Tag: rent

Office Rentals in Barcelona Hit the Bottom

International real estate consultant Jones Lang LaSalle published today the report on rent and investment in offices within Barcelona during the fourth quarter of 2013.

Office Market in Barcelona

The prime rentals on the office market in Barcelona seem to reach the rock bottom level with the price of 17 €/m2/month. After five years of continuous fall, one can speak of adjustment completion assuming the dip down by 40% comparing to rental prices´golden age of the areas of Paseo de Gracia and Diagonal.

The report informs that the short- and medium-term tendency in the office rents will result in price stabilization and future benefit as there might be little supply of this kind of units in Barcelona. The office stock will continue to witness rehabilitation which started 2 years ago.

Jones Lang LaSalle highlights that the availability rate at the end of 2013 was 14.7%. The appearance of the Cornerstone in 22@ project for a short moment increased slightly the availability. However, the indicator will start to go down from the second quarter of 2014 on due to lack of new offices on the market and a rebound in the contracting in the friendlier economic environment.

In the part about transactions, the report emphasizes that in 2013 Barcelona registered the lowest number of the office rent contracts in last 16 years. In the last quarter of the year the contracts involved mere 55.000 square meters which added to the accumulated 122.000 m2 from the previous three quarters equals to 177.000 m2.

According to Jordi Toboso, the CEO of Jones Lang LaSalle in Catalonia “(…) The last quarter of 2013 has been the most vivid over the whole year and the first quarter of 2014 already looks promising”.

Public Administration will play important role in the sector due to its relocation and space rationalization plan for 2014.

Investment Market in Barcelona

As the consultant company claims, the last quarter of 2013 marked rising interest in the real estate investments in Barcelona. Both national and foreign investors turn their eyes to the property in the city center. Precisely, the talk is about all types of investors: opportunistic, value-added and core. If it comes to the individual assets, the demand focuses on portfolios, debts, management companies, etc.

The demand for the office buildings in profitability has not changed and 2013 showed relevant consolidation on the part of the hotel investors about the office property, both empty and with short-term tenant contracts. Conversions became an important part of the market (in 2013 20% of total investment) (…).

In turn, the supply lacks property in profitability that would meet the investors´expectations. The property put on sale by the Regional Government of Catalonia (Generalitat) allowed to test the interest and prices (…).

The major investment demand also provokes conduction of off market transactions (…) however in 2013 they were scarce.

(…) During the last quarter of 2013, only two transactions have taken place: the sale of the building Córcega 289 destined for a hotel by the insurance company Zurich and the sale of the trade premises of Cahispa at 16-18 Roger de Lluria Street to Princess hotel group.

The report informs that the total investment amount in 2013 was 290 million Euros, 8% more than in 2012. If it comes to the profitability, it has slightly gone down in the area of Paseo de Gracia/Diagonal by 6.5%, in hope for the tendency to continue in 2014 in the city center.

Source: Inmodiario

The Economist: Spanish Housing Overvalued by 10%

The prices of houses in Spain still shall come to an end with adjustment. According to “The Economist”, in the twilight of 2013 houses were overvalued by 10% in regard to the wages available for home. The number is by 20% smaller than the one estimated at the beginning of 2013.

Idealista.com echoes the data adding that Spain leads together with Italy in the price fall among the most developed countries in the world.

Calculation highlights that the Spanish housing declined by 5.3% last year, while compared to the maximum recorded in the first quarter of 2008 the drop-off equals to 30%.

If it comes to Italy, the 2013 witnessed 5.9% decrease and, in reference to the top score, the housing numbers depreciated by 12.2%. Similar sort of data is found in the Netherlands (…).

In order to present the data above, the weekly newspaper analized the long-term information about the relation between the rental price and wages.

According to the classification, New Zealand, Australia, the United Kingdom, Canada, Belgium or France set themselves among the countries with the most overpriced houses. (…).

 

Source: El Economista

Office Buildings for Sale and Rent Within the M-30 Ring Road

The zone covers 50.7 square meters or 8.4% of the total extention of the capital. It is the very center of Madrid and the M-30 determines the zone´s outreach. It is also where the majority of companies desire to settle in.

Before the crisis, prices soared so much that many of them had to abandon the zone, moving towards the perypheries. (…).

In the center there are over 400 empty buldings and more than 500 building lots. A research made by the San Pablo University in Madrid (CEU) estimated that the value of the real estate assets is equal to 12,000  million Euros, with an extention of 630,000 square meters, which is half of the space covered by the Retiro Park.

(…). Many of the assets require a reform, but if you think of changing your premises location, you should know that many buildings are practically new, equipped with office furniture and all the amenities.

The price for a square meter has dropped significantly by about 40% since 2008, however not so much in the prime zones which resisted the crisis´s impact. The experts claim that the non-residential sector has reached the bottom and they augur the 2014 as a year marked by changes.

Source: Expansión

Sareb has sold 4500 properties to individuals.

The last business plan of Sareb, redrafted by the consulting company KPMG in March, established a sales target of 7528 properties at the end of the year, with the intention of obtaining earnings of 933 million Euros. The institution assures that the pace of sales will reach its “cruising speed” while the company carries out its activity.

In this sense, the company presided over by Belén Romana hopes to reach a medium term objective, stating that it does not need to reach a specific number of sales this year. The business plan establishes that Sareb will get rid of 34000 properties until 2016.

However, it is also necessary to take into account the wholesale market, in which Sareb has awarded a portfolio with 939 properties to the venture capital fund HIG, within the operation Bull. Through a Banking Assets Fund (BAF), the institution will hold 49% of the capital and will therefore participate in the earnings derived from the sale of these properties.

Sareb indicates that the renovated interest of the foreign venture capital firms in the real estate sector could mean that prices are reaching their rock bottom level. In this sense, they hope that this perception of the market should provide a boost to the sales of properties. As for next year, the company forecasts a scenario with a bigger volume of sales and a certain stability of prices.

The bad bank also points out that it bets on rentals with the aim of maintaining its assets “alive” and in view of the cultural change experimented by Spanish people after the real estate and economic crisis.

Sareb will also transfer between 1500 and 2000 properties to the regional governments in order to reserve them for subsidized rentals. The agreements with the regions are still in a “first stage”.

On the other hand, Sareb has various pending operations that it plans to close before the end of the year. There is the sale of a portfolio of loans from Realia within the operation Bermuda and the sale of a package of offices (Corona project). “We are in the last stages of the negotiation”, they have declared from the bad bank.

The company lead by Romana has also launched the project Harvest (22 rural properties in different regions), the project Crossover (80 plots of building land) and the project Paramount (35 luxury villas scattered around Madrid, Barcelona, Costa del Sol, Comunidad Valenciana and  Balearic Islands  with  a  joint  value  of  38 million  Euros), among other operations.

Source: Expansión

The Ministry of Infrastructure has created the rental map in order to detect which incentives are necessary.

The Government will carry out a statistic of rentals in Spain, something like a rental map. The aim: to get to know better the problems within the sector, so as to find solutions. The rental has always been the outcast of the real estate sector, in a country with a majority of owners. And in spite of the proliferation of statistics on housing, there is not one that assesses officially the reality of the rentals.

It will be a global inventory, that will include the number of rentals and their prices- and not only the percentage variation, as done by the NIS until now-, as well as their locations (where there are more or less rentals), according to the consulted financial sources. The statistics on empty properties and therefore susceptible to be rented will also be demanded from the NIS.

All this in collaboration with the regional governments, which are the ones competent on real estate matters, and which will have to defray all necessary bureaucratic costs.  Agreements will be signed and working groups will be created by the Government and the regions, according to sources within the Ministry.

This great statistic is created by the Rental Law, which comes into force today, after being published yesterday in the state official gazette.

In its first additional ruling it is stated that “with the intention of defining, proposing and executing the Government policy on access to properties”, the Ministry of Infrastructure will be able to demand “information on the location of properties, on rental agreements (…), from the administrative registries of agreements and deposits from the regional governments and the National Council of Notaries Public”.

All this is required to get a real picture of rentals and “get to know the market better”, so as to detect where there is more offer, where more demand of social housing, or in which areas the express evictions are working better as well as the new advantages for owners so that they put their properties for rent. “We would also like to check the influence of the new law”, they add from the Ministry.

Along with the new law, the Government has approved a new policy of subsidized housing, focused only on the social and rotating rental, with low prices – less than 400 Euros- and not on the acquisition.

The final objective of this new law is to reduce the gap between the rental and the ownership. Because Spain is still lagging behind in the percentage of people that rent instead of buying. Only 17% of Spaniards prefer it, opposite to the 83% that goes for ownership. In Germany, however, 46,8% goes for rental. In France, 38%. And in Switzerland, 55,7%. This close relationship from Spaniards to the construction business affects the labor mobility – and therefore the employment- as signaled frequently by the Bank of Spain.

Also, the Government will demand all statistic data stored by the IRS “derived from the access to tax benefits from tenants and landlords”. All this without violating the legislation on data protection.

Source: Expansión

Catalonia and Valencia, the two communities with the most properties in the social rental fund.

 Catalonia, the Valencian community and Andalusia are the regions with the biggest number of properties in the social housing fund (SHF) created by banks in order to rent to those who have suffered the eviction from their homes since 2008 and comply with certain socioeconomic requirements. (…)

The SHF has 5047 properties, a quantity which is lower than the 5841 ones committed by banks in the agreement that regulates the functioning and the features of the fund signed last January.

These differences can be explained by the fact that Caixabank has organized its contributions to the fund on a quarterly base.

As explained by the bank in its web page, it has awarded 200 properties to the fund in this first call, and will be increasing this number throughout the year until reaching the 850 announced properties. (…)

Source: Expansión