16 May 2018 – Press Release
The real estate developer created by a former director of Fortress now owns a land portfolio spanning more than 1 million m2 for the construction of 8,000 homes.
Led by the investment manager Kronos, the real estate company Kronos Homes has become one of the largest property developers in the country, in just four years, with a land portfolio that exceeds 1 million m2.
Saïd Hejal leads the company. The Parisian founded Kronos in 2014, after several years studying the Spanish market from London as the head of one of Fortress’s investment funds. “I was in charge of investments in Southern Europe (Portugal, Spain, Greece and France) for Fortress, with a particular focus on Spain from 2012 onwards. We chose Spain because we believed that it was the market with the greatest future growth potential with respect to the other European countries”, explains Hejal, Managing Partner of Kronos.
Unlike other investors, the former executive of Fortress opted to create his own property developer and grow it to become one of the largest landowners in the country. “I have worked for years in the US, and there, the property developers were focused on design; in Spain, we saw the opportunity to create a company based on design, that’s why we chose to create a company, with a new image, rather than acquiring an existing one”.
To carry out this project, Hejal went to a group of investors who, through Kronos Asset Management, put together the funds to create the Spanish developer. “Kronos is the owner of Kronos Homes, the brand of the residential developer. We have an office in London since most of our investors are based all over Europe; they are family offices and global investors. In total, we have around 15 investors, who arrived after the company was created, although the family that founded Kronos is also still with us”, explains.
Since its creation, Kronos Homes has invested €500 million in the purchase of land. “We have a portfolio spanning 1 million m2, which will allow us to develop 8,000 homes. The plots are located in Madrid, Cataluña, Costa del Sol and Alicante. Now we are entering some of Spain’s large capitals such as Córdoba, Sevilla, Tarragona and Cadiz”, says Hejal who predicts more new acquisitions. “We plan to invest another €500 million over the next 24 to 36 months”.
To this end, Kronos is backing the selective purchase of land. “We have acquired two thirds of our current portfolio from banks and the other third from developers; we have also completed several operations with Sareb and we will continue to work in this way”.
Thus, he rules out the possibility of corporate operations, giving priority to organic growth. “We are not interested in buying other companies. Such deals typically involve very difficult processes, combining corporate cultures and requiring a lot of time for integration.”
Kronos closed 2017 with 500 homes sold, among their developments in Madrid, Barcelona, Costa del Sol and Alicante. “2017 was quite a good year, better than expected, and 2018 is going very well, too. We have some very expensive projects and others that are more affordable. Our cheapest house costs around €145,000 and the most expensive, €2 million. The latter is a spectacular project in Estepona (Málaga), designed by Rafael de La-Hoz”.
“Our typical customers are first-time buyers, who have budgets of between €300,000 and €400,000.”
Unlike other investors, the head of Kronos Homes is not planning to debut his firm on the Stock Exchange – “we are not interested, there are too many distractions”, he says – but he does plan stay with the company for many years. “Our plans in Spain are long term, we have already developed ten projects, this year we will deliver more than a hundred homes (133) and launch six new promotions. In 2019, we will launch another 20, including a project in Valencia that will be the tallest residential building in the city, with 34 floors”.
The plans of Kronos coincide with other ambitious bets from property developers such as Aedas, Vía Célere and Metrovacesa. “I think it is good that there is competition, it is healthy and positive for the consumer. We have positioned ourselves in a certain niche, with a focus on design and architecture, and that is what makes us different.”
Original story: Press Release
Edited by: Carmel Drake