Aedas Revolutionises the Property Development Sector by Building 500 Turnkey Homes for Ares

12 April 2019 – El Confidencial

Aedas Homes has decided to launch a new line of business by building complete housing developments for other companies. In this way, the listed property developer hopes to generate value from its production over-capacity; it anticipates recording revenues of around €70 million from the initiative.

In this vein, the company led by David Martínez has reached an agreement with the fund Ares to build 500 homes in its name in three different locations: Torrejón de Ardoz, Alcalá de Henares and El Cañaveral (all in Madrid).

This is the largest turnkey project in the sector since the outbreak of the real estate crisis, a decade ago and as such, represents a real milestone.

The three largest listed property developers in Spain, Neinor, Aedas and Metrovacesa, are all living by the famous mantra “reinvent yourself or die”. As such, they are expanding their operations as they seek to actually generate the high turnover figures that they promised when they made their stock market debuts.

With this latest announcement, Aedas is sending a clear message to its competitors. It has over-capacity in its production model, which means that it can handle turnkey projects on a large scale, as well as deliver the roadmap that it is already committed to.

With the additional 500 homes from this project, Aedas Homes could end the year with more than 3,000 units launched, compared with the 2,580 initially planned for the year.

Meanwhile, Ares Capital is immersed in its commitment to the Spanish real estate market, with a particular focus on the residential segment, with homes both for sale and for rent.

Original story: El Confidencial (by Ruth Ugalde)

Translation/Summary: Carmel Drake

ASG Homes Sets its Sights for Growth on Andalucía

12 March 2019 – ABC Sevilla

ASG Homes, which manages and develops projects for the British fund ActivumSG, owns a stock of land on which it could build 5,000 homes in Spain, making it the seventh or eighth largest property developer in the country by land bank. It largest regional presence is in Andalucía, where it owns land on which to build 1,700 homes, with Sevilla and, specifically, Sevilla Este, accounting for the majority of those plots, where it has capacity for 1,200 homes.

According to the CEO of ASG Homes, Víctor Pérez Arias (pictured above), his firm currently has 600 homes under construction in Sevilla, Estepona and Marbella, whose prices will range between €140,000 and €300,000. Moreover, it is also looking to repeat its activity in Sevilla and so is searching for land to purchase along the coasts of Málaga, Cádiz and Huelva. It is also interested in opening a hotel in Sevilla.

According to Pérez Arias, there is a shortage of buildable land across Spain, which is causing demand to exceed supply, and as such, prices to increase. The delays involved in processing building permits to convert developable land into finalist land is not helping either. In some cases, rather than taking up to 6 months, as permitted by law, those procedures are taking up to 14 or 15 months.

In light of the high level of demand in the rental market, ASG Homes is starting to work on projects in the residential rental market. Besides homes, ASG also promotes shopping centres, student halls, hotels and serviced apartments.

Original story: ABC Sevilla (by María Jesús Pereira)

Translation/Summary: Carmel Drake

Pelayo Capital to Create a New Breogán Park with an Investment of >€60M

15 January 2019 – Eje Prime

Pelayo Capital is throwing itself into the Spanish retail sector during its second year of life. The Galician family office, which is currently working on the conversion of the Dolce Vita shopping centre in A Coruña into a retail park, is planning to replicate the project in other Spanish cities with an investment of more than €90 million, according to Íñigo Veiga, CEO of the company, speaking to EjePrime.

Similarly, the group wants to add high street stores to its portfolio of assets during the course of this year. In this sense, Pelayo Capital is on the hunt for properties located in Madrid, Galicia and Asturias, in particular, in which it plans to invest at least €1 million. “We are not ruling out other cities either, given that our strategy involves working hand in hand with retailers”, said the director.

Breogán Park is the company’s star project, an asset in which the company is going to invest €60 million and which will be inaugurated in the spring of 2021. It is the first project undertaken in Spain to involve the demolition and conversion of a shopping centre into a retail park. “The initiative that takes advantage of the demand for these types of assets in many cities around the country”, said the executive.

The surface area, spanning 45,000 m2, will have 2,500 parking spaces and used to house the Dolce Vita shopping complex until 2014. “It is a great opportunity to build a retail park in A Coruña; we are not going to find any others because there is no land available in the city on which to build a retail park of this size”, explained Veiga.

Pelayo Capital is looking for ways to handle the maturity of shopping centres and the boom in e-commerce in Spain by committing itself to retail parks and commercial premises located on the most prime streets. For this reason, the company has just purchased its first asset at number 103 Calle Hermosilla in Madrid, revealed the director.

“We do not have an investment objective or commitment, because we believe that pressure can lead to errors”, explained Veiga. Saddled between Galicia and Madrid, Pelayo Capital has the support of investors with different profiles and is not averse to the idea of backing the logistics or residential markets in the long term.

The company was created in 2017 hand in hand with Breogán Park, a project that launched it into the midst of the Spanish real estate sector. Although it is also working on the rehabilitation of a residential building in A Coruña, Pelayo Capital has placed its focus on retail and for that reason, it has hired Luis Íñiguez, former director of JLL’s retail division in Spain, as senior advisor to the company.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

Stoneweg Plans to Build New Homes in Barcelona & along the Costa Brava

10 October 2018 – Eje Prime

Stoneweg is continuing to grow its portfolio of projects in Cataluña. The Spanish-Swiss fund is strongly committed to the territory and has already announced new developments in Barcelona and the Costa Brava.

Two of the most important projects are going to be developed on two prime streets in the centre of Barcelona, namely Rambla Catalunya and Pau Claris. The company led by Joaquín Castellví and Jaume Sabater declined to share more details about these future homes, according to Expansión. The real estate company is going to unveil the two developments at the next Barcelona Meeting Point, which will be held in the Catalan capital between 25th and 28th October.

Meanwhile, in L’Hospitalet de Llobregat, the fund is going to build two towers containing 276 homes on the site of the former Cosme Toda factory, a plan that was announced in March, when a €370 million investment plan was registered to build 800 new homes in Cataluña.

The sought-after 22@ district for the office market is also of interest to the company, which is planning a development on Calle Llull. In the meantime, on the Costa Brava, Stoneweg has started projects in the residential market in Palamós, Platja d’Aro, Roses and Begur.

Original story: Eje Prime 

Translation: Carmel Drake

German Fund Manager Aquila Capital Launches its own Property Developer in Spain

1 August 2018 – El Economista

The German fund manager, Aquila Capital, is demonstrating its commitment to Spanish property by launching a new property developer called AQ Acentor.

Until now, the firm has worked in Spain by delegating its development activities and in partnership with other real estate companies such as Inmoglacier, with which it has undertaken several projects. “The strategic partnership with the property developer has been positive and has resulted in the construction of three successful real estate developments, which have contributed to Aquila Capital’s expansion plans in the Spanish market under its own brand, AQ Acentor”, explains Sven Schoel, CEO of the German manager in Spain.

Aquila has been operating in Spain since 2014, focusing its business on the real estate sector, with projects worth more than €800 million. With the creation of this new brand, the firm has incorporated a management team to boost growth through in-house development.

AQ Acentor has been created with more than 3,000 new homes under construction, of which around 500 will be handed over during the course of this year. Currently, the firm is working on residential projects in metropolitan areas, primarily in Madrid, Barcelona, Málaga and Valencia.

“The company has a multidisciplinary team comprising more than 40 professionals located in offices in Madrid, Barcelona and Málaga”, explain sources at the firm.

“The creation of AQ Acentor responds to our firm commitment to the Spanish market and is backed by a pipeline amounting to €1 billion over the next five years”, specifies Schoel.

The manager is also present in the logistics market in Spain, one of the other real estate segments that is experiencing a boom, besides the residential segment. In that case, it has launched an investment plan amounting to between €350 million and €400 million for the Iberian Peninsula and Italy.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Gestilar Launches Plan to Address Mallorca’s Scarce Housing Supply

6 July 2018 – Eje Prime

Gestilar is thinking about the Mediterranean. The property developer has started the summer by marketing the first 89 homes that it is building in Mallorca. As part of its €123 million investment plan, the real estate company is going to build 400 homes over the next few years in Palma across three developments in the Nou Llevant area, to the south-east of the city.

Mediterrània 1, the residential development through which the real estate firm has arrived in the Balearic Islands, is going to comprise homes with two, three and four bedrooms. It is designed for locals, both first-time buyers as well as those looking to reposition”, explain sources at Gestilar speaking to Eje Prime.

On an island with a “shortage of structural supply and economic stability”, Mallorca has become “one of the most desirable markets in Europe for investing in the real estate sector”, according to Raúl Guerrero, Director of Developments at Gestilar.

At the end of 2017, the property developer led by Javier García-Valcárcel purchased three plots in the Balearic capital with a total surface area of 55,300 m2. “We set our sights on Palma due to the shortage of new housing projects that have been built there in recent years”, explains Guerrero, who highlights the “the pent-up and unfulfilled demand” that exists in the city.

The first of the developments comprises several four- and seven-story blocks with their ground floors allocated to commercial premises. The design of the project has been entrusted to the Spanish architecture studio L35, which has created an urbanisation with substantial common areas.

Located 500 metres from the beach and the port of Portixol, Mediterrània 1 will have communal spaces with a swimming pool, a gym and a games area for children. The construction of the first phase is due to start between the last quarter of this year and the first quarter of 2019, with the aim of handing over the first keys before the end of 2020.

“There is space for new projects in Palma” 

Gestilar’s interest Palma is not the first from a Spanish residential property developer in recent months. A few days ago, the listed company Aedas Homes put on the market its fourth project in the Balearic capital and several other companies are working to begin projects this year.

This growing interest in Mallorca comes in response to the sales rates on the island that place it at the top of the ranking in the residential sector, behind Madrid and Barcelona. “It is still too early to assess the rates of our own developments, but for the last few months, we have been monitoring and updating our market research, and the results of this analysis reveal a high rate of marketing in the area”, explains Guerrero (…). According to the director of Gestilar, “there is space for new projects in Palma”, where the property developer has already opened an office.

In this regard, the property developer believes that Palma is going to be one of the cities, like Madrid, Barcelona and Bilbao, that will look to improve its positioning abroad. In the Balearic capital, we are seeing a recovery in terms of property development activity, where a significant number of developments have started to be marketed between December 2015 and October 2017, which means that home completions are now growing, according to Gestilar (…).

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

CBRE: House Prices Will Rise by 6% in 2018

25 May 2018 – Expansión

Good omens for the Spanish residential market. After experiencing a serious setback five years ago, with a significant decline in demand and, as a consequence, a decrease in prices, the housing market is now well on the road to recovery, with a positive outlook for the year ahead. In this sense, for 2018, the predictions are optimistic, with an estimated increase of 6% in average house prices at the national level, according to data compiled by the real estate consultancy firm CBRE.

“We expect strong growth over the next six to twelve months, which will reach 6% compared to the current YoY rise of 5% and, then growth at a lower intensity from then on of between 3% and 5% for 2019”, says Álvaro Martín, Head of Research at CBRE.

This growth rate of 6% will be more acute in the large cities such as Madrid and Valencia, as well as in tourist towns such as Málaga and the Balearic Islands, where the YoY increases will reach up to 10%, according to the consultancy firm.

“In large cities such as Madrid and Barcelona, we have seen price tension but prices are still 50% lower than the average prices over the last ten years”, explains Samuel Población, National Director of Residential and Land at CBRE España. According to estimates from the consultancy firm, house prices in Madrid will increase by between 8% and 10% this year with respect to 2017.

Despite these price increases, the absolute values are still well below those seen during the real estate boom. In this way, although house prices have been rising at the national level since 2014, the intensity of that growth has been moderate, with YoY increases of around 5%. “In recent years, price rises of between 5% and 6% have been recorded, but during the boom, those figures reached 12%”, recalls Población.

Nevertheless, there are exceptions to that moderate rise: such as the case of towns like Madrid, Barcelona and Palma de Mallorca, where new build house prices have risen by 23%, 34% and 13%, respectively with respect to the historical minimums recorded at the beginning of 2014. Meanwhile, in the second-hand segment, the increases registered amount to 28% in Barcelona, 27% in Palma and 21% in Madrid (…).

Transactions

The price rises are being accompanied by an increase in demand, which, currently, is focused on those buyers who are looking for homes to reposition themselves or as investments.

“House sales have grown at a constant rate since 2015, but they have been very oriented towards the second-hand market, which accounted for 90% of transactions in 2017, due to the lack of supply in the new build segment and the absorption of much of the unsold stock”, says Población (…).

The consultancy firm predicts that demand for housing will continue to grow, with more than 575,000 transactions being closed in 2018, up by 8% compared to the previous year.

Of those operations, foreign buyers will retain an important role, above all, in the market for second homes. “The bulk of that demand is concentrated around five provinces, with established tourist infrastructure: Alicante, Málaga, Barcelona, the Balearic Islands and Tenerife, which accounted for more than half of the average annual volume of transactions by overseas citizens between 2006 and 2017”.

Another buyer cohort will be investors who buy properties to let them out, taking advantage of the growth in the rental market, which currently accounts for around 22.5% of the total stock of Spanish households. “The expansion of the rental market is attracting lots of investors, something that wasn’t happening ten years ago, given that they can now achieve returns of between 4% and 6% on average”, says Martín. By city, in Madrid, the average gross return amounts to 4.7% p.a., compared with 5.4% in Barcelona and 5.8% in Sevilla.

“If we also consider gains from the appreciation in property values, we see yields of up to 9% in the large cities”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Grosvenor Will Invest €200M to Double its Portfolio in Spain by 2022

25 April 2018 – Eje Prime

The British group Grosvenor is taking advantage of the strong performance of the real estate sector in Spain. The company, which has just presented its financial results for 2017, revealing a record profit of GBP 143.5 million (€163.8 million), has revised its plans for Spain. It is now going to spend more than €200 million on purchases, together with the Malaysian group Amprop, with which it owns a joint venture in the country. The group aims to double its portfolio of assets between now and 2022, according to James Raynor (pictured below), CEO of Grosvenor, speaking to Eje Prime.

“In 2017, we increased our potential in the residential sector, specifically in Madrid, where we undertook six acquisitions for development”, explained Raynor. “Our intention is to transform under-utilised assets into properties that contribute to the growth and dynamisation of the neighbourhoods in which they are located, and we have faith that our first projects in the districts of Salamanca and Chamberí will do just that”, he added.

Grosvenor’s most ambitious plans in Spain include its new purchases. The group, which now employs eight people in the country after it opened an office in Madrid, has increased its investment capacity to €200 million through its joint venture together with Amprop, created last year to build luxury homes in Madrid. “We will also evaluate investments outside of the joint venture”, added the director.

The alliance with Amprop set itself the objective of backing value-added investments, where it assumes high risks but also assigns them high profitability. For these types of projects, the two groups have allocated a budget of €70 million, although they have reviewed the numbers thanks to the “opportunities being offered by the Spanish market”, explained the executive.

Grosvenor evaluates its last year in Spain as “a good year”. (…). “Having expanded our team, we have more power to unlock opportunities that would have been impossible without the experience of professionals in the sector. We have also been making progress with projects such as the one we have underway at number 53 Jorge Juan”, explained Raynor.

Over the coming months, the British group is going to continue “to look for investment opportunities in the main neighbourhoods of Madrid”. “We think that this is the perfect time to invest in residential developments in Spain and in repositioning opportunities, although we are also open to the acquisition of mixed-use assets, as well as retail properties and offices”, says Raynor -; “As an investment company, we have a diverse portfolio and extensive experience in all of the real estate sectors, and so we will take advantage of that know-how to find the most appropriate opportunities to suit us (…).

The fund has been led in the Spanish market by Fátima Sáez del Cano since 2007, although its operations in the country date back to 1996. The director leads the fund specialising in the office and commercial sectors, which is also responsible for the management of the funds and assets. Some of the properties under Grosvenor’s management in Spain include the Islazul shopping centre in Madrid and the Anecblau complex in Barcelona (…).

In addition, in recent months, Grosvenor decided to add new blood to its management team by hiring more directors. In September, the group recruited Javier García as the new Technical Director for the Spanish market. The director is responsible for the technical management of operations in Spain, from the control of the design to the monitoring of project costs and deadlines (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Lennar’s Socimi Al Breck Sells 14 More Assets for €11M

19 April 2018 – Eje Prime

Whilst last year was marked by investments on the part of the Socimis, this year is being marked by divestments. Lennar Corporation is divesting in Spain again and has closed fourteen operations to sell properties through one of its Spanish Socimis, Al Breck, for €11 million, according to a statement from the company.

The company has carried out the transactions through the company Rialto Capital Management, an investment vehicle headquartered in Luxembourg, which Lennar uses to carry out its real estate operations in Europe and the only one that has a stable structure in Spain.

The company divested the properties between 16 February and 12 April, generating a gain for the company of €5 million. This divestment follows another carried out in January when it sold four assets for €3.5 million.

Lennar Corporation made its debut on the Alternative Investment Market (MAB) with Al Breck at the end of November 2016 (although it commenced activity in Spain in December 2014), with a stock of around 639 rental homes located in the centre of Madrid. The Socimi created its asset portfolio through the purchase of a portfolio from Segurfondo Investion in December 2014.

Specifically, the Socimi’s assets are located in the centre of the Spanish capital (in the Centro, Salamanca, Chamberí and Chueca districts), as well as in La Moraleja and in towns close to Alcobendas and Torrejón de Ardoz. The portfolio also contains retail premises and offices. According to the IPO prospectus, the market value of the asset portfolio at the time of its stock market debut was €110.52 million.

The Socimi made its stock market debut with a business plan that involved generating value from its portfolio, in other words, selling all of its homes within a 5-year period, ending in December 2020. The company has now initiated this divestment process with the sale of these first assets.

Al Breck’s strategy

Specifically, the company’s plan involves investing in improvements in homes “to increase their yields and increase their occupancy rates to stable levels, and then implementing an aggressive rental strategy that includes, where necessary, reducing the rents and making concessions to tenants to improve the cash flow conditions”.

Subsequently, according to the group’s IPO prospectus, “after improving the occupancy rate, the objective is to keep it stable and start to progressively increase the rents in accordance with the improvements made to the properties and market prices”.

Finally, the Socimi plans “to optimise the value of its portfolio by selling assets individually or in batches, when the demand and price so dictate, and once the minimum ownership term of three years has passed in each case”, according to the firm in its brochure.

In addition, the company launched a second Socimi, Ceres Real Estate Socimi, at the end of last year. Although for the time being, that entity’s activity has been very limited (it does not hold any assets in its portfolio), the sole administrator of the company is Rialto Capital.

This new Socimi is, in turn, the heir of Clearfield Invest, a firm constituted just over two months ago and whose administrators form part of the TMF Group’s team in Spain, a company specialising in the provision of services for all kinds of companies.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Sareb Selects Aedas, Vía Célere & Aelca as the Finalists for its Property Development Plan

18 April 2018 – Eje Prime

Sareb is closing the loop in its casting session to find a property developer with which to partner up to develop its large land bank. Aedas Homes, Vía Célere and Aelca are the three companies that have been chosen by the entity as the finalists of the project to which the bad bank is going to transfer a portfolio of buildable land worth more than €800 million; that will represent its contribution to a non-monetary capital increase, and will see it become a minority shareholder in the chosen property developer.

Sareb’s plan is to enter the residential market hand in hand with an established Spanish property developer and that firm must be listed on the stock market. That final point is important for Vía Célere and Aelca, given that neither of which have rung the bell on the stock market yet, although they both plan to make their debuts before the end of 2019.

The operation being managed by the company led by Jaime Echegoyen is the largest by volume of all of those undertaken during the bad bank’s six years of life; the entity’s balance sheet largely comprises assets proceeding from the banks following the crisis, according to Cinco Días.

Sareb initiated conversations with up to six property developers and has cut the shortlist down to these three. The idea is to choose a strategic partner in the residential market within the next few months.

In terms of the distribution of the land bank that will form part of the project, the plots are located in Madrid, Cataluña, the Costa del Sol, Levante and Euskadi, as well as in some of the provincial capitals in Galicia, Andalucía and Castilla y León, amongst others.

If the project goes ahead, the operation will become the largest ever to be carried out by the entity, exceeding the €553 million that it transferred to Goldman Sachs through Portfolio Eloise.

Original story: Eje Prime

Translation: Carmel Drake