Developers Eye More Than €30 Billion in New Business in Madrid

21 August 2019

Developers are eyeing huge new possible investments they expect to build approximately 130,000 new homes over the next 25 years. That is in addition to major new investments in offices, retail spaces and industrial buildings. The sale of homes and other properties is expected to exceed €30 billion.

Developers are planning two new centres of investment in the north and southeast of the capital. The developments include Operation Chamartín (since renamed Madrid Nuevo Norte) and five new neighbourhoods to the southeast: Los Berrocales, Valdecarros, Los Cerros, Los Ahijones and El Cañaveral.

Operation Chamartín was finally approved last month by the municipal assembly, after a 26-year hiatus. A report by the city council forecasts that total sales of homes, offices and commercial areas will reach €13.198 billion, €10.2 billion of which will come from offices and retail areas. 10,500 homes will also be built in the area surrounding the Chamartín train station, 24% of which will have subsidies.

A development with a total of 118,737 homes is also planned for the city’s southeast. Sales for this area are expected to reach more than €20 billion over 25 years with profit margins reaching 20%. El Cañaveral, where construction has already begun, will see total investments of €3 billion. Next will be Los Berrocales and then Los Ahijones by 2021. Lastly, work will begin on Los Cerros and Valdecarros, with plans for more than 50,000 homes, the first of which will be ready in a decade. The owners of these developments, excluding El Cañaveral, calculate investments exceeding €13 billion, generating 965,000 direct and indirect jobs over the next few years.

Original Story: Cinco Días – Alfonso Simón Ruiz

Adaptation/Translation: Richard D. K. Turner

Habitat Buys 1,278m2 Residential Plot in El Cañaveral (Madrid)

17 July 2018 – Habitat Inmobiliaria

Habitat Inmobiliaria, the company dedicated to the development and construction of residential projects, has signed the acquisition of a plot of land measuring 1,278 m2 in the neighbourhood of El Cañaveral in Madrid. On the plot, which has a buildable surface area of 4,100 m2, a new residential development is going to be constructed containing 41 homes. The total planned investment in the project amounts to around €8.5 million.

The new development will comprise 41 homes with storerooms and 62 parking spaces and will also have green space, a swimming pool and common areas. Marketing of this new real estate development will begin in the first quarter of 2019.

The future urbanisation is located within the new El Cañaveral neighbourhood, in the municipality of Madrid. El Cañaveral is located between the neighbourhood of Vicálvaro in Madrid and Coslada, and has excellent access to the M-45 and R-3 motorways, which allows its residents to travel to the centre of Madrid by car in just 20 minutes. Moreover, it is close to the Renfe stations of Coslada and Vicálvaro.

Specifically, the plot where the development is going to be constructed is located on Calle María Pita, in an area that is seeing a great deal of urban development and where all of the necessary amenities are being planned, such as schools, nurseries, a doctors’ surgery, shopping centres and supermarkets.

This operation forms part of the land acquisition plan that the company has launched and that in recent months has seen it purchase plots in Collado Villalba and Móstoles, both in Madrid. In total, the company has more than 1,400 homes under development, as well as one of the most significant land banks in Spain, which is being strengthened by new additions.

Original story: Habitat Inmobiliaria

Translation: Carmel Drake

Quabit Acquires a Plot for 125 New Homes in Madrid for €7.4M

6 April 2018 – Eje Prime

There is no stopping the property developers in 2018. Quabit, the company chaired by Félix Abánades, is pushing ahead with its strategic plan and has added a plot of buildable land in El Cañaveral (Madrid) to its portfolio. This purchase involved an investment of €7.4 million for the group, which plans to record turnover of €29.4 million once it has completed the development, according to a statement.

The new plot has a buildable surface area of almost 13,500 m2 for the construction of 125 homes and will join the four other developments that Quabit is building in El Cañaveral. This is the second land operation that the company has closed this year, following the portfolio of buildable residential land that it acquired during the first quarter in Guadalajara and Corredor del Henares.

With all of these operations, Quabit is strengthening its land bank, which now contains 1,043,306 m2 of buildable land for the development of 8,700 homes. During the first quarter of this year, the group started building 473 homes across 6 developments, in addition to the 302 homes that it was already working on.

During the second quarter, construction will begin on another 350 homes and the plan is to have around 1,700 homes under construction by the end of the year. The company maintains its objective of handing over 7,900 homes between now and 2022, due to its capacity to obtain building permits (it has taken an average time of four months for the permits obtained so far this year) and due to its compliance with its investment targets, building work starts and new commercial launches.

All in all, Quabit will end the year with a commercial portfolio of around 3,000 homes. This year, it will also begin to hand over its first developments, although it will not be until 2019 that it exceeds the threshold of 900 finished homes to reach its cruising speed of 3,000 completions per year in 2022.

Original story: Eje Prime

Translation: Carmel Drake

BNP Paribas: Land Sales Will Soar To €4,076M In 2017

9 November 2017 – Expansión

The blast of property developer activity and the entry of funds into the residential business have caused land purchases to soar in recent months. According to forecasts from BNP Paribas Real Estate, 2017 is set to close with approximately 22,700 land purchase transactions in total, with a combined value of €4,076 million, which represents an increase of 37% compared to 2016.

The consultancy firm explains in a report about the residential market that interest is focused on the more stable markets, such as Madrid and Barcelona. Nevertheless, the scarcity of available buildable land has led to searches for plots in other markets too, such as Sevilla, Málaga and Valencia.

“After overcoming some very tough years for the real estate market, and in particular the land market, with the paralysis of property developer activity, the segment started to recover over the last two years, in line with the improvement in the fundamentals of the market and the good performance of the economy”, explain sources at the consultancy firm.

The report points out that, although there is a lot of available land in Spain, the average time it takes to create buildable land is eight years, due to the administrative processes that are required. “Over the last 10 years, no land has been generated; no one was interested in investing in the market”.

In certain areas of the more established markets, that lack of buildable land is leading to an increase in prices, with rises of up to 30% and even 40% over the last two years. In this way, in markets such as Valdebebas, Montecarmelo and El Cañaveral (in Madrid) have seen significant land price increases, as a result of the fact that the supply of buildable land is very limited.

BNP Paribas Real Estate highlights the change brought about in the sector due to the increased demand and the entry of investment funds eager to back the market.

New players

Property developers such as Neinor, Aedas – both of which are listed – , Vía Célere, Metrovacesa and Aelca are taking advantage of the good times that the sector is enjoying and the upwards cycle, in general, to strengthen their presence and launch new developments.

The report points out that, during the eight months to August, 315,795 house purchase operations were closed. It forecasts that the total number of transactions could reach 530,000 homes in 2017, which would represent a return to the pre-crisis levels. The main international market is the United Kingdom, whose citizens account for 14.9% of transactions by overseas players, despite Brexit. In addition to the Brits, the French, Germans, Belgians, Italians and Nordics are the other main buyers of homes in Spain.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Foro Consultores: Land Prices Soar In Certain Pockets Of Madrid

13 February 2017 – El Confidencial

Land prices are soaring, house prices are rising, the buying frenzy is gaining momentum in some areas and in certain developments…Is history repeating itself? Are we witnessing the gestation of a new real estate bubble, albeit not on a national scale, but nevertheless in certain areas of the country. That is what seems to be happening in some neighbourhoods of Madrid. But, the answer, for the time being at least, seems unanimous: not yet.

Buildable land, in other words, land that is ready to be built upon, is running out and, across Spain, there is barely enough land left upon which to construct the 1.5 million homes estimated to be required to supply the market for the next 8.6 years. In Madrid, the land will run out in just over 6 years, according to the latest report from the appraisal company Tinsa. It identifies a worrying shortage of this type of land in areas of expansion to the north of Madrid, as well as in certain specific points of the metropolitan area, such as Pozuelo, Villanueva de la Cañada, Coslada and Rivas. In some of these areas, according to warnings from Tinsa, there will be no buildable land left within 12-24 months. This situation has, unsurprisingly, led to sharp increases in land prices in certain areas. And these rises are concerning the sector. Where are these first warning signs starting to sound?

Valdebebas

The large real estate development in the north of Madrid, which was launched at the height of the crisis and which has fallen victim to numerous legal setbacks, has become, in the eyes of the residential sector, a clear example of the extent to which land can become a very sought-after, as well as a very dangerous, asset.

“Without doubt, it is one of the areas where land prices have grown significantly. In 2014, they ranged between €750/m2 and €900/m2, whereas nowadays operations are being closed for more than €1,200/m2 and €1,300/m2, and the perception in the market is that land can no longer be sold for less than €1,400/m2”, explained Vicente Quintanilla, Director of the department for Investment and Land at Foro Consultores. According to this expert, “this trend generates significant tension in terms of the prices of new builds, which are being sold for €3,000/m2 in certain developments”. (…).

Pozuelo, Aravaca…

Another market where prices have also risen significantly is the municipality of Pozuelo de Alarcón, where Sareb sold land for around €1,000/m2. (…).

Indeed, the supply of land in Pozuelo has completely run out and families in need of homes are heading to other markets, such as in Boadilla del Monte, a cheaper alternative. According to data from Foro Consultores, the gap in prices is very significant. “To give you an idea, a family home or chalet in Boadilla costs around €450,000 on average, compared with between €700,000 and €1 million in Pozuelo.

Scarce and sought-after plots of land have also seen sharp price increases in recent years. “In El Camino de Barrial, in Aravaca, land prices have risen from €1,200/m2 in 2014 to around €2,000/m2 now. (….).

Boadilla del Monte, at boiling point

Boadilla del Monte is another one of the markets that has experienced a huge boom over the last two years. And there, it has not been due to the scarcity of land, but rather because of the strong demand from families who, as described above, cannot find homes in Pozuelo de Alarcón.

“For family home plots, land prices have increased from €400-500/m2 in 2014 to €800-900/m2 in2016, say Foro Consultores. (…).

Euphoria in Méndez Álvaro and rises in El Cañaveral

In the heart of the capital, where land is noteworthy due to its absence, land prices have increased considerably. In 2014, buyers paid €1,000/m2 and in a recent operation, whereby Adif and Renfe sold a plot to Vía Célere, the price paid amounted to around €1,900/m2. (…).

This increase in land prices is not exclusive to the area to the north of Madrid (…). The price of more affordable land and cheaper homes has also risen significantly in recent months.

Such is the case of El Cañaveral, in the east of Madrid, where “last summer, land prices amounted to around €360-370/m2 and now plots are going for €450-500/m2” (…).

Finally, all of the experts lament the fact that during the crisis, no agreement was reached to manage land, which has resulted in this significant shortage and in the inevitable increase in prices. They advocate greater agility in terms of urban planning, especially where the shortage is leading to a bottleneck in the market.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Neinor Buys 7 Plots Of Buildable Land In El Cañaveral (Madrid)

27 December 2016 – El Confidencial

Developments in the south-east of Madrid have come under the spotlight of Neinor, one of the largest property developers in Spain, which has just marked a turning point with the purchase of several plots of buildable land in El Cañaveral, the most advanced neighbourhood in the capital’s ambitious expansion project.

The company led by Juan Velayos has acquired seven plots of land, with a combined buildable area of 47,000 m2, where it plans to start to build almost 500 homes, according to sources familiar with the transaction. The company itself has declined to make any comments.

Specifically, Neinor wants to construct 24 detached homes and 459 multi-family homes, plans which would lead to the definitive launch of El Cañaveral, where 14,000 homes are expected to be created in total, to house a population of around 50,000 people.

Nevertheless, Velayos’ plans for this development go much further, given that it is one of the few areas in Madrid where it is possible to buy buildable land, in other words, land that is ready to be developed.

According to the same sources, the company is holding advanced conversations to acquire four other plots, whose buildability exceeds 11,300 m2 and where it hopes to build another 95 homes.

Appetite for growth

Since its re-launch just over a year ago, Neinor has shown a strong appetite for growth, and to achieve that objective, it is actively searching for blocks of buildable land where it will be able to start to build new homes quickly.

In fact, the road map that the company announced at the end of 2015 aims to develop around 3,000 homes per year and to establish a permanent bank of land to enable it to build 10,000 homes. (…).

In addition to these ambitious business plans, another major corporate challenge promises to mark Neinor’s future in 2017, namely, its debut on the stock market. It is already working on the IPO and the size of the company will play an important role in its success.

The current firm Neinor was created by Lone Star, one of the international funds that was most committed to Spain during the worst years of the crisis, from the foundations of Kutxabank’s former real estate group.

This company, named Neinor by the Basque entity, was created in 2012 from the sum of the different real estate activities of the Basque former savings banks – BBK, Vital and Kutxa – and the Andalucían entity Cajasur.

Lone Star bought the property developer at the end of 2014 for €930 million, in an operation that represented a real milestone for the real estate sector, which was still licking its wounds, given that it represented the largest transaction by a company in the sector since the outbreak of the crisis.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Fogesa Sells 64,000 sqm Of Buildable Land In Madrid

28 September 2016 – Inmodiario

Aguirre Newman has advised the Fogesa Group on the El Cañaveral operation, involving the sale of more than 64,000 sqm of buildable land (in Madrid). It represents one of the largest residential land transactions to be carried out in Spain in recent years.

The operation, advised by Aguirre Newman, was divided into two lots, containing five plots in total. The plots were located across two blocks, with an estimated capacity for 600/650 homes.

This operation represents a milestone in the sector and consolidates the recovery of the property development segment, which has been gathering steam for around 18 months now. Through this operation, Aguirre Newman reinforces its position as the leading advisor in land sales, following the sale at the beginning of the year of another major land portfolio: five plots in Valdebebas, owned by Parque Empresarial del Olivar, which were sold for more than €50M.

The Fogesa Group was instructed to conduct the orderly liquidation of assets that were previously owned by the cooperative Puerta de O’Donnell, which it has undertaken successfully thanks to the organisation of the 1,000 shareholders and negotiations with the creditors, who have positively valued the offers received during the sales process led by Aguirre Newman.

This is an interesting investment in an urbanisation…that is expected to be one of the main focuses of attraction in Madrid over the next few years. The area of El Cañaveral, where several developments have already been built, is well connected with the centre of Madrid via the R-3 and M-45 motorways.

Original story: Inmodiario

Translation: Carmel Drake

Strong Recovery In Madrid’s Market For New Homes

14 July 2015 – Cinco Días

The lack of new housing developments in Madrid in recent years means that the few blocks that have been built are being sold quickly, as the economic environment improves. So much so that the marketing company Foro Consultores has conducted the first comprehensive study of the new build segment, which not only estimates the size of the stock of new homes in the capital, it also calculates when that stock may be depleted if the current strong rate of sales continues.

The study, based on visits to all of the developments currently for sale and simulations of purchases or direct surveys at the sites, has focused on analysing the existing supply in new urban developments (Arroyo del Fresno, Montecarmelo, Las Tablas, Sanchinarro, Valdebebas, El Cañaveral, El Ensanche de Vallecas and Carabanchel), since those are the areas where the new builds are concentrated. Whole new buildings are the exception rather than the rule in the city centre and in the city’s more established neighbourhoods.

Foro Consultores begins its report by highlighting the number of new homes: currently the stock of new homes available for sale in Madrid amounts to 1,770, of which 781 are “free” and 989 are social housing (VPO) homes. That figure represents just 20% of the total number of buildings that have started to be built since 2010. Moreover, we are talking about very small numbers if we take into account that the study has analysed 102 developments in total, containing 4,001 “free” homes and 3,861 social housing homes, almost 8,000 homes, which came onto the market in recent years as turnkey properties or homes sold off-plan.

4.1 homes sold per development per month

The uptake of homes by region is not uniform. More than half of the new homes built in El Cañaveral, in the south of the city – the last development to get underway – have not yet been sold. Meanwhile, in other new neighbourhoods, such as Montecarmelo, less than 5% of the new homes or those under construction remain unsold. Furthermore, in Ensanche de Vallecas in 2007, there were almost 3,000 unsubsidised new homes for sale, but now there are just 166 left.

As well as the scarcity of supply due to the construction paralysis in recent years, one of the keys that explains the fast absorption of the stock is the acceleration in the rate of sales in recent months. Foro Consultores estimates that if no new developments come onto the market, then the excess would be depleted in just six months, at the current sales rate of 4.1 homes per development per month.

The study highlights that these 4.1 homes sold (per development per month) represents the sale of 5.3% of developments every 30 days, an average rhythm that has not been seen since 2003, and for unsubsidised housing, that figure is almost 5 homes per development per month, whereas during the crisis, it never exceeded one unit per month.

The study also shows that 79% of the developments on the market were started between 2010 and 2015, and of those 77% have already been sold.

In terms of prices, the report also highlights that in certain developments in El Cañaveral, the price of unsubsidised homes is lower than the price of VPO homes, which is not very typical in Madrid. “This shows that the social housing pricing model is out of synch with the market and that the promoters of unsubsidised homes have adapted better to the changes in conditions”, explained Foro Consultores.

In the areas analysed, the absolute prices of unsubsidised homes ranges between €77,000 and €657,000, with an average price of €273,021. Meanwhile, the prices of VPO homes range between €38,474 and €382,652, with an average price of €150,721.

Finally, the study concludes that by type of home, three-bedroom houses are in most demand. Meanwhile, the construction of studios and small flats, which were so fashionable during the boom, is now reducing.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake