Tag: PSOE

International Funds Encouraged By Decline In Podemos Support

4 November 2015 – El Confidencial

An air of tranquillity has returned to the offices of the large international funds following the uncertainty that was unleashed on 24 May. Then, the success of groups linked to Podemos in the municipal elections caused many institutional investors to rethink their positions in our country, they slammed on the brakes and chose to move cautiously, as they awaited developments.

This attitude affected the rhythm of several sectors that were enjoying a real boom at the time, including the real estate sector, where large buyers were responsible for driving the recovery. The electoral calendar meant that they had no choice, with the upcoming regional elections in Cataluña (which Junts Pel Sí was trying to hijack as a referendum on independence) and the general elections scheduled for the end of the year, the second half of the year was set to be very quiet. But the latest election polls are changing everything.

The decline of the group led by Pablo Iglesias and the growing expectations surrounding the alliance between PP and Ciudadanos has given the large international funds reason for hope. The results of the opinion polls are showing them that our country’s politics will continue in line with the reforms undertaken in recent years and, above all, that it will not fall into the hands of a leftist coalition involving a Government seeking to resemble the Greek Syriza party.

As one source in the sector explains “now that Podemos is becoming weaker, our concern regarding the country’s political risk has decreased siginficantly – any scenario involving stability is welcome. In other words, the change in the perspective of the international funds has not been driven so much by the rise of PP-Ciudadanos, but rather because the decline in support for Podemos significantly reduces the risk of instability”.

In fact, to say that overseas investors have a preference for one party or another is, in the opinion of the professionals in the sector, completely incorrect. “Investors are not saying ‘I want this party or that party to win’, overseas investment in real estate has been the same under the PSOE and the PP. The good news now is that Ciudadanos is no longer regarded as a risk”.

Several investors specialising in the real estate sector acknowledge that this change of perspective is being felt by the day, a domino effect that has been accelerating with the wave of polls in recent weeks, all of which are marked by the common denominator of the decline of Podemos with respect to the rising trend that started with the European elections and peaked with the municipal elections, and the consolidation of Ciudadanos as the great emerging force.

Tensions continue in Cataluña

(…). The only exception to this rule is Cataluña, “where the separatist tensions mean that there is a great deal of uncertainty”, says one M&A expert. “I have decided to delay any decisions until next year, it only means waiting a few more months. What difference does that make?”.

Just as there is a general feeling of calm amongst the large international investors regarding Spain in general, their views regarding the future of Cataluña are divided. Many are convinced that independence is a utopia that will never actually happen, but there are others that regard it as a credible option, in which case they prefer to wait and see.

The direct consequence of these fears, besides the delay in terms of closing operations, is the downward pressure on the prices of those operations already underway. Similarly, the return of confidence is a revulsive in favour of the vendors, which still have almost two months to reach agreements (before year-end), but now with the factor of economic stability in their favour. Provided that is, that the opinion polls are correct.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Carmena Creates ‘”Political Table” To Resolve Operación Chamartín

29 October 2015 – Cinco Días

Manuela Carmena, the mayoress of Madrid, wants to start to resolve the situation known as Operación Chamartín, a town planning project in the North of the city that has been up in the air for more than 20 years now. The project is being led by the company Distrito Castellana Norte, in which BBVA owns a stake of more than 70%; the remaining shares are owned by Grupo San José. In order to move forwards, two working groups will be launched, one political and one technical, comprising officials from the Town Hall.

The Town Hall of Madrid will constitute a so-called “political and social table”, which all four of the political parties that have representation in the local government (Ahora Madrid, PP, PSOE and Cuidadanos) will be invited to join. Neighbourhood associations and the company Distrito Castellana Norte will also be encouraged to participate, according to sources at the Town Hall.

The mega-project, which was initially going to be approved by the PP during the previous legislature, will involve private investment amounting to around €6,000 million, the development of land covering 3.1 million m2 and the construction of up to 17,500 homes, over several phases.

The political table will monitor the conditions that Operación Chamartín will have to fulfil to be accepted, based on those approved yesterday by Ahora Madrid and the PSOE, which in turn rejected proposals made by Ciudadanos to create the table immediately and resolve the project within three months.

Ahora Madrid and PSOE agreed instead to an amendment to replace the proposal submitted by Cuidadanos. That group had released a statement defending the immediate creation of the table with the municipal groups, in order to establish the basic guidelines for resolving the operation within a maximum period of 90 days.

Meanwhile, the representative for Sustainable Urban Development, José Manuel Calvo, responded that it does not make sense to limit the duration of the debate to three months, however he added that there is no doubt that the current situation needs to be resolved soon.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Opposition Parties Force Carmena To Reduce Business IBI

1 October 2015 – Expansión

The opposition parties in the Town Hall of Madrid (namely, the Partido Popular, PSOE and Ciudadanos) have put paid to the plans of the mayoress, Manuela Carmena, to increase the IBI rate for businesses and companies to 10%. In fact, they forced an agreement for it to be decreased by 2%. (Earlier in the week), all of the political parties, including Ahora Madrid, approved a 7% reduction in the residential IBI rate, and now, the opposition parties have forced a 2% decrease in the business rate.

The agreement by the plenary session represents an overall decrease of 100% for residential properties, as well as for the vast majority of non-residential properties. The 7% reduction in the property tax, will decrease the tax from its current rate of 0.548% to 0.51%.

Moreover, the majority – the result of the vote went against Ahora Madrid – approved a commitment to continue to reduce the rate of IBI for residential properties to 0.4%, the minimum rate set by law, “respecting the payment of expenses approved by the government, as well as sustainability”.

Meanwhile, the PP congratulated itself after some of the proposals it had presented to the plenary session were approved, including: zero taxes for entrepreneurs for the first two years (…).

In the same way, it indicated that large companies should not have to pay taxes for having “larger” buildings since “the rate of IBI is progressive and so it does not make sense for smaller clinics to pay a lower rate of IBI than public hospitals”.

Begoña Villacís, from Ciudadanos, said that the Town Hall should have a “single discourse” regarding the payment of debt, and the tourist tax. Moreover, she said that her party proposes a reduction in taxes and that the Town Hall should support the cadastral review plan.

The socialist Ransés Pérez Boga pointed out that on 22 July the plenary session approved a decrease in the rate of IBI, after it had been proposed by his party. He advocated a decrease in the rate of business IBI “to maintain the social progressive nature of the tax charge”. In his judgement, the reduction will allow companies to retain their employees.

Original story: Expansión (by Mercedes Serraller).

Translation: Carmel Drake

Madrid’s Property Tax (IBI) Will Decrease By 7% In 2016

22 September 2015 – El País

In October, the Town Hall of Madrid will approve a 7% decrease in the property tax (‘Impuesto sobre bienes inmuebles’ or IBI) for all homes and the majority of commercial premises, offices and retail stores. This decrease, accepted begrudgingly by the minority Ahora Madrid government following its enforcement by the other parties (PP, PSOE and Ciudadanos), will be passed with equal reluctance next month by the socialists, who were seeking a higher cut. The 7% decrease in IBI will be equivalent to a €25 reduction in the average monthly bill (€350).

Yesterday, a Councillor from the Treasury, Carlos Sánchez Mato (pictured), announced a 7% decrease in the rate of IBI for all homes in the capital (1,448,765 households) and for the majority of non-residential buidlings.

Nevertheless, the rate will increase by 10% for those non-residential buildings that have a “higher cadastral (land registry) value”. The Town Hall defines this threshold as follows: for individual buildings, the increase will apply only to those that have a cadastral value of more than €35 million (there are around 30 such properties in Madrid); retail stores worth more than €860,000 (around 3,000 of more than 97,000); buildings used for sporting activities worth more than €20 million (around 30 in total); and offices worth more than €2 million (1,760 out of almost 32,000).

These targeted increases to non-residential buildings with higher cadastral values will almost entirely offset the decrease in the rate of IBI for the rest of the city.

IBI is the main source of income from the Town Hall, and therefore any change in the rate significantly affects its capacity to provide public services: IBI will account for €1,279 million of the €4,388 million that the municipal coffers will receive this year (i.e. it accounts for almost one in every three euros). The changes proposed by Ahora Madrid will reduce this revenue by just 3.7%.

A new tax

This fall in revenues (€49 million) will be primarily offset by the creation of a new tax to be paid by the companies that generate the most waste. The other municipal taxes will remain unchanged in 2016, although there may be an as -yet-unknown decrease in the price of certain services (sports centres, kindergartens, etc). (…).

Original story: El País (by Bruno García Gallo)

Translation: Carmel Drake

Kennedy Wilson & Renta Corporación Buy ‘Puerta del Sol, 9’ For €30M

18 May 2015 – El Mundo

The real estate group Restaura closed the sale of the building at Puerta del Sol, number 9, for more than €32.2 million on Wednesday. The ground floor of this historic property houses Casa Labra, the famous restaurant-cafeteria where Pablo Iglesias founded the PSOE on 2 May 1879.

A consortium created by the US fund Kennedy Wilson and Renta Corporación acquired the main property for €30 million; meanwhile, the owners of Casa Labra paid €2.3 million to purchase the ground floor, according to reports published yesterday by the Catalan newspaper La Vanguardia. The property, which occupies 4,000 square metres, is currently in the process of obtaining a licence to accommodate shops; it is located in one of the most important retail areas of Madrid, next to El Corte Inglés and the Apple store.

The bid submitted by Renta Corporación and Kennedy Wilson beat those presented by other funds, including Axa Real Estate, Meyer Bergman and Thor Equities, which is some cases offered more money but with less immediate payment conditions and, therefore, less attractive for Restaura. Allegedly, the real estate consortium chaired by Xavier Solana needed immediate liquidity to meet the obligations arising from its bankruptcy – it owes Sareb €14.2 million, the Tax Authorities a further €6.2 million and Barclays another €3.7 million. As one of its creditors, Sareb tried to foreclose the mortgage and repossess the building.

Renta Corporación and Kennedy Wilson have created a company that has starred in some very important real estate transactions in Madrid and Barcelona (in recent months). Most notably, it purchased an office building in the district of Chamberí, which is going to be converted into luxury homes.

Original story: El Mundo

Translation: Carmel Drake