Madrid City Council Gives Preliminary Approval to Operation Chamartín

29 July 2019 – Richard D. K. Turner

The Madrid City Hall gave conditional approval to the Madrid Nuevo Norte project, also known as Operation Chamartín, yesterday 25 years after it was first proposed.

The modifications to the General Urban Development Plan will be sent for final approval to the government of the Community of Madrid.

The mayor of Madrid, José Luis Martínez-Almeida stated that they would maintain the project originally agreed to by the Ministry of Development, the private developer leading the project, Distrito Castellana Norte (DCN) and the Madrid City Council. The mayor added that construction is expected to begin in 2020 or 2021 and generate 200,000 direct jobs.

Community organisations and environmental groups such as the Regional Federation of Neighbourhood Associations of Madrid (FRAVM), Ecologists in Action and the North Zone Platform, stated that they would contest the development in court.

Original Story: El Diário

Operation Chamartín Expected to Receive Go Ahead

15 July 2019 – Richard D. K. Turner

The mayor of Madrid, José Luis Martínez-Almeida, expects that the City Council will approve Madrid Nuevo Norte, also known as Operation Chamartín, in September. Operation Chamartín is a development north of the city of Madrid, near the Chamartín train station, that licensing issues have kept in limbo since 1993.

BBVA owns 75% of DCN, the development’s main protagonist, while the rest belongs to Grupo San José. The firm controls the rights to a large part of the land, which, in reality, is still owned by Adif, the state-owned railway company. Thus, DCN will pay Adif more than €1.2 billion euros over 20 years after the development receives approval.

The Madrid Nuevo Norte involves the construction of 10,500 homes and a new financial zone, in a potential investment of more than €13 billion.

Original Story: Idealista

Operación Chamartín: DCN To Build Tallest Tower In EU

14 April 2016 – Expansión

The property developer behind “Operation Chamartín” plans to construct six towers – five will be around the same height as the four already in place and a sixth will measure more than 300m.

Distrito Castellana Norte (DCN) owned by BBVA and the construction group San José, has unveiled some of the plans for Operation Chamartín. The Chairman of the property developer, Antonio Béjar, explained yesterday that the project will include the construction of what will be the tallest skyscraper in Europe, measuring more than 300m tall and spanning 70 floors.

In total, this project will involve the construction of six towers, five of which will be around the same height as the four towers on the Castellana and a sixth, which will be the tallest in the European Union. DCN also said that 80% of the space will be allocated for use as public spaces and green areas and 20% will be used for the construction of homes, businesses and offices.

“The project is alive and kicking. Now we just need to submit it to the Town Hall for final approval”, said Béjar during the Sustainable Urban Development Forum organised by the newspaper El País. According to DCN, the urban plan has been approved by all of the relevant authorities and technicians through 48 favourable sectoral reports. (…).

Ministry of Development

Béjar reiterated that the completion of the process and the approval of the plan no longer depends on the Ministry of Development, but rather on the Town Hall alone.

In terms of his relationship with Manuela Carmena and her team, Béjar made it clear that DCN has not participated in the recent debates organised by the Town Hall to analyse the feasibility of the project…(…).

“At the moment…our intention is not to take this process to court, not at all. We want to reach agreement and consensus with all levels of government. However, clearly, that does not mean that if the project is harmed or damaged by government decisions that we consider do not comply with the law, that we will stop defending our interests….”.

The Chairman of DCN said that his intention was to unveil the details of the plan so as to “clear up unknowns”. In this sense, he denied that the buildability level would be excessive and pointed out that it is “significantly” lower than the levels in well-established neighbourhoods, such as Chamberí (3x higher), and Paseo de la Castellana (2x higher). He also added that infrastructure represents an investment of more than €1,400 million, which will be funded in full by the owners and will represent “zero cost for the residents of Madrid”. “By adopting a public-private partnership model, the infrastructure will be developed by the owners at the request of the various government bodies and for the benefit of Madrid’s citizens. (….), said Béjar.

Original story: Expansión

Translation: Carmel Drake

Financial Institutions See 2015 As “Year Zero” Of The Recovery

9 February 2015 – El Mundo

Many banks (49%) believe that financing will return to normal between 2016 and 2018

Although many large banks are already taking positions in the real estate sector to benefit from its recovery, with transactions such as Operation Chamartín led by BBVA, or Santander’s increase of its stake in Metrovacesa, the financial sector does not believe that 2015 will be the year that marks the full recovery of the real estate sector. That is the conclusion of a study conducted by the consultancy KPMG, based on the views of more than 200 sector experts in the Spanish market.

According to the document, 2015 is going to be “year zero” in terms of the start of recovery of the Spanish real estate sector in Spain – 80% of Spanish banks and Sareb do not expect credit for housing and other real estate activities to flow normally this year, despite the fact that according to data published by the Bank of Spain, consumer loans and mortgages recorded a slight increase towards the end of 2014, for the first time since 2007.

Many financial institutions (49%) expect that financing will return to normal between 2016 and 2018, whilst 31% do not expect that it will happen for more than two years.

By that time, i.e.. from 2018 onwards, 79% of the banks surveyed (plus Sareb, the bad bank) expect that the stock of real estate assets, which is still being accumulated in Spain and which continues to weigh down on the results of the financial sector, will be absorbed.

Nevertheless and despite the high levels of unemployment, demand could increase significantly from 2016, according to 51% of the financial institutions that have participated in the study.

The sector is divided in its assessment of how this demand will behave and there is no consensus as to whether there has been a change in the mindsets of young people following this economic crisis. 50% of the banks surveyed (plus Sareb) believe that young people (aged less than 35 years) in Spain will continue to prefer to buy a home rather than rent one and most of the rest (44%) think that there will be a change in the home buying trend and that young Spaniards will chose to rent rather than buy as we learn from the past.

Nevertheless, there is complete consensus amongst respondents as to the involvement of financial institutions in supporting the recovery of the real estate market and the importance of their role as lenders, given that the other methods that are currently being used to close transactions – such as direct lending or investment by specialist funds – are necessary but not sufficient for the sector to fully recover.

There is also strong consensus (85%) that the old financing model of high leverage, which generated the property boom in Spain will not be repeated.

Construction reduces its weight over total GDP

According to estimates by the National Construction Confederation (Confederación Nacional de la Construcción or CNC), the construction sector accounted for around 23% of Spain’s GDP in 2007; by 2013, that weight had decreased by more than half (to 10%). The study, conducted by KPMG’s Real Estate team, concludes that 82% of the players involved in this business (banks, Sareb, companies, investors and the public sector) believe that construction’s contribution to national wealth will exceed 10% within five years, however it will have to reach 15% for it to really constitute a recovery. The majority of the participants in the survey agree that employment will be generated in the sector over the next five years. More than half think that the construction sector will provide work for more than 7% of the active population and more than a third believe that this figure will amount to 10%. But everyone agrees that the figure will not reach the level (14%) seen before the crisis.

Original story: El Mundo (by María Vega)

Translation: Carmel Drake

BBVA And The Government Reactivate The Castellana Extension

2 February 2015 – Expansión

BBVA and San José will invest €4,800 million in the Castellana Extension / Covering an area of more than 3 million sqm in the North of Madrid, it will be the largest real estate development project in Spain. An IPO has not been ruled out.

Investment of almost €6,000 million, an area of more than 3.11 million sqm, 20 years of planning and another 20 years of development – those are some of the dizzying figures encompassed by the Castellana Norte urban development project in Madrid, also known as Operation Chamartín or the Castellana Extension.

“It is a very unique, innovative project that will result in the strengthening of the local, regional and national economy. It is the only project of its kind anywhere in the world”, said Francisco Gonzalez, the Chairman of BBVA, on Friday as he presented the plans for the regeneration of the north of Madrid, which has been paralysed for years and which will be the largest real estate development project undertaken in Spain in the last two decades.

The financial institution is the owner of 75.5% of the company Castellana Norte Madrid, the developer behind the plan. The remaining shares are held by the San José Group, whose own shares soared by 8.5% in trading on Friday.

Homes and offices

The project includes the extension of the capital’s main thoroughfare, the Paseo de la Castellana, by 3.7 km and the movement underground of the railway tracks at Chamartín station. 17,000 homes will be built on this land, of which 10% will be subsidised in some way; a financial district covering almost one million square metres will also be constructed.

The company Castellana Norte will drive the regeneration of this area, alongside Chamartín station and its adjoining railway tracks. Thus, of the total investment (€5,974 million), the company will spend €1,300 million on infrastructure and another €3,500 million on the construction of buildings. A long way off of the €11,000 million projected in the initial plans devised for the area in 2008. “The previous project was based on estimated revenues and therefore associated investment when housing was worth 40% more (than it is now)” explained Antonio Béjar, the Chairman of Castellana Norte. “The current plan addresses the shortcomings of the past and will involve a significant degree of self-financing”, he added. Sources of funding may include the entry of a new partner into the company, the use of bank financing and even the IPO of the company.

Construction of this neighbourhood, designed in four areas, will take place over 20 years and will result in the creation of 120,000 new jobs. “The project will generate economic gains of more than €3,363 million for the public administrations”, confirmed the Town Hall of Madrid on Friday.

The developers hope that the various government bodies involved in the process (the Ministry of Development, the Community of Madrid and the Town Hall of Madrid) will formally approve the project during the next few months so that work can begin on the development “at the end of this year or at the beginning of next year”.

Sustainable travel will play an important role in the new urban development, which will include three new metro stations, two train stations and 12.8km of cycle lanes. 80% of the 3.114 million square metres of land (just under the permitted buildable area) will be used for public infrastructure projects, including space for green areas equivalent to 56 football pitches.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake