Invesco Invests €30M In A Residential Development In Valencia

11 July 2016 – Valencia Plaza

The international fund Invesco has invested around €30 million in a 15,000 sqm residential development in Valencia. The chosen site is the Ciudadela building, which has been used as office space until now, and which has been purchased from the company Ciudadela in a transaction brokered by Olivareas Consultores. The building is located between Cronista Carreres and Paseo de la Ciudadela, overlooking the river.

According to the Director of the Residential Sector at Olivares Consultores, José Ramón Ballesteros, who is marketing the homes, this project will involve the construction of 58 homes of varying sizes, with between two and five bedrooms. Finished to a very high standard, the building will have a gym and solarium for exclusive use of the residents. The homes will be sold to the public for between €3,000/sqm and €3,200/sqm.

This investment comes after years of small investments by funds…During the month of September, the prices and plans will be made available, although a high number of reservations have already been placed. Invesco is one of the most important investment management funds in the world, with assets under management worth more than USD 800,000 million.

This residential development is just another example of the on-going reactivation of the property market in the city of Valencia. The Zriser Group, the investment arm of the Valencian entrepreneurs Ana and Pablo Serratosa, are also selling a complex of luxury homes off-plan, located at number 11, Avenida de Francia. The complex, which represents the firm’s first foray into urban development, is called Llum Plaza and will be constructed next to the Hotel Barceló, on a plot of land that the company acquired in 2014, according to sources from the Zriser Group. That development contains 34 three- and four-bedroom homes and has already seen strong demand.

Sareb has also launched two developments in the city of Valencia, which will add a total of 118 new homes. The plots of land owned by the bad bank are located on Calle Río Escalona – between Avenida del Puerto and Paseo de la Alameda – and on Avenida Alfahuir.

Original story: Valencia Plaza (by Esfefanía Pastor)

Translation: Carmel Drake

RE Megaprojects Return To The Costa Del Sol

27 July 2015 – Málaga Hoy

The property market on the Costa del Sol is showing signs of recovery. After years of crisis and turmoil in the construction sector, domestic and international investors are putting their faith in the region once again as they undertake new developments and generate profits. In the last three months, three large million-euro initiatives have been launched in Estepona, Marbella and Mijas, together with others, on a smaller scale, along other parts of the coast.

In Estepona, the company Ikasa has announced that it will invest €205 million in the construction of 400 luxury homes in an urbanisation that will be called ‘Panoramia Estepona’. It will be built over eight years, in a series of phases that will depend on the behaviour of the market; work will begin on the first phase this summer. (…).

The second mega-project is in Marbella and will involve the injection of €150 million from one of the largest US investment funds, for the construction of 200 luxury homes next to the Santa Clara Golf urbanisation. The first of the four phases could be completed by the end of the year and will include the creation of 20 independent villas, each with its own exclusive design, styled under the supervision of six of the country’s leading architects and with prices that will range between €900,000 and €2.5 million. 70% of the units in this development have been sold in just one month. And this is just the first of several projects that the developer Urbania International is planning in the area. (…).

Finally, last Monday, the company Taylor Wimpey España announced that it will invest €21 million on the construction of 48 apartments and 55 terraced houses in La Cala Resort, in Mijas, over the next five years, mainly aimed at foreign customers. (…)

In the international real estate market, Marbella portrays an image of quality, exclusivity, privacy and security. It is not surprising that the most luxurious private urbanisation in Europe, La Zagaleta, ended 2014 with a record turnover of €40 million and a three-fold increase in its profits compared with the previous year. So much so that the stock of newly constructed properties on the site has now dried up, and so plans are afoot for the construction of six new villas in 2016, which will have prices of between €8 million and €15 million.

The Costa del Sol is a gold standard, but the experts insist that the local and provincial administration must be more efficient in their bureaucratic management to secure continued investment and ensure greater legal security. (…).

Who are the buyers of these luxury homes?

Most of the buyers are foreigners, but “they are no longer seeking out the bargain that they thought they were going to find in years gone by”, says Pía Arrieta Morales, Partner at the real estate company Diana Morales Properties – Knight Frank. (…)

Kristina Szekely, Director of the real estate company that bears her name says that clients with less cash to invest are mainly looking for apartments with a price tag of between €200,000 and €300,000, not far from the beach, but not necessarily within the Golden Mile. Whereas, those with more capital prefer residences of between 800m2 and 2,500 m2, with an average value of €2.5 million, located in the Golden Triangle, including in La Zagaleta. But customer preferences are also a question of culture. “Russian and Arabs look for large, light-filled spaces, whilst Scandinavians prefer quiet places with views that are not necessarily overlooking the sea”.

Ricardo Arranz, the President of the Andalucían Federation of Town Planners and Residential Tourism added that the three most important factors for buyers on the Costa del Sol at the moment are: the best climate in Europe, security and infrastructure. There is a special emphasis on the integration of foreign residents with the opening of 12 international schools with pupils from 42 different nationalities in the Golden Triangle alone. Arranz notes that more than 30,000 homes worth more than €1 million have been constructed and sold in this area and another 35,000 homes that are worth between €400,000 and €600,000. (…).

Original story: Málaga Hoy (by A. Recio and E. Moreno)

Translation: Carmel Drake

Foreign Investment ‘Pulls Up’ House Prices In 8 CCAA

15 April 2015 – El Economista

The housing phoenix is rising from the ashes, but, as yet, it is not soaring with equal force across the whole country. After 2014, which was year zero for the sector after seven years of hard-hitting decreases, the foundations are being laid in 2015 for a new cycle. Whilst in the large cities, such as Madrid and Barcelona, (the recovery) has taken off, fuelled by foreign investment, tit is still weak and flighty in areas with lower demand; nevertheless it is still a recovery.

The revival of the mortgage market, accompanied by an environment of low interest rates, a good overall economic climate and the outlook for growth both in terms of consumption and production, has generated the ideal breeding ground for the real estate sector to return to our economy, although in terms of size it is still well below its pre-crisis levels.

According to data from the National Construction Conference (Conferencia Nacional de la Construcción or CNC), in 2007, construction accounted for around 22% of GDP. Today, it represents approximately 5%. Leaving the excesses of the real estate boom aside, the prudent return of construction activity is important to enable proportional feedback between the Spanish economy and housing.

Where is real estate taking off?

After the hangover of the crisis, the housing sector is starting to record its first price increases. According to Sociedad de Tasación (ST), the average price of new and used homes increased by 3.3% during the first quarter of 2015 to record nine consecutive months of increases. With the latest rise, the (average) price per square metre amounts to €1,316, according to the Trends in the Real Estate Sector report. Nevertheless, the evolution is very uneven across Spain.

The value of properties in eight autonomous communities has increased. Navarra, led the ranking with an increase of 6.7%, followed by the Balearic Islands (6.5%), Valencia (5.7%), the Canary Islands (5.4%), Madrid (3.8%), La Rioja (3%), Andalucía (2.8%) and Extremadura (0.3%).

Fluctuations are still expected

Nevertheless, as Juan Fernández-Aceytuno, CEO of ST, notes, this data should be interpreted with caution, given that it comes in the context of a decrease of around 45% in the price of homes; as such the downward trend has less distance to travel. Moreover, if we focus only on the price of new homes, then the decrease has not bottomed out yet.

All of this, he explains, draws a picture that is characterised by “stabilisation, but with a serrated edge”. In recent months, positive and negative data has been recorded and the distribution of the recovery is uneven. Therefore, although the majority of the experts agree that house prices have bottomed out, it is too early to talk about a full recovery. For that, the CEO of ST says, the figures for the number of transaction and mortgages granted will need to return to the levels last seen in 2001 and 2002. And he adds that those two variables are the ones that are really going to shape the evolution of the real estate sector. “A market the size of Spain should be granting around 750,000 mortgages and closing 800,000 house sales per year”, he says.

Who is buying?

Despite the opening up of the credit market and the improvement in conditions, the level of financing continues to be low and does not stop flowing between families; this brings us back to a position of prudence, says Fernández-Aceytuno. “The stored-up demand will have to be released at some point”, but decisions to buy are still being postponed. Price decreases and greater employment stability may provide a boost for all of those latent buyers.

So, who is behind the increase in the number of house sales? José Luis Ruiz Bartolomé, expert in the real estate sector and author of the book ‘Return, property, return’ (‘Vuelve, ladrillo, vuelve’) explains. After the necessary price decreases, there has been a strong inflow of foreign investment, both by funds as well as individuals, especially in the coastal regions. Moreover, as this expert indicates, more homes are being sold, but “location is becoming very important”.

The outlook, therefore, is that the evolution (of prices) will be very different in some areas than in others. This is confirmed by the report about the residential market in Spain issued by Maxxima REA, which states that 2014 was the turning point for real estate investment in Spain. According to the study by that real estate consultancy firm, transactions to date have been concentrated in Madrid and Barcelona, and have focused on prime assets, whose supply is scarce. As a result, the prices of higher quality assets in better locations have increased.

More properties are being bought and sold

What is undeniable is that the evolution of prices is supporting the revival of house sales. According to the latest statistics from the National Institute of Statistics (INE), house sales increased by 15.5% in February with respect to the same month last year, to reach a total of 29,714, whereby recording six consecutive months of increases.

Another positive statistic, but again, one that needs to put in perspective, since it is still a comparison against minimum real estate activity. In terms of the geographical distribution of house sales, the map is uneven. Whilst sales are soaring in Aragón (49.2%), followed by Madrid (28.4%), Barcelona (23.2%) and the Balearic Islands (21.7%), other regions are suffering from a decrease in the number of house sales, including (-22.7%) and the Canary Islands (-5.5%).

The return of the cranes

(…) Refer to article dated 30 March 2015 for these details.

The risks

In this overall market context, the obvious question is “Is this recovery stable”? All of the experts agree that it is. The change in the cycle is here to stay, but they also call for caution because money is “very easily frightened”, according to Ruiz Bartolomé, who warns against two risks: political instability, with the rise of parties such as Podemos, “which scare off overseas investors” and the danger that Spain becomes complacent and puts the brakes on its structural reforms.

At the Sociedad de Tasación, they are more optimistic in this sense and they believe that the risks of destabilisation are remote. “Not even the electoral calendars will have a direct impact on the market”, explains its CEO. However, any sharp rises in interest rates would impact the recovery, however such a move is highly unlikely, especially given the latest monetary policy measures undertaken by the European Central Bank.

Original story: El Economista (by Silvia Zancajo)

Translation: Carmel Drake

House Sales To Foreigners Soar By 30% In Málaga

13 March 2015 – Diario Sur

In 2014, in the province of Málaga, 9,140 homes were sold to citizens from other countries, a figure that comes close to levels last seen before the crisis. This means that foreign buyers accounted for 38% of all real estate transactions in the province last year.

Foreign demand continues to be high in the Malaga property market, which recorded an increase of 28% in house sales last year, according to data published today by the Ministry of Development. Of the 23,929 homes sold in the province in 2014, 9,190 were to foreign buyers, which represents a percentage of 38%.

And the volume of house sales to foreigners has almost doubled in two years: from 5,140 in 2012 to more than 9,000 last year, representing a growth rate of almost 80%. Transactions involving Spanish buyers also increased in 2014, specifically, by 29%. However, according to the Chairman of the Association for Builders and Developers, José Prados, demand for primary residences, i.e. demand from buyers from Malaga itself, continues to be “very static”.

In terms of the foreign nationalities that are buying homes in Malaga, the ranking is led by the British, Scandinavians, French, Benelux, Germans and Russians, in that order, according to Prados. “Demand from Russian buyers, which peaked to compete with that shown by British buyers at one point, has cooled off significantly as a result of the internal problems facing the country”, he adds.

The vast majority of the foreigners that buy homes in Málaga (8,010 out of 9,190) are resident in Spain. The number of non-resident buyers has not increased significantly, despite the incentives introduced by the Government to grant residence permits.

Original story: Diario Sur (by Nuria Triguero)

Translation: Carmel Drake

Spain House Sales Rose Last Year (For First Time Since 2010)

11 February 2015 – Bloomberg

Spanish home sales increased last year for the first time since 2010, adding to signs that the property market is recovering from the worst recession in the country’s democratic history.

Transactions rose by 2.2 percent from a year earlier to 319,389 units, according to data compiled by the National Statistics Institute. That’s still far below the peak in 2006, when 955,186 properties were sold.

“We are out of the operating room but we are still in the hospital,” said Fernando Encinar, co-founder of Idealista.com, Spain’s largest property website. He said 2013 was “the worst year of all for Spanish real estate sales, so any comparison will look good.”

More than two years since applying for a European Union rescue of its banking system, Spain has become one of the fastest-growing economies in the euro area as exports surge and investment rebounds. The country is poised to have the highest growth since 2007 this year.

Tinsa, Spain’s largest homes appraiser, said today that home prices fell 2.7 percent last year, taking the drop since values peaked in 2007 to almost 42 percent.

Original story: Bloomberg (by Sharon Smyth)

Translation: Carmel Drake