Temprano Capital Partners Acquires a New Site for a Student Residence in Madrid

17 June 2019 – Press Release

The new project, which forms part of the Temprano Student Living (TSL) initiative, will provide 10,000 m2 of premium accommodation for more than 400 students. This project represents Temprano Capital Partners first scheme in Madrid and its eleventh Student Residence development in the Iberian Peninsula.

Temprano Capital Partners has just acquired a new site in Getafe, Madrid. It is the firm’s first student residence project to be developed in Spain’s capital and the eleventh in Temprano Student Living (TSL) Iberian’s  pipeline.

The first TSL project to complete was TSL Marques de Pombal in Lisbon, which opened its doors to students in January 2018 and won the award for “Best in Class for Property Innovation and Sustainability at the Class” given by The Class of 2020 annual awards for its good work in innovation and sustainability.

By adding this new student residence in Madrid, TSL will increase the number of beds in its portfolio to more than 4,000. The city of Madrid has the largest number of students in Spain followed by Barcelona, Valencia and Bilbao, respectively. More than 300,000 students are enrolled in the region in the 2018-2019 academic year, of which 196,400 attend public universities with the remainder at various private educational institutions around Madrid.

The large student population in Madrid includes a large contingency from other regions of Spain (approximately 80,000 according to internal research) and approximately 24,000 international students principally Europeans and from the Americas.

The recently acquired site is located at Calle Ramón Rubial 37, Getafe, which is an 8-minute walk from the main campus of the Carlos III University and a 10-minute walk from the railway station Las Margaritas Universidad.

It is envisaged that the student residence will provide some 400 beds in a combination of cluster, studio and twin room configurations, within a building spanning just over 10,000 m2. The residence will provide other services and amenities, such as a gymnasium, lounge club area, audio visual / cinema rooms, library, study rooms and areas created for group work, dinner party rooms and onsite catering and restaurant facilities. The residence will offer rentals to be fully inclusive with 24/7 concierge service. Rooms will provide kitchens, individual bathrooms, Smart TVs, in addition to desks for in room study needs. High speed Wi-Fi will be provided throughout the project.

Original story: Press Release

Edited by: Carmel Drake

US Firm Valeo Groupe Wants to Build 20,000 Beds in Student Halls in Spain

11 June 2019 – Cinco Días

After teaming up with Bankinter to invest in Spain last year, the US firm Valeo Groupe has now announced that it wants to become the market leader in the student residence sector. According to its CEO for Europe, Peter Haspel, “Our objective in Spain is to reach 20,000 beds”.

The firm does not have a detailed timeframe at this stage but its target would make it the market leader or one of the largest players in the country, alongside Resa, which currently has 10,000 beds, and Nexo Residencias, which is growing rapidly. Haspel considers that Spain has the capacity for 500,000 beds compared with the existing supply of 98,000.

The company has already designed a first investment plan amounting to between €300 million and €400 million to build 10 halls of residence in Spain and Portugal over the next two or three years.

It has already started work on a project in Granada and is about to launch one in Porto. They will be followed by new halls in other major cities such as Madrid, Barcelona, Lisbon, Valencia, Sevilla and Bilbao.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation/Summary: Carmel Drake

Bank of Spain: Spain’s Housing Market is Not Overvalued

9 June 2019 – Eje Prime

The Bank of Spain does not think that a real estate bubble exists. The institution’s Director General of Economics and Statistics, Óscar Arce, has assured that the bank does not consider that the housing market is “overvalued in general”. Nevertheless, he is following the sector “very closely” given its history.

Arce highlighted several differences between the current climate and the previous cycle including the fact that price rises now are not uniform across all regions or cities. In fact, according to the latest data published by the Bank of Spain, average house prices rose by 6.8% YoY during Q1 2019, driven by Madrid, Barcelona, some parts of the coast and the islands.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

Savills: Spain willl have 260,524 m2 of New Innovative Commercial Space in 2019

3 June 2019 – La Vanguardia

According to the latest edition of the Retail Report Spain, compiled by Savills Aguirre Newman, Spain will see the addition of new innovative commercial space spanning 260,524 m2 this year, where 10 new shopping centres are going to be developed.

In addition, the real estate consultancy forecasts that shopping centres worth up to €2.5 billion could be put up for sale, including Intu’s portfolio comprising four shopping centres, which are worth c. €1 billion. The pipeline also includes other non-prime shopping centres and portfolios of supermarkets and hypermarkets.

Nevertheless, the report forecasts that investment levels in 2019 will be lower than in the previous two years, as many overseas investors, particularly those from the UK and USA, adopt a ‘wait and see’ approach to the Spanish market in light of the slow-down in the world economy and the boom in e-commerce.

In this way, demand is expected to focus on small convenience centres, particularly those linked to supermarkets, and prime and secondary retail parks that are not so affected by e-commerce.

Original story: La Vanguardia

Translation/Summary: Carmel Drake

Spain’s Property Developers Glimpse the First Signs of a Moderation in Prices

29 May 2019 – Expansión

Yesterday, several of the largest property developers in Spain met for a Medcap roundtable event moderated by Deloitte to discuss the outlook for the residential market.

Specifically, representatives from Metrovacesa, Aedas, Quabit, Insur and Lar participated in the discussions, during which they observed that house prices in Spain are starting to moderate in some of the more mature markets, although they acknowledged that there are still many secondary cities where the new (growth) cycle is just beginning.

In this context, the representatives identified a number of focuses and challenges facing the sector, namely:

Licences: All of the property developers are pushing for great agility from the public administrations when it comes to the granting of construction permits.

Construction: The labour shortage in the construction sector is pushing up prices and leading to delays in project finishes.

Concentration: Property developers are larger and more professionalised now than before the crisis; they require critical mass to be resilient to real estate cycles.

Industrialisation: Prefabricated homes allow construction periods to be shortened and for greater control over the processes.

Access: Young people are finding it increasingly difficult to afford to buy a home.

Overall, the experts consider that the residential sector is still immersed in the early stages of the new cycle, but only time will tell whether they are right.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

GMP Puts Huawei’s Offices in Castellana Norte Up For Sale

28 May 2019 – Eje Prime

The real estate group GMP has put the headquarters of the Chinese company Huawei in Madrid up for sale. The technology giant has occupied the offices, which span 21,000 m2, since Q1 2017. The premises are located in the Castellana Norte Business Park in Las Tablas, close to the headquarters of other groups such as Mediaset and Nokia.

The Castellana Norte Business Park has become one of the most important urban renovations projects in the Spanish capital. It offers office space measuring more than 1 million m2, with capacity for over 200,000 people.

GMP, which is owned by the Montoro family and the Singapore sovereign fund, specialises in the management of offices and retail parks. It owns 18 work centres in Madrid and generated revenues of €106.7 million in 2018, up by 8% YoY.

The office market in the Spanish capital is one of the most attractive for international operators thanks to the combination of low prices (€33/m2/month) and availability (10.5%).

GMP’s decision to sell the property was taken before the US named the Chinese company as a threat to national security and vetoed it from all business with US companies.

Original story: Eje Prime (by Marta Casado Pla & Marc Vidal Ordeig)

Translation/Summary: Carmel Drake

BNP Paribas: Office Rentals Soar in Barcelona during Q1 2019

23 May 2019 – La Vanguardia

The office market in Barcelona broke historical records in terms of space leased and rental prices during the first quarter of the year, according to a report from the consultancy firm BNP Paribas Real Estate.

According to the data, 152,300 m2 of office space was leased during Q1 2019, up by 65% with respect to the same period in 2018, boosted by a 60% increase in demand for large spaces (those measuring over 3,000 m2).

According to David Alonso, Head of Research at BNP, the office market in Barcelona was traditionally dominated by SMEs demanding spaces measuring less than 1,000 m2. Nevertheless, since 2015, that trend has changed with the arrival of technological companies requiring larger offices, and since 2017, with the entry of coworking companies – the latter leased 22% of the space let during Q1 2019.

As such, 91 new contracts were signed during the first quarter of 2019, with the 22@ district as the main driver, accounting for 30 of the operations and 40% (60,900 m2) of the space.

Nevertheless, the two largest operations were closed in more secondary areas: the rental of 18,000 m2 in Sant Joan Despí by Gallina Blanca and the rental of 17,209 m2 on Gran Vía in Barcelona by La Caixa.

All of this activity drove up rents with prices in prime areas, such as the best buildings on the upper end of La Diagonal, reaching €27/m2/month, and some operations even reaching €30/m2/month, whereby exceeding the maximum recorded in 2008 (€27.5/m2/month).

Original story: La Vanguardia (by Rosa Salvador)

Translation/Summary: Carmel Drake

Investors Purchase the Site of the Former ‘Cervezas Victoria’ Factory in Málaga

20 May 2019 – Diario Sur

The growing demand for land in Málaga has reactivated an operation involving the site that used to be home to the former Cervezas Victoria factory, situated alongside the Azucarera-Intelhorce highway to the west of the city centre.

Thirteen years ago, the Town Hall approved the urbanisation of those plots, which were divided into four blocks in order to house offices, businesses, warehouses and parking lots. The urbanisation work was completed but the economic crisis hit before the plots could be occupied. They ended up in the hands of the banks, specifically, Unicaja, which has now managed to offload most of them onto entrepreneurs who are keen to develop the area.

According to sources familiar with the operation, local and German investors have teamed up to acquire the plots, which are crying out to be transformed into a new business centre. The plots span a surface area of 50,137 m2 in total and the investors have spent €7 million to date buying up the land.

Original story: Diario Sur (by Jesús Hinojosa)

Translation/Summary: Carmel Drake

Spain Needs 150,000 New Homes Per Year But the Market is Capable of Delivering Only 75,000

16 May 2019 – El Confidencial

According to the experts, on the basis of the rate of formation of new households and for a healthy residential market, Spain needs to produce between 120,000 and 150,000 new homes per year. Those figures are a far cry from the 650,000 units that were constructed in 2007, just before the outbreak of the real estate crisis. Nevertheless, the latest data reveals that even 150,000 homes is too ambitious a target, at least for the next few years.

That is according to the latest Real Estate Pulsometer, compiled by the Cátedra Inmobiliaria in collaboration with the University of Málaga, which estimates that 70,400 new homes will be finished by the end of this year and 77,100 by the end of next year. In other words, half the number needed. The reason? According to José Antonio Pérez, Director General of the Cátedra Inmobiliaria, “In simple terms, the sector does not have sufficient manpower to build that many homes. There are sufficient numbers of qualified people – such as architects and surveyors -, but there is a distinct lack of basic labour, such as workmen and builders”.

Tens of thousands of jobs were destroyed in the construction sector during the crisis. At the height of the boom, the sector and its related segments employed almost 2 million people, but by 2017 (latest available data), that figure barely exceeded 800,000. In other words, almost 60% of the workers had disappeared. Most have either left the country (many were foreigners) or reinvented themselves in other sectors and are reluctant to return to construction now.

Employment in the construction sector has recovered slightly over the last three years, with almost half a million people working in the sector. But that figure is not sufficient to build the homes that the country needs, which means delays and higher construction costs.

Lack of bank financing

The situation is compounded by the lack of available land and the shortage of bank financing to launch those 150,000 homes. The banks are willing to finance just 65,000 homes per year, according to Juan Antonio Gómez-Pintado, President of Asprima (the Association of Property Developers of Madrid). Several alternative financing funds are trying to cover the gap but they are not enough.

It is also true that stagnant salaries and problems of affordability for young people are other factors at play against the construction of so many homes.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

INE: House Sales Rose by 3.7% YoY in Q1 2019

14 May 2019 – Idealista

According to data from INE, 133,989 homes were sold in Spain between January and March 2019, which represents a YoY increase of 3.7%. It also represents the best quarterly sales figure since the spring of 2008.

Nevertheless, it is worth noting that the volume of monthly sales actually decreased during the quarter from 47,000 in January, to 43,700 in February and 42,700 in March. Second-hand properties accounted for most house sales during the period, specifically 81.1% in March, although the volume of new build transactions did grow by 14.4% during the quarter.

By autonomous region

Andalucía, Cataluña and Madrid continued to lead the ranking in terms of the regions with the most transactions signed, with 8,915, 6,904 and 6,233 units sold, respectively.

Despite the strong results, Fernando Encinar, Head of Research at Idealista urges caution in light of the new Royal Decrees published in recent months. They are generating uncertainty in the market and so are slowing down growth – families and investors alike are deciding not to use their savings to buy a home and rent it out, in the short term at least, and that trend may become more widespread over the coming months.

Original story: Idealista

Translation/Summary: Carmel Drake