Tag: Juan Velayos

Neinor Buys 7,000m2 Plot Of Land In Valencia

5 April 2017 – Expansión

Neinor Homes is stepping on the accelerator and strengthening its presence in Spain by entering a new region. The property developer – which debuted on the stock market on Wednesday 29 March –  has completed the purchase of its first plot of land in Valencia, with a buildable surface area of 7,000 m2, where it will construct 54 homes. This acquisition allows the company, which is controlled by the US fund Lone Star, to expand its operations to Valencia, where it is considering opening a local office.

According to the company, the market in Valencia displays the characteristics that it demands for its investments: a shortage of structural supply, a lack of competition, positive population growth and unsatisfied demand. For this reason, it is looking for “new opportunities in the city”.

Since the beginning of January, the company has invested €51.5 million in the purchase of buildable land in Sitges, Gerona, Sabadell, Mairena de Aljarafe (Sevilla), Sazares (Málaga), Madrid and Valencia. These plots will allow the developer to build more than 700 homes on almost 90,000 m2 of land.

The CEO of Neinor, Juan Velayos (pictured above), said that the purchases made during the first quarter place the company on the road to exceed its annual objective in terms of acquisitions, set at €200 million. “It is a confirmation that we are still able to buy carefully selected plots of land from non-natural landowners, such as banks and companies without any development activity”.

In this way, sources at Neinor underlined that each one of these operations exceeds the profitability objectives set by the property developer and that they were closed only after rigorous legal, technical and commercial due diligence had been completed.

The firm has 1 million m2 of land in its portfolio, with a gross value of €1,120 million, on which it plans to construct more than 9,000 homes.

At the end of February, the company had 60 active developments – already started or planned to be launched – in País Vasco, Madrid, Cataluña, Andalucía and the Community of Valencia, on which it plans to construct 4,002 homes.

The property developer plans to reach cruising speed in 2020, with the completion and delivery of between 3,500 and 4,000 homes per year.

The company, which plans to announce its results on 26 April, closed last year with revenues of €228.6 million and a gross operating profit (EBITDA) of €9.6 million.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Neinor’s Share Price Rises By 3.16% On First Day Of Trading

31 March 2017 – Eje Prime

Neinor Homes ended its first day of trading on the stock market on a high, as its share price increased by 3.16% following its debut on Wednesday. Its shares ended their first trading session at a price of €16.98 per share compared with the price of €16.46 set for their debut on the stock market.

The largest real estate development company to be listed in the last decade saw its shares appreciate by 9.96% at one point, given that during trading its share price fluctuated between a low and high of €16.98 and €18.10 per share, respectively.

The real estate company’s shares began trading at 12:00, following the traditional ringing of the bell by its CEO, Juan Velayos (pictured above) and the representative of Lone Star, Juan Pepa, at the Bilbao Stock Exchange, where the firm has its corporate headquarters.

The objective of the real estate company’s IPO is to reduce debt and continue acquiring plots of land in areas with strong demand. Neinor intends to list on the stock markets in Madrid, Bilbao and Valencia.

The group owns one of the largest portfolios of buildable land in Spain, comprising 161 developments and 9,086 homes. As at 31 December 2016, its buildable land portfolio was worth €1,120 million and had a development value of €2,548 million.

Original story: Eje Prime

Translation: Carmel Drake

Demand For Neinor’s Shares Far Exceeds Supply In A Few Hours

21 March 2017 – Expansión

The public share offering (OPV or ‘oferta públic de venta’) and share subscription that Neinor Homes launched on Friday, for the purpose of debuting on the stock market on 29 March, was covered within just a few hours, according to the real estate company.

The company owned by the fund Lone Star received requests for shares for an amount that “far exceeds” the supply from international institutional investors, primarily in France, the UK, USA as well as from Spanish entities.

The real estate company led by Juan Velayos considers this over-demand to be a “sign of the strong interest from qualifying investors” in participating in the company and in its process to debut on the market.

By virtue of the timetable established for debuting on the stock market, investors still have time to request shares in Neinor, until 27 March.

Neinor plans to place up to 60% of its share capital in the market at €16.46/per share. By virtue of the operation, the company has launched a public offering for share subscription (OPS) of 6.07 million new shares and an OPV whereby the current owner of the company, the fund Lone Star, will sell another 37.01 million shares.

The debut on the stock market forms part of the strategy that Neinor Homes designed when Lone Star constituted the firm in 2015 using real estate assets it had purchased from Kutxabank. The operation seeks to expand the firm’s shareholder base and incorporate new shareholders, as well as to raise resources to pay off debt.

Original story: Expansión 

Translation: Carmel Drake

Neinor Buys 7 Plots Of Buildable Land In El Cañaveral (Madrid)

27 December 2016 – El Confidencial

Developments in the south-east of Madrid have come under the spotlight of Neinor, one of the largest property developers in Spain, which has just marked a turning point with the purchase of several plots of buildable land in El Cañaveral, the most advanced neighbourhood in the capital’s ambitious expansion project.

The company led by Juan Velayos has acquired seven plots of land, with a combined buildable area of 47,000 m2, where it plans to start to build almost 500 homes, according to sources familiar with the transaction. The company itself has declined to make any comments.

Specifically, Neinor wants to construct 24 detached homes and 459 multi-family homes, plans which would lead to the definitive launch of El Cañaveral, where 14,000 homes are expected to be created in total, to house a population of around 50,000 people.

Nevertheless, Velayos’ plans for this development go much further, given that it is one of the few areas in Madrid where it is possible to buy buildable land, in other words, land that is ready to be developed.

According to the same sources, the company is holding advanced conversations to acquire four other plots, whose buildability exceeds 11,300 m2 and where it hopes to build another 95 homes.

Appetite for growth

Since its re-launch just over a year ago, Neinor has shown a strong appetite for growth, and to achieve that objective, it is actively searching for blocks of buildable land where it will be able to start to build new homes quickly.

In fact, the road map that the company announced at the end of 2015 aims to develop around 3,000 homes per year and to establish a permanent bank of land to enable it to build 10,000 homes. (…).

In addition to these ambitious business plans, another major corporate challenge promises to mark Neinor’s future in 2017, namely, its debut on the stock market. It is already working on the IPO and the size of the company will play an important role in its success.

The current firm Neinor was created by Lone Star, one of the international funds that was most committed to Spain during the worst years of the crisis, from the foundations of Kutxabank’s former real estate group.

This company, named Neinor by the Basque entity, was created in 2012 from the sum of the different real estate activities of the Basque former savings banks – BBK, Vital and Kutxa – and the Andalucían entity Cajasur.

Lone Star bought the property developer at the end of 2014 for €930 million, in an operation that represented a real milestone for the real estate sector, which was still licking its wounds, given that it represented the largest transaction by a company in the sector since the outbreak of the crisis.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Lone Star Will List Neinor On Stock Market In 2017

27 October 2016 – Cinco Días

The reactivation of the real estate sector in Spain has a future stock market star in the making: Neinor Homes, the former property development arm of Kutxabank, which the US private equity fund Lone Star acquired in May last year. The goal is to list the company on the stock market in 2017 and it has been assigned a preliminary valuation of around €2,000 million.

Neinor Homes belonged to Kutxabank until May 2015, although the sale agreement with Lone Star was signed in December 2014. The US private equity fund acquired the company that groups together properties from the former Basque savings banks, created in December 2012 as a bad bank, under the terms of the royal decree governing the clean up and sale of real estate assets in the financial sector.

The company was sold to the US private equity firm for €930 million, but Lone Star’s goal was not to liquidate the property developments and land that the entity’s property developer owned and pocket the corresponding gains. Instead, Juan Velayos (pictured above), CEO of Neinor Homes, announced as soon as he joined the company – previously he worked for Renta Corporación, but left in 2011 to join PwC – that the mission was to invest in land and construct developments.

Financial sources indicate that the company is already holding negotiations to engage investment banks to assist with its debut on the stock market, expected in 2017. Preliminary appraisal values, pending the publication of the company’s accounts for 2016 and the evolution of the real estate market, amount to around €2,000 million. That figure represents a valuation that is more than 100% higher than the price at which Lone Star purchased the company.

“From day one, the company was designed to list on the stock market. It is the natural step”, say sources at the company. “We are working with investment banks to evaluate the option of debuting on the stock market in 2017, but the final decision has not been taken yet. We will do it when we think that it is the optimal time in the market”, add the same sources.

It will be the first debut by a bread-and-butter property developer on the Spanish stock market in recent times, given that the only debuts in the sector since the crisis have involved Socimis (Lar, Hispania, Axiare and Merlin, which list on the main exchange); and 25 Socimis, which have debuted on the Alternative Investment Market (MAB). Neinor is a rarity, because it has moved away from the traditional real estate ownership model focused on rental income and the office market. At Neinor, revenues are driven by residential property developments.

The last traditional real estate company to debut on the stock market was Realia on 6 June 2007. The share price of that firm, hwich is controlled by Carlos Slim, has plummeted by 86% since that placement.

Velayos designed a €1,000 million investment plan for Neinor’s land. In 2015, the firm recorded sales of €340 million and EBITDA of €25 million. Nevertheless, the latest accounts filed with the commercial registry show a clear split between the two periods –the firm recorded losses of €70.9 million between January and June 2015 and losses of €11.2 million between July and December.

The company has signed an agreement with Kutxabank to administer and manage its assets for an initial period of seven years, extendable on an annual basis, which guarantees it recurrent annual income. The accounts filed with the commercial registry show that the firm recorded revenues of €14.4 million in H2 2015 by virtue of that contract. (…).

Original story: Cinco Días (by P.M. Simón, L. Salces and A. Simón)

Translation: Carmel Drake

Neinor’s CEO, Juan Velayos, Shares His Views Of RE Market

12 May 2016 – Expansión

Neinor Homes was created in May last year with the aim of leading the property development market in Spain and making a name for itself for quality and customer service. That is still the group’s vision, according to the company’s CEO, Juan Velayos (pictured above), which aspires to be an “industrial, professional and transparent” company. The property developer, created just a year ago from the purchase of the real estate subsidiary of Kutxabank by the US fund Lone Star, owns land worth around €800 million. “This is the largest stock of quality, developable land in Spain, with a surface area that would allow us to construct 8,500 homes”, said Velayos.

The director explained that for years the sector was guilty of a lack of transparency. He insists on the importance of placing the customer at the centre of the business, as well as of relying on new technologies, sustainability and quality standards to lead a transformative change in this industry. “We have to distance ourselves from the image of shady real estate deals”, he said.

In this sense, Velayos believes that the dawn of the Socimis in Spain is “good news”. The director said that, following the crisis, we now need competent institutional fund managers in the property industry.

In terms of the entry of his business into non-developable land, Velayos acknowledged that, “in one way or another, the leading property developer in the country will have to participate in the ‘land factory’. But never as our main business”. The director also pointed out that Neinor has a stock of homes that will last five years.

The company aspires to deliver between 2,500 and 3,000 homes per year. Currently, it has around ten projects in the commercial launch phase and another 21 projects to be launched this year.

The real estate group is currently constructing 300 homes, is about to start building another 300 homes and will start constructing another 800 in Q3 2016.

IPO

Regarding a possible IPO, Velayos explained that it would be a “natural step”, although “at the moment”, it is not something is being considered. “We will debut on the stock exchange if the company’s leadership so demands it and the shareholders require it”, he said.

The Company closed last year with turnover of €340 million and a gross operating profit (EBITDA) of almost €25 million.

More professionalism

To achieve its objective of “putting a rubber stamp” of quality on its services, the company has doubled its workforce, from 80 to around 170 in just one year, and has launched a dedicated communication channel with its clients, Neinor Experience.

Velayos explained that it is an exclusive community for Neinor’s clients, through which the property developer offers advice on all issues, from the point a buyer reserves his home to the hand over of the keys and the subsequent after-sales service.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Servihabitat: House Prices Will Rise By 6% In 2016

18 November 2015 – Expansión

According to Julián Cabanillas, the CEO of Servihabitat, the volume of house sales could reach half a million units in 2016.

This data indicates that we can expect an acceleration in the level of activity in the sector with respect to this year. The company expects 2015 to close with an increase in house prices of between 2.3% and 2.6% and the sale of around 400,000 homes.

During an informative event organised by Europa Press, Cabanillas echoed the messages of the President of Merlin Properties, Ismael Clemente, and the CEO of Neinor Homes, Juan Velayos, in highlighting the trend towards recovery in the real estate sector. (…).

“In the absence of externalities, we are facing a positive cycle, at least in the real estate sector, where we should have a strong tail wind for an extended period”, said the President of the Socimi, who said that the current expansion of the sector could last for up to seven years, “if it is properly managed”.

In terms of the segment for the development and sale of homes, “it has taken a bit longer to get going, but their ducks are now all in a row”, said the CEO of Neinor Homes. “We expect to see a flurry of activity over the next few years”, he said.

Nevertheless, Velayos considers that one of the challenges facing the sector, which could strenghthen this recovery, is for developers to stop being so “self-centred” and to think less about supply and more about demand, in terms of the types of homes that citizens actually want. According to his predictions, the sector is facing some “important challenges”.

In this sense, the CEO of Servihabitat said that the stock of unsold homes accumulated during the crisis is reducing at annual rates of 30% and that now certain areas are experiencing significant demand, including parts of Madrid and Barcelona, “where clients are no longer able to find the real estate products they are looking for”.

Moreover, he said that the “rental market is here to stay”, highlighting that the percentage of households that live in homes under lease arrangements has risen to represent 21% of the total, from 15% before the crisis. And he predicts that this figure will continue to rise.

Cabanillas attributed this increase in demand for rental housing to changes in social and family structures, as well as to the need for labour mobility and the fact that, after what happened with the crisis, citizens are more reluctant to get themselves into debt.

“These changes are going to force the sector to change and adapt”, said the CEO of Servihabitat. “Increasingly, more Spaniards can afford to take out a mortgage, but they are not doing so because owning a house is not something that they are even considering. In the same way, they are increasingly less likely to want to own a car, they would rather just rent one”.

Original story: Expansión

Translation: Carmel Drake

Lone Star To Spend €500M On Land For Homes in 2015

11 June 2015 – Bloomberg

Lone Star Funds, the private-equity firm founded by billionaire John Grayken (pictured above), will invest as much as €500 million this year buying land in Spain for housing developments as demand picks up.

“Despite the glut of homes in Spain, there are areas where stock is running out and we aim to fill that gap,” said Juan Velayos, CEO of Neinor Homes, the Lone Star unit seeking to become Spain’s biggest home builder. “We aim to build homes where there is solvent demand and where people can afford to and want to buy.”

Lone Star’s blueprint for Neinor signals the changing sentiment toward the nation’s residential property market, which is rebounding after a six-year slump when prices fell by as much as 40%. The company will buy land in Madrid, Barcelona, the Balearic Islands and some coastal areas where stock is being depleted, Velayos said in an interview in Madrid.

Dallas-based Lone Star bought Neinor from Spanish lender Kutxabank SA in December for €930 million. It has already signed contracts to purchase 230,000 m2 of land for €187 million to construct 2,050 homes, Velayos said. The firm will target middle class homebuyers aged 40 to 50.

House prices rose by 1.5% in the first quarter from a year earlier and there was a 9.4% surge in transactions. The Madrid region is helping to lead the revival, with sales jumping by an annual 20% in April, while the volume of transactions grew by 18% in Cataluña.

‘Astute’ Strategy“

“Their strategy has a very high chance of success as properties are literally flying off the shelf in these areas,” said Fernando Rodriguez de Acuña, head of Madrid-based property research firm R.R. de Acuña & Asociados. “Targeting that stratum of the population is very astute given that that age bracket normally has stable employment, savings and already some equity in housing.”

Both domestic and international buyers evaporated when the economy collapsed during the financial crisis, leading to an international bailout of Spanish banks and the worst recession in the country’s democratic history. An excess of credit-driven construction before the slump led to a surplus of more than 1.6 million homes after sales plunged from 955,186 units in the peak in 2006 to 365,594 units last year.

Possible IPO

“Demand for homes in Spain will never go back to the numbers we saw at the peak of the boom and for this reason we have carried out extensive research,” Velayos said. “Many excess homes and land are situated in areas that will never sell because there is simply no demand. So we only develop in areas where we have the complete conviction that people can and want to buy.”

An initial public offering of Neinor could happen if the plans for the company work out, Velayos said.

Spain has an excess of 1.6 million empty homes, of which as many as 60% were built in areas where there is no demand, according to Rodriguez de Acuña.

“Madrid, Barcelona and good areas on the coast such as Málaga are where we are seeing the most activity and the jump in transactions that we are seeing corresponds to those areas,” Rodriguez de Acuña added.

Original story: Bloomberg (by Sharon Smyth)

Edited by: Carmel Drake