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

Allegra & ACR Invest €130M To Construct 600+ Homes

27 September 2017 – Expansión

The construction and real estate group ACR and its partner Allegra Holding, the investment arm of the Losantos family (former owners of Riofisa) have expanded their alliance in the Spanish real estate sector, with three new operations.

The partners have recently acquired three new plots of land, one in Madrid and the other two in Pamplona, with a combined surface area of 45,000 m2. In the case of the first, the plot of land is located in Vallecas, measuring 10,000 m2, where they plan to build 100 private homes, with an estimated investment of around €19 million.

In the case of Pamplona, it represents the first operation outside of the Community of Madrid. Specifically, ACR and Allegra have acquired two plots of land in the El Ensanche area, where they plan to construct between 120 and 140 2-, 3- and 4-bedroom homes.

These latest operations follow others undertaken just a few months ago, when the joint venture between ACR and the firm led by Mario Losantos invested more than €29 million in land, also in Madrid, specifically, in the El Cañaveral district.

In total, both companies have invested €130 million to build more than 600 homes, under the brand Nature. “It is a successful alliance that is continuing to make progress and it demonstrates the strong performance of both companies in the market, which is allowing us to continue evaluating new investment alternatives in Madrid, but also in other locations such as Barcelona, Málaga and Levante”, explains David Botín, Director General of Real Estate Development at ACR Grupo.

After years focusing on international real estate markets such as London and New York, the family office led by Mario Losantos returned to Spain three years ago, to invest in plots of land for residential use and to build homes on them. In its first operation, in February 2014, and in partnership with ACR Grupo, they invested around €19 million in the construction of 96 homes on a plot in the north of Madrid. A year later, they started work on 42 exclusive homes in the Puerta de Hierro area.

Beyond the residential segment, Allegra has also invested in office buildings, logistics platforms, as well as commercial premises in Castellana.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Lar & Pimco Sell A Luxury Home In Lagasca 99 For €16,000/m2

15 December 2016 – El Confidencial

They have exceeded all expectations and broken a new record in the luxury residential market in Madrid. The Socimi Lar España and the US fund manager Pimco, which jointly own (50% each) the most exclusive housing project in the capital, Lagasca 99 (previously known as Juan Bravo 3), have already sold half of the 42 super-luxury homes that make up the development, where the average sales price stands at around €10,000/m2.

But that is not the most interesting part of the story. One of the homes, measuring 800 m2 (one of the largest in the development) has been sold for around €16,000/m2, bringing its final sales price to around €13 million, including the price of the parking spaces (four or five), according to sources close to the project.

Moreover, these same sources also confirm that the project has just received the green light from the Town Hall of Madrid for the last urban planning licence necessary, not only for the definitive launch of the project, but also so that the sales of the homes can be formalised. Until now, only reservations have been accepted.

The price of €16,000/m2 undoubtedly breaks all records in the high standing market in the capital, where, until a few weeks ago, a 600 m2 penthouse on Calle Serrano 7 boasted the honour of being the most expensive multi-family home ever sold in the heart of Madrid. It was sold for €9 million, equivalent to €15,000/m2.

The transaction signed now at Lagasca 99 has even exceeded Pimco and Lar’s initial expectations, given that they had fixed a price range of between €10,000/m2 and €14,000/m2 for the properties. (…).

The identify of the purchaser has not been revealed and the utmost secrecy is being maintained. Nevertheless, several sources indicate that the buyers of Lagasca 99 include some very wealthy Latin American and Spanish investors, primarily from outside of Madrid.

The homes will be ready in 2018

The plot of land on which this exclusive development, designed by the architect Rafael de la Hoz, is going to be constructed, was sold to Lar España and Pimco at the beginning of 2015, when the two companies joined forces to purchase Eurosazor. The property developer was previously owned by Rafael Ortiz and the businessman Fernando Fernández Tapias, and owned a 26,023m2 plot of land on Juan Bravo 3 and a 5,328 m2 plot of land on Claudio Coello 108. Lar and Pimco paid €120 million for the business and since then, this asset has appreciated in value by more than 10% – the building on Claudio Coello was sold to the German firm Patrizia Inmobilien for €22 million. (…).

The homes are expected to be finished during the first quarter of 2018.

Luxury homes gain momentum

The luxury residential market in Madrid is enjoying a real boom. At the beginning of October, the homes on José Abascal 48 went on sale, with the first luxury properties now ready for their owners to move in. The building contains 17 homes measuring between 100 m2 and 400 m2, whose prices range between €6,000/2 and just over €10,000/m2. But there are also several important renovation projects being carried out right in the heart of the capital, such as on Príncipe de Vergara 11, Recoletos 13 and 8, Salustiano Olózaga 12 and Lagasca 19. (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake