Catalan Generalitat to Acquire Land in Tarragona

29 June 2019

The Regional Ministry announced that it would exercise its preemptive right to acquire the land where BCN World had been planned for construction. The Catalan government expecteds to pay more than 100 million euros to La Caixa for the property.

Investors have planned a series of different projects for the site, beginning with the Eurovegas megacasino and followed by and the Valencian company Veremonte’s BCN World.  The latest plans are for the Hard Rock Entertainment World (HREW). Construction on the €2-billion project had been slated for this month.

The investors behind the initiative, including the Generalitat, Value Retail, which owns La Roca Village) and the Benetton family had been complaining about their failure to receive the necessary permits to begin work on the project. However, reports have stated that the government firm Incasòl will acquire the land and transfer it to HREW.

Original Story: Crónica Global

La Generalitat Approves a Law that Provides for the Expropriation of Vacant Homes

5 March 2019 – La Vanguardia

The Government of Cataluña has approved a decree law establishing around thirty urgent measures to improve access to housing in the region.

The objective of the law is three-fold: to address the lack of social housing available for rent; to facilitate instruments to combat emergency situations and evictions; and to moderate increases in residential rental prices.

The measures range from fines to the expropriation of homes that have been empty for two years (from large property owners at a reduced price, which is no case may exceed 50% of the market price), to forcing the banks to rehouse in social housing properties any residents that they choose to evict.

Another measure in the pipeline, for introduction later this year, includes a plan to increase the minimum rental term, which currently stands at three years, to increase it to between six and ten years, depending on whether the owner is a private individual or a real estate company. Moreover, efforts are being made to limit rental price increases to CPI.

Original story: La Vanguardia (by Luis B. García)

Summary/Translation: Carmel Drake

SGR Seeks Buyer for Real Estate Assets that Had Been Destined for Generalitat

27 August 2018

Though it has not yet concluded its first real estate transaction since its rescue, the Sociedad de Garantías Recíprocas (Society of Reciprocal Guarantees – SGR) is already preparing a second sale, looking to unload additional real estate assets. The financial institution, saved from bankruptcy by the current municipal council with 200 million euros from the FLA (liquidity fund), is concluding the sale of an important portfolio made up of loans and real estate that will allow it to end the year with debts of 15 million euros, well below its previous €400 million that had nearly pushed it into bankruptcy.

Within the portfolio are real estate assets valued at 26 million euros that SGR had intended to place with the Generalitat as part of the restructuring process. According to the original plan to save the institution, prepared and executed by the Valencian Institute of Finance (IVF), the Valencian administration had to stay in the operation to comply with its requirement to perform due diligence in the recovery of public resources. That requirement was a part of the €200 million guarantee that the Generalitat concluded in 2013 – or the EU could consider the guarantee as illegal state aid.

Now, however, those assets will no longer go to the Generalitat. The entirety of that portfolio, consisting mainly of urban land or lots, industrial buildings (23%), buildings (11.5%), rural lands (11%) and building plots (8.5%) plus a part of the assets that remain in the balance of the SGR will be subject to a second sale, once the sale of the first real estate portfolio is formalised.

According to Manuel Illueca, general-director of the IVF and president of the SGR, the composition of this second package is “attractive” for investors, since the high percentage of land included in this portfolio “may be better placed on the market now that the real estate market has once again taken off.”

The director of the IVF highlighted the market’s favourable response to the placement, which is why it is already preparing the second phase of asset disposals before signing the first, something that will happen in September. The potential investors include international investment funds and, although exact nature of the portfolio is still to be defined, he estimated that it would be concluded “within the range of typical discounts of this type of operation.”

“We needed to sell because we had to achieve a net positive asset ratio over a period of three years. The market has been receptive, and we have been able to reduce our debt. We are now going to carry out a second operation to further advance the restructuring process. The expectation for financial institutions that operate with the SGR today, is a full recovery of the amounts owed,” says Mr Illueca.

When the first sale of assets ends, the solvency ratio of the SGR will rise to 14.5%, with net senior debt at approximately €15 million, compared to the €400 million it had before. Apart from that, there are the €40 million in subordinated loans it has with the entities, the director of the IVF explained.

The first operation, in which SGR is being advised by Alantra, includes 793 properties that range from industrial warehouses, homes, parking spaces and land, stemming from a time that saw “endless guarantees.” The expectation, when the operation was announced, was to unload the equivalent of 75% of the properties on its balance sheet, raising 30 million euros. The net book value of the portfolio amounts to €44 million, while the assessed value reaches €83 million.

In 2016, SGR already tried to raise 180 million euros with its ill-fated Citrus Project, a portfolio of executed guarantees of more than 800 million euros, with foreclosed assets and loan losses initially valued at €82 million for which it expected to obtain €170 million.

After the project failed to move ahead, as the best offer received was only €65 million and not even for the entire portfolio, the new head of the IVF opted to move ahead with the execution of the €200-million guarantee, which expired in 2018, to try to sell the assets. The operation aimed to get more time to find a better solution on the market, as has occurred.

After the early repayment of the 200-million-euro guarantee in favour of the Generalitat, negotiated with the group of banks that already participated in its rescue in 2013, SGR’s outstanding debt with the financial institutions fell to 94 million euros: €54 million of senior debt and another €40 million in an unsecured participative loan from the municipal council.

Original Story: Valencia Plaza – Xavi Moret

Translation: Richard Turner


Catalana Occidente Finalises Purchase of Gaudí’s Torre Bellesguard for €30M

20 July 2018 – Idealista

Catalana Occidente is adding a new asset to its portfolio. The real estate investment arm of the insurance company Catalana Occidente is finalising the purchase of Torre Belleguard, constructed by Antoni Gaudí at the beginning of the 20th century, for €30 million. The Town Hall of Barcelona, the Generalitat and the Regional Council of Barcelona have declined to exercise their right of first refusal and preferential acquisition.

The Catalana Occidente Group, which is headquartered in Sant Cugat del Vallès, has expressed its interest and is willing to pay the owners €30.1 million, excluding taxes, such as the property transfer fee, which would increase the consideration to at least €33 million, according to El País.

The acquisition of this property (which has been classified as an Asset of National Cultural Interest since July 1969) is pending “a few finishing touches” and the intention is for the building “to continue to be open to the public because we are aware of its importance and great heritage value”, explain sources at the company.

Torre Bellesguard was threatened in 2008 when deteriorations caused by the passage of time forced its owners to undertake a comprehensive restoration project and invest €600,000 (a cost shared equally between the family, the Generalitat and the Town Hall).

The high cost of the renovation led the family owner of the property to open it to the public in 2013, organising guided tours inside the tower. It also opened its gardens for the celebration of cultural and social events.

Following this purchase, Catalana Occidente would increase its asset portfolio. The insurance group has invested up to €208 million in the purchase of properties in Spain over the last two years. In total, the company has acquired six offices buildings located in Madrid and Barcelona.

The largest purchase made by the company, which is itself controlled by the Serra family, was the acquisition last year of two properties (Luxa Silver and Luxa Gold) in the 22@ district of Barcelona for which it paid €90 million to the fund Stoneweg.

Moreover, at the end of 2016, the insurance company purchased the building at number 55 Paseo de la Castellana, in Madrid, for which it disbursed €60 million. The asset, which was sold by Standard Life with a 100% occupancy rate, has a surface area of 5,625 m2.

The €27 million that it paid for a second property in the Spanish capital, located in the Montecarmelo area (…) completes the number of acquisitions made by the group’s parent company since 2016.

With these investments, Catalana Occidente’s real estate portfolio in Spain amounted to €1.265 billion at the end of the first quarter of 2018. This line of business generates gains of €476.6 million for the group, in which the real estate component of the investment portfolio (€12.2 billion) amounts to 11.3%.

Original story: Idealista

Translation: Carmel Drake

Banco Sabadell Sells its Hotel in Boí Taüll Ski Resort

13 December 2017 – Crónica Global

This December, Banco Sabadell has completed the sale of Aparthotel Augusta, an establishment located in the Catalan ski resort of Boí Taüll. The operation has been advised by the international consultancy firm Christie & Co and has been closed for €1.5 million, according to sources in the sector.

The buyer is the Kesse Invest group, a company specialising in managing mountain tourism experiences (…).

Start of the ski season

Aparthotel Augusta is a four-star establishment containing 39 one-, two- and three-bedroom apartments. It offers additional services such as a 1,200 m2 Spa and an outdoor swimming pool, two features that differentiate it from other accommodation options in the area, according to the same sources.

The transaction has been closed just after the start of the ski season in Boí Taüll, which opened on 1 December. The Catalan ski resort owned by the Nozar group expects a repeat of the good performance recorded last year, the best for a decade, with a 40% increase in turnover and 20% more skiers.

These figures are encouraging the Nozaleda brothers, the managers of the ski resort, to try and negotiate with the Generalitat to obtain an extension of the concession granted to them by the public company Actius de Muntanya, which runs until 2023. That process has not been started yet due to the on-going political situation in Cataluña, which first started in the summer and which has led to the calling of elections on 21 December.

Sabadell’s hotel divestment

Banco Sabadell, which has declined to confirm the details of this transaction, indicates that the deal forms part of its strategy to divest its hotel business. After selling its HI Partners division to Blackstone for €630 million (at a profit of €55 million) on 17 October, it was left with 11 (hotel) assets on its balance sheet, which it holds through the company HI Holdco Gestión Activa.

In addition to the establishment in Boí Taüll, a month ago, the bank sold a hotel it used to manage in Jerez de la Frontera (Cádiz) to Hotusa – the hotel in question was the 4-star Eurostars Asta Regia.

Original story: Crónica Global (by Cristina Farrés)

Translation: Carmel Drake

Parc Sagunt Formalises Sale Of 3 Plots For €3M

17 November 2017 – La Vanguardia

The Parc Sagunt Business Park has formalised the sale of three plots of land to the companies Gourmet Potato, Ecología y Protección Agrícola and Inmo Arnedo, for an amount approaching €3 million.

With these operations, more than 800,000 m2 of land has now been sold in this business park. The deadline for the presentation of offers for the 14 plots dedicated to industrial and logistics use measuring between 8,500 m2 and 50,000 m2 finalises on 13 December.

The companies that have acquired the plots in question are: Gourmet Potato from the food industry, with a plot measuring 16,100 m2; and Ecología y Protección Agrícola, with a technological base, dedicated to the development and manufacture of phytosanitary products based on bio-rational pest control techniques, which has acquired a plot measuring 8,348 m2.

The other plot has been acquired by Inmo Arnedo, which operates in the logistics sector. It will pay a monthly fee for 35 years for the surface area rights with the option to buy the plot measuring 31,618 m2.

The first phase of Parc Sagunt comprises more than 3 million m2 managed by a joint venture between the Government and the Generalitat for the comprehensive development and sustainability of the park.

Original story: La Vanguardia

Translation: Carmel Drake

Terrassa Plaça Retail Park Will Open On 3 November

27 October 2017 – Press Release

Terrassa has a new retail park, in the form of Terrassa Plaça. With a gross leasable area (GLA) of 30,535 m2, the new complex will be officially inaugurated next Friday 3 November. The event will be attended by authorities from the Generalitat de Cataluña, the Town Hall of Terrassa and representatives of the centre’s operators and Citygrove, the property developer.

The new centre is backed by an investment amounting to €30 million, the creation of more than 500 jobs and will house an extensive and varied retail offer: from the distribution of consumer goods and construction materials to fashion and restaurants. Citygrove’s aim with Terrassa Plaça is to cover the growing demand from the local population for these types of services. An entire commercial offer centralised in a single space.

Famous brands

This new project will open its doors with the following brands in situ: Bricomart, Mercadona, Globomoda, Altafit Gym Club, Gifi, Kiwoko, Barimueble, Sprinter, La Tagliatella, Pause&Play, Maxcolchón, Drim and Petrocat. All of them are looking to take an important step in their expansion here and to establish themselves as iconic labels in the minds of consumers. That is especially true in the case of the Italian company Globomoda, which has chosen to open its first store in Cataluña in Terrassa Plaça.

The complex is located on a plot measuring 56,000 m2 delimited by Avenida del Vallès, Calle Navarra, Avenida de las Naciones and Calle Cantabria. Its construction has allowed for improvements to the transport network in the area, with the creation of a pedestrian crossing on Calle Cantabria (…). In addition, the retail park will have an electric vehicle charging station, plus 1,000 parking spaces for cars and 70 for bikes, as well as a new bus route. Within the next few days, a new bike path will be opened between the city centre and the retail park.

Terrassa Plaça is the city’s new commercial offer and represents one of the most ambitious projects from Citygrove, the Anglo-Saxon property developer who has shaped this project. A key player in the real estate sector in Europe, with offices in the UK and Germany, Citygrove backed Terrassa from day one with the aim of turning it into a commercial benchmark project for the city, which was demanding this type of facility.

Original story: Press Release

Translation: Carmel Drake

RE Experts Warn That The Cataluña Situation Is Seriously Affecting Investment

17 October 2017 – Expansión

The Spanish Association of Real Estate Consulting Companies (ACI) says that the “serious” situation currently being experienced in Cataluña is affecting the normal evolution of the real estate market since investors are fearful.

The Spanish association of real estate consultancy firms, comprising domestic and international companies alike, such as CBRE, Aguirre Newman/Savills, Cushman & Wakefield, JLL, Knight Frank and BNP Paribas, warned yesterday of the consequences that the secessionist challenge is having in the real estate market.

Specifically, the association chaired by Ricardo Martí Fluxá said that “the serious situation” in Cataluña at the moment, is affecting the strong performance of the Spanish real estate market as a whole. Until the third quarter, the volume of investment in real estate assets was registering record figures, at €10,300 million, up by 58% compared to the same period a year earlier. “The latest developments are seriously affecting the normal operation of investment activity and the evolution of our real estate market”, they warned.

For this reason, the real estate consultancy firms have called for respect for the laws, appealing to the Generalitat to abide by the order established in the Constitution. “Our association joins the large number of companies, institutions and entities that are calling on the Generalitat to comply with the provisions of our laws and abide by the order established in the Constitution”, they said in a statement.

The warning from the large real estate consultancy firms follows a statement made just a few days ago by the CEO of Lar España, one of the five large Socimis whose shares trade on the (main) Spanish stock exchange.

The CEO of the listed company, Miguel Pereda, said that if his firm had to make an investment in Cataluña today, it would “probably” not go ahead with it, in light of the political situation regarding independence.

Meanwhile, on 5 October, the ratings agency Moody’s issued a report warning that the “growing political tension” may negatively affect the credits interests of the Socimis Merlin and Colonial, given that the entities hold 13 % and 19% of their respective portfolios in Cataluña.

Indeed, Colonial is one of the listed companies that has moved its corporate headquarters from Barcelona to Madrid because of the secessionist challenge posted by the Catalan Generalitat.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Can Spain’s Rental Price Hikes Be Contained?

6 February 2017 – El País

(…) A strong increase in demand and a shortage of supply have led to increases in rental prices, which soared by 15.9% in Spain last year, according to Idealista. Barcelona and Madrid recorded historical rises, with increases of 16.5% and 15.6%, respectively.

No-one in the sector is talking about a bubble, but rather about an imbalance between supply and demand. Nevertheless, this mismatch has raised alarm bells in the two hardest hit cities. The Town Halls of Madrid and Barcelona have asked the Government to change the Law governing Urban Leases (LAU) in order to regulate prices and prevent disproportionate increases.

And the Government of Cataluña has gone even further: it is going to punish landlords who charge expensive rents. The regional government is going to establish a rental price reference index in the Spring, which will establish orientative prices per square metre, based on the size of the home, age of the building, characteristics of the home and its location. Work will be performed on the mathematical formula over the next two months.

Carrot and stick

The tool will reward or penalise ownera through the tax system, in the form of the Property Tax (IBI), in the autonomous section of the Income Tax Return (IRPF) and in renovation work. Moreover, empty home owners may even avoid fines if they rent their properties out in line with the “benchmark price”. “If the rent is lower than the reference index, then the incentive will be positive and if the rent is higher, then the incentive will be negative”, explain sources in the Housing Department at the Universitat Rovira i Virgili (URV) – which (…) at the guidance of its director, Sergio Nasarre, has coordinated the working group whose conclusions form the basis of the Generalitat’s new initiative.

The rental market is gaining weight in Spain. “It has gone from accounting for 17.9% of the market in 2001 to 22.3% in 2015”, said José Peral, Director of Sales and Marketing at Solvia, who notes that the rental sector is undergoing a seismic change. Moreover, we are seeing “market convergence towards average volumes and prices that are more aligned with those observed in other European countries”, said David Calzada, CEO at the Socimi Vbare. Calzada expects prices to continue to rise in Madrid and Barcelona, at a sustained, albeit more contained rate. Oscar Bellette, CEO at Inveriplus, forecasts that rental prices will rise by 7% in both cities this year.

Despite this, the creators of the index consider that Spain still has the smallest residential rental market in Western Europe. Moreover, “it is dysfunctional, expensive and poor quality in nature; 46% of homes are rented on the black market and more than 3.5 million homes are empty”, says Nasarre. (…).

The Catalan method, the first of its kind in Spain, is based on a methodology that has worked in Berlin for years, where 95% of rents are open-ended. The index fulfils its objective in the German capital: indexed rents rise by between 2.7% and 3% per year, whilst those not subject to the index increase by between 5% and 10%, p.a., says Jutta Hartmann, from the Berlin Tenants’ Association. (…).

Nevertheless, the initiative is generating a lot of questions and concerns amongst agents in the sector in Spain. “It is a useless and counterproductive measure, which will lead to an increase in black market activity and in the number of empty homes”, says Sergi Gargallo, Director General at Alquiler Seguro. (…).

Nevertheless, all of the agents agree that the market will benefit from professionalization, thanks to the arrival of companies such as Socimis. “In Spain, 3.8 million primary residence homes are rented out and 97% of those are owned by individuals”, says José Peral, at Solvia.

Original story: El País (by Sandra López Letón)

Translation: Carmel Drake

Cataluña Raises Taxes On Barcelona’s Tourist Flats By 250%

14 November 2016 – Cinco Días

The Generalitat de Cataluña, supported by the parliamentary groups CUP and JxSí, is looking to restructure the region’s tourist tax with a law that will accompany the Budget for 2017. It is seeking to modify and increase the tourist tax charged to travellers using hotels, apartments, campsites and cruise ships in the autonomous community.

The aim of the modifications, presented by the Secretary of Finance for the Regional Government, Luis Salvadó, is to generate additional revenues for the Generalitat, amounting to more than €180 million (…). The Government intends to approve the law between the end of this month and the beginning of December, so that the tax changes can come into force from April (2017).

In the case of the tourist tax, the highest increase will affect rental apartments in the city of Barcelona, where the tax will rise by 246%, from €0.65 per night to €2.25 per night. The new fee is equivalent to the rate charged to guests of five star hotels, whose amount will not vary. Meanwhile, clients using tourist apartments in the rest of Cataluña will have to pay €0.90 per day, compared with the current rate of €0.45.

The Association of Tourist Apartments in Barcelona (Apartur) and the Catalan Federation of Tourist Apartments has questioned the legality of this measure, describing it as “discriminatory and meaningless”, given that it charges the same amounts to users of tourist apartments in Barcelona as it does to clients of luxury hotels. The groups have stated that the decision is “disproportionate, unjustified and completely arbitrary” and they expressed their concern that it will only serve to encourage the supply of illegal apartments.

The Chairman of Apartur, Enrique Alcántar, stated that the planned increase in the tax rate for tourist apartments in Barcelona is “complete madness”. According to his calculations, the charge is equivalent to 10% of the total daily price of a stay in a tourist apartment, compared to just 1% of the cost of a stay in a five star hotel.

Through this revision to the regulations, the Generalitat is also seeking to introduce the role of a collection assistant. It wants to turn the technological platforms, such as Airbnb, Homeaway and Booking, which act as intermediaries between owners and travellers, into tax collectors. In addition, it has announced a framework of specific offences and sanctions.

New tax on short-stay cruise passengers

Another new measure is planned, which will affect cruise passengers. Until now, cruise passengers who spent less than 12 hours in Barcelona have not had to pay any kind of tourist tax, but from now on, they will have to pay €0.65. The rate for those spending more than 12 hours in the city remains the same, at €2.25. (…)

Original story: Cinco Días (by L.S.)

Translation: Carmel Drake