will continue their path of gradual growth over the next few months, which will encourage house purchases, above all from people looking to reposition themselves in the market or invest. Nevertheless, that will not avoid the least active markets from continuing to show progress in terms of house prices. Geographical heterogeneity will continue to be present in the Spanish real estate market. Those were the conclulsions of the latest Real Estate Observatory in Spain report, prepared by BBVA Research, the financial institution’s research service.

Following a positive balance during the first half of the year, we expect the residential sector to continue to grow during the second half of 2016, underpinned by favourable financial conditions and the increase in foreign tourism, which is forecast to hit a new record this year.

However, the bank indicates that the economic moderation that is forecast to take place over the next few months will result in a smaller increase in house sales than that recorded during the first half of the year. Moreover, the uncertainty in terms of political-economic decisions may be reflected in demand to some extent.

Meanwhile, real estate activity will continue to build on the growth in demand and in the gradual absorption of the oversupply of housing, which points to significant growth by year end, although from relatively low levels.

That is also being demonstrated by the strong evolution of transactions involving urban land: according to data from the General Council of Notaries, the surface area of land sold during the second quarter of the year grew by 81.5% YoY, the highest increase in recent times.

Original story: El País (by S.L.L)

Translation: Carmel Drake

Málaga Will Need 6,000 New Homes Per Year To Meet Demand

5 April 2016 – La Opinión de Málaga

Indicators for the housing market are starting to recover after years of a complete slump in house sales, however high rates of unemployment and family indebtedness mean that most of Málaga’s population still has limited possibilities when it comes to buying a home.

Nevertheless, the Bank of Spain predicts in a report that the province of Málaga will require 84,812 primary homes between now and 2029 to meet the demand for new households that will be constituted during that period. The study predicts that in Málaga, in a scenario built on actual economic and population trends in recent years, more than 6,000 new households will be created each year, a figure that makes it the second most dynamic province after Madrid (where more than 21,000 households are expected to be created) and ahead of Sevilla (4,097), Murcia (3,564) and Granada (3,104). The figures are negative in 17 Spanish provinces because the population forecasts indicate that there will be fewer households overall. (…).

These calculations do not mean that all of those homes will have to be built from scratch. The report reminds its readers that one of the legacies of the crisis in the country has been the persistence of the stock of finished homes that have still not been sold. In fact, the Bank of Spain says that the potential demand reflected in the study “may be met through the construction of new properties, but also in the first instance, through the sale of homes that have already been built”. Besides, many new families may choose to rent or buy second-hand homes.

In Málaga, according to the most recent official figures from the Ministry of Development, the housing stock contained 12,672 homes at the end of 2014, although the Association of Construction Companies and Property Developers in Malaga (ACP) believes that this figure may have now been reduced to almost half. (…).

The rest of the country

At the national level, the report says that 63,000 households will be created each year in Spain, under the base case scenario and 238,000 households will be established in the most optimistic scenario, resulting in a potential housing volume for that period of between 900,000 and 3.3 million. According to the Ministry of Development, the stock of new homes pending sale in Spain comprised around 540,000 units at the end of 2014, having decreased gently since 2010. (…).

Original story: La Opinión de Málaga (by José Vicente Rodríguez)

Translation: Carmel Drake