ASG Homes Negotiates the Sale of 1,000 Rental Homes to Institutional Investors

19 June 2019 – Expansión

ASG Homes, the property development arm of the European manager ASG, is following in the footsteps of many of the major property developers in Spain by putting up for sale 1,000 rental homes.

The announcement comes in response to interest from institutional investors in acquiring and managing portfolios of rental homes, given the booming demand in the rental market.

Specifically, ASG Homes is negotiating the sale of 3 of its developments in San Sebastián, Madrid and Sevilla, which will be worth €200 million once finished, with investment funds, Socimis and family offices.

ASG Homes had planned to hold onto the properties and manage them itself but the strong interest from investors has resulted in a change of tack. In this way, the company is emulating the strategies of several listed property developers, such as Metrovacesa and Aedas Homes.

In total, ASG Homes has a landbank spanning 500,000 m2 with the capacity to build 5,000 homes distributed across Madrid, Alicante, Estepona, Marbella, Salamanca, Barcelona, Sevilla and Valencia. It launched its business in Spain in 2013 and invests not only in the residential sector, but also in the hotel, shopping centre and office segments.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

Which Players Will Shape The RE Sector In 2017?

5 December 2016 – Expansión

The end of 2016 will mark not only a new record in terms of real estate investment in Spain, but also the start of a new phase in the sector, after three years of recovery.

“In mid-2013, funds like Blackstone started to close operations, at a time when the market was completely paralysed. That prompted a magnet effect, which, together with the creation of Socimis and the reorganisation of the banking sector, launched the recovery of the sector”, said Adolfo Ramírez-Escudero, President of CBRE.

Thus, after closing last year with an investment volume of €12,884 million, the expectation is that the figure will reach €13,900 million by year end 2016. “We may reach record investment figures by year end, as new property owners, with a more institutional profile, enter the market, such as German investment funds, insurance companies, etc.”, he said.

The investment figure may be maintained next year if corporate operations continue, say sources at the consultancy firm. “We are living in a different Spain, with GDP growth of 3.2% this year and forecast GDP growth of 2.5% next year. That has a direct correlation with employment and, therefore, with real estate”, said Ramírez-Escudero.

For this new phase, one of the most important players will be the large Socimis, which have continued to close operations this year, but in a more measured way as they have been more focused on managing their properties; as well as German funds, such as Invesco Real Estate and the real estate division of Deutsche Bank.

Nevertheless, these more risk-averse investors will share the stage with another kind of player in the Spanish real estate sector in 2017. “We are pretty convinced that there is going to be a new property developer cycle, given that the real estate companies have now been established, with new capital. Next year, the property developers will be building new products”, said the Head of CBRE.

Residential segment

These new players will include Neinor Homes. The real estate company, created by the fund LoneStar with the former subsidiary of Kutxabank, has become a key player in the property development sector, with projects underway across Spain. In 2017, the company led by Juan Velayos will debut on the stock market, whereby restoring the profile of property developers, such as Martinsa Fadesa and Reyal Urbis, which fell from grace following the burst of the bubble.

Another player in the residential sector will be Avantespacia. The new real estate company, in which Inveravante (Manuel Jove’s company) owns a 70% stake and Anida (BBVA’s real estate arm) owns a 30% stake, will promote almost one thousand homes during its first phase of development. Its first project in Málaga, with 135 properties, is already being sold, whilst in Madrid, the new company is preparing a development in the Francisco Silvela area.

But development will not only be happening in the residential segment, major projects are also planned for the office and shopping centre segments. In the former, Merlin Properties is expected to play an important role. Spain’s largest Socimi is currently working on the development of an office building in the Isla Chamartín area, in the north east of Madrid.

In addition, it has just completed the purchase of the Adequa business park, a complex that comprises four office buildings and a shopping area, with space for the construction of a 24-storey skyscraper, with a total surface area of 29,000 m2.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Real Estate Investment Reached 10.300 Million In 2015, Lower Than That Of 2007

15 February 2016 – La Vanguardia

The investment in the tertiary real estate sector in Spain reached EUR 10,300 million in 2015, an amount surpassed only in the past decade by the 10,800 million registered in 2007, according to a report by Cushman & Wakefield.

The last quarter of 2015 saw unremembered business volumes with 3,800 million invested, well above the quarterly average for the last years, resulting in a growth of 61% over the previous quarter and 33% over the same period of 2014 .

The major players in the market were the SOCIMIs, which reached 68% of the investment in the fourth quarter.

Nearly 83% of the investment is concentrated in offices and commercial sectors, with the office sector the one capturing the most investment with nearly 69% and EUR 2,600 million.
A percentage that contrasts with the 48% registered in the previous quarter.

The commercial sector was second with 600 million, 33% lower than the previous quarter. Activity in the industrial sector increased again after the downturn of the third quarter and captured 6% of the total investment.

In addition, in 2015 there has been a decline in large transactions. While in 2014 the weight of transactions over 100 million represented more than two thirds of the amount invested, in 2015 it only reached half of that amount.

Last year, the activity of domestic investors increased its relative weight, representing 60% of the total volume and much of the foreign investment came from the traditional Europe, approximately 15%.

In 2015 yields have continued to fall in almost all sectors. However, this yield drop has been slowing in the industrial sector.

By 2016, the consulting firm expects that investment in commercial assets goes back to show high activity, since they are trading large transactions as that of El Corte Ingles and the placing on the market of more shopping centers, which is expected to be closed between the short and medium term.

The office sector is expected to remain strong, but it is foreseeable that the levels seen in the fourth quarter of 2015 are reduced.

Original story: La Vanguardia

Translation: Aura Ree