Tag: landowners

Countdown to Los Berrocales: Investment of €4.4bn Over 20 Years

18 February 2019 – Eje Prime

More millions for Los Berrocales. Joaquín Gómez, manager of the Los Berrocales Compensation Board, expects investment of up to €4.4 billion from the owners and future housing developers over 20 years. That amount will be added to the €200 million that has already been invested by the owners in pipelines, collectors, infrastructures, service roads and earth movement work.

The proposal that has been reached with the owners of Los Berrocales is that the neighbourhood will be constructed in phases. First, phases I and III, which are expected to involve the construction of 10,000 homes over 10 years. The rest of the construction work will be carried out in the following decade. Up to 100,000 homes from the plan, located in Los Cerros and Valdecarros, will be suspended due to the requests filed for compensation against the Town Hall, according to reports from Cinco Días.

Nevertheless, the approval of the agreement does not mean that the construction work is going to begin immediately. In fact, Gómez expects that construction of the homes could begin in 2022 or 2023. For now, there are no threats of suspensions for political reasons given that Ahora Madrid, Ciudadanos and the PP are all in favour of the project. The position of Pepu Hernández, the likely socialist candidate, if he is elected mayor, remains to be seen.

The owners of the 8.3 million m2 of land include Habitat, Pryconsa, Santander, Caixabank and Liberbank. Another of the major landowners is the Town Hall of Madrid, which holds almost 8% of the plots.

Original story: Eje Prime 

Translation: Carmel Drake

Atlético de Madrid Expects to Close the Sale of the Calderón Plots in Early 2019

20 November 2018 – Eje Prime

Atlético de Madrid is proof of the importance that property can have when it comes to financing activity. The football club has decided to take out a mortgage backed by the Wanda Metropolitano stadium to secure its €200 million refinancing with Inbursa, the financial entity controlled by Carlos Slim, according to reports from Palco 23. The intention of the Board of Directors is to convert that debt into a long-term liability and obtain better conditions than those signed when the financing plan for the new stadium was modified. In parallel, the club is preparing the sale of the plots of land on the site of the Vicente Calderón, scheduled for the beginning of 2019.

The €200 million refinancing plan and the sale of the plots alongside the Manzanares River are closely linked. Two years ago, the Mexican bank offered the financing necessary to finish the building work at the Wanda Metropolitano, after FCC, the construction group that it also controls, refused to charge for its service through the delivery of units for urban development at the Vicente Calderón.

The contract allowed the parties to cancel the loan with the sale of the plot or with the payment of annual instalments for four seasons, which made the repayment of the loan very short term, in the middle of the expansion of the sports area. In the end, the club has committed to extend the term and so the liquidity injection that will result from the sale of the Calderón will not be used to repay the debt, but rather to make more resources available for the club’s daily operations, as well as for new projects and to access to the transfer market,  if necessary.

Sources at the club indicate that the second real estate operation will probably not be signed until next year, after the municipal government of Madrid failed to provide its definitive approval of the urban planning project until last week. “We think that the uses will be converted into plots and registered in the name of the club at the beginning of 2019, which is when we will proceed with the sale”, they said.

Obtaining all of the permits is the guarantee that the property developers will be able to undertake their projects without any problems. The definitive plan establishes 33,339 m2 for residential use, with a buildability of 132,344 m2; of that capacity, 13,234 m2 in total will be reserved for social housing properties. Tertiary use land will span 14,705 m2, with 13,893 m2 for public amenities and just over 73,000 m2 for green space and others.

The new owners will have to assume the urbanisation costs of €42.22 million, including the €22 million required for the demolition of the former Atléti stadium, without affecting the M-30 road, which passes under one of the stands. It is unknown whether the football club and the Mahou brewery or the future owners will assume that price, and what impact that will have on the final sales price (…).

Original story: Eje Prime (by M. Menchen)

Translation: Carmel Drake

Madrid Nuevo Norte’s New Offices will be Home to 125,000+ Employees

22 October 2018 – Eje Prime

Madrid Nuevo Norte, the focus of the recently announced new homes, is also going to be home to a business centre. Offices are going to be built in the financial epicentre of the Spanish capital to house 125,472 employees in total. Moreover, the district is going to be home to the tallest building in Spain, with up to seventy floors.

The project is going to house the Chamartín Business Centre, where almost all of the properties for businesses are going to be located. They will house two thirds of the 1.5 million m2 that are going to be dedicated to offices in Madrid Nuevo Norte, according to reports from Cinco Días.

The volume of business in terms of office development will exceed €10 billion; in the case of house building, that figure will reach €3.0 billion. The project’s economic report shows a range of profitability from the real estate business in the new district of between 11.2% and 16.4%.

After several adjustments, Madrid Nuevo Norte has decreased its total buildability by 21%, down from 3.37 million m2 per the initial plan to 2.66 million m2. Similarly, the district has been divided into four areas: Chamartín station, the business district, Fuencarral-San Roque-Tres Olivos and Fuencarral-Las Tablas. Each one will have its own timetable and urbanisation costs.

The project is going to be financed almost in its entirety by the landowners, which will disburse an average of €1.2 billion. With the aim of covering the urbanisation costs, the Town Hall of Madrid will spend €307.89 million, which will be added to €24.78 million from the Community of Madrid and €220.49 million from Adif, the concessionaire of the rights.

Original story: Eje Prime

Translation: Carmel Drake

Madrid Nuevo Norte will Generate €13.2bn of Business for the RE Sector

12 October 2018 – Eje Prime

Madrid Nuevo Norte represents good news for the Spanish real estate sector. The Town Hall led by Manuela Carmena expects the project, which received the green light at the end of September, to generate €13.2 billion of business for the real estate sector.

The urban development project, to the north of Chamartín train station, is going to house 10,485 new homes, as well as 1.5 million m2 of offices and another 103,119 m2 of commercial space. The acquisition of the plots will involve a total cost of €3.74 billion and the construction costs will exceed €2.78 billion.

The Town Hall of Madrid has confirmed that the tertiary assets will contribute the bulk of the income for the property developers that participate in the construction of Madrid Nuevo Norte. Together, the sales price of those properties will amount to €10.2 billion. In the case of the development of new homes, the business will amount to €2.98 billion, according to reports from Cinco Días.

The results of an economic study for the project show a range of returns of between 11.2% and 16.4%, although the Town Hall warns that the margin will depend heavily on factors such as the evolution of the real estate market and the acquisition price of the land. In terms of the latter, an orientative cost of €2,899.47/m2 is forecast for private housing located in the financial centre.

Following several adjustments, the total buildability of Madrid Nuevo Norte has decreased by 21%, down from 3.37 million m2 according to the initial plan to €2.66 million m2 under the current plan. In addition, the district has been divided into four areas: Chamartín station, the business centre, Fuencarral-San Roque-Tres Olivos and Fuencarral-Las Tablas. Each area will have its own construction timetable and urbanisation costs.

The project will have to be financed almost in its entirety by the landowners, who will disburse €1.2 billion on average. The Town Hall of Madrid is going to spend €307.89 million with the aim of covering the urbanisation costs, which will be added to €24.78 million from the Community of Madrid and €220.49 million from Adif, the concessionaire of the rights.

Original story: Eje Prime

Translation: Carmel Drake

Ciudadanos Blocks the PP’s House Building Plans for Alcobendas

24 November 2017 – El Confidencial

Ciudadanos has decided to block one of the most important urban planning operations left to be developed in the Community of Madrid, specifically, in the town of Alcobendas (114,000 residents). On Friday, the PP, which has a minority government, submitted a new attempt to the Urban Planning committee to approve the partial plan for Los Carriles, a new neighbourhood where the plan is to build 8,600 homes. The PP, with 12 councillors, who have been trying to get this project off the ground for years, do not have support from the majority opposition parties – PSOE, IU, UPYD and Sí se Puede—, which comprise another 12 councillors.

The decision lies in the hands of Ciudadanos (three councillors). Previously, those party members supported the PP’s plans (…) but they decided to vote against the project in the meeting on Friday and will do so again in the plenary session on Tuesday. (…). This new block puts in limbo the development of 2,172,909 m2 of land (5% of the surface area of Alcobendas) and business of around €2 billion.

The owners of the affected land include the town hall, the Archdiocese of Madrid and several landowners from the municipality, such as the Serrano Alberca family and the company San José del Taller de Nazaret, which owns 320,691 m2 of land, making it the largest individual landowner in this sought-after development.

A lot of money and a lot of interests have been buried in Los Carriles for 14 years now, waiting for the various political parties to reach an agreement. The initial idea for this development arose under the Socialist Government of José Caballero, who, in 2003, backed by the IU, started the first version of the project, which included 14,000 homes, 50% of which were due to be social housing properties. Nevertheless, that project never received the blessing of the regional Government, led at the time by Esperanza Aguirre.

Four years later, the PP took over the town hall once again and started a new plan, but with 40% fewer homes (8,600 in total). (…). But, even though the PP had an absolute majority in Alcobendas and in the Community of Madrid for many years, the project never ended up being finalised. (…) until September 2016 when the PP found an unexpected ally, the only councillor from Izquierda Unida.

The plenary for this month was called to approve the partial plan, which increased the number of social housing properties to 3,870. But the Madrilenian management of the IU did not support its councillor and he had to back down in the end. It was then that Ciudadanos called the project an “urban planning outrage”. “We do not support it. There is no sufficient demand for 9,000 homes. We do not want to build up Alcobendas to the hilt” (…).

In the face of the block, the PP decided to create a working group to try to reach an agreement, focusing in particular on Ciudadanos, its investiture partner.

In the end, after much too-ing and fro-ing, the agreement was signed between Ciudadanos and PP (…). The PP says that it has started to fulfil the agreement (…) but Ciudadanos does not see it like that (…) and has accused the PP of cheating them. “The matter has reached the Assembly of Madrid this week and, there, the Director General of Urban Planning in the Community of Madrid has explained that the partial plan does not comply with the law (…).

As a result, Los Carriles is going to continue in a dry ditch. Moreover, Sí se Puede and environmental groups say that the planned development is going to harm the ecosystem in Valdelatas, where there are a lot of oak trees and a sizeable population of wild boars. The project includes plans to build 800 luxury homes next to the regional park, a protected space. Without forgetting that the plan’s mobility study reveals that the new neighbourhood will add 156,932 daily journeys to the municipality, of which more than 95,000 would be in private vehicles. That would collapse the area even further (the exit to the north of Madrid from the A-1) which already suffers from serious traffic problems.

Original story: El Confidencial (by David Fernández and Ruth Ugalde)

Translation: Carmel Drake

“Valdebebas Is Ready To Welcome Companies Post-Brexit”

27 June 2017 – Expansión

Valdebebas – one of the largest urban planning projects in the Community of Madrid, with a land surface area of 10.6 million m2 – has fired the starting gun for what is expected to become the city’s “new financial and technological district”.

“We have land spanning more than 1 million m2 (equivalent to the surface area of almost 140 football pitches) available for tertiary use. People talk about Castellana Norte, but there is no development in Spain quite like Valdebebas. It is already ready to welcome companies from London searching for new locations after Brexit and any other multi-national companies”, explains Marcos Sánchez, Managing Director of the Valdebebas Compensation Board, which represents the owners of the land. Market sources indicate that the land owners include Monthisa, Bisbel, Vivienda Económica, Celteo, Coindeco and Inmobiliaria Espacio.

This business park will comprise twenty blocks, with buildabilities ranging between 9,000 m2 and 110,000 m2. It will house buildings that have between five and fourteen storeys.

The director said that, although they have not yet started “to sell” Valdebebas as a destination for companies, international investors, funds and hotel chains have already expressed their interest in the development: “We are still in the preliminary conversation phases. Until now, contact has been made because interested parties have been approaching us”.

For Sánchez, the aim of Valdebebas is to attract fin-tech companies and others relating to that sector. Moreover, it has the capacity to accommodate between three and four hotels and restaurant brands. “We have direct access to the airport and are well connected to the city centre. It is an unbeatable location in Europe and the world”.

In this sense, it is worth remembering that a bridge is being constructed to connect this area with Barajas Airport – T4, with a forecast investment of more than €20 million. “We have already moved earth and started building the foundations on both sides. The work, which was started in February, is going well and will be finished within two years”, he said.

Valdebebas has several advantages over the potential Operación Chamartín: the immediacy – with “windows of opportunity that can be benefitted from now” – its size and location, according to Sánchez. “Castellana Norte is our natural competitor; despite that we want that site to be developed as soon as possible and in the best way possible because we will all end up winning as a result”, he said.

Legal journey

In terms of the legal position, Sánchez acknowledges that, although Valdebebas has always been very judicialised – construction of between 800 and 1,000 homes has been suspended following a ruling by the Supreme Court – almost 100% of the residential property has been sold, the population already stands at 10,000 people and is set to reach 18,000 by the end of the year. In his opinion, it is “perfectly feasible” to reach agreements before the urbanisation is completed. “All of this administrative and judicial chaos will end when the urbanisation is handed over in two years time”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

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

Operación Chamartín: The Plot Thickens

30 September 2015 – El Confidencial

The small print of the agreements signed between the Government and the developers of Operación Chamartín, BBVA and San José, includes an important payment in kind that has gone undetected until now. A payment that will convert the Ministry of Development into one of the largest landowners of this development.

And so, not only will the company formerly known as Duch, now Distrito Castellana Norte, have to pay €1,240 million in cash to acquire the land (covering an area of almost 2 million m2) currently owned by Adif, it will also have to make a payment in kind, involving the transfer of urbanised land with buildability of 100,000 m2 for residential use.

This payment forms part of the principles of the agreement signed on 22 January between Duch and the public entities Adif, Renfe Operadora and Adif-Alta Velocidad, the owners of the land where the majority of Operación Chamartín is expected to be constructed and, therefore the main beneficiaries of this urban planning project.

Specifically, when this development, whose official sign off has so far been delayed for more than two decades, was reactivated at the beginning of the year, the economic agreement was structured around three pillars: the payment of a cash fee amounting to €984 million, the payment of interest linked to this expenditure over the next two decades (which takes the total amount of the cash payment to the aforementioned figure of €1,240 million), and the payment in kind in the form of plots of land.

But the public administrations’ role as landowner goes much further than that, given that the land that the Ministry of Development will take control of will be added to the plots (covering an area of almost 600,000 m2) that will correspond to the Town Hall of Madrid.

The Local Government, led by Manuela Carmena (who has the ultimate power to unblock this development) is set to become the second largest landowner, as a result of the sum of: the space (165,000 m2) it currently owns in the area; the area (150,000 m2) that houses the EMT’s garages in Fuencarral; and the land (300,000 m2) that corresponds to it from the transfer of 10% of the land from the developers, as required by legislation.

Sell or develop

At the current market price of €1,000 /m2, the value of the plots of land owned by the Town Hall could amount to around €600 million, whilst the land owned by Adif could be worth around €100 million.

In both cases, the public administrations have the ability to benefit from their roles as landowners to develop social housing on the Operación Chamartín site itself or to make profits to return to society.

And one of the main attacks launched against the developers of this site has been they are simply seeking to “strike it rich”, criticism that has been fuelled by the fact that the development is located in the north of the capital, an area traditionally regarded as very wealthy, and because the original plans include just 10% of social housing.

The reason why it looks like the people responsible for Distrito Castellana Norte are planning to construct so few VPO homes is partly because these calculations do not include the uses that the public administrations will make of all of their plots of land. Therefore, it is up to Carmena and Adif to increase the volume of social housing in this development.

Between the two of them, they own more than 20% of the total surface area (3.1 million m2) that makes up the Operación Chamartín site.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake