Tag: Pryconsa

Adif Sells Plot in Madrid for 80% More than its Original Asking Price

2 January 2018 – El Confidencial

It has been, without a doubt, the clearest example of the overheating in the prices of buildable land in Madrid. Adif has just concluded the auction of several plots in Dehesa Vieja, San Sebastián de los Reyes, which it launched at the beginning of October. The asking price was set at €9 million and in the end, the state-owned firm has obtained proceeds amounting to €16.3 million, in other words, 80% more than initially expected.

The plots, which have a buildable surface area of 10,500 m2, sparked interest amongst much of the property development sector, given that they are located in one of the most sought-after and rapidly growing areas of the Community of Madrid. Up to 13 property developers participated in the first auction held on 3 October, including some of the industry stalwarts.

From Gestilar to Amenábar Promociones, and including the renewed Acciona Inmobiliaria and Pryconsa. Other participants also included Monthisa, Aelca, the listed firm Neinor Homes, Procisa and Solvia. And one cooperative: SS de los Reyes Sociedad Cooperativa, owned by the Asentis group, which after going head to head with the real estate company owned by the Entrecanales family over the last month, has ended up acquiring the sought-after plot. And the reality is that, after a couple of years on the back burner, cooperatives have returned to the market with a bang and are showing that they are capable of competing, economically speaking, in spaces where traditional property developers cannot or do not want to operate.

Adif’s auction is a clear example. SS de los Reyes Sociedad Cooperativa has won the bid with an offer of €16.3 million, compared to the figure of just over €16 million that Acciona Inmobiliaria was willing to pay and which represents a land (impact) price of €1,550/m2. Just too high, in the eyes of many of the interested parties who threw in the towel along the way and who marked a top price of around €1,200/m2.

To give us an idea, the price paid by the cooperative (…) means that the future homes that are going to be constructed on the site will have to be sold for around €2,400/m2, or around €2,900/m2 if the aforementioned offer had been presented by a property developer, since it would have to include its margin to sell the homes and ensure it did not make a loss (…).

“It is important to consider that the homes planned for the site are large, measuring between 130 m2 and 140 m2 and that if we exceed prices of €400,000 for a three-bedroom home, then no matter how much prices rise by, middle-class families start to have limitations in terms of financing, and, therefore,  problems when it comes to buying such homes”, according to sources at one of the property developers that participated in the bid.

And it is not the only land operation to have raised the alarm. For months now, the market has been seeing sales of buildable plots of land at prices that were unthinkable just a couple of years ago. Recently, the Mutualidad de la Policía (Mupol) managed to sell three plots of buildable urban land – in other words, ready to build on – for around €2,250/m2 to another cooperative manager, Gesvieco, which has placed between €40 million and €42 million on the table for the plots that span 5,500 m2. The traditional and conservative property developers such as Pryconsa and Vía Célere were not willing to pay that price (…).

To give us an idea, 24 months ago, according to data from Foro Consultores, buyers were paying €800/m2 for buildable land. In other words, in two years, land prices have doubled. This (impact) price means that the price of homes for end users has increased from around €2,300/m2 to €3,100/m2.

Operación Calderón, the next major operation

Nevertheless, if there is an operation that can break all records, it is the one involving the plots that Atlético de Madrid owns next to the Vicente Calderón Stadium. The club is asking around €200 million for that package of land, in other words, around €3,500/m2, which would give rise to homes with prices of €6,000/m2, well above the price for the area, which ranges between €3,000/m2 and €4,000/m2 (…). The interested parties have already submitted their binding offers, now the club just needs to choose the best suitor.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Aelca, Ibosa, Amenabar, Pryconsa, Libra & Princeton Compete For Calderón Plots

18 November 2017 – El Economista

Atlético de Madrid has already received its first offers from investors interested in acquiring the plots of land adjacent to the Vicente Calderón stadium. The sale represents the largest land operation currently underway in the centre of Madrid and the football club is taking advantage of that fact to try to find a buyer willing to pay double the current prices in the area.

According to several sources in the sector, the companies that have bid to acquire these plots of land include the property developer Aelca, in which Värde holds a stake. It is the only one of the four large real estate companies still in the process, given that Neinor, Aedas and Vía Célere have all ruled out participating in the operation, due to its high price.

The same sources state that Grupo Ibosa is another one of the firms that is pushing ahead with the purchase process; and it is doing so with the backing of a fund. Similarly, the property developers Amenabar and Pryconsa have also submitted bids, as has the cooperative manager Libra Gestión.

The British family office Princeton is another name that appears on the list of investors interested in the Calderdón. That firm arrived in Spain at the beginning of 2015 and since then has closed several residential operations as well as a handful of others of a tertiary nature.

CBRE, which is advising the operation, will receive the binding offers at the end of November, with the aim of trying to close the sale before the end of the year. Atlético de Madrid wants to repay Carlos Slim on time for the more than €160 million that he loaned the Club, through the company Inbursa, to finance the works on the new stadium, Wanda Metropolitano.

The land up for sale is divided into three plots (RC-4, RC-7 and RC-8) and together cover more than 63,000 m2. The largest space corresponds to private residential use and the rest to tertiary use. The amount that Atlético de Madrid expects to receive for this operation, according to real estate sources in the know, comes to €200 million, which places the price per square metre in a very high range, of around €3,300/m2. In this way, the c. 480 homes that will be constructed on the site, will have to be sold for around €6,000/m2 if the operation is to be profitable for the buyer. It is precisely these figures that have deterred the large listed real estate companies, as well as those that have financial backing from funds, given that they must fulfil the returns they have promised to their shareholders and investors in every operation.

First obstacles

Although the project known as Mahou-Calderón, which encompasses the sale of these plots, has already received provisional approval from the Town Hall of Madrid, it is still awaiting definitive approval from the Community of Madrid’s Urban Planning Committee, which has four months to analyse the one-off amendment to the PGOU, and the Community of Madrid’s Governing Council, according to José Manuel Calvo, a Councillor for the Town Hall of Madrid, in an interview for the El Economista’s Inmobiliaria magazine.

Nevertheless, on Wednesday, it was revealed that the Ministry for the Environment and Land Planning had identified a “calculation error” in the buildability coefficients, and has urged the municipal technicians to correct the errors in order “to prevent the operation from being susceptible to being challenged in the courts in the future”, said sources from the Ministry to EP.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Domo Activos Embarks On New Growth Phase

3 November 2017 – Eje Prime

Domo Activos is embarking on a new phase of growth. The largest property developer Socimi, aimed at medium-sized investors, is going to launch a €15 million capital increase over the next few weeks. It plans to use the funds raised to buy new land in Spain, with the purpose of building new homes, according to José Luís Alba, Director of Domo Gestora’s Socimi.

According to the director, the company has already identified opportunities in Spain and is now waiting to beef up its financial strength so as to be able to actually purchase the new plots. “We will focus these acquisitions in Madrid, Málaga and Valencia in the first instance, but we are also looking for plots in Sevilla, Córdoba, Granada and Zaragoza”, said the executive.

Domo Activos Socimi will increase its share capital through an issue and placement into circulation of up to a maximum of 7.5 million shares, with a nominal value of €2 each “with an incomplete subscription forecast”. To approve this increase, Domo Activos has convened an Extraordinary General Shareholders’ Meeting, which will be held in Madrid on 30 November.

The business model of Domo Activos involves the acquisition of land for the construction of buildings, which are let out for the first three years and then sold “whereby benefitting from the tax benefits afforded to these types of companies”. “In this way, all of the capital gains generated, from the date the land is acquired to the date the properties are sold, are not taxable for corporation tax purposes”, explain sources at the group.

According to the company’s own estimates, the return on this project, once the divestments have been made, could reach 10% per annum. Investors receive the profits resulting from rental income in the form of dividends throughout the period that the buildings are leased and until they are sold.

Currently, the first project being promoted by Domo Activos is the development that it is constructing in Madrid, in El Ensanche de Vallecas. This building will contain eighty homes for rent, according to sources at the group.

New leadership team

Moreover, the company has also been reshaping its management team in recent months. To carry out this new phase of growth, Domo Gestora has appointed José Luís Alba as Director of the Socimi, a role carried out until now by Roberto Boluda, who moved to Prygesa in July as the Managing Director of the property developer owned by the Pryconsa group.

Domo Gestora’s Socimi was created by a team that is closely related to the real estate business. When it was launched, the company appointed Enrique Guerra as its CEO. Guerra is an expert in real estate management and has specialised in housing cooperatives since 2002 (…).

Domo’s management team is completed by executives such as Juan Pedro Plaza, the Socimi’s Director of Investments (…); Feliciano Conde, who took over the presidency of Domo Activos in January 2016 (…); and Alberto Freire, Director of Developments at Domo, amongst others.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Realia & Pryconsa Buy Two Plots Of Land From Ministry Of Defence

5 October 2017 – Expansión

The incessant drip feeding of operations in Madrid involving the purchase of land on which to build homes is continuing. In this case, the stars have been the real estate companies Realia, controlled by Carlos Slim, and Pryconsa, owned by the Colomer family. The plots were put up for sale by the Ministry of Defence in July for a combined sum of €40 million.

The first is a plot for residential use, located on the outskirts of Alcalá de Henares. Measuring 14,395 m2 and with a buildable surface area of 44,755 m2, the asking price amounted to €27 million, according to the real estate portal Addmeet. In the end, Realia paid €27.524 million for the plot.

The second plot sparked even more interest. Located in Vicálvaro and measuring 13,723m2, it has a buildable surface area of 19,000 m2. The Ministry of Defence put that plot up for sale for €12.6 million. In the end, the plot was awarded to Pryconsa for more than €15.12 million, almost 20% more than the original asking price.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

The RE Kings Are Building Thousands Of Homes In Spain

18 September 2017 – El País

The house building sector in Spain is back after a decade adrift during which many of the large firms went to the wall (…).

But the same crisis (that harmed so many) has also given rise to a new, more institutionalised house building sector, which claims to have learnt from the mistakes of its predecessors (…).

In this new industry, there are some familiar faces, such as Realia, Quabit, Amenabar, Pryconsa, Ferrocarril, and ACR, amongst others (…). But the market now is dominated by new firms. They are the new generation of property developers, or rather, they are real estate giants, and their names include Neinor Homes, Vía Célere, Aelca, Aedas Homes and Kronos, poised to ride the new wave in the residential sector. Ahead, they face some major challenges, such as facilitating housing for young people, cutting costs, the industrialisation of the sector, putting clients first to avoid the errors of the past, and improving the image of the sector by being intolerant to all forms of corruption.

At the helm of these giants are overseas investment funds, which have chosen to back the Spanish residential market, with the economic cycle in full swing – new build permits rose by 29% in 2016. These foreign players are investing thousands of millions of euros in the purchase of large portfolios of land, at still low prices, in strategic locations and they are benefitting from low construction costs, at least for the time being. In this way, the funds have engaged managers with extensive experience in the traditional property developers to lead these firms, such as Juan Antonio Gómez-Pintado (Vía Célere) and David Martínez (Aedas Homes), amongst others (…).

The firms themselves talk about reaching a cruising speed of between 3,000 and 4,000 new homes per year (per firm) over the next three years (…). The largest 50 property developers and managers by volume of homes sold (based on completions due from 2018) “plan to build around 45,000 homes over the next three years”, according to Raúl Templado, at Alimarket Construcción. This figure is low if we consider that various trade associations, such as APCE and CEOE, calculate that Spain needs 150,000 new homes per year to ensure a healthy residential market.

That is why international funds are so interested in doing business in a sector that, despite its sharp decline – the number of housing permits represents less than 10% of the level in 2007 – “continues to carry significant weight: 15% of domestic GDP” (…).

Foreign capital

The arrival of foreign funds, such as Värde Partners, Lone Star and Castlelake, has been like a breath of fresh air. “They have provided strategic vision and they made the decision to invest when we were still in a bearish cycle, identifying opportunities and giving credibility to a sector that was and still is attractive for investment, when nobody else was interested. On the other hand, their way of working with a more financial vision has resulted in structural and organisational changes that before were not considered”, says Gómez-Pintado (…).

The result is a sector in full transformation, where movements are happening non-stop, and so it is hard to know who is leading the market. The Institute of Governance and Applied Economics, an independent research centre, calculates that the largest 20 property developers in the country will build 80,000 homes between now and 2020. Their ranking is led by Metrovacesa, Neinor Homes and Aedas Homes, although family groups, local businesses and cooperative managers also feature (…).

Original story: El País (by Sandra López Letón)

Translation: Carmel Drake

The Coordenadas Institute Ranks Spain’s Top 20 Property Developers

24 July 2017 – El Confidencial

The awakening of the residential sector in Spain has brought with it a large number of property developers, who are promising to construct thousands of homes over the next three years. The problem is in the detail, understanding who is going to promote each one of those homes.

That analysis is what the Coordenadas Institute of Governance and Applied Economics, an independent study centre, has just developed. It has identified the Top 20 largest companies in the country, ranked according to the number of homes that they are planning to construct between now and 2020.

At the top of the list is Metrovacesa, the property developer controlled by Santander, BBVA and Banco Popular, which is planning to bring 12,600 homes onto the market over the next three years and which, together with Neinor, Aedas, Vía Célere, Corp and Pryconsa are the only ones that already own all of the land they need to build these homes.

Moreover, the company led by Jorge Pérez de Leza and controlled by three Spanish entities, breaks the leadership ranks of the large international funds, which are behind the bulk of the companies that comprise this Top 20 and are already negotiating with local companies to tackle the purchase of land to allow them to achieve the current housing forecasts.

In order to complete the 80,000 homes that these companies plan to develop together, the Coordenadas Institute has taken into account both developments in progress, as well as those that may be developed on the available land and forecast new land purchases, which have been extracted from various sectoral sources.

Neinor Homes (Lone Star), with 10,250 homes; Aedas Homes (Castlelake), with 9,850; Vía Célere (Värde), with 6,200; and Aelca (Värde) with 5,750 homes, complete the first five positions in the ranking which contains just two companies linked to the large listed construction groups: Acciona Inmobiliaria, with 4,500 homes; and Realia (FCC) with 1,650.

Another company with a differential sign is the Catalan firm Corp, since it is the only member of the ranking that does not have a national presence, rather it focuses all of its efforts on its own autonomous region, where it plans to construct 3,000 homes.

Some of the main innovations in this new property developer sector, besides the hegemony of the large funds, are: the family structure of the bulk of the domestic property developers (Amenábar, Quabit, Pryconsa, Lar, Ibosa…); the greater demands on the banks to grant mortgage financing to local investors, with requirements such as having pre-sales of more than 50%; and the focus on the client.

“It is clear that the Spanish property development sector has learned some important lessons from the crisis and now operates with completely different criteria. A key factor is the focus on the client, which for the first time in a long time has become an essential piece of the real estate business. Property developers that know how to connect with what the client needs are going to be assured survival in the market; those who don’t know, will disappear”, said Jesús Sánchez Lambás, Executive Vice-President of the Coordenadas Institute.

Of those that survive, many will do so by making the leap onto the stock market, where Neinor and Quabit are already listed; they will soon be joined by Aedas, Vía Célere and Metrovacesa. Nevertheless, many more will follow in their footsteps, given that the institute forecasts that between eight and ten companies will be listed on the stock market within the short term.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

The Montoro Family Prepares For Monthisa RE’s IPO

28 April 2017 – El Confidencial

With the discretion that characterises family businesses, the Montoro family, which owns the real estate firm Monthisa, has been working for two years on one of the major milestones in its recent history. Known as Project Maura, the operation is aimed at creating a large portfolio of rental assets, with the firm’s debut on the stock market as the ultimate objective.

To deal with this firm, the company segregated its entire real estate business into the company Monthisa Real Estate, which was just another subsidiary until then, and sold one third of the capital to the US fund Proprium Capital, the same entity that has been a shareholder of Grupo Lar for almost a decade, which currently controls 16.5% of that company’s shares.

This asset manager is the heir of Morgan Stanley’s former special situations fund, which ended up being spun off from the parent company in the United States for regulatory reasons, although the management team continued, with Tim Morris at the helm.

Although Proprium – whose representative on the Board of Monthisa Real Estate is Philipp Westermann (…) – is a minority shareholder, the two partners signed a pact by virtue of which they established joint control over Monthisa Real Estate and committed to multiplying the assets in record time.

The result of this alliance has been the creation of a new real estate giant, whose first major purchase was the acquisition of the El Corte Inglés’ ground-floor retail premises on Paseo de la Castellana for almost €150 million, an operation that was closed in September last year; and most recently, the purchase of a building on the Madrilenian Calle Montera, which will be used for tertiary activities (offices and a hotel).

Following these operations, Monthisa Real Estate has a portfolio worth around €250 million, given that the company was constituted with commercial premises, offices and hotels that the Montoro family already controlled, worth more than €100 million.

Its assets include: the Correos Building, so called because the tenant is the public postal company; number 8 on Ribera del Loira, currently occupied by Dell; and the Hotel Radisson, on Calle Moratín 52, on the sought-after Prado Recoletos thoroughfare.

But the Montoro family and Proprium are also rotating their asset portfolio, as demonstrated by the sale of the office building that they used to own in Berlin – a 7,975 m2 property, leased in its entirety to MTV; and a unit in the Plaza Norte 2 shopping centre, occupied by Cinesa cinemas.

Survivor of the crisis

Monthisa is, together with Lar, GMP and Pryconsa, one of the few domestic real estate companies that managed to survive the crisis and, like the first two, it is committed to carving out its real estate business and teaming up with overseas funds to take advantage of the recovery in the sector.

Before reaching this point, the Montoro family’s property development arm regularised its situation with Sareb (…) and reached an agreement with the entity chaired by Jaime Echegoyen to develop properties jointly.

Following all these changes, the next major milestone involves turning Monthisa Real Estate into an iconic real estate company and, if the script is followed, providing an exit for Proprium, with the capital markets as the preferred option.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Valdebebas: Carmena Cuts 160 Homes & Insists On Social Housing

16 February 2017 – El Confidencial

Fewer homes and no unsubsidised properties. That is the condition that the Town Hall of Madrid has put on the table to unblock the “commercial pill” of Valdebebas, the last plot of land in the area that is still waiting to receive the necessary administrative and legal blessings before the cranes can move in.

On Tuesday, the Town Hall presented its buildable surface area and density proposals for the area, where 1,000 homes were going to be constructed on a plot that was initially going to house the largest shopping centre in Europe.

As expected, the Town Hall has reduced the buildable surface area, although by more than initially expected. Specifically, it has reduced the space allocated to residential use by 18,000 m2, an adjustment that affects almost all of the 14 plots (around 16,000 m2) that Pryconsa acquired from the Compensation Board last year.

The direct consequence of this change is that the company owned by the Colomer family is going to have to recalculate its figures and construct between 140 and 160 fewer homes. This represents a reduction of just over 15% compared to the number initially proposed, all of which were going to be social housing properties.

The other major loser under the Town Hall’s proposal is Premier, the owner of a plot of land allocated for unsubsidised housing, with a buildable surface area of almost 11,000 m2. The Town Hall has said that it must now build in accordance with some kind of protected housing scheme, as well as reduce its buildable surface area by 2,000 m2.

By contrast, the Joyfe College and the Valdecam Cooperative, which acquired land on which to construct 65 social housing properties, will not have to make any changes to their plans (…).

Next steps

After its meeting with the Town Hall on Tuesday, the Valdebebas Compensation Board, which represents almost 5,000 owners in the area, will present the Town Hall’s proposal to its governing board. That body, in which only large landowners participate, may opt to take a decision or may refer it to the assembly, so that all of the owners, and not just the large ones, take the decision.

The problem that the Compensation Board now faces is that it has to reduce the price at which it sold its plots to Pryconsa and Premier, given that the use and buildable surface area of those plots has been modified. This means that it will have fewer resources to allocate to all of the social service works – healthcare, education, sports facilities – that are required in the area. (…) This new proposal emerged after the ruling from the Superior Court of Justice of Madrid (TSJM) last year, which overturned the special plan for the area.

It is possible that the Compensation Board will reject the Town Hall’s plan and wait until the Supreme Court makes its ruling regarding the TSJ’s ruling. The problem is that, if it endorses the existing ruling, it will return to the initial situation, in other words, no homes will be built at all, given that the 109,000 m2 in this area were initially designated for the construction of a large shopping centre.

That would mean having to start conversations with the Town Hall from scratch, whereby further delaying the resolution of the problem. It would also have to deal with land buyers invoking clauses that allow them to break contracts and deprive the whole neighbourhood of a new school that the almost 10,000 residents are anxiously awaiting, given the lack of educational provisions in the area.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Saint Croix Acquires Blanco Store On c/Goya For €15M

13 February 2017 – Eje Prime

Saint Croix, the Socimi owned by the Colomer family, has won the bid to acquire the Blanco store located on Calle Goya in Madrid. The company has spent €15 million on the premises, which several other investors, including Jesús Antúnez, also bid for. Antúnez came close to winning, but Saint Croix took the prize in the end.

The Socimi owned by the Colomer family (which also owns the real estate developer Pryconsa) has spent €15.25 million acquiring the property, which has a gross leasable area of 863 m2. In other words, it has paid a price equivalent to more than 17,600/m2. The company has also acquired two parking spaces as part of the operation.

Until now, the premises were owned by the real estate arm of the former owner of the Madrilenian chain Blanco (which specialises in fashion retail), namely, Inversiones Blasol. The company, whose administrator is Bernardo Blanco Moreno (son of the founder of the Blanco fashion chain) and which was constituted in 19991 with the corporate purpose of leasing real estate assets, filed for voluntary creditors’ bankruptcy in December 2014 in Commercial Court number 10 of Madrid. The company is now in the middle of negotiating its bankruptcy arrangement.

Inversiones Blasol has several other assets up for sale, including a store on Calle Pelai, 1 in Barcelona. That establishment has a commercial area of 200 m2. Jesús Antúnez also bid for those premises, and sources consulted by Eje Prime report that he offered €4 million.

According to the most recent results filed by the company, as at 30 September 2016, the Socimi had a portfolio comprising 209 assets, worth €339.26 million. They include retail premises, such as the Zara store on Conde de Peñalver (Madrid) and several supermarkets leased to Día; office buildings such as CLH’s headquarters on Calle Titán; and several four- and five-star hotels on Isla Canela (Huelva), managed by chains such as Iberostar, Meliá and Barceló.

Original story: Eje Prime

Translation: Carmel Drake

Socimi Saint Croix Obtains €11.4M Loan From Banca March

23 January 2017 – Expansión

The listed company owned by the Colomer family, which also control the real estate company Pryconsa, has mortgaged one of its assets by way of guarantee for this loan, which has a maximum term of 14 years.

This long term loan from Banca March will allow the Socimi to continue with its business plans, which include managing properties worth more than €300 million.

Saint Croix is the vehicle through which the owners of Pryconsa, one of the few traditional real estate companies in the sector that survived the crisis, are managing their personal wealth.

At the end of September 2016, the Colomer’s Socimi owned a portfolio containing 209 assets, worth €339.26 million. They included retail premises, such as a Zara store on Conde de Peñalver (Madrid) and several supermarkets leased to Día; offices buildings such as the headquarters of CLH on Calle Titán; as well as a large portfolio of hotels, including five 4-star and 5-star hotels on Isla Canela (Huelva), managed by hotel chains such as Iberostar, Meliá and Barceló.

During the first nine months of 2016, Saint Croix earned €10.46 million, 18% less than during the same period a year earlier, after generating turnover of €13 million, down by 5% compared to the same period in 2015.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake