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.

US Investment Fund Grabs €1.1 Billion Spanish Property Portfolio

 US Investment Fund Grabs €1.1 Billion Spanish Property Portfolio

The love of investing in Spanish property shows no signs of slowing down. Just recently the US private equity firm Bain Capital purchased a loan and real estate portfolio from three Spanish banks for the sum of €1.1 billion.

Spain looks an amazing investment hub for the next 7 or 8 years

Spanish banks stepped forward during the years following the recession and claimed ownership of thousands of distressed properties. Most of these banks have since gone on to try and sell the properties, even offering them at discounted prices to private investors who want to grab a bargain.

Bain Capital’s decision to purchase this portfolio show just how attractive Spanish real estate is to foreign investors. It’s impossible to know the exact details of the purchase but Reuters are reporting that around €220 of the €1.1 billion of the residential and commercial property all came from one Spanish bank.

The rest of the money went towards purchasing bad loans at face value from Spanish banks Sabadell and Cajamar. It’s believed that most of these loans were offered by the banks to small property firms that were going through bankruptcy. Bain said that these firms are backed by real estate assets and they outlined their belief that these property assets would be enough to recoup their money thanks to the rising property prices in Spain.

As Spain is currently experiencing historically low interest rates there’s never been a better time for this kind of investment from a firm that has the power to carry the burdens. After the recession of 2008 prices in the real estate market slumped by as much as 40%. While property prices are on the increase many properties are still severely undervalued and present a great investment.

The rental yields from commercial and residential property rose to 6.1% in the second quarter of 2016 in Spain, which works out at about five times the return on a 10-year, government backed bond. As such owning property in Spain has become quite the attractive bet across the entire spectrum of investment.

One of the managing directors for Bain Capital Credit, Fabio Longo, said that they see the potential of investing in the Iberian Peninsula, especially in real estate and non-performing loans.

US Beauty Longoria Found In Marbella

US Beauty Longoria Found In Marbella

Longoria and her new husband were spotted in Marbella and they looked to be quite comfortable in the Old Town of the resort.

Longoria spent last summer under the sun on her luxurious yacht a few metres offshore. This time the former Desperate Housewives start Eva Longoria decided to get off the boat and get more up close and personal with Marbella.

Longoria and her new husband in Marbella,  Old Town.

In what looks like it’s becoming an annual event for the star Eva, 41, stepped out on the town with her new husband José ‘Pepe’ Bastón in the Old Town of Marbella on Tuesday. The pair were snapping pictures, having fun, and just enjoying the atmosphere of the gem of the Costa del Sol that is Marbella.

Eva looked at ease as she made her way through the cobbled streets of Marbella in her summer attire, hand in hand with her husband. The pair were married in Mexico in May. It’s thought that the trip to Marbella is part of their extended honeymoon and they definitely made quite the couple as they held hands and linked arms as they made their way through the town.

Another important part of Longoria’s trip to town was to once more fill the shoes of the host of the Global Gift Gala, a Marbella based non-profit organisation that aims to make a positive impact on the lives of women, children, and families the world over.

The summer is always the best time to do a bit of celeb-spotting in and around Marbella and Puerto Banús. Many Hollywood A-listers make their way to the region, along with Premier League stars and famous musicians. They, much like every tourist, are drawn to the scenery, climate, clubs, bars, boutiques, and world class restaurants in Spain.