Aedas Acquires a 15,000 m2 Buildable Plot in Valencia

21 May 2018 – Eje Prime

Aedas Homes wants to cause a storm in Valencia and already has plans to build 500 homes in the city, which is famed for its firecrackers and fireworks. Now, the listed property developer is increasing its portfolio of buildable land in the Mediterranean city with the acquisition of 15,000 m2 of land in the Patraix area, split into two plots.

The real estate company in which Castlelake holds a stake could have invested between €5 million and €6 million in these plots, after paying between €350 and €400 per square metre acquired in this operation, according to València Plaza.

The company, which has declined to confirm or deny the information, is whereby adding its fifth project in Valencia, where it already has developments underway in the Quatre Carreres and Nou Campanar districts. Moreover, the property developer recently acquired a plot in Mislata, a town in the capital’s metropolitan area, where it will start building homes next year.

With these operations, Aedas is looking to rival Neinor Homes to become the property developer king of Valencia, a region where, traditionally, investment in the real estate sector always grows early when the Spanish economy is enjoying an upward cycle.

Also in the Community of Valencia, the property developer led by David Martínez has six more projects underway in Alicante, split between the coastal towns of Denia and Jávea and the capital.

Currently, Aedas Homes owns more than 1.5 million m2 of land, almost all of which is buildable. On that surface area, the property developer plans to build up to 13,000 homes in Madrid, Sevilla, Costa del Sol, Cataluña, Levante and the Balearic Islands. Similarly, the company is preparing for its developer break-even point, given that in 2022 it will hand over more homes than it builds.

Original story: Eje Prime

Translation: Carmel Drake

CBRE: Valencia Is Running Out of Urban Land

28 February 2018 – El Confidencial

Valencia is running out of urban land that’s ready to develop. The municipal area is running out of batches of “finalist” land after several years of paralysis in the development of new urban planning spaces. The recovery in demand and the credit granted to the sector over the last year have attracted investors and property developers interested in positioning themselves in an urban market. And that of the third capital city of Spain is proving appealing, since prices there are still well below the saturation point that they are experiencing in Barcelona and, above all, in Madrid. Many of the local real estate businessmen from the boom era have filed for liquidation, and so now it is listed property companies, managers backed by large international and domestic funds and new industrial firms with surplus cash, that have taken over the batten to launch new residential projects.

In total, the city has 60 new build projects in process and being marketed, and the forecast is for another 15-20 developments to come onto the market during the course of the year, according to a sector report compiled by the consultancy firm CBRE, which was presented by the Director of the office in Valencia, José Ángel Sospedra, and the Director of New Build properties in Spain, Carlos de Almeida. Interest from property developers has been concentrated in the few neighbourhoods in which there is “finalist” land to be completed: Patraix, Nou Campanar, Malilla Norte and Quatre Carreres. They are areas that were processed during the real estate boom whose development was cut short by the economic crisis and whose plots ended up in the hands of the banks, for the most part, which, in turn, have been placing them with third parties and which have now ended up in the hands of companies such as Neinor, Aedas, Aelca and Q21.

Almost all of the plots are being processed, which is why CBRE expects that within three to five years, the buildable plots for new build properties will have run out. “Due to the current scarcity of available urban land in the city of Valencia, house prices are expected to increase in the medium term. During 2018, demand will focus on developments located inside the city where land is still available, such as Benicalap, Patraix and Moreres. And for the first time since 2008, we will see interest return to the city’s natural areas of expansion and its metropolitan areas, given that the stock of urban land in the city of Valencia will run out within the next 3 or 4 years”, said the bulletin.

Last year alone, the number of transactions increased by 26%, with more than 8,000 homes sold. That figure will grow over the next two years because that is when the new build flats and houses that property developers started to market and promote last year are going to be notarised (…).

The consequence of this phenomenon, in addition to greater interest in areas that are further away from the old town, in settlements in the metropolitan area, is that property developers are starting to become interested in non-finalist areas pending development, such as the PAI del Grao (…) and the undeveloped plots of Fuente de San Luis, close to the new Hospital La Fe (…).

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

Aelca Buys 209,702m2 Of New Developable Land In Valencia

28 November 2017 – Inmodiario

With these sizeable acquisitions, Aelca has significantly increased its portfolio of land in Levante, where it now owns more than 238,000 m2 of land. Moreover, it has consolidated its position of leadership in the province.

Aelca has completed the purchase of 209,702 m2 of new buildable land in the Community of Valencia. The acquisition involves various plots located in some of the best areas of Valencia and Alicante. In the former, the purchases are located primarily in Patraix, one of the most sought-after residential neighbourhoods due to its proximity to the centre of the city, with wonderful transport links and levels of services. In Alicante, the most representative plot is located in the coastal town of Denia, in a privileged location, in the marina area.

With these operations, the company places itself amongst the leading Spanish property developers, with one of the largest portfolios of land in the country. It is also one of the major players in the residential market in the Community of Valencia, where it now owns 238,000 m2 of buildable land, on which it plans to construct more than 2,300 homes.

“Levante is a strategic market for Aelca. It is an area that is seeing a clear recovery in terms of residential development, driven, above all, by domestic buyers, although foreign demand on the coast is also picking up”, according to Javier Gómez (pictured above, left), CEO of Aelca.

Currently, Aelca, which is considered one of the largest property developers in the country, owns a portfolio of buildable land in Spain covering 1,250,000 m2 for the development of 12,300 homes.

Original story: Inmodiario

Translation: Carmel Drake

Aedas, Neinor & Aelca Start Building New Homes in Valencia

4 November 2017 – El Confidencial

(…) A sign that a new wave is coming to the real estate sector can be seen in the Nou Campanar neighbourhood of Valencia, one of the city’s areas of expansion, which was left frozen in time by the burst of the real estate bubble. For many years, an enormous plot of land measuring 12,000 m2 was a symbol of the indulgences of one of the leaders of the Valencian real estate sector, Juan Armiñana. He used to build his spectacular ‘fallero’ monument that won the Fallas competition year after year on that site (…)

Nevertheless, Arminñana, like many other local property developers, went bankrupt. And although he has now timidly returned to the sector, almost all of his assets ended up in the hands of the financial institutions. The large plot of land described above ended up on Sareb’s balance sheet, as collateral for a portfolio of loans. In turn, the bad bank sold those loans to the US investment fund Castlelake. Meanwhile, Aedas Homes, a listed property developer created by that fund, attended the Valencian real estate fair Urbe on Friday. There, it presented its plans for the city for the next two years, revealing that its star development is going to be located on the same iconic plot that used to be owned by Armiñana.

Aedas is one of the property developers of the day. It has arrived in Valencia as demand for new build properties is heating up, in parallel to the economic recovery. Since April, the firm has put almost 300 new homes on the market in Campanar, Quatre Carreres and Dénia, with the intention of putting the cranes to work early next year and handing over the homes in a couple of years. In turn, Aedas holds a portfolio of land and it is continuing to explore acquisitions, whenever the prices fall within acceptable ranges. (…).

Two of Aedas’s rivals, Neinor and Aelca, have also started to make a controlled landing in the Valencian market. The listed company led by Juan Velayos plans to build 500 homes per year in the Community of Valencia, which it considers its third largest market after Madrid and Barcelona. (…). The real estate company in which Lone Star holds stake has just purchased a plot of land for 200 homes in the neighbourhood of Benicalp and it already owns plots for another 450 homes in the neighbourhood of Malilla.

But, the player that has launched itself into the market without any qualms is Aelca. Although traditionally it has been very focused on Madrid, Barcelona and Málaga, the property developer founded by Javier Gómez and José Juan Martín has now launched developments to build up to 1,200 homes in Valencia. Its immediate projects, which are already being marketed, are located in the neighbourhoods of Patraix and Nou Campanar, and they will be joined by another residential building in the Cabecera Park area and another in Dénia. In Alicante, on the Playa de San Juan, Aelca is also working on its first project on the Levante Coast, Residencial Arenas, a residential complex executed in collaboration with Sabadell (…).

Aedas, Neinor and Aelca are the new kids on the block. But there are other players who have been in the market for a long time. Sareb is one of them. Until a few months ago, it was focusing on divesting its land and second-hand homes. The Community of Valencia is the second most active region in terms of sales for the bad bank behind Madrid, with 488 properties and €150 million of land sold since 2013, according to the entity’s CEO, Jaime Echegoyen. Now, Sareb has rolled up its sleeves and is trying to generate some value from the projects that are underway and unfinished from the banking portfolio that it received – more than €6.4 billion in properties and loans secured by real estate assets.

The bad bank has signed agreements with local property developers and construction companies to develop some of the assets that have not ended up in the hands of investment funds (…).

Another very active agent is CBRE Richard Ellis. It has sold more than 3,000 homes in recent years and has another 400 new build homes on the market in Valencia. These properties have been launched by funds and property developers such as Iberdrola Inmobiliaria, which has built a 58 home luxury residential building in Ruzafa and Q21 Real Estate, owned by the US fund Baupost, which has a presence in the so-called PAI of Quatre Carreres (…).

The volumes of off-plan sales are unprecedented in recent years. Developments that have been on the market for just six months are already reaching pre-sales ratios of 40% or 50% in Valencia and along the coast. These percentages mean that property developers are able to secure financing and improve the trust deposited in them by financial institutions (…).

Foreign property developers are also joining the activity being undertaken by the local players that survived the economic crisis. For example, Ficsa, the real estate brand of the Noguera family, has four developments underway in Valencia and its metropolitan area, with reservation rates of 50%. In addition, Parvasal, which has projects in Patriax and on Avenida Giorgeta (Patraix Plaça and Sosa Edificio) is in a similar position.

Metrovacesa, Grupo Lar, White Real Estate and IHomes also all have developments underway (…), which will be ready in 2019 (…).

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake