Wednesday 13 November 2013

Five Reasons to Invest in Spanish Real Estate Now

"The situation has changed radically since January." "We are living a unique moment". These statements relate to a broad representation of experts from presidents of the leading consultancies in the country to representatives of international funds in the real estate sector. 

After more than five years of crisis, uncertainty about when the real estate sector would recover - a 'vital sector" in the Spanish economy according to Finance Minister Cristobal Montoro - has given way to a widespread optimism, thanks largely to the participation of  foreign investors. "We have entered a new stage in the Spanish property market. In recent months, we have seen materialize what seemed impossible a year ago"

"Foreigners have seen the opportunity and started thinking that now is the right tome to invest in Spain, to achieve attractive returns in the future" noted Ricardo Marti-Fluxá yesterday, president of the Association of Real Estate Consultants (ACI) in a conference organized by this association. "We are experiencing a boom in investor interest," added Andrew Escarpenter, CEO of Jones Lang LaSalle, in the same forum. 

This phenomenon, however, will not last - "the message we are sending to investors is that if you want to do something in Spain, you have to anticipate it as this will change," adds Escarpenter - to converge now only several factors: 

1. More profitability 
The economic difficulties have increased the risk of investing in Spain, penalizing any operation in this market and forcing vendors to better their offer. 
"For a shopping mall in Germany, you have a yield (profitability) of 4.25%, whilst in Spain they are closing prime center operations with 7% yield" says Ismael Clemente, CEO of Magic Real Estate , partner of Blackstone who have purchased 1,860 social housing properties in Madrid. 
This return on investment will be lower (in some operations than two digits) when the perception of the Spanish economy improves. "Investors discount when we are at a turning point," says Alberto Prieto, CEO of Knight Frank. 
Adolfo Ramirez-Escudero, president of CBRE, forecasts that once the Spanish economy improves so to will prices.

2. Price drops 
Santiago Aguirre, president of Aguirre Newman, estimated price declines of approximately  50% in general, with variations in location and type of property. Discounted prices have now reactivated purchases and, in some cases, prices have steadied. 

3. Sareb Operations 
Since the launch of Sareb earlier this year and more importantly, the closure of its first bulk sale in August, there has been a "pull" factor in search of better opportunities. 
The Society of Assets Proceeds from Bank Restructuring (SAREB) has a very strict business plan, that it aims to sell more than half of its assets (has a portfolio of 50,000 million in assets and loans) in five years. In its first year, Sareb already achieved sales of 1,200 million euros and is expected to reach 1,500 million at year end. 
Also, it has put in place nearly a dozen operations (Bull, Bermuda, Corona, Abacus, Teide and Harvest, among others), operations expected to close quickly and which do not give option to investors to doubt whether or not to participate. "They're going to complete ten deals before year end," predicts John Pepa, Lone Star CEO Europe, involved in the transaction Bull, which won HIG Capital. 

4. Multiple candidates 
"There are over 200 funds looking to invest in Spain," said the president of Aguirre Newman. Having studied the markets for some time and waiting for the opportune moment to arise, many international investors are now willing to invest in Spain. "We have a great opportunity in Spain to convert that positive 'noise' into jobs," said Pepa. 

5. Alliances 
In the market there are many specialist real estate experts, with the experience to provide the market know-how that can be invaluable for strategic partners of international funds, that usually do not have a team on the ground in Spain. 
"There are some investors who are still stuck in the situation of 2012 where the price was the only aspect to consider, and there are others who are starting to work differently, through partnerships", said John Beard, a director of Sareb. "In the future we will see partnerships between foreign investors and local managers, as it is not just about buying the real estate debt but long term partnerships" he adds. 
The CEO of Colonial, Viñolas Pere, advocates changes in the capital of the large real estate companies - "to be more specialized and more global. The funds were the missing piece and they are now entering the market which can really boost the sector." 

Rental 
As a word of warning, while most experts believe it is good time to be shopping around for property bargains, there is still to be seen an improvement in the rental business, incomes in general and the employment situation.

From the Expansion newspaper 11th November 2013, original version in Spanish here: http://www.expansion.com/2013/11/11/empresas/inmobiliario/1384208595.html

Thursday 7 November 2013

Flor de Ponoig, Polop - Prices from 95.000 Euros


Over the last few years, I can probably count on one hand the number of invites we have received to attend a launch of a new development, however with buyers returning in their droves, today (Wednesday) we were pleasantly surprised by the stunning surroundings of the final phase of the development "Flor de Ponoig" located in Polop, about ten minutes drive from the beaches of Benidorm and Altea.


This is a development of 58 two and three bedroom town house properties within an established urbanisation, and they are ready now. Prices range from 95.000 Euros (plus taxes of approximately 13% in total) for a two bedroom town house and from 145.000 Euros for a three bedroom corner town house. The properties are spacious, the two bedroom having a total usable size of 112,87 sq.meters and the three bedroom version, a usable size of 130,40 sq.meters.

The properties are officially on sale as of Monday 11th November with completion of contracts at the notary in the first quarter of 2014. Come and visit us, the weather has been superb so far this Autumn with plenty of sun.

Enough words for now, some photos:







More details on our webpage here or contact us via email if you have any questions.
We look forward to hearing from you.





Tinsa €/m2