Spain’s CNMC Takes Madrid, Bilbao & San Sebastián to Court Over Anti-Airbnb Legislation

7 August 2018 – El País

The competition authorities are cracking down on the attempt by some of Spain’s large Town Halls to regulate the boom in tourist apartments, created by Airbnb and its competitors, which many blame for contributing to an increase in residential rental prices and the expulsion of the most underprivileged from the centre of Spain’s cities. The National Markets and Competition Commission (CNMC) announced on Tuesday that it is going to challenge the urban planning rules approved recently in Madrid, Bilbao and San Sebastián on the basis that they violate “competition” and harm consumers and users. Other rules, not yet in force, in Barcelona and Valencia, could also be targetted by the CNMC, warn sources at the agency.

Imposing a compulsory licence on those who rent their homes to tourists. Limiting the types of properties that may be leased for short periods. They are some of the measures introduced by the Town Halls that the CNMC is now challenging. And the battle doesn’t stop there. New rules that other cities decide to approve may also clash with the opinion of the market regulator, which is now sending the cases of Madrid, Bilbao and San Sebastián to the High Court of their respective autonomous regions. They will have to decide whether to admit the appeals and overturn, in part or in whole, the municipal regulations.

The body chaired by José María Marín Quemada said that it has sent a request to the three municipalities to provide explanations regarding the “need and proportionality” of the restrictions or, failing that, for those restrictions to be annulled. In the absence of a satisfactory response, the CNMC will resort to the courts through a contentious-administrative appeal. The informal talks held so far have made very clear the gulf that separates the independent body from the Town Halls.

In its note, the CNMC details the different regulations that are, in its opinion, deserving of appeal for being measures with “restrictive effects on competition”. Madrid requires a licence for the rental of tourist apartments and homes. The municipality also establishes a period of one year, extendable for one more, before new licences can be granted in areas such as the Centro district. According to the recently approved legislation, the rental of tourist apartments that do not have an independent entrance will be prohibited, which represents 95% of the homes in the city centre.

In both Bilbao and San Sebastián, the regulations limit tourist apartments to ground and first floors only, unless they have independent access from the street. In Bilbao, moreover, tourist apartments need to be authorised and registered; and in San Sebastián new tourist apartments are prohibited in certain parts of the centre.

Higher prices

The Competition authority believes that, with their decisions, the municipal teams in Madrid, Bilbao and San Sebastián “are impeding the entry of new operators and consolidating the position of the existing suppliers of tourist accommodation”. The body has announced that these measures will lead to “higher prices in terms of tourist accommodation” and lower quality, investment and innovation in tourist accommodation in those three cities (…).

The affected municipalities reacted quickly, stating that they will defend their regulations in the courts. The Town Hall of Madrid, governed by Manuela Carmena (Ahora Madrid) said that it wants to combine the defence of tourism with the rights of “citizens in our neighbourhoods”, according to Julio Núñez. “Our objective is introduce regulation that protects the residential use of land and favours competition in a sector where hostels and hotels already operate”, add sources at the Urban Planning Department (…).

Original story: El País (by Luis Doncel)

Translation: Carmel Drake

Jesús Ger Starts Building Homes Again in Marina d’Or

24 May 2018 – Expansión

New homes are being built again in one of the major symbols of urban development along the Spanish coast: Marina d’Or. The developer and owner of a large proportion of the popular resort town of Oropesa (Castellón), Jesús Ger, has launched his first housing development, after more than a decade of paralysis due to the real estate crisis.

The new residential block will have 11 storeys and will house 286 apartments on one of the last remaining unbuilt plots on the beachfront of the tourist complex.

Nevertheless, the return to real estate activity has not materialised through the companies traditionally linked to Marina d’Or, but instead is being carried out by Inseryal, the property developer whose sole administrator is Sandra Rodrigues, the wife of Jesús Ger.

Inseryal has already started off-plan marketing of the homes in the so-called Edificio Miramar. The apartments, all of which are going to have two bedrooms in theory, will go on sale for upwards of €129,000 plus VAT. At those asking prices, the new block should generate revenues of at least €37 million for the property developer, which expects to complete this project in June 2020.

The first development in Marina d’Or since the crisis comes at the same time as the completion of the bankruptcy proceedings of Comervi, Ger’s main real estate company, which approved its creditors’ agreement a few weeks ago. The group became one of the most famous developers of holiday homes in Spain, with turnover of €345 million in 2007. Despite the debt, Ger has withstood the lean times thanks to the other branch of his business, tourist accommodation.

Original story: Expansión (by A.C.A.)

Translation: Carmel Drake

Socimi Elaia Buys a Hotel in Mallorca for €5.7M

23 April 2018 – Eje Prime

Elaia Investment Spain is growing through purchases. The Socimi has acquired a hotel in Mallorca for a total value of €5.7 million, according to a statement filed by the group with the Alternative Investment Market. The asset acquired is Hotel Valparaiso, an establishment spanning 2,400 m2 on a plot measuring 4,400 m2, located on the seafront in Cala Murada, Manacor (Mallorca).

This represents Elaia Investment Spain’s sixth asset in the Balearic Islands. The hotel is located on the east of the island, on a cliff top, 17km from the underground lake in the Drach Caves and 3.5 nautical miles from Portocolom.

Elaia is a Socimi focusing primarily on the tourist accommodation sector (87% of its assets), whilst the rest of its portfolio comprises residential assets. Following this acquisition, the Socimi now owns 15 assets in total: two residential buildings in Madrid, seven tourist apartment complexes, five hotels and one project under development.

Batipart is currently the majority shareholder of Elaia, in which it holds a 66% stake. The other shares are distributed between 22 shareholders including Euler Hermès Reinsurance (13.81%), Allianz Invest Pierre (9.21%), managed by Immovalor Gestion, and other individual and corporate shareholders with minority stakes.

Original story: Eje Prime

Translation: Carmel Drake

Only-Apartments Creates ‘Cerbium Holding’ After Buying Tech Firm TBD

7 February 2018 – Eje Prime

Only-Apartments is starting a new phase. The tourist apartment rental platform has carried out a non-monetary capital increase to purchase the technological company Texting Big Data (TBD) for €1.5 million. Following the operation, the company will create Cerbium Holding, which is what the company will now be called.

Listed on the Alternative Investment Market (MAB), the general shareholders’ meeting of the real estate company approved the issue of 703,990 new shares to finance the acquisition of 100% of the share capital of TBD. By virtue of the agreement, the majority shareholders of the technology firm, Guillem Junyent, Pier 46 and Wecap Barcelona, will now be shareholders of the new holding company, according to Expansión.

Moreover, Only-Apartments has expanded its Board of Directors with the inclusion of two of TBD’s other shareholders, Ángel Cánovas and Sajama Invest, who will accompany the proptech’s cofounders, Alon Eldar and Elisabet Cristià (pictured above), as well as Jaime Buxó. Meanwhile, Juan Marín has resigned from the Board.

Following this operation, the holding company will have two lines of business: the traditional arm, linked to tourist accommodation; and the new technological branch, which will offer technological consultancy and management services, amongst other activities.

Original story: Eje Prime

Translation: Carmel Drake

HI Partners Acquires 3 Hotels in Mallorca & Málaga

26 December 2017 – Ali Market

On 22 December, Spain’s National Securities and Exchange Commission (CNMV) reported that the US fund The Blackstone Group International Partners (through Halley Bidco, S.L.U.) had finally made effective the purchase of 100% of HI Partners Holdco Value Added from Banco Sabadell, in an operation worth €630.73M (…).

Hotel Investment Partners (HI Partners) divides its assets between two subsidiaries, HI Partners Holdco Value Added and HI Partners Holdco Gestión Activa. Value Added owns HI’s larger tourist accommodations, located in premium areas and capable of generating significant returns once converted. That division owns 15 tourist accommodation establishments (grouped into 14 complexes), which are integrated into various hotel groups through management and rental contracts, comprising 3,724 rooms in total.

Meanwhile, Gestión Activa (635 units spread over 11 establishments) owns the rest of the group’s assets, most of which are smaller properties, in secondary locations, with the aim of being sold after optimising their management. As at 25 December 2017, HI Partners owned a total portfolio of 4,359 accommodation units (beds) spread over 26 hotels, according to a Census performed by Alimarket Hoteles.

New additions

Blackstone’s aim over the next few years is to position HI Partners in the Spanish hotel sector and to continue adding new assets to its portfolio in order to make it one of the largest owners in the domestic hotel market. In this sense, HI Partners has just announced the purchase of three holiday resorts. Specifically, in the Balearic Islands, it has purchased ‘Calviá Dreams’ (4E-161 beds) and ‘Barracuda’ (3E-264 beds) in Magaluf (Mallorca) and in Torremolinos, it has acquired the Malagan aparthotel ‘Pueblo Camino Real’ (4E-513 beds).

The first two assets currently form part of the Alua Hotels & Resorts portfolio (a chain that is owned in its entirety by Alchemy) (…). In fact, and in its fight to grow its portfolio, Blackstone bid this year to acquire the Alua Hotels’ portfolio; however, the Socimi Hispania (the largest hotel owner in Spain, with 11,047 beds spread over 39 hotels) pipped the US fund at the post by acquiring a batch of 7 hotels linked to Alua for €165 million earlier this month (…).

Original story: Ali Market (by Ricardo Vallano)

Translation: Carmel Drake

Friendly Rentals Acquires Apartments Barcelona

9 October 2017 – Eje Prime

The real estate manager Friendly Rentals has been shopping. The company, owned by the Novasol group since 2016, has absorbed one of its competitors in Cataluña, Apartments Barcelona.

Both companies specialise in the management of tourist rental homes and, according to sources in the sector, the operation will not affect the day to day operations of Apartments Barcelona, which will continue to function as an independent brand, with the same CEO, Eduardo Navarrete, and workforce, according to Expansión. Nevertheless, the union of the company’s offices has not been ruled out.

The company currently owns 370 apartments and expects to generate revenues of €2 million in 2017. Friendly Rentals is led by Pablo Zubicaray, who founded the company thirteen years ago, and invoices more than €10 million per year.

The integration of Apartments Barcelona into the Novasol group will result in an increase in its client base and rental home portfolio in Barcelona, at a time when demand for this type of tourist accommodation is continuing to grow.

Original story: Eje Prime 

Translation: Carmel Drake

INE: Overnight Hotel Stays Rose By 7.4% YoY In July

24 August 2016 – Expansión

The Balearic Islands, Canary Islands and Valencia recorded the highest occupancy rates during the month. There was no “Brexit effect”: the British market grew by 15%. The sector believes that it has recorded from the losses of the crisis.

The tourism sector has moved full steam ahead during the first half of the year and, above all, so far this summer. In July, there were 42.8 million overnight hotel stays (28.1 million foreigners and 14.6 million Spaniards), up by 7.4% compared with the same month in 2015, when the figure had risen by 6% YoY. There are two main drivers of this acceleration: overseas tourists, whose stays increased by 8.2%, and Spain’s own residents, whose stays rose by 5.7% in July compared with last year, according to data published yesterday by INE. Sources in the sector consider that the problems of the crisis, above all in terms of the domestic market, are now behind us.

The autonomous regions with the highest occupancy rates during the seventh month of the year were the Balearic Islands (91%), the Canary Islands (84.9%), Valencia (77.9%) and Cataluña (75.8%). The most successful area in terms of the number of beds occupied was the island of Mallorca, with a 92.1% occupancy rate and Palma-Calvià, which achieved a higher occupancy rate on the weekends (90.9%). In terms of total overnight stays, the most popular area was the Costa del Sol, with more than 2.3 million overnight stays during the month.

And not only did the number of overnight stays rise, hotel prices also increased in July: by 7.5% compared with a year ago, which represents an increase of 1.5 points over the rate obtained then (6%). Again, the autonomous regions that contributed the most to this increase were the Balearic Islands (with a YoY increase of 10%), Andalucía (8.9%), the Canary Islands (8%) and Cataluña (5%).

In addition, the average revenue per room occupied stood at €93.20, up by 6.3% YoY. By hotel category, the average income was €208.40 for five-star properties; €102.40 for four-star hotels and €79.40 for three-star establishments (…).

In addition to the economic recovery, which has relaunched domestic demand after it was significantly depressed during the crisis, one reason that explains the strong tourism figures in Spain is the difficulties that competing countries are facing, such as Turkey, whose tourist market is experiencing decreases of 30% following the terrorist attacks in recent months, and Egypt, with a decline of almost 70%, following five years of political and social instability since the outbreak of the Arab spring (…).

For the time being, the figures do not reflect any negative effect from Brexit in terms of the arrival of British visitors. Quite the opposite: in July, Brits recorded 1.28 million overnight stays in Spain, up by 15% compared with the same month in 2015. “So far in 2016, the British market has grown by 20%”, said Juan Molas, Chairman of the Spanish Confederation of Hotels and Tourist Accommodation (CEHAT), who revealed that reservations made by tour operators for the winter season (November-April) already reflect an increase of 16% compared with the same period last year.

Despite the general recovery in terms of overnight hotel stays, sector representatives are still warning about the increase in the use of unregulated establishments through platforms such as Airbnb, Homeaway and Niumba, amongst others. “The use of these services unbalances the tourist model”, said Inmaculada Benito, Chairwoman of the Hotel Business Federation in Mallorca. A war has been declared on these types of businesses in cities such as Barcelona.

Original story: Expansión (by Yago González)

Translation: Carmel Drake

Fotocasa: Rental Prices Rose By 4.8% YoY In June

18 July 2016 – Expansión

Over the last three years, the prices of most goods and services have remained stable, to the extent that many economists have come to fear that Spain will enter into a period of deflation. Nevertheless, in the midst of these “doldrums”, there is a market where prices have already started to pick up pace: the residential rental sector. According to the latest data from Fotocasa, residential rental prices rose at a rate of 4.8% YoY in June, just two tenths below the historical maximum, recorded in 2006, when the index was first compiled. (…).

As with everything, this market also reflects the two speeds that are being seen in other segments. In this way, prices grew by 15.7% in the Balearic Islands, but remained stable and even decreased in La Rioja, Extremadura and Castilla-La Mancha, reflecting the demographic and tourist pressures in one of the areas and the lack of strength in the others. After the islands, comes Murcia, where rental prices rose by 11.3%, followed by Cataluña (10.7%), Comunidad Valenciana (10.5%) and Madrid (9.9%). All of the other regions fall a long way behind, well below the average.

Something is changing in the rental market. “There is no longer a single market, but rather areas that vary significantly by district and even by street. For example, in Barcelona, rental prices have risen by more than 20% in several neighbourhoods: Gràcia, Sants and Ciutat Vella”, says Beatriz Toribio, Head of Research at Fotocasa. In addition, whilst before the highest rental price increases were seen in those cities with the highest economic growth, now prices are rising by the most in the most popular tourist destinations. That is because tourists are increasingly opting to stay in private accommodation instead of hotels, and increasingly more owners are putting their homes up for rent for this purpose, given that they offer higher returns.

Although this type of housing does not enter into Fotocasa’s calculations, the use of residential properties for this purpose significantly limits the supply of homes, which drives prices up. For example: rental prices rose by 7.1% in the capital of Valencia with respect to last year, but soared by 19.6% in Peñíscola, 21.6% in Gandía, 25.6% in Benidorm and 49% in Santa Pola. (…).

The major exception to this changing pattern in the Canary Islands, where rental prices grew by 3.8%, below the average. That rate of growth was in line with Andalucía (where prices rose by 4.3%, also driven by many towns along the coast), Navarra (where prices also rose by 3.8%), Cantabria and Galicia (3.5% in both cases). There were also significant price increases in Asturias (3.2%), Aragón (3%) and Castilla y León (2.4%).

Finally, prices remained stable or decreased in just four autonomous regions: País Vasco (where rental prices rose by 0.8%), Castilla-La Mancha (0.6%), Extremadura (where they remained stable) and La Rioja –where they decreased by -0.2%.

As a result of the price increases in the last year, Madrid and Cataluña have joined the league of autonomous communities where rents now cost more than €10/sqm, following the path set by País Vasco. These regions are followed by the Balearic Islands (€9.16/sqm) and then Navarra (€7.11/sqm). The cheapest rents are found in Castilla-La Mancha and Extremadura, at less than €5/sqm, followed by La Rioja, Murcia and Valencia (between €5/sqm and €6/sqm).

Original story: Expansión (by P. Cerezal)

Translation: Carmel Drake

Constitutional Court Suspends Tax On Empty Homes

4 May 2016 – Expansión

The Constitutional Court (TC) has suspended three laws approved by the Catalan Parliament, after they were appealed by the Government at the end of April. The laws in question are: the law that taxes empty homes, the local government law and the law for equality between men and women. The appeals have been accepted for processing, which means that the laws themselves have been temporarily suspended. Nevertheless, the acceptance for processing and the temporary suspension do not represent a ruling of any kind regarding the outcome of the appeal.

According to the acting Justice Minister, Rafael Catalá, who spoke at a press conference following the Council of Ministers meeting held on 22 April, the Government is challenging the law that establishes a tax on empty homes because that taxable event is already taxed under the current system for financing local governments, which provides for surcharges of up to 50% under IBI. (…)

The appeal against this Catalan law is surprising if we consider the fact that the Stability Program, which the Government has just submitted to Brussels, praises this law as one of the measures that the regional Governments are using to try to guarantee revenues “such as the tax on empty homes and the tax on tourist accommodation”, it says.

Original story: Expansión

Translation: Carmel Drake

Barcelona Cracks Down On Illegal Tourist Accommodation

19 January 2016 – El Economista

The Town Hall of Barcelona has ordered the cessation of activity in 388 tourist apartments, has sealed off another 16 for not adhering to the order to cease their activity and has confirmed that another 17 are in the sealing period.

At a press conference on Monday, the Deputy Mayoress for Urban Planning, Janet Sanz, explained that 482 disciplinary proceedings have been opened against the owners of apartments that have been operating illegally and the revocation of 400 licences has been initiated in cases where the licence holder has been identified to not be the owner of the property.

Alerted by complaints

2,108 disciplinary procedures have been filed against the owners of tourist apartments and the Call Reception Centre set up by the Town Hall has handled more than 3,000 complaints about around 2,400 lodgings, which have allowed the City Police to begin the inspection of 1,816 unlicensed apartments.

The inspections have also allowed 226 disciplinary files to be opened against the owners of tourist apartments that do have licences, but which have not dealt with or resolved an incident when required to do so.

In total, the authorities have identified 1,080 flats in breach of the legislation, but have only fined 482 because they are waiting for a second round of inspections to be carried out to confirm that illegal tourist activity is being undertaken in the properties.

The Deputy Mayoress has also highlighted that the vast majority of the illegal apartments identified are located in the district of Ciutat Vella, followed by Eixample.

These actions to alleviate problems for tourists are included in the report “Municipal actions to counter the illegal supply of tourist accommodation 2015”, which will be presented to the Committee for Ecology, Urban Planning and Mobility on Wednesday.

Sanz explained that she would like to have more inspectors to detect this kind of activity, but added that the Town Hall has a very “limited” recruitment strategy, restricted by the Law of Budgetary Stability.

Reinforcement in la Barceloneta

She also said that the neighbourhood of la Barceloneta, which is one of the most affected areas, has been visited in a “proactive” way to detect illegal tourist apartments…8,553 visits have been made in total in recent months.

In addition, the neighbourhood has had its own office since November to facilitate complaints from local residents. Furthermore, 33 identification plaques have been installed in apartments that do have licences – there are 72 in total – showing details of the corresponding licence and telephone number.

The objective of the initiative is to identify those apartments that are operating legally and those that are not.

Original story: El Economista

Translation: Carmel Drake