Zaragoza Leads the Sale of New Build Homes in Spain

5 November 2018 – El Periódico de Aragón

Zaragoza is still leading the sales of new build homes in Spain. Last year, it was the third-ranked city in the country, after Madrid and Barcelona, in terms of sales volumes, with 800 transactions, and in 2018, it is maintaining that trend. In fact, during the second quarter of the year, the Aragonese capital recorded the sale of 305 new homes, exceeded only by Madrid. That is according to the latest report compiled by the real estate consultancy firm CBRE, which shows that the evolution of Zaragoza this year is even better than last year: 537 new build house sales were recorded during the first half of this year, and so all indications are that they will exceed the 800 units recorded in 2017.

According to the experts, pent-up demand during the years of the crisis, which forced many citizens to postpone their decision to buy a home due to the economic uncertainty, and the current supply of high-quality homes for sale at reasonable prices, are the main causes behind Zaragoza’s leadership of the sector.

Of course, the data is still light years away from the figures recorded before the crisis. “There is still a long way to go in the new build construction market”, said the Director of CBRE in Zaragoza, Miguel Ángel Gómez. During the peak of the real estate boom, 4,000 sales were recorded per quarter in Aragón, and 45% of those were in the new build segment, but that percentage has now dropped to 12%. The figures confirm that the reactivation of the sector is based almost exclusively on second-hand homes. “The supply of second-hand homes is enormous, for that reason, as property developers we have to offer a differentiated, high-quality product if we want to attract customers”, said the President of the Confederation of Construction Companies of Aragón (CEAC) and the Director General of the Lobe group, Juan Carlos Bandrés.

Data relating to the number of building permits that the Town Hall of Zaragoza is granting confirms the new build recovery: last year, 1,526 permits were granted, compared with 1,040 in 2015. This year, it seems that the number of permits granted is decreasing although we still have two months of the year left to run. Either way, the figure is well below the 3,150 recorded in 2009 and light years away from the 8,940 registered in 2006.

The experts also attribute the better performance of Zaragoza compared to other major cities in Spain to the fact that the community has managed to maintain “its own financial system” (Ibercaja), which continues to back the projects of property developers. “Here, there are more possibilities to take projects forward”, highlights Bandrés (…).

Original story: El Periódico de Aragón (by Rubén López)

Translation: Carmel Drake

Gestilar Launches Plan to Address Mallorca’s Scarce Housing Supply

6 July 2018 – Eje Prime

Gestilar is thinking about the Mediterranean. The property developer has started the summer by marketing the first 89 homes that it is building in Mallorca. As part of its €123 million investment plan, the real estate company is going to build 400 homes over the next few years in Palma across three developments in the Nou Llevant area, to the south-east of the city.

Mediterrània 1, the residential development through which the real estate firm has arrived in the Balearic Islands, is going to comprise homes with two, three and four bedrooms. It is designed for locals, both first-time buyers as well as those looking to reposition”, explain sources at Gestilar speaking to Eje Prime.

On an island with a “shortage of structural supply and economic stability”, Mallorca has become “one of the most desirable markets in Europe for investing in the real estate sector”, according to Raúl Guerrero, Director of Developments at Gestilar.

At the end of 2017, the property developer led by Javier García-Valcárcel purchased three plots in the Balearic capital with a total surface area of 55,300 m2. “We set our sights on Palma due to the shortage of new housing projects that have been built there in recent years”, explains Guerrero, who highlights the “the pent-up and unfulfilled demand” that exists in the city.

The first of the developments comprises several four- and seven-story blocks with their ground floors allocated to commercial premises. The design of the project has been entrusted to the Spanish architecture studio L35, which has created an urbanisation with substantial common areas.

Located 500 metres from the beach and the port of Portixol, Mediterrània 1 will have communal spaces with a swimming pool, a gym and a games area for children. The construction of the first phase is due to start between the last quarter of this year and the first quarter of 2019, with the aim of handing over the first keys before the end of 2020.

“There is space for new projects in Palma” 

Gestilar’s interest Palma is not the first from a Spanish residential property developer in recent months. A few days ago, the listed company Aedas Homes put on the market its fourth project in the Balearic capital and several other companies are working to begin projects this year.

This growing interest in Mallorca comes in response to the sales rates on the island that place it at the top of the ranking in the residential sector, behind Madrid and Barcelona. “It is still too early to assess the rates of our own developments, but for the last few months, we have been monitoring and updating our market research, and the results of this analysis reveal a high rate of marketing in the area”, explains Guerrero (…). According to the director of Gestilar, “there is space for new projects in Palma”, where the property developer has already opened an office.

In this regard, the property developer believes that Palma is going to be one of the cities, like Madrid, Barcelona and Bilbao, that will look to improve its positioning abroad. In the Balearic capital, we are seeing a recovery in terms of property development activity, where a significant number of developments have started to be marketed between December 2015 and October 2017, which means that home completions are now growing, according to Gestilar (…).

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Málaga’s Residential Sector is Booming Once Again

11 March 2018 – Málaga Hoy

“We all want to be in Málaga because almost all of the cases there are successful. It is an established location (…)”. That is according to Juan Conejo, Director in Andalucía of the property developer Momentum, and his feelings are shared by the majority of the professionals in the sector who ratify that Málaga is, for the time being, the third largest market in Spain for the construction of new build homes, behind Madrid and Barcelona. This newspaper has been in contact with several of the most important property developers that operate on the Costa del Sol and all of them tell the same story: the crisis is over, the sector has reactivated and thousands of homes are being built or will be soon backed by multi-million investments.

Moreover, the complexion of the market has changed completely. The banks are no long financing the land purchases, but rather property developers are having to look for other resources – in-house, investment funds, asset sales, etc. – and they are only being granted loans to build homes if they can prove that at least 40%-50% of the homes have already been reserved, the famous pre-sales. Financial institutions only lend money if they find safe bets (…).

In this context, Málaga is becoming one of the great protagonists on the national stage because it is playing on several fronts. The capital is an important location for primary residence properties and the coast, primarily to the west of the capital, although there are also some projects to the east, is one of the most sought-after places for foreigners to have second homes.

“Málaga has clearly climbed onto the podium alongside Madrid and Barcelona and it is clear that the market has been reactivating for a year now, whereas other provinces such as Valencia and Sevilla are starting to see movement now”, explains Miguel Ángel Barruso, Director in Andalucía of Avantespacia, a property developer that is building 215 homes in two promotions in Tabacalera – where it has already sold 70% of the properties – and Teatinos, which will be handed over at the end of 2019. “Property developers have not sold any new homes for 10 years and there is significant pent-up demand on the buy-side, and so we are now looking ahead to the next few years with optimism”, added that expert.

Momentum is clear about its commitment to Málaga (…). “Málaga is growing a lot. We have a development in Teatinos that we were going to build in phases but which, in the end, we are going to construct in one go, comprising 300 homes in total, because we already have 50% of the properties reserved; meanwhile, in Colinas del Limonar, we have two other projects with the same level of pre-sales”, said Conejo (…).

Nevertheless, the Regional Director for Momentum emphasises that it is important to move with caution and to analyse each project in detail, especially in light of the current banking demands. “Starting a construction project now is already a success because it shows that you have pre-sold around half of the homes that you are going to build and it is always harder to get customers to buy off-plan, and so we have to analyse very clearly where the demand is”, he said.

Now, professionalism is key. Rafael Torres, Insur’s representative in Málaga (…). Insur is working on two major projects in Málaga capital in the Plaza del Teatro – where work on 57 homes has now started and 50% of the properties have been reserved, some of which have been paid for in their entirety – and in Churriana. It also has several projects in Marbella, comprising 300 more homes. Torres highlights that the market research conducted by his company reveals that there are 83 new home developments under construction or in the pre-sale phase on the western Costa del Sol, of which 40% are in Estepona, Mijas, Benalmádena, Marbella and Fuengirola.

One of the historical Málagan property developers in Myramar, which celebrates its 60th anniversary this year. Its CEO, Miguel Rodríguez (…) says that the company is currently working on four real estate developments in Mijas, Fuengirola and Benalmádena involving around 200 homes (…).

Meanwhile, Rafael Molina, Commercial Director at Grupo Ansan, also corroborates that the real estate sector is currently enjoying good times in the province (…) “we have developments underway in the Carlos Haya area, in Teatinos and in Puerto de la Torre, where we have already sold a significant volume”, he said.

Two other national companies that have set their sights on Málaga are Aelca and Neinor Homes. Jaime Pérez is the Director of Aelca in Andalucía and explains to this newspaper that “we are absolutely convinced about working in Málaga and we have land on which to build 3,200 homes in the province over the next four or five years”. In Málaga capital, his firm has started to market the first phase of an urbanisation in Hacienda Cabello comprising 128 homes – the total project involves 433 units – , they are going to start work in Bizcochero Capitán, they acquired the Flex building on the Cádiz Road and they are going to start to sell 130 homes and a retail area at the end of the year. They also have another project behind Vialia comprising 144 homes and a hotel. Moreover, they have projects in Mijas and Estepona.

Meanwhile, sources at Neinor explain that (…) “Málaga attracts domestic and international demand alike due to its location, infrastructure and climate (…)”. That firm’s portfolio of projects is also very extensive. At the moment, it has 20 plots and 2,166 homes in the province, which corresponds to a turnover of €780 million. In 2018, it is going to launch the sale of seven new projects, comprising 1,076 homes in total, in Casares, Estepona, Benahavís and Málaga capital (…).

Property developers are investing millions in Málaga because they know that there is demand there. Last year, permits were granted for 5,000 homes and, taking into account the projects that all of these companies have in the pipeline, that number looks set to soar over the next few years, which will generate more employment and wealth in the area.

Original story: Málaga Hoy (by Ángel Recio)

Translation: Carmel Drake

Valencia Sparks Significant Interest Amongst Investors & Property Developers

26 January 2018 – El Economista

In 2015, the developable land market in Valencia was almost at a standstill. In 2016, a few operations were closed, in some of the up-and-coming areas of the city, with prices ranging between €200/m2 and €300/m2. In 2017, by contrast, those figures soared in the areas with the greatest potential, to reach €650/m2, boosted by growing demand from large groups and international investment funds, which have become the dominant players in a market that is clearly recovering. Sources in the sector estimate that around 80 developments are currently underway in Valencia – at different stages of completion, from requesting licences to construction – corresponding to more than 3,000 homes.

In recent months, interest from property developers has focused, above all, on first-time buyers, in response to the growth in pent-up demand over the last few years. The stoppage of construction work due to the impact of the economic crisis; the lack of stock that fulfils the new expectations of real estate buyers – in terms of quality, size and energy efficiency critiera, amongst other points -, and the improvement in the purchasing power of families, due to the economic recovery and employment, have resulted in a boost in demand for new build homes, with the return of off-plan sales.

“Our projects in Valencia are being very well received. By way of example, the rate of sales exceeds 70% in the case of the development on Carreres, 10 (…)”, says Juan López, Director of the Levante Regional Delegation at Aedas Homes.

“The region has been a little slower than average in terms of the recovery of property development because the impact of the real estate crisis here was much more profound. But 2017 saw the reactivation of projects. This year, players will focus much more on sales and we will have to see whether demand responds and what the rates of house sales are; most of them will be handed over in 2020 and 2021. It is time to turn the words into actions and we have no doubt that buyers will respond. The key is to consolidate a healthy, strong and transparent market that inspires confidence”, said Juan Velayos, CEO at Neinor Homes.

Currently, the Community of Valencia accounts for around 10% of all the new homes being built across the country, still well below the 15% that companies in the sector think it will represent in the coming years – it is expected that the number of new build homes per year in Spain will stabilise at around 150,000, almost twice the number registered in 2017 (80,000).

In 2017, the Town Hall of Valencia received licence requests for more than 2,480 homes, compared with 1,270 in the previous year. The municipal technicians signed the authorisation for 1,180 homes and around 2,000 more are being processed – some, presented almost two years ago, whose delay, according to the sector, is holding back the creation of between 10,000 and 15,000 jobs and €800 million of investment (…).

Pressure on prices

This investor interest in the city of Valencia has resulted in an increase in the average price of developable land and, even, in the signing of land repurchase operations between property developers. Examples include the sale of a 50,000 m2 plot by a local company, Urbem, to Neinor – for which it paid €27 million – as well as the purchase by Aelca of a 6,000 m2 plot from the Libra cooperative; both operations were closed in the neighbourhood of Malilla, one of the up-and-coming areas.

The President of the College of Real Estate Agents of Valencia, Alfredo Cano, warned in December that “house prices in Valencia have increased significantly in 2017, and if there is no change in the trend over the coming months, the situation will be accentuated in 2018. That could give rise to a mini-bubble (…)”.

Nevertheless, experts in urban planning, property developers and constructors rule out that risk in the current climate. “We are not seeing any signs of a bubble in the residential sector. You have to take into account that we are starting from minimum levels and, logically, if there is more demand, prices rise, due to laws of supply and demand, but they will start to normalise”, says Antonio Olmedo, President of the Federation of Property Developers and Urban Planning Agents in the Community of Valencia (Feprova).

Moreover, “and unlike in previous cycles, the lack of mass bank financing for land purchases is limiting investment capacity to a smaller number of professional operators and is forcing rigour in terms of investments; capital consumption is now transferred to the balance sheets of property developers from day one”, says Sergio Gálvez, Director of Strategy and Investment at Aedas Homes (…).

Restructuring of the sector

In terms of the major players, Aedas Homes – in which the fund Castlelake holds a stake – owns developable land in the Community of Valencia for the construction of more than 2,250 homes and is keen to buy more (…).

In addition, Neinor Homes – in which the US fund Lone Star held a stake until the start of January when it sold its shareholding – is heavily backing the region. Over the last nine months, it has closed seven land purchase operations in the city of Valencia and its metropolitan area – with capacity for around 1,200 homes (…).

Aelca – owned by the US fund Värde Partners (…) – is another of the major player taking positions in the region, where it owns land for the construction of more than 2,300 homes (…).

These new players are having to share the limelight with some of the large traditional groups from the sector – such as Metrovacesa, which has 36 developments underway in the Community of Valencia – and with local property developers, which are also standing their ground to an extent (…).

Original story: El Economista (by Olivia Fontanillo)

Translation: Carmel Drake

No Buildable Land Left in ‘Sevilla Este’ After Fund Shopping Spree

16 January 2018 – Sevilla ABC

The supply of land in Sevilla Este has almost run out. And that milestone represents more than just a symbolic fact. It is a clear sign that a new cycle of real estate expansion is underway, characterised by significant interest from property developers in neighbourhoods and towns on the outskirts of Sevilla. It also provides evidence of the shortage of buildable land that exists in the municipality of the provincial capital, which has caused the few plots of buildable land that have come onto the market to spark a great deal of interest amongst investors.

Whilst the property sector started its rebirth in certain parts of the city centre in 2015, interest in other areas of the city has been increasing significantly over the last two years to meet the new demand that is being generated by the growth of the economy. The result of this trend is that in just three months, almost all of the residential plots in the Sevilla Este area have been sold.

“With just a few exceptions, everything that was on the market has now been purchased”, along with plots that still need to be developed for public and social services, explains Juan Aguilera, Manager at Gaesco, speaking to ABC.

And this investor boom in that area of the city is due to the fact that “Sevilla is running out of buildable land for new developments, since vital infrastructures such as the SE-35 ring-road have not been built, which is the main artery that ought to be boosting all of the new areas of metropolitan expansion”, says Aguilera (…).

Q21’s investment

The most recent large land operation in Sevilla Este was carried out by Q21 Real Estate, the property developer that emerged from the merger between the US investment fund Baupost and the Spanish company Grupo Pinar (one of the most recognised firms in the former property sector). That company has acquired a plot measuring 5,400 m2 at the end of Avenida Emilio Lemos, opposite the Aleste Plaza shopping centre, where it will build around 164 homes. The company is currently processing the permits it requires to start the building work and, once it has received the green light, will complete the construction of the properties within a period of 26 months. The plot that Q21 has acquired belonged to another company in the sector that filed for bankruptcy.

That purchase operation took place at the same time as two other large investments in Sevilla Este, also made by companies that are partly owned by large investment funds. One of them was led by Vía Célere, in which Värde Partners owns a majority stake; it acquired a plot for the construction of 1,700 homes that had belonged to BBVA. And in parallel, the fund Activum purchased plots for the construction of more than 1,000 homes (…).

In Aguilera’s opinion, the interest from these investment funds in Sevilla Este has arisen because several factors have converged. “There is significant built-up demand in Sevilla from families who chose to rent during the crisis and who are now interested in buying a home, plus the years of recovery are now creating new families who can also afford to buy one of these new homes”. This demand, combined with the shortage of buildable land in Sevilla, is what has caused the interest in Sevilla Este to soar, which is exactly what already happened with Hacienda Rosario (which used to belong to Gabriel Rojas and which was acquired by Aedas Homes).

Interest in Entrenúcleos

In these circumstances, Aguilera considers that future real estate investments will not be made directly in Sevilla, but rather in the some of the population nuclei of the metropolitan area, especially in Dos Hermanos (which has made the effort to develop an area like Entrenúcleos).

Aguilera thinks that, unfortunately, time has proved him right. “If we had done our homework, we would now be enjoying a great period for the reactivation of large residential projects: demand and the economy are growing, financing is available at very reasonable prices…but none of the areas that require the SE-35, like Higuerón Norte, Buen Aire, San Nicolás Oeste and Villanueva del Pìtamo, have the infrastructure they need to capitalise on this new construction boom” (…).

Original story: Sevilla ABC (by Luis Montoto)

Translation: Carmel Drake

House Prices: How Much Upwards Wiggle Room Is There?

13 June 2017 – El Mundo

In many respects, the housing sector has been restored to its former glory: house sales are rising at an increasingly faster rate, the development of new homes has resumed and the granting of mortgages is growing apace. However, the jubilation in the residential market can be felt, above all, in the significant increase that prices are experiencing in the new real estate cycle.

House prices rose by 7.7% in YoY terms during the first quarter of 2017, according to Real Estate Statistics from the College of Property Registrars. In the historical series published by that body, that figure represents the highest increase in house prices since 2007, in what is now the third consecutive year of increases in the market after seven years of severe decreases. (…).

The Registrars highlight the favourable behaviour of the real estate and mortgage markets, but warn that this strong dynamism “does not justify any intensification of growth towards double digits anytime soon”.

The registrars reiterate in their analysis that “From a global perspective, the market is debating between sustainable growth and an intensification towards forgotten figures”. They attribute the significant increase in house prices to the consolidation of economic growth, creation of employment, low interest rates, activity in the mortgage market and overseas demand.

The main consequence of the variables listed by the registrars, which work in favour of rising prices is, clearly, the increase in the number of potential buyers of homes, as highlighted by Julio Gil, Managing Partner at Horizone Consulting Inmobiliario. “The factors that are driving the appreciation in house prices nowadays are demand-driven, with three very clear facets: pent-up demand from previous years, which is now coming into play, demand to reposition and demand to invest”, reflects Gil. (…).

Moreover, all indications are that prices will continue to rise, at least, in the medium term (…). What is not so clear is the intensity of that increase. (…).

According to the registrars “Our predictions are based on forecasts of moderate growth rates, defined to be YoY rates of around 5%-6%, although there may be cyclical periods of more intensive QoQ rates. It would seem that “the social and economic reality does not justify an intensification much greater than these amounts”. And they highlight: “The evolution in terms of the number of inhabitants, wage levels, the outlook in terms of interest rates etc. ought to put the brakes on the upwards trend, to a certain extent”.

That prediction is not shared by Gonzalo Bernardos, Economist and Director of the Masters in Real Estate Management and Development at the University of Barcelona. “House prices will rise by around 8% in 2017 if the net credit available to purchase a home does not increase; and will soar by around 13%, if lending rises by 5%”. For the time being, this expert does not see an obvious risk of a bubble and recalls that that only happened a decade ago after net credit had been increasing for 10 years by almost 20%. (…).

Looking ahead, Bernardos takes it for granted that the steep rise in house prices will be contained when the price of money increases (it currently stands at 0% in Europe). He calculates that, provided nothing changes in the international environment, this turning point in interest rates will happen at the end of 2018, which means that by 2019, the average YoY increase in house prices will be sustained at around 3%-4%-5%. (…).

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake

House Prices Forecast To Rise By 5% In 2017

6 June 2017 – Expansión

Growth / The sharp fall in house prices during the crisis years, combined with the pent-up demand, the reactivation of mortgage lending and the recovery of the Spanish economy means that property developers, appraisal companies, real estate companies, funds and consultants alike are all predicting fresh rises in house prices this year. Nevertheless, the professionals stress that the growth in prices will vary by area, with Madrid and Barcelona leading the recovery.

In 2016, house prices rose by 4.7% in Spain on average, according to the National Institute of Statistics (INE). That growth rate was the highest since the burst of the real estate bubble, a decade ago. And the experts believe that that figure will not only be repeated in 2017, it will actually be bettered. “According to CBRE’s Trend Barometer which reflects the views of the 100 most senior directors in the real estate sector, one out of every two surveyed believe that house prices will grow by between 3% and 6% in 2017 at the national level, whereas only 21% shared that optimism in 2016. It is the first time since the start of the crisis that the experts are forecasting a general rise in house prices in Spain”, explained Adolfo Ramírez Escudero, President, CBRE Spain. (…).

According to the majority of the experts, the increase will amount to around 5% this year…(…).

Although all of the experts are optimistic about the overall trend in prices, several are quick to point out that this increase will vary by region. “The recovery in prices is proving selective and heterogeneous. Although prices are soaring in certain places, they have still not bottomed out in other markets”, said Pedro Soria, at Tinsa.

“Salaries have not risen to a level that makes us think that prices are going to soar, although there are some exceptions in specific areas of the large regional capitals where we have detected strong demand”, said David Martínez, CEO at Aedas Homes.

By area, Madrid and Barcelona account for the best forecasts in terms of price rises. (…).

Similarly, in addition to the two major cities, the positive outlook is starting to spread to new areas. “Prices are on the rise primarily in the major capitals and on the islands”, said Sandra Daza, at Gesvalt.

The improvements in the macroeconomic variables mean that the good feelings about the housing market this year are also expected to have an impact over the coming years. “House prices are going to continue to rise over the next few years. This year, we expect to see an average rise of around 5%, but the shortage of buildable land in those areas where demand exists means that we can expect to see higher rates of growth in the future”, said Javier de Oro, at Aliseda, the real estate arm of Banco Popular.

In this sense, and despite the price rises that have been seen in recent quarters, the experts point out that we are still a long way from the figures seen before the burst of the bubble. “We are entering a period of growth, which may last three or four years. It is true that there are cycles, but I don’t think that we’ll ever see the price decreases of the past again”, said Juan Antonio Gómez-Pintado, President of the property developer Vía Célere and of the sector organisations Asprima and APCE. (…).

Whilst in the case of new homes, the upward trend in prices seems clear, in the case of second-hand properties, a recovery is also being seen but at a slower pace. “So far this year, our real estate index has been registering very slight YoY decreases, of just a few tenths of a percentage point, which shows us that second-hand house prices in Spain are stabilising”, said Beatriz Toribio, Head of Research at Fotocasa. (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Demand For Off-Plan Homes Returns As Stock Runs Out

6 June 2016 – El Economista

The purchase of off-plan homes has returned to the stage after years of lethargy, driven by: the absorption of residential stock in many areas of Spain; the need for new homes; the improvement in the economy and in future employment; and the clear recovery of the real estate sector.

According to the President of the property developers’ association APCE, Juan Antonio Gómez-Pintado, the “stock” of homes, which has weighed down (on the sector) since the crisis, has been gradually absorbed and in certain areas, such as Madrid, Barcelona and the Costa del Sol, it is practically non-existent. (…).

The market, in general, has a view that residential stock has disappeared in many areas, leading to the activation of prices and the construction of new homes, said the CEO of Quabit, Javier M. Prieta. He added that housing permits soared by 42.5% in 2015, whereby confirming the need for new homes.

Exponential growth

Since 2013, the number of off-plan purchases has grown exponentially, especially in the medium-high and high end residential segment, according to the Director of the Development at Gilmar, Óscar Ochoa, who highlighted that after many years of crisis, there is a latent demand for newly built homes.

At present, buyers are looking to purchase homes to reposition themselves, say sources at Tinsa, who consider that one of the major challenges in the residential market will be to achieve the recovery of the employment market and the conditions that allow for that pent-up demand to become solvent.

Sources at Neinor Homes have also observed a significant revitalisation of the market in the last year and assure that off-plan buyers are looking for a type of home that has not been built yet or that was hard to find until now. Clients are very demanding and well-informed about what their homes should be like.

The property developer Vía Célere has also detected a substantial increase in off-plan sales, both in Madrid, where 90% of Residencial Célere Adelgas II has been sold with still a year to go before it is completed, and in Barcelona, where half of Residencial Célere Magoria, which was launched at the end of 2015, has already been sold.

These are clients who do not need a home in the short term and who are able to invest more in exchange for a new home in which they will not have to invest anything over the long term, said the Director of Gilmar. (…).

Clients who buy off-plan should always verify that the project has a building licence, that the contract includes a delivery date and that the amounts paid during the construction process are guaranteed by some kind of insurance policy or aval, say sources at APCE.

In terms of the benefits of buying off-plan, price is a fundamental aspect, as well as the possibility of customising the home, say sources in the sector.

Sources at Tinsa, APCE, Quabit, Gilmar, Vía Célere and Neinor all agree that off-plan buyers should only purchase from transparent and solvent firms with experience in the sector, and they recommend steering clear of apparent bargains. Off-plan buyers should also check that the property developer in question already owns the land on which the property is going to be built or that an aval has been constituted for the entire development.

Off-plan buyers should also demand a guaranteed individual aval to allow them to recover monies paid in the event that their homes are not handed over in the end.

Original story: El Economista

Translation: Carmel Drake

ACR Emerges From The Crisis Thanks To RE Recovery

20 May 2016 – Expansión

After the slump of 2013 and 2014, the Spanish construction company ACR, which specialises in the construction and development of residential housing, has experienced significant growth thanks to the recovery of the real estate market in Spain. “The residential construction segment has clearly improved”, said Michel Elizalde (pictured above), the CEO of the company, which saw its turnover soar by 45% in 2016, to reach €130 million.

The fruits of 2015 (€100 million in new contracts) have contributed to increase the size of the portfolio to €125 million, of which only 10% comes from abroad. Spain, unlike the trend in other construction companies, has offset the irregular nature of the business overseas. ACR is withdrawing from France and is analysing Colombia very carefully, where it is starting to feel the lack of projects due to the difficult economic situation, driven by the unfavourable exchange rate versus the euro, the decrease in the price of oil and in fall in prices of raw materials. “Our international expansion is costing us more than we expected it would when we launched the initiative in 2011”, acknowledges Elizalde. ACR will continue to analyse opportunities in Colombia, but it will abandon the French market, due to the barriers to entry against foreign groups and the different culture there in terms of contracting suppliers.

ACR performs most of its work for third parties, and the remainder relates to developments in different cities, primarily, in Madrid and Barcelona. Currently, the group has around 1,900 homes under construction. According to ACR, the factor that has most contributed to the mobilisation of the Spanish residential market has been the entry of new investors, primarily investment funds, which require the support of groups with experience in construction to develop their projects. “In addition, there was pent-up demand, which is now flourishing, although we are still a long way off the production speeds of 100,000 homes per year”.

ACR, with a controlled debt of €26 million, expects its turnover to reach €140 million this year, on the basis of its performance during the first four months of the year. “We are evolving from a real estate construction firm into a project management partner”, said the CEO of ACR.

Elizalde gave the example of his firm’s agreement with the fund Allegra to develop two housing complexes in Madrid.

Original story: Expansión (by C.Morán)

Translation: Carmel Drake