Neinor Gains Approval to Begin Work on €86-Million Sky Homes Development in Valencia

24 September 2019 – Neinor Homes has obtained approval for its Sky Homes mega-development in Valencia. The new complex will consist of four residential towers with twenty floors each, for a a total of 417 flats. Neinor plans to invest 86 million euros in the development, including the acquisition of the land.

Original Story: Eje Prime

Adaptation/Translation: Richard D. K. Turner

Neinor Homes Posts €12.4-Million Profit in First Six Months of 2019

28 July 2019 – Richard D. K. Turner

Neinor Homes, the developer led by Borja Egotxeaga, closed out the first semester of 2019 with 12.4 million euros in net profits, well above its loss of 8.2 million euros during the first six months of last year. The firm’s revenues doubled, year-on-year, in the period to 161.8 million euros. 85% of its turnover came from its operations as a developer.

Neinor increased its gross margins by 82.1% year-on-year, while, at the same time, reducing its expenses to €22.9 million this year.

The developer delivered 379 homes in the semester, 32% of its target for the year. On the other hand, the company’s NAV fell to €1.325 billion.

Original Story: Eje Prime

Neinor to Invest €550 Million to Acquire Land for New Developments

3 July 2019 – Richard D. K. Turner

Neinor Homes intends to invest 550 million euros to acquire new land for development in the years to 2022. That land should be enough to build up to 13,000 more homes. The company expects to invest one hundred million euros this year and next; €150 million in 2021 and €250 million in 2022.

Having downgraded its forecast for deliveries, Neinor stated that it will deliver between 1,200 and 1,700 units this year; 1,700 to 2,400 homes in 2020 and up to 2,750 in the two following years. The developer currently has sixty projects, with 5,00 homes, under development in such areas as Madrid, Catalonia, the Basque Country and Valencia.

Original Story: EjePrime

 

Former CEO of Neinor Juan Velayos Joins Alantra

24 June 2019Cinco Dias

Alantra has hired Juan Velayos as a managing partner, tasked with building up a new real estate asset management business in Spain and abroad. Velayos will lead the creation of investment vehicles, while raising funds and directing investment, following the example of such major international firms as Blackstone, Brookfield and Cerberus.

Juan Velayos was Neinor Homes’ CEO until two months ago after Lone Star put him in charge of the firm when it acquired the developer from Kutxabank.

Original Story: Cinco Dias – Alfonso Simón Ruiz

Translation/Summary – Richard D. Turner

 

 

Orion Becomes Neinor’s 2nd Largest Shareholder with an 11.1% Stake

29 May 2019 – Eje Prime

The French fund Orion European Real Estate has doubled its stake in Neinor Homes in just two months to 11.1%, despite the profit warning issued by the property developer in April.

As such, Orion is now Neinor’s second-largest shareholder, after the Israeli fund Adar Capital, which owns 28.7% of the shares. Other shareholders include Bank of Montreal (5.2%), Julius Baer (6.2%) and King Street Capital (4.1%).

Based on the current share price, Orion’s package of 8.8 million shares in Neinor is worth €95 million.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

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

Property Developers are Building 18,000+ Homes in Andalucía

18 March 2019 – ABC Sevilla

The real estate market in Andalucía is booming, and in a good way. According to the latest figures from the Ministry of Development, 12,363 permits were granted in 2017 for the construction of new homes, compared with the record before the burst of the bubble of 156,483 in 2006. Construction activity is responding to real demand in the market and is featuring some new players that are planning to build thousands of new homes in the region over the next three years.

Two markets

The investors, which include international funds and local property developers alike, differentiate between two markets – the eastern (Málaga) and the western (Sevilla) – the former accounts for 70% of new developments.

Aedas Homes currently leads the regional ranking by number of homes planned and investments forecast in the autonomous region. The property developer controlled by the US fund Castlelake plans to invest almost €1.3 billion in the region in the construction of 5,150 homes, primarily in the provinces of Málaga (2,600 homes) and Sevilla (1,800).

It is followed by Neinor Homes, which owns a portfolio of 29 plots for the construction of 3,628 homes; Metrovacesa, which has 2,300 homes in its Andalucían portfolio at various stages of completion; and Vía Célere, controlled by another US fund Värde, which is building 1,975 homes across 21 developments.

Meanwhile, ASG Homes has buildable land in Andalucía for the construction of 1,700 homes; Habitat Inmobiliaria, owned by the US investment fund Bain Capital, is working on the construction of 15 developments containing 1,621 homes; and the Sevillan property developer Insur is working on 17 residential developments comprising 1,136 homes at various stages of completion.

Finally, Q21 Real Estate, the property developer created from the alliance of the US fund Baupost and the owners of the former Pinar group, is also constructing almost 500 homes in the region, bringing the total number of homes under construction to more than 18,000.

Original story: ABC Sevilla (by Encarna Freire)

Translation: Carmel Drake

Neinor Withdraws from the Purchase Process of ‘Solvia Desarrollos Inmobiliarios’

28 February 2019 – El Español

Neinor Homes is not going to be one of the candidates that submits an offer to acquire Solvia Desarrollos Inmobiliarios (SDI), the subsidiary of Banco Sabadell. The real estate company has been studying the operation for a while but has concluded, following its initial analysis, that the numbers do not fit with its investment philosophy.

That is according to explanations provided by Neinor’s CEO, Juan Velayos, who acknowledged that he has the sales prospectus on his desk but that at the moment, “it is not a priority” for him. We are talking about a company that has a portfolio of 300 buildable plots and which the bank led by Jaime Guardiola put up for sale in January.

Velayos himself acknowledges that he “loves the portfolio”, but he’s not so convinced by the numbers being seen in the market”. (…). “I’m afraid that it is not going to be for us from the perspective of a disciplined investor”, he said. The first valuations of SDI’s land are in the region of €1.3 billion, given that the portfolio also includes 130 real estate developments in different areas with 5,000 homes under construction.

Indeed, the price of land is one of Neinor’s obsessions. Over the last year, it has purchased 2,400 plots in which it has invested €95 million. Neinor’s CEO believes that his firm has adopted a prudent policy in this regard (…).

As a result, it looks like Neinor will not be one of the candidates to bid for Sabadell’s subsidiary in the end. The bank is awaiting possible expressions of interest for its land company. The intention is to receive binding offers before the end of this quarter and to settle the sale during the month of April.

Interested parties

In terms of the parties that are interested in SDI, they include some of the main international funds such as Cerberus, Värde, Oaktree and Blackstone (…).

The sale of SDI comes after Banco Sabadell sold Solvia, its real estate servicer for €300 million, for which it obtained capital gains of €185 million (…).

Original story: El Español (by Arturo Criado)

Translation: Carmel Drake

Neinor Wants Sabadell’s Land & so is Competing with the Large Funds to Buy SDIN Desarrollo Inmobiliario

17 December 2018 – Voz Pópuli

The bidding for the land owned by Sabadell’s property developer, SDIN Desarrollo Inmobiliario, is going to start in a matter of days and none of the funds wants to miss the party. Everyone has their own interest, but there are some who may bid more strongly than others due to their close relationship with the bank. But this time, they will not be alone.

Neinor Homes wants to take a seat at the negotiating table, according to sources familiar with the operation speaking to Voz Pópuli. The property developer led by Juan Velayos is interested in obtaining the land that Sabadell owns in Madrid and Barcelona. The market classifies the plots as very good. Neinor has not made any comments in this regard.

Oaktree is also going to join the bidding – it has been a familiar face in Sabadell’s recent operations. The fund is very interested in acquiring SDIN Desarrollo Inmobiliario’s land. The plots have been valued at €1.3 billion, according to reports by El Confidencial, which have been confirmed by this newspaper.

Sources familiar with the operation have explained that the fund has a lot of interest after the joint venture that it formed with the group this summer to buy land from Iberdrola.

Cerberus

The third candidate in discord is another old hand: Cerberus. The giant also wants its share of the pie. The acquisition of the property developer Inmoglacier could be related. If it is successful with this operation, the fund could create a new “giant”, which would fulfil all of the requirements to debut on the stock market.

The bidding is expected to begin before the end of the year. It could even start this week but could also be delayed due to technical reasons (…). The intention is for this operation to be closed by the end of the first quarter of 2019 or the beginning of the second.

This operation will begin after Sabadell sold its servicer for €300 million to Intrum on Friday. Solvia has more than €30 billion in assets under management and has sold more than 94,000 properties in recent years.

Original story: Voz Pópuli (by David Cabrera)

Translation: Carmel Drake

Ghost Towns Still Haunt Spain in Property Rebound a Decade After

25 November 2018 – Bloomberg

Juan Velayos’s biggest headache these days is getting licenses fast enough to hand over new homes such as the upscale condos his company is building in the northern suburbs of Madrid.

Less than 60 miles away, Ricardo Alba’s neighborhood tells a different story about Spain’s property market. The fencing instructor is one of only two occupants at a block of apartments whose development was frozen in its tracks when banks pulled the plug on credit.

“The real estate sector’s recovery in Spain is developing at two clearly different speeds,” said Fernando Rodriguez de Acuna, director of Madrid-based real-estate consultancy R.R. de Acuna & Asociados. “While one part of the country is consolidating the recovery of the sector and even expanding, another part of the country is stagnating and is showing few signs of returning to pre-crisis levels in the medium- and long-term.”

A decade after the financial crisis hit, Spain’s real estate recovery is a tale of two markets. Key cities and tourism hot spots are enjoying a fresh boom, fueled by interest rates that are still near historic lows, an economic recovery and a banking system that’s finally cleaning up its act. Private equity firms such as Blackstone Group LP are picking up once-toxic assets worth tens of billions of dollars and parsing out what’s still of value, often using their playbook from the U.S. real estate recovery to convert properties into rentals.

But travel a little beyond the bustling centers, to the outskirts of smaller villages, and ghost towns still litter the landscape — once ambitious developments, often started on agricultural land that was converted into building lots just before the crisis hit. They still stand half-finished, unable to find a buyer.

The “Bioclimatic City La Encina” where Alba began renting an apartment two months ago is one such development. Situated on the edge of the village of Bernuy de Porreros, about 10 kilometers (6 miles) from Segovia, it promised to be Spain’s first environmentally-friendly town, providing solar energy and recycled water for 267 homes, comprised of two-, three-, and four-bedroom chalets and apartments. A faded billboard speaks of the dreams that were sold, including communal swimming pools and gardens for residents who would “live… naturally.”

Today, only about a dozen of the homes are occupied. One street has finished homes but half have their windows bricked up to discourage break-ins, locals said. Alba does have solar panels heating his water, but his electricity comes from the local network. On the far side of the development, trees sprout out of the middle of a street that was never paved. Brightly-colored pipes and cables protrude from the ground. Bags of plaster on a pallet have long hardened.

Spain’s housing crash was fueled by a speculative frenzy combined with loose restrictions and corruption that allowed plots of farmland in rural villages to be converted to feed a demand for homes that never truly existed, said Velayos, who is chief executive officer of Neinor Homes. At the height of the boom in 2006, authorities approved 865,561 new home licenses when even in an economic boom demand is no greater than 250,000 homes, he says.

Banks were handing out loans to developers who had little to lose if a project didn’t find a buyer because the money wasn’t theirs. The result was an almost total collapse of the market and close to $200 billion of soured assets.

About half of them were bought in 2012 by Sareb, a bad bank set up by the government to help lenders. Sareb spent about 50 billion euros to acquire assets that were once valued at twice that amount, mostly loans to developers and real estate. Among the latter are also 97 of the 267 properties at La Encina. None of them are currently for sale as Sareb works through legal issues and construction of many isn’t finished.

Other assets were picked up by deep-pocketed investors such as Blackstone, which has 25 billion euros invested in Spain, according to Claudio Boada, a senior adviser at the firm. The New York-based company — the world’s largest private markets investor — is doing what it did at home after the financial crisis: renting out homes instead of selling them in a bid that fewer people can afford to own. Spain had a relatively high home ownership rate before the crisis but it has since come down.

Blackstone’s Bet

“We’re holding most of what we own and looking to rent it out for the foreseeable future,” said James Seppala, head of real estate for Europe at Blackstone. “There’s a meaningful increase in demand for rental residential around the world, including in Spain, driven by home ownership rates coming down.”

Private equity investors also backed a new breed of real estate developers that are bringing a different rigor to the industry. Companies such as Neinor and Aedas Homes S.A.U. are more tech-savvy when assessing markets, and emphasize industrial production techniques to improve efficiency. They’re behind a surge in licenses for new homes to 12,172 new homes in July, the highest monthly total in a decade.

But demand is uneven: Madrid is enjoying its most robust year of home construction since 2008 with an average of 2,151 licenses awarded per month in the first seven months of the year. In Segovia, just 27 minutes from Madrid on the state-run bullet train, an average of 25 homes licenses have been approved per month in 2018, compared with an average of 180 homes a decade earlier.

The volume of residential mortgages sold in Spain peaked in late 2005 before hitting a low in 2013. Since then they have gradually picked up, with 28,755 sold in August, a seven percent annual increase.

Velayos, chief executive officer at Neinor, said business is starting to pick up beyond Madrid and Barcelona to smaller cities and the coast. His company plans to hand over 4,000 homes by 2021, more than 12 times as many as in 2017. The biggest challenge has been getting licenses approved on time. Velayos had to cut his delivery target for 2019 by a third as often understaffed local councils cause bottlenecks in the production process.

More significantly, Spain’s real estate is now funded by investor’s equity and not credit, said Velayos. Neinor was bought by private equity firm Lonestar Capital Management LLC from Kutxabank SA in 2014 and went public in March 2017. Aedas is backed by Castlelake, another private equity investor, and was floated the same year. Metrovacesa SA, owned by Spain’s biggest banks, held an initial public offering earlier this year.

Shares of all three developers have declined this year at more than twice the rate of the local stock index, a reminder that the market’s recovery remains fragile, with higher interest rates and an economic slowdown on the horizon.

For the Bioclimatic City La Encina, that means it may take longer still until Alba gets new neighbors. Prices for half-finished chalets were slashed by half, according to residents. Some now sell for as little as 16,700 euros, half the cost of a mid-range car.

Alba doubts such cuts will lure buyers. Then again, that may not be a bad thing, he says in summing up the development’s advantages: “It’s very peaceful.”

Original story: Bloomberg (by Charlie Devereux)

Edited by: Carmel Drake