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Posts for properties-in-spain



On The Threshold: The sun shines once more on the Costa Del Sol

By Alessandro Pasetti 

Are you looking for the real estate investment of your lifetime in Spain? Do you dream of retiring or living on the Costa Del Sol?
If so, we have some great news for you: thanks to strong local relationships with developers, real estate agents, tax advisors and legal consultants, the Inveztments team can help identify outstanding real estate investments to help you achieve your financial goals.

(Source: Andalucia.org)

The latest trends suggest there could be no better time to eye a property development or existing property investment in a country that after years of stagnation seems to be making a long-awaited comeback.  

The areas on Inveztments’ radar are Puerto Banus, Marbella, San Pedro De Alcantara, Nueva Andalucia, and Estepona.

Background 

“Three Costa Del Sol towns are driving Malaga’s property market into the top of national rankings,” ran the headline in The Olive Press (OP) last week.

Based on data from Panorama Properties, Marbella’s most established estate agency, price growth in Marbella, Estepona and Benahavis is greatly outpacing the national average.

“The three towns saw sales shoot up by 11.15% in 2017 compared to the year before, exceeding pre-2007 levels by 10.4%. The rest of Spain, meanwhile, still lags 21% behind pre-financial crisis levels,” OP reported, noting that Estepona, in particular, saw sales rocket by almost 30% last year.

Along with the UK, the south of Spain is where Inveztments’ founders have lived and invested in for over two decades, and while the choice between the two countries often concerns lifestyle, there are some other important considerations from an investor’s standpoint.

While currency risk has to be managed by European investors hunting for a property deal in the UK, a euro-denominated deal in the Costa Del Sol carries no currency risk at all for European residents funding their purchases in euros — and do not ignore the fact that the right place in Andalucīa could turn out be a hotspot offering even steeper growth rates than the UK.

Additionally, cultural barriers are likely to be lower, and as for the weather… well, that needs no explanation.

Why not? 

The allure becomes more obvious when you consider that not only is the outlook for 2018 in Andalucía undeniably rosy, but the region’s infrastructure continues to attract further investments — read more here about its encouraging mid/long-term prospects.

Of course, you could choose other Spanish hotspots, and even commute from other major cities at a bargain, but that choice comes with caveats.

In an infamous story published by The Guardian in mid-2015 headlined “Commuting from Barcelona: a London worker who makes it pay”, Sam Cookney explained that he had been renting in the UK capital, and was “getting very frustrated” with London prices – “the usual scenario”, he noted at the time.

“It began as a joke. I said to a friend that I bet it would be cheaper if I actually lived in Barcelona and commuted every day.” 

It turned out to be true — and even, if you are unfamiliar with London, you will probably understand why some areas are cheaper now than in the past. However, the recent political uncertainty surrounding Barcelona has harmed the local real estate market, at least temporarily. And inevitably this will boost the prospects of locations further south.

Previously on a roll, “the Catalan independence referendum on October 1, and the political uncertainly that followed, stopped the market in its tracks,” The Financial Times wrote earlier this month in a story headed “Lowballers hunt bargains in Barcelona’s faltering property market”. 

In the weeks following the independence referendum, it added, notaries and real estate agents reported a 50% drop in sales volumes. As a reference, although total transaction volumes in last year’s fourth quarter were up 3.4% on the year before, they were up 10.4% in the third quarter.

The Costa Del Sol is nothing like that.

What does it mean to invest in Spain today?

The most important headlines came in last summer, when the Financial Times reported that “Spain’s unemployment crisis continued to ease in the second quarter of 2017, as the jobless rate fell to 17.2% of the workforce — the lowest in more than eight years.”

After years of terrible unemployment levels and a sluggish recovery in terms of GDP growth, the property and financial markets currently reflect an increasingly benign economic environment, although admittedly the latest employment figures sent mixed signals, these are probably the result of seasonality. And it could take some time before real estate investment once more becomes risky, given that the ECB last week again indicated that interest rates will remain untouched in the near future — and this is good for buyers as it affects their funding costs. The Wall Street Journal was unequivocal: “ECB Seeks Clarity on Economy Before Next Move”.

Elsewhere, Reuters recently wrote that real estate firm Testa aimed for an IPO with an eye on the rental market rebound, and then there is property developer Metrovacesa, with the first listing since Catalonia’s political crisis?

Even Blackstone, one the largest global private equity houses, is benefiting from certain local dynamics, with the news agency recently noting that “bets on Spanish housing and oil assets” helped it mitigate stock market jitters that weighed on its performance in the first quarter.

The PE firm is so attracted to Spain that it is reportedly looking to bid for “Hispania, the Spanish property company whose shareholders include hedge-fund firms Soros Fund Management LLC and Paulson & Co., as investor appetite for Iberian real estate rebounds,” Bloomberg wrote.

At the end of 2017, the US news agency pointed out that investment in “malls, warehouses, hotels and offices is this year set to reach the highest since 2007”. 

Since the turn of this year, the news coming out of Spain has been consistently reassuring, with the latest reports suggesting that “almost 6,000 new building and property companies” were set up in the first quarter, boosted by rising prices across the country.

This is the right time to get in touch with Inveztments: fill in this form NOW and you’ll be contacted within 24 hours.

(This post was written by Alessandro Pasetti. Ale is the founder of Hedging Beta Ltd. He writes about investment strategy and assets valuation for European clients as well as Seeking Alpha, The Loadstar, Transport Intelligence and others. Based in London, he previously worked for about five years at Dow Jones/The Wall Street Journal, producing analysis for the IB community. Prior to that, he contributed to the launch of London-based Loan Radar, where he worked for three years. He had stints in equity research at Bear Stearns in London, HVB in Munich, and Unicredit in Milan. 

It was edited by Gavin van Marle, managing editor of London-based The Loadstar. Gavin is also the author of the book Around the World in Freighty Ways: Adventures in Globalisation. He has won numerous awards, including the Seahorse Journalist of the Year 2011 and 2009, and Supply Chain Journalist of the Year 2010 and 2014. )

On The Threshold: "Not one moment of uncertainty" a Q&A with Inveztments' founders

By Alessandro Pasetti, November 2017.

I recently hit the road with Tonino Montesanti and Elisa Vezzani, the founders and managing directors of Inveztments, who were eager to share with me the benefits and risks involved when it comes to real estate investment in the UK, where their company is making strides in a highly competitive arena.  

What is the USP you offer investors and prospects? 

Tonino: “I am particularly inspired in helping customers unlock and realise the potential in current assets which earn very little in interest, and educate them on achievable and realistic returns and capital appreciation in the markets that we also invest in.”

Tonino Montesanti

 

Reputational risk, in a sector fraught with moral hazard, is part of the problem 

Elisa: “We have two unique selling points that our clients ought to consider: we have skin in the game, and we are investors who have lived both in the UK and in the part of Spain where also we offer real estate investment. This is our core business. Others sell a bit of everything, promising high returns while concealing the risks. Ours is a truly unique combination, and those who have dealt with us over the years know that trust plays a key role all the way through the process. Clients’ needs are our focus.” 

Elisa Vezzani

 

But what about inherent risk in the market itself? How have you dealt with uncertainty over the past 20 years? 

Tonino: “We are talking about 20 years of growth, as the charts show — and another 20 years of solid returns are likely to be on their way given the current imbalance between demand and supply in the UK. Uncertainty, what uncertainty? We have never seen prices go down, and while a mild correction could happen, long-term trends are benign.”  

(Source: Trading Economics)

 

 

(Source: Trading Economics)

 

Elisa: “I have not witnessed a single moment of uncertainty, not even in the dark days of 2008.”  

Tonino: “Exactly, not even in the days of the Great Crisis did we feel the pressure. Real estate cyclicality belongs to other European countries.”

I have heard amazing things about the returns you secured over the years. Tell me about your investment in Twickenham.

Tonino: “We bought a Victorian house there for £272,000 in 2005 and exited the investment in 2014, accepting a £630,000 bid, having spent about £60,000 in renovation.”

(Note for the reader: That is a solid nine-year compound annual growth rate, or CAGR, of 8.3%, once renovation costs are considered.)

Elisa: “We are still looking in Twickenham for a second home, but prices do not point to a bargain at present.”

I know you have a strong track record. Can you tell our reader a bit more about other investments you have made in the past decade? 

Elisa: “We bought in Clapton, aka London’s Bronx at the time, one of its streets was known as Murder Mile, in anticipation of the Olympics Games. We sold an apartment for £470,000, and we had paid about half that price only a few years earlier.”

Tonino: “Then we have invested in Brentford, which at the time was all about industrial warehouses and close to Heathrow, in what has always been an event-driven strategy — essentially we try to predict future trends and events that could boost all-in returns. This is why we are looking at Liverpool now, where we have recently invested.”  

Does it make sense to look for deals in London or outside London? 

Tonino: “We have always looked at London, but the time is not right, and there is no reason we should bite there, not now anyway.”

Elisa: “Lately we have seen London as being unfairly priced, and although we have looked for opportunities, nothing was worth our time and money in the past three years.”

Tonino: “Yields are down to 3%/4% and this comes as first time buyers are pushed outside the M25, although they can easily commute.” 

What kind of market is this for buyers? 

Tonino: “It’s a sellers’ market, Birmingham, Manchester Liverpool doubles the yield you see elsewhere.”

Elisa: “I saw Liverpool two years ago and I loved it, I went to look for a few developments and ended up buying two apartments off plan. We researched in-house, I called all the private agencies, there was a long waiting list, the stars were aligned.” 

Tonino; “And that is a high single-digit yield.”

London vs Liverpool. What’s the deal there? 

Tonino: “The Liverpool-London investment ratio is about 1:3 or 1:4, in some cases — which means that an investment in London will cost you three/four times more in term of initial commitment. And short-term letting is another wonderful opportunity to propel returns.”

Elisa: “Need I say more? Weekend/short term let stuff is always fully booked. And the beautiful Lake District is within reach, just over an hour’s drive away…”

How about Manchester?  

Elisa: “There is a different vibe than in Liverpool, which I prefer, but it is business-orientated, and some properties are on the outskirt of the city centre.” 

Tonino: “And that is exactly what makes these areas attractive if you have that forward-looking view that is necessary when it comes to this kind of investment.”  

Would you recommend a real estate investment with a buyback option?

Elisa: “Many think that a guaranteed buyback offers reassurance, but it is worth considering that it works in favour of the developer, not the investor. A 125% buyback option means that investors will be offered a 25% premium at maturity to give up all the other capital appreciation considerations, and the market offers more than that – and then, of course, you want to retain full control. So, the buyback option is not necessarily a good thing.”

What else do you want to tell your readers and investors?

Elisa: “We are an independent company with a healthy amount of experience in properties and a proven track record. If you want us to help you understand the markets, all the sub-sectors in the real estate world, how we can help you invest in property and what you will achieve through a steep learning process that will become much easier with our help: Contact us and we’ll guide you through this wonderful investment journey.”

If you want to learn more about the appealing features of the portfolio managed by Inveztments, please contact Tonino and Elisa here.

Disclosure:  Clients do not pay a penny to the team of Inveztments. The commission is paid by developers who have been painstakingly selected according to very strict criteria, and trust plays a key role from the early negotiations to the final closing of the deal.

(This post was written by Alessandro Pasetti. Ale is the founder of Hedging Beta Ltd. He writes about investment strategy and assets valuation for European clients as well as Seeking Alpha. Based in London, he previously worked for about five years at Dow Jones/The Wall Street Journal, producing analysis for the IB community. Prior to that, he contributed to the launch of London-based Loan Radar, where he worked for three years. He had stints in equity research at Bear Stearns in London, HVB in Munich, and Unicredit in Milan. 

It was edited by Gavin van Marle, managing editor of London-based The Loadstar. Gavin is also the author of the book Around the World in Freighty Ways: Adventures in Globalisation. He has won numerous awards, including the Seahorse Journalist of the Year 2011 and 2009, and Supply Chain Journalist of the Year 2010 and 2014. )