US Construction Firm Promises to Build Thousands of Home in Spain

US Construction Firm Promises to Build Thousands of Home in Spain

Seems like lots of countries are coming to invest and

build in Spain once again the carinas are arriving.

A lot of time and thought goes into every decision made by a major Wall Street investment firm. This is why many will welcome the news that Lone Star Funds – which began investing in the construction sector of Spain back in 2015 – have promised to increase their Spanish house building over the next few years.

This private equity-backed investment firm built 2,000 homes across 2016, and are pledging to build over 3,200 homes each year leading up to 2020; which says a lot about the way the Spanish property market has matured.

In the years between 2009 and 2016, bank lending to the Spanish real estate industry dropped 65%. This brought the construction industry of Spain to the point where any large-scale construction project would need significant private backing to succeed.

This meant that many Spanish developers were left out in the cold, hoping to receive more money from the bank or the government. Analysts say that US firms are a breed unto themselves, though.

Fernando Rodriguez, the general director of R.R. de Acuña& Asociados, a Madrid real estate firm, says that Lone Star uses an Anglo-Saxon model; meaning that they research every little detail and won’t build property in a place where demand won’t exist for the next two years at least. This approach is just what is needed by the sector, which was damaged by the Spanish method of just building whatever, whenever, and wherever. Spanish developers would just build as many houses as they wanted, which is a bad strategy.

There were around 675,000 new homes built in Spain each year between 1997 and 2006. The result was that around a million-and-a-half properties were left empty or not even finished during the crash. Most of these homes have found an owner now, but many of them are likely never going to be sold. They were built for urbanisations and towns that were never completed. Only 39,890 new homes were built in the country during 2015.

Even so, there’s now a lack of new properties in the most popular areas of Spain such as Madrid, Barcelona, and the Costa del Sol. There isn’t enough of a supply to keep up with the demand in these areas. Market analysts say that the plans Lone Star have to build a select number of houses in select areas shows that they have definitely done their research.

The wider Spanish property market – including resales – grew by over 13% last year. It’s expected that the growth will continue in the double digits for 2017 as the market continues to “normalise” and reach levels unseen since the boom period between 2007 and 2008.

New Build Requests in Spain up 35% in 2016

New Build Requests in Spain up 35% in 2016

Spain is back as carinas are springing up all over the

costa del sol again which confirms the new growth.

When the Spanish economy crashed in 2016 one industry that really felt the damage was the construction industry. The years leading to the crash saw the industry enjoy incredible success that could never last and the construction of new homes in Spain stalled following 2008 as home developers went out of business, prices collapsed, and everyone lost confidence in the industry.

The construction industry was a little slower to recover than most other sectors. As the economy and housing market of Spain began to come back to life after 2012 the country entered a buyer’s market, with the low prices of the resale sector proving to be attractive. Not to mention all the unbuilt and unwanted apartments still left in the country because of the lack of demand.

Recent years have proven to be great for the real estate sector of Spain though. This means that the construction industry has also matured and become competitive once again. There are still areas of the country that have too much construction but the areas that have always been popular with purchasers are moving past the problem.

The market has moved on so far that the latest data from the Ministry of Development shows that the amount of building license applications have increased 35% over the course of a year. The data from August shows that the amount of license requests has increased 20.2% year-on-year, with 3,291 requests made during the month.

In fact the number of building permit requests has increased each month for the past 17 months, which is a very clear indication that the construction sector has truly gotten back to work. They might not be working as much as they were before the crash, but things are moving at an encouraging pace that should be able to meet the demand of both foreign and domestic consumers.

2016 has seen around 42,869 license granted. This number might not be much higher than the amount from 2015, but there were an amazing 911,000 such requests granted in the same time period in 2006. That’s almost one million property licenses granted in just nine months.

History shows us that the demand simply could last and it didn’t take long for the bubble to burst. Everyone is moving much slower and sensibly this time around.

Go-Ahead to Build Largest Leisure Park in Andalucía Given by Torremolinos

Go-Ahead to Build Largest Leisure Themed Park in Andalucía Given by Torremolinos.

Leisure park to be built near the Torremolinos water Park

Torremolinos council gave the green light to build the largest leisure park in Andalucía this past Tuesday when the town planning regulations (PGOU) received almost unanimous approval.

The giant leisure park will be built and developed by Intu Properties and will house shops, restaurants in Spain, a dry ski slope, and a large pool with surf waves. The area chosen to host the park is the area between the Palacio de Congresos and the motorway.

The leisure park project is expected to receive direct investments of up to 650 million euros. It is also expected to receive another 550 million euros through indirect investments. The construction of the park will open up 4,000 new jobs, with a further 3,000 jobs created through indirect employment.

This brand new leisure and shopping complex also gives good news for the Torremolinos council. The council is expected to receive 20 million euros from Intu Properties through the building license and other related fees. This is equal to roughly one fifth of the entire annual budget for the town. The park is also expected to generate 3 million euros through property taxes.

The park was part of the new planning regulations that were approved last Tuesday. All parties involved except for Izquierda Unida because if environmental concerns,  voted in favour of the new PGOU. This marks the first time in 20 years the opposition parties voted in favour of a new PGOU. The vote also finally ended the decade long planning stalemate the town had been suffering through.

The new PGOU includes more than just the park. The town centre will be pedestrianised, and cycle lanes and a river park will be constructed. The plan is to also create more green areas overall. Torremolinos also has plans to improve and enhance their Sierra.