Town Hall of Sevilla Grants Plot to Insur in Exchange for 63 Homes, 3 Retail Premises & €3.5M

6 July 2018 – Inmodiario

The Town Hall of Sevilla, through Emvisesa, and the company Inmobiliaria del Sur (Insur) have formalised an operation to exchange a plot of land on c/Ramón Carande included within the strategy to urgently expand the public housing stock and approved by the Town hall with a final value of €11.2 million, excluding the investment that the company will make to develop the land acquired.

In this way, and following a public tender, the city is exchanging a plot of land worth €7 million on which it will build up to 68 homes, for 63 constructed and completed homes, plus three commercial premises, a plot of land for 135 flats and €3.5 million.

“This is an innovative project of a social nature, which we launched with the backing of the Town Hall at the start of the mandate and which is now a reality. It is a good agreement for the city, which allows us to respond to an urgent need: to expand the public housing stock immediately”, explained the Mayor of Sevilla, who participated in the event at which the exchange agreement was signed together with the Delegate for Social Well-being and Employment, Juan Manuel Flores; the Delegate for Urban Living, Tourism and Culture, Antonio Muñoz; the Manager of Emvisesa, Felipe Castro; and the President and CEO of Inmobiliaria del Sur, Ricardo and Francisco Pumar.

Upon signing the agreement, the company handed over the 63 completed homes to the Town Hall. They are ready for the tenants to move into and 51 of them are located in the same block, on Avenida de Andalucía. They have a total appraisal value of €6.5 million.

The local government, through Emvisesa, is already working to formalise the change in rating from sale to rental and to complete their award (to their new tenants) as soon as possible with the following split: 70% will be allocated to young people recorded in the claimants register and the remaining 30% will be social housing properties based on criteria established by Social Well-being.

Similarly, three commercial premises are being incorporated into the town hall’s portfolio, which will be marketed as part of the municipal employment programs. A plot of land in Valdezorras is also being incorporated, where 135 more affordable homes may be built, which will be executed by Emvisesa.

Finally, Emvisesa will also receive €1.2 million from this operation, which will be used to purchase empty Emvisesa homes that have a total budget of €1.5 million and which already has 25 homes appraised and valid for acquisition. The remaining €2.3 million will be used for renovation projects, such as the new inter-generational housing block on c/García Ramos.

Original story: Inmodiario 

Translation: Carmel Drake

Aelca Locks Horns with its Owner Värde Over Sareb Mega-Contract

12 June 2018 – Voz Pópuli

An underground war in the heart of Aelca, one of the largest property developers in Spain. The real estate firm founded by José Juan Martín and Javier Gómez is immersed in negotiations regarding a possible alliance with Sareb which has generated unease for its main shareholder, Värde Partners, which owns 80% of the share capital.

Sources at the US fund consider that their investee company is negotiating this agreement behind their backs, something that they are opposed to since it could mean that their stake in the property developer decreases to less than 50%, according to financial sources consulted by Voz Pópuli.

Sources at the property developer declined to comment: “Aelca is continuing to work on the project with Sareb. In this sense, we decline to make any comment”.

Meanwhile, Värde Partners has been assessing a possible merger between Aelca and Vía Célere, the fund’s other property developer in Spain, for some time. They see it as the best way to generate value from their investments in Spain ahead of a possible IPO when the market improves. But neither of the US fund’s partners like the merger option, they would both prefer to continue on their own.

Sareb’s process

The property development alliance with Sareb is making progress, with the recent selection of just two finalists: Aelca and Aedas. The President of the bad bank, Jaime Echegoyen, said yesterday that his entity is in no hurry to close an agreement and nor does it have any obligation to close a deal if the numbers do not work out in the end.

Sareb’s idea is to include land worth €800 million in the agreement. According to financial sources consulted, developments in progress worth another €500 million may also be included. And of all of that, Aelca would want to hold onto around €900 million, or 70% of the total.

One of the options being negotiated is that Aelca and/or Aedas acquire the plots in exchange for allowing Sareb into their share capital. The valuation of the property developer is around €1 billion, and so such an agreement would reduce Värde’s stake to below 50%. Even so, according to the same sources, Aelca would have to obtain approval for the operation at the General Shareholders’ Meeting, which would be tricky if the fund is not in agreement.

Moreover, sources at Värde do not think that the valuations that they are seeing for the possible agreement with Sareb are justified, and they fear that the negotiations will dilute their stake (…).

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Land Oligopoly: 10 Cities Account for 55% of the Developments Underway in Spain

31 May 2018 – Eje Prime

The data is conclusive: ten cities account for 55% of the residential developments underway in Spain. They constitute a municipal land oligopoly, which is now showing signs of tension on the demand side given the lack of buildable land available for development and the delays by the public administrations when it comes to approving building permits. “The concentration of the population in the major cities is a phenomenon that is going to increase over the next few years”, predicts Sergio Gálvez, Director of Strategy and Investment at the property developer Aedas Homes in the context of the Madrid Real Estate Fair (SIMA) conference on land and its strategic market.

The executive of the listed Spanish company also explained that the delays in the granting of licences in certain cities are lasting for up to ten months. Gálvez regrets that “any delay suffered in the production chain clearly results in a higher sales price for the end client”.

The Director of Aedas, who believes that “the public administrations still have a long way to go in terms of the agility of the licence-granting process”, was accompanied at the roundtable by Ignacio Ocejo, Partner at Kronos Homes. The director of the Spanish property developer turned the spotlight onto financing: “the situation in the financial world has changed drastically with the new cycle; in the past, the supply could have been four times larger”.

Nevertheless, Ocejo was favourable of the fact that land financing is now “much more controlled” because capital can still be obtained under reasonable conditions. “I do not think that it is a problem, the banks themselves are being proactive when it comes to financing; the problem is more that there are fewer entities”, said the Director of Kronos.

Meanwhile, the Commercial Director of the appraisal firm Tinsa, Pedro Soria, seemed more concerned than his roundtable colleagues about land and its overheating (…) “In some places, we are already seeing price caps on land”, says Soria, “the only option left if we want to achieve the desired returns is to raise house prices”. In the event that land prices continue to rise, the Tinsa executive sees a “risk”, nevertheless, the market could be more profitable on the land investment side than when it comes to house building itself.

Spain is seeing an improvement in its new home permits once again, but the figures are still well below the more than 800,000 permits granted in the most active years of the boom in the 2000s. In this regard, Ocejo explains that “in a scenario of stability and compared with the previous cycle”, an increase in new builds at a rate of between 25% and 30% would be “positive”. “A healthy market for me would see the construction of between 130,000 and 160,000 new homes each year in Spain”, added the Partner of Kronos Homes.

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Oaktree Joins Forces with Sabadell to Promote Iberdrola Land

17 May 2018 – El Economista

Oaktree and Sabadell, through its subsidiary Bitarte, have requested permission from the European Commission to constitute a joint venture through which they will dedicate resources to residential development in Spain. Most of this new joint venture’s portfolio, at least initially, will comprise land that the US fund is going to buy from Iberdrola Inmobiliaria, which has declined to comment in this regard.

According to experts in the sector speaking to this newspaper, Oaktree is going to close the operation to acquire at least five plots of land worth approximately €100 million during the course of this month. As soon as the US fund’s alliance with Sabadell has been approved, the land will be integrated into the new company, whose purpose is going to be to continue growing through new land acquisitions.

Sabadell has chosen its subsidiary Bitarte, an instrumental company dedicated to the world of real estate, to carry out this association with Oaktree, although its stake in this new company is going to be managed by Solvia Desarrollos Inmobiliarios, the arm of the bank that is responsible for property development. The entity constituted that firm, which owns land worth around €1.2 billion when it completed the carve out of Solvia Servicios Inmobiliarios.

According to explanations from the same sources, Sabadell’s role in its alliance with Oaktree will be that of industrial partner with experience in the property development market, and so the fund will have a financial role, contributing the majority of the capital.

Assets

At first, the possibility was raised of an alliance between all three parties, which would see Iberdrola not only contribute assets, but also hold onto a stake in the company, and for that deal, the figures that were bandied around at the time amounted to around €130 million.

In the end, the alliance will be signed between the fund and Sabadell, and so the electricity company will contribute somewhat fewer plots. Of the chosen sites, in the absence of the definition of the final plots to be transferred, one in Móstoles (Madrid) stands out, where Iberdrola has already started work on a residential development project: Villas del Sur 2. This development comprises 22 terraced homes with three and four bedrooms and a private garden.

The other plots selected are located in Salamanca, the Costa del Sol, Pamplona and Pozuelo de Alarcón. This is a small part of Iberdrola’s land portfolio, which owns assets with a buildable surface area of 3.5 million m2. Specifically, the real estate company is working on the construction of more than 330 homes located in different places around Madrid, Murcia, Santander and Valencia.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

PwC Forecasts Record RE Inv’t in Spain This Year

17 May 2018 – Expansión

The real estate market in Spain is striding towards a new investment record. That is according to the partner responsible for this area at the consultancy firm PwC, Rafael Bou, speaking yesterday at the presentation of a report about trends in the real estate market in Europe – he highlighted that the best international scenario favours the arrival of new projects.

Bou affirmed that there is “widespread optimism” amongst the main players in the sector. “Even 2017, with Brexit and Trump, was a year of record investment, and so 2018 ought to be even better, given that we do not have any of that”, he said. In this sense, he also indicated that there is greater political stability in Europe following the elections in France and Germany,

Another factor that will favour the achievement of this investment record is that the European Central Bank (ECB) is going to maintain interest rates low. Bou confirmed that the uncertainty hanging over the sector is not knowing when the current expansive cycle will end; he put a date on the horizon. “Next year, the uncertainty in this regard may increase with the appointment of a new Chairman of the ECB”.

Madrid, the fifth most attractive city

PwC’s survey, compiled in collaboration with the Urban Land Institute, places Madrid as the fifth-ranked European city for conducting real estate business. If we look at the small print, the Spanish capital is ranked in sixth place in terms of the development of projects and in fifth place for the capture of investment.

The research confirms that significant growth is expected in the capital’s office rentals. “Compared to other European capitals to the north, the growth in rental prices has been restricted by the setback that the Spanish economy suffered following the global financial crisis”, he said. PwC highlights the evolution of the retail and hotel sectors, and the repositioning of offices. Madrid has risen four places in the ranking with respect to last year.

Barcelona, which has risen by five places, is now ranked in eleventh place overall. The Catalan city was ranked in thirteenth place in terms of investment and in ninth place for the development of real estate projects.

The report indicates that Barcelona is one of the cities that could most benefit as a result of Brexit, although it warns of the dangers of secessionism. The analysis highlights that the retail, office and residential sectors are currently at a critical point. So too is logistics. “Boosted by demand from e-commerce companies, investors and property developers are buying logistics warehouses and developing new spaces in Barcelona in a speculative way, for the first time since the global economic crisis”, according to the report. “Some people are now talking about a price bubble in the logistics sector in light of the boom that it is experiencing”, added Bou.

The 800 surveys that have been used to compile the study were conducted prior to 1 October 2017, and so they do not reflect the impact on the real estate sector of the political crisis resulting from the Cataluña-independence process. “Having overcome the initial shock, investment has been recovering gradually”, explained Bou. Most overseas investors have returned. “Some people have decided not to invest, but others saw an opportunity in terms of prices and competition and came back quickly”, he said.

Would Barcelona and Madrid have occupied similar positions in the ranking if the surveys had been carried out after 1-O (1 October 2017)? Bou highlighted that Madrid is always ranked higher than the Catalan capital because it is a larger city.

Original story: Expansión (by Gabriel Trindade)

Translation: Carmel Drake

Emesa Plans to Invest €100M in New RE Projects Between Now & 2023

13 April 2018 – Eje Prime

Emesa Corporación, the investment company owned by Emilio Cuatrecasas, is committed to the real estate business. The group is going to invest more than €100 million in Barcelona and the surrounding area to launch new projects in the residential, office building and hotel sectors, according to explanations provided by Ferran Forrellad (pictured below), CEO of Emesa, speaking to EjePrime in an interview.

Launched in 1980, Emesa Corporación has been turning its activity, step by step, into a business model in which it can operate comfortably. “The turning point came in 2015 when we went from being a company that bought, managed and operated, into being a company that develops and creates business”, explains Forrellad. “We want to be a player in the real estate sector that controls its projects from the beginning until the end”, he adds.

Emesa, which in addition to its real estate arm also has a business area destined to acquiring stakes in the share capital of companies in full growth (such as the case of the company specialising in storerooms Boxinfiniti), threw itself wholeheartedly into property development with a building in the 22@ district of Barcelona, which is now the headquarters of the law firm Cuatrecasas.

The group, which has multiplied its workforce by three-fold over the last three years, from seven employees to twenty-one, is now in the preliminary phase of constructing a new office building in the 22@ district, at number 184 Calle Pallars. Designed by the architecture firm BAAS, Emesa is going to invest €25 million in the new asset, which will have an above-ground surface area of 9,200 m2, as well as 5,000 m2 below ground. “It will be finished during the third quarter of 2020”, says Forrellad.

“We want to create unique buildings in Barcelona and we are on the lookout for new plots in 22@ on which to build more offices since we firmly believe that it is one of the areas of the future in the city, both for business and homes”, said the company’s CEO.

In recent months, the company has starred in several high profile operations in the Barcelona real estate market, such as the purchase of the Diagonal 444 building, the former headquarters of Cuatrecasas; and the Diagonal 632 building, which houses the headquarters of Quirónsalud Barcelona’s Ophthalmological Institute.

And from one side of La Diagonal to the other. As Eje Prime revealed, Emesa acquired 37,000 m2 of land in Finestrellas, a new development area, which is going to include offices, residential properties and a commercial area. The project in which Emesa is participating constitutes a 90,000 m2 office development, in which it has invested €80 million and which is hopes will be fully operational by 2023 (construction work begins in 2020).

Emesa will also focus on the residential business over the next few years. The company is going to build a development comprising forty homes for rent in Badalona after investing €12 million in this project. According to the forecasts of Emesa, which is on the verge of receiving approval for its licences, the project will be launched in 2020 and has been designed by the architecture firm Barozzi Veira (…).

Last year, the company also purchased the Ullastret Palace in Girona, with the aim of turning it into a high-end hotel, which is going to be the first of a chain of select hotels in El Empordà. (…).

Currently, the portfolio owned by Emesa Corporación spans more than 180,000 m2 and is worth more than €750 million. Emesa Corporación Empresarial generated turnover of €8.07 million last year.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Micmarsein to Invest €60M in New Land in 2018

13 March 2018 – Eje Prime

The property developer Micmarsein is taking advantage of the good health of the residential market in Spain. The company, a joint venture between the construction firm Marsein and the property developer Mercat Inmobiliaria Català, is focusing on developing its promotion business in Cataluña, Ibiza and Valencia, with the purchase of new land worth €60 million, according to sources from the group speaking to EjePrime.

“Micmarsein has been created out of the need for two companies to join forces to reach an objective, which is to build residential properties”, explain the sources at the group. The company, which has more than 25 years of experience across Spain, has started 2018 with the purchase of a plot in Les Franqueses, Barcelona, for the construction of a development comprising 35 homes, as well as retail premises and parking spaces, which will involve an investment of €14 million.

The homes will have surface areas of between 68 m2 and 105 m2. This development, which will be started at the end of 2018, comes in addition to the developments that Micmarsein is currently executing in Cataluña and the Balearic Islands.

In Ibiza, the group is immersed in two developments. The first is located in Santa Eulalia, where it has purchased a plot on which to build 29 flats and where it is going to invest €17 million. Moreover, on the same island, it is also going to build a new development in Sant Josep, aimed at a public with a high purchasing power.

In terms of Barcelona, the company is on the verge of handing over a development containing 13 homes in Collblanc and has just finalised work on two more developments containing fourteen and six homes in the neighbourhood of San Andreu, also in the Catalan capital. To complete the picture in the Catalan market, Micmarsein is also now building a development in Cardedeu.

Of the new purchases that Micmarsein is going to carry out this year, some will be financed using own funds to nourish its business, whilst others will be commissioned by other funds, which trust in the group to develop their investments in the country.

This year is going to be one of the most ambitious for the company in recent times. According to the group, the forecast is to end the year with a turnover of close to €40 million, which will mean multiplying by almost seven its revenues from a year earlier, when the group recorded sales of €6 million.

Micmarsein hopes that the increase in its revenues over the coming years will stem from its expansion plan in the Spanish market. In addition to the Mediterranean Coast and the Balearic Islands, the group is planning to acquire land and build new developments in Madrid and Málaga over the medium term (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Oaktree to Buy Land from Iberdrola for €100M to Develop it with Solvia

13 March 2018 – Eje Prime

Oaktree is going shopping hand in hand with Solvia. The US fund is just one step away from signing an agreement with Iberdrola Inmobiliaria to acquire a portfolio of land worth more than €100 million. In this operation, the property developer subsidiary of Banco Sabadell would perform the role of developer of the future promotions through a joint venture with the investment fund.

The plots of land that Oaktree is planning to acquire are located all over Spain. More than half of the land that Iberdrola is willing to sell is located in Granada, although the portfolio for sale also includes plots in Madrid, Valencia, Málaga, Navarra, Salamanca, Cantabria and Murcia, according to Vozpópuli, which reports that the operation just needs to be signed.

Other funds and institutional investment groups have reportedly expressed their interest in this land portfolio, including the US bank Goldman Sachs.

For the development of the acquired land, Oaktree is planning to create a joint venture with Solvia Desarrollos Inmobiliarios, the property development arm of Sabadell. Nevertheless, the operation proposes, in addition, that each new development generate new companies in which Iberdrola Inmobiliaria would also have a presence.

In November last year, Banco Sabadell announced the creation of its own property development subsidiary to be responsible for this area of the real estate business for the financial entity. Currently, Solvia Desarrollos Inmobiliarios has a land portfolio worth €1.2 billion, which would now increase as a result of this alliance with Oaktree.

Meanwhile, once the sale is certified, Iberdrola Inmobiliaria would see a reduction in its exposure to real estate, a sector in which it has been very active in recent months, as shown by the project that it is working on in Barcelona, where it is planning to build 88,120 m2 of offices. At the end of 2016, the company owned real estate assets worth €1.7 billion.

Original story: Eje Prime 

Translation: Carmel Drake

Realia Buys Land & Reactivates Its Property Development Business

12 March 2018 – Expansión

Realia, the real estate firm controlled by Carlos Slim (pictured below), has acquired a plot of land in Alcalá de Henares (Madrid), with a buildable surface area of 44,755 m2, from the Ministry of Defence for €27.5 million. This is the first land acquisition that the company has undertaken since the Mexican magnate took control of the entity, and sees it join the wave of investments that companies in this segment are making in land in light of the reactivation of the sector, reports Europa Press.

In the case of Realia, the land purchase forms part of the reactivation of its construction and house sale activities, which it had suspended, firstly due to the crisis and, subsequently due to the process to restructure and clean-up the company. In this way, it is going to allocate this land to undertaking one of its first three housing developments. The other two, which are going to be built on the portfolio of land that the company already owns are located in Sabadell (Barcelona) and Palma de Mallorca.

Strategy

Realia’s strategy to resume its property development activity involves analysing new build construction projects in “areas where demand is consistent and the supply is very low or new”, such as specific areas of Madrid and Barcelona and “certain other places with the same market characteristics”, according to a statement made by the firm in its annual report for 2017.

That is one of the company’s main objectives for 2018, together with the improvement in margins through the streamlining and optimisation of expenses, and the recovery of prices.

Original story: Expansión

Translation: Carmel Drake

Acciona Buys More Land on which to Build 4,500 Homes

27 February 2018 – Europa Press

Acciona has accelerated its property development and house sales businesses by investing in the purchase of developable land, in such a way that it now owns a portfolio of land on which to build around 4,500 homes, which it plans to continue increasing.

The group chaired by José Manuel Entrecanales (pictured above) forecasts that the resumed real estate activity will start to contribute to the income statement next year.

Two years ago, Acciona took the decision to recover its real estate division with the aim of generating value from the assets that it still held in the sector in light of the reactivation that the business was starting to show in Spain following the crisis.

Thus, in terms of its real estate assets, the company merged its rental homes into Testa Residencial, the Socimi in which Santander, BBVA, Merlin Properties and now the group itself hold stakes, and which is planning to make its debut on the stock market next quarter. Moreover, it is proceeding with the sale of the rest of its assets (hotels and offices) on an individual basis.

In terms of its property development activity, Acciona resolved to return to building on the land portfolio that it had, whereby taking advantage of the recovery in the sector.

Nevertheless, the company has given a boost to that initial business plan and has dived into the purchase of new land. Specifically, over the last year, the firm has purchased plots worth €82 million with capacity for the development of around 1,400 homes.

In this way, Acciona currently has a land bank for the construction of 4,500 apartments, more than triple the amount that it had a year ago.

Nevertheless, the group has expressed its interest in continuing to invest in land both in Spain as well as in the other two markets where it has a presence in the real estate sector: Mexico and Poland, according to the company’s Director of Corporate Development, Juan Muro Lara.

The group calculates that it will allocate around 20% of its average annual investment, which amounts to between €900 million and €1 billion to the development of this revived business, including both the purchase of land and the construction of homes.

Original story: Europa Press

Translation: Carmel Drake