Tag: Operación Campamento

Carmena Invites Ministry of Development to Reactivate Operación Campamento with 11,500 Homes

25 September 2018 – El Confidencial

The mayor of Madrid, Manuela Carmena, announced today that she has invited the Ministry of Development to reactivate Operación Campamento, originally proposed in 2005, to be built on disused military land in the south-west of the capital, with the construction of 11,150 homes instead of the 22,100 units projected by the PP initially. This is one of the last remaining urban development projects in Madrid, together with the developments in the southeast of the city and Operación Chamartín, which received initial approval from the Town Hall of Madrid last week.

In April 2015, the Ministry of Defence – the owner of the plots – announced their sale through an online public auction on Addmeet, but in the end, the operation was left hanging. Then, as El Confidencial reported, the asking price for the plots – through the public auction process – amounted to between €200 million and €250 million.

Now, three years later, and with the urbanisation process underway for Madrid Nuevo Norte (MNN) – the new name for Operación Chamartín – Carmena seems to be willing to place enough land on the market to try to put a stop to the sharp rise in prices, both in the purchase and rental markets, that the capital has experienced over the last two years and which has also led Carmena herself to propose to the central Government a moratorium or an automatic extension of the rental contracts that are due to terminate before the Urban Lease Law (LAU) is reformed.

Manuela Carmena made this announcement during her opening speech in the debate over the state of the city, in which she vindicated the Government’s actions in urban planning and its willingness to put a stop to the inequality that exists between the north and the south of the city (…).

As already happened with MNN, where the total buildability was reduced by 21% – from 3.37 million m2 in the previous plan to 2.66 million m2 in the current plan – along with the number of homes – from 18,500 to 10,510, mostly social housing properties – the operation will not go ahead at any price and, according to Carmena’s comments, the total buildability would also be reduced in this new Operación Campamento and the construction of public housing would be strengthened.

Operación Campamento in numbers

Designed on plots of land owned by the state, the Town Hall wants to build 11,150 homes, of which 40% will be private – 4,150 -, 37% will be social housing properties with limited prices – 3,800 – , and 23% will be social housing properties, of which 1,100 will be rental homes.

So-called Operación Campamento was launched in 2005 with the signing of an agreement between the then Minister of Defence, José Bono, and Minister for Housing, María Antonia Trujillo, and the then mayor of Madrid, Alberto Ruiz-Gallardón, for the construction of two phases of up to 22,100 homes on this disused military site to the west of the Spanish capital. Even though today, around half of the homes should have already been built, not a single brick has been laid.

Despite the strategic location of the plots, the reality is that only the Chinese businessman Wang Jianlin, owner of the Wanda group, publically announced his intention to undertake the €3 billion investment on them. That offer never came to fruition because the auction never went ahead (…).

Operación Campamento is one of the most important residential developments in Madrid capital after Operación Chamartín. It spans 1.5 million m2 – with more than 1 million m2 of buildable space – on which offices, hotels, shopping centres, private and public housing, as well as sports facilities and schools could be built. Moreover, the operation would include placing part of the highway to Extremadura (the A-5) underground as well as the construction of a transport interchange at the Aviación Española metro station, where a parking lot is planned for around 2,000 vehicles.

Original story: El Confidencial (by E.S.)

Translation: Carmel Drake

Town Planning Paralysis In Madrid: 60,000 New Homes On Hold

2 February 2017 – El Economista

Paralysis is the word that best defines town planning in Madrid at the moment. And, the people who are ultimately paying the price for these stoppages in the capital are its citizens. The shortage of supply is pushing up land prices, which is, in turn, driving up house prices, forcing many families out of the city centre.

That is the scenario that Madrid is currently facing.  Construction of more than 60,000 homes has been suspended, in the north and south of the city alike, projects as iconic as Operación Chamartín with 17,000 homes, Valdebebas with 1,000 homes, Residencial Metropolitan with 400 homes, Berrocales with 22,000 homes and Operación Campamento with 11,000 homes, are being affected. And these are just a few of the most high profile examples that are still waiting to receive the green light from the Town Hall of Madrid.

The paralysis of these projects has created a lack of supply in terms of housing, which is forcing people to move to towns on the outskirts of Madrid. For example, in the north of the capital, buyers are moving towards Alcobendas and San Sebastián, and in the south they are moving towards Rivas. “These towns are aware of the significant demand that they are generating and in the end, that is causing prices there to rise. In fact, the supply has almost run out in Rivas”, explains Ignacio Ortiz de Andrés, analyst at Foro Consultores.

According to the politician Bosco Labrado, spokesman for the Ciudadanos Party and President of the Committee for Town Planning at the Town Hall of Madrid, “in order to resolve town planning in Madrid, we at Ciudadanos propose obtaining consensus between all of the political forces and agents that participate in town planning – we demand greater legal certainty, updates and modifications to the General Town Plan – which is the tool that we use nowadays, but which is out of date – and finally, support for more public-private collaborations, which have already worked well, such as the renovation of the Beurko neighbourhood in Vizcaya, and efforts to try and strengthen them”.

Affordable (subsidised) housing is particularly scarce. If we look at the south of Madrid, demand has been forced out to towns on the outskirts due to the lack of supply. “If someone is looking for a subsidised homes for between €160,000 and €200,000 with three bedrooms, there is currently nothing available in Madrid. In the south, all construction work at Los Berrocales, where most of the land is owned by the Town Hall, has been suspended and demand has moved to Rivas”, said Juan José Perucho, CEO at the Ibosa Group.

And Los Berrocales is not the only area where work has been suspended. The situation is the same with Operación Campamento, owned by the Ministry of Defence (…). In short, in both the north and south of Madrid, the Town Hall has put the brakes on and Madrid’s housing supply is becoming increasingly limited.

Original story: El Economista (by Luzmelia Torres)

Translation: Carmel Drake

Political Uncertainty Deters Real Estate Investment

31 May 2016 – Expansión

The political uncertainty in Spain is hanging over the real estate sector, which, despite continuing to be active, is not shining with the same splendour that it did in 2015. Specifically, real estate investment during the first quarter of the year exceeded €2,100 million, which represents a 25% decrease with respect to 2015, according to data from CBRE.

The segment most affected by this slowdown was offices, where investment declined by 70% during the first three months of the year, to €180 million. Meanwhile, investment in retail amounted to around €770 million, almost 45% less. By contrast, investment in the logistics sector amounted to €200 million, compared with €80 million in the same period a year earlier. In other sectors – residential and hotels – investment amounted to more than €1,000 million, compared with €885 million during Q1 2015.

Pedro Lacambra, manager at Ibercaja Gestión, explained that the Spanish real estate market is showing signs of a slowdown, which is accentuated in certain business segments, such as offices. The expert said that Socimis account for 40% of all investment in offices, and that they are having to raise new funds to grow and invest in assets. Moreover, he said that the office business requires greater demand for space from existing companies, as well as the appearance of new companies and multinationals arriving in Spain. For Lacambra, the current panorama of political uncertainty does not encourage any of these scenarios.

Meanwhile, Daniel Pingarrón, market strategist at IG, considers that the political uncertainty is weighing down more on the Socimis and real estate companies than on players in other sectors. “ The stock exchanges and financial markets are more globalised and depend a lot less on politics and local factors. By contrast, the real estate sector is more sensitive, as we have seen with Operación Chamartín and Operación Campamento”.

In this sense, the analyst thinks that some investors are waiting for the uncertainty surrounding the formation of the future Government to be resolved before entering Spain.

Taxation of the Socimis

The analyst at Selfbank, Victoria Torres, explains that the political uncertainty that currently exists in Spain is one of the factors that is significantly affecting the real estate sector, which is very sensitive to the legislation in force. “There is a fear that a change in Government could increase the tax charges for Socimis. For that reason, we are not seeing any massive sales, but rather defensive moves to reduce positions until after the General Election”, explains Torres.

Torres thinks that these companies are helping to boost a depressed sector thanks to the tax benefits that they enjoy, amongst other reasons. Socimis pay Corporation Tax at a special rate of 0%, receive a 95% rebate on Stamp Duty (AJD) and Property Transfer Tax (ITP) on capital gains, and do not retain the dividends distributed to their shareholders, which include both individuals and corporations.

For Torres, the new concerns over the sector come at a key moment for the firms, especially Hispania, which is preparing a €231 million capital increase. (…).

Gonzalo Sánchez, analyst at Gesconsult, shares the same view. For him a more or less similar Government would benefit these companies. “Behind the Socimis are overseas investors, who want to have their money where they can see it and to avoid the chance of any nasty surprises”, he added. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Madrid Leads Spain’s Property Development Drive

23 October 2015 – Expansión

The Barcelona Meeting Point, which has been held this week and the Autumn edition of SIMA, which starts in Madrid today, are both proving to be of particular interest to the Spanish real estate sector. And it is no wonder, given that those two regions are leading the way in terms of property development at the moment. But the reactivation of the real estate sector is not proving to be homogeneous: it is slow, uneven and focused on certain large urban areas. Investment funds and real estate companies have acquired offices and commercial assets amounting to €10,800 million so far in 2015, already exceeding the total figure invested in 2014 (€10,200 million). And investors’ interest, which began in the tertiary sector, is now extending to the residential sector, at the hands of a winning formula: the partnership of large investment funds and local property developers.

Interest in ‘ready-to-build plots’ (‘suelo finalista’) has been increasing in Madrid since the end of 2013, however, given the shortage of land in the capital, attention is now starting to focus on other development land (‘suelos con gestión de desarrollo previo’), according to findings from CBRE in its latest report Market View Residencial. The lack of property developments to meet future demand is already a concern for the sector, and that perception has only increased since the change in the municipal government, given that the brakes seem to have been put on several projects: Chamartín, Mahou-Calderon and Canalejas.

According to Servihabitat’s latest report about the residential sector, house sales will have increased by 25.6% by the end of this year, to total more than 400,000 operations. The entity expects the rising trend to continue in 2016, with more than 460,000 house sales, up by 14.5%. As a result, it expects house prices to rise by 2.6% this year and by 6% in 2016. All of the experts agree that the lack of land will end up impacting house prices.

In the centre of the capital, large one-off operations continue to abound, such as the ones closed last year by Domo Gestora, which acquired a plot of land on Raimundo Fernández Villaverde for €111 million; and Ibosa, which was awarded the former Metro depot in Cuatro Caminos. Another highly anticipated operation is the sale of a plot of land on Calle Padre Damián, 52, owned by the Ministry for Foreign Affairs, measuring 15,000 m2, where 200 homes are going to be built. The auction date has not been set yet, but Domo, Larcovi (with Ruiz-Larrea Architects), Comunidades Santa Gema, and the strong partnership between Los Jardines and El Olivar, have created four cooperatives interested in this plot worth around €100 million.

In terms of other future projects, within the M-30 radius, all eyes are focused on Operación Chamartín (17,500 homes), Operación Campamento (10,700 homes) and the smallest project of all Operación Calderón (2,000 homes). For Samuel Población, National Director of Residential Property and Land at CBRE, all three are very interesting projects and, in his opinion, Chamartín is the most necessary. “It will be the vertebral axis between the Castellana and the developments in the North, it has the blessing of the owners and it will take almost 20 years to complete. It doesn’t make any sense, either commercially or development wise, to delay it any longer”. However, the new mayoress of Madrid considers that this urban planning project cannot be resolved “in two months” and has said that no decision will be taken until after the general elections. This uncertainty, which will exist until the final version of the General Plan for Madrid is reviewed and the new Town Hall’s plans are presented in more detail, is not good for the sector, at a time when real estate investment has shot up by 51%, says Samuel Población, who also points out that, the project now known as Distrito Castellana Norte is planned in several phases, which means that its launch is not incompatible with subsequent adjustments.

Scarcity on the horizon

The lack of supply has been felt most notably in the PAUs (‘Proyectos de Arquitectura y Urbanismo’ or Architecture and Urban Planning Projects)  in the north of Madrid: Sanchinarro, Las Tablas, Montecarmelo and Arroyofresno; and is starting to become apparent in Valdebebas. Currently, around 5,000 homes (unsubsidised and subsidised) have been delivered or are about to be in that development alone, out of a total projected number of 13,500. The Junta de Compensación is selling new plots for the construction of social housing, with plans for 1,000 subsidised homes to be built; after that, the supply of protected land in Valdebebas will have run dry.

In the south of the city, the Ensanche de Vallecas area is also showing signs of the shortage: in 2007, there were almost 3,000 homes for sale there, and now there are just 150.

In the southeast, other important developments are planned, such as Valdecarros (48,000 homes), Los Ahijones (15,400 homes) and el Cañaveral (15,000 homes), however there is not yet sufficient demand in those areas to match the vast supply.

Madrid’s residential market is a very polarised and so, despite the fact that there appears to be stock, there are pockets where scarcity is just around the corner.

Luis Corral, the CEO of Foro Consultores, reminds us that  improvisation does not work in the housing sector: “To develop homes, land needs to be created and that takes time, which means developers need to have developable land in their portfolios”.

Original story: Expansión Special ‘Casas’ Supplement (Loreta Ruiz-Ocaña)

Translation: Carmel Drake

Carmena Meets Wang’s Team To Unblock “Chinese Eurovegas”

14 October 2015 – El Confidencial

Manuela Carmena does not know Rafa Benítez, the Head Coach of Real Madrid, or Dimas Gimeno, the Chairman of El Corte Inglés, according to comments made by the mayoress herself during some of her recent public appearances. But she has certainly met the right hand man of the richest person in the world, Wang Jianlin, who wants to develop the largest real estate and leisure project seen in Spain’s capital for many years.

According to sources close to both parties, Carmena met with Laurent Fischler, the right hand man of the Asian magnate and the head of the real estate division of Dalian Wanda Group on 2 October. Fischler arrived in the capital to try and unblock the dispute with the Town Hall of Madrid over the façade of Edificio España, located in the middle of the capital, which the Chinese group bought from Banco Santander for €265 million last year.

That was the first investment in Spain made by the multimillionaire businessman, who is estimated to have a fortune worth €42,600 million, or €38,200 million. The second was the acquisition of 20% of Club Atlético de Madrid for around €50 million. Both cases were small fry compared with this project, which involves the construction of a leisure complex in the south of Madrid and in which he is willing to invest €3,000 million in the first phase and up to €6,000 million in the second phase.

Sources close to the parties say that the conversation between Carmena and Fischler was good-natured. They discussed the renovation of the façade of Edificio España, proposed by Dalian Wanda Group, which the technicians from the Town Hall reject, as they refuse to accept that the demolition will enable the protected features of the building to remain intact. But one of the other central topics of the meeting was understanding the Town Hall’s position vis-à-vis its authorisation of the project known as “Chinese Eurovegas”, after the attempt by the US magnate Sheldon Adelson to construct a gaming city on the outskirts of Madrid.

Wang’s project does not include casinos or bingos or anything of the sort; in fact it is centred around attraction parks, leisure complexes and a real estate development that requires the approval of the Ministry of Defence, the owner of the land where the Chinese magnate hopes to construct his complex, and the Town Hall of Madrid. The Ministry of Defence, which will officially announce the public auction of the 2.1 million m2 land, which used to house the former military barracks of Campamento, in a couple of weeks, has already approved the project, in accordance with the Government’s instructions, after Mariano Rajoy gave his blessing to the project a year ago during a trip to Beijing.

So far, Carmena has not said whether or not she supports this project, which would involve the regeneration of one of the capital’s most “run down” neighbourhoods, a description made by the mayoress herself. Although her electoral program included a comprehensive review of the urban plans and an inspection of the major building projects, such as Operación Chamartín, the former judge has already held meetings with Pedro Morenés, the Defence Minister, to discuss the construction of the complex.

In theory, although their ideologies separate them conceptually, Ahora Madrid and the PP do see eye to eye on this macro-project, which would result in the creation of thousands of jobs (direct and indirect), and the regeneration of the transport network in the southeast of the capital, as well as a significant cash inflow for the central and municipal administrations. They just need to overcome the concerned raised by one neighbourhood association and one group of ecologists, which have been protesting against the renewal of the area.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Operación Campamento Delayed Until Mid-2016

23 September 2015 – El Confidencial

According to the popular proverb, Rome wasn’t built in a day. And Operación Campamento, a development that has already been delayed for more than a decade, may not be completely “clean” to be put up for auction until the middle of 2016. In other words, one of the most anticipated urban planning projects in the capital, whose expected sale was announced in style by the Ministry of Defence – which owns the land – through the real estate website Addmeet in April, will have to wait almost a year. And all because of the urban “paperwork”.

At the beginning of September, Pedro Morenés, from the Ministry of Defence, blamed the Town Hall of Madrid for the delay, as it “has to grant the licences for the project to go ahead. The Ministry of Defence has already gone to the Town Hall to ask for the permits”, he assured the Senate.

According to the experts consulted by El Confidencial, “although the pending urban planning procedures are simple, they will take time. And, in this case, we could be talking about months”. However, far from harming the Ministry of Defence, which expects to generate revenues of €80 million from the sale – as reflected in the State’s General Budget for 2016 – the delay may end up benefitting the central government department, given the significant level of interest the land has sparked amongst investors over the last year. At the beginning of July, the State Land Company (‘Sociedad Estatal de Suelo’ or Sepes) awarded the largest package of land in Madrid to date – measuring 120,000 m2, on which more than 1,200 social housing properties will be constructed – for €50 million.

On a smaller scale, but of no less importance for the purposes of measuring the temperature of this market, have been the on-going sales of land in Valdebebas, which has also witnessed this renewed buyer appetite at first hand, along with the slight “overheating” that is starting to be seen in some land purchases. Prices in this development bottomed out a few years ago at around €800/m2 and currently stand at around €1,100/m2, although some operations are being closed at higher prices.

The experts consulted calculate that Operación Campamento may be put on the market for between €200 million and €250 million, and that the urban planning delay may tip the balance towards an even higher figure. It is worth remembering that this development has a surface area of almost 1.5 million m2, of which 1.3 million m2 are buildable, and almost 11,000 homes (social housing and unsubsidised homes) may be constructed. (…).

In any case, the Town Hall insists that “the procedures that the Ministry of Defence says depend on the municipal institution, are being carried out within the appropriate timeframes” and they criticise the Ministry of Defence for trying to make the general public believe that the Town Hall is to blame for the delay to the Operación. (…).

Original story: El Confidencial (by Elena Sanz and Paloma Esteban)

Translation: Carmel Drake

IESE: Demand For New Homes In Madrid Will Reach 20,000 In 2019

2 June 2015 – El Mundo

At a conference organised by the College of Civil Engineers before the local elections, Manuela Carmena, who will become the mayoress of the capital provided Esperanza Aguirre does not stand in her way, ruled out Operación Chamartín as a significant objective: “I do not think that we need 17,500 homes, we will talk about that again in 2017 or 2018, but not now”.

Her comments are interesting because just a few days later, professor José Luis Suárez, of IESE, has claimed that, during 2015 and 2016, demand for new housing in the metropolitan area of Madrid will reach 14,000 units and in 2017 alone, it will reach 13,000. Suárez is one of the foremost experts in the Spanish real estate market and during the annual symposium of the Center for International Finance (CIF), he presented the preliminary results of a study about the evolution of demand for new homes in Spain until 2028.

Suárez and his team of researchers are building a model to allow them to predict the demand for new homes in nine large Spanish urban areas. The model is driven by several factors, including the reduction in the number of people per household; financing; the rate of obsolescence of homes in use; the demand for replacement; the acquisition of second homes; employment; investment in housing; the preference for new housing; renovations; the declining population; the over-stock of housing; and rentals.

Although Spain’s “demographic winter” may lead us to expect a decrease in the number of homes, as well as in their average size, the calculations performed by Suárez for the Madrid area show that demand for new homes will reach 20,000 units in 2019. This quantity would mean demand returning to the levels last seen in 2009-2010, years when the trend lines between the purchase of new homes and the supply of new homes intersected. At the height of the bubble, in 2006, more than 40,000 new homes were sold in Madrid and during that same year, more than 60,000 units were constructed.

In fact, the excess stock of housing in Madrid is practically non-existent now. There is still excess supply in Spain, but not in places where demand is high.

Urban planning is one of the areas that the local politicians enjoy the most and where Carmena is undertaking a detailed program. She is committed to renovating and supporting operations in deprived neighbourhoods, such as the so called Operación Campamento, which is sponsored by Chinese capital. Although critics accuse the plans of being neoliberal since they serve individual interests, the fact is that urban planning is anti-liberal by definition and is fertile territory for commercialism.

(…)

Original story: El Mundo (by John Müller)

Translation: Carmel Drake

MoD Opens The Bidding For ‘Campamento’ Land

27 April 2015 – Expansión

Auction worth more than €200 million / The Government is launching an auction process to sell a plot of land measuring 1.5 million square metres in Madrid, where the Chinese millionaire Wang Jianlin wants to construct luxury homes, hotels and casinos.

The Spanish Government has decided to refloat the so-called Operación Campamento just seven months before the general election. Today, the Ministry of Defence, the main owner of the land in the area measuring more than 1.5 million square metres, has officially put the plot, measuring 1,550,576 square metres, up for sale on the real estate portal Admeet.

The land, located in the south-east of Madrid, is the preferred location of the Chinese tycoon Wang Jianlin, owner of the business conglomerate the Wanda Group, to construct a mega-project containing thousands of homes, a retail complex, theme parks and casinos.

Negotiations

Jianlin, who officially closed the purchase of 20% of Atlético de Madrid’s share capital in January, has been negotiating with the Town Hall and Community of Madrid for months, to identify a location for his residential and leisure complex in the capital. Previously, in June 2014, he bought Edificio España from Banco Santander for €265 million, which was his first transaction in the Spanish market.

In January, when he signed the deal to acquire a stake in the Madrid football club, Jianlin took the opportunity to reiterate his interest in acquiring the land that is now up for sale. The plot housed the Ministry of Defence’s barracks in Madrid for many years.

Wang Jianlin is willing to invest €3,000 million in this project. To do that, the first step will be to acquire the land. By law, this purchase must be made through a competitive process since it involves a public asset.

“The interested parties must participate in a transparent and competitive auction process, in accordance with state legislation for the sale of property”, says the advert.

Auction

The auction of the land by the Ministry of Defence will be led by Pedro Morenés. The plot measures around 1.132 million buildable square metres and the vast majority has been marked for residential use (986,710 square metres). Subsidised and non-subsidised housing may be built on the site.

Wanda’s goal is to construct up to 15,000 high-end homes, with prices of around €4,000 per square metre. Moreover, offices, retail spaces and leisure complexes may also be built on the site. Wang Jianlin wants to use this land to create a leisure complex, similar to the ones he has constructed in Asia. For the time being, the Ministry of Defence has only released information about the land, and has not set a date for the auction or specified a minimum price.

Minimum price

However, sources in the sector estimate that the Government may set the minimum price at just over €200 million, an amount that is expected to be surpassed both by Wang Jianlin’s bid, as well as by the bids made by other interested parties.

The seller has not revealed the auction date, which may be determined by the timings of the local and general elections due to be held in May and November, respectively. To date, the current President of the Community of Madrid, Ignacio González, has shown his willingness to collaborate with the Chinese businessman, following the decision by the US billionaire Sheldon Adelson to abandon the Eurovegas project in Alcorcón.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake