Tag: mexico

Global Geopolitics Fuels Demand for Luxury Homes in Madrid

12 May 2019 – El Confidencial

Wealthy investors and families from China, Russia, Venezuela and Mexico are particularly active in the luxury home segment in Madrid, in particular in the districts of Salamanca, Chamberí, Retiro and Moncloa-Aravaca.

According to the College of Property Registrars, foreigners accounted for 6.7% of all residential purchases over €500,000 in the Community of Madrid in 2017, a figure that rose to 8.4% in 2018.

There are several pull-factors motivating these buyers including tax exemptions, golden visas (thanks to Law 14/2013), (relative) legal certainty, low rates of crime and affordable prices, compared to Miami and other European capitals. The language, climate and excellent transport infrastructure also play their role, as do the world-class universities and business schools in the Spanish capital.

A number of push-factors are also evident, which is where the geopolitical developments come into play. The political and economic crisis in Venezuela, the election of Andrés Manuel López Obrador as the President of Mexico in December, the political uncertainty in Cataluña and even the on-going Brexit saga, are all important reasons for wealthy buyers to turn their backs on their home countries in favour of Madrid when it comes to buying a property.

To date, since they were introduced in 2014, 2,948 golden visas have been granted for the purchase of luxury homes, with half going to Chinese citizens (1,476) and a fifth going to Russians (621).

Moreover, according to official statistics from Spain’s National Institute for Statistics, the number of Mexican residents in Spain has risen from just over 20,000 in 2014 to more than 25,200 by the end of 2018, of whom one third live in Madrid.

Meanwhile, the number of Venezuelan residents has increased from just over 32,000 five years ago to 57,120 in 2018. Nevertheless, in both cases, the real number of arrivals is higher since many move to Spain through family links making them entitled to Spanish passports.

Original story: El Confidencial (by Marcos García)

Translation/Summary: Carmel Drake

Lar Launches Fund to Coinvest in Residential Segment in Spain & Latam

12 March 2018 – Expansión

Founded in 1975 by Felipe Pereda, the real estate developer Lar was one of the few high-profile companies during the boom that survived the subsequent crash. Having become the manager of one of the largest real estate companies on the stock market, Socimi Lar España, the company owned by the Pereda family has not been neglecting its house building activity. “We are currently working on residential projects in seven countries. At the global level, we are working on projects involving 18,000 units”, explains Miguel Amo, Director General of the Lar Group.

This extensive portfolio also includes the Spanish market, where the company has focused on the residential business, after years of investing in shopping centres (it has a clause not to invest in commercial assets beyond the Socimi). “The first thing we did when we saw the signs of recovery in the market in 2013 was to team up with Fortress to acquire a portfolio containing almost 1,400 homes and plots of land spread all over Spain from Sareb. With that batch, we created a FAB (banking asset fund), which expires this year, with the delivery of the final homes. Next, we entered the luxury business, with Lagasca 99, a project that we are managing and in which we also hold a stake through the Socimi. And, with the market recovering, we saw the opportunity for new build projects”, said Amo.

First fund

Last year, after selecting several plots of land, Lar opted to create a fund, called Acacias Inmuebles, to promote seven projects with 450 homes in total. “The vehicle was created in July 2017 with €35 million and we have now invested 100%. We manage it and we own 30% of the vehicle (…) and the rest is owned by investors from Spain and Peru (…), explains the head of Lar.

In total, Acacias Inmuebles is going to promote five primary residence projects over the next three years in Madrid, Valencia, Málaga, Torremolinos and Sevilla, and two other second-home developments in the Malaga towns of Benalmádena and Mijas (…).

The success of that first vehicle has caused the real estate company to launch a second fund. “We are asking for a minimum capital investment of €500,000. It is a fund without any intermediary liquidity, but which will distribute dividends when the projects are handed over and the investments will be recovered within a period of between three and five years, with an approximate annual return of 12%”.

Besides Acacias and Lagasca, Lar owns other plots for the development of an additional 400 homes. “They are located in Móstoles (Madrid) and Valladolid; in the case of the latter, we will likely sell off some of the land to be developed by third parties”, said Amo. In addition to its activity in Spain, the majority of Lar’s developments are based abroad, primarily in Latin America.

Specifically, Lar, which was one of the first Spanish real estate companies to branch out overseas (in 1998) has 9,000 homes under construction in Mexico, another 5,000 in Peru and 1,300 in Colombia (…) “We are also building in Romania. We always do it by ourselves, in conjunction with a local team, and we are very happy with the results so far”.

Revenues

Thanks to all of these projects, Lar had forecast revenues of between €400 million and €450 million in 2017, which would be added to the fees received for the management of the Socimi. “2017 was a good year in all areas, we sold 1,500 homes in private contracts and 1,300 were notarised. This year, we will hand over 1,500 homes, of which between 200 and 300 will be in Spain”, highlights Amo.

Lar is also committed to buying land for its subsequent management. “In Spain, we are also going to intensify our investment in land. We think that developable land is running out all over Spain, after 10 years with no investment and, so there is a need to “manufacture” land. We want to acquire plots for at least 1,000 homes and if we can buy land for 3,000 units, then even better”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Acciona Buys More Land on which to Build 4,500 Homes

27 February 2018 – Europa Press

Acciona has accelerated its property development and house sales businesses by investing in the purchase of developable land, in such a way that it now owns a portfolio of land on which to build around 4,500 homes, which it plans to continue increasing.

The group chaired by José Manuel Entrecanales (pictured above) forecasts that the resumed real estate activity will start to contribute to the income statement next year.

Two years ago, Acciona took the decision to recover its real estate division with the aim of generating value from the assets that it still held in the sector in light of the reactivation that the business was starting to show in Spain following the crisis.

Thus, in terms of its real estate assets, the company merged its rental homes into Testa Residencial, the Socimi in which Santander, BBVA, Merlin Properties and now the group itself hold stakes, and which is planning to make its debut on the stock market next quarter. Moreover, it is proceeding with the sale of the rest of its assets (hotels and offices) on an individual basis.

In terms of its property development activity, Acciona resolved to return to building on the land portfolio that it had, whereby taking advantage of the recovery in the sector.

Nevertheless, the company has given a boost to that initial business plan and has dived into the purchase of new land. Specifically, over the last year, the firm has purchased plots worth €82 million with capacity for the development of around 1,400 homes.

In this way, Acciona currently has a land bank for the construction of 4,500 apartments, more than triple the amount that it had a year ago.

Nevertheless, the group has expressed its interest in continuing to invest in land both in Spain as well as in the other two markets where it has a presence in the real estate sector: Mexico and Poland, according to the company’s Director of Corporate Development, Juan Muro Lara.

The group calculates that it will allocate around 20% of its average annual investment, which amounts to between €900 million and €1 billion to the development of this revived business, including both the purchase of land and the construction of homes.

Original story: Europa Press

Translation: Carmel Drake

New Build Homes Return to La Moraleja Thanks to Miguel Ángel Ruiz

9 January 2018 – Eje Prime

New build homes are returning to La Moraleja. The exclusive residential complex in Madrid has expanded its community with the incorporation of 100 homes corresponding to the Camino Ancho 2 development, a project led by the businessman Miguel Ángel Ruiz, through the company ‘Universal de Negocio e Inversiones’, which he owns jointly with Carlos Cutillas (50% each). The keys for these properties are expected to be handed over during the coming months.

The businessman from Soria, who owns a home in the same urbanisation, acquired, together with Cutillas, the owner of Inmobiliaria Chamartín, land in La Carrascosa, a plot that had been owned until then by Luis Rodríguez Durón, according to El Confidencial.

Ruiz is a player who is backing the Spanish residential sector hard after making his fortune in Mexico, where he emigrated to when he was young in search of work. A successful man on the other side of the pond, the property developer owns several assets in the Aztec country, including The Point, a complex of homes, offices and businesses in the Mexican capital.

Similarly, the businessman is also a partner of Dunas Capital in the development of its recently created real estate company, Viveland. The agreement between those two parties includes several purchase options over the plots of land located around an urbanisation in Alcalá de Henares, in Madrid, where the company could build almost 350 homes.

Original story: Eje Prime

Translation: Carmel Drake

Barceló Doubled Its Profit In 2014 To Generate c. €50m

12 February 2015 – Expansión

Barceló recorded a profit of c. €50 million in 2014, whereby doubling its result from the previous year. The co-chairman of the hotel chain, Simón Pedro Barceló announced the result yesterday (the group’s definitive results for the year are still pending) and attributed the increase to “a significant increase in EBITDA (from €183 million to €215 million) and the incorporation of ten new hotels in Mexico and the Dominican Republic. Moreover, 2014 was the first full year to include the results of its new travel division.

Turnover exceeded €2,000 million, of which €1,100 million was generated by the travel sector and €900 million from hotels. The total figure amounted to €1,800 million in 2013. The co-chairman of Barceló said that it is too soon to say how the tourism sector will evolve over the course of the year, but he noted that “the Caribbean and Mexico have had a strong start to the year and although we do not know what will happen during the summer months, we believe that we will outperform the results recorded in 2014 by 10%”.

According to the latest information released by the Mallorcan company, Barceló has 140 hotels in 17 countries containing 37,380 rooms. Half of them are located in Europe and the remainder are in America, primarily in the US and the Caribbean. It also has 400 travel agencies operating in 22 countries.

New acquisitions

The group, which returned to the travel agency segment last year through its acquisition of Orizonia, together with Globalia, has not ruled out growth through further acquisitions. Yesterday, Simon Pedro Barceló confirmed that “new corporate transactions have not been ruled out” in the travel agency sector.

The family business owns 39% of its hotels outright, and leases or manages the remainder. Its goal is to be “a great hotel company”, said Barceló yesterday, which is why the company is continually adding new hotels to its portfolio. “We have just signed an agreement to lease a new 4 star hotel with 250 rooms in Berlin”, he said.

Barceló, who was giving a lecture at ESADE, was very optimistic about the future of the economy and the tourism sector in particular and encouraged employers to work together with entities that are independent and able.

Original story: Expansión (by Marisa Ángeles)

Translation: Carmel Drake

Iberdola Injects €617m Into Its Real Estate Arm

3 February 2015 – Cinco Días

The company has conducted a capital increase of €154 million.

Iberdrola has recapitalised the debt that it held with its real estate subsidiary, Iberdrola Inmobiliaria. The energy group has injected €616.7 million into its subsidiary through a capital increase of €154.2m and an issue premium, explained the company. In this way, Iberdrola Inmobiliaria “cleans up its balance sheet and is made stronger to face its new challenges”.

The group’s real estate subsidiary, chaired by Ignacio Sánchez Galán, recorded losses of almost €70 million in 2013 and turnover of more than €45 million, according to the most recent company accounts filed with the Companies Registry. The company held debt, primarily with its parent company, amounting to more than €500 million, according to those accounts.

Iberdrola Inmobiliaria was created in 1993 from the merger of Iberdrola’s real estate companies. During the 1990s, it grew its business as a residential developer. By the end of the decade, it had focused on three main areas: the development of housing; the development and operation of rental property; and the management and development of land.

During the years leading up to the burst of the real estate bubble, the company undertook some major investments and also launched businesses overseas. In 2006, it invested €240 million in the construction of a shopping centre in Valencia, together with local constructors, Gesfesa and Valencia Residencial. That same year, it approved a €200 million investment in the Porta Firal project, located at the entrance of the Gran Via Fair (in l’Hospitalet), which was in the middle of its own enlargement program.

In 2007, it recorded turnover of almost €400 million and approved a €300 million investment in a geographic expansion plan. In July of that year, it acquired a 35% stake in the tourist resort Puerto Peñasco (in the state of Sonora, on the west coast of Mexico) for €43.12 million. In 2008, it bought residential land in Bulgaria for €44.6 million for the development of a tourist resort.

The economic crisis thwarted the expansion plans of the energy company’s real estate subsidiary, which nevertheless continued to operate throughout the worst crisis to hit the Spanish real estate sector in decades. In 2010, Iberdrola injected €400 million into the subsidiary, in a similar operation to the one just undertaken. In 2013, it acquired a minority stake in Sareb.

Original story: Cinco Días (by Alberto Ortín Ramón)

Translation: Carmel Drake