Tag: residential segment

BNP Paribas Prepares to Enter Spain’s Property Development Sector

13 November 2018 – Eje Prime

BNP Paribas Real Estate already has the foundations in place to begin its activity in real estate development in Spain. The French group, which has extensive experience in this area, is preparing its structure in the domestic market to be able to increase a portfolio comprising more than 100,000 m2 of offices and more than 3,000 homes located all over Europe.

The first step taken by the company in this sense was carried out in July, when it simplified its corporate structure in Spain, as revealed by Eje Prime. At that time, the group dissolved its consultancy company (BNP Paribas Real Estate Advisory Spain) and transferred its assets and liabilities to its sister property company (BNP Paribas Real Estate Property Management Spain).

After that modification, the real estate area of the French consultancy firm had two companies in Spain: the property company and the investment company (BNP Paribas Real Estate Investment Management Spain).

The group’s Director of Development, Thomas Charvet, said in France yesterday that the real estate company is going to “accelerate” the development of assets in Europe. And Spain, undoubtedly, is one of the most mature markets in the continent in the development of office buildings and residential properties. Nevertheless, sources at BNP Paribas Real Estate España indicate that “the company has no intention of starting that activity soon”.

With experience spanning more than 40 years in property development, BNP Paribas Real Estate has constructed everything ranging from new build projects, to residences with special services to “the development of new neighbourhoods”, according to its website in France (…).

Presence in half of Europe

Spain is one of the few leading companies in Europe where BNP Paribas Real Estate has not undertaken any real estate development, yet. As well as France, the company also has a presence in Germany, the United Kingdom, Italy, Portugal and Luxembourg (…).

New faces for the new roadmap in Spain

All of the internal changes that BNP Paribas Real Estate has carried out in Spain in recent months have a common denominator: the recruitment of Frédéric Mangeant as the new CEO at the beginning of the year. The real estate firm has made several new hires since then to lead its different areas. Between May and June, Mangeant recruited five experienced executives in the real estate sector to lead the various lines of business that the consultancy firm operates in the real estate sector (…).

A giant with 33,500 homes under management in Europe

Spain could become another major market for the real estate arm of BNP Paribas. Taking advantage of the boom in the economy and, therefore, in the domestic real estate market, the French bank will put its efforts into growing in the country through its different lines of business.

BNP Paribas Real Estate is a giant in the sector, with more than 33,500 homes under management in Europe and 30.6 million m2 of real estate assets under management for third-party companies in Europe.

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

KKR, Altamar & Single Homes Launch New JV to Invest €450M in Málaga

26 October 2018 – Eje Prime

New joint venture to boost the luxury residential sector in Málaga. The funds KKR and Altamar have joined forces with the real estate company Single Homes to invest €450 million in the construction of several developments in the prime urbanisation of Finca Cortesín, located close to the Málagan town of Casares.

The plot where the residential complex is going to be built spans an area of 215 hectares and is located in the centre of the Costa del Sol, between Marbella and Sotogrande. The plan is for the joint venture to build a complex of luxury apartments and villas on this plot worth more than €200 million, according to reports from Expansión.

Single Homes is going to retain a majority stake in the company, whose long-term purpose involves launching other projects with a surface area of almost fifty hectares. The alliance with the funds will allow the real estate firm to finance and consolidate the Finca Cortesín residential complex, which already has a hotel, a golf course and two residential complexes.

The Spanish group, which has more than fifty years of experience, started to operate under the current name in 1987, following the merger of various companies. Nowadays, the company owns a portfolio of assets worth more than €450 million and land for the construction of more than 2,500 homes.

Meanwhile, with this project, KKR and Altamar are once again joining forces in Spain. In 2017, the funds teamed up with the property developer Elix to launch a Socimi specialising in the residential segment.

Original story: Eje Prime

Translation: Carmel Drake

Lar Launches Fund to Coinvest in Residential Segment in Spain & Latam

12 March 2018 – Expansión

Founded in 1975 by Felipe Pereda, the real estate developer Lar was one of the few high-profile companies during the boom that survived the subsequent crash. Having become the manager of one of the largest real estate companies on the stock market, Socimi Lar España, the company owned by the Pereda family has not been neglecting its house building activity. “We are currently working on residential projects in seven countries. At the global level, we are working on projects involving 18,000 units”, explains Miguel Amo, Director General of the Lar Group.

This extensive portfolio also includes the Spanish market, where the company has focused on the residential business, after years of investing in shopping centres (it has a clause not to invest in commercial assets beyond the Socimi). “The first thing we did when we saw the signs of recovery in the market in 2013 was to team up with Fortress to acquire a portfolio containing almost 1,400 homes and plots of land spread all over Spain from Sareb. With that batch, we created a FAB (banking asset fund), which expires this year, with the delivery of the final homes. Next, we entered the luxury business, with Lagasca 99, a project that we are managing and in which we also hold a stake through the Socimi. And, with the market recovering, we saw the opportunity for new build projects”, said Amo.

First fund

Last year, after selecting several plots of land, Lar opted to create a fund, called Acacias Inmuebles, to promote seven projects with 450 homes in total. “The vehicle was created in July 2017 with €35 million and we have now invested 100%. We manage it and we own 30% of the vehicle (…) and the rest is owned by investors from Spain and Peru (…), explains the head of Lar.

In total, Acacias Inmuebles is going to promote five primary residence projects over the next three years in Madrid, Valencia, Málaga, Torremolinos and Sevilla, and two other second-home developments in the Malaga towns of Benalmádena and Mijas (…).

The success of that first vehicle has caused the real estate company to launch a second fund. “We are asking for a minimum capital investment of €500,000. It is a fund without any intermediary liquidity, but which will distribute dividends when the projects are handed over and the investments will be recovered within a period of between three and five years, with an approximate annual return of 12%”.

Besides Acacias and Lagasca, Lar owns other plots for the development of an additional 400 homes. “They are located in Móstoles (Madrid) and Valladolid; in the case of the latter, we will likely sell off some of the land to be developed by third parties”, said Amo. In addition to its activity in Spain, the majority of Lar’s developments are based abroad, primarily in Latin America.

Specifically, Lar, which was one of the first Spanish real estate companies to branch out overseas (in 1998) has 9,000 homes under construction in Mexico, another 5,000 in Peru and 1,300 in Colombia (…) “We are also building in Romania. We always do it by ourselves, in conjunction with a local team, and we are very happy with the results so far”.

Revenues

Thanks to all of these projects, Lar had forecast revenues of between €400 million and €450 million in 2017, which would be added to the fees received for the management of the Socimi. “2017 was a good year in all areas, we sold 1,500 homes in private contracts and 1,300 were notarised. This year, we will hand over 1,500 homes, of which between 200 and 300 will be in Spain”, highlights Amo.

Lar is also committed to buying land for its subsequent management. “In Spain, we are also going to intensify our investment in land. We think that developable land is running out all over Spain, after 10 years with no investment and, so there is a need to “manufacture” land. We want to acquire plots for at least 1,000 homes and if we can buy land for 3,000 units, then even better”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

CBRE: Investment in Residential set to Overtake Offices in 2018

16 February 2018 – Eje Prime

The Spanish real estate sector is going to continue on its path to recovery in 2018. The real estate market is expected to continue to spark great investor appetite although some of the cards may change their order in the deck. For example, the residential sector is set to climb to the top of the ranking in terms of investment demand for the first time since the change in the cycle, whereby surpassing the office segment. Together, the two segments look set to ensure that the sector maintains an investment volume of around €13 billion for the year as a whole, just like it did in 2017.

The keys for the continuation of the positive trend in the sector are the “strong economic forecasts for Spain, favourable financing conditions, the cycle of maturity in the market, the products for sale in the pipeline and the corporate operations underway”, according to the consultancy firm CBRE in its Real Estate Outlook for 2018 report.

The housing market will reign in the real estate sector this year, attracting one-third of all investment in the sector as a whole, according to the consultancy firm and experts consulted by CBRE. Nevertheless, the office segment, which will be demoted to second place in the investment ranking, will not be far behind the residential segment in absolute terms, accounting for 27% of total investment. The remaining third of the investment volume is expected to be split between retail (18%) and logistics (12%), as well as less significant amounts in hotels and other types of assets.

The recovery of the residential sector, therefore, will be strengthened over the coming months, according to the consultancy firm. House prices will continue to rise across Spain in 2018, with rises of around 5% and 6% p.a., and the highest increases in the two most dynamic markets, Madrid and Barcelona. CBRE forecasts that demand for housing will amount to between 550,000 and 570,000 units, primarily second-hand homes.

Nevertheless, following residential development growth in 2017, “we can establish that the trend in the sector will be positive for at least the next three years and that the construction output levels will be absorbed by demand (…), says Samuel Población, National Director of Residential and Land at CBRE Spain.

The executive explained that the sector is immersed in a process of concentration amongst the property developers, where “the ten largest property developers in the country will account for more than 15% of domestic output”. Of those, the director highlighted the listed companies Neinor Homes, Aedas Homes and Metrovacesa, as well as Aelca, Vía Célere, Pryconsa, Amenabar and Kronos, amongst others.

In 2018, the promotion of homes will continue to boom, supported by the high existing demand, with 100,000 permits forecast for the year as a whole. Moreover, Población estimates that, between now and 2020, new homes will reach a rate of demand of between 130,000 and 140,000 units. In terms of the large cities, Madrid stands out “with an average need for 25,000 new homes per year” (…).

Development of new offices and logistics spaces 

Offices and logistics are two segments that grew at record rates in 2017. Above all, in Madrid, where both segments experienced a year of great growth, and that boom is not expected to decrease this year. According to the report, the office market will continue to progress with its recovery (…).

For the Catalan capital, more surface area will be handed over this year than in any year since 2010, most of it in the form of new build properties. Even so, Barcelona will remain well behind Madrid in terms of leasing volumes, given that CBRE estimates that leasing volumes in the Spanish capital will amount to 600,000 m2, compared with 350,000 m2 in the Mediterranean city (…).

In the case of the logistics sector, the segment is currently one of the most attractive markets for investors. After registering record figures in 2017, with more than 1.5 million m2 of space leased, this year, more land will be added to the stock. CBRE estimates that for the sector in Madrid, its main stronghold, 850,000 m2 of space will be leased. That would result in an increase in investment in the logistics sector, which could amount to €1 billion in 2018 (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Domo Activos’s Socimi Approves €15M Capital Increase to Buy Land

12 December 2017 – Eje Prime

Domo Activos is getting down to work with its growth plan. The largest property developer Socimi, which is aimed at medium-sized investors, has approved a €15 million capital increase at an Extraordinary Shareholders’ Meeting. The funds will be used to purchase land in Spain for the construction of new homes.

The company has already identified purchase opportunities in a number of cities in Spain, according to José Luis Alba, the company’s Area Director, speaking to Eje Prime. “We will focus these acquisitions on Madrid, Málaga and Valencia in the first instance, but we are also searching for plots in Sevilla, Córdoba, Granada and Zaragoza”.

The Socimi’s capital increase will be undertaken through the issue and launch into circulation of a maximum of 7.5 million shares, granting a nominal value of €2 to each one of them.

Currently, the first project promoted by Domo Activos is the development being constructed in Madrid, in the Ensanche de Vallecas. This building will have eighty homes allocated for rent.

Original story: Eje Prime

Translation: Carmel Drake

Stoneweg Still Has €200M To Invest In Spain

10 November 2017 – El Economista

The Swedish real estate investment platform Stoneweg, founded at the beginning of 2015 by the Spaniards Joaquín Castellví (pictured below, left) and Jaume Sabater (pictured below, right) in Geneva, has an investment plan for Spain amounting to €750 million. “So far, we have spent €550 million and our intention is to continue looking for opportunities in Madrid, Barcelona and along the coast, to spend the remaining balance that we have left of the €200 million”, explains Castellví.

Both partners left the bank Edmond de Rothschild to embark on this new venture, which, in just two years has established a presence in Italy, the USA and Switzerland, as well as in Spain. In the latter, its strategy is based on property development, including both new build and renovation projects, primarily residential, which currently account for 89.5% of its portfolio. In this way, the firm is currently working on the construction of 1,600 homes and “between October and November, we will be delivering the first units”, said the Director. He added that in the case of Madrid, the firm is looking for opportunities in the centre, in neighbourhoods such as Moncloa and Arguelles, “where there is a latent demand for a type of product that has not been built for many years”.

Stoneweg’s latest project in the centre of the Spanish capital is in the former Provincial Court building in Madrid, located on Calle Ferraz, where it is going to build 25 homes. “We have already started to market the homes and in the first week alone we have sold five units”, said the Director, who points out that the prices in other neighbourhoods, such as Salamanca and Chamberí, do not fit with their strategy, since they are looking for average returns of between 15% and 20%.

In its residential business, Stoneweg is also working by means of one-off partnerships with other property developers. Such is the case of its largest operation in Móstoles, where it has purchased a plot land for 300 homes together with ACR.

Also positioned in offices

The firm also holds positions in the office sector. In Barcelona, in fact, it is working on the largest business development in the city, the Luxa complex, comprising two buildings, which have already been pre-leased to Amazon and WeWork. “We sold those two properties to Catalana Occidente and we are now searching for a tenant for the WIP building, also located in 22@, measuring 4,500 m2. Once it has been leased, we will put it up for sale”.

The Director is optimistic because he acknowledges that “clearly, all the noise and uncertainty that we are currently seeing in Cataluña is not having any effect; we continue to have faith in the fundamentals of the city (…)”.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Meridia Capital To Launch A Fund Specialising In Rental Housing

9 November 2017 – Eje Prime

Meridia Capital is taking another step forward in its real estate adventure. The company, founded and chaired by Javier Faus (pictured below, far right), is considering entering the residential rental business. To this end, the group has already negotiated the cost of capital and returns required to raise a new fund, as the director explained on Tuesday at the Economy Circle in Barcelona.

The fund will be aimed at institutional investors who work regularly with the investment fund, according to Crónica Global. The businessman acknowledges that it will be a tough market to enter, but he considers that it is “basic” for the future of this type of real estate vehicle.

At the same meeting, Pere Viñolas (pictured above, second from left), CEO at Colonial, said that the entry of listed real estate companies into the rental housing market in countries such as Germany has boosted the sector and helped to adjust prices.

Original story: Eje Prime

Translation: Carmel Drake

Private Housing Developments Reactivate Sevilla’s Crisis-Hit Neighbourhoods

26 October 2017 – Sevilla ABC

The new residential expansion zones planned for Sevilla and its metropolitan area will move from paper to reality over the next five years. The economic recovery and express reactivation of the property sector will allow neighbourhoods to be established once again, after the crisis reduced many of them to isolated developments without any services or public infrastructure.

Perhaps the clearest example of this new panorama is Entrenúcleos, in Dos Hermanas, where plans are afoot to construct 2,500 homes. The project has been entrusted to Insur and BBVA, which has already started to market the first phase, involving almost 300 properties. That development will be built in parallel to that of the social housing blocks promised by the real estate firm Altamira – a subsidiary of Banco Santander – and the Ferrocarril group.

The growth of this Nazarene enclave was originally reflected in the PGOU approved in 2002, with a view to creating a neighbourhood with more than 20,000 inhabitants, almost a small city between the urban centres of Dos Hermanos and Montequinto.

The latter nucleus has also undergone significant residential expansion  in recent times thanks to the company Bekinsa, which has constructed several developments in the area around Avenida de Europa, the last remaining space left to build on, next to the Metro stop, where a couple of urbanisations have already been sold, for delivery this year, and where off-plan apartments are being sold, for delivery in 2019.

More buildings are going to be built next to these homes on plots, located next to the shopping centre, which have been acquired by Quintos, S.A., with capacity for 800 two-, three- and four-bedroom homes.

In the Andalucian capital, the cranes are already appearing in the neighbourhoods on the outskirts, where there are still large blocks of land left to populate. As set out in the Urban Development Plan, the city will continue to grow eastwards, with a new recently announced development. It will be constructed by the Madrilenian company Vía Célere, which has acquired the former plots of the real estate company Osuna after they ended up in the hands of BBVA. The investment has exceeded €26 million and will allow for the construction of 1,700 homes on the land closest to the water park, on the Airport Industrial Estate (…)

New neighbourhoods

The property developer Metrovacesa is also working on a residential plan of a similar scale on land in Palmas Altas, taking advantage of the interest that the new shopping centre will generate there and the recent agreement that it has reached with the Town Hall to push ahead with the initiative (…).

The final area of residential expansion in Sevilla is Hacienda Rosario, located next to Torreblanca, where 1,977 homes are due to be constructed around a large park, which will form the lungs of the new neighbourhood. Of those, around 800 will be social housing properties and the remainder will be private homes (…).

Another aspect that has caught people’s attention is the decided commitment from the American investment funds to the real estate sector in Sevilla. Several, such as Värde Partners (through Vía Célere) and Aedas Homes, which is leading the project in Hacienda Rosario, will be looking to the Andalucian capital to push ahead with their plans over the next five years.

Original story: Sevilla ABC (by Elena Martos)

Translation: Carmel Drake

Servihabitat: Rental Prices Will Rise By 2% Before Year End

26 October 2017 – La Vanguardia

Residential rental prices will rise by 2% on average in Spain during the second half of the year, according to the third edition of the “Residential rental market in Spain” report, compiled by Servihabitat, which also forecasts that the trend will continue to be “positive” into the beginning of 2018, despite the fact that some provinces “have stalled”.

The platform says that greater geographical mobility, the popularity of the rental culture amongst young people and the impact of tourism are the factors that are continuing to drive up rental property prices.

In this way, according to Servihabitat’s data, almost 70% of renters in its areas of operation are aged between 26 and 35 years, a figure that increases to 90% if that range is extended to include people aged up to 40 years old.

Currently, 52.3% of homes that are rented out are found in buildings with 10 or more homes; 66.1% are between 46 m2 and 90 m2; and 56.4% were constructed more than 35 years ago.

The average time that it takes to rent a home from when it becomes available on the market has decreased from just over two months on average in Spain to 1.7 months, in just six months.

Nevertheless, in the autonomous regions of Cataluña and Madrid, it takes a maximum of 1.5 months to rent out a home. In fact, in cities such as Madrid and Barcelona, the lag time can be as short as a few days.

Spain currently has 97,900 rental homes available, down by 17.5% compared to a year ago. In other words, there are currently 2.5 homes on offer for every 1,000 inhabitants or 5.3 properties for every 1,000 households.

Servihabitat believes that the progressive reduction in available homes is explained by a reduction in the average length of time it takes to rent out a home and due to “the shortage of residential stock being allocated to  the rental market”.

Supply is most abundant, taking into account the population and the number of households, in provinces such as Salamanca, Alicante, Ciudad Real, Segovia, Burgos and Cantabria.

The following autonomous regions have a supply of more than 13,000 homes: Andalucía, Comunidad Valenciana, Cataluña, Cantabria, Castilla y León and Castilla-La Mancha.

Spain’s most expensive regions: Balearic Islands, Madrid and País Vasco

On the basis of price per square metre, the Balearic Islands, Madrid and País Vasco are the regions where the average rental price is the highest.

In general, in Spain, the average price of a home measuring between 80 m2 and 90 m2 is €620, up by 3.3% compared to 6 months ago.

The average gross return from rental homes in Spain amounts to 5.5%, a figure that is even higher in the autonomous regions of Cataluña (6.1%), Madrid and the Balearic Islands (5.8%) and the Canary Islands (5.7%).

The study also highlights that the evolution of the rental market in Spain is characterised by “a positive trend, although it displays different behaviours depending on the region analysed”.

In this way, Servihabitat considers that the proposals aimed at increasing the stock of public housing for rent will contribute to a “greater equilibrium” between the purchase and rental markets as residential options in the country.

The Director-General of Servihabitat’s real estate business, Juan Carlos Álvarez, believes that the rental market represents an “attractive prospect for the arrival of new investors dedicated to this activity in Spain”, but he considers that the trend in the future will involve “necessary regulation” to protects both landlords and tenants alike.

He also thinks that this regulation should be accompanied by “a strong commitment” to the rental market by institutions, through a “decided” institutional investment in the rental market.

Original story: La Vanguardia

Translation: Carmel Drake

Bilbao To Build 13,000 New Homes In Growth Areas

16 October 2017 – El Correo

Bilbao is fine-tuning where the city is going to grow in the future. The next General Urban Development Plan (PGOU), the instrument that will regulate the city’s development over the next thirty years, is reserving land on which 13,000 new homes are going to be built, in some of the most prominent areas of the city.

Specifically, it confirms the construction of 8,500 homes in Zorrozaurre, Punta Zorroza – a project that has not been defined yet – and Bolueta, where a lack of demand has forced the local government to convert a residential tower that was already designed in the plans into VPO (social housing) properties. The remaining 4,500 homes are planned for Elorrieta, Olabeaga, the Irala area –spread across industrial units still pending reclassification – and the “lid” of the Abando underground station.

The preview of the PGOU, which was unveiled to the public on Friday by decision of the local PNV-PSE Government, considers that the figure of 13,000 homes has “the capacity to support a similar number of inhabitants” to the number living in the city today – 342,481 residents, according to the latest report from Eustat. The population, which has been ageing and in progressive decline for the last decade, represents one of Bilbao’s future challenges.

Another challenge facing the next PGOU is the balance of social housing and the rate of growth that respects the environment, especially in the case of mobility. In this sense, the urban planning rules include several operations to eliminate obstacles, which have been requested repeatedly by citizens: the Rekalde section of the motorway viaduct – a project that also depends on the Diputación – and the placing underground of roads in the neighbourhoods of Zorroza and Olabeaga. The latter neighbourhood has opted to “exclusively” develop residential when the goods line disappears.

Original story: El Correo (by José Mari Reviriego)

Translation: Carmel Drake