Málaga’s Residential Sector is Booming Once Again

11 March 2018 – Málaga Hoy

“We all want to be in Málaga because almost all of the cases there are successful. It is an established location (…)”. That is according to Juan Conejo, Director in Andalucía of the property developer Momentum, and his feelings are shared by the majority of the professionals in the sector who ratify that Málaga is, for the time being, the third largest market in Spain for the construction of new build homes, behind Madrid and Barcelona. This newspaper has been in contact with several of the most important property developers that operate on the Costa del Sol and all of them tell the same story: the crisis is over, the sector has reactivated and thousands of homes are being built or will be soon backed by multi-million investments.

Moreover, the complexion of the market has changed completely. The banks are no long financing the land purchases, but rather property developers are having to look for other resources – in-house, investment funds, asset sales, etc. – and they are only being granted loans to build homes if they can prove that at least 40%-50% of the homes have already been reserved, the famous pre-sales. Financial institutions only lend money if they find safe bets (…).

In this context, Málaga is becoming one of the great protagonists on the national stage because it is playing on several fronts. The capital is an important location for primary residence properties and the coast, primarily to the west of the capital, although there are also some projects to the east, is one of the most sought-after places for foreigners to have second homes.

“Málaga has clearly climbed onto the podium alongside Madrid and Barcelona and it is clear that the market has been reactivating for a year now, whereas other provinces such as Valencia and Sevilla are starting to see movement now”, explains Miguel Ángel Barruso, Director in Andalucía of Avantespacia, a property developer that is building 215 homes in two promotions in Tabacalera – where it has already sold 70% of the properties – and Teatinos, which will be handed over at the end of 2019. “Property developers have not sold any new homes for 10 years and there is significant pent-up demand on the buy-side, and so we are now looking ahead to the next few years with optimism”, added that expert.

Momentum is clear about its commitment to Málaga (…). “Málaga is growing a lot. We have a development in Teatinos that we were going to build in phases but which, in the end, we are going to construct in one go, comprising 300 homes in total, because we already have 50% of the properties reserved; meanwhile, in Colinas del Limonar, we have two other projects with the same level of pre-sales”, said Conejo (…).

Nevertheless, the Regional Director for Momentum emphasises that it is important to move with caution and to analyse each project in detail, especially in light of the current banking demands. “Starting a construction project now is already a success because it shows that you have pre-sold around half of the homes that you are going to build and it is always harder to get customers to buy off-plan, and so we have to analyse very clearly where the demand is”, he said.

Now, professionalism is key. Rafael Torres, Insur’s representative in Málaga (…). Insur is working on two major projects in Málaga capital in the Plaza del Teatro – where work on 57 homes has now started and 50% of the properties have been reserved, some of which have been paid for in their entirety – and in Churriana. It also has several projects in Marbella, comprising 300 more homes. Torres highlights that the market research conducted by his company reveals that there are 83 new home developments under construction or in the pre-sale phase on the western Costa del Sol, of which 40% are in Estepona, Mijas, Benalmádena, Marbella and Fuengirola.

One of the historical Málagan property developers in Myramar, which celebrates its 60th anniversary this year. Its CEO, Miguel Rodríguez (…) says that the company is currently working on four real estate developments in Mijas, Fuengirola and Benalmádena involving around 200 homes (…).

Meanwhile, Rafael Molina, Commercial Director at Grupo Ansan, also corroborates that the real estate sector is currently enjoying good times in the province (…) “we have developments underway in the Carlos Haya area, in Teatinos and in Puerto de la Torre, where we have already sold a significant volume”, he said.

Two other national companies that have set their sights on Málaga are Aelca and Neinor Homes. Jaime Pérez is the Director of Aelca in Andalucía and explains to this newspaper that “we are absolutely convinced about working in Málaga and we have land on which to build 3,200 homes in the province over the next four or five years”. In Málaga capital, his firm has started to market the first phase of an urbanisation in Hacienda Cabello comprising 128 homes – the total project involves 433 units – , they are going to start work in Bizcochero Capitán, they acquired the Flex building on the Cádiz Road and they are going to start to sell 130 homes and a retail area at the end of the year. They also have another project behind Vialia comprising 144 homes and a hotel. Moreover, they have projects in Mijas and Estepona.

Meanwhile, sources at Neinor explain that (…) “Málaga attracts domestic and international demand alike due to its location, infrastructure and climate (…)”. That firm’s portfolio of projects is also very extensive. At the moment, it has 20 plots and 2,166 homes in the province, which corresponds to a turnover of €780 million. In 2018, it is going to launch the sale of seven new projects, comprising 1,076 homes in total, in Casares, Estepona, Benahavís and Málaga capital (…).

Property developers are investing millions in Málaga because they know that there is demand there. Last year, permits were granted for 5,000 homes and, taking into account the projects that all of these companies have in the pipeline, that number looks set to soar over the next few years, which will generate more employment and wealth in the area.

Original story: Málaga Hoy (by Ángel Recio)

Translation: Carmel Drake

Spain’s Large Property Developers Own Land to Build 100,000 Homes

5 February 2018 – Expansión

Metrovacesa, Aedas, Neinor, Vía Célere, Aelca, Quabit, Realia and Insur own land spanning more than 15 million m2, which they want to use to take advantage of the new real estate cycle.

The upturn in the residential sector is consolidating and the large property developers want to take advantage of the new cycle to obtain returns from the portfolio of land they have accumulated in recent years. The new generation of property developers Metrovacesa, Aedas, Neinor, Vía Célere and Aelca, and some of the listed survivors of the crisis, such as Quabit, Realia and Insur, now own land spanning more than 15 million m2 with the capacity to build more than 100,000 homes over the next few years.

Metrovacesa, controlled by Santander and BBVA is the property developer with the largest portfolio of land on its books. Following a capital increase amounting to €1.108 billion last June, undertaken through the transfer of assets from its main shareholders, the firm owns 6 million m2 of land, with the capacity to build 37,500 homes. As at 30 September, the firm owned a portfolio of residential land with a gross value of €1.9 billion, of which €1.3 billion corresponded to developable land.

Currently, the company has 51 projects under development to build 2,263 homes and it plans to reach cruising speed in 2021, with the delivery of between 4,500 and 5,000 units per year.

Stock market debuts

Metrovacesa, which plans to debut on the Madrilenian stock market tomorrow (Monday) with a market capitalisation of €2.5 billion, says in its IPO brochure that it does not need to acquire additional land to fulfil its annual house building objectives for the next eight years.

The next firm by volume of land is Aedas. That company, in which the US fund Castlelake holds a stake, owns land spanning 1.5 million m2 with capacity for 13,270 homes. The property developer, which started to trade on the main stock market in October, invested €124 million in land purchases in 2017 alone for the construction of 3,159 homes.

The strategy of the firm led by David Martínez involves reaching its cruising speed in 2022, when it expects to record revenues of more than €1.0 billion and handover more than 3,000 homes per year.

The other listed property developer, Neinor, which was the first to make its debut on the stock market in March 2017, owns land spanning 1.3 million m2, worth €1.3 billion and with the capacity for more than 12,000 homes, according to the most recent public information as at 30 September.

Specifically, during the first nine months of last year, that property developer acquired 24 developable plots for the construction of more than 3,000 homes for €275 million.

The firm led by Juan Velayos will launch 2,500 homes during 2018, will begin construction on another 5,000 units and will hand over more than 1,000 homes this year. In 2020, Neinor expects to reach its cruising speed and hand over between 3,500 and 4,000 homes per year.

Some of the most active property developers in the purchase of land and launch of new developments also include Vía Célere and Aelca, both of which have plans to debut on the stock market soon. Vía Célere owns land spanning 1.43 million m2, with capacity for 12,200 homes. The company chaired by Juan Antonio Gómez-Pintado invested €227 million in land last year.

The other property developer controlled by Värde, Aelca, owns a portfolio of developable land spanning 1.28 million m2 for 12,566 homes. The firm expects to launch 49 new developments in 2018 and will have 86 residential projects underway at different stages of completion.

Meanwhile, the listed property developers that survived the crisis, Quabit and Insur, own land with the capacity for 6,720 and 4,691 homes, respectively. Quabit plans to invest €670 million in the purchase of land until 2022, when it will reach cruising speed with the hand over of 3,000 homes per year, whilst Insur will invest €80 million in purchases until 2020 in order to hand over 600 homes per year.

In terms of the residential business of Realia, the firm controlled by Carlos Slim owns a land portfolio spanning 1.85 million m2, of which 25% is developable (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Insur to Invest €70M in Office Complex in South of Madrid

31 January 2018 – Eje Prime

Insur is committed to the world of work. The Andalucían group is going to invest €70 million in the south of Madrid to build an office complex that will have a total surface area of 30,000 m2. The project will involve the construction of two buildings alongside Madrid Río.

The company chaired by Ricardo Pumar plans to inaugurate the complex at the end of 2019. The Madrid Río area, where the offices are going to be built, is one of the most sought-after by the real estate sector at the moment. This is evidenced by the Operación Calderón, which will constitute one of the most important real estate operations in recent times in Madrid when it is completed in June.

Insur’s development in the Spanish capital is going to be undertaken through an alliance with two financial partners, in which the group holds a 50% stake. This investment in prime offices will also strengthen the company’s real estate arm, which is looking to diversify both by geography and by segment.

Indeed, this week, the property developer announced the segregation of its property development and real estate businesses. In this sense, Insur has opened a new line of business with its inclusion in the hotel sector, where it already owns three buildings under development, including one establishment in Zahara de los Atunes (Cádiz), which will have 500 rooms. The other two properties will be located in Córdoba and Sevilla and will be operated by Hotusa.

Moreover, the real estate company is looking for opportunities to build out-of-town retail spaces in Spain to expand its real estate portfolio, which is currently worth €294 million.

The objective of Grupo Insur for 2018 is to strengthen its real estate arm, without forgetting about the residential sector. In fact, in that segment, it is going to invest between €75 million and €80 million until 2020 buying up developable land. Currently, the property developer has 2,039 homes under construction and owns a land portfolio with the capacity to build another 2,652 more residential properties.

Original story: Eje Prime

Translation: Carmel Drake

Insur Carves Out its Property Development & Rental Businesses

29 January 2018 – El Confidencial

In order to adapt itself to the preferences of investors, Grupo Insur is carrying out the separation of its two main branches of activity: property development and real estate management – the latter arm will hold onto the rental properties. This carve-out could be described as historical given that the firm, which is listed on the main stock market and led by Ricardo Pumar, has used the combination of both businesses as its best antidote against the cyclical crises of the real estate sector. But now, although the two activities will continue to be owned by the parent company and consolidated for reporting purposes, they will generate independent income statements, belonging to the two subsidiaries.

According to sources close to the Sevillan company, the first step in this sense has been to increase the share capital of Insur Promoción Integral, the real estate parent company, to reach assets worth €80 million. The firm had a frantic 2017 in terms of house sales, with activity soaring by 41% in the last two quarters to reach €37.4 million between June and September (including the sale of properties jointly owned with third-party partners, whose amounts are not recorded by Insur).

In total, the group’s development activity generated sales of €60 million between January and September – up by 82% YoY – of which €28 million proceeded from revenues for the construction of housing developments, both in-house, as well as for initiatives with partners such as BBVA, Santander and the bad bank (Sareb). Insur planned to have 1,000 homes under construction distributed across 18 developments in Andalucía and Madrid by the end of last year.

By contrast, the real estate management activity is continuing to see a decline in its contribution, in line with previous years. Insur owns rental buildings spanning around 116,000 m2, almost all of which are located in Andalucía, although it is currently building a business park in Madrid. Its vacancy rate has fallen by 10 points in recent months, to 23% in September, and the rental income generated during the first three quarters of last year amounted to €7.5 million compared with €8 million during the same period in 2016.

The Junta de Andalucía, to which Insur has traditionally leased space, especially in Sevilla, vacated 12,000 m2 in May 2016 and whereby increased the total amount of space that it has stopped leasing during the final years of the crisis to 33,000 m2. Insur details in its accounts to September that the annualised rental income from tenants that have already signed contracts (not all of them have moved in yet as the offices are being refurbished) is €12.7 million. The picture of this business area is completed if we look at the request for additional information about the accounts for 2016 that Insur sent to the CNMV in October, which shows that each year it spends €6.8 million on these rental properties (…).

Coverage from Sabadell

For all these reasons, and according to the same sources, the managers of Insur rule out the creation of a Socimi to group together the real estate management activity, for the time being, given the need to improve its results and have better visibility over its evolution in the future. Moreover, there is no need for it to provide liquidity to its shareholders, given that 43% of Insur’s share capital is free-float. The company’s 15 directors control 37.5% of the share capital.

Insur’s share price has increased by more than 50% over the last 12 months, to reach €12.50. Its shares are soon going to be covered by analysts at Banco Sabadell, who will join the more specialist firms that have been following the stock until now: Arcano, Kepler and Fidentiis.

Original story: El Confidencial (by Carlos Pizá de Silva)

Translation: Carmel Drake

Non-Ibex Property Developers Also Shine: Quabit, Insur & Montebalito

5 January 2018 – El Confidencial

The real estate sector is starting to show green shoots and that is being reflected in the Spanish stock exchange. In 2017 alone, 19 companies made their debuts on the Alternative Investment Market, taking the total number to 47. Beyond the five large Socimis (Merlin, Colonial, Hispania, Axiare and Lar), there are alternative real estate companies that have experienced positive growth and that represent good investment options.

Quabit Inmobiliaria could summarise its 2017 in two ideas: financial support from large firms and capital increases. And, at the end of December, the company closed a capital increase amounting to €29 million, most of which (77%) was subscribed by Cobas Asset Management (Francisco Paramés’ management firm) and Kairos Investment. In total, it saw its share price rise by 16% during 2017 and experts believe that its share price will reach €2.40.

“In addition to the push that it has been given by the fact that large funds are including its stock within their portfolios, the listed company owns a significant number of properties as it heads into 2018. Moreover, its debt has decreased, and so it can afford to invest more. In addition, another positive factor is the performance of house prices, above all in Barcelona and Madrid, where it has its greatest presence”, explains an analyst at XTB Manuel Pinto.

Another real estate firm to watch is Montebalito, which saw its share price rise by 43% in 2017. “In general, we expected more from this stock. Nevertheless, it managed to close the year with a gain, thanks to the sale of a property in Berlin for €10 million, a deal that allowed it to clean up its balance sheet”, said Pinto.

Nevertheless, its performance could have been greater if it had not been for the depreciation of the currencies in Brazil, the Dominican Republic and Colombia, countries where the listed firm owns a significant number of assets.

All of this data is being supported by the boom in the real estate sector, which has managed to increase in value by more than 360% since 2012, according to the latest report from ‘Bolsas y Mercados Españoles’ (BME). “All of Spain’s real estate companies are very healthy, mortgages are rising, the sector is cyclical…In general, all indicators are still positive for these companies to continue growing during 2018”, says an analyst at Orey iTrade Roberto Berzal.

Moreover, Inmobiliaria del Sur has also joined the party, given that it managed to increase its share price by 35% (in 2017). “This company is improving its turnover and income, above all in the construction sector. Nevertheless, results from the last quarter mean that we are being cautious with the stock and waiting for its performance over the medium term”.

Original story: El Confidencial (by C. Alba)

Translation: Carmel Drake

Insur Records Profits Of €3.7M During First 9 Months Of 2017

30 October 2017 – Eje Prime

Grupo Inmobiliaria del Sur (Insur) has seen its results soar thanks to the good times that the residential sector in Spain is enjoying at the moment. The company recorded a profit of €3.7 million during the first nine months of the year, according to a statement filed by the group with Spain’s National Securities and Exchange Commission (CNMV).

The group’s turnover also soared during the first nine months of the year. Insur’s revenue amounted to €59.7 million, which represents an increase of 82.2% compared to the same period last year. The acceleration in Insur’s property developer activity and the rise in pre-sales (up by 43.1%) helped this growth.

By category, property development contributed €32.4 million to Insur’s total turnover during the first nine months of the year, compared to €21 million in the same period last year. Revenues from construction, leases and management contributed €18.3 million, €7.5 million and €1.5 million to the group’s turnover, respectively, during the nine months to September.

One of the group’s milestones in recent months has been its entry into the co-working sector, with the launch of the iSspaces business centre in Sevilla, a building with a surface area of 1,800 m2 comprising 30 offices.

Original story: Eje Prime

Translation: Carmel Drake

Private Housing Developments Reactivate Sevilla’s Crisis-Hit Neighbourhoods

26 October 2017 – Sevilla ABC

The new residential expansion zones planned for Sevilla and its metropolitan area will move from paper to reality over the next five years. The economic recovery and express reactivation of the property sector will allow neighbourhoods to be established once again, after the crisis reduced many of them to isolated developments without any services or public infrastructure.

Perhaps the clearest example of this new panorama is Entrenúcleos, in Dos Hermanas, where plans are afoot to construct 2,500 homes. The project has been entrusted to Insur and BBVA, which has already started to market the first phase, involving almost 300 properties. That development will be built in parallel to that of the social housing blocks promised by the real estate firm Altamira – a subsidiary of Banco Santander – and the Ferrocarril group.

The growth of this Nazarene enclave was originally reflected in the PGOU approved in 2002, with a view to creating a neighbourhood with more than 20,000 inhabitants, almost a small city between the urban centres of Dos Hermanos and Montequinto.

The latter nucleus has also undergone significant residential expansion  in recent times thanks to the company Bekinsa, which has constructed several developments in the area around Avenida de Europa, the last remaining space left to build on, next to the Metro stop, where a couple of urbanisations have already been sold, for delivery this year, and where off-plan apartments are being sold, for delivery in 2019.

More buildings are going to be built next to these homes on plots, located next to the shopping centre, which have been acquired by Quintos, S.A., with capacity for 800 two-, three- and four-bedroom homes.

In the Andalucian capital, the cranes are already appearing in the neighbourhoods on the outskirts, where there are still large blocks of land left to populate. As set out in the Urban Development Plan, the city will continue to grow eastwards, with a new recently announced development. It will be constructed by the Madrilenian company Vía Célere, which has acquired the former plots of the real estate company Osuna after they ended up in the hands of BBVA. The investment has exceeded €26 million and will allow for the construction of 1,700 homes on the land closest to the water park, on the Airport Industrial Estate (…)

New neighbourhoods

The property developer Metrovacesa is also working on a residential plan of a similar scale on land in Palmas Altas, taking advantage of the interest that the new shopping centre will generate there and the recent agreement that it has reached with the Town Hall to push ahead with the initiative (…).

The final area of residential expansion in Sevilla is Hacienda Rosario, located next to Torreblanca, where 1,977 homes are due to be constructed around a large park, which will form the lungs of the new neighbourhood. Of those, around 800 will be social housing properties and the remainder will be private homes (…).

Another aspect that has caught people’s attention is the decided commitment from the American investment funds to the real estate sector in Sevilla. Several, such as Värde Partners (through Vía Célere) and Aedas Homes, which is leading the project in Hacienda Rosario, will be looking to the Andalucian capital to push ahead with their plans over the next five years.

Original story: Sevilla ABC (by Elena Martos)

Translation: Carmel Drake

Insur Launches Its Co-Working Business With 1,800m2 Space In Sevilla

17 October 2017 – Eje Prime

Insur is moving into the co-working sector. The Andalucían real estate company has launched an iSspsaces business centre in Sevilla. The building, which has a surface area of 1,800 m2, contains 30 offices, three meeting rooms and one training room with capacity for 80 people. With this move, the group is following in the footsteps of WeWork and Spaces, which have both opened their first centres in Spain in the last month.

This is the first space of its kind in Andalucía, “a place adapted to the new needs of companies that are looking to bring themselves in line with current models of working”, explains the Director of Insur, Alejandro Fernández.

According to Fernández, “the total saving in terms of investment in this business centre compared to a traditional office is 84.7%”. The offices measure 5nm2 each, with space for between one and ten desks.

iSspaces is located in the Edificio Insur, on Avenida de Diego Martínez Barrio 10, in Sevilla, next to some of the city’s strategic transport hubs, such as the San Bernardo metro and train station, several bus stops, the Santa Justa train station and with fast access to the motorways linking with Málaga, Cádiz and Huelva.

The co-working business is entering Spain with a vengeance in 2017, as shown by several investments undertaken in recent months in Barcelona and Madrid. In the Catalan capital in September, the North American multinational WeWork, which specialises in the management of coworking spaces, leased an office building in the 22@ district of Barcelona, thanks to an agreement signed between the real estate developer Grupo Castellví and the real estate funds Stoneweg and 1810 Capital Investments, according to Eje Prime. Moreover, during the same month, the company also signed a lease for another property in Madrid, owned by Colonial, on Paseo de la Castellana.

Similarly, another company in the sector, Spaces, has opened an office measuring 1,500 m2 in the centre of Madrid, on Calle Manzanares, whilst it awaits the opening of its first centre in Barcelona, in the 22@ district.

Original story: Eje Prime

Translation: Carmel Drake

Insur & Anida Launch New Development In Sevilla

27 September 2017 – Eje Prime

Insur and Anida, the real estate subsidiary of BBVA, are continuing to make progress with their joint business. Desarrollos Metropolitanos del Sur (DMS), the company constituted by the two companies, has started to market and construct the second phase of Selecta Arquímedes, located in the Entrenúcleos project, in Sevilla. The property developers will invest €31 million in these two initial projects, which mark the revitalisation of the area in the context of the real estate recovery.

In October, construction of this new development of 61 family homes is expected to begin. The developments, which form part of the residential project Sevilla Selecta Entrenúcleos, will start their journey with an open doors event, to be held this Thursday, Friday and Saturday, when interested parties can visit the show home.

DMS states that it has carried out the development of these new family homes given the success of the sale of the first development, Selecta Rodas, where it is building 54 family homes, which are expected to be completed by the end of 2018.

Selecta Entrenúcleos spans a buildable area of 292,726 m2, which will include, during the course of the various phases, 2,434 homes and retail space, comprising the most important real estate project in the Sevilla metropolitan area.

Original story: Eje Prime

Translation: Carmel Drake

Insur To Invest €135M Building New Homes In Madrid

25 November 2016 – Expansión

The real estate group Insur is planning to invest around €135 million on the development of new homes in Madrid over the next three or four years. These homes will be constructed on land that the company has already acquired in the capital, according to comments made by the firm’s Chairman, Ricardo Pumar.

The real estate market in the capital, along with the Costa del Sol, constitutes Insur’s “major focus” for the geographical diversification of its business, which until now, has been centred in the south of the country.

Insur will take a step forward in its diversification strategy to grow in Madrid, which is a “more competitive, but safer market”, said Insur’s Chairman. To this end, the company has invested around €45 million buying plots of land in the capital.

Original story: Expansión

Translation: Carmel Drake