Gazeley Purchases a 75,000 m2 Industrial Plot in Toledo

19 October 2018 – Eje Prime

Gazeley has returned to the Spanish market. The logistics warehouse and distribution park investor and developer group has acquired a 75,000 m2 plot in the Toledo town of Illescas on which it will build a 36,000 m2 warehouse. The company is planning to complete the project in 2019.

Moreover, the company has opened new offices in Madrid. Oscar Heras, Construction Director at Gazeley, will assume the role of Director of the subsidiary Gazeley España, which, until now, has stayed away from Spanish real estate activity after selling all of its assets in the country in 2016.

Then, the company was going through a bad time: it had accumulated more than 1.5 million m2 in more than a dozen platforms. Moreover, that same year, the Spanish subsidiary recorded a net profit of more than €16 million, which it used to offset losses from previous years, exceeding €11 million.

Now they are back, because, according to Heras, “it is a time when there is more demand for logistics warehouses than ever”. The company’s intention is to continue growing in Spain.

In Europe, Gazeley has a portfolio of assets spanning 17 million m2, concentrated in the United Kingdom, Germany, France and the Netherlands and leased (96%) to clients such as Amazon, UPS and Volkswagen. The company forms part of the GLP group, which is listed on the Singapore stock market, with more than $50 billion in assets under management.

Original story: Eje Prime

Translation: Carmel Drake

Carmena to Outlaw 95% of Madrid’s Tourist Apartments

27 July 2018 – Expansión

The days are numbered for tourist apartments in the centre of Madrid. Yesterday, the Town Hall of Madrid gave the green light to legislation that will put a limit on holiday rentals: 90 days or three months, is the maximum term that a person may rent their home for those purposes. From day 91 onwards, owners will need to have a commercial lodging licence, just like hotels.

Yesterday, the Spanish capital’s Governing Body approved the Special Plan for the Regulation of the Use of Lodgings, which will apply to the city’s most central neighbourhoods. The plan is expected to enter into force at the beginning of 2019, after being approved by the plenary session in October.

The Town Hall led by the mayor Manuela Carmena is also going to prohibit the operation of all homes destined to tourist rental that do not have an independent entrance, like in the case of hotels. According to the Town Hall, with that requirement, “95% of homes that operate as tourist apartments will no longer be able to do so”.

“Specifically, the affected radius will span 52.7 km, distributed in three concentric rings, depending on the massification of the ads. According to the Town Hall, in the rest of the municipality, “the existing legislation will be maintained”. Madrid is, in fact, the European capital where the number of adverts on these platforms has grown by the most, up by 67% in 2017 with respect to 2016, according to a report from Colliers International.

With this legislation, Madrid’s Town Hall is opening a new chapter in the fight between public administrations and tourist apartments. Its intention is to outlaw almost all of the tourist apartments that are advertised on platforms such as Airbnb in the centre of the city.

The prohibition is tacit. The trick is that 95% of the homes advertised on these platforms in the capital do not have an independent entrance. That limitation will only exist in the case of homes that are leased for more than three months. The 90-day limit draws a line between what is considered a home for tourist use and a property in the collaborative economy.

Obtaining a licence is not going to be easy. It will be subject to zoning, following in the footsteps of cities such as Barcelona. Once the Special Plan comes into force, it will not be possible to change the use of a home located within the inner two rings from residential to tertiary, given that those properties account for the majority of the regulated and unregulated tourist supply. Together with this new plan, the Town Hall has approved a moratorium that prohibits the granting of tourist licences of any kind for one year.

Putting a cap on rents

The objective of the plan is to preserve residential use in the central areas of the city that, with the tourist boom and rise of online platforms, are seeing rising rental prices.

In this vein, the Town Hall wants to establish maximum rental prices. To that end, and as it already did in the case of the request for the tourist tax, the delegate for Sustainable Urban Development, José Manuel Calvo, yesterday asked Sanchez’s Governments for the necessary powers.

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake

Barcelona’s Town Hall has Shut Down 2,355 Illegal Tourist Apartments in 2 Years

11 July 2018 – Inmodiario

After launching the emergency plan against illegal tourist apartments (HUT) in July 2016, the Town Hall of Barcelona has closed 2,355 properties and is in the process of shutting down another 1,800.

Moreover, this summer the “Fair Tourism BCN” campaign is being promoted once again to inform and raise awareness amongst citizens and visitors alike about the dangers of this illegal activity for everyone.

In total, 10,635 files have been opened and 5,503 fines have been imposed, five times as many as during the period from 2014 to 2016. The number of termination orders rose from 663 in 2014 to 4,148 in 2016.

By area, the files opened have been located primarily in L’Eixample (3,193) and Ciutat Vella (2,920), followed by Sant Martí (1,220), Sants-Montjuïc (1,042) and Gràcia (939).

In addition to this activity, inspections have been conducted of: 81 entire buildings where it was suspected that illegal tourist activity was being undertaken; 21 student halls, also suspected of tourist activity; and 61 illegal B&Bs, under the umbrella of rooms for rent, which were leasing all of their rooms.

Besides the fining activity, the team comprising more than 100 inspectors and visualisers is continuing to work to ensure that closed down apartments do not reopen, to identify new illegal properties and to hunt down the organised networks that are managing more than one property.

In parallel, work is continuing with holiday rental platforms through a joint roundtable that has been working for some time with Homeaway, Booking, TripAdvisor, Rentalia and Apartur, and which has recently been joined by Airbnb.

Work is currently on-going to allow the Town Hall to have access to data about users who have joined the platforms since 1 June 2018.

Original story: Inmodiario 

Translation: Carmel Drake

Sareb Sets Itself an Online Sales Challenge: €1.8bn in NPLs

10 July 2018 – El Economista

Sareb has launched a new wave of non-performing loans for sale on its online marketing channel, aimed at investors and professionals, to boost the divestment of €1.8 billion, equivalent to 7.2% of its portfolio of financial assets, according to sources at the company speaking to Europa Press.

Since July 2017, Sareb has had a dedicated loan sales channel for investors and professionals, a pioneering initiative in the European market, which allows it to promote divestment and increase the visibility of these kinds of assets.

The aim of the so-called bad bank is to enhance the transparency of the sales processes of these types of assets, which are now in their fourth wave. At the end of 2017, it had managed to sell loans with a nominal value of €186 million, €35 million through its website and €151 million through its servicers, which also have specific platforms to market these portfolios.

The guarantees associated with these loans mainly constitute mortgages over properties of different kinds: finished residential homes, work in progress buildings and land.

With this channel, Sareb is continuing to push ahead with its divestment process and its commitment to a more dynamic and transparent loan market, according to Expansion.

The channel is aimed at investors and professionals who fulfil a series of minimum eligibility requirements. Sareb’s aim is to expand the number and profile of investors who can participate in its loan sale processes, whereby facilitating divestment in the segment. In this way, the players that may operate on the channel include international and domestic professionals, as well as local operators interested in the loans.

Sareb has a loan volume amounting to more than €25 billion proceeding from almost 14,575 debtors. All of them have a combined debt of €70.4 billion, including associated interest and expenses. In order to recover those amounts, the entity carries out an active management process that allows it to ensure the payment of interest on the loans and, where possible, their repayment or cancellation.

When it was constituted, Sareb received around 200,000 assets worth €50.8 billion, of which 80% were loans and property developer credits and 20% were properties.

After five years of life, Sareb has reduced its portfolio by more than €13.6 billion. Currently, its portfolio of assets comprises 67.3% in loans and 32.6% in properties.

Sareb issued debt backed by the Spanish State to pay the rescued entities for the assets that they transferred to the company. The company is complying with the repayment of that debt, and to date has repaid more than €12.9 billion.

Original story: El Economista 

Translation: Carmel Drake

Deloitte: Spain’s Logistics Sector is Hot Property Thanks to the ‘Amazon Effect’

18 May 2018 – Expansión

Investment funds want to take advantage of the collateral effects that the boom in e-commerce is going to have in the real estate market by taking positions in a segment with great potential, namely: the storage of goods and products. The logistics segment has become the “golden girl” of the real estate sector and one of the favourites of investors boosted by strong yields and the expectations of business growth. In this context, Asian investors have placed their focus on the European logistics market.

According to the Logistics Property Handbook compiled by Deloitte, last year, investment in logistics assets in Europe recorded a milestone with €42.5 billion of assets transacted, thanks to mega-operations such as the purchase by China Investment Corporation (CIC) from Blackstone of the Pan-European platform Logicor for €12.2 billion, and the acquisition of the European platform Gazeley by Global Logistic Properties (GLP), headquartered in Singapore, for €2.4 billion.

Mega-operations

In Spain alone, investment in logistics assets amounted to €1.63 billion, which represented a 75% increase compared to the previous year, and a historical record, due to significant transactions involving logistics portfolios. CIC’s purchase of Logicor implied a transaction volume of €652 million in Spain. Meanwhile, P3 Logistic Park – owned by the Singapore sovereign fund, GIC – purchased 11 assets from Green Oak in Spain for €243 million. Those operations boosted investment to historic levels.

Moreover, last year, Mango sold its logistics centre in Palau-Solità I Plegamans (Barcelona) to the fund manager Invesco for €100 million. That transaction was the largest involving a single asset in Spain and the fourth-largest in Europe.

According to the forecasts in the report, operations in the pipeline, which may be closed this year, already amount to €980 million.

“The large institutional funds that aspire to lead the logistics sector in Europe and around the world are bidding hard to accumulate the largest logistics surface area possible during this economic cycle. The location and size of their international logistics platforms are the two key variables for exercising greater negotiation power and whereby obtain the highest rents from operators”, explains Javier García-Matro, Partner in Financial Advisory at Deloitte.

Despite the record investment figure recorded last year, the volume of assets transacted in Spain represents just 4% of the total European market. “This fact is proof of the growth potential of these types of assets in our country. In 2017 alone, 865,000 m2 of logistics space was handed over in Madrid, Cataluña and Valencia. The strong demand of the current cycle is causing logistics promoters to develop more than 2 million m2 of land in these markets, in both turnkey and speculative projects”, says García-Mateo.

One of the major players in the sector is the Socimi Merlin, which has placed logistics asset at the centre of its growth strategy. Merlin’s expansion plan involves the development of land and turnkey construction, a roadmap that has allowed it to become one of the leaders in the sector in just four years.

The main players

Merlin has 2 million m2 of logistics land, both in portfolio and under management, and its plans involve increasing that volume to 3 million m2 before the end of the economic cycle. Specifically, it plans to spend around €250 million on logistics development over the next four years.

Another important player is Logicor, the Pan-European platform, which has been controlled by the Chinese group GIC since last year and which owns 1.2 million m2. Meanwhile, the alliance formed by the real estate manager CBRE GI and its local partner Montepino is going to develop a portfolio of prime assets in the main geographic areas of Spain with a planned investment of around €300 million.

They are joined by the European giants Prologic and the platform P3 Logistic Parks, which own 900,000 m2 and 400,000 m2, respectively, as well as the European investment group VGP, which owns almost 400,000 m2 of logistics space in Spain.

In terms of the types of assets, the Amazon effect has revolutionised the industrial sector and forced logistics operators to reinvent themselves to adapt to the new needs of clients (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Palma de Mallorca to Ban All Tourist Apartments From July

24 April 2018 – El País

From July onwards, homeowners in Palma, on the Balearic Island of Mallorca, will not be allowed to rent out their apartments to tourists. The capital of the popular Mediterranean destination has adopted a pioneering measure, which will see the definitive prohibition of tourist flats right across the city. The local government team – a leftist alliance between the Socialist Party (PSOE), the local group Més per Mallorca and the anti-austerity Podemos – has taken this decision after commissioning several studies on the matter, which revealed that the supply of unlicensed tourist flats increased by 50% between 2015 and 2017 to reach 20,000 beds across the city. In Palma, which is Spain’s eighth-largest city by population, only 645 properties used for short-term vacation rentals have proper licenses.

The government team will approve initial holiday rental zoning plans at a meeting on Thursday, which will then be subjected to public scrutiny before being put to a final vote at a council session in July. At that point, tourists seeking this kind of accommodation will no longer be allowed to rent apartments in multi-family residential housing. Instead, they will only be able to stay in detached, single-family homes, which are being left outside the ban. Yet even these properties will be off limits if they are located on protected rural land, near the airport, or in non-residential areas such as industrial estates.

The move follows a reform of tourism legislation by the regional parliament of the Balearic Islands in August last year. That reform banned vacation rentals in apartments but left it up to local authorities to decide which neighbourhoods to apply it in. In the end, the city of Palma has decided to consider the entire municipality a “single zone” and so the ban will apply in all parts of town. The decision is meant “to protect residents,” said mayor Antoni Noguera.

Studies commissioned by city officials show that 48% of tourist apartments are offered for seven to eight months of the year, meaning they are not available for long-term residential rentals. “There is a parallel between the evolution of vacation rentals and the rise in rental prices,” said José Hila, the local chief of city planning. Rent in Palma has soared by 40% in recent years, making it the second most expensive Spanish city after Barcelona for residents who rent.

“Tourist accommodation affects the makeup of buildings and neighbourhoods, and it also affects social harmony,” said Hila. A report by the Citizen Ombudsman’s Office shows a rise in the number of complaints filed by residents due to problems with tourists who use these apartments, typically related to noise. There were 42 complaints in 2014 and 192 in 2017.

Pioneering initiative

Mayor Noguera is convinced that this measure, which is pioneering in Spain, will set the standard to be followed by other cities. “Palma is a bold and decisive city. We have agreed this on the basis of the general interest, and we believe that it will create a trend in other cities when they see that finding a balance is key.” said the mayor. “All European cities are being transformed from one day to the next by this type of offer,” said planning chief Hila.

Currently, in the Balearic capital, there is a supply of around 11,000 tourist rental beds, of which 645 have licences, all for family homes. Before the new regional legislation was approved in August, the number of beds amounted to 20,000 but the high fines established by the law – of up to €400,000 – led to the withdrawal of adverts from users of many of the large platforms (…).

Original story: El País (by Lucía Bohórquez)

Translation: Carmel Drake

Treasury Requires Tourist Rental Platforms to Submit Quarterly Informative Returns

1 March 2018 – Expansión

The Government wants to put a stop to the fraud that is happening in the emerging market for tourist apartments. To this end, it is going to intensify the inspection of companies dedicated to the transfer of use of flats, such as Airbnb, HomeAway, HouseTrip, MyTwinPlace, Only-apartments, IntercambioCasas and Rentalia. For that, it is going to require them all to provide much more information and it will conduct a quarterly control of all of their activities. Through this, it wants to improve the “prevention of tax fraud for people and entities, in particular, the so-called collaborative platforms that mediate the transfer of use of homes for tourist purposes”, according to the draft ministerial order designed to put a stop to these kinds of irregularities, to which Expansión has had access. The text approves the so-called “model 179 informative declaration”, together with the conditions and procedures for presenting the required information before the Treasury.

The measure forms part of the strictest control that the Treasury wants to exercise over intermediaries in a rising sector, such as the tourist rental market, which has experienced a genuine boom in recent years and which now has 513,820 beds, 30% more than the sum of Spain’s hotels, hostels and B&Bs (393,838), according to data from Exceltur.

Until now, some of the main initiatives have been directed at users themselves, such as the warning issued last year by the Tax Authorities to more than 21,500 people that had leased their homes through these platforms, advising them that they must declare the money received in their tax returns.

The Treasury wants to close the door on the lack of transparency surrounding certain tourist rentals, behind which are sometimes even hotel chains, which lease homes through the platforms, and are in turn disguised as private users.

As a result, the ministerial order that the Department of Tax Management at the Tax Authority has prepared, emphasises certain concepts that may seem obvious, such as the importance of identifying the owner of the home or of the right “by virtue of which use of the dwelling is transferred”, if that is different from the rightful owner of the home. Moreover, all of the features of a property must be identified. Together with the general registry information, the specific details of each one of the operations that are carried out must be reported: the number of days during which a client leases the home and the price paid to the owner in exchange for its use.

This new order from the Treasury comes in addition to local legislation from many Town Halls such as those of Barcelona, Madrid and the Balearic Islands, which have proposed “ceilings” to stop the overheating of rental prices that has resulted from the boom of Airbnb and similar platforms. In fact, according to calculations from Urban Data Analytics for this newspaper, the upwards trend from the collaborative economy has caused rental prices to rise by an additional 6% in the Eixample district of Barcelona and by an additional 4% in the Centro district of Madrid in one year. That happens because the properties in question generate double the returns of a long-term rental property “A 40 m2 one-bedroom home in the Puerta del Sol area of Madrid generates €1,513 per month on Airbnb and a traditional rent of €700”, says the company by way of example.

Grace period

(…) This ministerial order (…) will apply to all transfers of homes for tourist purposes that take place on or after 1 January 2018.

The frequency of these returns to the Treasury will be quarterly (they must be submitted during the calendar month following the end of each quarter). But this year, in order to facilitate the process, those corresponding to the first two quarters of 2018 may be submitted up until 31 December 2018. Those corresponding to the third and fourth quarter will have to be submitted before 31 October 2018 and 31 January 2019, respectively (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Palm Capital Acquires 3 Logistics Projects in Getafe from BCM

26 February 2018 – Observatorio Inmobiliario

Palm Capital has become a protagonist in the Spanish logistics market with the acquisition of three projects in the Los Gavilanes Business Area in Getafe from the property developer BCM (MCA Group). The operation, advised by the real estate consultancy Proequity, involves the acquisition, under the forward funding method, of three turnkey logistics projects with constructed surface areas of approximately 33,000 m2, 25,000 m2 and 27,000 m2, respectively.

The price for which the agreement has been closed has not been disclosed by the parties, but the value of the three completed projects is estimated to amount to around €100 million.

The first project that is going to be constructed will comprise two platforms measuring 22,000 m2 and 11,000 m2, which may house up to four different operators. It is expected to be ready for delivery by the first half of 2019.

With this acquisition, Palm Capital is going to become the main owner in the Los Gavilanes Business Area, with more than 85,000 m2 of leasable logistics space under ownership. Gavilanes represents the first acquisition that Palm Capital made in the Spanish logistics market and marks the beginning of an ambitious expansion plan through which it intends to acquire and build more logistics assets in the short term.

The Los Gavilanes Business Area is positioned in a strategic location in the south of Madrid, 16km from the centre of the Spanish capital. It has quick access to the A-4 highway between Madrid and Andalucía and 1,500 m2 of its façade overlooks the M-50 ring road. For this reason, first-class companies such as Amazon and Decathlon have already chosen the location for their distribution centres.

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

Rental Prices Soar & Are Now Equivalent To The Minimum Wage

2 August 2017 – El Economista

Renting a holiday home for short periods of time has become fashionable. According to data from Exceltur, the association that represents 23 of the largest companies in the tourist sector, the stock of homes available for tourist use amounted to 1.7 million at the end of last year. In other words, there is currently one tourist home for every two regulated beds. This new business, which has always existed – but which is now experiencing a boom – is being criticised in the market at the moment, since holiday homes are being blamed for the rise in residential rental prices.

According to the real estate portal Idealista, “the rise in rental prices has nothing to do with the supply of accommodation for tourists given that that is static and there is a lot of rotation in the traditional rental market”. Moreover, Idealista adds another reason to distinguish the rise in traditional rental prices from the supply of holiday homes, since “the greatest increases in rents have been registered in those neighbourhoods that are least attractive to tourists”.

Therefore, for Fernando Encinar, the co-founder and Head of Research at Idealista, “the rise in rental prices is being driven, exclusively, by the improvement in employment”. Joseba Cortázar, PR Manager Iberia at HomeAway, shares this view: “There is really no evidence to suggest that tourist homes are driving up rental prices. Prices are rising in line with the evolution of the economy”.

Regulation

On the other hand, Gerard Marcet, founding partner at Laborde Marcet, says that “it is inevitable that tourist housing will have an inflationary effect on the rental sector in Spain if it is not properly regulated. If we do not take effective measures, it is almost impossible to control what each individual does in his or her home and whether or not he or she pays tax on the accommodation services he or she offers outside of the regulatory framework.

For this reason, rental prices are rising at double-digit rates in Spain’s major cities. In Barcelona, Madrid and San Sebastián, it is no longer possible to rent a property for less than €650-€700, which is basically the minimum wage”.

Solutions

Which solutions can be introduced to regulate this market? Joseba Cortázar says that “we need public-private collaboration between the platforms and associations in the sector to better understand the phenomenon and arrive at a consensus in terms of legal regulation, but we should not demonise the sector. We have to establish an ethical code of conduct for the various platforms to adopt”.

In this sense, Gerard Marcet thinks that “on the one hand, we need to approve unique, ambitious and effective regulation to put an end to this irregular practice and that the only thing that it does is to encourage a price war and the rise of the underground economy. On the other hand, we need to grow the stock of public housing to increase the supply of homes available for rent and, whereby, deflate prices in the market, allowing people access to homes at reasonable prices, given the salaries in Spain. Finally, in cities such as Barcelona, the government should unblock the situation that the hotel sector has been immersed in since the hotel moratorium was approved”.

Original story: El Economista (by Luzmelia Torres)

Translation: Carmel Drake

Sareb Sold 900 Plots Of Land In YTD Apr17

30 May 2017 – El Español

Sareb (…) has started its fifth year of life in a rather surprising way, by doubling its overall sales between January and April, and by tripling its land sales.

The upwards trend has been on the cards for a couple of years, with the emergence of property developers, such as Neinor, Aedas, Aelca and Kronos. These new stars of the real estate market, which are mainly financed by large investment funds and managed by Spanish professionals, have had to buy up land to support their business plans.

Improvement following the migration of assets to the servicers.

In addition to this overall improvement in the real estate environment, sources at the bad bank also defend the role played by the servicers engaged by Sareb (Altamira, Haya, Servihabitat and Solvia) in this exponential increase in sales. “Last year, not all of the assets had been migrated to their respective platforms, but this year, now that the migration has been completed, the results have improved significantly”, say the sources.

(…) The 3,260 properties sold by Sareb between January and April represent an increase of 87% compared to the same period a year ago. In the case of land, the number of plots sold has tripled, in such a way that the bad bank has managed to divest almost 900 plots of land during the first four months of the year, which is the same number that it sold during the whole of 2016.

Nevertheless, the increases in sales do not correspond to a similar increase in revenues, another trend that has also been seen over the last two years.

Twice as many sales, at half the price

In 2015, Sareb sold 421 plots of land for €335 million, i.e. an average plot price of €800,000. Last year, that average decreased to €400,000. It is true that the number of plots sold increased by 220%, to 927, but the corresponding revenues only grew by 9%, to €366 million.

Sources at the bad bank chaired by Jaime Echegoyen justify this gap by explaining that “increasingly smaller plots of land are being sold now. Moreover, the geographic spectrum has been expanded (…)”.

Call for caution

If the trend recorded until April continues, Sareb should be able to shed around 1,500 plots during 2017, which, at the average price of last year, would allow it to generate revenues of around €600 million. Nevertheless, sources at the bad bank prefer to be prudent. (…).

Unsustainable increase in land prices

The increases in house and land prices, which are being seen in certain areas of Madrid, Barcelona and the Mediterranean Coast, were one of the most talked about phenomena amongst professionals in the real estate sector last week, when they met at SIMA, the Real Estate Conference in Madrid.

In this context, the President of Spanish Property Developers, Juan Antonio Gómez-Pintado, called for caution. He is not talking openly about the existence of a new bubble and maintains that the increases are still technically a rebound after almost a decade of near paralysis in this market, but he did admit that “the increases that are being seen are not sustainable”. He believes that there isn’t sufficient housing demand to sustain the amount of land that has been acquired over the last year.

Original story: El Español (by Juan Carlos Martínez)

Translation: Carmel Drake