Real Estate & Commercial News in Spain from Propertyshowrooms.com

Investment volumes in Spanish commercial real estate fall

Tue, 15 Nov 2011 00:00:00 GMT

New research has revealed that the amount of money ploughed into the Spanish commercial property sector fell by over 50 per cent during the first three quarters of 2011, compared with the same period a year earlier.

According to Savills, the nation has seen €1.25 billion (£1.07 billion) injected into its commercial real estate markets between January and September this year.

The firm noted that the country's economy has been "severely affected by tension in the financial markets", which has resulted in many investors taking a more cautious approach.

Danny Kinnoch, international investment director with the organisation, commented: "Although there is product available, investors are increasingly conservative and continue to wait for the perfect investment."

Looking forward, Savills predicted that a lack of finance will prevent many potential deals being closed, while there are problems with existing transactions due to the extended length of time it is taking for sales to go through.

Data published earlier this month by the Royal Institution of Chartered Surveyors revealed that sentiment among both occupiers and investors in Spain remained in "deeply negative territory" during the third quarter of this year.

Spanish commercial property sector 'weakens further'

Tue, 8 Nov 2011 00:00:00 GMT

The latest data to be published by the Royal Institution of Chartered Surveyors (Rics) into the state of European commercial property markets shows an overall decline.

Countries such as Spain, which have been affected by the sovereign debt crisis on the continent, in addition to poor domestic economic performance, have been hit particularly hard.

According to the Rics findings, capital value and rental expectations across all areas of the Spanish commercial property sector are well into negative territory.

In terms of the underlying value of assets, office and retail premises have slipped further than their industrial counterparts.

However, there is a greater disparity when it comes to rental expectations, with industrial still the more favoured class, closely followed by retail buildings, while the sentiment surrounding offices has been hit much harder.

Simon Rubinsohn, Rics chief economist, noted that "overall, confidence has definitely taken a knock".

He attributed this to the "considerable levels of uncertainty in financial markets around the world and the intensification of the euro area crisis".

'Promising signs' in Madrid office market

Tue, 30 Aug 2011 00:00:00 GMT

The office market in Madrid's central business district (CBD) is showing signs of recovery, the latest research from Savills has revealed.

According to the organisation, vacancy rates in the Spanish city dropped during the second quarter of the year to reach 4.73 per cent, compared to the 5.31 per cent recorded in the first three months of 2011.

Meanwhile, Savills also noted that a lack of new developments has resulted in landlords refurbishing their properties in Spain to bring new space on to the market.

Ana Zavala, head of office agency at Savills Madrid, described this as "a promising sign", although she noted that there are still concerns over the economy that are affecting commercial real estate.

However, there has been a low level of transactions in the office building sector since the beginning of the year, which has helped keep yields steady.

The Royal Institution of Chartered Surveyors recently issued its European Commercial Property Survey for the second quarter of the year, which predicted that the number of investment transactions in Spain will increase over the next three months.

Spain and Portugal looking for World Cup boost

Wed, 1 Dec 2010 00:00:00 GMT

The Spanish and Portuguese property markets could be dealt a timely boost later this week when the hosts of the 2018 and 2022 FIFA World Cups are named.

Spain and Portugal are among the leading candidates after registering a bid together, A Place in the Sun reports.

If successful, the two countries would benefit from a boost to their fragile economies and potentially an improvement in their respective property markets, the news provider stated.

The news could interest individuals looking for real estate in Spain as there are currently a number of bargain homes available.

Meanwhile, a recent survey from tourism marketing experts, Pangaea Network, found that hosting an international football tournament will do more to boost a nation that any other sporting event.

According to the report, football tournaments are four times more popular than motor racing and there is no bigger sporting event in the world than the football World Cup.

Notorious Spanish property developer facing administration

Thu, 22 Jan 2009 00:00:00 GMT

Yet another Spanish developer is facing administration and possible bankruptcy as the global down turn continues to affect the property market...

Spanish Banks Asset Rich, Cash Poor

Wed, 7 Jan 2009 00:00:00 GMT

Spanish banks are turning into some of the biggest real estate companies in Spain, just as they did during the last property crash of the late 80s and early 90s.

To a greater or lesser extent, banks are running some of Spain’s biggest listed developers, companies like Colonial and Metrovacesa, who were forced to throw themselves at their bankers’ feet when they couldn’t cope with their billions of Euros of debt.

It’s not just the big developers with billions of Euros of debt that the banks are having to take over to prevent their loan default rates from going through the roof. All around Spain many small regional banks and savings banks have been quietly taking over small local developers for the same reason.

Having taken over developers or their assets in return for cancelling debts, many banks and savings banks, known as cajas, now find they own a wide variety of real estate assets from land and flats under construction to finished developments and business parks.

Knowing what to do with all their new real estate holdings is an increasing problem for Spain’s banks. Big banks like Santander have set up new divisions to manage property portfolios, which in Santander’s case is valued at more than 2 billion Euros.

But banks are not property companies, and on the whole do not do a good job of managing real estate assets. That said, the property crash of the early 90s turned out to be one of the most profitable episodes in the history of Spanish banking. Having got assets on the cheap, all the banks had to do was hold on until the market picked up, which it inevitably did.

The big question is, will it be the same again this time?

Story by Mark Stuckling

Spanish banks turning into property companies

Tue, 30 Dec 2008 00:00:00 GMT

Spanish banks are turning into some of the biggest real estate companies in Spain, just as they did during the last property crash of the late 80s and early 90s. To a greater or lesser extent, banks are running some of Spain’s biggest listed developers, companies like Colonial and Metrovacesa, who were forced to throw...

Rich Spaniards to Save Commercial Property

Wed, 24 Dec 2008 00:00:00 GMT

Spain's super-rich will emerge as the key investors in its troubled property sector next year and would do well to take up positions in the office market, the head of consultants Cushman & Wakefield said on Monday.

Roger Cooke, Cushman's managing partner in Spain, said traditional investors like German property funds had the money but not the ability to open new funds in Spain, while private equity buyers were still waiting on the sidelines to swoop on distressed assets.

"I expect that in the early part of next year, Spanish private families will be the strongest investors in the market," he told Reuters in an interview in Madrid.

Spain's richest individuals, such as Amancio Ortega, the owner of Inditex (ITX.MC: Quote, Profile, Research, Stock Buzz), famous for its Zara fashion chain, have long targeted the property market and have a tradition of more hands-on involvement than others in Europe, who pass investment decisions to fund managers.

"They've got the money, yields have adjusted, they are not looking for really distressed levels of pricing, so there's more on offer," said Cooke.

Investment in smaller lots of up to 50 million euros would be the trend next year, as they are easier to finance and match the buying power of family firms.

Cooke added that office space was probably the best defensive bet in the downturn. "I suspect the office market will begin to return before the retail market. We haven't seen the last of retail sales problems, and the office market (in Madrid and Barcelona) is not oversupplied like it has been in previous cycles," he said, adding that office leases had fallen by 35 to 45 percent this year.

"I think the first half of 2011 will be quite an interesting time to be delivering a building."

Retailers' hesitancy to occupy new units and tenants pushing for rent cuts as consumer sales weaken, put pressure on shopping centre investments, he said.

Spain's 10-year residential property boom was snuffed out this year by massive oversupply, rising interest rates and the credit crunch, while the commercial business caught the same cold sweeping global property markets.

"There is a complete lack of confidence, and that applies across the board, whether it be residential, development, occupational. The whole Spanish market is very uncertain." The sector racked up billions of euros of debt in a wave of ambitious expansion, and Cooke said funding that debt while revenues shrivelled had turned almost every Spanish property firm into a stressed, though not distressed, seller of assets.

"Pretty much all have an interest in a sensible sale of assets. We are talking, quite literally, of survival in many cases."

However, the market would not degenerate into a fire sale because banks would seek to avoid loading their balance sheets with toxic debt, he said.

"The banks are not letting them sell at any price. If you get to a situation where the banks push too far, and they don't survive, is anything served by that?

"Whether we see more distressed sales next year all depends on the attitude of banks, regulators and even politicians."

Story from Reuters

Spanish Developer Habitat Enters Administration

Fri, 5 Dec 2008 00:00:00 GMT

Spanish property group Habitat filed for creditor protection owing €2.3bn ($2.9bn), amid signs that last-ditch efforts to rescue other developers were also in trouble.

The Barcelona-based group, created by a highly leveraged takeover two years ago, said it had taken the decision to "protect as best as possible the rights of creditors", which include the country's biggest banks.

It was forced to enter administration after failing to raise fresh funds in a cash call to shareholders a month ago. It was the country's second biggest corporate failure in the property sector this year, after market leader Martinsa-Fadesa entered voluntary administration in July with total debts of €5bn.

Yesterday's move by Habitat came as Colonial, once the country's largest developers by market value, warned in a regulatory filing that it risked default if it failed to find buyers for assets worth about €2bn.

A third company, Metro-vacesa, was locked in talks about the discounted sale of HSBC's London headquarters back to the UK bank.

It is also planning to swap debt for equity in separate negotiations with lenders in Spain.

All four developers are the result of complex, debt-financed takeovers and mergers agreed just before Spain's residential property market collapsed 18 months ago, leaving an estimated 1m new homes unsold.

House building permits for the first nine months of this year have dropped 60 per cent year on year, according to figures released this week.

The 18-month-old credit squeeze, and collapse in asset values, has further complicated refinancing efforts, while stock market turbulence has triggered margin calls in some cases.

Shares in Colonial, which two years ago peaked at €6, were yesterday trading at less then 20 cents.

Senior bankers and analysts have identified default by property companies and mortgage-holders as the biggest single threat to Spain's financial system.

From less than 1 per cent a year ago, the bad loan rate was 2.56 per cent at the end of September, according to the Bank of Spain.

Iberian Equities, a Madrid-based brokerage, yesterday estimated the non-performing loan (NPL) rate among property developers at 5.6 per cent, after accounting for Habitat and Tremón, a smaller real estate company that filed for creditor protection two weeks ago. This was set to soar, it said.

"We estimate a peak NPL ratio of 12 per cent for developers in our base case," it said in a note to clients, "leading to a system peak of 6.2 per cent".

Its worse case estimates suggest a 20 per cent default rate among property groups, and a system rate of 7.2 per cent.

Story from the Financial Times

Banks take over Metrovacesa

Fri, 5 Dec 2008 00:00:00 GMT

Spain’s Sanahuja family ceded control of Metrovacesa to creditors, less than two years after completing a leveraged buy-out of one of Spain’s biggest property companies...

Theres Money to Be Made in Tenerife Businesses

Thu, 6 Nov 2008 00:00:00 GMT

Tenerife is the largest of the Canary Islands. It is also the most popular tourist destination in the region with people flocking to spend luxurious holidays not only from Spain but all over the...

Spain's Colonial agrees to debt restructuring

Mon, 15 Sep 2008 00:00:00 GMT

One of Spain's largest property groups have agreed with creditors to restructure around €7bn of debt and sell assets in an attempt to keep it out of administration...

Spanish property giant loses £2bn

Tue, 2 Sep 2008 00:00:00 GMT

Spanish property group Colonial, which is struggling under huge debts, reported a €2.38bn (£1.9bn) first-half loss as the value of its assets tumbled...

Sacyr plans to sell environmental division

Tue, 2 Sep 2008 00:00:00 GMT

Sacyr Vallehermoso, the Spanish construction and real estate group, plans to sell Valoriza, its environmental division, in order to reduce debt. Sacyr hopes to raise €1bn from the sale...

Banking revival

Thu, 28 Aug 2008 00:00:00 GMT

Is there scope for Spanish firms to beat the trend?...

Trouble for Spanish giant Metrovacesa

Fri, 8 Aug 2008 00:00:00 GMT

Property company in danger of breaching covenants over £810m loan...

Rental Demand Boosts Spain's Buy-To-Let Market

Thu, 7 Aug 2008 00:00:00 GMT

Increasing domestic demand for rental property boosts Spanish buy-to-let market, especially commercial areas and cities...

Spanish Estate Agent Opens New Office

Wed, 6 Aug 2008 00:00:00 GMT

While most estate agents in Spain are struggling, Bonnin Sanso opens a new shop on the island of Menorca...

Property buyers drawn to lifestyle attractions

Thu, 31 Jul 2008 00:00:00 GMT

Many overseas property buyers are choosing to buy homes in places which offer lifestyle attractions, according to a new study.

Research by Holiday-Rentals revealed that leisure facilities are one the main considerations for people when choosing their ideal location.

More than two-thirds of second home owners stated that this was a "key motivation" behind their purchase.

Holiday-Rentals said this helps to account for the continuing popularity of Spain, a country which is currently in the midst of a major downturn.

The group added that the appeal of the country among foreign holidaymakers means it still offers strong rental potential.

Greg Grant, managing director of Holiday-Rentals, commented: "We expect to see continued growth in the holiday home rentals market, both in terms of supply and demand."

According to figures from the organisation, 31 per cent of British-owned residences in Europe are located in Spain.

Lifestyle buyers advised to rent out homes

Tue, 22 Jul 2008 00:00:00 GMT

People who have bought a second home overseas have been advised to consider the possibility of letting it out to visitors.

According to Greg Grant of Holiday-Rentals, many overseas property owners are people who have bought a residence for their own personal use.

However, the ongoing economic decline in the UK has meant that a growing number of people have become financially stretched, including those who own a second home abroad.

This has prompted Mr Grant to suggest that people ease their financial burdens by using their property to generate money.

Speaking to the Telegraph, he commented: "Those who have previously kept their homes to themselves may begin renting out to maximise income in these tighter times."

Mr Grant added that the rental yields collected in a single month could cover the cost of maintaining a home throughout a full year.

According to Holiday-Rentals, Spain is currently the most popular location among second home buyers in the UK.

Spain Stops Reassurances as Crisis Deepens

Mon, 21 Jul 2008 00:00:00 GMT

Spain's finance minister Pedro Solbes has stunned the markets with an admission that his country faces the worst economic crisis in its history as the full effects of the property crash spread through the economy.

"This crisis is the most complex we have ever lived through given the plethora of factors on the table at the same time," he told Punto Radio in Madrid, breaking with past efforts to put a reassuring gloss on events.

Mr Solbes said the Madrid bourse had suffered an "earthquake", crashing 27pc since the start of June. He blamed the toxic cocktail of high oil prices, the global credit crisis and the sharp slowdown in the key export markets of North America and Germany.

The comments follow this week's bankruptcy of Martinsa-Fadesa, Spain's biggest corporate failure. The property developer - with an empire of housing estates, hotels, shopping malls and hotels - collapsed after failing to refinance €5.1bn (£4bn) of debts. The company's demise was a textbook story of aggressive over-expansion at the top of the cycle, driven by high debt gearing. It has €11bn of assets.

Mr Solbes has pursued a rigorous "no bailout" policy, saying Martinsa-Fadesa took "excessive risks" and must now face the consequences. He has reportedly clashed with cabinet colleagues, who are now searching for any means to stop the downward spiral in the economy.

El Pais reports that house prices crashed by 20pc in the second quarter compared with a year earlier, based on 183,000 completed transactions.

The Martinsa-Fadesa collapse has sent tremors through the whole property and construction sector. The share price of giant developer Sacyr has halved over the past month.

The two banks with most exposure to the Martinsa-Fadesa are Caja Madrid, at €900m, and Banco Popular, at €400m.

Goldman Sachs has issued "sell" recommendations on a clutch of Spanish banks, including Bankinter, Banco Popular and Banco Sabadell, warning that the sharp turn in the credit cycle could prove worse than the recession in the early 1990s. "The consumer is more leveraged today than in any of the previous cycles," it said.

The ratings agency Standard & Poor's has not yet taken a decision on whether to downgrade Banco Popular and Caja Madrid.

In reality, this is unlikely to be the worst economic crisis in Spain's history. Philip II defaulted on his sovereign debts three times in the 16th century after he bankrupted the Spanish Empire to pay for his Counter-Reformation wars against Protestants. He crippled the Italian banking system in the process - much to the benefit of London and Amsterdam.

Full story from telegraph.co.uk

Britons may lose Spanish property

Mon, 21 Jul 2008 00:00:00 GMT

Thousands of British holiday-home owners are facing potential losses of as much as £150,000 each with the collapse of one of Spain’s largest property developers...

Developers fear domino effect from Martinsa-Fadesa bankruptcy

Mon, 21 Jul 2008 00:00:00 GMT

The Spanish press reports that owners and managers of Spanish property developers are worried that Martinsa-Fadesa’s bankruptcy could set off a domino effect that engulfs the sector. Various sources in the Spanish property business have told the press that more bankruptcies are now inevitable. The G-14 lobby group of the 14 biggest developers in Spain, which...

Valencian developer Obradis files for bankruptcy

Sun, 20 Jul 2008 00:00:00 GMT

The Spanish property crisis has claimed another victim. The Valencian developer Obradis has been forced to seek protection from its creditors in the face of plunging sales and rising financial costs. With 5 developments partly sold and under construction, including its Balco de la Vila building in the popular resort town of Javea, Obradis has run...

Investment Banks Look to Spain for Bargains

Thu, 17 Jul 2008 00:00:00 GMT

Lehman Brothers and other investment banks, private equity firms and hedge funds are lining up to buy distressed Spanish assets as the steep economic slowdown offers investors big discounts.

Lehman has purchased stakes in distressed senior bank debt, the law firm Ashurst said recently, providing a rare glimpse of insight into the normally secretive world of such transactions.

The U.S. bank also bought stakes in a defaulted senior bank debt agreement, Ashurst said in a brochure on distressed transactions, in which investors take on parts of troubled companies at a discount.

Such deals - not normally disclosed by banks wary of showing their positions - also include the purchase by the U.S. private equity firm Apollo of a portfolio of receivables from two Spanish banks, Caixa Galicia and Banco Popular, according to Ashurst.

"We expect more nonperforming loan sales to follow," José Christian Bertram, a partner at Ashurst, said at a presentation to investors about Spain's distressed market in London last week.

Lehman, Apollo and Carval all declined to comment.

Spain has become the center of focus for Europe's restructuring bankers, such as Rothschild, Lazard, Houlihan Lokey, Goldman Sachs and Cyrus, eager for business after years of dearth in distressed deals.

"We think Spain is going to be a very interesting market for opportunistic players," said Antoine de Cockborne, an associate at City Property Investors. "This is the start of a very difficult situation. It will hit the bottom. We're looking for discounted assets."

The Spanish economy is faltering after a decade-long boom that saw house prices almost triple. Spaniards who borrowed against the rising value of their homes to buy cars and second homes are struggling to pay their bills.

The global credit crunch and record oil and food prices are squeezing Spanish consumers and forcing local shops to close down. Empty stores with "for sale" signs have become a common sight around the country.

Investors in distressed debt are also looking at firms such as Cortefiel, a clothing retailer bought by the private equity firms PAI Partners, CVC and Permira in 2005. Its debt trades at about 50 cents per dollar.

Retailers and service providers face tough times as customers leave unpaid bills. Investors may buy the bills for as little as 10 percent of face value, offering those who risk it an attractive yield.

Bank of America and WestLB bought a portfolio of receivables from Vodafone in Spain worth €190 million, according to Ashurst.

But chasing assets in Spain can be harder than investors think, because servicers - agents in charge of recovering debts - are not as sophisticated as in other countries, said Juan Hormaechea, a partner at Ashurst.

"The services market in Spain is underdeveloped; they are slow and not used to mortgages," Hormaechea said. "Some buyers buy portfolios without knowing that the servicer will become the bottleneck."

Prices are another barrier, as distressed assets may have to fall still further to attract investors.

"At the moment, we have more sellers than buyers," Bertram said.

Full story from www.iht.com

Spain Property Market More Transparent

Thu, 10 Jul 2008 00:00:00 GMT

A bit of good news for once. The Spanish property sector has made some progress towards cleaning up its act, according to the latest bi-annual report on real estate sector transparency published by Jones Lang LaSalle, an international property consultancy.

In the 2008 edition of Jones Lang LaSalle’s Global Real Estate Transparency Index, which measures corruption in real estate sectors worldwide, Spain has risen two place from 18th in 2006 to 16th today. As a result, Spain is now rated 10th in Europe, and 16th in a world ranking of 82 real estate markets.

Corruption is not the only variable measured by the index, which also takes into account other factors such as legal frameworks, respect for private property, levels of professionalism, and the availability of reliable market statistics. The improved availability of information, plus greater professionalism in the Spanish property sector lie behind Spain’s rise in the rankings.

The Index, which Jones Lang LaSalle says provides a rigorous framework for comparing the level of real estate transparency across world markets, shows that nearly half of the countries surveyed in 2006 demonstrated a significant improvement in their transparency score two years later.

“Transparency levels globally are improving as governments seek to streamline regulatory and legal hurdles to aid cross-border movement of capital and corporate facilities,” says a press release from Jones Lang LaSalle. “Only Venezuela posted a lower transparency score this year compared with 2006, principally due to changes in government regulations and new taxation policies targeting foreign investors.” In keeping with historical results, Anglo-Saxon real estate markets remain the most transparent in the world. Top of the ranking are Canada, Australia, the US, New Zealand, and the UK, in that order.

Full story from www.spanishpropertyinsight.com

Facelift for Costa Beaches

Mon, 7 Jul 2008 00:00:00 GMT

The Junta de Andalucia’s Tourism councillor, Luciano Alonso, said last week that he was looking at ways to give the Costa del Sol a facelift. He told a meeting of the Tourism Journalists’ Association (Apertur) at the Parador de Golf that these would include widening the beaches, recover disappeared green areas and create a variety...

HUGE BUSINESS CLOSURES IN MALLORCA

Mon, 7 Jul 2008 00:00:00 GMT

The president of Mallorca’s Tourism Businesses Association (Acotur) warned last week that some 6,000 businesses could close down on the island in October because of a drop in sales of 25%. Sr José Tirado said most of the businesses were souvenir shops, cafeterias and other leisure establishments. He urged the regional government to adopt measures...

EXPO OPENS WITH A SPLASH

Mon, 16 Jun 2008 00:00:00 GMT

The whole Royal Family turned out last Friday for the opening of the Zaragoza Expo 2008 by King Juan Carlos. Most of the government ministers, led by Prime Minister José Luis Rodríguez Zapatero, were also there. For the next three months, Aragon’s capital will be the water capital of the world, as the Expo focuses...

MADRID IN OLYMPIC RACE

Mon, 9 Jun 2008 00:00:00 GMT

Madrid is on the short-list of candidates to host the 2016 Olympic Games, the International Olympic Committee announced last Wednesday. The other candidates are Tokyo, Chicago and Rio de Janeiro. Madrid came within a whisker of winning the 2012 Games, narrowly losing out to London. Each candidate will now prepare detailed plans and the final...

Tourism growth set to benefit investors in Spain

Fri, 28 Dec 2007 00:00:00 GMT

Owners of rental accommodation in Spain will be likely to see greater demand from tourists after officials revealed that more holidaymakers were visiting the country.

According to the ministry of industry, commerce and tourism, 56 million people arrived in Spain during the first 11 months of the year, Thomson Financial reports.

This is up by 2.1 per cent on the number of holidaymakers recorded between January and November 2006.

Meanwhile, the volume of tourist arrivals was found to have increased by five per cent when last month was compared with the same period of the previous year.

The growth in the tourism sector means that more people will be seeking temporary accommodation in the most popular areas.

As a result, owners of Spanish property could be in line to pocket higher rental returns than they did in 2006.

Spain's continuing appeal among overseas property buyers was recently highlighted in a study by Knight Frank.

Figures cited by Property Week showed that Madrid and Barcelona were two of the most popular investment markets.