Tag: proposals

Spain’s New Government Proposes an Action Plan to Alleviate the Rental Market

18 June 2018 – El Confidencial

The rental market is, without doubt, the issue that Pedro Sánchez, the new President of Spain, and José Luis Ábanols, the new Minister for Development, will have to face in light of the price boom being experienced in certain areas of the country. According to sources close to the PSOE, the new Executive is going to focus its housing policy on: facilitating access to rental homes for young and older people; and curbing the rise in house prices, leaving to one side those measures destined to buying a home (…). For this, the new Executive is going to need support from other parliamentary groups, including Podemos, which is amongst its main allies, with very similar proposals to those put forward by the socialists to tackle the rental problem.

In terms of the State Housing Plan for 2018-2021 approved in March, when the Government was still under the mandate of the PP, the same sources confirm that the agreements with the autonomous regions have not yet been signed and, therefore, its execution is still pending (…).

Rental prices are the most pressing issue of the day. During Mariano Rajoy’s mandate, not only was it in the background, but also several draft bills presented to the Congress to tackle the boom in rental prices were defeated. The first one that failed to pass Congress’s filter was the Platform for those Affected by Mortgages (PAH), whilst proposals put forward by the PSOE were also initially vetoed by the PP, although the veto was not only not ratified, it was also lifted last Friday and so it will return to parliamentary debate, where a consensus with the other political parties will be needed to push it ahead.

The socialists propose restoring the duration of five-year rental contracts, limiting rental price rises – in the case of renewals – to the evolution of CPI, as well as introducing significant tax relief for those who decide to rent their homes below certain thresholds or by limiting the deposits required. All of these proposals are susceptible to being supported by the political parties that supported Pedro Sánchez’s no-confidence motion, in particular, Podemos (…).

Limiting rentals

(…). In its proposal, the PSOE is committed to offering tax incentives to those landlords who let out their flats on the basis of a public price reference system, depending on the area in which their property is located. Such a system would have to be fixed by the town halls. All landlords who respect those limits could benefit from a 60% deduction on their income tax returns (…).

To facilitate access to rental housing for young people, the PSOE proposes that if a home is let to a young person aged between 18 and 30 on a low income, then the tax treatment available to the landlord would be even more favourable, with deductions of 100% (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Colau Buys La Escocesa To Build Social Housing Properties

1 September 2017 – El País

The Town Hall of Barcelona has acquired three plots of land on the site of the former La Escocesa industrial complex, in the neighbourhood of Poblenou, for €10.1 million. As a result, the Town Hall now owns 93% of what used to be the former factory, where it plans to build social housing and public facilities. The remaining 7% is still owned by Sareb, although the Town Hall has expressed its intention to buy that stake as well.

The Town Hall already owned 43% of the site, which used to house workshops for artistic creation. The purchase of an additional 50% from Banco Santander and the real estate firm Altamira on Tuesday was made possible by the fact that the centre was declared a Site of Local Cultural Interest in 2006 and for that reason, the Town Hall was able to exercise its preferential purchase right. For the time being, only the two internal patios and two buildings are classified as public facilities. The Town Hall’s Councillor for Housing, Josep María Montaner, said on Tuesday that the purchase represented a new initiative “against the process of gentrification in the neighbourhood”. Montaner explained that the Town Hall plans to construct 81 luxury flats, which will be used for social housing.

The deputy mayor of Urban Planning, Janet Sanz, said that public housing needs to be built “to avoid residents being driven out of their neighbourhoods due to rises in rental prices”. Sanz said that the purchase would allow the recovery of the project to transform Calle Pere IV and “to reactivate and transform the 22@ project, which had been suspended”.

In addition to public housing, the Town Hall will expand the artistic and cultural facilities. The 22@ coordination committee will open a participative process, which will begin in October. Residents, business people and universities will be invited to submit proposals for the renovation of La Escocesa. The participative process will conclude in 2018 and the Town Hall estimates that the conversion work will take eight years (…).

Original story: El País (by Alfonso L. Congostrina)

Translation: Carmel Drake

Sacyr Invites Alternative Offers For Testa

8 May 2015 – Expansión

The construction group has engaged Lazard to coordinate offers for its real estate subsidiary Testa. It was initially planning to place 30% of the shares on the stock exchange (but is now open to alternative proposals).

Sacyr was going to place 30% of Testa‘s shares on the stock exchange, but the widespread interest expressed in the market has caused the construction group to change its strategy. The company, which had proposed a public offering (IPO) of 30% of Testa’s shares to the CNMV, is currently evaluating several alternatives: to continue with the plan to place some shares in the market with qualified investors; to join forces with an institutional partner such as a Socimi or international fund; and in the meantime, it does not rule out the sale of 100% of its subsidiary. Moreover, it is also considering a fourth option, which would have a much greater strategic significance, namely the integration of Testa with a large group in the sector, in this case, Colonial, to create the largest Spanish real estate company and one of the largest in Europe.

Sacyr has engaged Lazard to carry out this process. The investment bank has instructed the various investors that are interested in Testa to make a non-binding offer for the company.

Proposals will be welcomed both for the 30% stake that Sacyr had initially planned to place on the stock exchange, as well as for the entire share capital. Lazard has given interested parties until today to present offers, say sources close to the process. One player that is interested in acquiring the real estate company is Merlin Properties. The largest Socimi by market capitalisation has acknowledged its interest in participating in Testa’s capital. Now, Merlin would be willing to acquire Testa in partnership with other investors and purchase 100% of the company, according to sources in the sector.

Corporate movement

Sacyr is also studying a possible integration of Colonial and Testa. For the time being, the conversations are very preliminary between Sacyr and the real estate company whose primary shareholder is Juan Miguel Villar Mir.

The merger of both companies would create a giant with more than two million square metres of leasable surface area in prime areas of Madrid, Barcelona and Paris and a combined turnover of €400 million. Testa’s market capitalisation amounts to €2,098 million and Colonial’s is €1,977 million.

Sources involved in the process confirm the interest shown by Colonial. The final decision will depend on the other options that Sacyr has on the table. The placement of a percentage of new shares in Testa on the stock market (a maximum of 30%) forms part of the action plan designed by Sacyr to regularise the finances of its subsidiary and provide it with greater liquidity. The shareholders of the real estate company, controlled by Sacyr (99.2%), approved an ‘accordion operation’ in February, involving a €1,197 million contribution to shareholders, comprising a €527 million ordinary dividend and a €669 million reduction in share capital.

This transaction is, in turn, subject to a simultaneous capital increase that would enable Testa to reconstruct its balance sheet through the inflow of around €500 million. It is during this phase that Colonial may enter the fray.

The real estate company chaired by Juan José Brugera is exploring growth opportunities in Spain after cleaning up its balance sheet in 2014 with a capital increase of €1,263 million, which involved the entry of Juan Miguel Villar Mir, along with Mora Banc and Qatar Investment into the share capital of the real estate company. Villar Mir is currently the owner of 24.5% of Colonial, after buying a new block of 1.46 million shares (in recent weeks).

According to experts, the potential merger of Colonial and Testa makes sense in business terms, since both companies specialise in the rental of buildings; exclusively office buildings in the case of Colonial and shopping centres and homes in the case of Testa.

Nevertheless, the change in ownership may have an impact on the financial structure of the companies, with guarantees linked to new investments and changes of control. At the end of 2014, Colonial’s net debt amounted to €2,545 million and Testa’s amounted to €1,688 million.

Original story: Expansión (by R. Ruiz and C. Morán)

Translation: Carmel Drake