Tag: Sima

Madrid Leads Spain’s Property Development Drive

23 October 2015 – Expansión

The Barcelona Meeting Point, which has been held this week and the Autumn edition of SIMA, which starts in Madrid today, are both proving to be of particular interest to the Spanish real estate sector. And it is no wonder, given that those two regions are leading the way in terms of property development at the moment. But the reactivation of the real estate sector is not proving to be homogeneous: it is slow, uneven and focused on certain large urban areas. Investment funds and real estate companies have acquired offices and commercial assets amounting to €10,800 million so far in 2015, already exceeding the total figure invested in 2014 (€10,200 million). And investors’ interest, which began in the tertiary sector, is now extending to the residential sector, at the hands of a winning formula: the partnership of large investment funds and local property developers.

Interest in ‘ready-to-build plots’ (‘suelo finalista’) has been increasing in Madrid since the end of 2013, however, given the shortage of land in the capital, attention is now starting to focus on other development land (‘suelos con gestión de desarrollo previo’), according to findings from CBRE in its latest report Market View Residencial. The lack of property developments to meet future demand is already a concern for the sector, and that perception has only increased since the change in the municipal government, given that the brakes seem to have been put on several projects: Chamartín, Mahou-Calderon and Canalejas.

According to Servihabitat’s latest report about the residential sector, house sales will have increased by 25.6% by the end of this year, to total more than 400,000 operations. The entity expects the rising trend to continue in 2016, with more than 460,000 house sales, up by 14.5%. As a result, it expects house prices to rise by 2.6% this year and by 6% in 2016. All of the experts agree that the lack of land will end up impacting house prices.

In the centre of the capital, large one-off operations continue to abound, such as the ones closed last year by Domo Gestora, which acquired a plot of land on Raimundo Fernández Villaverde for €111 million; and Ibosa, which was awarded the former Metro depot in Cuatro Caminos. Another highly anticipated operation is the sale of a plot of land on Calle Padre Damián, 52, owned by the Ministry for Foreign Affairs, measuring 15,000 m2, where 200 homes are going to be built. The auction date has not been set yet, but Domo, Larcovi (with Ruiz-Larrea Architects), Comunidades Santa Gema, and the strong partnership between Los Jardines and El Olivar, have created four cooperatives interested in this plot worth around €100 million.

In terms of other future projects, within the M-30 radius, all eyes are focused on Operación Chamartín (17,500 homes), Operación Campamento (10,700 homes) and the smallest project of all Operación Calderón (2,000 homes). For Samuel Población, National Director of Residential Property and Land at CBRE, all three are very interesting projects and, in his opinion, Chamartín is the most necessary. “It will be the vertebral axis between the Castellana and the developments in the North, it has the blessing of the owners and it will take almost 20 years to complete. It doesn’t make any sense, either commercially or development wise, to delay it any longer”. However, the new mayoress of Madrid considers that this urban planning project cannot be resolved “in two months” and has said that no decision will be taken until after the general elections. This uncertainty, which will exist until the final version of the General Plan for Madrid is reviewed and the new Town Hall’s plans are presented in more detail, is not good for the sector, at a time when real estate investment has shot up by 51%, says Samuel Población, who also points out that, the project now known as Distrito Castellana Norte is planned in several phases, which means that its launch is not incompatible with subsequent adjustments.

Scarcity on the horizon

The lack of supply has been felt most notably in the PAUs (‘Proyectos de Arquitectura y Urbanismo’ or Architecture and Urban Planning Projects)  in the north of Madrid: Sanchinarro, Las Tablas, Montecarmelo and Arroyofresno; and is starting to become apparent in Valdebebas. Currently, around 5,000 homes (unsubsidised and subsidised) have been delivered or are about to be in that development alone, out of a total projected number of 13,500. The Junta de Compensación is selling new plots for the construction of social housing, with plans for 1,000 subsidised homes to be built; after that, the supply of protected land in Valdebebas will have run dry.

In the south of the city, the Ensanche de Vallecas area is also showing signs of the shortage: in 2007, there were almost 3,000 homes for sale there, and now there are just 150.

In the southeast, other important developments are planned, such as Valdecarros (48,000 homes), Los Ahijones (15,400 homes) and el Cañaveral (15,000 homes), however there is not yet sufficient demand in those areas to match the vast supply.

Madrid’s residential market is a very polarised and so, despite the fact that there appears to be stock, there are pockets where scarcity is just around the corner.

Luis Corral, the CEO of Foro Consultores, reminds us that  improvisation does not work in the housing sector: “To develop homes, land needs to be created and that takes time, which means developers need to have developable land in their portfolios”.

Original story: Expansión Special ‘Casas’ Supplement (Loreta Ruiz-Ocaña)

Translation: Carmel Drake

Former Larcovi Employees Create New RE Company

22 October 2015 – Expansión

A new real estate management company has been born. It is called Víveme, a company created as the result of a carve-out from the real estate group Larcovi. “We have been hatching the idea for almost a year; and we have been working towards its launch now, at a time when the results in the sector are improving”, explains Mariam Martín Ferreiro, the President of Víveme.

The new company will be responsible for rendering a range of services to third parties, including land searches, project development, financing searches and the marketing of homes. “We work with cooperatives; financial institutions that own land; and projects that have been foreclosed due to bankruptcy”, says Martín Ferreiro. “Víveme will not take on any developer risk, but sometimes we will provide financial support to investors”, she said.

Behind this new company are several former employees of Larcovi. “There is no large business group behind us, instead, as employees we are also shareholders. We have created Víveme because we believe in the recovery of the market and in our own experience”.

Although it was only launched recently, the real estate company has already got almost one thousand homes under management. “As we start out, we already have several projects underway for the development of 900 homes, mostly in Madrid, of which 500 are already under construction”, says the President.

Forecasts

Thanks to this volume of activity, the company hopes to close the first year with a profit. “With the current portfolio, and another two projects that we plan to start before the end of the year, we hope to end the year with turnover of €1.5 million”. The aim is to manage between four and five new projects per year, whereby delivering 2,000 homes between now and 2020. “We have now obtained financing for a development close to the Castellana and in October we will deliver 57 family homes in Rivas”.

Víveme will compete directly with the banks’ real estate arms, which is not something that concerns its directors too much. “We know that the financial institutions are there, but increasingly they are focusing on their core businesses and we believe that we can compete with them, by offering high quality products and by listening to our clients, personalising each home, not just the finishes, but also letting customers participate in the design phase”.

Víveme is one of numerous companies that will participate in the Autumn edition of the SIMA real estate trade fair in Madrid, which is being held between 23 and 25 October. Other participants include: Iberdrola Inmobiliaria, Vía Célere, Hercesa and TM Grupo Inmobiliario, as well as Servihabitat, owned by La Caixa, and Anida, owned by BBVA

Original story: Expansión (by R.R.)

Translation: Carmel Drake

ST: Some House Prices Still Need To Fall By 15-20%

28 September 2015 – Cinco Días

Is it compatible to say that the market is moving towards stabilisation and at the same time that the prices of some homes still need to decrease by a further 15% to 20%? Most of the experts and the CEO of Sociedad de Tasación, Juan Fernández-Aceytuno (pictured above), think so. They argue that those two facts can coexist in time and that they show that the real estate market is slowly emerging from the worst crisis in its recent history.

“We are currently undergoing a period of stability, not recovery”, said Fernández-Aceytuno last week during the presentation of his appraisal company’s latest report, prepared in conjunction with Planner, which outlines the new profile of the home buyers attending events such as SIMA in Madrid. The Head of Sociedad de Tasación explained that there is still some way to go in terms of what needs to happen from now on for us to be able to speak more openly about a recovery in the market.

Greater confidence

Given the evolution of appraisal market, Fernández-Aceytuno considers that there are still many places where house prices need to decrease by a further 15% to 20% for the supply to match up with the demand. In fact, he points out that we can only talk about a recovery in a handful of regions, where sales now significantly exceed the levels recorded a year ago and where new developments are being constructed once again.

Moreover, he said that the improvement in the market for the securitisation of mortgage loans must continue following the first operation (for several years) signed in June, and that the growth in employment, household income and GDP must all strengthen. “All of the ingredients are present for demand to react. What is happening now is that an increased level of confidence is being demanded, investors are being more prudent and potential buyers have realised that investments in housing are not infallible”, said Fernández-Aceytuno.

In this sense, he commented that we cannot talk about a full recovery yet in a market in which the transactions being conducted by foreign investors and buyers carry a greater weight than those being undertaken by first time buyers, as a result of the creation of households, or those that want to acquire better homes (as corroborated by Solvia’s study published on Tuesday). How long do we have to wait for this recovery then? “It is impossible to say, but it will take years, not months”, concluded the CEO of the appraisal company.

Meanwhile, the report prepared by Planner and Sociedad de Tasación, which analyses the profile of potential buyers attending real estate fairs, such as SIMA, reveals that the typical profile is younger (aged between 25 and 35), with greater confidence in the future, with larger budgets and looking for larger homes, according to the CEO of Planner Exhibitions, Eloy Bohúa.

According to the report, in parallel, there has been an increase in the number of older buyers whose main motivation is to improve their current home or to move from rented housing to their own home.

Some of the impediments that prevent the closure of more operations include, in order of importance: price, financing (a lack of it) and uncertainty regarding employment conditions.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Santander, BBVA & Sabadell Start To Build Homes Again

11 May 2015 – Expansión

Property development / The large financial institutions are constructing homes once again in light of the improved macroeconomic outlook, demand in certain areas and the aim of generating profits.

Real estate development is no longer a forbidden phrase in the world of banking. Several major banks have decided to resume the construction of new homes in light of the macroeconomic improvement and the need to capitalise on property inherited from the crisis.

Entities such as Santander, BBVA, Sabadell and Popular are now not only focusing on selling the homes that were foreclosed during the crisis, they have also started to construct new developments over the last few months. Most of these developments are located in Madrid, Barcelona and to a lesser extent, on the coast, where there is still a large stock of homes to sell.

Another catalyst of this new trend has been the reduction in the losses recorded by the real estate arms of these banks. During the first quarter, Santander’s real estate division lost €95 million, the smallest loss since it was created three years ago; and BBVA recorded a loss of €154 million, 37% lower than during the same period in 2014.

Thanks to this, the group chaired by Francisco González announced on Friday that it is studying 25 developments to construct 2,000 homes, and that it has already started another 12 developments to construct 630 million. This statement was made by Lorenzo Castilla, Commercial Director at BBVA Real Estate-Anida: “This is not about filling Spain with cranes, but rather about projects that make sense”, who spoke during Madrid’s International Real Estate Fair (Salón Inmobiliario Internacional de Madrid or SIMA).

(…)

Full balance sheets

As the BBVA director indicates, financial institutions still had more than €83,000 million foreclosed assets (on their balance sheets) at the end of 2014, of which more than €31,000 million related to land and €4,000 million to buildings under construction.

To reduce this burden, the entities are nowadopting two strategies: the sale of homes through their commercial networks, a channel that has accelerated over the last year; and the transfer of portfolios and joint ventures with institutional investors.

For the time being, the entity that has announced the most ambitious housing development plan has been Santander, which reported that it is developing 300 real estate developments, at its most recent results presentation.

Banco Sabadell is also stepping on the accelerator in this sense. Its real estate arm, Solvia, currently has 1,400 homes under construction, primarily in Madrid, Andalucía and Valencia.

Aliseda, the real estate company that renders services to Popular, has also announced an ambitious plan to enter the market for real estate development.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Demand For Off-Plan Homes Rises From The Ashes

8 May 2015 – El Confidencial

We can see cranes and bulldozers on the horizon in Spain once more. And although players in the real estate sector would rather talk about prudence than euphoria, stabilisation than recovery, the outlook is very encouraging.

Mortgage lending is increasing, more new homes are being built and more homes (in general) are also being sold. And, although the second-hand market is still winning hands down – even though the statistics are distorted by the foreclosures of homes by banks – demand for new builds is returning once more. Thus, purchasing a home off-plan, a practice that became almost anecdotal during the crisis, is returning to the fore once again, seven years after the real estate bubble burst.

There are several advantages to purchasing off-plan. You buy a new home that, for the most part, does not need any work doing to it. Some developers even allow future owners to adapt homes to their needs and likes – to convert a 4-bedroom home into a 3-bedroom property with a larger living room, for example – but, undoubtedly, the main advantage is that purchasers are not obliged to make a major outlay (of cash) in one go, but rather, they make small contributions until the keys are handed over, and those amounts are then deducted from the final price of the home. The main drawback is that new builds are not yet finished, which means they are not available immediately. And construction work can last for between 18 and 24 months.

Recently, several dozen people queued up overnight to reserve one of 62 homes that Solvia will soon build in Barcelona. It will be the real estate platform’s first development in the regional capital. (….) “There was a great deal of interest because it was a well-located product, with great features and reasonable, attractive prices”, said Augusto Monte, Director of Sales and Transactions at Solvia. “Clearly, it was an exceptional case and you cannot make wider generalisations about what happened with this development”. Nevertheless, Monte acknowledges that the fear of buying off-plan has declined in recent months.

(…) Other recent examples include the actions of housing cooperatives – for example, the plot of land in Raimundo Fernández-Villaverde or the old engine sheds at Cuatro Caminos – which obtained 100% of the partners in record time to sign up to purchase homes that will not be built for another two years.

Property developers, banks and servicers are conscious of this change and have come to the largest real estate fair in Spain (SIMA) with this type of product. Thus, for example, Solvia has a 75-home development of Alcalá de Henares. Between July and September last year, 64% of the development had already been purchased. And it is not the only one.

“We still notice considerable uncertainty amongst prospective buyers. Many of them come to the stand to ask us when the construction work will to begin. They are quite afraid that the building work will get delayed or that it will not happen at all”, says Inmaculada López-Gasco, sales manager at Magnum & Partners, which started to sell 63 homes in San Sebastián de los Reyes in April. “We have already sold 16 – i.e. 25% – and we will have the licence to start the construction work in June. We hope that sales will accelerate once the bulldozers start work.

(…)

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Why Did Foreigners Buy 72,000 Homes In Spain In 2014?

8 May 2015 – Expansión

When it comes to buying homes in Spain, foreigners are primarily motivated by the quality of life, the sun and good flight connections to their home countries.

The volume of house sales increased by 21.6% in 2014. In total, 365,594 transactions were closed, according to the Ministry of Development. It is clear that the real estate market has begun its recovery and, to a large extent, that is due to the interest that the real estate market is sparking amongst investors from overseas. Purchases by foreign residents in Spain have grown in recent months, partly due to the incentives that the Government has introduced – mainly the residence visa – but above all due to the opportunities offered by the real estate market here. Foreigners purchased more than 72,000 homes in Spain last year and the average transaction value was €152,000.

But, who are these foreigners that are purchasing homes in Spain and what is it that draws them to our country? “Many of these overseas investors are tourists who come to Spain on holiday and after spending time here, decide to invest in a second home”, says a study performed by TM Grupo Inmobiliario, which has a stand at the SIMA (Salón Inmobiliario de Madrid or Madrid Real Estate Fair) being held until 10 May. “They are primarily motivated by the quality of life, the sun and good flight connections to their home countries”, says the report, which concludes that the profile of the average purchaser is a man, aged 53 years-old, with children. On average, these purchasers have an annual income of €66,000. There is also a significant percentage of resident buyers in our country who are making Spain their new home given the improvement in the economic environment.

Britons are the nationality most interested in purchasing homes in our country; they accounted for 18.62% of all transactions closed by foreigners (in 2014). They are followed by the French (9.39%), Germans (7.25%), Belgians (6.90%), Italians (6.13%), Russians (5.83%), Swiss (5.83%), Chinese (4.14%) and Norwegians (3.74%). In recent years, interest from Russian nationals in Spain had increased significantly, but the decline in the Ruble and in the price of petrol (last year) reduced their desire to purchase. There is also a great deal of interest from Mexicans and Colombians in buying a home in our country, but in absolute terms the numbers are not yet significant. The vast majority of them have a high purchasing power and are buying second homes here.

The decrease in house prices has not affected all areas equally, but overseas investors are primarily interested in three main areas: the Mediterranean Coast (Barcelona, Alicante, Girona and Málaga), the Islands (above all Mallorca, Ibiza and Tenerife) and Madrid.

Original story: Expansión (by E.V.)

Translation: Carmel Drake

Servihabitat Will Pay Customers’ Mortgages For 1 Year To Boost Sales

7 May 2015 – Expansión

Servihabitat will pay the mortgages of customers who purchase homes before 30 June, for a period of up to one year. That is one of the main claims of the new campaign that the real estate platform has launched to stimulate sales; it is also offering discounts of up to 60% on certain homes.

The company, which is controlled by the US Fund TPG and owned by CaixaBank, will offer these conditions in honour of the Salón Inmobiliario de Madrid or Madrid Real Estate Fair (Sima), which is being held from today until Sunday.

Servihabitat has selected 9,000 second-hand homes and new builds, located all over the country, whose purchasers may benefit from: free mortgage payments for a year, gift vouchers, discounts of up to 60% and the option of the client to propose the price him/herself.

At the fair, Servihabitat will also market several new property developments and luxury residential dwellings located in Ciudalcampo. The new developments are located in Majadahonda, Carabanchel and in the Madrilenian district of Chamartín. The main second-hand home complex is located in Palm-Mar, in the municipality of Arona (Tenerife).

Original story: Expansión (by S.S.)

Translation: Carmel Drake

SIMA 2014 Autumn Edition to Host New Mortgage Offer

7/10/2014 – El Mundo

Return of lending will be the talk of the town at the upcoming Sima 2014 Autumn edition fair to be held from 24th to 26th October in Pavilion 1 of Feria de Madrid. Three banks (Bankinter, EVO Banco and ING Direct) have confirmed their participation in the event.

According to the latest statistics, residential market is brushing up the dust with better performance in sales, prices, mortgage approvals and issuance of building permits.

Attended by Over 50 Companies & Institutions

Sima Autumn has by now attracted attention of more than 50 firms and institutions willing to take part in the event. Their number is expected to grow.

Among the exhibitors who confirmed their presence one may find ACP Level, ACR Promociones, Aelca, Allegra Holding, Asprima, Bankinter, Bari Gestión de Cooperativas, Básico, the Community of Madrid, Construcciones Amenábar, two public housing companies: Empresa Municipal de la Vivienda from Rivas Vaciamadrid and Empresa Municipal de Vivienda y Suelo from Torrejon de Ardoz, National Bank of Building Certifiers (Enace), Evo Banco, Fotocasa, Getsa, Gilmar Consulting Inmobiliario, Globaliza, Grupo Inmobiliario Ferrocarril, Grupo Mahersol, Grupo Prometeo, Hercesa, Hermosilla Residencial, Hi! Real Estate, idealista, Ingecasa, Inmoglaciar, ING Direct, Kutxabank Inmobiliaria, Libra Gestión de Proyectos, Luján y Jardín-Home and Place, Magnun & Partners, Metros2, Monthisa, Neinor, Nuevo Arpegio, Pisos.com, Residencial Nature, Pincasa, Poscam, Premier España, Rentalia, Residencial Foresta Valdebebas Inbisa, Serprogresa, ST Sociedad de Tasación, Su Vivienda, TM Grupo Inmobiliario, Tuinper, Vía Célere, Viviendas a Medida and Woss.

Visitor’s Profile

Planner Exhibitions, the organizer of the autumn edition of Sima, believes in the arrival of many potential buyers as they have dominated the previous events. As the guests themselves admit, 97% of them come to the fair in search of a home or other property type, whereas 67% declares an intention to buy within a year.

The Sima Otoño exhibition is addressed to diverse kinds of investors. The biggest group of them looks for a primary residence property (both first and repossessed homes), but many also want to buy a holiday apartment. Others visit the fair because they are interested in the real estate market as an investment target.

More than 1.000 people signed up for the event. The number is unusually high if compared to the attendance to the previous editions of Sima.

When it comes to supply location and characteristics, the general public will find around 200 new housing developments, as well as existing homes in the city of Madrid, in the region, border provinces and coastal destinations. The offer comprises both subsidized and unsubsidized properties with various purchase possibilities.

Non-residential products, i.e. offices, retails, CRE and land, complete the supply range. Also, the visitors may sign contracts with such service providers as appraisal, valuation, energy certification or rehabilitation firms, to give few examples.

The main attraction of the event will be the financial entites which will present their mortgage offer, giving details on interest rates and terms and conditions, says Eloy Bohua, the CEO of Planner Exhibitions.

The fair’s opening hours: on Friday 24th and on Saturday 25th of October from 11 am to 8 pm, whereas on Sunday 26th from 11 am to 3 pm.

 

Original article: El Mundo

Translation: AURA REE

IEE: Housing Prices to Stabilize in 2014 & Jump Abruptly in 2016

28/05/2014 – El Economista & El Confidencial

General director of the Institute for Economic Studies (or IEE by its Spanish acronym), José Luis Feito claims that on condition that the recovery reaches sustainability and the economic growth and employment “synchronise”, housing prices will shoot suddenly up within few years.

Furthermore, over the upcoming 10 – 15 years the values are expected to slightly exceed the Cosumer Price Index (CPI), but stay at below 2%.

CEOE´s think thank has projected this scenario in a report on “The Importance of Real Estate Sector For the Spanish Economy” during yesterday´s Real Estate Conference Madrid 2014, included in the professional programme of Madrid International Real Estate Exhibition (SIMA). 

According to Feito, in the short-term and before the strong rebound takes place, the property prices achieved their equilibrium with having faced the nominal value loss of 30% – 40% during the recession. “Forecasted further adjustment of 15% seems utterly unbelievable, the prices will stabilize in 2014 and the increase will not be visible before 2016”, he explains.

When it comes to the supply, Feito portends “abrupt correction for this and the next year”, however that will require the economy to continue on its way to recovery. Rise in the GDP and creation of more work places will also be imprescindible to see the improvement. Neither the population is going to rise significantly or witness massive migration, nor unlimited, cheap lending on levels from the bubble inflation will return.

 

Original article: El Economista (after Europa Press), El Confidencial (by Elena Sanz)

Translation: AURA REE

Banks, the kings of the real estate exhibitions.

Next week the Spanish real estate sector will reunite in a meeting that used to be unavoidable for the big names in the construction business for years. Today, after five years of financial and real estate crisis, the real estate exhibition in Madrid (Sima) will reopen between the 30th May and the 2nd June with new leading actors and a clear goal: to sell properties.

“The importance of the real estate sector has been reduced significantly. There is less activity and there are less companies”, Eloy Bohúa, director of Planner Reed, organizer of the fair, explains. “The crisis is redefining the role of the different actors in this market, especially the financial institutions, whose strategies in the residential segment are decisive for the whole sector”, Bohúa adds.

The director of the exhibition provides one of the keys for the change of scenario experienced within the sector which is reflected in the number of exhibitors that will attend the most important real estate fair in Spain: the predominance of financial institutions.

No great developer or real estate company will attend this year´s edition of the fair. In exchange, the subsidiaries of Santander, Bankia, CatalunyaCaixa, Popular, Sabadell and BBVA have confirmed their attendance. There will also be traditional real estate companies such as Level, Hercesa, Habitat, and the subsidiary of Iberdrola.

There will be in total 150 exhibitors – a similar figure to last year´s – that will offer bargains during the fair such as the assumption of the VAT, although discounts will not be the essence of the offer. “Discounts have lost importance as the main selling argument: discounts in reference to what price? To the one from last year or two years ago? We now see that efforts concentrate in communicating as clearly as possible the features of the product. The price does have an influence, of course, but also does the location or services. The buyer is more and more informed, he knows what he is looking for and what he is ready to pay and in a growing percentage of cases, what financing he can get. One of the positive consequences of the crisis is that the market is getting more and more transparent”, he assures.

Although most companies within the sector are centered in reducing their debt, experts believe that the developer is also a key figure.

Most banks have chosen to sell the awarded properties directly, but they need to get rid of the stock of finished properties and of plots, which do not find a buyer nowadays. “We will see a growing cooperation between financial institutions and companies in order to get rid of plots that can materialize in viable projects. All this will be followed by a greater professionalization in all spheres of the activity”, the director of Sima forecasts.