Tag: gentrification

‘Valencia Parque Central’ Reorganises City Centre Plots to the Benefit of Adif & Sareb

18 December 2017 – El Confidencial

The large urban planning operation to reorganise the railway access in the centre of Valencia has an aristocratic influence. The public company responsible for carrying out the project, Valencia Parque Central (VPC), and the city’s Town Hall have just finalised the reparceling of the land that has been released for the execution of the project’s first phase, which comprises the construction of a large park, the train access channel and the generation of residential building. Two aristocratic families have been included in the restricted group of owners of land susceptible to being built on – the Prat Dupuy de Lome y Puigmoltó family (…) and the Gómez Trénor Trénor family (…).

The Prat Dupuy de Lomes and the Gómez Trénors share plots with Juan Giner, a Valencian businessman, who has appealed the reparcelation (…).

Giner, the Prat Dupuy and the Gómez Trénor are among the few private owners that have held onto their plots on the site affected by the Parque Central PAI. In reality, the main beneficiary of the large urban reorganisation project is Adif, the Ministry of Development’s railway infrastructure company, to which almost 90,000 m2 of buildable space has been awarded, either directly or indirectly, with an estimated value of almost €40 million (…).

VPC and Adif have started to market the plots corresponding to phase 1A; they are located around the Joaquín Sorolla AVE train station and on the other side of the first stretch of the garden area, in accordance with Kathryn Gustavson’s plans. The idea is that the funds obtained from the profits resulting from the reclassification will help to finance the first round of work to adapt the railway access channel, as agreed by the Ministry of Development, Íñigo de la Serna, the councillor for infrastructure, María José Salvador, and the mayor Joan Ribó (…).

The VPC’s Board of Directors still needs to meet to agree the calendar for the plot auctions and the structure of the sale (whether the plots should be grouped together or sold individually). Meanwhile, Adif is already looking for buyers for the three plots that it has been awarded directly, initially worth just over €13 million and with a buildable surface area of 27,000 m2. Sources at the tripartite company admit that local investors and developers have expressed interest in the plots, which are all developable and which are located in the heart of the city centre. Lots of players are expected to participate in the bidding. The plans for this first phase involve the construction of 1,0000 homes and retail premises.

A hotel for Sareb?

Although Sareb has been given a lot less land than the Ministry of Development, it has also ended up winning from this first reparcelation (…). For the time being, it has been awarded a plot measuring just over 300 m2, but with a buildable surface area of 3,100 m2. The asset has an unbeatable location, right next to the Joaquín Sorolla AVE train station, and so it is likely that it will house a residential development, or a 70-room hotel, according to predictions from Sareb’s analysts.

The entity is open to receiving offers (it has already rejected some bids) for the plot, but it is also interested in developing the plot jointly with a partner in the property development or construction sectors (…). The public company VPC has valued Sareb’s plot at €1.57 million (…).

The local property developer Urbem and the firm Inmobiliaria Martínez Segura have also been awarded a residential plot measuring 219 m2, with a buildable surface area of 1,859 m2, which will likely house a residential development. Other players that have been awarded plots include the Planells Solers (Bronces Mestre) and the Giner Serras, who are related to the Ferrando family (Gesfesa).

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

Servihabitat: Rental Yields Now Exceed 10% in Madrid, Cataluña, Balearic & Canary Islands

18 December 2017 – Expansión

“The Spanish residential market has been showing clear signs of recovery in 2017 and all indications are that the rate of growth will be even higher in 2018. The number of house sales will rise by 16.9% this year, to exceed 472,000 operations, and by another 18.3% next year, which means that we will see the sale of almost 560,000 units”. In this way, Servihabitat summarises the trend in the residential sector, which is enjoying a sweet moment.

The key factors contributing to the boost in demand include: the growth of the number of solvent buyers; policies by financial institutions to grant more loans; the progress in terms of the construction of new homes; and the increase in investor interest – in the case of holiday homes, investors now account for 19% of all operations.

This last aspect is fundamental for understanding the boom in the most consolidated areas of Spain. According to data from Servihabitat, the average annual yield from buying a home to let is 10%: 5.5% from the gross rental yield and 4.5% from the appreciation in the property value over 12 months, which the real estate servicer calculates in its forecasts at the end of 2017.

This data tallies with the 9.8% calculated by the Bank of Spain. The difference is that Servihabitat breaks down the yield by region and province. The regions in which it is more profitable to acquire a home to let are: the Community of Madrid, (13.3% gross p.a.), Cataluña (13.1%), the Balearic Islands (11.4%) and the Canary Islands (10.8%).

They are the only four regions where yields exceed the national average, which gives us an idea of the importance that the two largest cities and residential investment along the coast play in the overall calculation for the Spanish market. It comes as no surprise that the most profitable provinces are: Barcelona (13.7%), Madrid (13.3%), Las Palmas (12.4%), the Balearic Islands (11.4%), Málaga (10.1%) and Santa Cruz de Tenerife (9.5%). In other words, the six largest real estate markets in Spain (together with Alicante), where demand from overseas buyers is boosting the sector and the cranes are back on the horizon. Overseas buyers now account for 17.4% of all purchases or one in six. That percentage rises to 47.6% in the case of Alicante, 40.8% in Santa Cruz de Tenerife, 33.7% in the Balearic Islands, 32.8% in Girona, 31.4% in Málaga and 22.6% in Las Palmas.

They are clearly the “hot” areas of the real estate sector, but they are not the only ones to be offering high returns. Other examples include: Salamanca (8.4%), Guadalajara (7.8%), Murcia (7.7%), Cantabria (7.6%), Valladolid (7.5%) and Lleida (7.5%), amongst others. This positive trend will become even more marked in 2018 (…).

In the Catalan capital, yields in the district of Sants-Montjuic are off the scale, with an average gross annual return of no less than 32.9% (5.3% from the rental yield and 27.6% from an appreciation in property prices). It is followed by Eixample (26.8%), Gràcia (25.9%), Sant Martí (25.6%), Horta-Guinardó (24.9%) and Nou Barris (21%). The centre (Ciutat Vella) yields 19%, and the exclusive district of Sarrià-Sant Gervasi 13.2%

In Madrid, yields in the Centre amount to almost 20% (19.7%), followed by Salamanca (19.2%) and Chamberí (18.8%) (…).

Despite this inflation in prices and yields, “there is no risk of a bubble in either city”, according to Cabanillas. “The problem is not speculative; the price rises are resulting from the pressure in terms of demand for the use of second homes and tourist accommodation. The risk is that gentrification will force young people out of city centres, but there is no risk of over-financing”, says the CEO of Servihabitat.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Madrid’s Town Hall Prepares To Legislate For Tourist Apartments

30 April 2017 – El Confidencial

The Town Hall of Madrid has decided to take the lead regarding the problem of the proliferation of tourist homes in the capital. Although it lacks the power to introduce legislation (that responsibility lies with the Community of Madrid), the Town Hall’s Councillor for Sustainable Urban Development is working towards signing a Memorandum of Understanding with Airbnb, and the other platforms that operate in the city, to try to put some order to a situation that isn’t showing any signs of letting up. (…).

José Manuel Calvo (pictured above), Councillor for Sustainable Urban Development, plans to have the agreement ready before the end of this legislature.

Specifically, there are three measures that the Town Hall of Madrid is hoping to extrapolate from an example that it has been studying in Amsterdam. The first is “to establish a maximum period of time, be it 60 days, 120 days, etc, that an owner may lease his/her property (home/room) for each year and for the platform to withdraw the property in question from its website, once that quota has been reached, until the following year”.

The second measure involves ensuring that only the owner of a property may lease it out, whereby preventing the involvement of any companies. This will allow “people who need to supplement their mortgage payments, or who need to lease their house to make ends meet, to continue to let out their homes/rooms, but it prevents people from creating tourist accommodation companies without paying taxes, or complying with legislation, etc”.

The crux of the agreement comes in the third measure: “we are considering a tourist tax for tourist homes only, not for hotels, given that hotels already pay taxes, fees, fulfil their obligations etc. Meanwhile, tourist homes do not currently pay any taxes. In other Central European cities, and even in some American cities, some of the landlords’ profits are reinvested in the town, in agreement with the operators”, said Calvo.

With this new revenue stream, the Town Hall could finance the systems of control that it plans to implement to verify that Airbnb and its competitors are complying with the agreed conditions.

But the problem of the touristification or gentrification of the centre of Madrid goes beyond the tourist homes and also affects the proliferation of hotels, to the detriment of residential buildings; another challenge that Calvo wants to tackle by limiting changes of use. (…).

Although he acknowledged that “Madrid faces a very different situation in terms of hotels to Barcelona, Venice and Lisbon (we have 2.7 beds for every 1,000 inhabitants, compared to 8 in Barcelona)”, he also admits that he is worried by the degree of saturation that is starting to be seen in certain neighbourhoods in the centre, where limits do need to start being imposed (…).

“Madrid undoubtedly still has the capacity to increase its hotel and tourist capacity, but, the question is whether that should all be concentrated in the centre, in the same neighbourhoods, where the residential fabric is being pushed out by the increase in hotels and tourist apartments? We don’t think so, we need to diversify. Ideally, they would go towards the Arganzuela district, towards Chamartín, towards Chamberí, to the outskirts, to the other side of the M-30…”.

And it was on this point that Calvo was most belligerent, going as far as to state that he would be willing to set thresholds, to establish limits in those areas where saturation is detected. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Gentrification Drives Up House Prices In Barcelona

13 March 2017 – El Periódico

It never rains but it pours: property prices in Barcelona are rising in a continuous and alarming way; a bullish process that echoes the trend seen in residential rental prices in recent times. Only those who are very optimistic – or very cynical – will be able to argue that these price rises are not a reflection of the improvement in the economy and that the laws of the market are as follows: the more pressure in terms of demand (from property buyers), the more the supply benefits (owners and real estate companies alike). According to all indications, the worst of the crisis is over, but the reality of the daily economy is far from the one seen during the years before the bubble burst, in 2007-2008 (and probably will not be in the next few years): average salaries have decreased, employment is more precarious and young people looking to emancipate themselves are finding it very difficult to put a roof over their heads.

But Barcelona is fashionable, a phenomenon that seems unlikely to end (nor would that be desirable) – and moreover, available land for new homes is in short supply. The combination of these two factors is fuelling the purchase of properties as investments, in many cases by foreigners and, is leading to a price spiral that, according to reliable samples, means that 80% of the homes currently up for sale cost at least €200,000. Below that price, properties abound only in the neighbourhoods of Nou Barris, Sant Andreu and Horta-Guinardó.

The Town Hall, led by Ada Colau, has taken some initiatives to alleviate these perverse effects of Barcelona’s appeal, but its legal and economic capacity is limited. The problem requires coordinated action with other administrations if a mockery is not to be made of the Constitution, which establishes that: all Spaniards have the right to decent housing and that the public authorities must ensure as such, “by regulating the use of land in accordance with the general interest to avoid speculation”.

Barcelona, at the forefront in many periods in history, still has time to show that success does not have to denaturalise a city to the point of turning against its inhabitants and driving them out through a large-scale gentrification process. Nobody wants Barcelona to end up like Venice, a paradigm of a city, with lots of glamour and many visitors but with increasingly little soul.

Original story: El Periódico

Translation: Carmel Drake

A Revamp Of Avenida Diagonal Would Boost RE Inv’t

4 August 2016 – Mis Locales

With the debate raging over whether or not to reform Avenida Diagonal, between Paseo de Gracia and La Plaza de las Glorias, real estate investments are firmly under the spotlight. Following the approval of the proposal by the municipal council, planned for next summer, at a cost of around €11 million, the door has been opened to the extension of the prime area, currently centred around the commercial thoroughfares of Rambla de Catalunya and Paseo de Gracia, to other areas of the city centre.

The renovation includes increasing the width of the pavements by up to 40%, moving the tramlines to the middle of the avenue and restricting private traffic to just two lanes in each direction. Those are the main changes of the reform, which would generate 1,000 new jobs, 500 direct and another 500 indirect.

“The renovation of La Diagonal would turn it into one of the state of the art thoroughfares not just in Spain, but in Europe. Moreover, it would generate lots of business opportunities for an area that has historically been regarded as a transit route”, said Gerard Marcet, Founding Partner at Laborde Marcet. The renovation would give priority to citizens and would boost businesses in the area. On the stretch between Paseo de Gracia and Paseo San Juan alone, 100 premises are either vacant or in a precarious situation, which could see their fortunes turned around thanks to this refurbishment.

The project has been prepared on the basis of the city’s urban mobility plan, which forecasts a 20% reduction in private traffic by 2018, which would allow the space designated for bicycles and pedestrians to be increased, and the stretch of La Diagonal between Paseo de Gracia and La Plaza de las Glorias to be converted into a pedestrianized area. (…)

“Investing in La Diagonal means attracting investment and businesses from all over the world, as well as to another main focal point: Diagonal Mar”, said Marcet. The main commercial focus of attraction in the 22@ district has a surface area of 88,000 sqm, contains 200 shops, 40,000 employees and more than 4,800 parking spaces.

Companies such as Sara Lee, ADP, Henkel Ibérica, ISDIN, RBA, Microsoft Ibérica, Telefónica, Indra and Sanofi are some of the companies that are already located in the area.

Original story: Mis Locales

Translation: Carmel Drake