Tag: market

Neinor’s Share Price Drops by 16% As the Market Reacts to its New Strategic Plan

9 April 2019 – La Vanguardia

The share price of Neinor Homes decreased by more than 16.3% after the change in CEO and a new more conservative strategic plan was announced on Monday.

As such, Neinor’s share price has plummeted by more than 30% since the start of the year and is currently trading at around €9 per share.

The company has appointed Borja García-Egotxeaga as its new CEO, following the resignation of Juan Velayos, who will continue as a senior advisor to the property developer.

Original story: La Vanguardia

Translation/Summary: Carmel Drake

The Market for Land Makes a Come Back in Valencia

25 March 2019 – El Mundo

The stars are aligning in the real estate sector in Valencia. Investors and developers alike are keen to get there hands on the raw material there – land. Activity in the segment is still well below its peak of the boom but the recovery is now well underway.

According to the latest figures from the Ministry of Development, during 2018, the number of land sale operations increased, as did the total surface area sold and the total amount of the transactions. The market for land is still on the rise, even though the average prices being paid for plots has decreased.

In this way, 1,884 land sales were completed in the Community of Valencia during 2018, up by 11.1% YoY, when 1,687 sales were recorded. That is the highest figure since just before real estate bubble burst – 3,199 operations were recorded across the three provinces in 2007.

In total, 3.9 million m2 of land was sold last year, compared with 3.35 million m2 in 2017. Not since 2007 has more land been transacted in a single year – 5.4 million m2 of land was sold in 2007.

In total, investment in urban land amounted to €373.5 million last year, compared to €345.7 million the previous year. That is the highest figure since 2009 when €512 million was invested.

Moreover, the outlook for the year ahead is positive. More and larger land purchases are forecast, although the stock of plots with the most potential is starting to run out.

In terms of prices, the average price per square metre fell by 18% in Q4 2018 in YoY terms to €149.6/m2. Nevertheless, the average price rose by 21.7% to €217.9/m2 in those municipalities with more than 50,000 inhabitants in Alicante. That price compares very favourably with the average for municipalities with more than 50,000 inhabitants across the rest of Spain, where prices increased by 6.3% to €292/m2.

Original story: El Mundo (by F. D. G.)

Translation/Summary: Carmel Drake

Brexit Deters Brits from Buying Homes in Andalucía

17 March 2019 – ABC Sevilla

The residential market in Andalucían is booming, despite the slowdown in demand from British buyers. The regional market is split into two clear segments – the market for second-hand homes for holiday use along the Costa del Sol, centred around Marbella and Estepona – and the market for primary residences across the rest of the autonomous region, where Málaga, Córdoba and Sevilla stand out with the most activity.

In the former, despite the decrease in demand from British purchasers due to Brexit, there has been a notable increase in buyers from the north of Europe, especially from Belgium and the Nordic countries.

In the latter, the local population, which primarily comprises families aged between 45 and 55 years old, with savings and stable incomes, is driving demand. For example, house sales in Córdoba grew by 16% in 2018, according to INE.

Original story: ABC Sevilla (by E. Freire)

Translation/Summary: Carmel Drake

ARC Homes Launches Across Spain with a €50M Fund

9 January 2019 – Eje Prime

ARC Homes is expanding in Spain. The property developer, which has been present only in Barcelona until now, has created a €50 million fund with the aim of launching residential developments in municipalities with more than 100,000 inhabitants located in different parts of the country.

The company has started its search for land in locations as diverse as Galicia, Asturias, País Vasco, La Rioja, Navarra and Valladolid, according to EFE. To begin with, ARC Homes has already started work on two projects comprising 43 homes in Girona, with a total investment of €14 million.

Currently, the province of Barcelona is the company’s main market given that it accounts for more than eighty homes under development and a portfolio of land for the construction of another 180 units. The company says that it is looking for new buyer profiles such as millennials, who may be interested in assets located in areas connected with large Spanish cities.

Original story: Eje Prime

Translation: Carmel Drake

Spain’s Banks Set to Sell €120bn+ in Problem Assets This Year

4 July 2018 – Cinco Días

Spain’s banks are stepping down on the accelerator to put an end to the property hangover, although it will still take another two or three years for them to get rid of all of the excesses left over from the financial crisis. And that is not so much due to the leftover real estate portfolios but more because of the portfolios of non-performing loans, a caption that is continuing to augment the balance sheets of financial institutions.

In this way, the experts hope that this year will see a new record in terms of the sale of portfolios, for an approximate total of €120 billion, including the macro-operations from Santander and BBVA, announced last year but completed this year. Without them, the figure could amount to more than €51 billion, slightly higher than in 2017, which would increase to €80 billion if Sareb manages to sell a €30 billion portfolio.

Pressure from the European Central Bank (ECB) and the Bank of Spain, as well as that exerted by the market itself, is causing financial institutions to opt to sell their portfolios of problem assets in single operations wherever possible, rather than selling them off in a piecemeal fashion, in light of the prospects of rising prices.

Interest from opportunistic funds to invest in Spain and, also forecasts for even greater price rises for real estate assets in the future, are leading the banks to take advantage of the opportunity to clean-up their balance sheets between this year and next, just 10 years after the start of the crisis, explain several experts.

“The funds have large amounts of liquidity. Moreover, interest rates are still at historical minimums (still negative) and so financing can be obtained at very low prices, hence their interest in buying large portfolios of assets linked to property. They want to take advantage of the current climate”, explains Íñigo Laspiur, Director of Corporate Finance CBRE España.

All of the experts agree that the sale by Santander of Popular’s property to Blackstone, an operation announced last year, but ratified at the beginning of this year, for a gross amount of around €30 billion, was the trigger that caused the banks to decide to divest their portfolios on a mass scale.

Since that operation was ratified at the beginning of this year, to date, the banks have divested more than €62 billion in problem assets. That amount includes BBVA’s operation with Cerberus, the fund to which it sold €13 billion. Nevertheless, that operation is still pending approval from the Deposit Guarantee Fund (FGD) since some of it forms part of the Asset Protection Scheme (EPA), having proceeded from the former savings bank Unnim.

Financial sources maintain that there are currently operations underway amounting to another €21 billion, plus an addition €8 billion that may be closed over the coming months. The largest include the sale of around €11 billion in assets from Sabadell (of which €900 million has already been sold to Axactor), whose sale is scheduled for this month.

To these figures another €30 billion gross may be added from the sale of a Sareb portfolio this year if Pedro Sánchez’s Government approves that potential operation in the end. Santander has also put up for sale another €6 billion.

Original story: Cinco Días (by Ángeles Gonzalo Alconada)

Translation: Carmel Drake

Land Oligopoly: 10 Cities Account for 55% of the Developments Underway in Spain

31 May 2018 – Eje Prime

The data is conclusive: ten cities account for 55% of the residential developments underway in Spain. They constitute a municipal land oligopoly, which is now showing signs of tension on the demand side given the lack of buildable land available for development and the delays by the public administrations when it comes to approving building permits. “The concentration of the population in the major cities is a phenomenon that is going to increase over the next few years”, predicts Sergio Gálvez, Director of Strategy and Investment at the property developer Aedas Homes in the context of the Madrid Real Estate Fair (SIMA) conference on land and its strategic market.

The executive of the listed Spanish company also explained that the delays in the granting of licences in certain cities are lasting for up to ten months. Gálvez regrets that “any delay suffered in the production chain clearly results in a higher sales price for the end client”.

The Director of Aedas, who believes that “the public administrations still have a long way to go in terms of the agility of the licence-granting process”, was accompanied at the roundtable by Ignacio Ocejo, Partner at Kronos Homes. The director of the Spanish property developer turned the spotlight onto financing: “the situation in the financial world has changed drastically with the new cycle; in the past, the supply could have been four times larger”.

Nevertheless, Ocejo was favourable of the fact that land financing is now “much more controlled” because capital can still be obtained under reasonable conditions. “I do not think that it is a problem, the banks themselves are being proactive when it comes to financing; the problem is more that there are fewer entities”, said the Director of Kronos.

Meanwhile, the Commercial Director of the appraisal firm Tinsa, Pedro Soria, seemed more concerned than his roundtable colleagues about land and its overheating (…) “In some places, we are already seeing price caps on land”, says Soria, “the only option left if we want to achieve the desired returns is to raise house prices”. In the event that land prices continue to rise, the Tinsa executive sees a “risk”, nevertheless, the market could be more profitable on the land investment side than when it comes to house building itself.

Spain is seeing an improvement in its new home permits once again, but the figures are still well below the more than 800,000 permits granted in the most active years of the boom in the 2000s. In this regard, Ocejo explains that “in a scenario of stability and compared with the previous cycle”, an increase in new builds at a rate of between 25% and 30% would be “positive”. “A healthy market for me would see the construction of between 130,000 and 160,000 new homes each year in Spain”, added the Partner of Kronos Homes.

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Family Office Puts Tesla’s Store on c/Serrano Up For Sale for €7M

18 April 2018 – Eje Prime

The retail sector is hotting up in Madrid. A Spanish family office has put up for sale the store at number 3 Calle Serrano, which is occupied by Tesla, the company specialising in electric cars and led by Elon Musk. Although sources close to the operation have explained to Eje Prime that the process to receive offers has already begun, the estimated price of the asset is around €7 million.

This store has been occupied by Tesla since last September after it signed a lease contract that will continue in force following the sale. The asset has a retail surface area of 247 m2 spread over two floors. There, Tesla has a showroom, a warehouse and the group’s offices in Spain. According to real estate market sources, the consultancy firm CBRE is exclusively leading the sales process.

In recent months, the retail sector has been reactivated in the Spanish capital, with both the placing of premises on the market and the renovation of assets for their subsequent rental. The latest to be added to the portfolio of establishments for sale was the branch that Bankia owns at number 1 Calle Alcalá.

Although the bank already initiated an auction, which was attended by funds such as Arcano and real estate groups such as Renta, who were offering approximately €18 million for the premises, Bankia has decided to wipe the slate clean and launch a new auction process, through which it hopes to raise at least €20 million.

The asset, which, given its façade appeals more to restaurant operators than fashion retailers, is spread over two floors: the first floor spans 458 m2, whilst the basement measures 405 m2.

And from premises for sale to premises sold. In March, the fund manager IBA Capital, together with CBRE Global Investment, finally completed the sale of number 9 Calle Preciados, in Madrid, to the real estate investment vehicle of the insurance company Generali, Generali Real Estate. The Italian group paid €100 million for the asset, which is going to house Pull&Bear’s future flagship store on this high street, one of the most expensive in Spain for opening a store (…).

Investor appetite in 2018 

After closing 2017 with a total investment of €3.5 billion, the sector started 2018 with retail assets up for sale worth €2.5 billion. Moreover, during the course of this year, the volume of retail space on the national map is forecast to increase by 500,000 m2.

At the moment, shopping centres worth €2 billion are up for sale, along with high street products worth another €500 million. This situation guarantees a high degree of product availability for the segment, which is ideal at a time when Spain is very much in the firing line of international investors.

The influence of the retail market on the tertiary sector in 2017 is evidenced by the statistic that 38% of all transactions completed in this market involved retail assets, allowing retail assets to exceed office buildings for the first time ever.

With a volume increase of 36% over the last year, several large shopping centre openings are scheduled for 2018 including Open Sky in Madrid, which will see the arrival of Compagnie de Phalsbourg in Spain, after investing €160 million in the complex.

Similarly, in the Community of Madrid, the shutters will be lifted on X-Madrid, owned by Merlin, and in Málaga, McArthurGlen and Sonae Sierra will inaugurate a new designer outlet centre in the capital of the Costa del Sol. The stock of retail surface area in Spain amounts to 16.5 million m2, up by 1.4% YoY.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Lidl Boosts its Real Estate Business with €300M Investment

27 December 2017 – El Economista

Lidl is strengthening its commitment to the real estate sector. The German supermarket chain is planning to invest around €300 million next year (2018) buying up land and stores on/in which to open new supermarkets. Contrary to what most of the distribution sector is doing (the majority of retailers are selling their properties and leasing stores instead so as to focus on their core retail businesses), the German giant is standing firm in its commitment to the real estate recovery in Spain and so will continue investing.

With a current network of 540 stores, the idea is to own the largest possible number of stores. The average sales area amounts to around 1,500 m2, and so Lidl is looking for spaces measuring between 4,000 m2 and 9,000 m2, to allow space for warehouses and parking.

“Although we haven’t set an exact figure yet, the idea is to maintain the same rate of store openings as this year (2017), which means that we would open between 30 and 40 establishments in 2018”, explain sources at the company. Lidl arrived in Spain in 1994 and closed 2016 with a turnover of more than €3.335 billion, which represented an increase of 9.5% compared to the previous year. The company has also consolidated its position as the fifth largest operator in the sector with a market share of 4.3%, behind only Mercadona, Dia, Carrefour and Eroski, according to the latest market research published by the consultancy firm Kantar Worldpanel.

Presence at real estate fairs

Loyal to its real estate strategy, Lidl has already attended the recent exhibitions of the Barcelona Meeting Point fair to search for business opportunities. Moreover, it has decided to diversify its store opening strategy and enter, for example, traditional food markets (‘mercados de abastos’) and shopping centres.

In the case of the first, the German company has committed to opening stores in Barcelona, in the Sant Antoni and Vall d’Hebrón markets, and in Madrid, in the Tetuán market, in a strategy similar to the one being carried out by Mercadona. In the case of shopping centres, it has already opened its first store in this type of space in Islazul, in Madrid. Moreover, as well as new stores, Lidl is also making very significant investments in improving and modernising its existing stores.

Original story: El Economista (by Javier Romera)

Translation: Carmel Drake

Gorbea Puts FCC’s HQ on the Market for €150M

30 November 2017 – El Confidencial

The headquarters of FCC, located in the Madrilenian neighbourhood of Las Tablas is on the verging of changing hands. Its owner, Gorbea Arrendamientos, has decided to cash in its holding and, to this end, has engaged CBRE to launch an express sale process. The intention is to choose a winner before the end of the year. Sources at the consultancy firm declined to comment.

This operation is set to be the most important of the year in the office segment, since the vendor aims to close the sale for around €150 million, according to market sources. That amount has not been reached so far by any of the other office transactions closed in 2017.

Gorbea Arrendamientos is owned by the Hernández-Beitia family, which acquired the land where the headquarters of the company controlled by Carlos Slim is now located for €80 million from FCC seven years ago.

Then, the infrastructure group signed a 20-year lease contract, of which almost 13 years still remain. Specifically, this rental commitment is the main feature of the operation, given that it guarantees the future buyer a stable income in one of the fastest growing areas of Madrid.

When Gorbea acquired FCC’s headquarters, a return of 7% was estimated on the basis of the rental contract. However, the new buyer will see that yield decrease to around 3%-4%. That range that makes this purchase a classic operation for conservative investors, such as insurance companies and pension funds.

Cinematographic fortune

The Gorbeas, as the family behind this real estate group is popularly known, amassed their real estate portfolio as owners of important cinemas in Madrid, including Roxy B on c/Fuencarral, Lido on c/Bravo Murillo and Renoir on c/Narváez. From there, they leapt into the office segment, where they are known for naming many of the buildings they own after their parent company, Gorbea.

Despite the box office crisis that caused so many cinemas to close, this family group still owns several subsidiaries linked to the world of cinema, such as Cines Floridablanca, Cines Retiro and Cines Princesa, in the centre of Madrid, as well as several multiplex companies in Majadahonda, Zaragoza and Guadalajara.

Construction of FCC’s headquarters, which cost €48 million to build, was completed five years ago and, since then, the building has housed more than 1,000 employees from the infrastructure group.

The building has a surface area of 21,000 m2, spread over 3 inter-connected buildings, which occupy an entire block and form an H-shape. They have two basement floors and a ground floor, with capacity for 400 parking spaces, as well as six office floors and a rooftop.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Dutch Fund Acquires ‘Mercado de San Miguel’ For Record Price

28 July 2017 – El Confidencial

The Mercado de San Miguel has a new owner. A Dutch fund specialising in the real estate sector has just taken ownership of this historical and iconic building in Madrid. And it has done so for €70 million, a figure that, in absolute terms is not by any means one of the largest in the market, but which, nevertheless, represents the most expensive transaction per square metre that has ever been closed in the Spanish real estate market.

According to sources consulted by El Confidencial, for every one of its 1,200 m2, the buyer has paid €60,000, an amount that breaks all real estate records and which represents, for the founders and promoters of the project, several times their original investment.

The person that has led this project from the beginning is Montserrat Valle Hernández, the majority shareholder of the company that used to own the market, El Gastródomo de San Miguel. She was the architect behind the renovation of this iconic building, which last year marked its first century of life.

Sources consulted explain that prominent shareholders also included bankers such as Pedro Guerrero Guerrero (President of Bankinter), Salvador García Atance Lafuente (former President of Morgan Stanley in Spain), Paul Gomero Vaquero (Private Banking Partner at A&G), as well as the well-known journalist Guillermo Fesser and the businessmen Víctor Josue Alarcón, Pedro Gómez Blazquez and Juan Ramón Ramírez Lozano.

Aguirre Newman participated in the operation, which was signed on Thursday at a notary’s office on Calle Serrano in Madrid. Aguirre Newman led the sales process and studied the various offers that were received from domestic and overseas groups, to bring this deal to a successful conclusion. Sources at the consultancy firm declined to comment on the transaction.

A centenary building

The unique Mercado de San Miguel, located in the square of the same name, next to Plaza Mayor, was acquired more than a decade ago by a group of companies led by Monserrat Valle with the aim of restoring it and turning it into a gastronomic centre.

On 13 May 2009, it reopened its doors, restoring the splendour that it enjoyed in its heydey. The building was constructed between 1913 and 1916 and was designed by the architect Alfonso Dubé y Díez. Nowadays, it still retains its original iron structure dating back to the beginning of the 20th century, which stands out as one of its greatest features (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake