Second development project in Barcelona
The international platform for cross-border real estate transactions, together with one of its clients and a local developer, is investing in the construction of an apartment building on Rue Numancia in Les Corts, one of the central districts of Barcelona.
The project envisages the construction of a residential building with 22 apartments, 25 parking spaces and the placement of street retail with a total area of 2.1 thousand square meters. The project is partly funded by a Spanish bank.
The company helped to select a site for construction, structured the relationship between the developer and the investor and now coordinates the development of the project, preparing to participate in the sale of apartments through its platform.
This is the second development project in Barcelona. This market is promising for value added projects for several reasons:
Low mortgage rates since 2014. Spanish banks provide loans to non-residents in the amount of up to 60% of the property value at an average of 2.5% per annum, while conditions are even more profitable for residents: a loan of up to 80% at only 1.5%.
The potential growth in prices. From the high of the first quarter of 2007 (4 732 euro / m²) to the minimum of the third quarter of 2013 (2 957 euro / m²), prices fell by 37%. Since the beginning of 2016, prices are skyrocketing, in the second quarter of 2017 the cost per square meter in Barcelona is 11% lower than the peak values. In parallel, the demand from international investors is constantly increasing.
In Barcelona, three main motivations of real estate buyers converge: “dacha by the sea”, rental income and a “golden visa” when buying property worth from 500 thousand euros.
Growing demand. In Barcelona, the limited supply of new buildings provides high liquidity, good sales rates and the potential for growth in returns for investors. The city is bounded by the sea in the south, by mountains in the north, and densely built-up villages adjoin it from the east and west, which hinders the construction of new districts and makes the city center even more popular with buyers.
The development of tourism. The capital of Catalonia is among the ten most visited cities in Europe according to European City Marketing. In Barcelona, 8–9 million tourists from abroad stop annually for at least one night, and every year their number increases.
The welfare of the locals is growing. The population of Barcelona is gradually recovering from the 2014 recession. Expenditures of residents grow from 2013, by 2015 increasing by 5.4% to 22.88 billion euros. The unemployment rate, having reached a peak of 23.7% in 2013, is gradually decreasing – in 2016 this figure dropped to 14.4%.
Tranio is already working on several value-added projects in Barcelona, Bavaria, Athens, Vienna and Miami.
In parallel with the launch of new construction projects, Tranio provides customers with the possibility of secondary participation in development projects: investors with capital from 500 thousand euros can buy out shares in current projects with a yield of 10% per annum, the investment period is 1.5 years.
Until the end of 2017, Tranio plans to launch a collective investment fund in Germany. Clients with a capital of 30 thousand euros will be able to invest in value-added projects together with Tranio and receive a yield of 12% per annum after deducting all expenses and taxes.
In connection with the concern that has arisen because of the recent referendum in Catalonia, we are activating other areas for investment: for example, redevelopment projects in Valencia.