Tag: Neinor Homes

Land Prices In Madrid & Barcelona Have Doubled Since 2012

24 February 2016 – Real Estate Press

The price of urban land in Madrid and Barcelona has more than doubled since the lows of 2012 and is now threatening the recovery of the real estate sector, as property developers are being forced to put homes on the market at prices that consumers are unable to afford.

Domestic property developers are being the most active in denouncing the increase in land prices, driven by the scarcity of urban plots and the difficulties involved in obtaining licences for new developments.

In the case of Valdebebas, a development located 21 kilometres from the centre of Madrid, the ‘repercussion value’ per m2 has increased from €700/m2 at the beginning of 2014 to €1,200/m2 last year, with values now reaching €1,600/m2. “Land prices are increasing at an alarming rate in Madrid and Barcelona”.

According to the real estate consultancy firm Irea, the volume of land purchases tripled last year to reach €929 million (representing 7% of total real estate investment). According to the report, the majority of transactions involved plots of land assigned for development, which accounted for €706 million of the investment, whereby multiplying the figure recorded in 2014 by 7x.

Domestic investors accounted for just 1% of this investment, with real estate companies, many linked to international funds, accounting for 43%. Nevertheless, the bulk of the funds were direct investments by funds (38%) and Socimis (18%), which together invested €523 million.

The largest land purchase operations last year were seen in Barcelona and Madrid. In Cataluña, Neinor Homes, the property developer controlled by the fund Lone Star, purchased land worth €200 million, where it plans to construct 1,500 homes. Moreover, Vía Celere invested €78 million in the development of homes in Barcelona (Magòria and El Fòrum) as part of a joint venture with the fund Chenavari. Meanwhile, Corp acquired land in Sant Boi, Arenys de Mar and Molins de Rei to construct 850 homes. In Madrid, the US fund Castlelake bought a batch of four plots of land for residential use in Boadilla del Monte from Sareb, and Grupo Lar and Pimco joined forces to buy a plot of land in the centre of Madrid for €120 million.

The recovery of land prices is being driven by a rise in prices and sales in the wider real estate market, and has led the primary owners of land, namely Sareb and the financial institutions, to reduce their land sales and opt for direct development instead. Sareb will begin work on 13 housing developments imminently, ten of which will be constructed by Solvia, the real estate arm of Banco Sabadell, one of the most active banks in the development segment, with more than one thousand homes under construction across Spain.

Original story: Real Estate Press

Translation: Carmel Drake

Solvia Will Market Over 6,000 Neinor Homes Properties Valued At 400 Million

15 February 2016 – Expansion

The agreement will mean an increase in sales of these properties for Neinor Homes.

Solvia has reached an agreement with Neinor Homes to market a portfolio of 6,200 properties of this residential developer valued in EUR 400 million and consists mainly of residential assets acquired from financial institutions, the company said.

Specifically, 60% of the properties in the portfolio are homes and, to a lesser extent, are business premises (17%), land (13%), offices (6%) and other assets such as warehouses, garages, lumbers, etc. Likewise, 80% of the assets are located in Andalusia, Madrid and the Basque Country.

The contract will mean for Neinor Homes an increase in the sales of these properties, while allowing Solvia to increase the market share of the company in the regions where these assets are located.

Solvia accumulates over 50,000 properties sold since 2011, through its multi-channel marketing model and its open and territorial structure platform that allows the company to maximize the value in the marketing of assets.

Original story: Expansion (by Europa Press)

Translation: Aura Ree

Investment Returns To The Residential Market

11 February 2016 – Expansion

Experts say that this trend is heterogeneous, with regions that need to dispose of their stocks and other in need of developable land.


The residential business – until recently the ugly duckling in the housing sector – emerges again as one of the values on the rise, in part thanks to the return of large reals estate companies to this activity, one of the most affected by the economic crisis. Thus, for the first time since in mid-2007 the gradual deterioration of the housing market situation began, the sector turns its attention to this business, since in 2014 it showed the first signs of improvement, although with a concentrated demand in very well located and high segment product.

Ongoing projects  

Some of the most recent examples are the Socimi Lar-Pimco España, which will soon begin “Lagasca 99 project” on the site at Juan Bravo, 3, Madrid, or Metrovacesa, with “Ciudad del Sur” in Tarifa and the study of new projects in Madrid. Likewise, Realia has residential assets in the Madrid suburb of Valdebebas and Quabit has strongly returned to this activity thanks to the capital increase undertaken last year. At the same time, developing companies like Via Célere, Pryconsa, Aelca, Inmobiliaria del Sur or Neinor Homes are making a move in this segment with the aim of becoming the first residential developer of Spain, as well as cooperatives as Momentum, Domogestora and Ibos. 
The director of the National Residential and Land area of CRBE España, Samuel Población Blanco, emphasizes the “great heterogeneity” in this trend, with differing behaviors. 
Thus Población highlights that while in Madrid there is a great need for developable land, with the risk that in one year the housing demand can be much higher than the existing supply, other regions still need to dispose of their stock. 
Likewise, Población notes that SOCIMIs and asset management companies will be increasingly interested in the residential renting area, coinciding with the change of mentality in Spanish society, the higher functional-geographical mobility and the professionalization in this activity. 
For his part, the Chairman of Armabex, Antonio Fernández, explains that there is a gap between renting demand in Spain and Europe, which tends to shorten due to the new working conditions and the lack of funding. 
”In Madrid, for example, they lack efficient product; no large blocks or buildings dedicated to renting” says Fernández.

Original story: Expansion (by Rebeca Arroyo)

Translation: Aura Ree

Copisa Sells 7 Plots To Castlelake To Avoid Bankruptcy

18 November 2015 – El Confidencial

Josep Cornadó, the President of Copisa, the construction company accused of paying unfair commissions to Jordi Pujol Ferrusola and of financing Convergència Democràtica de Catalunya (CDC) in exchange for sizeable contracts, has had enough of his comings and goings at court, and is trying to save his company from bankruptcy. Given its precarious financial situation, with overdue amounts owing creditors, the Catalan construction company has been forced to put itself into the hands of the so-called vulture funds.

According to financial sources, Copisa has sold seven plots of land in Cataluña to Castlelake, a firm that specialises in opportunistic operations and manages $7,200 million around the world. The company, formerly known as TPG Credit Management, has created a team in Spain to take advantage of the difficult situations that companies and institutions are finding themselves in; many are having to sell (off assets) at any price to pay their creditors.

One of the entities that fits this profile is Sareb, or the ‘bad bank’, from which Castlelake has purchased several batches of real estate assets. Another is Copisa, which is throwing in the towel for the third time in just over a year because it cannot pay its debts. Sources in the sector indicate that Castlelake has acquired seven plots of land from the Catalan construction company, with a buildable area of more than 32,000 m2. The land is primarily located in L’Hospitalet and has been sold with discounts of more than 40% on the book value.

The transfer of these assets has been performed with the approval of BBVA, Santander and Caixabank, the three main creditors, with which the group owned by the Cornadó family has been negotiating repayment extensions for almost four years. The last missed payment amounted to €20 million and it has been overdue now for several months, which means that the banks are entitled to enforce the loans and repossess the guarantees. Or in other words, to take ownership of Copisa’s shares, and whereby become owners of the company.

(…) At the same time, the company has completed the sale of two other assets linked to the real estate company Neinor, the former subsidiary of Kutxabank, which was acquired by Lone Star last year for almost €1,000 million.

According to official sources, Lone Star, the opportunistic fund that has created the largest real estate company in Spain through its purchase of the non-performing loan portfolio from the German bank Eurohypo for €3,400 million, has also acquired two property developments from Copisa in Barcelona, one on Calle Pintor Alsamora and the other on Plaza de Europa, which together include 110 homes, and have a buildable area of almost 13,000 m2.

In the hands of the three major banks

The company, which has negative equity of €113 million, should technically be wound up. Only the continued extensions from Santander, BBVA and CaixaBank, are allowing it to survive and not have to file for bankruptcy. Copisa’s debt amounts to almost €300 million, whilst its parent company Auro 97 SL, carries liabilities amounting to €420 million. (…).

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Servihabitat: House Prices Will Rise By 6% In 2016

18 November 2015 – Expansión

According to Julián Cabanillas, the CEO of Servihabitat, the volume of house sales could reach half a million units in 2016.

This data indicates that we can expect an acceleration in the level of activity in the sector with respect to this year. The company expects 2015 to close with an increase in house prices of between 2.3% and 2.6% and the sale of around 400,000 homes.

During an informative event organised by Europa Press, Cabanillas echoed the messages of the President of Merlin Properties, Ismael Clemente, and the CEO of Neinor Homes, Juan Velayos, in highlighting the trend towards recovery in the real estate sector. (…).

“In the absence of externalities, we are facing a positive cycle, at least in the real estate sector, where we should have a strong tail wind for an extended period”, said the President of the Socimi, who said that the current expansion of the sector could last for up to seven years, “if it is properly managed”.

In terms of the segment for the development and sale of homes, “it has taken a bit longer to get going, but their ducks are now all in a row”, said the CEO of Neinor Homes. “We expect to see a flurry of activity over the next few years”, he said.

Nevertheless, Velayos considers that one of the challenges facing the sector, which could strenghthen this recovery, is for developers to stop being so “self-centred” and to think less about supply and more about demand, in terms of the types of homes that citizens actually want. According to his predictions, the sector is facing some “important challenges”.

In this sense, the CEO of Servihabitat said that the stock of unsold homes accumulated during the crisis is reducing at annual rates of 30% and that now certain areas are experiencing significant demand, including parts of Madrid and Barcelona, “where clients are no longer able to find the real estate products they are looking for”.

Moreover, he said that the “rental market is here to stay”, highlighting that the percentage of households that live in homes under lease arrangements has risen to represent 21% of the total, from 15% before the crisis. And he predicts that this figure will continue to rise.

Cabanillas attributed this increase in demand for rental housing to changes in social and family structures, as well as to the need for labour mobility and the fact that, after what happened with the crisis, citizens are more reluctant to get themselves into debt.

“These changes are going to force the sector to change and adapt”, said the CEO of Servihabitat. “Increasingly, more Spaniards can afford to take out a mortgage, but they are not doing so because owning a house is not something that they are even considering. In the same way, they are increasingly less likely to want to own a car, they would rather just rent one”.

Original story: Expansión

Translation: Carmel Drake

Investment Funds & Socimis Revolutionise RE Sector

26 October 2015 – Expansión

The real estate sector is recovering well. During the first nine months of 2015, purchases of offices, commercial and logistics assets, hotels and residential properties amounted to €10,800 million, representing an increase of 57% compared with the same period last year. After more than five years of severe economic difficulties, the return of investment, at the hands of investment funds and Socimis has breathed a new wave of optimism into the sector.

“After a really tough economic crisis, we were almost in a coma and the arrival of these funds is invigorating the market”, said Juan Antonio Gómez-Pintado, President of the Association for Real Estate Developers in Madrid (‘Asociación de Promotores Inmobiliarios de Madrid’ or Asprima), who together with Rafael González-Cobos, President of Grupo Inmobiliario Ferrocarril and Gecopi; Alberto Fernández-Aller, Corporate Director of Prinex Real Estate; and Manuel del Pozo, Assistant Director of Expansión, were responsible for opening the forum ‘The New Era of the Real Estate Sector in Spain: Investment funds and Socimis’.

The event, organised by the newspaper Expansión, in collaboration with Drago Capital, Gómez-Acebo & Pombo, JLL, Neinor Homes and Merlin Properties, and with Prinex as the technological partner, served to highlight the evolution of the market in recent years and the impact the Socimis have had on the strong investment figures recorded in the sector.

46% of the capital invested in Spain so far this year has come from Socimis, an investment vehicle inspired by the REITs in the USA, first launched in the 1960s, which did not arrive in Spain until 2009. As the Corporate Director of Prinex Real Estate explained, they are “a mechanism that allow us to hold much more open asset portfolios, without any major legal or regulatory obligations and with great tax advantages”.

Partnerships

Moreover, the entry of international capital is also helping to professionalise the sector, as well as to support the recovery of Spanish property developers and real estate companies, hit hard by years of paralysis and lack of investment. “All of the funds coming into Spain are looking for support from companies that already know the environment. They are using their capital to undertake operations with Spanish developers”, said Fernández-Aller. “They generate capital movement, investment and jobs. The Socimis are helping to create a professionalised stock of homes for rent”, added the President of Grupo Inmobiliario Ferrocarril. (…).

Meanwhile, the participants highlighted the threat that political instability poses to the recovery of the real estate sector. One example, they indicated, is Madrid, where all of the major urban planning operations (Canalejas, Chamartín and Edificio España) are currently on hold.

Large cities

The recovery of the real estate market is happening in a very uneven way and, for the time being, is limited to the major cities only, such as Madrid and Barcelona, and some coastal regions. (…).

Meanwhile, Juan Velayos, CEO of Neinor Homes, emphasised the profound transformation that the Spanish real estate market has experienced over the last 18 months and said that he was convinced that the mistakes that led this sector – which accounted for 25% of the country’s GDP at its height – to the brink of disaster, will not be repeated.

“What we are seeing in Spain is an absolute transformation of the industry. I do not think that the banks will let what happened before with the RE bubble happen again. We are not going to see any projects without equity. It is going to be a sector that, for the first time, builds what customers actually want. If we do not understand that (basic premise), then customers are not going to buy homes from us”, concluded Velayos.

Original story: Expansión (by Javier G. Fernández)

Translation: Carmel Drake

Anticipa: 230,000 New Homes Will Be Built Before 2018

22 October 2015 – Expansión

The supply of housing in Spain will grow by 20% p.a. and the market will receive around 230,000 new homes between now and 2018, according to a study by Anticipa and Josep Oliver, a professor at the Universidad Autónoma de Barcelona, which was presented at Barcelona Meeting Point yesterday.

Spain currently has 983,000 homes to sell. In 2018, there will be 978,000 empty units. The accumulation of unoccupied housing stock, which partly explained the crisis in the sector, will remain stable for the rest of this decade and will only decrease if fewer homes than forecast are built. It is expected that the economic improvement will help the formation of new households – and the demand for homes – despite the falling population.

Lluís Marsá, President of the Property Developers (Association) of Barcelona (APCE), warned that the pace of house construction in Cataluña is four times lower than it should be, but he did not dare to predict when it would return to its normal ratio of 3.5 new homes per thousand inhabitants.

The recovery is very heterogeneous. “We have a two-speed market in Spain and when some people hear talk of recovery in the country, it would not be unreasonable for them to respond with a comment such as: “What are you talking about?””, said the CEO of Neinor Homes Madrid, Juan Velayos, during a talk.

Whilst Madrid and Barcelona have shortages, there are still lots of unsold properties left in unpopulated areas, as the CEO of Vertix Barcelona, Elena Massot, highlighted. She warned that the price of land may rise due to the entry of funds into the market.

The experts point to a rise in rentals, which have increased from 10% to 17% in recent years. “This figure is going to continue to rise”, said the Director General of Servihabitat’s real estate business, Juan Carlos Álvarez.

One segment that is very much not in crisis is the hotel sector, which will grow by 72% in 2015 to €1,900 million, according to the consultancy CBRE. This volume reflects a return to pre-crisis levels.

Original story: Expansión (by A. Zanón)

Translation: Carmel Drake

Spain’s New Property Developer Kings – Who’s Who?

5 October 2015 – El Economista

The funds, financial institutions and real estate companies that have survived the crisis, forecast that they will construct 150,000 new homes and 50,000 secondary residences per year until 2020.

After the burst of the real estate bubble and the harsh years of the crisis, a new panorama is now emerging in the construction sector with several new players in the wings. Many funds and financial institutions have already emerged as the new stars of the residential development segment and have taken on a significant role in the sector.

Nevertheless, these banks and investment firms will have to share the market with some of the survivors from the past, namely the former property developers. A handful managed to survive the drought, as they diversified their businesses and/or made intelligent developments before the crisis, and they are now ready to become property kings once again.

Neinor Homes, will undoubtedly be one of the most active companies over the next few years, since according to its forecasts, it will construct between 2,000 and 3,000 homes per year. The company, led by Juan Velayos (former CEO of Renta Corporación) is the largest residential real estate company created in Spain following seven years of recession.

Neinor Homes is pushing down hard on the accelerator. This year alone it will invest around €1,000 million on the purchase of land, which it will add to the land worth €350 million that is already holds on its balance sheet. (…).

The banks are also entering the sector

According to the first report prepared by Solvia, to analyse the trends in the real estate market, the banks, through their servicers, have also positioned themselves amongst the main property developers. Solvia itself is playing a significant role in the new panorama. The real estate company owned by Banco Sabadell has already developed more than 3,380 homes over the last few years and has around €4,200 million in land assets under management. (…).

BBVA has also launched itself into property development, as the Commercial Director of BBVA Real Estate – Anida, Lorenzo Castilla explains. The entity is evaluating the development of 25 sites for the construction of 2,000 homes, whilst already developing another 12 for the construction of 630 properties.

The director clearly describes the new model that has now been implemented in the sector, he says that “it is not about filling Spain with cranes, but rather focusing on projects that make sense”, given that “there was a distinct lack of rationale during the boom years”.

According to the estimates published in Solvia’s Market View report, both Altamira, the real estate subsidiary of Banco Santander, and Cerberus will develop between 1,000 and 2,000 homes per year. In the case of the US fund, this development will be centred on the urban complex it purchased together with Orion from NH, in Sotogrande (Cádiz) for €225 million. (…).

The real estate companies make a return

Solvia’s report also highlights that property developers such as Via Célere, Corporación Promotors, Pryconsa and Inmobiliaria Espacio will also be developing between 500 and 1,000 homes per year. (…).

All of these projects come in stark contrast to the still very high figures for unsold housing stock (533,734 units in 2014). Moreover, the experts say that a significant volume of this stock may never be sold, however, the sector justifies the new developments. Solvia says that the business model that it applies now is more conservative than in previous years, since land purchases are generally being financed using own funds. In addition, “the lack of stock in certain areas, and the existence of pent-up demand, makes the conditions very favourable for a return to development”.

On the basis of this data, property developers estimate an annual output of 150,000 new homes and 50,000 secondary residences between 2016 and 2020.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Neinor Wants To Sell 1,000 Homes In Andalucía

21 July 2015 – El País

The residential property developer Neinor Homes has announced its new real estate project for Andalucia, where in addition to continuing to market CajaSur Inmobiliaria’s portfolio, it also expects to sell 1,000 homes and reach a cumulative investment of €200 million by purchasing buildable land. The real estate company has opened a new office in Córdoba, from where it will coordinate its expansion across the autonomous region.

Neinor Homes, which was launched in May of this year, is committed to marketing residential assets from both Kutxabank, as well as from its subsidiary CajaSur, throughout Spain over the next seven years. It also owns a stock of land for the new development of more than 5,000 homes and its business plan for 2015 includes a domestic investment of around €1,000 million to purchase land.

For the time being, Neinor’s own residential portfolio of finished products, which the firm has started to market in Andalucía, contains approximately 500 homes, including properties in developments such as Benalmádena Golf, the second phase of Residencial Duquesa de Manilva and Valle Romano.

Original story: El País

Translation: Carmel Drake

US & Asians Investors Want To Construct More Homes In Spain

30 June 2015 – El Economista

There are 439,000 empty new homes in Spain. However, that figure is not deterring international investors, who are coming here to construct more homes. According to Roger Cooke, Senior Advisor in the Real Estate Transactions team at EY: “US and Asian investors are very interested in buying land in Spain for the development of homes”.

This is a significant development in the market. “In the 20 years that I have been working in the Spanish real estate sector, this is the first time that international investors have been interested in Spanish land for residential development”, explains Cooke, who remembers that before the crisis, foreign investors channelled funds into property development, but only in non-residential segments, whereas most of the investors in the residential sector were domestic.

Nowadays, many overseas investors are looking to build partnerships and work together with Spanish developers – under these arrangements, the investors inject the majority of the capital and the developers provide the local knowledge.

In fact, some of the large funds have already managed to reach such agreements in Spain, for example, the case of Lone Star, which will invest €1,000 million this year buying land through Neinor Homes. Together, they hope to launch ten developments and sell more than 2,000 homes.

Space in the market for everyone

With figures of this magnitude, it is easy to think that the country must be heading towards another real estate bubble. However, Cooke considers that there is sufficient demand for new housing developments in Spain. (…).  He says that there are currently two types of buyer, which reflect the two types of development: those where construction has not yet started; and those properties that were built before the crisis.

Moreover, on the one hand, there are buyers who look for the best price. They want to acquire properties constructed before the crisis, in peripheral and/or sparsely populated areas. On the other hand, there are more sophisticated, primarily international investors, which are more focused on new developments on the coast. These types of clients are willing to pay more money, but for homes that are built to their liking and have high standards of quality. (…).

For now, the residential market is recovering in cities such as Madrid and Barcelona, but Cooke warns that “we must look towards the coast, because that is where we see demand for holiday homes”.

In this segment, European buyers are the most active, although potential buyers from outside Europe are also arriving on the scene.

Asian investors have also seen the opportunity in this market and are starting to buy land to develop certain projects.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake