During February, the financial impact of the coronavirus crisis on the large companies in the real estate sector became apparent. Several large operations were closed in the retail sector, specifically in the supermarket segment. Meanwhile, the build to rent business, together with the logistics and hotel sectors, continued to dominate the real estate agenda.
Residential
In February, it was revealed that house sales decreased by 17.7% in 2020 compared to the previous year, with a total of 415,748 transactions registered. That represents the biggest drop in nine years and the lowest annual number of transactions since 2016, according to data from the National Institute of Statistics (INE).
Moreover, 2020 closed with a year-on-year fall in house prices of 1.8%, to reach an average of 1,622.3 euros per square metre, according to data from the Ministry of Transport, Mobility and the Urban Agenda (Mitma).
Also in February, the credit ratings agency Standard & Poor’s (S&P) published its house price forecasts for Europe. In terms of Spain, it predicts that house prices will grow by 1.4% this year, and then by 4.3% in 2022, and by 3.6% in 2023.
The build-to-rent segment is and will continue to be one that will dominate the real estate agenda over the coming years. According to CBRE, 500,000 rental homes will be needed in the Spanish market over the next four or five years alone.
In February, we published the ‘Ranking of property developers by number of new homes they plan to complete in 2021‘, according to data from the real estate big data platform Brainsre. Specifically, 71,825 new-build homes are expected to be completed during the year, spread over 3,342 developments. The companies that occupy the top four positions in the ranking are: Neinor Homes, Metrovacesa, Vía Célere and Aedas Homes.
Companies
Metrovacesa, the property developer owned by Santander and BBVA, reported losses of 163 million euros in 2020, a figure that was much higher than the losses registered the previous year: 4.5 million euros. The main reason for this increase was a provision for 135 million euros that the company had to make to reflect the revised valuation of its real estate portfolio.
Meanwhile, the property developer Quabit, which is in the process of being absorbed by Neinor, saw its losses soar to 147.5 million euros in 2020, compared to 9.2 million euros in 2019. The company was greatly affected by the need to recognise provisions to reflect a deterioration in the value of its land, and by a reduction in tax credits. However, it did increase its turnover by 300% to 180.2 million euros. For its part, Neinor earned 70 million last year, up by 11% compared to 2019. It also achieved revenues of 579 million euros, an increase of 18% YoY.
The Socimi Merlin Properties generated a profit of 56.4 million euros and net turnover of 508 million euros in 2020. These figures contrast with those obtained by the real estate company in 2019, when its profits amounted to 546 million euros and its revenues exceeded 530 million euros. The other large Ibex-35 listed Socimi, Colonial, obtained a net profit of 2 million euros, compared to 827 million in 2019 when it recorded capital gains of 820 million euros for its assets.
Meanwhile, the Socimi Lar España closed 2020 with losses of 53.7 million euros, compared to a profit of 80.7 million euros in 2019. Its losses were the consequence of a 4.9% drop in the valuation of its assets, to 1.475 billion euros.
The investment fund Apax Partners announced the repurchase of 17% of the shares of the real estate portal Idealista. The transaction, which is estimated to be worth 250 million euros, was carried out just two months after the fund sold its shares in the company to EQT for 1.351 billion euros.
Logistics
The joint venture formed by Kefren Capital Real Estate and Tristan Capital Partners completed the acquisition of a new logistics warehouse located on the Malpica Industrial Park (Zaragoza), which spans an area of 65,000 m2 on a plot measuring 100,000 m2.
The American company Prologis announced that it will invest 100 million euros in the development of two new projects located in San Fernando de Henares (Madrid) and Guadalajara, which will span 61,000 square metres in total.
The fund manager Eurofund, through its joint venture with the British group Logistics Capital Partners (LCP), is finalising the purchase of a logistics centre that Amazon is going to build in Figueres (Girona). The project will span 175,000 square metres and will be located on the Far-Vilamalla logistics park.
The real estate developer Engel & Völkers Development has acquired a portfolio spanning 100,000 square metres for the development of last-mile logistics projects in the Villaverde park (Madrid).
The supermarket chain Lidl is going to invest 85 million euros in the construction of a new warehouse in Parla (Madrid) to boost the expansion of its stores in Madrid and the central Spain region. To this end, it has acquired a plot spanning around 150,000 square metres.
Hotels
During February, it was reported that overnight stays in hotels in January exceeded 2.3 million, which represents a drop of 85% compared to the same month in 2020, according to data from the National Institute of Statistics (INE).
In addition, Único Hotels sold the Hotel Único Madrid to an investor advised by Aiga Advisory. The company owned by businessman Pau Guardans will continue to operate the hotel on a lease basis.
Also in Madrid, Archer Hotel Capital, the hotel investment vehicle owned by the Singapore fund GIC and the Dutch pension fund APG, completed the purchase of the Madrid Edition Hotel for 205 million euros.
Meanwhile, Amancio Ortega acquired the Senator Playaballena Hotel located in Rota (Cádiz) through his family office Pontegadea. In total, he paid around 25 million euros for the property owned by the family group Hoteles Playa.
The family real estate wealth manager Mazabi closed two sale and purchase operations; specifically, it acquired one hotel in Menorca and sold another one in Ibiza, valued at more than 40 million.
Moreover, Leo Messi, the Barcelona Football Club player, acquired the 5-star Hotel Canut, located on Avenida Carlemany in Les Escaldes, Andorra. The operation was carried out through the company MiM Hoteles, owned by the Argentine footballer, together with the Majestic Group. It is one of the most emblematic hotels in the country and comprises 31 luxurious rooms in total.
Retail
In February, it was revealed that investors spent 1.351 billion euros on the purchase of shopping centres and retail parks in 2020, which represents an increase of 41.1% compared to 2019, according to the annual figures published by the Spanish Association of Shopping Centres and Retail Parks (AECC).
The fund KGAL Group, a German investment manager, made its debut in Spain with a commercial operation. Specifically, the firm signed an agreement with Barings to acquire a portfolio of ten Carrefour supermarkets, which it had bought from the fund Kennedy Wilson at the beginning of 2020 for around 73 million euros.
The Socimi Lar España sold 22 Eroski supermarkets to the investment fund Blackbrook for 59 million euros. Following this operation, which represents the British firm’s entry into the Spanish market, Lar España’s liquidity stands at close to 200 million euros. As Brainsre.news reported exclusively, at the end of 2020, Lar España decided to put two shopping centres up for sale -Las Huertas and Txingudi- along with 22 supermarkets for 100 million euros.
Juan Roig’s chain, Mercadona, is negotiating the sale of 30 supermarkets to the Israeli fund MDSR for almost 200 million euros. The operation includes nine shops.
The property developer AQ Acentor has obtained authorisation from the Generalitat Valenciana to develop a tertiary mega-complex in Turianova, a new neighbourhood of Valencia. The company plans to invest around 350 million euros in the construction of a 168,000 square metre urban macroproject, which will house both commercial and leisure areas -spanning up to 77,000 m2-; as well as hotel and sports facilities, 1,200 homes, offices and other services.
Meanwhile, the firm Eurofund acquired 100% of one of the investments that it shares with Intu in Spain. The manager acquired the Porto Cabral project, in Vigo, which includes the construction of a large shopping centre in the Galician city.
Offices
During the month, it was reported that almost 160,000 m2 of office space was rented in Barcelona in 2020, which represents a drop of 60% compared to 2019, according to CBRE. In addition, in 2020 only 2,800 square metres of new coworking space was rented in Madrid and 4,500 m2 in Barcelona, which represents a sharp drop compared to the 150,000 m2 that was leased a year earlier in the two cities, according to JLL.
The American firm Blackstone is finalising the sale of the Glòries office complex in Barcelona. The investment fund is negotiating the operation exclusively with the real estate manager IBA Capital Partners. The complex has three properties, with a combined surface area of more than 21,500 square metres. In addition, the Socimi Zambal, which is managed by IBA Capital, bought an office building in Las Rozas (Madrid) for 36.5 million euros from Naropa Capital.
Meanwhile, Renta Corporación completed its work on the building located on Calle Badajoz, 112 in the 22 @ district of Barcelona, its first comprehensive turnkey office construction project.
And in the international market, the listed real estate firm Urbas Grupo Financiero announced that it is going to build a project spanning 150,000 m2 of office space and 30,000 m2 for commercial use in Dubai, with an investment of 300 million.
The German fund manager Deka Immobilien sold an office building in London to CBRE Global Investors for 265 million pounds (305 million euros). The property has a leasable surface area of more than 24,000 square metres and 23 parking spaces.
NPLs
Finally, the economic crisis caused by Covid is expected to generate a significant increase in the portfolio of doubtful loans. Specifically, the volume of NPLs that Spain’s banks are currently estimated to have (60 billion euros) is expected to increase by a further 80 billion euros as a result of defaulted payments generated by the pandemic, according to an investor study prepared by PwC and ULI.
Top 10 most read news – February 2021
- RIU and TUI put three hotels up for sale (in Spanish)
- The Rental Market a Year After the Outbreak of the Pandemic
- Madrid to Definitively Approve the New Neighbourhood Next to La Moraleja
- Jaume Oliu to Leave Banco Sabadell to Create His Own Real Estate Fund
- Who’s Who in the Build-to-Rent Business in Spain?
- Marina d’Or Sells €108 Million in Debt to the Fund Farallon
- Eurofund Buys Amazon’s Logistics Project in Girona
- Home Inheritances Soar to Record Levels Due to Covid
- What Has Changed (and What Hasn’t) in the Housing Market Post-Covid
- Sareb Seeks a Manager to Put More Than 300 Plots of Land on the Market
Read the original article in Spanish.
