Financial fears for Spanish developers become investment opportunities

Whilst Spanish construction giants, the so-called G14, encompassing household names such as Martinsa-Fadesa, Realia and Reyal Urbis, are sobbing into their cervezas at the slowdown of their industry and plunging share values, holiday home hunters are cracking open the cava as a market slowdown forces developers to think creatively about how to attract buyers. And current chair of the G14, Martinsa-Fadesa, has certainly got its thinking cap on.

Andrew Benitz, Director of Titan Properties, is promoting the largest and fastest selling golf resort in Spain, Martinsa-Fadesa’s Costa Esuri, in the province of Huelva on the Spain-Portugal border. As the Spanish housing market weakens sales there have understandably slowed requiring a strategic rethink from the developer.

Andrew comments, “Martinsa-Fadesa is in a stronger position than many of its compatriots since its creditors have recently shown considerable faith and refinanced its debt holdings favourably. The loan involving 45 Spanish and international banks promises interest-only repayments for three years and Martinsa-Fadesa’s cashflow now has renewed strength. Other developers with liquidity problems have not thus-far been so fortunate and are becoming strangled by falling cash flow, rising costs and no access to new credit. The good news for buyers of Martinsa-Fadesa product is two-fold, their money is safe thanks to the company’s financial backing and secondly the buyer is in the driving seat and entitled to various perks.”

Fernando Martín, Chairman of Martinsa-Fadesa, is no stranger to strategy having been President of defending La Liga champions Real Madrid, and his company is now offering up some sumptuous incentives to investors. Newly completed apartments and townhouses across Costa Esuri now come with an attractive 5% guaranteed rental income for year one, which on an entry level 160,000 euro unit is a healthy 8,000 euros, whilst each year thereafter rentals fall into the hands of a leading provider of self-catering accommodation to the likes of ebookers.com and lastminute.com. Units will be fully furnished and equipped according to stringent health, safety and fire regulations set by international tour operators and, based on Titan Properties’ close relationship with Martinsa-Fadesa since Costa Esuri’s launch, the whole package has been specially negotiated by Titan Properties for the benefit of its clients.
Andrew continues, “Covering 6.5 million square metres of land alongside the picturesque River Guadiana, Costa Esuri has plenty to offer both the investor and holidaymaker. The first of two 18-hole championship standard golf courses designed by José Canales and under Aymerich Golf Management opened in December 2006 to rave reviews and the second will be unveiled later in 2008. A large commercial centre containing four storeys of high street stores, boutiques, restaurants, bars, a bowling alley and Eroski supermarket is well underway and zones have been designated for sporting facilities plus four and five star hotels, the first of which is to be open by the end of 2009. Suddenly Spain makes for a very interesting investment proposition.”

A 5% rental guarantee is well-and-good but for the investment to stack up, not just Costa Esuri but the area as a whole needs to make mid- to long- term sense. The province of Huelva has this covered. Staying within Costa Esuri planning permission has been granted for a freshwater marina along the Guadiana, the only of its kind in Europe. With 1,000 moorings, upon completion around 2010, this marina, together with the golf courses will enable Costa Esuri to rival the likes of Puerto Banús and Vilamoura. Looking at the province as a whole, property prices in Huelva rose by 7.6% in 2007 the best growth performance on coastal Spain; on price/m² beachside or golf-front property is 39% more expensive on the Costa del Sol and 48% more expensive on the Algarve and tourism in Huelva increaseed by 74% between 2001 and 2006 versus 10.1% on the Costa del Sol.

Fully furnished two bedroom apartments within Costa Esuri start from just 160,000 euros with 5% guaranteed rental income for year one. Two bedroom townhouses within the resort start from just 194,000 euros with the same rental guarantee and furnishing package. Costa Esuri is an hour from Seville Airport, only 35 minutes from Faro Airport and closest to Huelva Airport which could be fully operational by 2012.

For more information, visit titan-properties.com.