Tag: Sima

Land Oligopoly: 10 Cities Account for 55% of the Developments Underway in Spain

31 May 2018 – Eje Prime

The data is conclusive: ten cities account for 55% of the residential developments underway in Spain. They constitute a municipal land oligopoly, which is now showing signs of tension on the demand side given the lack of buildable land available for development and the delays by the public administrations when it comes to approving building permits. “The concentration of the population in the major cities is a phenomenon that is going to increase over the next few years”, predicts Sergio Gálvez, Director of Strategy and Investment at the property developer Aedas Homes in the context of the Madrid Real Estate Fair (SIMA) conference on land and its strategic market.

The executive of the listed Spanish company also explained that the delays in the granting of licences in certain cities are lasting for up to ten months. Gálvez regrets that “any delay suffered in the production chain clearly results in a higher sales price for the end client”.

The Director of Aedas, who believes that “the public administrations still have a long way to go in terms of the agility of the licence-granting process”, was accompanied at the roundtable by Ignacio Ocejo, Partner at Kronos Homes. The director of the Spanish property developer turned the spotlight onto financing: “the situation in the financial world has changed drastically with the new cycle; in the past, the supply could have been four times larger”.

Nevertheless, Ocejo was favourable of the fact that land financing is now “much more controlled” because capital can still be obtained under reasonable conditions. “I do not think that it is a problem, the banks themselves are being proactive when it comes to financing; the problem is more that there are fewer entities”, said the Director of Kronos.

Meanwhile, the Commercial Director of the appraisal firm Tinsa, Pedro Soria, seemed more concerned than his roundtable colleagues about land and its overheating (…) “In some places, we are already seeing price caps on land”, says Soria, “the only option left if we want to achieve the desired returns is to raise house prices”. In the event that land prices continue to rise, the Tinsa executive sees a “risk”, nevertheless, the market could be more profitable on the land investment side than when it comes to house building itself.

Spain is seeing an improvement in its new home permits once again, but the figures are still well below the more than 800,000 permits granted in the most active years of the boom in the 2000s. In this regard, Ocejo explains that “in a scenario of stability and compared with the previous cycle”, an increase in new builds at a rate of between 25% and 30% would be “positive”. “A healthy market for me would see the construction of between 130,000 and 160,000 new homes each year in Spain”, added the Partner of Kronos Homes.

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Kronos Finalises €400M Investment in Cataluña with Land Purchases in Gavá & Sant Cugat

1 June 2018 – Eje Prime

Kronos Homes wants to be a leading player in the Catalan residential market. The Spanish property developer has just completed the purchase of two plots in Gavá and Sant Cugat del Vallés. These two operations form part of the significant investment plan that the company has initiated in Cataluña, where it already has investments amounting to €400 million. “The objective is to close at least two more operations in Cataluña before the end of 2018”, explained Manuel Holgado, Partner at the real estate firm, speaking to Eje Prime.

The first of the acquired plots, in Gavá, has a surface area of approximately 173,500 m2, with capacity for the construction of 1,500 homes. The company plans to start marketing this project within two years.

In the case of the plot in Sant Cugat, it is located in the centre of the prime Barcelona city and spans 33,800 m2, on which 320 homes are going to be built. These more than 1,800 homes will be added to the 900 units that the firm currently has underway in four other projects.

Two of those projects are located in Tarragona, a province in the south of Cataluña, with one development in the provincial capital and one in Calafell. Both will start to be marketed this June and the property developer, founded in 2014 by Saïd Hejal, has taken advantage of the opportunity presented by the Madrid Real Estate Fair (SIMA) to unveil the two developments.

The investment by Kronos is Cataluña is going to continue to increase over the coming months and Holgado says that “we would like to close at least two more operations before the end of 2018”. The company’s Director General, Majda Labied, also points out that “we have just opened an office in the centre of Barcelona, which strengthens our 100% commitment to Cataluña”.

Currently, the property developer has two promotions in the province of Barcelona, namely H20 and O12, two residential projects with an innovative design, which are located in the maritime area of Badalona. The first promotion has 252 homes with 25 different types of homes.

Entry into the Costa Brava

Having entered Barcelona and Tarragona, Kronos now only has Girona and Lleida left to conquer. The Costa Brava is one area “where we have been working actively for a while”, explains Holgado, although the property developer has not yet found the right opportunity to start a project there.

The forecast by Kronos Homes for the next four years involves it doubling the number of homes underway in Cataluña at the moment. The real estate firm also has a presence in Madrid, the Costa del Sol, Andalucía and Levante, and wants to branch out into new markets over the next few years. Areas such as Euskadi, for example, have always been on the company’s radar. The firm is keen to invest and position itself as one of the leading property developers in Spain.

Investment of €500 million in land all over Spain 

To build homes, you need land and, to that end, Kronos is going to invest €500 million between now and 2021 in the purchase of primarily residential land. The company will thereby acquire sufficient land to build 8,000 homes all over the country.

With a land bank spanning more than 1 million m2, spread between Madrid, Cataluña, Costa del Sol and Alicante, the intention of Hejal and the other shareholders that support him, including, in addition to Holgado and Labied, Ignacio Ocejo and Enrique Feduchy, is to expand the business to more Spanish provinces. The firm is currently making headway in the provinces of Córdoba, Sevilla and Cádiz, amongst others.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Sareb Sold 900 Plots Of Land In YTD Apr17

30 May 2017 – El Español

Sareb (…) has started its fifth year of life in a rather surprising way, by doubling its overall sales between January and April, and by tripling its land sales.

The upwards trend has been on the cards for a couple of years, with the emergence of property developers, such as Neinor, Aedas, Aelca and Kronos. These new stars of the real estate market, which are mainly financed by large investment funds and managed by Spanish professionals, have had to buy up land to support their business plans.

Improvement following the migration of assets to the servicers.

In addition to this overall improvement in the real estate environment, sources at the bad bank also defend the role played by the servicers engaged by Sareb (Altamira, Haya, Servihabitat and Solvia) in this exponential increase in sales. “Last year, not all of the assets had been migrated to their respective platforms, but this year, now that the migration has been completed, the results have improved significantly”, say the sources.

(…) The 3,260 properties sold by Sareb between January and April represent an increase of 87% compared to the same period a year ago. In the case of land, the number of plots sold has tripled, in such a way that the bad bank has managed to divest almost 900 plots of land during the first four months of the year, which is the same number that it sold during the whole of 2016.

Nevertheless, the increases in sales do not correspond to a similar increase in revenues, another trend that has also been seen over the last two years.

Twice as many sales, at half the price

In 2015, Sareb sold 421 plots of land for €335 million, i.e. an average plot price of €800,000. Last year, that average decreased to €400,000. It is true that the number of plots sold increased by 220%, to 927, but the corresponding revenues only grew by 9%, to €366 million.

Sources at the bad bank chaired by Jaime Echegoyen justify this gap by explaining that “increasingly smaller plots of land are being sold now. Moreover, the geographic spectrum has been expanded (…)”.

Call for caution

If the trend recorded until April continues, Sareb should be able to shed around 1,500 plots during 2017, which, at the average price of last year, would allow it to generate revenues of around €600 million. Nevertheless, sources at the bad bank prefer to be prudent. (…).

Unsustainable increase in land prices

The increases in house and land prices, which are being seen in certain areas of Madrid, Barcelona and the Mediterranean Coast, were one of the most talked about phenomena amongst professionals in the real estate sector last week, when they met at SIMA, the Real Estate Conference in Madrid.

In this context, the President of Spanish Property Developers, Juan Antonio Gómez-Pintado, called for caution. He is not talking openly about the existence of a new bubble and maintains that the increases are still technically a rebound after almost a decade of near paralysis in this market, but he did admit that “the increases that are being seen are not sustainable”. He believes that there isn’t sufficient housing demand to sustain the amount of land that has been acquired over the last year.

Original story: El Español (by Juan Carlos Martínez)

Translation: Carmel Drake

Gov’t Says RE Recovery Is More Intense Than Expected

30 May 2017 – El Mundo

The Secretary of State for Budgets and Expenditure, Alberto Nadal, has highlighted that the growth of the economy in Spain is being favoured not only by the country’s exports, but also by the recovery of the construction and real estate sectors, which is proving to be much more intense than the Government had expected.

Those were the declarations made by the Secretary of State during the presentation of Inmonext 17, an event organised by Idealista in the context of Madrid’s International Real Estate Fair (SIMA) 2017, where he noted that GDP growth this year is set to exceed the official forecast of 2.7%.

During his speech, Nadal emphasised that this increase in growth is being supported by exports, which will continue to be very strong and by the recovery of the construction and real estate sectors. “The coffers don’t lie, people don’t pay taxes if they don’t have any cash”, he added.

In this sense, he said that the real estate sector is going to play a fundamental role in the growth of Spain and he reminded his audience that the sector was oversized during the years prior to the crisis and that real demand for housing was not well founded because prices were growing and the volume of credit exceeded the borrowing capacity of families. “Economic growth was unbalanced and was heavily concentrated in the real estate sector”, he said.

In his opinion, a reasonable cruising speed would be the creation of 50,000 homes per year and he added that the recovery is reaching the real estate sector later than other markets, perhaps because it was oversized before. For this reason, he said that the logical thing would be for the sector to operate at a reasonable average, leaving behind the extremes seen before the crisis and over the last few years.

Nadal said that the data shows that there is not a bubble now and he emphasised that the outlook of the Spanish real estate sector depends on the faith that Spaniards have in the future, especially in their jobs and salaries.

Original story: El Mundo

Translation: Carmel Drake

Hispania Plans To Sell Its Offices For €520M+ Before Year End

29 May 2017 – Cinco Días

Hispania Activos Inmobiliarios has started the process to sell off its portfolio of offices, according to a statement made on Thursday by Cristina García-Peri (pictured above), the Socimi’s CEO, speaking at the real estate investment forum, which is being held in conjunction with the SIMA housing fair in Madrid.

“Although we have until 2020, we have accelerated the sale of our offices. Now is the right time”, said García-Peri, who plans to divest these assets before the end of the year. The idea is that the Socimi, which is managed by the Azora group and whose largest shareholder is a fund owned by George Soros, will sell the office portfolio as a whole, with the exception of a few individual transactions, such as Uría Menéndez’s new headquarters in Madrid.

Hispania’s CEO said that overseas investors are the main potential candidates, but she did not rule out Spanish Socimis. “There are lots of buyers. International investors are still interested in Spanish real estate”, she said in a statement. In terms of the sales price, the Socimi hopes to exceed the portfolio’s current valuation, which stands at €520 million, according to the company’s most recent presentation.

This Socimi is undergoing a complete transformation, given that it is now specialising in hotel ownership and by 2020, when it is planning its own liquidation, it hopes to have become a hotel-only vehicle, so that it may be sold to another company. “What we will be looking for primarily is a change in control of the company”, said García-Peri, to allow those shareholders who wish to exit the share capital to do so.

In addition, the company is immersed in a transaction involving its residential assets, which involves selling the properties individually in the retail market.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Emerige Will Build 200 Homes In Spain In 2017

18 May 2017 – Observatorio Inmobiliario

The French real estate developer Emerige, which has been operating in Spain since 2013, is going to build 200 homes in Spain during 2017, according to a statement made by the company’s Deputy Director General, Yann Bloch.

At the same time, the head of the French real estate company announced the marketing of its latest development in Madrid, by Proel Consultoría, which will be officially unveiled at SIMA. It is a 105 home development – also containing one commercial unit – located on Calle General Yagüe 37, in the immediate vicinity of the Paseo de la Castellana business district. The development, which is under construction, will feature the high quality and design standards that characterise Emerige.

The French real estate company, founded in 1989 by Laurent Dumas, is one of the major property developers in Paris and the surrounding region. It specialises in the development of offices and homes, as well as in the restructuring of real estate assets. In 2017, it has more than 1,500 homes under construction and more than 200,000 m2 of tertiary space.

Emerige is characterised primarily by its special dedication to aesthetics and the design of its buildings, for which it collaborates with the best international architectural firms (David Chipperfield, RCR, Rafael de la Hoz, Factoría UDA, Antonio Ruiz Barbarín…). Another defining element is the firm’s attention to contemporary art, through patronage work, as well as by incorporating works of art into its projects. “We work in all segments of the market, but always with a special care and requirement for quality. We pay more attention to the quality of our operations than to the quantity”, said Yann Bloch.

This philosophy has been translated into projects that Emerige is constructing in Spain “where we are working only with Spanish collaborators, from the project manager to the architects, always with high levels of quality and demand”.

In theory, Emerige will limit its operations in Spain to central locations of Madrid and Barcelona. In this latest project, it began the journey with a project to renovate a 3,000 m2 property containing 29 homes, which has already been finished and sold in its entirety.

In Barcelona, the firm is currently marketing a project under construction, comprising the transformation of an office building into 24 apartments, located on Calle Montaner. In Madrid, it is currently working on the aforementioned project on Calle General Yaguë and is now at a very advanced stage on another 61-home property on Calle Garibay, 3, in conjunction with the firm Rafael de la Hoz, which it will start to market at the end of the year.

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

Stoneweg Will Invest €750M+ In RE Assets In Spain

26 April 2017 – El Mundo

Stoneweg, the real estate platform created in Switzerland by Jaume Sabater and Joaquín Castellví – specialists in Real Estate following their time at the bank Edmond de Rothschild – has announced the opening of its first two offices in Spain, in Barcelona and Madrid.

In this way, Stoneweg is consolidating its position in the Spanish market, where it has been investing in numerous and diverse real estate developments since 2015. The company has also announced that, over the next few years, it will allocate more than €750 million to investments in Spain, of which €450 million has already been committed to various projects. Specifically, the developments that Stoneweg is already constructing, managing and marketing in Spain – which are due to be delivered between 2017 and 2020 – are located in the urban nuclei of Madrid and Barcelona, the metropolitan rings of both cities and the Mediterranean Coast (Costa Brava, Costa Blanca and Costa del Sol).

In total, the manager is working on more than 1,300 homes across 30 developments, on residential land spanning 200,000 m2 and retail premises, as well as three developments measuring more than 22,000 m2 above ground in several office buildings. The platform has created this sizeable investment portfolio by purchasing properties from the banks, Sareb and private owners.

“We place our trust in Spain due to its power for constant economic growth and its high capacity to attract tourists in search of a second home, as well as for the strengthening of mortgages and the rapid access to them”, explained Joaquín Castellví, Director of Acquisitions at Stoneweg and CEO of Stoneweg Spain. (…).

The manager has signed agreements with some of the main financial entities (Banco Santander, BBVA, La Caixa, Banco Sabadell, Abanca) and strategic partners (Grupo Sorigue, Ferrocarril, Grupo Castellví) with the aim of constituting one of the most robust real estate groups in Europe.

In addition to Spain and Switzerland, the manager led by Sabater and Castellví also has a presence in Italy and the USA, and has an investment capacity of more than €1,400 million in real estate assets across all of its markets (50% of which will be invested in Spain). (…).

Stoneweg’s new offices in Spain, located on Paseo de la Castellana in Madrid, one of the capital’s main thoroughfares, and on Calle Mestre Nicolau, in the heart of Barcelona’s financial district, will employ personnel with an average age of around 32 years old, which means that Stoneweg will be the real estate manager with one of the youngest workforces in the country.

Next month, the platform will participate in Sima (Salón Inmobiliario de Madrid) for the first time, with the aim of promoting, amongst others, the projects that it already has underway in the Spanish capital, especially the developments at the Fresno Norte urbanisation, and on Calles Alfonso X and Mateo Inurria, which are scheduled to be completed by the end of 2017 and/or the beginning of 2018.

Original story: El Mundo

Translation: Carmel Drake

SIMA’s Director Confirms That The RE Recovery Is Underway

10 May 2016 – Fotocasa

The Director of Madrid’s Real Estate Fair (SIMA), Eloy Bohúa, praised the “good” impressions in the real estate sector at the start of the 18th Fair, which he considers will serve as “confirmation of the recovery”.

With more than 200 exhibitors, 25% more than last year; a larger surface area, up by 30%; and more diverse international presence, with exhibitors from 12 countries, SIMA began with a “good prospects”, boosted by positive feelings at the Investment Forum, the pre-cursor to the fair, which more than 300 people attended. (…).

Bohúa explained that 2015 was the year of recovery, although the first signs of recovery were actually seen in Autumn 2014. He expects the “confirmation” of the recovery to be seen this year, but said that “we must be cautious and ensure that the sector does not repeat the same mistakes of the past”, something that “is present in everyone’s minds”.

During the opening of SIMA 2016, the acting Ministry of Development, Ana Pastor, observed that the real estate fair was “busier than ever”, and noted that data in the real estate sector “is continuously improving”.

In this vein, she said that growth in the sector amounted to 4.5% in 2015 and that 50,000 jobs were created in the sector last year (…).

This recovery was reflected at SIMA in data such as the supply of properties at the fair, which this year depended less on the Community of Madrid than in previous years. Whilst in recent years, it was customary for the supply in Madrid to account for 60% of the total supply at the fair, this year that figure amounted to less than 50%.

In addition, for the first time since the burst of the real estate bubble, the supply of off-plan projects for sale at SIMA exceeded the number of turn-key products, in such a way that the proportion of new projects to property developments (stock) this year was 60%:40%.

68% of the developments marketed at the fair relate to primary residences, of which 83% are unsubsidised and 17% have some kind of protection/subsidy; the remainder are holiday homes.

Markets operating at different speeds

In terms of the stock left in Spain, Bohúa explained that it is different in major capitals, where the recovery first started, given that there “sales are growing”, and the stock “is being drained off very quickly”. By way of example, he said that he estimates that around 5,000 new homes are left, which means the stock will run out within eight months.

And in the major capitals, there is “minimal stock that is not significant in terms of the market”, which is why Bohúa thinks that “now is the time to start new projects in response to a thriving demand”.

Other areas of the Peninsula are experiencing a different situation – particularly where the recovery is happening “more gradually”, i.e. in smaller population nuclei. In the holiday home segment, there is “a lot of activity and a great deal of interest from buyers and investors” in certain areas, such as along the Costa Blanca and the Costa del Sol, but again “the stock is not being absorbed at the same speed along the entire coast”, which means there the markets are operating “at different speeds”.

Investor appetite continues despite uncertainty

Regarding the possibility that the political uncertainty may affect real estate investments and purchase decisions, Bohúa acknowledges that uncertainty affects all economic sectors and “we are seeing slow downs and delays in decision making, but that is only natural because investors want certainty”.

Nevertheless, he said that investor appetite is “still high”. (…).

“There is no risk of investors fleeing from Spain because the fundamentals of the Spanish economy are in place”, he said. (…).

Original story: Fotocasa

Translation: Carmel Drake

Aliseda Enters House Development Market

9 May 2016 – Cinco Días

Aliseda is joining the new wave of recovery in the market for building new homes, as it seeks to expand its business beyond the sale of Popular’s real estate assets. To this end, the company is finalising the acquisition of a new property development business, hand in hand with some new partners.

The company is looking for additional activity in the development of homes on behalf of third parties. But it will also invest in some of these future developments using its own funds. In 2016, it will launch around 25 new build residential projects, which will mean bringing around 1,500 homes onto the market. From 2017, the pace of construction will increase, to reach 2,000 homes. “This represents a new business opportunity”, said Javier de Oro, the Director of Real Estate Assets at Aliseda, speaking at SIMA, the real estate fair held in Madrid this weekend.

Aliseda was created as a management platform for Popular, with the aim of marketing the burden of assets that the bank had accumulated during the property crisis. At the end of 2014, the financial institution sold 51% of the company to the US funds Värde Partners and Kennedy Wilson. Both firms specialise in finding opportunities in the real estate sector.

Värde, for example, has been active buying up land, according to market sources, and Kennedy Wilson has joined forces with Renta Corporación to undertake new real estate projects.

New business line

Currently, Aliseda focuses on two lines of business: the management of foreclosed assets and of doubtful loans. It manages land worth €7,000 million and holds more than 55,000 assets, of which 31,000 are being marketed and are published on its website (25,700 of those are residential). At the end of 2015, it had sold 13,000 properties, to record sales of €2,000 million.

41% of those assets were new build properties. Part of Aliseda’s activity involves constructing homes on land owned by Popular and at unfinished sites taken over by the bank. But the next step is now going to involve selling  properties off-plan and with different partners, outside of Popular’s circle. The forms of collaboration will be varied, given that the companies may provide their own land, hire Aliseda to manage the building work and the real estate company take decisions, on a case by case basis, for those projects that it also invests, thanks to the cash generated by the company.

Areas to build in

According to the Head of Aliseda, there are opportunities to construct new homes beyond Madrid, Barcelona and the Costa del Sol, such as in, for example, the Balearic Islands, Córdoba, Almería, Alicante, Valencia and other major cities: “We think now is a good time for residential assets. Last year, 400,000 homes were sold, in 2017, that figure will reach around 450,000 and by 2020, it will reach 550,000, based on conservative estimates”.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

INE: Land Sales Increase By 10.5% In 8m To Aug

27 October 2015 – Cinco Días

This week has seen the conclusion of the two major annual events in Spain’s real estate calendar: the Real Estate Trade Fair in Madrid (SIMA) and Barcelona Meeting Point. In addition to a sharp increase in the number of private visitors, this year more companies have wanted to be present at both events, because the figures clearly show that more houses are being sold, at higher prices (the price decreases have now come to an end across most of the country) and most importantly, new properties are being constructed once again.

Given that land is the raw material required to launch new developments, it was crucial for funding to return to this segment of the market as well, and the statistics show that the trend there is now reversing. Not only are more mortgages being granted to acquire homes and complete developments abandoned due to the crisis, loans are also being granted once more to buy land. (…)

According to the latest available statistics, compiled by INE, for the period from January to August 2015, 48,905 plots of land were sold in Spain during the first 8 months of the year, an increase of 10.5% compared with the same period in 2014 (when 44,237 plots were sold). If this trend continues, 2015 will close with a significant increase on the number of plots of land sold last year (65,821), breaking the downward trend that began in 2007 (the first year this data was collected) when 195,269 plots of land changed hands.

What are investors looking for?

In terms of whether more or fewer mortgages are being granted on the plots of land being sold, the figures do not yet reflect an overwhelming improvement (…).

Again, according to INE, between January and July (the data for August is published today), 4,897 mortgages were granted for plots of land, a decrease of just 1.6% compared with the same period last year, when the number amounted to 4,979. Like in the case of land sales, if the trend in mortgages granted for land is maintained between now and the end of the year, then 2015 will close with an increase in the number granted for the first time since 2009.

For the experts and everyone now working in the real estate sector (including the banks, the Socimis and the new servicers), the fact that financing has returned to the land segment is very good news, since this will revive the construction of new builds. Above all, we are now starting to see studies that show that one of the imbalances on the horizon in the market is the lack of offices, developable land and industrial warehouses in prime and other good locations in cities, which is what exactly national and international investors are looking for.

Finally, if this trend continues and improves, it will be a great relief for the banks, since 37.8% of the almost €80,000 million in foreclosed real estate assets that last year weighed down on the balance sheets of the main Spanish financial entities (Santander, BBVA, CaixaBank, Sabadell, Popular, Bankia, Bankinter, Kutxabank, Unicaja, Ceiss, BMN, Liberbank, Ibercaja-Caja3, Novagalicia and Catalunya Banc) related to land, the same percentage as for finished homes, which accounted for 37.1% of the total, according to a study by the Department for Research and Economic Analysis at La Caixa.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake