Tag: price

Hostmaker: Tourist Flats were 11.6% YoY More Expensive in Barcelona this Easter

6 April 2018 – Eje Prime

The Barcelona brand is continuing to sell outside of its borders. The price of tourist rentals in the Catalan capital rose by 11.6% during the recent Easter holidays. This data is evidence of the “recovery” of the city, according to the apartment manager Hostmaker.

The British company, which has been operating in Barcelona since 2015, reveals that visitors paid €115 per day, on average, for every night that they spent in one of the hundreds of tourist apartments located all over the city, up from the €103 that they paid last year during the same (equivalent) dates.

“We are seeing a trend that confirms the recovery of the Barcelona brand”, said Inés Nobre, Director General of Hostmaker in Spain. The data from her company supports this statement, given that the occupancy rate of tourist apartments grew by 25% between 24 March and 2 April 2018 compared to the same (equivalent) period in 2017.

Of the tourists who used the platform to spend Easter in Barcelona, European visitors were the most prevalent, accounting for 57% of total reservations, followed by North Americans, with 23% of the total. People from Asia and South America, with 11% and 9%, respectively, were the other two visitor profiles who took advantage of the holidays to stay in tourist apartments in Barcelona.

Original story: Eje Prime 

Translation: Carmel Drake

C&W: 876,000 m2 of Logistics Space was Leased in Madrid in 2017

9 January 2018 -Eje Prime

The logistics sector is starting 2018 with a bang. The industrial sector is soaring, after breaking records last year, with the leasing of 876,000 m2 of space in Madrid, its strongest location. That figure represents an increase of 80% with respect to 2016 and is the highest recorded in the last decade, exceeding even the 800,000 m2 of space that was leased in 2007, according to data from the real estate consultancy Cushman & Wakefield.

Similarly, the number of operations signed in relation to the purchase of warehouses and logistics centres amounted to 66, whereby exceeding the 50 recorded in 2016, and the average size of the surface area leased was 15,000 m2.

The areas bordering the A-2 and the A-4 were the most sought-after, as reflected by the influence that they had on the total volume of space leased in Madrid as a whole: the first area accounted for 60% of all operations, whilst assets located along the road to Valencia accounted for another 26% of transactions.

That significant increase in the sale of logistics land also resulted in a rise in prime rents. 2017 closed with an average price per square metre of €5.25/m2.

Meanwhile, in Barcelona, 450,000 m2 of logistics space was leased during 2017, which represents a decrease compared to 2016 when 645,000 m2 of space was leased, primarily because two large operations were registered during that year, with the arrival of Amazon and Mango, which incorporated warehouses with surface areas of 200,000 m2.

In the Catalan capital, by contrast, prime rents rose by 12.5%. The latest data shows an average price per square metre of logistics space of €6.25/m2 in the Mediterranean city. That rate is the highest of any of the capital cities in Southern Europe and is one of the highest on the continent. London is still the most expensive enclave for leasing warehouses and logistics centres with a price per square metre of around €15/m2.

Original story: Eje Prime

Translation: Carmel Drake

Basque Gov’t Sells Listed Property in San Sebastián for €10.4M

27 December 2017 – El Diario Vasco

The auction of the building located on Plaza de Bilbao in Donostia will generate 48% more than the asking price for the Basque Government.

The former headquarters of the Chamber for Urban Property, which has not been used for six years, was sold by the Basque Government last week for €10.4 million in an auction process. The firm that has acquired the attractive property is a shell company headquartered in Madrid, which was constituted a month ago with the aim of acquiring and operating real estate properties and which will likely convert the building into homes.

The property is one of the three buildings whose curved façades give Plaza de Bilbao its shape. They were designed between 1901 and 1905 by Pedro Arístegui and Carlos Ibero as the finishing touch to the thoroughfare comprising Estación del Norte and the María Cristina bridge. Although the internal layouts of the three homes are different, the façades are the same and the Special Protection Plan for Constructed Urban Properties (Peppuc) protects them – they have been granted grade B status (…).

Ownership of the property was transferred from the (Spanish) State to the Basque Autonomous Community when it became the offices of the Chamber of Urban Property and, following the liquidation thereof in 2006, the building has been in disuse since 2011. The property comprises seven storeys (a ground floor, five normal floors and an attic) and has a surface area of 324 m2 per floor (except the attic, which is slightly smaller). A study performed by the Chamber of Urban Property at the time estimated its economic value at around €18 million.

The Treasury Department of the Basque Government decided to divest this property in light of the expenses that it was generating without any prospects for future use (…).

Seven companies submitted bids, after having deposited a guarantee of €350,347 (equivalent to 5% of the tender amount) and on Thursday last week the bid envelopes were opened and the sale was confirmed.

According to sources, the firm that has acquired the building is a shell company, headquartered in Madrid, and constituted on 21 November 2017, that goes by the name Boyton Invest S.L. (…). The price paid, €10,375,000, is 48.06% higher than the initial asking price (…).

Original story: El Diario Vasco (by Aingeru Munguía)

Translation: Carmel Drake

Lladó Family Buys Office Building in Madrid from Axiare for €30M

22 December 2017 – Eje Prime

Axiare is ending the year by starting a new divestment phase and the Lladó family is growing its portfolio of assets. José Lladó, President and majority shareholder of Técnicas Reunidas, is exercising his real estate leg with the purchase of a building on Calle Fernando el Santo, owned by the Socimi Axiare, for €30 million. The asset will become the new headquarters of the European investment fund Eurofund Capital Partners.

The Socimi has begun its divestment phase and has decided to get rid of its Fernando el Santo property, a prime building located in the centre of Madrid, for which it will receive proceeds of €30 million.

The property, measuring 3,254 m2 spread over six floors, is located at number 15 Calle Fernando el Santo.  It has 42 underground parking spaces and currently houses the headquarters of the Argentinian embassy and consulate in Spain. It is adjacent to the current residence of the Argentinian ambassador.

The Socimi has obtained a return of 82% from this asset in just three years, after having purchased the property in 2014 for €16.5 million. Moreover, the building’s rent has risen by 43% during the three years that the company has managed it.

The new owner of the building is the Lladó family, which in recent months has opted to acquired assets located in prime areas where the value of those assets may exceed their prices over the coming years. Before acquiring this property from Axiare, the company purchased another building from the Socimi Hispania, which will house the future headquarters of the law firm Uría y Menéndez for €29 million.

In recent years, the owner of Técnicas Reunidas has also purchased a building at number 2 Marqués de la Ensenada, located just a stone’s throw from Plaza Colón in Madrid, for €6 million. In July 2014, the family office also purchased a building from Vía Célere at number 15 Paseo de Recoletos, for almost €20 million. The Lladó family also owns the property at number 33 on the same street.

Axiare starts divesting at the height of its takeover bid

The Socimi Axiare, which on the offensive, after Colonial launched a takeover bid to take control of the Socimi, is beginning a new divestment phase with the sale of this asset.

Axiare’s portfolio appeals to Colonial because it mainly comprises offices (74%), but also contains other types of assets, such as commercial premises, which account for 9% of the total, and logistics assets, which represent 18% of the total. The Socimi is led by Luis Alfonso López de Herrera-Oria.

The main assets of Axiare, whose tenants include companies such as eBay, Cuatrecasas, Konecta, McKinsey&Company and Alantra amongst its clients, are its office buildings on Calle Sagasta in Madrid, measuring 7,054 m2; on Calle Velázquez, measuring 16,816 m2; and on Calle Manuel de Falla, measuring 6,252 m2.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Bank of Spain: Rental Yields Soar to 9.8%

7 December 2017 – Expansión

According to the Bank of Spain, buy-to-let homes yield a return from rental income of 4.2% p.a. If to that figure, we add the appreciation in value of the underlying property, the total return amounts to almost 10%, on average. That figure is similar to those recorded during the real estate boom.

Buying a home to put it up for rent offers a much higher return than those generated by other financial assets, such as debt and deposits. Moreover, house prices are still much lower than they were ten years ago and still have the potential to rise. These factors, combined with the gradual recovery in employment and the enormous demand for rental properties, have created a very fertile scenario for investors, both for individuals as well as for Socimis and funds. For this reason, the major indicator of the residential sector is no longer just price – although that is important – but instead yield.

Homes now generate an average annual return of 9.8%, according to the Bank of Spain, which takes into account not only the rental yield but also the appreciation in the property value over 12 months. In other words, the yield is now 1.6 percentage points higher than it was a year ago, to bring it in line with the figures seen at the end of 2007, at the peak of the real estate boom.

This rise in returns is due to the increase in house prices and the rental boom. Increasingly more buyers are opting to acquire homes as a business, in the hope that those properties appreciate in value and generate more than 4% in the rental market (the average is 4.2%).

According to the latest study from Fotocasa – which Expansión revealed last Saturday – 24% of the people who have participated in the residential property market in the last year are investors. That figure exceeds 30% in the large cities, above all in Valencia (44%), Barcelona (36%) and Madrid (35%), according to data from Tecnocasa and the Universitat Pompeu Fabra.

“Now is a good time to buy to let, both for the long-term as well as for second home properties, given that both formulae are generating returns that, in the current context of low interest rates, cannot be found in any financial products or on the stock market”, says Beatriz Toribio, Head of Research at Fotocasa (…).

What’s more, the appearance of new real estate business models has spurred profits along in the large cities, in such a way that 20% of investors now use their homes as tourist rental properties. That high percentage is due to the new short-term let platforms, such as Airbnb, which allow them to obtain even higher returns than from the traditional rental market.

Nevertheless, 65% of investors still prefer the stability of having a long-term tenant. The remaining 15% buy homes not to put them up for rent, but rather to wait for them to appreciate in value and to sell them at a profit.

Market leaders

Madrid and Barcelona are spearheading this new property fever. In the Spanish capital, buying a home to let it out generates a gross annual return of 11.8% (from rental income and capital gains); that figure amounts to no less than 23.1% in the Catalan capital, almost twice as much (…).

The central areas of Madrid and Barcelona are experiencing a genuine profitability boom. In the Catalan capital, the Sants-Montjuic district stands out, with a gross annual return of no less than 32.9% (5.3 points from rental income and 27.6 due to price rises). It is followed by Eixample (26.8%), Gràcia (25.9%), Sant Martí (25.6%), Horta-Guinardó (24.9%) and Nou Barris (21%, although the latter is the most profitable district excluding price rises: 6.6%), which all exceed 20%. The centre (Ciutat Vella) generates 19% and the exclusive district of Sarrià-Sant Gervasi yields 13.2%

In Madrid, the Centro district comes close to 20% (19.7%); it is followed by Salamanca (19.2%) and Chamberí (18.8%) (…).

Something similar is happening along the coast. The highest returns in the beach areas are located in the Balearic Islands, Barcelona, Las Palmas, Huelva and Almería, where rental yields exceed 5.5%, and overall yields exceed 10% if we include the capital gains. The high combined return along the Malaga coast (17.9%) is particularly noteworthy.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Barcelona’s Vía Portaferrissa Looks To Reposition Itself As Prime Real Estate

27 November 2017 – Eje Prime

Portaferrissa is claiming its place amongst the prime shopping streets of Barcelona once again. The road has a privileged location, between Portal de l’Àngel and Las Ramblas, receives local and tourist traffic and has several available retail spaces, but its prices are not competitive and only a handful of operations have been closed in recent times. Now, two historical properties are making a move to put Portaferrissa back on the prime map.

One of them is at number 25, so-called Casa Gralla, which until just a few months ago was occupied by Pepe Jeans. The property is owned by the Casacuberta family, which also controls the building that houses the Decathlon store on Calle Canuda, as part of a portfolio containing more than twenty assets.

During the 1990s, the ground floor premises of number 25 housed shopping arcades, Gralla Hall, but that closed at the beginning of the 2000s, when the model showed its first signs of weakness.

Pepe Jeans then took over the lease of the premises and sub-leased part of the space to Quiksilver, which remained for years. Nevertheless, that company did not invest in creating a retail store, other than eliminating the separation of the former arcade.

The Casacuberta family has now begun to renovate the property to merge the two spaces, which will span 1,900 m2 after the renovation. The most recent significant negotiations (held with a view to finding a tenant) were with Adidas, with which a pre-agreement was reached, although the operation did not end up going ahead.

Now, the property is facing its third year on the market, although its prices, which are well above market rates, may still be a barrier.

Another one of the premises on the market on Portaferrissa is Palau Castanyer, which currently houses the Art Montfalcó souvenir shop. That property was sold to KKH Capital group in November for €24 million.

Falling prices 

Portaferrissa begins at La Rambla dels Estudis and ends at La Plaça de la Cucurulla, just stone’s throw from the very busy Portal de l’Àngel. Prices on the street reached their peaks before the crisis, with an average of €1,808/m2 per year in 2005, although the prices of stores measuring less than 100 m2 ended up exceeding €2,500/m2.

However, since then, prices have plummeted, by around 30%, according to sources in the sector. “In 2007, River Island rented the store at number 13 for €970,000, and a few years later, it was leased for €600,000”, say the same sources.

According to the recent report Main Streets Across the World, compiled by the consultancy firm Cushman & Wakefield, the average rental price per square metre per year on Portaferrissa amounted to €1,980 in 2016, in line with the previous year.

Original story: Eje Prime (by I. P. Gestal)

Translation: Carmel Drake

Notaries: House Sales Rose By 8.6% In Sept To 40,094

20 November 2017 – Eje Prime

House sales are continuing to soar. The volume of residential transactions rose by 8.6% in September with respect to the same month in 2016 (and by 12.2% in the series corrected for seasonality) to 40,094 operations, according to data from the General Council of Notaries.

By type of home, the sale of apartments registered a YoY increase of 7.7% (up by 11.3% in the series corrected for seasonality) and the volume of private home sales rose by 8.%. This increase in the number of transactions involving private homes was due, exclusively, to the expansion of second-hand home sales (10%), given that the sale of new build homes decreased by 1.9% YoY. Meanwhile, the sale of family homes rose by 12% YoY.

In terms of average prices, the cost per square metre of the homes purchased in September 2017 amounted to €1,331/m2, whereby reflecting a YoY price increase of 2.4%. According to the notaries, this increase in the price per square metre of homes was due to both an increase in the price of family homes (1.4%) and an increase in the price of apartments (3.8%). Meanwhile, the price per square metre of private homes rose by 4%.

Original story: Eje Prime

Translation: Carmel Drake

AGV: Almost One Third Of Madrid’s Citizens Think More New Homes Are Required

20 November 2017 – Observatorio Inmobiliario

Almost one third of Madrid’s citizens believe that there is not sufficient housing in the city to meets their needs in terms of prices and features. This perception increases as the respondents’ annual salary and age decrease. Similarly, more than half of future buyers believe that there is not sufficient supply to allow them to choose the most appropriate home and almost 45% think that more housing needs to be built. Those are some of the findings of a study conducted by the Association of Housing Managers (‘Asociación de Gestoras de Viviendas’ or AGV) amongst citizens of the capital, which reveals the needs of house buyers in the city of Madrid.

The people surveyed, of whom 3 out of 4 were buyers aged between 31 and 39, revealed that buying a home or apartment in a building is their preferred option. The vast majority confirmed that they would choose to buy a private home (rather than a subsidised property). In fact, almost 80% stated that they are most tempted by that type of home; 90.5% of them are aged 40 or over (86.3%), compared with the younger population, where only 56.7% said that they would be able to buy a private home.

The youngest people who do not own their current homes stated that they will invest less than €160,000 in the purchase of a home as they cannot afford more expensive properties. Moreover, only 11% of the respondents said that they would spend a maximum of €300,000 to buy a property in Madrid.

Price and location are the top priorities

Both price and location stood out as the main factors to take into account when it comes to buying a home. More than half of Madrilenians (63.4%) rank price as one of the most important considerations, along with the characteristics of the home. The study confirmed that price and the lack of help or tax incentives are the main obstacles preventing the majority of Madrileños from affording to buy a new home.

In terms of the housing market, potential future house buyers claim to be those who have planned their savings (29.6%), have good prospects in terms of employment (23.9%), and monthly earnings that allow them to afford the expense (35.7%). Of the latter, the population aged between 31 and 39 stands out, with annual earnings of more than €36,000.

Limited information and a sensation of complexity when accessing social housing

The survey confirmed the existence of a firm interest in social housing properties in the city of Madrid, even though only 30% of those surveyed said that they were informed about subsidised housing, and 61% consider that the application procedures are too complex. In fact, almost 60% of women and 63.3% of young people (under 30) consider that they will have to go down this route.

Juan José Perucho Rodríguez, President of AGV, declared that “we are facing a critical situation given that demand from citizens is clear and the situation is not adapting to reflect what is happening in Madrid. The construction of social housing properties is vital for citizens, who have seen their purchasing power diminish, to be able to afford to buy a home. In this sense, we think that starting to discuss the option of creating more homes is necessary to cover the needs of the citizens who demand them”.

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

Liberbank Agrees To Sell €750M RE Portfolio To Bain

11 October 2017 – El Confidencial

Liberbank has agreed to sell a portfolio of foreclosed properties worth €750 million to the fund Bain Capital, after ruling out a rival offer from KKR. According to sources familiar with the situation, the transaction will be closed at a price of between 45% and 48% of the initial value (the final figure is the only matter that still needs to be agreed), in other words, with a discount of between 52% and 55% of the book value. That haircut is lower than the 66% that Santander had to apply to divest Popular’s property portfolio in the summer.

The aforementioned sources explain that, in the end, this portfolio does not include any non-performing loans, but rather contains foreclosed assets only. The sales price implies a higher discount than the net value (after provisions) at which Liberbank recognises these assets on its balance sheet (around 40%, albeit based on their appraisal value as at 2017), which means that the entity will have to recognise an additional loss as a result of this sale. But it will cover some of that loss with funds resulting from the €500 million capital increase that it approved on Monday and to which its main shareholders have already signed up.

The fact that Liberbank has had to offer a lower discount than Santander did for the sale of Popular’s assets is explained by three factors. Firstly, the size and urgency of the operation: the bank chaired by Ana Botín sold a much larger portfolio, amounting to €30,000 million, which it wanted to divest from its balance sheet as soon as possible, and whereby shield itself from the possible legal annulment of its purchase of Popular.

The second is that Santander sold only 51% of its portfolio, in other words, in that case, the bank will continue to receive income from the rental or sale of the assets in its remaining 49% stake. A better price can always be negotiated when the buyer acquires the rights to all of the revenues associated with a given portfolio. The third reason is that “not all of the assets are the same, and Popular’s portfolio contained a lot of poor quality properties”, according to one of the sources consulted. In other words, Liberbank’s portfolio contains better quality assets.

Ensuring survival on its own

(…). As El Confidencial has reported, both this real estate operation, as well as the capital increase, are consequences of demands made by the (Spanish) Government and the Bank of Spain to strengthen Liberbank’s solvency for fear of a repeat of a collapse like Popular’s (a fear that also led to the supervisor imposing a ban on the short selling of the entity’s shares, which still continues). In the face of interest from Abanca, Unicaja and CaixaBank to acquire Liberbank, the entity led by Manuel Menéndez decided to undertake these operations to ensure its survival as an independent player.

Moreover, the entity sold another €215 million in real estate assets unrelated to this portfolio during the third quarter. In that case, it sold the assets at their net book value, in other words, without the need to record any additional losses. In this way, Liberbank will easily exceed its objective of decreasing its property portfolio by €800 million this year, with most of the fourth quarter still remaining. In addition, during the same period, it decreased its non-performing loans by a further €230 million thanks to recoveries and foreclosures.

Original story: El Confidencial (by Eduardo Segovia)

Translation: Carmel Drake

Cerberus Cools Off Negotiations With BBVA Due To Political Climate

10 October 2017 – Eje Prime

The negotiations between Cerberus and BBVA are being cooled down by the political climate in Spain at the moment. The banking entity acknowledged a couple of weeks ago that it was holding negotiations with Cerberus Capital regarding the sale of its real estate business in Spain. Now, according to sources close to the process, the political instability could lead to a reduction in the price of that portfolio.

Conversations between the two parties were already very advanced; they just needed to agree the price, but then the events of 1 October in Cataluña threw the cat amongst the pigeons on the markets and unleashed an instability that could end up dictating the future of the operation, according to El Confidencial.

Sources at BBVA have declined to comment on how the Catalan market may affect the closure of the sale of the entity’s real estate subsidiary, but observers in the sector speculate that it could trigger a reduction in BBVA’s price expectations. Nevertheless, they don’t rule out that the entity will wait for the waters to temper before resuming the process.

The bank will need an offer of, at least, €8,760 million to be able to transfer its entire portfolio to Cerberus without recording any losses. Nevertheless, the entity indicated that it could not say whether the negotiations will end in an agreement or not, or what the terms and conditions of such an agreement might be.

Original story: Eje Prime

Translation: Carmel Drake