Town Hall Of Madrid Launches Campaign To Buy 150 Homes

7 February 2017 – El Confidencial

The Town Hall of Madrid, governed by Ahora Madrid, wants to increase its stock of social rental housing. The decision was taken last September by the Board of Directors of the Empresa Municipal de la Vivienda y Suelo de Madrid (Madrid’s Municipal Land and Housing Company or EMVS), but the marketing campaign has not been launched until now.

Its aim is to attract the attention of individuals and companies that are looking to sell off their homes. However, not all properties qualify. Homes must be “free from charges and levies, tenants, occupants and squatters”. In other words, they must be empty. Moreover, the Town Hall has said that it will pay between €65,000 and €160,000 per property. The EMVS is hoping to acquire 150 homes in total (…).

Nevertheless, the Town Hall is not willing to pay any price, not even for those homes located in the best neighbourhoods. (…). It has established fixed prices for the homes it is will to buy, which vary depending on location. In this way, the price per m2 may not exceed €1,300 in Puente de Vallecas and Villaverde; €1,500 in Carabanchel, Latina, Usera, Vicálvaro and Villa de Vallecas; €1,800 in Arganzuela, Ciudad Lineal, Hortaleza, Moratalaz, San Blas and Tetuán, and €2,000 in Centro, Chamartín, Chamberí, Fuencarral-El Pardo, Moncloa-Aravaca, Retiro and Salamanca.

On the basis of these figures, the Town Hall is going to spend, at least, €9.7 million (assuming that it buys 150 homes measuring 50 m2 and pays €1,300/m2 for each one). (…).

To put these figures in context, the price per m2 of second-hand homes in the neighbourhoods of Salamanca and Retiro amounted to €4,590/m2 and €3,734/m2 at the end of 2016, according to data from Idealista. Meanwhile, prices stood at around €1,400/m2 in Puente de Vallecas and Villaverde. (…).

Interested vendors should submit their tenders by 14:00 on 1 March 2017 in the EMVS’s General Registry in Calle Palos de la Frontera, 13. Further information is available on the EMVS website.

Original story: El Confidencial

Translation: Carmel Drake

Marina d’Or Launches Aggressive Marketing Campaign

4 October 2016 – Cinco Días

The former hotel and real estate empire Marina d’Or has launched an aggressive marketing campaign to raise revenues. It has put apartments up for sale from as little as €130,000 and retail premises from €200,000, with a “guaranteed” return of 7%.

The empire created by Jesús Ger began to crumble at the same time as the real estate bubble burst in Spain. The Holiday City, which was advertised in the City of London as the best place to spend the summer and as a golden retirement destination for British pensioners, is resorting to aggressive marketing techniques once again to increase its sales in the short term.

The key to the campaign, which is featuring in most national newspapers, is the slogan… “Guaranteed returns of 7%”. The small print explains that these investment opportunities relate to fully operational retail premises, with an established client base, as well as beach-front apartments. It specifies that the return of 7% with guaranteed rent will be over “1, 2 3 or more years, depending on the agreement”.

The reality is that the entity selling these assets is the hotel subsidiary of the group, which has not filed for bankruptcy, unlike its property developer associate.

Hoteles Marina d’Or has been selling homes and retail premises from €130,000 and €200,000, respectively, since the summer. In theory, the guaranteed return used to be 4%, but in September, that figure was increased to 7%.

How does it work?

The mechanism is simple. The company undertakes to pay that percentage over the purchase price on the basis of a signed contract, if the owner grants it the right to rent out its property in return. “In reality, they are apartments that the hotels already manage and given their locations, it is almost certain that they will be occupied; and as such, we are able to promise such returns”, said a sales agent from Marina d’Or. A spokesperson for the firm added that the sale of these apartments represents a direct cash injection and allows them to consider using this formula with more homes in the future. (…).

The hotel and real estate complex, which has half a dozen hotels, ranging from three- to five-star categories, is also home to several leisure facilities and a large spa. (…) The company, which guarantees annual interest of more than €9,000 per year for a flat costing €130,000, held own funds amounting to €86.2 million at the end of 2014, the last period for which accounts have been deposited in the commercial registry.

The company generated revenues of €38.6 million in 2014, in line with the preceding year. Its profit amounted to €627,000, compared with a loss of more than €1 million in 2013. The debt repayment calendar of Hoteles Marina d’Or, a limited company that is fully owned by Jesús Ger, was clear at the end of 2014. Last year, it had to repay €1.2 million; this year €1.4 million; and in 2017, €2.8 million. In 2018, the amount will increase to €4.6 million and from 2019, to €87.5 million. In total, the company’s debt amounts to almost €100 million. (…)

The return means multiplying the average interest rate on one- and two-year deposits by 30, given that on average such deposits paid out 0.23% in July. Nevertheless, the return is not quite so far-fetched in the real estate world. Sources in the sector acknowledge that it is high, given that holiday apartments offer around 4% in their contracts, and that it depends on the tourist occupancy rates in the area. In any case, there is a risk, given that the hotel company is responsible for paying that interest rate.

Original story: Cinco Días (by Pablo M. Simón y Laura Salces)

Translation: Carmel Drake

Servihabitat Will Pay Customers’ Mortgages For 1 Year To Boost Sales

7 May 2015 – Expansión

Servihabitat will pay the mortgages of customers who purchase homes before 30 June, for a period of up to one year. That is one of the main claims of the new campaign that the real estate platform has launched to stimulate sales; it is also offering discounts of up to 60% on certain homes.

The company, which is controlled by the US Fund TPG and owned by CaixaBank, will offer these conditions in honour of the Salón Inmobiliario de Madrid or Madrid Real Estate Fair (Sima), which is being held from today until Sunday.

Servihabitat has selected 9,000 second-hand homes and new builds, located all over the country, whose purchasers may benefit from: free mortgage payments for a year, gift vouchers, discounts of up to 60% and the option of the client to propose the price him/herself.

At the fair, Servihabitat will also market several new property developments and luxury residential dwellings located in Ciudalcampo. The new developments are located in Majadahonda, Carabanchel and in the Madrilenian district of Chamartín. The main second-hand home complex is located in Palm-Mar, in the municipality of Arona (Tenerife).

Original story: Expansión (by S.S.)

Translation: Carmel Drake