Property news has evolved as a US construction firm and a Dubai firm has promised to build thousands of homes in Spain.
US company, Lone Star Funds, are making an investment decision after funding the Spanish construction sector back in 2015. Over the next few years, they intend to exceed their expectations and strengthen Spain’s housing economy even more.
The private equity-backed company invested in 2,000 new homes in 2016, which is an impressive figure and has helped the Spanish recovery to improve. Lone Star Funds are planning to build more than 3,200 new homes a year between now and 2020 – an even bigger movement on the property front.
Bank lending to Spain’s real estate industry fell by 65% between 2009 and last year, which is a shift in the funding process. The nation’s construction industry has turned a corner that it now relies heavily on private funding to finance large-scale projects.
Analyst and Director of R.R. de Acuña & Asociados Fernando Rodriguez, speaks on the subject: “Lone Star’s model is typically Anglo-Saxon.
“They do their research in minute detail and don’t build unless it’s clear there’s demand today, tomorrow, and in two years.
“It’s what the sector needed and it’s nothing like Spanish developers that used to build whatever, wherever and however many homes they wanted.”
It has been predicted that 675,000 new homes were built in Spain every year between 1997 and 2006, which has meant millions of homes have been abandoned and left empty during the crash. Many of them have been sold on but many will never be able to be sold as many housing plans failed to progress. A lot of planned towns and urbanisations have not emerged, which has caused problems among the real estate development.
However, Lone Star’s involvement is a positive one and their desire to build new homes in handpicked areas demonstrate that they have researched the market well. The property market of Spain is undoubtedly growing and it is expected to be in the double-digit range this year as the market is predicted to return to a normal level, a healthy level.
Similar to the US, a Dubai firm is also investing in the Spanish property market. A Dubai-based holiday company, the Imperio Group, has announced that they plan to invest €50 million into Spanish property throughout this year. That is a staggering amount of money and they have said that they have intentions of investing a lot more in years to come.
The specialised group focuses on renovating and restructuring old properties and is particularly interested in Barcelona. They have recently spent €6.5 million on acquiring the historic Vincon Building on Pau Claris street that overlooks Gaudi’s La Pedrera.
This investment trend is certainly continuing around the world, as more and more countries are willing to invest in the Spanish property market. Everyone knows just how beautiful the country is and everyone must be thinking the same thing at the moment: let’s invest in Spain. Huge potential awaits and the housing success rates are paramount.
Written by Gemma Smith