21 January 2018 – El Confidencial
In all likelihood, this is the largest high-rise housing development to have ever been built in Spain. Not even during the boom years, when some of the biggest follies and real estate extravaganzas were committed, was a project undertaken to build a community of more than 3,000 residents. This proper new neighbourhood will involve an investment of €100 million for its developers.
The mega-urbanisation in question is the masterpiece of Aedas Homes, the listed property developer launched by the US fund Castlelake, which was the entity behind the purchase of the land on which the 1,046 homes that comprise the project are going to be built – the same number of units that the company sold during 2017. The homes are going to be spread over seven towers and the inhabitants will share all of the common areas of the urbanisation, including: a running track, a 1,000 m2 Olympic swimming pool, six padel courts, a five-a-side football pitch, a multi-sports court, a social club and an enormous private garden spanning 33,000 m2. The service charge will be very similar to the amount charged in any other urbanisation, around €80-€90 per month (…).
Not Madrid or Barcelona…but Sevilla
The striking thing about this project, in addition to its size, is its location, given that it is not found in either of the large real estate markets in Spain (…) but rather in Sevilla, which wasn’t even on the radars of most property developers, let alone large investment funds, just a year ago.
To understand the situation in this market, we have to rewind more than two decades. “During the economic boom cycle, the General Urban Development Plan for Sevilla was reviewed, which led to a lack of buildable land and a complete stoppage in terms of construction with the consequent increase in house prices. When the sector was on the up, there was no land on which to build, and so when the bubble burst, the market was paralysed to such an extent that, since 2007-2008, nothing has been constructed. The cranes disappeared from Sevilla for 10 years”, says Diego Chacón, Regional Director in Andalucía for Aedas Homes.
With the approval of the General Plan in 2006, the situation changed. Nevertheless, it was then, with four years of paperwork ahead, that the bubble burst. When the recovery happened, Sevilla was not a market to invest in. That privilege was assumed by Madrid and Barcelona, primarily. Then, Castlelake spotted this enormous plot, which had benefitted from the new General Plan, due to the opportunity that was presenting itself with demand from a middle class that had been completely expelled from the market. The vendor was a local property developer: Gabriel Rojas.
How much are these homes going to cost?
“When we looked at the land with a view to buying it, we conducted a study of the market and we identified that there was some unmet demand. There were potential buyers aged between 30 and 45 years, who were looking for high-quality, new build homes costing between €120,00 and €150,000 for two-, three- and four-bedroom homes, with good common spaces”, said Chacón, who explains that the prices in the first phase start at €111,000 – including a parking space and storeroom – in other words, at around €1,250-€1,300/m2, a very competitive price if we take into account that second-hand properties in the area cost around €1,500-€1,600/m2.
The purchase was closed in 2015 – sources in the market indicate that the transaction could have amounted to €30 million, around €350/m2 – and by the end of 2016, the plot was buildable and had been approved by the Town Hall of Sevilla. In other words, it was ready for construction work to begin.
Aedas’ strategy involves executing the project in phases. The marketing of the first tower has already begun. The first phase comprises 79 primarily three- and four-bedroom homes, almost all of which have been sold and which will be handed over in 2019. The second phase of the first tower will begin in November, whilst work on the second tower will begin after the summer (…).
Original story: El Confidencial (by E. Sanz)
Translation: Carmel Drake