Sareb’s Socimi to Debut on Continuous Market in 2021 with €500-Million Portfolio

5 October 2018

Sareb is moving firmly ahead with its socimi Témpore. The company, which has just presented the latest financial results for its vehicle specialising in residential rental assets, plans to move Témpore from the Alternative Stock Market (MAB) to the continuous market in 2021. The move will occur when the socimi’s portfolio of assets reaches 500 million euros.

The socimi’s goal has been to increase its initial portfolio of assets, which was worth 175.4 million euros, to around 500 million euros within a three year period. This increase in capital would provide sufficient volume to attract more investors and open the door to trading on the continuous market.

According to a statement the company submitted to the MAB, “Témpore is preparing to undertake a capital increase with a new contribution of assets from its main shareholder (Sareb), which we expect to complete before the end of the year… the homes are located mainly in Madrid, Valencia, Seville, Murcia, Logroño and Valladolid.”

Témpore, which debuted on the stock exchange at the beginning of April with almost 1,400 homes for rent, began to study the purchase of more flats owned by the bad bank this summer, aiming to increase its portfolio. The socimi has a three-year framework agreement that entitles it to a right of first offer on any of Sareb’s assets, which has been one of the main levers of its growth.

Témpore’s rental properties are mostly located on the outskirts of large cities or metropolitan areas such as Madrid, Barcelona, Valencia, Seville, Granada and Zaragoza. The houses have an average size of 93 square meters and have two or three bedrooms.

Financial results

Sareb’s subsidiary closed the first six months of the year with losses of 201,000 euros, a period in which its revenues reached 3.3 million euros. These results are in line with the company’s strategic plan and with the forecasts presented in the Document of its Incorporation into the Market, as explained by Sareb in a press release.

Nicolás Díaz Saldaña is the CEO of Témpore Properties. Mr Saldaña is the only executive director with the socimi. Juan Ramón Dios Rial, director of development and real estate development at Sareb, chairs the board of the socimi.

Original Story: Idealista

Translation: Richard Turner

Helena Beunza, General Secretary for Housing: “The Government Is Not Looking at Limiting Rental Prices”

9 August 2018

Helena Beunza has just arrived from the Valencian government to her new position as the General Secretary for Housing within the Ministry of Public Works. Like many other people who come to Madrid, she had to look for a flat. The PSOE-affiliated minister, responsible for housing policy in Spain, decided to rent.

An idealista/news exclusive interview with the new General Secretary for Housing at the Ministry of Public Works. We went deeper into the measures previously announced by the Minister José Luis Ábalos regarding rental policy, an increasingly important market for the sector and the Spanish government; the current state of Spain’s stock of housing, especially empty houses; the articulation of urban planning and the future of social housing in the country.

The current government wants to reformulate its housing policies to align them with the current state of the rental housing market. Ever more Spanish households are opting to rent, whether it is by need or conviction, and the sector requires better regulation.

The minister José Luis Ábalos already announced in the Congress of Deputies that the current government intends to upend the residential rental market with three big sets of reforms:

On the one hand, the government intends to amend the Urban Rental Act (LAU), which was signed into law in 2013 under the government of the PP. “In this amendment, we would return once again to a model of five-year contracts and three-year extensions. We would also revisit the regulations for security deposits,” Helena Beunza summarised. “On the other hand, we will establish a generalised understanding of the holiday home and tourist rental sector, so that the relevant authorities can then define the corresponding legal regimes in each Regional Community,” she said.

Action plan for 20,000 subsidised rental homes

The Minister of Development also announced the Spanish government’s initiative to allocate 20,000 subsidised homes to the rental market for young people and low-income families in those areas where the rental price has skyrocketed.

“It is a very ambitious project that not only covers legislation but the management on the part of the State at a fundamental level, in coordination with the Regional Communities and the city councils,” the general secretary noted. “Obviously, this measure alone will not solve the problem. These 20,000 homes, which will involve both new construction and renovations, are not enough, but it is a way to begin working with town councils and the CCAA (Regional Communities) for the creation of a public stock of rental housing that can be managed both publicly and through public-private partnerships,” Ms Beunza clarified.

The third group of measures that are important to highlight are the those aimed at improving the transparency of the Spanish real estate market. We know that greater access is needed, for everyone, to data and added information not just regarding the housing market, but also that for land.

Regarding taxes, we will work with the IRPF and with the IBI

To coordinate all these measures, the Ministry of Development will participate in an interministerial working group to define the legislative and tax policies that will be implemented in the housing sector. “It’s too early to talk about concrete measures. Those measures are expected to emerge from the discussions held within the interministerial working group. Regarding taxes, we will work with the IRPF and with the IBI, but the Ministry of Finance will have a leading role regarding the formulation of the tax measures that we would eventually adopt.”

Minister Ábalos stated that improvements to the tax regime associated with housing, which will go back to offering tax deductions (IRPF) and incentives to encourage property owners to place their homes on the rental market. Although it will be his colleague, María Jesús Montero, at Treasury, who will decide upon and implement any measures.

Any measures that would impact the Real Estate Tax (IBI) would have to be included in the Revised Text of the Local Authority Regulation Act, and the town councils would have to decide on their application.

The government also announced that it has ruled out any artificial limits on rental market prices. “We must differentiate between limiting rental prices from the limitation of prices that are set as a mere reference. This government has no plans to consider these issues,” says the general secretary for housing at the Ministry of Public Works.

Another one of the measures that were discarded, and the secretary states that was not even discussed, is the calculation of the IRPF (income tax for individuals) accounting for rental income.

Expand legal protections for rentals

The government does not want to limit its work to tax matters, but also intends to look at improving the legal protections within the rental sector so that the small owners can have guarantees and adequate compensation for placing their home on the rental market.

“We have to work on legal protections for both landlords and tenants, for both parties,” says Helena Beunza. “We need policies that treat housing as what it is, a fundamental right. We would have liked that the existing current speedy eviction law contained additional measures to take into account families that are occupying a home because they needed housing since we need to differentiate that occupancy from other types of occupancies.”

Secretary Beunza believes that a great deal of work will be needed to coordinate the various administrations to find a housing solution for families at risk of social exclusion. “Families need to be evaluated, and there needs to be coordination with social services so that we can help the people that want to enter the system, and who can meet the necessary conditions to sign contracts for public housing.”

From tourist rentals to empty homes

Real estate experts and regular citizens have their opinions as to the cause of the increase in rental prices. Blame is usually given to the growth in tourist apartments, the high number of empty homes and the socimis investments in the residential market. The general secretary analysed each point.

“There is a multiplicity of causes that have come together at a given moment and that have given rise to the situation in which we find ourselves now. It is too simplistic to state that tourist rentals have been the sole determinant in the increase in rents. While that could have been the primary factor in some places, but it is a very specific impact in very specific areas. The same thing holds for the increases in rental prices. We cannot speak of similar increases throughout Spain, but there have been huge variations in the increases, depending on the regions and cities involved, “the minister added.

Certain regions have already created registries of both empty homes and people seeking homes. “Yes, it is true that there are a lot of empty homes in Spain. One empty home is already too much. However, the first thing we need to understand is exactly how much empty housing there is in Spain and then we can work together with the CCAA. We need to improve data and transparency,” Ms Beunza stated.

How VPO (subsidised housing) fits into the housing stock

The Government of Pedro Sánchez has had little room for manoeuvre since taking office but has also found that many policies and items were already approved, starting with the General Budgets for 2018.

Regarding housing, the previous Minister of Public Works, Íñigo de la Serna, presented the general guidelines of the State Housing Plan for the period 2018-2021 last March. “It is not our plan, but we understood after listening to the CCAA that the priority was to sign the agreements so that the CCAA could begin to act on and process their files, mainly for calls for rental subsidies, which is he most urgent matter,” Secretary Beunza said.

The general secretary did criticise, however, is the current social housing plan (VPO), which the minister stated the PSOE would begin work on right away. “One of the issues that this Government has detected is the need to rethink the concept of official social housing. Moreover, we must take a look at all those lands which are already qualified in our country to be used in the VPO. In the current state housing plan, the word VPO does not appear.”

Land cannot again become a subject of speculation in this country

She also emphasised policies regarding land ready for development (finalist land). “We must coordinate our land policies with our housing policies because both the rental and sales markets need them to be aligned. Spain has land that is ready for development. That land is not necessarily where the developers want to build, but there is land in both Madrid and Barcelona. Another consideration is the price of that land. That is something we must consider because we can’t allow a repeat of what happened in our country before. Land cannot become a subject of speculation in this country again,” she argued.

Speaking of land, one of the biggest dilemmas facing the construction and real estate sectors also came up: the state of urban planning in Spain. “We must try to make the Spanish urban planning system more flexible and simplified. The State, although it is not directly responsible, has a clear will to define a path to accompany the CCAA (autonomous regions) in this process. We cannot take eight or 10 years to approve a general plan, simply because the economic and social reality of a particular city is not the same when a plan is approved as when it began to be written.”

The sector has been denouncing the amount of litigation in the construction industry for some time. “The problem is not just the litigation, but also but also the cascading annulments of planning instruments. It has generated a serious problem in our country since, when a general plan is annulled due to formal or material defects, the rest of the planning instruments also become null and void,” the general secretary explained.

The ministry intends to build upon the work of the previous Executive to articulate legislation that will increase legal protections and simplify urban planning.

The general secretary for housing still sees a lot of work ahead before a true state-level housing policy is defined. “There is so much to do regarding housing policies that we need to start at the beginning, and the foundations of housing policy at a state level in Spain do not yet exist,” the Secretary concluded.

Original Story: Idealista – David Marrero & Luis Manzano

Translation: Richard Turner

 

Servihabitat: Spain’s Housing Market Continues on its Positive Trajectory

24 July 2018 – Eje Prime

The housing market in Spain is going to continue with positive figures across all areas in 2018. That is according to a report from Servihabitat, which indicates that prices are going to continue to rise this year, up by 5.4%; operations are going to soar, with a leap of 24%; and new build starts are going to rise by 16.6% (all figures compared to last year).

According to the report, these increases respond to a residential market that “is progressing with clear signs of consolidation”, which is explained by factors such as an improvement in consumer confidence, the containment of unemployment and the positive evolution of companies’ turnover.

These elements “are encouraging the start of housing projects and configuring an expansive cycle”. With a special focus on the largest populations in Spain, such as Madrid, Barcelona, Málaga, Valencia and Sevilla, in the case of homes for regular use, and on regions such as Galicia, La Rioja, the Community of Valencia and the Canary Islands, the number of new home starts will rise by 16.6% this year to 93,895 units.

Meanwhile, the number of finished homes will rise by 15.5% during the course of this year, according to Servihabitat’s forecasts, with a total of 63,744 homes delivered. Despite that, the pull of demand will reduce the new build stock by 4% to 454,939 homes, with a greater reserve in the communities of Cataluña, the Community of Valencia and Andalucía (the three account for 49% of the total stock).

The second major increase will be seen in the number of transactions, in other words, the sale of homes signed at the notaries’ offices. According to the report, the year will close with a total of 669,739 transactions subscribed, up by 24.3% compared to 2017.

Macroeconomic conditions, together with opening up of the financial sector to the granting of mortgages and demand for property investment (thanks to the returns that the rental market is offering) are the three main drivers of demand, which have reduced the average sales period for a normal home to 6.6 months.

Finally, the evolution of supply and demand will lead to a rise in house prices once again this year, up by 5.4%, compared with an increase of 6.2% with respect to the previous year.

Prices are expected to grow by the most in the Community of Madrid, with a forecast increase of 11.5%; followed by Cataluña, 9.6%; the Balearic Islands, 8%; and País Vasco, with an expected increase of 5.2%. By contrast, prices are forecast to rise by less than 1% in the autonomous regions of Extremadura and Castilla-La Mancha in 2018.

The report also reflects the opinions of the real estate agents who form part of Servihabitat’s own network of branches and its collaborating agents. In particular, 64.2% of that sample believes that the price of regular homes (primary residences) will remain stable in 2018, compared with 33.2% who think that they will rise and just 2.6% who consider that prices will fall. In the case of holiday homes, the dispersion is somewhat greater: 34% forecast that prices will rise this year; 62.6% think they will remain stable and 3.4% believe that they will fall.

Original story: Eje Prime (by C. de Angelis)

Translation: Carmel Drake

Spain’s Banks Are Queueing Up to Finance Rental Housing

4 July 2018 – El Economista

One of the major challenges facing Spain in the residential market is the organisation of the rental home segment in light of the fragmentation that exists and the boom that is currently underway. There is currently a great deal of demand, but there is also a distinct lack of supply, and the new Housing Plan approved by the Government is not proving sufficient to incentivise the supply with the granting of aid to property developers that build rental housing. In light of this situation, we ask ourselves whether the opportunity that currently exists in Spain to organise the rental market is being taken advantage of?

“I think that the professionals and investors who have launched portfolios thanks to the creation of Socimis are taking good advantage of the opportunity, but I believe that some important players are simply not supporting the sector, such as the Public Administrations. Both nationally and locally, but above all locally, they are failing miserably and this is generating price tensions due to a lack of supply”, explains José Luis Ruiz Bartolomé, Director General of the consultancy firm Chamberí Asset Management.

Along the same lines, José María Cervera, Corporate CEO of Renta Corporación agrees and states that the public sector has been left on the sidelines. “Private capital has taken the initiative in this new segment of the market because it has seen a business opportunity and is looking for returns. And the public sector is going to have to enter, but now the arbitrage and those who are institutionalising it are in the private sector, and so they are going to place more rental properties on the market”.

For all of these reasons, during 2018, we are observing the creation of a new industry. Given that in Spain there are 18.5 million households, according to the latest figure from the Active Population Survey (EPA), and of those, 22% are rental homes, there are 4.7 million rental homes in total. Of that portfolio, only 5% are owned by institutional companies; the remaining 95% are owned by individuals.

“The Public Administration has done something important, which is to reorganise the real estate sector and separate property promotion and development activities, by creating Socimis that operate under a special framework. That has brought us closer to a situation that is more similar to those seen in other European countries. Now, we will have to see how the different players that are emerging in this market position themselves, and in two or three years, we will see the consolidation of this sector, which means that the Public Administrations will have to continue refining their regulations so that the sector can develop and be brought into line with those of other European countries”, says Nicolás Díaz-Saldaña, CEO at Témpore (Socimi of Sareb).

Nevertheless, not all of the experts in the sector concur. David Botín, Director of Real Estate Development at the ACR Group, says that this opportunity is not being leveraged. “It is possible that we are seeing the beginnings of a new rental market, but to date, just 22% of our households are renting and that supply is being provided almost exclusively by individuals. As such, it is very hard to fathom how we will reach the percentages seen in other countries such as Germany, where rental properties account for 48.3% of the market or the United Kingdom (36.6%). It is really hard to increase the stock in Spain because there are 19 million homes, and so a 1% increase means placing 190,000 more homes on the rental market, and that would take between three and four years (…). At that rate, nothing is going to happen quickly. No market works if there is no equilibrium between supply and demand. We need a large and varied supply for this market to work effectively”, he adds.

It is true that, historically, Spain has been a country of property owners, but the cultural and socio-economic changes that have been happening in recent years are drawing some new business lines, where the rental market is taking centre stage and is starting to become institutionalised. The new players in this market are: on the one hand, the Socimis, which are listed companies that serve as investment vehicles with tax benefits. The largest of them is Testa, which will debut on the stock market soon and which is owned by Santander, BBVA, Acciona and Merlin Properties. There are also others such as Azora, Vivenio (Renta Corporación), Témpore (Sareb) and Fidere, amongst the largest. Within this market, we can also include the servicers, which although they do not own properties, manage them, such as Solvia (Sabadell), Anticipa (Blackstone), Haya (Cerberus), Altamira (Apollo and Santander). And then, there are companies owned by the banks, such as Building Center (Caixabank) and other types of companies such as Alquiler Seguro, family offices, etc.

Therefore, now that the new players required to institutionalise this market are starting to be created, the next step is to develop a portfolio of assets. “We are going to need to reach agreements with property developers to build homes for rental (…), and at Sareb, we are going to use some of the land that we have for the co-development of rental homes (…)”, says Nicolás Saldaña.

That is a formula that is starting to spark interest. According to the experts, property developers have always been reluctant to enter the rental market, because they didn’t see it as their business, but in the end, the market trend has changed and whilst the sale and purchase segment will continue to exist, so too will the rental sector and property developers will have to participate (…).

The rental segment is a market that has always existed in the hands of individuals, but now, it is being professionalised, thanks to the arrival of overseas capital. “Investors have contributed many things, besides capital. They have contributed methodologies, rigour, professionalism (…). The banks were not open to this business before, they only financed promotion, but that has changed. For six months now, everyone has been wanting a piece of the pie and now there is a queue of financial institutions wanting to finance this type of business (…)”. Says José María Cervera (…).

Investing in residential properties is profitable. The gross return from investing in rental homes has increased to 7.3% from 6.3% a year ago, due to the strength of demand for rental properties, according to the real estate portfolio Idealista (…).

Original story: El Economista (by Luzmelia Torres)

Translation: Carmel Drake

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

Venezuelans Lead Ranking of Most Active Foreign Residential Investors in Madrid

5 June 2018 – La Vanguardia

Venezuelan immigrants lead the ranking of home acquisitions by foreigners in the Spanish capital, according to data from Redpiso’s Research Service.

This data represents an increase of 10% with respect to the previous year and places investments by Venezuelan immigrants above those made by the Russians and Chinese, who were, until now, the nationalities that purchased the most homes.

The typical investor profile are people with a medium-high purchasing power, educated and employed, who have lived in the country for no more than three years.

Above all, they are buying homes in the areas of Chamartín, Hortaleza, Salamanca and Retiro.

The average cost per home amounts to around €565,000 and purchases are mainly happening in the second-hand housing market, “given that the supply of new build properties is very low and even more so in these areas”, said Redpiso.

In terms of the rental market, the average number of contracts increased by 35%, with the average spend on rent by Venezuelans amounting to €1,700 per month with three-year renewable contracts.

To explain the factors driving this growth, sources at Redpiso allude “to the mass arrival of Venezuelan immigrants who are coming to Spain due to the controversial socio-political situation in their country, as well as the limited and increasingly more expensive supply of rental homes in Madrid”.

Original story: La Vanguardia 

Translation: Carmel Drake

Large Investors Manage Only c. 3% of Spain’s Rental Homes

28 May 2018 – Cinco Días

In recent months, a new name has been added to the list of alleged culprits to blame for the fact that rental prices in large cities are rising at a dangerously accelerated pace – they increased by between 10% and 18% last year. They are what the experts call the large owners of rental home portfolios. And are otherwise known as Socimis, investment funds, servicers and, to a much lesser extent, public companies.

But, how many homes are we talking about (…)? And what percentage do they represent over the total stock of rental homes? Taking into account that no official figures are compiled for the number of rental homes in Spain, and that we only talk about percentages of the total number of households (…) the truth is that the task seems complicated.

Nevertheless, according to the calculations performed by Cinco Días and after having requested data from the large funds, the resulting figure is so small, both in absolute and relative terms, that it seems to have almost no or limited influence on the evolution of rental prices. The figures compiled by CBRE reveal a balance that ranges between 2% and 4% of the total stock of rental homes. “It is possible that they have an influence at the local level in areas where more homes managed by those kinds of companies are concentrated, but it is clear that they cannot be blamed for what is happening to rental prices”, explains Sandra Daza, Director General at Gesvalt.

Thus, the statistics compiled by the Government and Eurostat reveal that approximately 22% of Spanish households live in rental properties, a figure that has increased considerably from 15% before the outbreak of the crisis (…).

Multiple factors

In this way, if we take as the reference the most recent figure for the number of households during the first quarter of this year, according to the Active Population Survey (EPA), of the 18.55 million households in Spain, 4.07 million were rental homes.

Of that volume of household-homes, a total of 114,000 homes are in the hands of the 15 largest investors, which together account for just 2.8% of the total stock of rental homes (…).

As Samuel Población, the National Director of Residential and Land at CBRE, explains, the increase in this regime of tenure over buying is driven by several factors. The new labour market, with more instability and lower salaries, is forcing many households to rent, plus all the demand that was expelled from purchasing during the crisis (…).

This increase in demand has not been accompanied by a parallel rise in the supply to the same extent and that is what is causing most of the tension in terms of rental prices, together with the effect of tourist apartments in certain neighbourhoods of large cities and higher visitor numbers. Not even the fact that one out of every five homes purchased is destined for rent to make the investment profitable has managed to generate more homes for rent.

“The current rise is a consequence of the large gap between demand and supply”, says Wolfgang Beck, CEO of the Socimi Testa Residencial, one of the largest owners of this kind of asset (…).

“It does not make sense to attribute the rise in rental prices to the funds. They have a long-term focus and are actually responsible for increasing the stock of rental homes on the market”, says Javier Rodríguez Heredia, Head of the Residential team at the housing manager Azora.

“Establishing regulations that provide certainty for institutional investors to make it attractive for them to enter the sector would result in the creation of a rental home stock commensurate with the needs of the country”, he said (…).

Original story: Cinco Días (by Raquel Díaz Guijarro & Alfonso Simón)

Translation: Carmel Drake

CBRE GI to Invest €800M in Spain in 2018

18 May 2018 – Expansión

The real estate asset manager CBRE Global Investor (CBRE GI) is redoubling its commitment to Spain. After ending last year with a record investment of €800 million and starring in several mega-operations, the firm wants to establish a new record this year, exceeding the milestone set in 2017. From its offices in Madrid, CBRE GI manages assets worth €3.2 billion in the retail, office, logistics and student hall sectors, located in Spain and Portugal, and is getting ready to enter the residential sector.

“Last year was very important given the significant transaction activity undertaken, of which €800 million corresponded to purchases. This year, we hope to match that figure and even exceed it”, explained Antonio Simontalero, Head of Operations for Spain and Portugal at CBRE GI, speaking to Expansión.

The firm works with eight funds and owns a portfolio comprising 19 shopping centres, 37 logistics platforms, three office buildings and 33 halls of residence for students.

Although retail is still the main market for the manager, accounting for 70% of its portfolio, CBRE GI has decided to attack new businesses. Thus, last year, it entered the market for student halls with the purchase, together with AXA IM Real Assets and Greystar, of Resa, the market leader in Spain, for €400 million. “We are continuing to analyse opportunities in the student hall market. We want to grow the portfolio and increase our exposure”, says Antonio Roncero, Head of Transactions for Spain and Portugal at CBRE GI.

Another milestone in 2017 was the consolidation of the manager in the logistics sector following the joint venture signed with Montepino for the development and promotion of logistics assets. “The initial objective of the investment in the joint venture with Montepino was €300 million, but we hope to exceed that figure soon. With the developments underway, we have 80% of the investments committed”.

Simontalero points out that CBRE already had 700,000 m2 of logistics assets under management and the agreement with Montepino will allow the firm to exceed the 1 million m2 threshold. The logistics sector is thereby becoming the manager’s second segment by volume, accounting for almost 15% of its total assets. “The differentiating feature of this joint venture is that all of the assets are going to be latest generation, which is what the main operators require”, adds Roncero.

Rental homes

In terms of next steps, CBRE GI is preparing to attack a new market, specifically, the residential rental market. “We are analysing various options with different partners, either through the development of new-build properties or by investing in a business through the purchase of portfolios”, say the directors.

For Simontalero, the size of the rental market vs. the purchase market in Spain is going to grow and will move into line with the rest of Europe. “There is latent demand that is not being fully satisfied with the current supply in the market”, he said.

For Roncero, the key is in the service. “We see an opportunity for offering a professionalised service in the rental home segment, providing security to the tenant and placing emphasis on the maintenance of properties”.

Roncero says that the objective of CBRE GI involves gaining “critical mass” in the sectors to which it is least exposed in order “to diversify and be more versatile”.

Sales

In addition to growing its portfolio with new properties, the company is continuing to rotate its assets. Specifically, last year, it sold four shopping centres (two in Spain and two in Portugal), and it is now preparing to sell three more – Gran Casa (Zaragoza), Valle Real (Cantabria) and Max Center (Barakaldo) – whose ownership it shares with Sonae.

“Our business involves identifying investment opportunities, managing them and selling them to generate returns for our investors”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

INE: Lack of Rental Homes Boosts House Purchases in Canary Islands

12 May 2018 – Canarias 7

During the first quarter of the year, 6,373 homes were sold in the Canary Islands, up by 20% compared to the same period a year earlier, and 8 percentage points higher than the national average. Every day between January and March, 70 homes were sold, 12 more per day than in 2017. Moreover, operations involving new build homes grew by more than those involving second-hand homes for the first time.

The lack of rental homes in the Canary Islands is boosting the volume of house sales in the archipelago above the national average. And that is because buying a flat is the only way of securing a home in certain areas of the archipelago, according to warnings from real estate experts.

Data published on Friday by Spain’s National Institute of Statistics (INE) confirm the trend in the Canary Islands’ real estate market. During the first quarter of the year, 6,373 homes were sold on the islands, which represented an increase of 20% with respect to the previous year. Every day between January and March, 70 homes were sold, 12 more per day than in 2017.

During Q1 2018, 1,001 more operations were closed in the Canary Islands than during the same quarter last year, according to the Statistics for the Transmission of Property Rights published by INE. At the national level, the increase was half that figure, 12%: between January and March, 128,348 homes were sold in Spain compared to 114,965 a year earlier.

In terms of the type of homes sold in the Canary Islands, for the first time since the outbreak of the crisis, the number of new home sales grew by more than the number of second-hand home sales. Operations involving new builds are fewer in absolute terms but they are growing more rapidly. Between January and March, 1,333 new homes were sold in the Canary Islands, up by 22% compared to the same period in 2017.

Meanwhile, 5,040 second-hand homes were sold, up by 17.8% compared to a year before, according to data from INE.

Price rises

House prices are going to rise by 5% on average this year, i.e. by almost twice the rate they grew by in 2017, according to forecasts from BBVA Research reflected in its magazine, the Real Estate Situation in Spain.

Similarly, the bank’s research department predicts that the volume of operations will reach 570,000 this year, up by 7% compared to 2017. In terms of new home permits, the forecast is that 93,000 will be signed by the end of the year, up by 15% compared to 2017.

In general, the potential demand for housing is expected to grow by between 1 and 1.4 million over the next 10 years, which translates into an annual average of between 95,000 and 135,000 households.

Original story: Canarias 7 (by Silvia Fernández)

Translation: Carmel Drake

Who are the Key Players in the Spanish Real Estate Market?

4 May 2018 – El Mundo

House sales are on the rise, as are house prices and rentals. Mortgages are also continuing their upward trend. Moreover, the resurgence of real estate activity is now a reality that can be seen in the increase in the number of new construction and real estate companies.

A recent report published by Gedesco, a firm specialising in financing for companies, says that one in four of the businesses created in Spain during the first quarter of 2018 belonged to the construction or property development sectors.

That represented a volume of almost 6,000 companies, 1.75% more than during the same quarter in 2017. With respect to the last three months of last year, the increase amounts to 21.9%.

Some good news to help us try to forget the fact that 142,576 construction companies disappeared between 2008 and January 2017 – both building firms and property developers -, according to the latest data from Spain’s National Institute of Statistics (INE).

In eight years, the sector went from having almost 360,000 companies to having just 216,987, a reduction of 39%. If we take the look at real estate companies, there were 106,375 in 2008, whereas there were just 67,812 by 2017, almost half.

The data compiled by INE reveals another interesting fact: the construction companies that had more than 5,000 employees in 2008 have disappeared. Although there were actually only three (including building firms and property developers), by 2017, there were just nine companies with 500 or more workers.

Names such as Martinsa Fadesa – created by the businessman Fernando Martín-, Astroc (chaired by Enrique Bañuelos) and Nozar went into the history books of the Spanish real estate sector, after failing to survive the impact of the recession.

Good health

Now, the outlook for the sector is looking healthy, in line with the increase in construction activity, which last year recorded a 28.9% increase in new build permits, to 80,786. According to the latest data from the Ministry of Development, corresponding to the first two months of this year, new home permits rose by 17.4% to 8,035 in February. Estimates in the sector indicate an output of 150,000 homes p.a. for the next few years.

For Elisa Valero, Marketing Director at Gedesco, “the construction sector is back in business”. Nevertheless, the director adds that “the creation of businesses has never gone away, if we look back a few years, the property developers were still there, but the volume of business creation was much lower”.

Whereas 5,000 companies are now being created, in 2011 – at the height of the crisis – just 2,000 were being constituted (…).

Success stories

Another report published in recent weeks by the College of Registrars in Spain also shows that real estate activity in the country is gaining momentum. In 2017, the weight of construction companies and property developers over the total number of businesses constituted rose to 20%, and the rate of growth in relation to 2016 was 14%.

But, looking beyond the figures and back to specific cases (…) we see, for example, that two of the largest property developers of the current cycle were created less than three years ago. The firms in question: Neinor Homes and Aedas, which were created in 2015 and 2016, respectively.

The origins of Vía Célere, another of the important property developers these days, dates back to 2007, at the height of the crisis. The firm emerged after Juan Antonio Gómez-Pintado sold the company that he had chaired, Agofer, and created Vía Célere.

In all three cases, the presence of funds in the shareholding of the companies has stimulated their rates of investment to purchase land on which to build new homes.

Second chances

On the list of property developers that have been created recently, highlights include Kronos Homes, Stoneweg and Q21 Real Estate.

There is another noteworthy name on the current panorama, which, although it cannot be considered a new company, is a clear example of the resurgence of a business after the crisis. The company in question is Metrovacesa. Following a facelift by its creditor banks, it returned to the stock market at the beginning of this year, after abandoning it in 2013.

The firm, controlled by BBVA and Santander, stands out since it is the largest landowner in Spain, amongst the listed property developers, with 6.1 million m2 of land spread over the whole country, with the capacity to build 37,500 homes.

Business transformations such as the one involving Metrovacesa were commonplace during the crisis and resulted in the appearance of new players on the real estate stage.

Another illustrative example has been the birth of the so-called servicers. These companies have emerged in recent years from the former real estate subsidiaries of the banks.

Altamira (whose origins are found in Banco Santander), Servihabitat (La Caixa), and Solvia (Banco Sabadell), amongst others, are fulfilling the mission entrusted to them: to take on the bank’s property, enabling them to complete their clean-ups and to divest the assets by taking advantage of the current boom in activity.

The servicers, whose main activity is located in the Community of Madrid, are also responsible for selling the properties of another one of the stars created in recent years: Sareb, commonly known as the bad bank.

In 2018, that company celebrates its 5th birthday, and during its short life, it has taken over the properties of the entities that have been intervened as a result of the bank restructuring (…).

In recent months, Sareb has also started to market its first new build developments constructed on own land that it holds in its portfolio. In addition, last week, it launched a campaign to sell 3,314 homes along the coast, 95% of which will be lived in for the first time by their new owners.

The Socimis

If there is one group of players that stands out above all of the other newly created real estate companies it is the Socimis.

The real estate investment companies started to trade on the Spanish stock exchange in 2012 as a result of a regulatory change introduced by the Government that gave them free reign to do so.

The Socimis Entrecampos and Promorent were the first to make their debuts. Six years on, there are 51 such companies and, according to some estimates, that number may reach 100 in the future. Merlin, Axiare, Hispania, Lar España, Testa and Colonial – the largest by volume – have all been created in the last four years and are now competing with property developers, such as Neinor and Aedas, on the real estate stage and on the stock market.

In April, one of the newest faces, Sareb’s Socimi Témpore, made its debut. In its first month on the Alternative Investment Market (MAB), it has seen its share price appreciate by 3.85%. When it made its stock market debut, the company’s valuation amounted to €152 million (…).

Original story: El Mundo (by María José Gómez-Serranillos)

Translation: Carmel Drake