Until the end of March, the date on which Covid-19 brought the habitual performance of almost every activity in Spain to a standstill, there were more than 4,800 new construction projects underway across the country, comprising 131,471 homes, according to data from the real estate big data platform Brainsre.
Of those more than 131,000 homes under construction, more than half form part of so-called large developments, i.e. projects with more than 50 units. That means that almost 800 macro-projects, comprising 75,630 homes, are being built to respond to the shortage of existing new build homes on offer. This has been reflected in the price trends, which have been growing at a faster rate than the prices of second-hand properties.
Of the 789 large developments in progress, ten contain more than 300 units. These are unique projects, located in large cities such as Madrid, Barcelona and Valencia, but there are also examples in Málaga, Bilbao and Tarragona. Together, these ten macro communities will comprise a total of 3,729 homes.
The ‘Twin Towers’ in Madrid
This is one of the most iconic real estate projects currently being constructed in the capital, in addition to being a key residential venture. It is the Skyline project and it consists of two skyscrapers that the high-end property developer Stoneweg is building in the Tetuan neighbourhood, in the north of Madrid. It will comprise 600 homes in total.
“It is a twin tower development. One of the towers is intended for sale to individuals and is being marketed by CBRE – it comprises 303 units. The second tower has been sold to M&G Investments and will initially be used for rental housing”, explains Diego Montojo, analyst at Brainsre.
With prices ranging from €300,000 to €645,000, construction work began during the first quarter of 2020 and is expected to last until the beginning of 2022. “The building work was halted by Covid-19 but no changes are currently expected to be made to the key delivery dates; in terms of the effect of coronavirus on reservations, there have been no cancellations,” says Montojo.
The largest rental project in Spain
Just one of the ten projects containing more than 300 homes is dedicated entirely to rent. That is the Barcelona Sants residence, owned by Becorp -the real estate agency created by the property developer Corp and Scranton, the investment vehicle owned by the Grifols family. It comprises 421 apartments for let. “This project is still under construction – the building work started during the second quarter of 2018 and the keys are due to be delivered in early 2021. The homes are not yet on the market,” according to the analyst at Brainsre.
Becorp’s complex will have 12 floors and 3,956 square metres of common areas, along with swimming pools, a wellness area and coworking centre.
Neinor, the ‘king’ of the large projects
Another project comprising more than 400 units is the Sky Homes development being constructed by the listed property developer Neinor Homes in Valencia. The company led by Borja García-Egotxeaga currently has more than 960 homes under construction in the Community of Valencia, of which 417 correspond to a single project, with an investment of €86 million. “The construction work on this project started during the fourth quarter of 2019, after the license was obtained in September; the delivery of the keys is scheduled for the end of 2022”, explains the analyst from Brainsre.
Nor is it the only major project Neinor Homes currently has underway. The company, which had almost 5,000 homes under construction until all building work was suspended by the Government, has two other developments amongst the largest in Spain. They are Bolueta Homes, in Bilbao, comprising 328 units. That is the sixth largest residential project under construction in the country. Work started there during the second quarter of 2019 and with prices starting at €235,000, this macro-project is due to be completed by the end of 2021, according to its developers.
The ninth and tenth largest developments in Spain also bear the seal of the Basque property developer (which has its origins in the real estate portfolio of Kutxabank). The ninth largest is Amara Homes, in the Madrilenian municipality of Las Rozas, comprising 316 homes. Work started on that project at the end of 2019, and with prices starting from €353,100, the company has already managed to sell 295 units. In addition, the firm is developing another project in Malaga (Hacienda Homes), comprising 308 homes and involving an investment of €65 million.
Neinor Homes had planned to deliver between 1,700 to 2,400 homes in 2020.
Meanwhile, the Madrilenian town of San Sebastián de los Reyes is home to the fourth largest new home development in Spain: King, comprising 363 apartments. Its promoter, the company ASG Homes, started work on this macro-project last September, with the aim of completing it in early 2022. The project comprises 363 lofts whose prices start from €157,900. “To date, they have sold about 30,” says Diego Montojo.
Also in Madrid, with 334 homes, the only project carried out under a cooperative system, is ranked in fifth place, namely, Residencial Maravillas. Located in the financial centre of Madrid, a stone’s throw from Paseo de la Castellana and Nuevos Ministerios, this project has been underway for several years since Domo Gestora was awarded the land where the old Artillery Precision Workshop was located in late 2014 for €111 million.
After various legal problems obtaining the building permit, due to complaints from environmental groups, these 334 homes, which have already been assigned to the cooperative members, are expected to be completed in the third quarter of 2021.
Behind the remaining two large developments are two new property developers: AQ Acentor and Kronos Homes, which are building the AQ Turianova development, in Valencia, comprising 324 homes; and The Kube, in Tarragona, with 318 units.
In the case of the first, which is the seventh largest development under construction in Spain, 324 units are currently being built, although AQ Acentor’s plans contemplate the construction of 1,200 homes in total. Of those, 544 homes will be social housing properties. “It is a new neighborhood that is being developed in the area. The part of the development called ‘Arcos’ corresponds to private housing and the part called ‘Riodeva’ corresponds to subsidised housing (VPO),” says Montojo. With prices starting at €159,900, the building work was due to start in February 2020 and 30% of the homes have already been sold.
Meanwhile, The Kube project, by Kronos Homes, in Taragona, is the eighth largest residential project. Designed by the DNA Architects studio, 98 of the 318 homes it will comprise have already been sold. “They are deferring payments for customers who have made reservations. For 3 apartments that were about to be reserved, a discount of €20,000 euros has been applied on the condition that the buyers go ahead with their reservations during this lockdown period. In theory, they are not planning to lower their prices, since they were actually planning to raise them in a few months time,” says the analyst from Brainsre.