Sabadell Seeks Investors to Develop More Than 2 million m2 of Land

28 December 2017 – Expansión

The bank, through Solvia, has spun off the management of assets worth €600 million into a new company, which will be headquartered in Madrid.

Solvia, the real estate management company of Sabadell, wants to replicate the operation that it carried out in the hotel sector earlier this year, when it sold its hotel business to Blackstone for €630 million, generating profits of €55 million.

As such, the entity has decided to carve out its activity relating to the development of land into a new company called Solvia Desarrollos Inmobiliarios. That company will manage 2.22 million m2 of land in total, equivalent to almost 300 football pitches. The construction of 4,000 homes, across more than 84 developments, is already underway.

The portfolio of assets under management amounts to €600 million, equivalent to approximately 15% of Solvia’s total income. That size places it in the second division in the sector, just behind the listed real estate companies, led by Metrovacesa, Neinor, Aedas and Vía Célere. The largest owner of land in Spain is Sareb.

This new company will be headquartered in Madrid and will be led by Francisco Pérez, former CEO of the Catalan property developer Vertix. “The idea is to grow hand in hand with the large overseas investors that are looking for high returns in Span, but which do not have any structure here. Most of the funding will come from outside of the country”, explains Javier García del Río, CEO of Solvia (pictured above).

The plans

Solvia Desarrollos will develop not only Sabadell’s land – the bank owns 83% of the portfolio – but also plots owned by family offices that the bank manages and the developments that Sareb is granting it. Solvia was one of the four entities chosen by the bad bank in 2014 to help it sell its homes to the general public. Specifically, it took over the problem loans proceeding from Bankia, Ceiss and Banco Gallego.

Sabadell has been developing land since 2013 and has grown a considerable business in that time. It was the first bank to get back on the horse after the real estate bubble burst. “Land is behaving magnificently, although we do not expect to see any abrupt growth. Areas that were very risky in 2013, such as Huelva, are no longer”, said García del Río.

The experts in the sector endorse his opinion. “The turning point in this market came in 2015 and 2016. This year has been exceptional, with more than 20,000 transactions involving land”, explains Samuel Población, National Director of Residential and Land at the consultancy firm CBRE. He calculates that property developers are capable of generating margins of between 18% and 22% from the construction of private housing blocks in Spain.

“The funds that left Spain have returned and investors are interested in buying land”, says José García Montalvo, Professor of Economics at the Universidad Pompeu Fabra and an expert in the real estate sector.

Solvia manages a portfolio of 148,000 real estate assets, whose value exceeds €31 billion. Last year, it generated a gross profit of €57.8 million and brokered the sale of 20,321 properties. Between 2011 and 2016, it sold more than 91,000 assets.

Sabadell granted new financing of €1.35 billion to property developers in 2016, up by 56%. Last year, it started granting property developer loans again in CAM’s area of influence after four years of restrictions imposed by Brussels.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

Sabadell Creates Property Developer Subsidiary With Land Worth €600M

17 November 2017 – Eje Prime

Banco Sabadell wants to continue to form an important part of the world of real estate. Known for many aspects of the boom in the real estate sector, the financial company has decided to back the construction of homes with the creation of Solvia Desarrollos Inmobiliarias, its new subsidiary in the sector, into which it is going to gather land worth €600 million. Francisco Pérez, former CEO at Vertix, will be head up the new entity. He will have the power to eliminate Solvia, the group’s servicer, from all the work in this business area of the market.

Pérez will have 64 professionals at his disposal, all from Solvia, which currently has 84 developments underway and more than 4,000 homes for  sale, for which it is acting as the developer’s representative, according to El Confidencial.

The company’s headquarters will be located in Madrid, unlike those of the bank and servicer of the Sabadell Group, which have been relocated to Alicante after the political conflict in Cataluña destabilised the Spanish market.

This is not the first business operation of its kind that the entity chaired by Josep Oliu has carried out. In the hotel sector, the company extinguished Solvia Hotels to create HI Partners in 2015, a hotel subsidiary, whose management model differs little from the one that will be used in the group’s new real estate arm. Exactly one month ago, Sabadell sold its hotel Socimi to Blackstone for €630 million.

Original story: Eje Prime

Translation: Carmel Drake

Vertix To Build An Aparthotel & 60 Homes In Stiges

9 June 2016 – Expansión

Vertix is about to start to build what will become the largest real estate development in Stiges (Garraf). The Catalan property developer has dusted off a project that has spent years in the waiting and whose first phase will involve the development of 23 hectares.

The property developer chaired by Félix Massot, which last year recorded turnover of €50 million, bought the land twenty years ago and is the owner of 60% of the site that it plans to develop. The rest belongs to small owners of a land owners’ consortium.

The project includes 400 VPO flats, an aparthotel and 80 plots for family homes, of which sixty belong to Vertix. It also includes several facilities. Originally, the plan involved the construction of apartment blocks, with communal gardens. “But Stiges is a town where buyers demand homes with their own gardens, so that caused us to rethink the project and propose separate plots”, explained the Group’s CEO and the founder’s daughter, Elena Massot.

The plots will be sold as they come (unconstructed) or with homes already built on them, depending on the clients’ preference. The homes will have a surface area of 300 sqm, will be surrounded by a garden with a swimming pool, and will be sold for €900,000.

The first phase of the project also includes the construction of an aparthotel, which will have 90 apartments in total and a small shopping centre, measuring 4,000 m2. In this case, Vertix will retain ownership of the building, as a family asset, and will lease it to an external company specialising in short-stay apartment rental. It is not Vertix’s first property of this type, given that the company’s portfolio already contains other assets, such as AC Hotel Sants, in Barcelona, and AC Hotel Gavà Mar (Baix Llobregat).

The land has already been developed, at a cost of €6 million, and is ready to be built on. Vertix has owned this land for two decades, but the urban development plan was not approved until 2007, at the same time the real estate bubble burst, which meant that no construction work was started until now. (…).

In Stiges, demand for housing is high, which means that the Catalan town has the most expensive second-hand house prices in Cataluña, with an average price of €3,779/sqm, ahead of Barcelona and Sant Cugat. It is also the third most expensive town in Spain, exceeded only by Zarautz and San Sebastián, according to a report from Fotocasa.

Vertix currently has property developments underway in Cerdanyola (Vallès Occidental) and in El Prat and Viladecans (Baix Llobregat), where it has identified genuine demand for new build homes. Its other projects are located in Barcelona, on streets such as Lepanto and Marina. (…).

Original story: Expansión (by Marisa Ángles)

Translation: Carmel Drake

RE Experts: Spain’s RE Sector Is Back In Fashion

22 October 2015 – Cinco Días

A wave of optimism is in the air at the Barcelona Meeting Point trade fair.

Senior executives from Colonial, Merlin Properties and Grupo Lar appeared optimistic on Wednesday, regarding the growth of the real estate sector in Spain, based on the comments they made during a session entitled ‘Spain: Back in fashion’ at the real estate trade fair Barcelona Meeting Point (BMP), which is being held until Sunday at the Montjuïc de Fira centre in Barcelona.

The President of Grupo Lar, Luis Pereda and the founding partner of Merlin Properties, Ismael Clemente, were in agreement that prices in Spain are starting to increase, but that they are still below the levels seen in other European countries, which is attracting international investors.

The CEO of Colonial, Pere Viñolas, spoke about the “positive outlook” for an increase in yields associated with these price increases, although he qualified this by saying that the results of the operations that we are now beginning to see will not have an impact on income statements until 2016.

Pereda said that the decrease in rental prices in Spain has been more marked than in other countries, but that the recovery will be too, because rental contracts are shorter term here (around three or four years).

Clemente confirmed that Spain is now in a very promising phase of the real estate cycle. “We have five to seven strong years ahead of us”, although there will be risks, such as the evolution of world (economic) growth and political influences. (…).

During the event to open the trade fair, which this year brings together 280 companies from fifteen countries and almost 40 international investment funds, the Secretary of State for the Economy, Álvaro Nadal, warned that “political uncertainty” may scare off investors from Spain. (…).

With just two months to go until the general election and with the Catalan sovereign debate still raging, the Government’s representative for the Economy said that, if we can guarantee that the improvement in competitiveness, economic growth, creation of employment and consolidation of the public accounts are all going to continue in Spain “without any disruptions” then we “will be reasonably certain that investors” will continue to support the country.

By contrast, added Nadal, “if the future looks like it holds other things, then they are less likely to want to invest”.

That was the message that Nadal wanted to send to the business people in the real estate sector, who are convinced that, for the time being at least, the political tension is not affecting business and that national and international investors are clear in their desire to back Spanish real estate.

“In Barcelona, half of our buyers are from overseas and we have not detected even the slightest interest from them in political matters. It seems that people are either certain that nothing is going to happen or that whatever happens, it will not impact their investment”, explained the CEO of the Catalan property developer Vertix, Elena Massot. (…).

Other participants of BMP also agreed that the expansion of the sector is now a reality, after several years of severe crisis, but that the recovery is going to be slow and uneven. (…).

This recovery will be more intense in the major capitals, where the prices of some properties have already started to rise, but it could still take a while to reach areas where there is less demand, which means a Spanish real estate market that is moving at “two speeds”.

The Property Developers’ Association of Barcelona (APCE) estimates that construction will begin on between 6,000 and 6,500 new homes in Cataluña in 2015. That figure is notably higher than those recorded seen in recent years, but it is still a long way off the data for 2006.

The turning point happened in 2013, when construction began on just 3,036 homes across the whole autonomous region. In 2006, the peak year for construction, construction began on a whopping 126,000 homes. (…).

Original story: Cinco Días

Translation: Carmel Drake

Anticipa: 230,000 New Homes Will Be Built Before 2018

22 October 2015 – Expansión

The supply of housing in Spain will grow by 20% p.a. and the market will receive around 230,000 new homes between now and 2018, according to a study by Anticipa and Josep Oliver, a professor at the Universidad Autónoma de Barcelona, which was presented at Barcelona Meeting Point yesterday.

Spain currently has 983,000 homes to sell. In 2018, there will be 978,000 empty units. The accumulation of unoccupied housing stock, which partly explained the crisis in the sector, will remain stable for the rest of this decade and will only decrease if fewer homes than forecast are built. It is expected that the economic improvement will help the formation of new households – and the demand for homes – despite the falling population.

Lluís Marsá, President of the Property Developers (Association) of Barcelona (APCE), warned that the pace of house construction in Cataluña is four times lower than it should be, but he did not dare to predict when it would return to its normal ratio of 3.5 new homes per thousand inhabitants.

The recovery is very heterogeneous. “We have a two-speed market in Spain and when some people hear talk of recovery in the country, it would not be unreasonable for them to respond with a comment such as: “What are you talking about?””, said the CEO of Neinor Homes Madrid, Juan Velayos, during a talk.

Whilst Madrid and Barcelona have shortages, there are still lots of unsold properties left in unpopulated areas, as the CEO of Vertix Barcelona, Elena Massot, highlighted. She warned that the price of land may rise due to the entry of funds into the market.

The experts point to a rise in rentals, which have increased from 10% to 17% in recent years. “This figure is going to continue to rise”, said the Director General of Servihabitat’s real estate business, Juan Carlos Álvarez.

One segment that is very much not in crisis is the hotel sector, which will grow by 72% in 2015 to €1,900 million, according to the consultancy CBRE. This volume reflects a return to pre-crisis levels.

Original story: Expansión (by A. Zanón)

Translation: Carmel Drake

Solvia Plans To Purchase Other RE Platforms

27 March 2015 – Expansión

The real estate platform expects to hire 200 people this year / Banco Sabadell is giving greater autonomy to its subsidiary, Solvia, which has taken a big step forward after being awarded the management of 42,900 assets by Sareb, worth €11,500 million.

Banco Sabadell wants to covert Solvia into a leading player in the Spanish real estate sector. The entity has proposed that it lead the consolidation process that the servicers in the market are expected to undergo (in the coming months and years). Servicers are the asset management platforms that were created in Spain following the burst of the real estate bubble and the restructuring of the financial sector. These companies were created as “bad banks”, in which entities placed the (distressed) assets that were accumulating on their balances sheets. In recent years, almost all of the financial institutions have opted to sell all or part of their platforms to specialist funds. Nevertheless, Sabadell has chosen to retain full ownership of Solvia and to promote its growth to the maximum.

“Solvia is the only servicer whose capital is held 100% locally; it is supported by a committed shareholder, a strong brand and an excellent system and team of professionals”, says Miguel Montes, CEO of Sabadell and the head of the real estate company.

As one of the winners of the contract to manage some of Sareb’s portfolio, Solvia now manages assets amounting to €34,000 million, with a portfolio of 135,000 units. Of this, €25,000 million relate exclusively to property and the remaining €9,000 million relate to loan portfolios.

Potential IPO

According to Montes, Solvia will grow through the purchase of new product portfolios and the acquisition of other platforms, since some of them have been left with small portfolios. “In Spain, there will be a consolidation (of the number of players) in the servicer market. Solvia will opt to purchase (some of its smaller competitors) to increase its size. We think that this is a business that is worth investing in”, he assures.

According to the director, if it grows in size, Solvia may consider an IPO. “Now is still not the right time to list the company on the stock exchange; before considering that, Solvia must establish itself as an independent multi-client servicer, but the stock exchange is not the only alternative, there are other options”, he says.

To accelerate growth and facilitate its ability to work with all kinds of external clients, Sabadell has decided to grant Solvia maximum independence, by providing the entity with the resources and structure necessary to operate autonomously. Thus, the company will depend increasingly less on the bank’s central services and will have its own management team. As such, it has launched a serious offensive to attract talent and recruit experienced professionals.

Solvia closed 2014 with a workforce of 240 people and this year expects to hire 200 more, to take its total number of employees to 440.

The real estate company recently hired Francisco Pérez – former director of the real estate developer Vertix – as the regional director in Cataluña. To strengthen its office in Madrid, it has hired Javier Román Palero from the fund Apollo.

The majority of the properties that Solvia manages following the award of Sareb’s portfolio, which in turn came from Ceiss, are located in the central region of Spain. Under project Ibero, Solvía also won the management of properties from Sareb that had previously belonged to Banco Gallego and Bankia. In total, 42,900 units with an original value of €11,500 million, although Sareb purchased them for €7,000 million. “We have completed the migration of the portfolio of assets that came from Ceiss and Banco Gallego; the migration of the properties from Bankia will be completed in May”, explains Montes.

To strengthen its autonomy, Solvia is expected to adopt a brand that differentiates it from Sabadell. In fact, at its regional headquarters in Barcelona, it already has a sign that does not include the letters “B” or “S” in the logo, which identify the bank.


In parallel, Solvia has relocated some of its team to Alicante, where it has opened the registered headquarters of the property marketing platform. “In 2014, Solvia sold 16,200 units for €2,750 million. None of the banks sold as much as us”, highlights Montes.

In parallel to the sale of properties from the portfolio, Solvia’s other main business line is the direct development of newly built homes on land that it owns. “We have 1,400 homes under construction” – he says – “and we expect an annual production of one thousand newly-built homes”. According to the director, Solvia has already sold several entire developments. “The number of “off-plan” sales that we are recording is spectacular”, he notes.

Montes says that Solvia’s business is “strategic” for Sabadell, since it will allow the entity to harness the potential being offered by the change in the cycle of the Spanish real estate sector. “Instead of leaving it for someone else to do, we are willing to invest and work hard in this business to leverage the potential value of the real estate market”. He argues.

Solvia has also started to sell land, a market that was completely paralysed until now.

Original story: Expansión (by S. Saborit/S. Arancibia)

Translation: Carmel Drake

Vertix Returns To The Real Estate Market With 180 Homes

9 February 2015 – Expansión

Felip Massot has appointed his daughter, Elena, as the sold director and CEO of Vertix to replace Francisco Pérez, who has joined Solvia as the new Regional Director of Cataluña.

Vertix is one of the few real estate developers that has been saved from the crisis, although it is now only a fraction of the size it once was. Whilst in 2006, the company, owned by Felip Massot, generated revenues of €200 million and constructed homes at a breakneck pace; in 2014, it recorded a turnover of €50 million and is currently building only around 180 homes, all in the Barcelona area and in locations where demand is guaranteed.

Original story: Expansión (by Marisa Ángeles)

Translation: Carmel Drake