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The Spanish Real Estate Market in April

This month, reports detailed how much of the European funds will go to housing and urban regeneration. At the same time, there were also significant deals in the logistics and hotel sectors.

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In April, the beginning of the second quarter of the year, investment activity was primarily directed towards the hotel, residential and logistics sectors. Some listed companies announced dividend payments, while others are waiting to see how the pandemic plays out. The Spanish government also announced how it would distribute European funds.

Residential

Of the 140 billion euros included in the Recovery, Transformation and Resilience Plan, the Spanish government will allocate 6.82 billion euros to housing renovation and urban renewal. The Spanish government also intends to spend one billion euros of European funds on building 20,000 new affordable public housing units.

This month, the National Statistics Institute (INE) has revealed that the number of home sales fell by 4.3% in February in year-on-year terms, to 43,185 transactions. The INE also revealed that the number of mortgages signed fell by 13.8% in February compared to the same month in 2020, to 31,647.

The developer Neinor Homes and the consultancy firm CBRE have become strategic partners of Aster for Life, a company created by Óscar Gil Marín to build 5,000 homes in 15 years in Los Ángeles de San Rafael.

Kronos and Nuveen will invest 400 million euros in acquiring land as part of their build-to-rent alliance. The companies have already started work on their first project in Cordoba and have bought two plots of land in Madrid to build more than 800 homes.

Housing developer Aedas Homes, controlled by the Castlelake fund, announced its sales figures for January to March 2021. In total, it sold 1,560 homes. Meanwhile, Premier España, owned by the Bassac Group, delivered 267 units in the first quarter of the year.

In the fourth month of the year, Patricia Hernández Cobo, corporate and business general manager of Vía Ágora, revealed in an interview with Brainsre.news that the company plans to deliver 600 homes by 2024.

The companies Grupo Ática and Inmoglaciar signed an agreement to construct five new developments in Valencia, totalling 234 new homes. The Madrid-based company already had the projects underway in the province and will now be complete them together with the Valencian developer.

For its part, the real estate company Lazora announced in April that it would add a further 450 subsidised rental homes located in El Cañaveral to its portfolio. The company launched the Crece Cañaveral development, which has 385 1-4- bedroom homes, including spacious communal areas, swimming pools, paddle tennis courts and a gym. The units are ready to be rented.

Companies

The listed developer Neinor Homes finalised its first bond issue after successfully placing its target of 300 million euros, with a maturity of 5.5 years and an interest rate of 4.5%. The operation was very well received, with demand for €1.5 billion, oversubscribed by five times the issue offer.

Santander, Caixa and Banco Sabadell are studying how to give up their stakes in the management company Sareb. Meanwhile, Sareb has chosen Landco, CBRE, Aliseda and Servihabitat as finalists to become potential partners to sell its land portfolio. Just over 320 plots of land, with a market value of €1.12 billion and the possible development of 60,000 homes.

The socimi Merlin Properties approved a dividend of 141 million euros at its shareholders’ meeting. During the meeting, its CEO, Ismael Clemente, described the Madrid Nuevo Norte project as “strategic” within its growth plan and assured that the firm’s commitment to the development “is total.” Mr Clemente reaffirmed his intention to continue with the project, despite the conflict in which DCN’s shareholders are involved, due to BBVA’s decision to eliminate the right of first refusal from the developer’s bylaws. In addition, the courts have dismissed the Baraka Group’s lawsuit against DCN and BBVA.

Libra Gestión and Accionas were awarded the Adif land in Méndez Álvaro. The cooperative management company won the bid for the smaller plot of land, offering more than 29 million euros, while Acciona won the larger plot for 67.3 million euros.

The consultancy firm Savills Aguirre Newman is finalising its acquisition of Knight Frank’s Property Management division. The area specialises in shopping centres and has a team of around 40 people. Both consultancy firms have already closed the deal, but the final signatures are still needed to complete the operation.

The insurance company Mapfre and Swiss Life Group created a pan-European co-investment vehicle aimed at the real estate market. The joint venture will be equally owned and will have assets valued at €400 million, located in Spain and Italy.

Logistics

The logistics segment continued to grow in 2021, attracting the attention of companies and investment funds. The GLP management company acquired a 28.6-hectare plot in Illescas (Toledo). The company plans to develop a logistics park, called Magna Park Tauro, on the land. The property will allow the construction of another 185,000-m2 facility.

Last month, the socimi Trajano Iberia finalised the sale of its warehouse in the Plataforma Logística de Zaragoza (Plaza) for 58 million euros. However, the transaction is still subject to the agreement between the parties regarding the purchase contract.

P3 Logistic Parks, a developer and manager, also acquired an 80,000 square metre plot of developable land in Illescas (Toledo). The company, owned by the Singapore sovereign wealth fund, plans to develop a 55,000-m2 turnkey project on the site, which BNP Paribas are marketing.

Hotels

The hotel market saw several transactions this month. Único Hotels group, owned by the Guardans family, sold the Grand Hotel Central in Barcelona for 85 million euros to York Capital, which paid around 575,000 euros per room. The 5-star Grand Hotel Central, located in Via Laietana, has 147 rooms.

Azora, through its fund Azora European Hotel and Lodging, FCR, acquired the Arenas Resort Giverola complex from the Swiss hotel group Arenas Resorts. The asset includes 213 flats, a glamping site, five restaurants and bars, sports facilities, swimming pools, a spa and a large car park. It is located in the municipality of Tossa del Mar, in the northeast of Catalonia and will be managed by Med Playa.

In April, the Spanish company Mazabi, which specialises in managing family real estate assets, acquired a hotel building located on Calle de Leganitos in Madrid. The property, which has a surface area of 3,290 square metres, will house a 92-room boutique hostel.

The socimi All Iron RE I also acquired a property in Bilbao for 5.1 million euros. The company plans to build a complex of 45 serviced apartments, as the traditional aparthotels are known in the sector. The building, located at Calle Ledesma 5, has a total surface area of 1,954 m2.

Retail

The retail investment market was active in April. One transaction of note was that of the Spanish fund GPF Capital, which acquired a portfolio of commercial premises leased to companies such as Mercadona, Día and Lidl. The acquisition was carried out through OMO Retail Invest.

Mazabi finalised its acquisition of two retail assets. The management company acquired a medium-sized retail unit on the island of Tenerife, which has more than 5,890 m2 and a warehouse of 5,366 m2, which is leased to Conforama. It also bought a 1,780 m2 commercial premises in Palma de Mallorca.

The real estate management company Corpfin Capital sold a retail store located on Madrid’s Gran Vía 55 for 18.4 million euros. The deal finalised a transaction whose purchase option was initially announced in September 2018.

Offices

In April, news came out that 84,000 square meters of office space were contracted in Madrid during the first quarter of 2021, a decline of 23% year-on-year; while there was a growth in office contracting in Barcelona of 67% to 75,342 m2, according to a report by Savills Aguirre Newman.

The socimi Castellana Properties acquired an office building with a gross leasable area of more than 4,600 sqm from Aliseda. The property, annexed to the Los Arcos shopping centre, will be transformed and integrated into the commercial space to invest 15.6 million euros.

Together with a Middle Eastern institutional investor, the real estate management company IBA Capital Partners acquired the office complex above the Glòries shopping centre from the giant Unibail Rodamco Westfield (URW) in Barcelona. The complex, which Blackstone owned, comprises three buildings, totalling some 21,500 sqm.

Last month, the Catalan real estate company Renta Corporación bought an office building located at 123 Vía Augusta street in Barcelona. It has already started work on a new coworking space, which IWG will operate. The refurbishment work on this shared office project, which has almost 4,000 m2, will involve an investment of eight million euros.

Finally, the French company MyShareCompany closed the purchase of its second asset in Spain a year after making its first investment. It is an office building in Valencia, for which it will pay almost 10 million euros.

NPL’s

In a report published in April, Moody’s Investors Service warned of a 20% drop in sales of bad loans since June 2020. The ratings agency’s study points out that logistics and supermarkets have a low vulnerability to pandemic stress, while “trade and hotels are very vulnerable.”

Cajamar is preparing to sell €300 million in residential assets in the coming months. The Andalusian firm hired Alantra to take charge of the so-called Jaguar Project, through which it intends to get rid of about 11% of its foreclosed assets.

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