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Market Overview – March 2016
More than three months after the general election on 20th of December, Spain is still without a Government. The political parties have until early May to try to form a coalition, but if their talks fail, fresh elections will have to be held, possibly in June.
Despite the on-going political uncertainty, which many investors criticised at the 2nd Meeting of the Real Estate Sector held in Madrid on 25 February, numerous small and mid-market transactions were closed during the month, in particular in Madrid.
AEW had a particularly busy month, acquiring three office buildings in total. It bought two offices on Calle Serrano, at numbers 7 and 240, respectively, as well as the Amura building in the Arroyo de la Vega de Alcobendas area of Madrid for €37 million.
In the retail sector, CBRE acquired the ABC Serrano shopping centre, also on Calle Serrano from the Socimi Zambal, whose owner, IBA Capital, will continue to manage the asset; and Patron Capital acquired 43 retail outlets distributed all over Spain from Blackstone for €35 million.
Meanwhile, Drago Capital bought Banco de Andalucía’s historical HQ in Sevilla for €25 million, which it plans to convert into a hotel; Patrizia acquired a residential building on Calle Claudio Coello, 108, in Madrid for €22 million; Meridia purchased a logistics centre in Ribarroja for €8.6 million; and Sabadell took ownership of 13 loans to Núñez i Navarro, with a nominal value of €131million, from Sareb.
Several sets of statistics were published during February about the full year results for 2015. The Ministry of Development and Real Estate Registrars both published data about house sales and prices in 2015, reporting price rises of between 1.8% and 6.6%, depending on the segment and region. According to INE, the number of transactions in the residential market increased by c. 11% during the year taking the total to around 354,000, and Bankinter has forecast that this figure could reach 420,000 in 2016.
The Ministry of Development also published data about new house builds in 2015, which were down by 5.5% during the 11 months to November 2015, compared with the same period in 2014. By contrast, Fotocasa published encouraging news, for landlords at least, showing that rental prices increased in 16 of Spain’s 17 autonomous regions (the exception was the País Vasco) in 2015, up by 3.6% on average. Meanwhile, the number of mortgage signings also rose dramatically, up by 19.8% in 2015. In total, mortgages amounting to €25,934.7 million were granted during the year, representing an increase of 24.1% compared with 2014; and the average value of the mortgages granted also rose, by 3.6%, to €105,931, according to INE.
Moreover, the banks announced record revenue figures resulting from the sale of real estate assets – the seven listed entities generated sales of more than €10,000 million from this activity in 2015, with Popular, Santander and BBVA accounting for 61% of that figure. They were also active in the sale of other non-strategic assets, with sales from such assets amounting to €15,800 million last year.
The banks continued to feature on the debt market – CaixaBank and Popular both completed €1,500 million bond issues, with demand for their placements amounting to more than €2,500 million and €2,800 million, respectively. Meanwhile, in the banking sector, Ibercaja outsourced the management of its RE business to Aktua and ING granted a €280 million loan to the Philippine businessman Andrew Tan to help him finance his purchase of Torre Espacio.
Finally, the Socimis continued to dominate the real estate sector, with Merlin, Hispania and Axiare all reporting stock market gains since going public in 2014; Merlin, Axiare and Lar España announcing the distribution of dividends from their 2015 profits; and AC, Hesperia, Piñero and BlueBay all confirming their respective plans to create Socimis in 2016.
Source: AURA REE – Spanish Property
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