Caledonian to Enter the Affordable Housing Sector with a 400-Unit Project in Madrid

The property developer, which normally focuses on high-end housing, is completing its entry into affordable development, with a 400-home project in Madrid, which will reflect its pioneering designs in innovation.

The Madrilenian property developer Caledonian, led by Enrique López Granados, is known for promoting ‘boutique’ style housing: high-end developments, focusing on both design and execution, and the application of energy efficiency and home automation techniques.

After developing hundreds of homes in areas with high purchasing power, such as Aravaca and Somosaguas in the northwest of Madrid, and Finca Cortesín, in Malaga, the real estate company has decided to expand its business with some more affordable housing.

Arcano Will Invest €200M with its Second Real Estate Fund: Ava II

19 February 2018 – El Economista

Arcano Asset Management, the asset management arm of the Arcano Group, is redoubling its commitment to the Spanish real estate market with the launch of its second fund specialising in property.

Known as AVA II, the new vehicle will have a target size of between €150 million and €200 million and will replace its first real estate fund, Asoref, by raising and investing its funds over a period of 18 months.

AVA II is going to focus on value-added operations and will complete its first close at the end of March, although it already has €40 million of funding committed, from domestic and international investors.

The fund, which is going to be open to new investors for the next 15 months, has a target net rate of return (IRR) of 15% and is going to invest in operations involving all types of real estate assets, with a clear focus on residential assets and offices in Spain’s main cities.

In addition, and in an opportunistic way, Arcano’s new fund is also going to have the option of exploring beyond Spain’s borders and investing in real estate assets in Portugal and Italy, although under no circumstances shall its investments in those countries exceed 20% of the fund’s total value.

Eduardo Fernández-Cuesta, Partner at Arcano Real Estate; José Luis del Río, CEO of Arcano Asset Management; and Pablo Gómez-Almansa, Director of Investments at Arcano Real Estate, are going to be responsible for leading this new vehicle, supported by a team of six professionals, including the recent new recruit Diego Vizcaíno, as Development Director.

Operations in Madrid

Asoref, Arcano’s first real estate fund, which has just completed its investment process, has disbursed or committed more than €170 million in total, focusing primarily on office assets and residential properties. Its most recent operation involved the purchase of Hotel La Moreleja in Madrid, for approximately €12 million, which it is going to convert into a state-of-the-art office building, designed by the architecture studio Rafael de la Hoz. The firm is going to spend around €14.5 million on the construction of that project.

That acquisition follows the purchase of another office building for corporate headquarters in Madrid at number 24 Calle Ríos Rosas, in the heart of the Chamberí neighbourhood, which has an above ground surface area of 3,517 m2.

Likewise, through this fund, Arcano has entered the residential market, closing the acquisition of a plot with a buildable surface area of 6,029 m2 in the north of Madrid, in Las Rozas, for the construction of high-end housing.

It also completed the purchase of a residential plot in the centre of Madrid, on Calle Divino Pastor 5, in the Malasaña neighbourhood, for the construction of 30 homes. Beyond Madrid, the fund closed the acquisition of a plot of land on the seafront in Benalmádena, with a buildable surface area of 12,000 m2.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

ActivumSG Launches New €500M Fund with Projects in Marbella & Salamanca

22 January 2018 – Eje Prime

The international group ActivumSG is continuing to back its business in the Spanish market. The company, which operates under the brand ASG in Spain, is launching a new €500 million fund to make real estate investments across Europe, according to explanations provided by the company to Eje Prime. Some of the first projects that have already been financed thanks to this fund, the fifth to be promoted by ActivumSG, include three projects in Berlin and three in Spain, located in Marbella, Salamanca and Estepona.

This new fund promoted by ActivumSG is one of the group’s most important in terms of investment, with funds raised mostly from investors that have already participated in the group. Of the €500 million, the fund has already committed more than €200 million in Spain and Germany.

In the Spanish market, ActivumSG has already launched Project España, located in Salamanca. Initially baptised as Project Victoria, the fund has now started construction on this luxury residential development in the centre of the city. “The project involves the demolition of an office building located at number 5 Plaza España to convert it into a high-end residential property, comprising 27 apartments”, say sources at the German company.

The second project that ActivumSG is going to promote with this new fund is Parque Central, in the centre of Estepona. The German fund is already finalising the details to start work on the construction of this residential development, which will span 12,600 m2 and which is already being marketed.

Finally, the fund is working on Project Sierra Blanca, in Marbella. That project, which is in its preliminary phase, will be located in the neighbourhood of Sierra Blanca, in Marbella, and will involve the development of 40 luxury homes, with gardens and parking.

The latter two projects are located in the province of Málaga, one of the main tourist destinations in the south of Spain. ActivumSG has been advised in the acquisition by the group’s Spanish subsidiary, ActivumSG Iberia, which is currently being led by Brian Betel, former Director of Cerberus Iberia Advisor and Citibank.

ActivumSG’s team in Spain is completed by Víctor Pérez Arias, former Director of CBRE; Juan Alonso Bartolomé, a director who has worked for companies such as GE Capital Real Estate and ING Real Estate; Alejandro Adan Manes, who joined the firm from Axa Real Estate; Carlos Molero Sánchez, formerly of PwC and KPMG, and Ignacio Gaytan, who previously held the position of maximum responsibility at Grupo Lar, amongst others.

ActivumSG in Spain

Currently, ActivumSG’s portfolio in Spain comprises a dozen assets, with the exception of two that have been divested in recent months, located in Manuel de Falla and Santa Leonor, both in Madrid (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Tinsa: Residential Land Prices Rose By 4.1% In Málaga In Q2

17 July 2017 – Diario Sur

The housing sector in Málaga is continuing to grow. The price of residential land in the province rose by 4.1% during the second quarter of this year compared to the same period last year, to reach €1,399/m2, which is €154/m2 higher than the national average, according to data from the appraisal company Tinsa. It represented the highest increase in Andalucía and the sixth highest in Spain as a whole; and it consolidates the upward trend seen over the last two years, a situation that has generated concerns about the possibility that the sector is heading towards a new real estate bubble.

The Director General of the Institute of Business Practice (IPE), José Antonio Pérez, said that, for the time being, the growth is “sustainable”, although he warned that the lack of buildable land on the Costa del Sol to meet the current demand from property developers and investors will limit this trend and may lead to a disproportionate rise in prices in some enclaves. Pérez attributes the lack of supply to “restrictions” imposed by the general urban planning orders in certain municipalities and the slow pace of urban planning procedures. (…).

Tinsa’s report also reveals that the average mortgage granted to Malagan households amounts to €126,815, the seventh most expensive in the country, with a monthly instalment of €592. The percentage of household income spent on paying the first year of a mortgage is 27.6%, almost eight points above the national average (19.9%). The appraisal company highlights that this statistic makes Málaga the province where families spend the highest percentage of their income on mortgage repayments, above the Balearic Islands and Barcelona (21%).

Málaga also leads the list of provinces with the highest number of house sales closed in the last four months, with respect to the size of its housing stock: 32.1 for every 1,000 homes. It was followed by Alicante and the Balearic Islands, which also have “a clear tourist component”, said the report. The appraisal company reminds its readers that the province is home to “a large number of high-end homes” aimed primarily at foreign buyers, which put upward pressure on average house prices.

By contrast, the IPE considers that it is “a mistake” to draw conclusions at the provincial level “because you cannot compare the situation in Villanueva del Trabuco, for example, with that of Marbella”. The institute, which specialises in the real estate sector, highlighted the sea fronts and golden triangle formed by Marbella, Estepona and Benahavís as the areas where demand for residential land is highest, as well as the capital, where Limonar and Valle del Guadalhorce are positioning themselves as the new enclaves for future urban development.

House sales

The Real Estate Pulsometer compiled by IPE confirms that Málaga is seeing one of the strongest recoveries in the sector, together with Madrid, Barcelona and the Balearic Islands. Investors, savers, funds and individuals comprise current demand, which caused house sales to grow by 6% last year; and a similar rise is forecast this year. Currently, half of all purchases are paid for in cash and the other half are financed through mortgages (…).

Original story: Diario Sur (by Alberto Gómez)

Translation: Carmel Drake

GreenOak Puts Luxury Homes On C/Fuencarral Up For Sale

7 February 2017 – El Confidencial

Between €350,000 and €1 million. That is the price bracket at which the high-end homes at number 77 on Madrid’s alternative shopping street Calle Fuencarral are going on the market for. The homes are going on sale in the building that GreenOak purchased, together with ASG Iberia Advisors (previously Activum), from the General Treasury for Social Security, for €21 million in a public auction – it was the only offer that the State received for this centrally-located property, whose renovation will combine luxury residential properties with retail space.

The operation, closed at the end of 2015, was led by John Carrafiell (GreenOak), hand in hand with the German real estate fund manager (ASG Iberia Advisors), which is led in Spain by Brian Bettel, the man who used to hold the reins at Cerberus in Spain.

According to sources close to the project, the plans, which have been developed with the utmost discretion since the acquisition, comprise the construction of 40 1-, 2- and 3-bedroom homes (measuring between 50m2 and 150m2), which will be sold for between €350,000 and €1 million, i.e. around €6,000/m2. In addition, the building will continue to house a sizeable retail space, as three of its six floors will be used for that purpose. The common areas will have a swimming pool, solarium and gym, however, it will not have any parking spaces, a major drawback for a project of this standing. Construction is expected to be completed by the end of 2018.

Sources consulted say that there is a long waiting list of people wanting to acquire these units, given that there are no other luxury new homes up for sale in the area to compete with this project. In fact, one of the developments that could compete in this market is located on Calle Fernando VI (in the Lamarca Building, just 500m away), which is owned by the Venezuelan Capriles family, has been completely sold already. GreenOak and ASG Iberia have engaged the luxury real estate company Gilmar and CBRE España to market the properties. (…).

The building, which is located just a short distance from Tribunal metro stop, has been completely derelict for several years. It has a total constructed surface area of almost 8,000 m2 spread over six floors and was constructed on a plot of land measuring 1,875 m2. (…).

This is GreenOak’s first major residential project in Spain, where it has previously focused more on the logistics, office and retail sectors; meanwhile, ASG Iberia has expressed much more interest in housing, along with the retail sector. In fact, that company has separate plans to construct more than a thousand homes in Madrid.

Last year, the fund manager purchased six plots of land from Altamira in Alcalá de Henares with a buildable surface area of 50,000 m2, on which it will build up to 650 homes. (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Prices of Luxury Homes To Rise In Madrid And Barcelona

14 May 2015 – Expansión

Recovery / The prices of high-end homes will increase by 5% in Spain’s largest cities in 2015, but they still fall well below those seen in Monaco, London and Paris.

Madrid and Barcelona are two of the large European cities in which luxury housing is least expensive. Nevertheless, it is clear that high quality properties are going to become more expensive in 2015. Specifically, by 5% in the “most prestigious areas” of Barcelona and by between 2% and 3% in Madrid.

Those are the findings of a study by Coldwell Banker – one of the largest networks of real estate brokers in the world – which compares prices per square metre for new, used and luxury housing in prime areas of the continent’s main real estate cities: Monaco, Prague, Rome, Milan, Paris, Valeta (Malta), Berlin and London, as well as in the Madrilenian and Cataluñan capitals. The comparison is linear; it does not take into account the (respective) income of citizens.

In the urban centre of Madrid, the average price per square metre of new housing developments is €5,610, i.e. €110 more than in the centre of Barcelona (€5,500). Those figures are light years away from the (prices seen in) London (€11,500/m2) and Paris (€10,000/m2) and from the stratospheric prices of €80,000 per square metre in the principality of Monaco.

Thus, whilst a 100 m2 apartment in a well-located area of the Spanish capital costs €561,000 on average; in the centre of Monte Carlo, the price of the same property would soar to €8 million. In other words, the same price as 14 such properties in Madrid and 14.5 in Barcelona. We should bear in mind that Monaco has a surface area of just 2 square kilometres, in which almost every centimetre contributes exclusivity and luxury.

Other European cities have less prohibitive prices. The price per usable square metre of a new residential property in Milan amounts to €10,500 and in Rome, to €8,500.

Of the 10 individual real estate markets covered in the report, only three are cheaper than Madrid and Barcelona: Berlin (€4,800 per m2, on average), Valeta (Malta, €3,650/m2) and Prague (€2,770/m2).

The price of luxury housing is increasing with respect to central areas in all of the cities, except for Monaco, which is an extremely “limited” market, says the report. The price per m2 of a new luxury apartment – not necessarily in the centre – is €60,000 in the state of Monaco.

Far below the prices seen in the Principality, the most exclusive capital in Europe is Paris, where the average price per square metre of luxury homes amounts to €25,000. In third place and still in a bubble is London, where residential properties of the highest quality have an average price of €18,000 per square metre.

Prices in London are double those in Madrid (€9,033). Luxury homes in Madrid are 20% more expensive than in Barcelona (€7,500 per square metre).

Limited supply

In Barcelona, “prices will start to recover slowly in the main areas. In the areas of highest demand and prestige, we expect to see an increase of between 3% and 5%”, says the report. In Madrid the increases will amount to between 2% and 3%.

According to Coldwell Banker, the “high quality” residential market in Madrid “is still very limited” and in Barcelona “supply is limited, since there are few new buildings in the centre of the city”. In Madrid, there are approximately 200 developments of this kind in the centre and around 400 in the wider metropolitan area.

That is not the case in other capitals. The supply of new homes in Berlin is “extremely strong”. Investors mostly seek “small furnished, high-end luxury apartments”. Penthouses can cost as much as €20,000 per square metre.

The other goldmine is still London: “In Mayfair and Marylebone, there is a large supply of new projects that are just coming to an end now”, says the report.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake