Blackstone Launches Large Sale of Buildable Land After Acquiring Aliseda

6 September 2018 – El Confidencial

It was just a matter of time. Aliseda, the servicer of Banco Popular, now controlled by Blackstone (51%) and Santander (49%), is starting the school year by looking for buyers for 270 residential plots and work in progress developments, with a total buildability of more than 2 million m2, distributed throughout Spain.

It is the most important land sale currently underway in Spain and, unlike what is happening in other areas of the market, it will not involve a block sale of assets, but rather possible interested parties may acquire each plot individually, which will allow for the entry of local property developers into a market that has been dominated until now by large property developers and investment funds.

The assets are located in 43 Spanish provinces. They consist of 231 plots in total, mainly buildable plots or plots under development, and 39 projects in progress. Many of the sites are located in Galicia, Levante, Costa del Sol and the Canary Islands; the latter market has been especially active in recent months.

“Unlike other sales processes, the operation that Aliseda is now putting on the market allows investors the possibility of submitting an offer for any of the plots independently, which means that they can structure the perimeter that best suits their needs and investment criteria. In this way, both local property developers, as well as institutional investors will have the opportunity to participate under equal conditions”, says Adolfo Blázquez, Director of Land at Aliseda.

Local developers and national developers looking to grow in volume and build large developments may bid for the plots, as may institutional investors looking to buy large blocks of buildable land – a scarce and very sought-after asset, especially in the hottest markets of Madrid, Barcelona and the islands.

Meanwhile, Samuel Población, National Director of residential and land at CBRE, the exclusive consultancy firm selected to launch the sales process, says that “the shortage of buildable land in the Spanish market has become one of the great barriers for property developers. Thus, the activation of residential land sale processes, such as this operation by Aliseda, places prime raw material on the market, which will gradually start to satisfy the high demand that currently exists”.

The process began on 7 September, with access being granted to information about the assets, and will go on until December with the closure of selected bids.

In March, the US fund and Banco Santander created Proyecto Quasar Investments, the holding company that groups together the real estate portfolio of Banco Popular and the marketing platform Aliseda. Blackstone controls the majority of the capital in the new company and also takes care of its management, led by Eduard Mendiluce, the CEO of the company. Mendiluce is also the most senior executive of Anticipa, the other large real estate firm that the fund owns in Spain and the former head of Catalunya Caixa Inmobiliaria.

Original story: El Confidencial

Translation: Carmel Drake

Ministry of Development: Spain Signed 60,000 New Home Permits in 2017

5 June 2018 – Eje Prime

Spain is still a long way from the dizzy heights of 2006, but its stock of housing is gradually recovering the colour it lost during the decade when the sun shone very little over the new build sector. Last year, 60,888 municipal licences were signed for the construction of new homes, which represents almost twice as many as the 31,213 permits that were granted five years ago, according to data from the Ministry of Development.

Moreover, in YoY terms, the increase in the number of licences for the construction of residential buildings was 6.5%, with even greater rises in certain autonomous regions, such as Cataluña, where the increase to November exceeded 50%.

Nevertheless, the region where most new homes are being built, Madrid, recorded a slight decline in 2017. Following a significant increase in the number of licences during the beginning of the new economic cycle, last year, that market for the construction of new homes lost speed with a decrease of 4.4%.

In total, in the Spanish capital and its surrounding area, 14,018 licences were signed last year for residential construction, a figure that doubles the number recorded in 2016, but which represents a decrease of more than 650 homes at a time when there is great demand from Spanish and international investors.

The recovery of the Madrilenian residential market is clearly understood in the increase in the number of licences for the construction of new homes experienced first between 2013 and 2015, and, more importantly, during 2016. Five years ago, 6,134 permits were signed in the central region, in an annus horribilis that followed a 2012 in which Madrid approved 17,000 licences. After that, 24 months of stabilisation in the segment with the registration of between 7,000 and 8,000 licences (in total) for new homes, proceeded a 2016 that doubled the figures with 7,500 administrative signings of contracts for residential development.

The shortage of land and the obstacles imposed by Town Halls such as Madrid’s (…) have led to a fall that is heating up the market and generating problems for the whole sector. Other autonomous regions, such as  Navarra, Aragón, Asturias and Murcia also recorded decreases in 2017, going against the tide (…) and once again showing signs that Spain is moving at two speeds in the residential sector.

Significant increases on the Mediterranean Coast 

The Mediterranean coast is proving to be the engine for new housing in Spain. Regions such as Cataluña, the Community of Valencia, the Balearic Islands and the Málagan section of the Costa del Sol are registering significant growth figures in terms of the number of licences granted for the construction of housing.

Cataluña is on a roll with the construction of homes, with an increase of 50% during the first ten months of last year. To November, 9,815 licences were signed and sources in the sector have said to Eje Prime that the forecast for the end of the year was 12,100 permits, up by 35% compared to 2016 (…).

Heading south, the Community of Valencia has developed in a similar way to the Catalan market over the last five years. It doubled its annual figures between 2013 and 2017, from 3,142 permits to 6,588, but the greatest increase came in 2016. In just twelve months, the Mediterranean region increased the number of licences from 4,712 to 6,540, up by 39%.

The markets in the Balearic Islands and Andalucía, where the Costa del Sol plays a prominent role, have also shown clear signs of improvement in recent years. On the islands, permits for new build almost tripled between 2015 and 2017 from 826 to 2,391 (…).

Meanwhile, in Andalucía, although the growth percentage was similar, the increase was calculated on a larger volume of homes. As one of the areas with the highest demand for new home permits, the region (…) closed 2017 with 12,363 licences. Just five years earlier, that figure barely exceeded 5,000 (…).

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Registrars: 99,343 Second-Hand Homes Sold In Q2 2017

4 September 2017 – Expansión

More than 1,000 second-hand homes were sold per day in Q2. During the second quarter of 2017, 99,343 second-hand house sales were recorded, the highest quarterly figure since 2007. That statistic confirms the consolidation of the residential market.

Over the last 12 months, 429,624 properties were sold, and so the experts consider that the sector is reaching its cruising speed. Moreover, they forecast that prices will rise by around 5%, which is the “healthiest” rate to avoid a bubble (…).

Each day, 1,090 second-hand homes are sold in Spain, according to data from the College of Registrars. It is true that not all of those homes are strictly “second-hand”, given that although they have all been sold in the past, some of them have never been lived in (those sold to the banks). However, new build sales are also recovering and overall, demand is booming. Over the last twelve months, 429,624 homes were sold, which is very close to the psychological threshold of 450,000, which real estate analysts consider would represent a return to normality in the housing sector.

“In most markets, the recovery is starting to take hold or has already been established”, said Julio Gil, President of the Real Estate Research Foundation. In his opinion, there are three speeds of recovery: “The first, in large capital cities, islands and the most established areas along the coast. The second, in the most heavily populated capital cities. The third, in small capital cities and areas without much activity”.

“The forecasts indicate that 2017 will close with between 450,000 and 500,000 residential property sales. I think that we are going to reach cruising speed”, says Manuel Gandarias, Founding Partner and Director General at Civislend PFP (…).

New build sales are taking off

“New builds are starting to gain ground. All of the off-plan sales made in 2014, 2015 and 2016 are starting to be recorded in the statistics now. The numbers are going to start to grow”, says Gandarias. According to Julio Gil, this recovery depends “on demand from the youngest generation, i.e. from first-time buyers, being able to access the market”. In reality, new families have been displaced to the rental market, which is experiencing a boom: rental prices are rising significantly and returns on homes are much higher than those being offered on deposits and public debt.

Gandarias explains the effect of this displacement on the buy-to-let market as follows: “There is still a lot of upwards potential for new builds. We are always talking about pent-up demand, and that demand exists, but it still doesn’t fulfil the solvency criteria demanded by the financial institutions”. Gil adds that “ It is absolutely necessary (for society) to redouble efforts in terms of access to housing for young people, with help to make purchases that can be reversed. That is one of the major challenges facing the housing market.

In other words, the market could still grow more. That will happen if employment continues to grow. However, there is a significant threat to mortgage financing and therefore home buying: that of a possible increase in interest rates.

The inevitable rise in interest rates

“A large part of the current recovery is due to the extraordinarily low interest rates” says Gil. “A rise in rates, which will happen sooner or later, will have a significant impact on the real estate market”. The other factor that will determine the behaviour of the future growth of the sector will be the behaviour of demand from first-time buyers.

Meanwhile, house prices are continuing to rise, but not by too much, dispelling fears of a new bubble. In comparison with the same period last year, second-hand house prices have risen by 1.7%, according to Idealista, up from €1,529/m2 in August 2016 to €1,554/m2 now. The highest rises were seen in the Balearic Islands (+1.7%), followed by the Canary Islands (+0.8%), Cataluña and Castilla-La Mancha (+0.7% in both cases). They were followed by prices in Comunidad Valenciana (+0.6%) and Andalucía (+0.5%) (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Playasol Hotels Forecast Sales Growth Of 13% In 2017

24 April 2017 – Expansión

Three years after it rose from the ashes and was taken over by the venture capital fund Hiperion, Playasol Ibiza Hotels – whose portfolio contains more than 4,000 rooms – is planning to complete the refurbishment of its hotel stock and is preparing to make acquisitions and expand its business.

The CEO of Playasol Ibiza Hotels, Antonio Domenech, explained that, after the judicial and liquidation administration process, Hiperion took over the operation and management of Grupo Playasol, whilst the real estate company Sunparty Real Estate took control of the assets. From that point on, the shareholders implemented a business plan, which has just seen the completion of its third year.

“Although the fund’s initial intention was to create value and sell, at the moment, its vocation is more industrial. We are not considering a fast-selling scenario”, said Domenech, in an interview with Expansión.

The director explains that, in the framework of this commitment by the shareholders, Playasol is analysing opportunities for growth, both in the Canary Islands, as well as on the peninsula. “We are analysing operations in nuclei where there is a critical mass and in the holiday segment”. In this way, Playasol is evaluating opportunities in mature destinations in the Canary Islands, Costa del Sol and Levante. “We are focusing on the Spanish Coast and the islands”, he said.

Forecasts

Playasol, which closed last year with revenues of €69 million, up by 24.7% compared to the previous year, expects to increase its sales by 13% this year. The hotel chain employs an annual average workforce of more than 600, peaking at 1,200 workers in the high season.

“These results not only fuel the group’s growth prospects, they also endorse the current strategy based on the search for greater efficiency, reinvestment in assets and financial discipline”.

Domenech highlighted Playasol’s current “solvency”. “We have scrupulously fulfilled all of the objectives agreed with the unions, we have even created jobs and our relationship with the local administrations is excellent. We have very much been part of the solution to the problem”.

Hotel refurbishment

Domenech said that the company has invested more than €12 million renovating its establishments and that it plans to allocate between €16 million and €25 million to improve its other assets between now and 2018, “depending on what we managed to agree with the local administrations in terms of procedures and licences”. “This year we are refurbishing fourteen establishments, including the complete renovation of four. The hotels in our portfolio are in excellent locations, but the properties were built in the 1960s and 1970s and so they need intensive investment”. (…).

The group has 37 hotels and apartments in total (36 in Ibiza and one in Mallorca) plus four others that are not currently operational. “The aim is for them to be operational for the 2019 season”. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Why Did Foreigners Buy 72,000 Homes In Spain In 2014?

8 May 2015 – Expansión

When it comes to buying homes in Spain, foreigners are primarily motivated by the quality of life, the sun and good flight connections to their home countries.

The volume of house sales increased by 21.6% in 2014. In total, 365,594 transactions were closed, according to the Ministry of Development. It is clear that the real estate market has begun its recovery and, to a large extent, that is due to the interest that the real estate market is sparking amongst investors from overseas. Purchases by foreign residents in Spain have grown in recent months, partly due to the incentives that the Government has introduced – mainly the residence visa – but above all due to the opportunities offered by the real estate market here. Foreigners purchased more than 72,000 homes in Spain last year and the average transaction value was €152,000.

But, who are these foreigners that are purchasing homes in Spain and what is it that draws them to our country? “Many of these overseas investors are tourists who come to Spain on holiday and after spending time here, decide to invest in a second home”, says a study performed by TM Grupo Inmobiliario, which has a stand at the SIMA (Salón Inmobiliario de Madrid or Madrid Real Estate Fair) being held until 10 May. “They are primarily motivated by the quality of life, the sun and good flight connections to their home countries”, says the report, which concludes that the profile of the average purchaser is a man, aged 53 years-old, with children. On average, these purchasers have an annual income of €66,000. There is also a significant percentage of resident buyers in our country who are making Spain their new home given the improvement in the economic environment.

Britons are the nationality most interested in purchasing homes in our country; they accounted for 18.62% of all transactions closed by foreigners (in 2014). They are followed by the French (9.39%), Germans (7.25%), Belgians (6.90%), Italians (6.13%), Russians (5.83%), Swiss (5.83%), Chinese (4.14%) and Norwegians (3.74%). In recent years, interest from Russian nationals in Spain had increased significantly, but the decline in the Ruble and in the price of petrol (last year) reduced their desire to purchase. There is also a great deal of interest from Mexicans and Colombians in buying a home in our country, but in absolute terms the numbers are not yet significant. The vast majority of them have a high purchasing power and are buying second homes here.

The decrease in house prices has not affected all areas equally, but overseas investors are primarily interested in three main areas: the Mediterranean Coast (Barcelona, Alicante, Girona and Málaga), the Islands (above all Mallorca, Ibiza and Tenerife) and Madrid.

Original story: Expansión (by E.V.)

Translation: Carmel Drake