Madrid to Avoid Price Controls on Rental Flats

4 January 2020 José María García, the Community of Madrid’s General Director for Housing and Rehabilitation, explained to idealista/news in an interview that the government of Madrid will not intervene in the market to place limits on rental prices in the region. Such measures have generally proven counter-productive in other European cities. The government has instead opted to concentrate on increasing the supply of rental housing to combat the recent price inflation.

A regional plan, called the Plan Live in Madrid, will use publicly owned land for the development of affordable rental homes. At the same time, the government intends to invest in urban renewal to take advantage of existing, though possibly degraded, properties. Young buyers, under the age of 35, will also receive deductions on interest payments on mortgages.

The Spanish government has already identified sufficient land to build approximately 15,000 homes and expects to find enough for at least another 10,000.  The land is spread out around Madrid, in areas such as San Sebastián de los Reyes, Alcobendas, Getafe, Alcalá de Henares and Tres Cantos.

José María García, Director General de Vivienda y Rehabilitación de la Comunidad de Madrid, ha explicado a idealista/news en una entrevista que el gobierno de Madrid no intervendrá en el mercado de alquiler para poner límites a los precios en la región de Madrid. Dichas medidas generalmente han producidas resultados contraproducentes en otras ciudades europeas. En cambio, el gobierno ha optado por concentrarse en aumentar la oferta de viviendas de alquiler para combatir la reciente inflación de precios.

Un plan regional, llamado Plan Live en Madrid, utilizará terrenos de propiedad pública para el desarrollo de viviendas de alquiler asequibles. Al mismo tiempo, el gobierno tiene la intención de invertir en la renovación urbana para aprovechar las propiedades existentes, aunque posiblemente degradadas. Los compradores jóvenes, menores de 35 años, también recibirán deducciones en los pagos de intereses sobre hipotecas.

El gobierno español ya ha identificado suficientes terrenos para construir aproximadamente 15,000 hogares y espera encontrar suficientes para al menos otros 10,000. El terreno se extiende por Madrid, en zonas como San Sebastián de los Reyes, Alcobendas, Getafe, Alcalá de Henares y Tres Cantos.

Original Story: Idealista – P. Martinez-Almeida & Luis Manzano

Translation/Summary: Richard D. Turner

Spain’s Government to Overhaul Regulations Governing Socimis

3 January 2020 The two parties in Spain’s governing coalition, PSOE and Unidas Podemos, have reached an agreement to overhaul the legal and tax frameworks that regulate socimis in the country. The principal effect will be to implement a 15% tax on retained earnings.

The government will also seek to implement measures to contain what it sees as abusive increases in rental prices in specific areas of the country. Spain’s autonomous regions and municipalities will henceforth have the power to impose ceilings on price increases based on an objective methodology, which will be determined at a later date.

The two parties also agreed to establish a legal framework to create a database of vacant housing and major property holders. Local governments will be able to use the information to induce such holders to put their properties on the rental market to relieve demand pressure.

Los dos partidos en la coalición gobernante de España, PSOE y Unidas Podemos, han llegado a un acuerdo para revisar el régimen jurídico y fiscal que regula a los socimis en el país. El efecto principal será implementar un impuesto del 15% sobre los beneficios no distribuidos.

El gobierno también buscará implementar medidas para contener lo que ve como aumentos abusivos en los precios de alquiler en áreas específicas del país. Las regiones autónomos y municipios de España tendrán en adelante el poder de imponer límites a los aumentos de precios basados en una metodología objetiva, que se determinará en una fecha posterior.

Las dos partes también acordaron establecer un régimen legal para crear una base de datos de viviendas vacantes y los principales propietarios en el país. Los gobiernos locales podrán utilizar la información para inducir a dichos titulares a poner sus propiedades en el mercado de alquiler para aliviar la presión de la demanda.

Original Story: Eje Prime

Translation/Summary: Richard D. Turner

European Real Estate Market to Prize Stable Income Streams in 2020

17 December 2019 – According to a report by Savills Investment Management, the big players in the European real estate market will begin to focus on more conservative investments in the coming year. Investors are expected to start looking for stable, long-term rental income streams in place of opportunistic bets.

The investment cycle in European rental markets is entering a period of reduced growth and heightened uncertainty due to weakened demand and economic and geopolitical developments. Consequently, analysts foresee anaemic economic growth over the next 12-18 months.

Savills IM, however, still sees significant opportunities in the office, retail and logistics sectors at the European level. In Spain, the firm expects the real estate sector to continue to see better than average performance in 2020, vis-à-vis the rest of Europe, despite the slowdown in domestic demand and weakness in external markets.

Original Story: Idealista

Adaptation/Translation: Richard D. K. Turner

Aedas Hires JLL to Sell Portfolio of Rental Homes

17 December 2019 – Aedas Homes announced that it would sell a 1,300-home turnkey project for rental homes. The developer is currently looking for one or more investors to carry out the operation, the largest so far in Spain.

The firm has chosen up to 10 developments throughout Spain: Barcelona, Madrid, Valencia, Seville, Alicante and Granada. According to estimates, the transaction would bring in 325 million euros to Aedas’s coffers. JLL is advising on the potential sale.

Should Aedas finalise the sale, it would be the firm’s second disposal of build-to-rent assets. Earlier this year, Aedas sold a portfolio of 500 homes to Ares Management.

Original Story: Idealista

Adaptation/Translation: Richard D. K. Turner

Urbas to Allocate Land to Residential Build-to-Rent Sector

16 December 2019 –

The Urbas real estate group is planning a series of new investments in the residential rental housing market. The firm is considering using some of its 18-million-square-meter portfolio of land for build-to-rent developments.

The firm is currently analysing potential opportunities, including participation in the Ministry of Development’s State Housing Plan 2018-2021, which was designed to stimulate the rental housing sector.

Original Story: Eje Prime

Adaptation/Translation: Richard D. K. Turner

Investments in the Build-to-Rent Sector Skyrocket in 2019

21 November 2019 – Investment funds and socimis active in the Spanish real estate market are increasingly investing in the residential build-to-rent sector. The constrained supply of rental housing and growing prices have led to funds and socimis like Ares, Vivenio, Azora and others to pile into the growing market.

Direct investment in the year to September reached €1.8 billion and are forecast to total €2.5 billion by the end of the year. In 2018, investment for the year as a whole reached just 900 million euros.

Funds and Socimis Invest in New Developments

The of the larger operations this year include a partnership between Aedas and Ares to sell four turn-key developments, with a total of 500 homes, in Torrejón de Ardoz, Alcalá de Henares and El Cañaveral (Madrid). Ares also recently acquired a portfolio of 400 homes to the east of Madrid. Stoneweg, for its part, will transfer a 300-flat development in Tetuán, Madrid, to M&G, while Vivenio is investing in a 340-home project in the growing area of Mahou-Calderón.

At the same time, Vivenio and Azora have joined forces with Áurea to develop projects in Móstoles and Cañaveral. Acciona, meanwhile, has finalised a deal to build 135 homes with Axa in Méndez Álvaro. Lastly, TPG is investing in a 391-home development called the Sardes project.

Financing for the developments usually takes the form of either forward funding or forward purchases. The former, which is used by investors looking for higher returns, and risk, usually involves an investor acquiring land from a developer subject to a pre-let but where the development has not been carried out. The developer will construct development paid for by the fund with an additional, profit-related, payment to the developer at completion. Forward purchases, which are considered more conservative, have the developer assume all costs until delivery.

Original Story: Expansión – Rebeca Arroyo

Adaptation/Translation: Richard D. K. Turner

Spanish Government to Create Land Bank for the Development of Affordable Rental Housing

28 October 2019 – The Spanish Government announced that it was working on a plan to cede public land for the development of affordable rental housing through a series of auctions. The head of the Ministry for Development, José Luis Ábalos, stated that the ministry is working on a plan to auction the surface rights to public land for 50 years so that private developers can build and manage affordable rental housing. The government is looking to address the recent increase in prices.

The ministry is looking to create a single land bank, using land from several different ministries. The government hopes that this management model, if successful, will be replicated at a regional level.

Original Story: Cinco Dias

Adaptation/Translation: Richard D. K. Turner

Quabit Invests in New Sectors in Preparation for a Change in the Market Cycle

24 October 2019 – Félix Abánades, the head of Quabit Inmobiliaria, has been preparing his firm for a new cycle in the real estate market. The firm recently began investing in the residential rental market, acquired a construction company (Rayet Construcción), placed a portfolio of 1,300 homes currently under construction on sale and announced that it would invest in the cooperative management sector. In the latter, the firm is looking to develop a portfolio of approximately 1,000-1,500 homes, within two or three years, with a turnover of around 175 million euros, through its Style Cooperatives initiative.

Quabit’s entry into the cooperative management market comes at a time when the sector is suddenly back in vogue. Cooperatives are typically able to offer higher prices for developable land than comparable developers.  The firm is adding the new line of business to its existing operations in land and residential development, along with its foray into the rental housing market.

Increasing construction costs and the possibility of a change in the market cycle are leading Quabit and other developers to reduce their earnings forecasts along with estimates of the number of homes it will deliver in the coming years.

Original Story: El Confidencial – Elena Sanz

Adaptation/Translation: Richard D. K. Turner

Grupo Lar to Create New Investment Vehicle With €1 Billion in AUMs

24 October 2019 – The developer Grupo Lar is studying whether to incorporate a new socimi for its rental housing business. The new investment vehicle would have more than €1 billion in assets, including more than 5,000 homes. Yesterday, Grupo Lar announced that it would start work on a project to build 66 rental homes in Valladolid, in an initial investment of nine million euros.

The development is part of the firm’s initial strategic plan to build 500 rental homes. Grupo Lar also has two other projects under development in Parla and Móstoles.

The company is studying the best investment structure for the new vehicle, potentially creating a new socimi.

Original Story: Cinco Días – Alfonso Simón Ruiz

Adaptation/Translation: Richard D. K. Turner

Vivenio Partners With Áurea Homes to Build Rental Housing

24 October 2019 – Áurea Homes, the developer owned by the construction company ACR, has reached an agreement with Vivenio to build a turnkey project with 150 homes in Móstoles. Áurea had initially owned the land, but it sold it to Vivenio after having completed the first phase.

This operation will be Áurea second in the rental housing segment. The developer is also about to finalise an agreement to build another 400 rental rent homes in four new developments, including two in Madrid, one in Pamplona and one in Sabadell.

With this operation, Vivenio’s property portfolio will total nearly 5,000 homes.

Original Story: Cinco Días – Alfonso Simón Ruiz

Adaptation/Translation: Richard D. K. Turner