Tag: plots of land

The Auction Opens For 2 Residential Plots In Valdebebas

1 July 2015 – El Confidencial

The countdown has begun. The Valdebebas Compensation Board has approved the terms and conditions for the auction of two plots of land destined for residential use measuring 18,000 m2 in this urban development, where 190 social housing homes will be built. The Board expects to receive at least €14 million for both plots, i.e. around €700 per square metre.

The plots, which will be auctioned individually, are located next to the site that will house the future Valdebebas shopping centre. One of them, which the Compensation Board has set an asking price for of at least €5.6 million, contains 7,400 m2 of land for residential use, whilst the other measures 10,200 m2 and will have an initial auction price of €8.3 million. (…).

In order to participate in the auction, interested parties must pay a deposit of €300,000 – before the first week of September – which will be deducted from the final auction price in the case of the winning bidder and returned upon completion of the process to all other bidders.

The interested parties, expressly invited by the Compensation Board, will have access to all of the legal, economic and environmental information about the plots and must submit their bids before 12:00 (midday) on 30 September, when all of the envelopes will be opened. On 1 October, the Advisory Council of the Compensation Board will award the plots and one day later, the sale and purchase deeds will be signed. All of the auction details are available on the Valdebebas website.

The plots owned by the Compensation Board have aroused interest from the cooperative manager Ibosa, which was hoping to offer €70 million for all of the land owned by the Compensation Board – with the exception of one of the plots up for auction that has been promised to FCC -. An agreement that has not yet been finalised, although discussions are continuing with the Board for the purchase of the remaining land that will not be auctioned.

Payment options: in cash, deferred or by instalment

The terms and conditions stipulate three possible forms of payment: in cash, deferred or by instalment. Cash offers will prevail over deferred payments, unless the latter exceeds the former by 2.5%. Cash offers will also prevail over payments by instalment, except when the latter exceeds the former by 5.5%. Finally, deferred payments will prevail over payments by instalment, provided the party that chooses the latter option does not present an offer that exceeds the former by more 3%.

If any bidders choose the deferred payment option, then they must pay the total amount, i.e. 100%, five months after the plot of land is awarded, i.e. by 2 March 2016. Meanwhile, 70% of any payment by instalment must be paid by March 2016 and the remaining 30% by September 2016. (…).

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Ministry Of Development: City Land Prices Soar By 38%

16 June 2015 – Expansión

The cost of land increased significantly in the year to March, especially in Castilla-La Mancha (381%), Asturias (176%) and Castilla y Leon (99.7%). The experts do not seen any signs of a new bubble…yet.

The price of urban land has increased significantly in Spain’s major cities. During the first quarter of 2015, land prices increased by no less than 37.8% YoY in municipalities with more than 50,000 inhabitants. The price per square metre rose from €220/m2 to €304.3/m2 in one year. And the number of plots of land sold in the major cities was 596, down by 1.3% from the first quarter last year, according to the Land Price Statistics published by the Ministry of Development, which are prepared using data from the College of Property and Commercial Registrars.

And land prices in large cities in certain regions have gone through the roof. That is the case of Castilla-La Mancha, where prices grew by 381% with respect to Q1 2014, Asturias (176%), Castilla y León (99.7%) and País Vasco (60.8%). The highest decreases in urban land prices were recorded in Galicia (-42.7%) and Murcia (-20.2%).

The average increase in Spain was 5.9%, a rate that is much less marked than that observed in the large cities. Not surprisingly, the average price across the country is €149.9/m2, less than half its value in the large cities.

The significant increase in the price of land in major cities raises fears of a small over-heating effect, due to the strong outlook for the sector, but the experts do not think that we are witnessing the birth of a new boom. We should remember that the Spanish real estate bubble had a clear spur in the price of land: between 1990 and 2007, house prices increased by 288% and land prices rose by 762%, according to a report from BBVA. (…).

The role of the banks

Julio Gil, Chairman of the Foundation for Real Estate Studies, offers an alternative view and points to the significant impact that the banks have on the market. “There were very few transactions and so the statistics are greatly affected by the intervention of financial institutions in the market for land. They are operations that relate more to the value of debt to property developers than the real price of land in the market”. In other words, the difference is because “before no one wanted to providing financing for land and now the financial institutions are funding it again. (…).

The highest prices in towns with more than 50,000 inhabitants were recorded in the provinces of Madrid (€546.2/m2), Barcelona (€448/m2) and the Balearic Islands (€353/m2). This explains why there is more interest in developing land, for both tertiary and residential use, above all in the central areas of large cities and on the outskirts, in high-class areas. (…).

Finally, the number of transactions completed during the first quarter of 2015 amounted to 3,465, i.e. a 4.4% YoY increase.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Notaries: House Sales Up By 1.9% In April To 30,758

16 June 2015 – El Economista

House sales increased by 1.9% in April, with 30,758 transactions, whilst the average price of properties sold decreased by 3.9% to €1,188/m2, according to data from the General Council of Notaries, published on Monday.

These percentage changes reflect a moderation with respect to the increase recorded in sales in March (+12.3%), as well as the drop in prices observed during that month (-7.5%). According to the same source, house prices have accumulated a total decrease of 37% with respect to the peaks reached in 2007.

By type of property, the sale of flats increased by 1.3% in April in YoY terms. In the free (unsubsidised) market, the increase was 1.1%. The rise in the number of flats sold was driven by an increase in the sale of second-hand homes (+5.9%), which more than offset the decrease recorded in the sale of new flats (-27.3%). Meanwhile, the sale of family homes increased by 4.2% in April.

In terms of prices, on average, flat prices decreased by 3.2%, with the price of second-hand flats falling by 3.3% and new flat prices increasing by 2.7%. Meanwhile, the price of houses (chalés) decreased by 2.9%.

During the fourth month of the year, the sale of other types of properties decreased by 9.1% to amount to 6,987 operations, of which 37.7% related to land and plots. The average price per square metre of these transactions was €123, i.e. 18.4% lower than in April 2014.

According to the same source, the evolution of the mortgage market for the acquisition of homes reflects the stabilisation observed in the real estate sector, “with an increase in total credit”.

Thus, in April, 12,716 mortgage loans were granted for the purchase of homes, i.e. 12.3% more, for an average amount of €122,199, i.e. 13.1% more. The percentage of home purchases financed using a mortgage loan was 41.3%.

Original story: El Economista

Translation: Carmel Drake

Solvia To Build 100 Sustainable Homes In Madrid

12 March 2015 – Expansión

Build homes that consume minimal energy and are carefully designed, at an affordable price. That is the goal that has been set for Solvia, the real estate arm of Banco Sabadell and the College of Architects (COAM), with the launch of a competition where Spanish architects will submit their proposals to create the most energy efficient residential development possible. “When COAM suggested this project to us, we looked at which one of our plots (of land) would be the most suitable and economically viable (a construction cost of €600 per square metre has been set) and we chose one in Torrejón de Ardoz with the capacity for up to 100 homes in two phases”, explains Anna Guantar, Innovation Director at Solvia.

The competition has been very successful and the developers have already selected five finalists. “The winner will be chosen this month and will receive €20,000, and if it is economically viable, then the project will be built”, says Pilar Pereda, Head of COAM.

Following the development of these homes, Solvia does not rule out the construction of other homes with zero emissions on foreclosed plots of land.

Original story: Expansión (by R. R.)

Translation: Carmel Drake

Castlelake Buys More Land From Sareb

23 February 2015 – Expansión

Transaction / The North American firm acquires several plots of land in Madrid for €13 million and strengthens its commitment to this type of product.

Sareb has generated more cash from its portfolio of real estate assets. The Asset Management Company for Bank Restructurings (la sociedad de activos procedentes de la reestructuración bancaria) has sold a batch of four residential plots, located in the town of Boadilla del Monte, Madrid.

For the sale, the company chaired by Jaime Echegoyen organised an exclusive sales process and invited five international funds to participate, in partnership with Spanish construction and real estate groups. Then, a sealed bid auction was held and the assets were awarded to the North American fund Castlelake (formerly known as TPG Credit Management).

According to sources close to the transaction, Castlelake paid €13 million for the plots (the minimum price was €11 million). The North American fund, which is operating with a Spanish partner, plans to construct uni-familiar homes worth €44 million on this land, which has a total surface area of 76,000 square metres.

Following its successful bid, Castlelake shall bear not only the costs of construction, but also the cost of the investment required to develop the area, explain real estate sources.

Other transactions

This is not the first time that Castlelake has purchased assets from Sareb. Last year, the North American fund acquired another batch of 17 plots included in the Crossover portfolio, worth €80 million. In the end, the transaction was closed for €55 million. These plots have been placed in a Banking Activity Fund (Fondo de Actividad Bancario or FAB), a vehicle that has significant tax advantages, in which Castlelake holds a 95% stake, whilst Sareb retains a 5% stake.

Castlelake’s new transaction exemplifies the interest that has been awakened once more in the residential market. “Just as 2014 was an extraordinary year for investment in tertiary real estate, 2015 will be a key year for the recovery of the residential market”, says Patricio Paloma, Director of Alternative Investment at CBRE España.

In recent months, several residential plots have been sold. For example, Sareb sold a plot measuring 3,328 square metres close to Plaza de Castilla, in the north of the capital, to Mario Losantos, through his investment vehicle Allegra Hólding. Through this transaction, the former owner of Riofisa returned to the Spanish real estate sector to construct a development for 120 homes, together with ACR.

Months later, the cooperative manager Domo paid €136 million to acquire a plot next to the Paseo de la Castellana in Madrid to construct 355 homes.

“Land is now starting to generate a lot of interest and, in addition to the transactions that Sareb will close, we expect that some of the banks will begin to put some of the land on their balance sheets up for sale, whereby generating liquidity for them that they will use to finance new projects”, says Palomar.

More sales of large plots in Madrid are expected to take place over the next few months. For example, the Ministry of Foreign Affairs is preparing the sale of land it owns on Calle Padre Damián, measuring 15,092 square metres and with capacity for up to 250 homes.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake