They had become an increasingly common sight in all of Madrid’s municipalities. After years without a trace, cranes had once again begun to adorn the landscape of the Spanish capital’s neighbourhoods. Be it downtown or in the suburbs, they all shared a single aim: to build thousands of new homes to meet the demand built up during the crisis.
However, since 30 March, all those cranes have stopped operating by order of the Government, which issued a Royal Decree to suspend all non-essential economic activity in an attempt to reduce the spread of the Covid-19 coronavirus. What has been the impact of this measure in Madrid?
According to data from the Brainsre big data real estate platform, of the more than 131,000 homes under construction in Spain that have been brought to a standstill by Covid-19, more than 26,700 are located in the Community of Madrid, making it the most affected region. According to data collected by Brainsre, in Madrid alone, 552 residential building sites have been temporarily closed down, corresponding to a total of 26,713 homes. And, of those, more than 75% form part of large developments, namely those with more than 50 units”, comments Antonio Ramudo, RE Data Scientist at Brainsre.
Of the more than 26,700 homes suspended, the majority (60%) correspond to building projects started last year, when work on 91,313 new homes was started across the country. Until the stoppage, which was decreed on 28 March and came into force on 30 March, licenses had been granted to start work on almost 7,000 new homes in Madrid so far this year.
With an average construction period of between 22 and 24 months for the largest developments, there were plans to complete around 1,150 homes in Madrid in 2020, plus an additional 14,000 by the end of 2021. “Up to 42 % of the dwellings on standby in Madrid were expected to be finished this year. That figure is closely aligned with the national average and will inevitably diminish in favour of 2021”, predicts the RE Data Scientist from Brainsre.
In April alone, 333 homes distributed across 16 sites were scheduled to be completed in the Community of Madrid. It is looking increasingly unlikely that these, and many others, will be handing over the keys on time, point out the experts.
By type of property, 57% of the suspended developments in Madrid are made up of multi-family dwellings -19,405 homes, specifically-, 12% are single-family units, whilst 13% correspond to social housing properties.
Madrid capital, more than 10,000 homes on standby
At the municipal level, Madrid capital is the area most affected by the shutdown, with more than 10,000 homes on hold. At the next level are peripheral municipalities, such as Rivas-Vaciamadrid, with new urban areas created in recent years and 1,800 homes under construction before the outbreak of the Covid-19 crisis. Also, Torrejón de Ardoz, where 1,400 homes on hold.
Getafe, Valdemoro, Boadilla del Monte and Las Rozas also have between 1,000 and 1,200 units on standby each, according to data compiled by Brainsre.
In total, up to 65 municipalities of the 179 in Madrid have seen new residential construction projects suspended.
Neinor and Amenabar: more than 1,000 homes on standby in Madrid
Madrid has been the location chosen by many of the large real estate companies to launch high-profile projects in recent years. With solid demand and one of the highest rates of economic growth in the country, the region combined all of the ingredients to make it a good destination for investment in new projects. And that is exactly what property developers, such as the listed firm Neinor Homes and Amenabar have done. But, they have now seen coronavirus paralyse the construction of 1,016 and 1,088 homes, respectively.
The company with the most homes on standby in Madrid is Amenabar. The real estate company, headquartered in Zarautz (Guipúzcoa) and controlled by the Amenabar family, has been one of the most active in recent years. It has ambitious delivery plans over the short- and medium-term, which will now be irretrievably affected by coronavirus and the measures to alleviate it. At the beginning of March, Amenabar had 58 developments underway and 3,438 homes in progress nationwide; its objective was to deliver more than 1,700 homes in 2020. The break in construction activity affects almost 1,100 homes under construction in Madrid alone.
“In terms of other developments, Amenabar has suspended work at the following sites: ‘ Aires de Alcalá ’, in Alcalá de Henares, a development comprising 181 social housing properties, whose keys are due to be handed over later this year; ‘Aires de Fuentelucha’, in Alcobendas, a development comprising 170 homes, construction of which began this year; and ‘Jardines de Boadilla’, in Boadilla del Monte, a development comprising 163 homes, whose completion was scheduled for the beginning of 2021 ”, comments the RE Data Scientist from Brainsre. In addition, Amenabar has at least five other developments under construction in the city of Madrid, two of which are in the new PAU in Valdebebas, where the company has already built four other developments and where it has just acquired land for another 230 homes.
Another company with significant property development projects in Madrid before the cessation of activity is Neinor Homes. The company led by Borja García-Egotxeaga had 1,016 new homes under construction in Madrid before the sector was forced to down its tools. “The largest development that Neinor Homes was working on in the Community of Madrid is located in Las Rozas: ‘Amara Homes’ is a project comprising 316 homes, whose keys were expected to be delivered by the end of 2021. In addition, the developer has up to 544 homes under construction in the North of Madrid, between Alcobendas and San Sebastián de los Reyes, whose main exponent is ‘Aura Homes’ in Alcobendas. That project comprises 254 homes, started in 2018, which are expected to be delivered by the end of this year”, details the RE Data Scientist.
Finally, the largest project on hold in Madrid, and also in Spain, is Skyline by Stoneweg. That development comprises 600 homes, work on which began in February and whose delivery is scheduled for 2022. Other high-profile projects paralysed by Royal Decree 10/2020 include the ‘Kings’ development by ASG Homes in the town of San Sebastián de los Reyes, which includes 363 lofts currently on the market and whose construction began in late 2019. On the cooperative side, the ‘Residential’ Maravillas project stands out – that development contains 334 homes on Calle Raimundo Fernández Villaverde, just a stone’s throw from Paseo de la Castellana and next to Nuevos Ministerios. It is managed by Domo Gestora, which, after a multitude of administrative problems, began construction in mid-2019.