2 January 2018 – El Confidencial
It has been, without a doubt, the clearest example of the overheating in the prices of buildable land in Madrid. Adif has just concluded the auction of several plots in Dehesa Vieja, San Sebastián de los Reyes, which it launched at the beginning of October. The asking price was set at €9 million and in the end, the state-owned firm has obtained proceeds amounting to €16.3 million, in other words, 80% more than initially expected.
The plots, which have a buildable surface area of 10,500 m2, sparked interest amongst much of the property development sector, given that they are located in one of the most sought-after and rapidly growing areas of the Community of Madrid. Up to 13 property developers participated in the first auction held on 3 October, including some of the industry stalwarts.
From Gestilar to Amenábar Promociones, and including the renewed Acciona Inmobiliaria and Pryconsa. Other participants also included Monthisa, Aelca, the listed firm Neinor Homes, Procisa and Solvia. And one cooperative: SS de los Reyes Sociedad Cooperativa, owned by the Asentis group, which after going head to head with the real estate company owned by the Entrecanales family over the last month, has ended up acquiring the sought-after plot. And the reality is that, after a couple of years on the back burner, cooperatives have returned to the market with a bang and are showing that they are capable of competing, economically speaking, in spaces where traditional property developers cannot or do not want to operate.
Adif’s auction is a clear example. SS de los Reyes Sociedad Cooperativa has won the bid with an offer of €16.3 million, compared to the figure of just over €16 million that Acciona Inmobiliaria was willing to pay and which represents a land (impact) price of €1,550/m2. Just too high, in the eyes of many of the interested parties who threw in the towel along the way and who marked a top price of around €1,200/m2.
To give us an idea, the price paid by the cooperative (…) means that the future homes that are going to be constructed on the site will have to be sold for around €2,400/m2, or around €2,900/m2 if the aforementioned offer had been presented by a property developer, since it would have to include its margin to sell the homes and ensure it did not make a loss (…).
“It is important to consider that the homes planned for the site are large, measuring between 130 m2 and 140 m2 and that if we exceed prices of €400,000 for a three-bedroom home, then no matter how much prices rise by, middle-class families start to have limitations in terms of financing, and, therefore, problems when it comes to buying such homes”, according to sources at one of the property developers that participated in the bid.
And it is not the only land operation to have raised the alarm. For months now, the market has been seeing sales of buildable plots of land at prices that were unthinkable just a couple of years ago. Recently, the Mutualidad de la Policía (Mupol) managed to sell three plots of buildable urban land – in other words, ready to build on – for around €2,250/m2 to another cooperative manager, Gesvieco, which has placed between €40 million and €42 million on the table for the plots that span 5,500 m2. The traditional and conservative property developers such as Pryconsa and Vía Célere were not willing to pay that price (…).
To give us an idea, 24 months ago, according to data from Foro Consultores, buyers were paying €800/m2 for buildable land. In other words, in two years, land prices have doubled. This (impact) price means that the price of homes for end users has increased from around €2,300/m2 to €3,100/m2.
Operación Calderón, the next major operation
Nevertheless, if there is an operation that can break all records, it is the one involving the plots that Atlético de Madrid owns next to the Vicente Calderón Stadium. The club is asking around €200 million for that package of land, in other words, around €3,500/m2, which would give rise to homes with prices of €6,000/m2, well above the price for the area, which ranges between €3,000/m2 and €4,000/m2 (…). The interested parties have already submitted their binding offers, now the club just needs to choose the best suitor.
Original story: El Confidencial (by E. Sanz)
Translation: Carmel Drake