After seven dormant years, Spain tiptoes back into house-building

On a street in central Madrid, Juan Jose Perucho points to where he is going to build one of the capital's tallest residential blocks after buying a site bigger than five football pitches from the state-owned metro network.
"We've sold faster than ever before on this development," says the head of unlisted real estate company Grupo IBOSA of the project, which will feature a 25-floor tower with swimming pool and hanging gardens.

"I've seen nothing like it in all my 24 years in this business."
Spain is building again after seven years of a crushing downturn in the construction sector with investment in house-building registering its first quarterly rise since before the crisis in the three months from June to September.
But while this is a sign of Spaniards' confidence in their recovering economy, construction is unlikely to return to pre-crisis levels, leaving a shortfall in economic activity which has yet to be replaced by any other sector.

Spanish construction accounts for 5 percent of the country's output compared to 10 percent in the boom years, or an annual shortfall of about 50 billion euros ($62 billion), and employs less than half than before the housing crash of 2008, with no quick prospect of a sharp rebound.

At the peak of its decade-long building bonanza, Spain was putting up more houses per year than Germany, France and Italy combined. This has left a stock of 740,000 unsold new homes, hard to shift as many stand in out-of-town areas like Guadalajara and La Rioja where demand for housing is weak.
Banks, with 161 billion euros homebuilder debt weighing on balance sheets, much of it soured, are highly cautious about lending to projects and are focusing on high-end developments in Madrid and Barcelona where prices are rising.

Developers must show half the flats have been sold off-plan before sealing financing deals. They must also buy the land with their own money and put half of their own capital into building costs, lenders say.
Even under such strict conditions, the amount of projects is up from last year, mostly because of the dynamism of Madrid and Barcelona. In Madrid, the city council issued 3,131 building permits for residential use in the first 10 months of 2014, more than it awarded in the whole of 2013.

BANKS CAPTURE MORTGAGES

New building is planned for prime real estate plots like former Ministry of Defence land in the exclusive Madrid neighbourhood of Chamberi, which another unlisted property company Domo bought in November and where it plans to build 355 flats in a gated development with swimming pool and shops.
Banks see financing upmarket housing projects in big cities and providing mortgages for buyers as a good way of capturing rich clients to whom they can later sell other products and boost their falling margins.

While 80 percent of Spaniards own their home -- twice as much as the euro zone average -- the amount of new mortgages ceded has dropped to less than a tenth of its pre-crisis peak of 127,233 signed in March 2006.

"One of the big motivations to get into the developer financing business again is to capture the mortgage holder," said Joan Bertran, head of real estate developer investment at Banco Sabadell.

His team is considering around 150 financing requests from house builders for projects, up from none this time last year, and has approved around eight new investments so far this quarter in Madrid and a similar amount in Barcelona, also compared to none last year.

Back at Perucho's site on the former metro land, the developer says most of the buyers are Spanish and buying flats to live in, not as an investment.

He says a larger than usual proportion are Spaniards working abroad with well-paid jobs in countries from Australia to the Gulf States in sectors like engineering -- a sign of how Spain's professionals who have travelled abroad for work during the crisis are now helping the country to recover.

This project is financed by Caixabank. Other parcels of land are coming up for sale that he is interested in, like the site of the old Atletico de Madrid soccer club stadium on the banks of the River Manzanares in central Madrid.

"It's about a return to normal activity, it's not a boom," he says. "The market was absolutely paralysed for seven years and there is a backlog of demand." ($1 = 0.8037 euros) (Additional reporting by Robert Hetz; Editing by Julien Toyer and Angus MacSwan)

source: dailymail.co.uk

Spain is investing big in Space progams

SPAIN TO INVEST 344.5 MILLION EUROS IN SPACE PROGRAMS 

At the Ministerial Council of the European Space Agency (ESA) held in Luxembourg earlier Wednesday, the Spanish delegation – led by the Secretary-General for Industry and SMEs, Begoña Cristeto, and the Managing Director of the Centre for Industrial and Technological Development (Spanish acronym: CDTI), Elisa Robles – announced that Spain will invest 344.5 million euros in space programs under agreements reached at the government’s Council of Ministers.
First and foremost, this investment will be used to finance participation by Spanish companies in the programs proposed by the ESA at the Ministerial-Level Council Meeting:
Spain will make significant progress in the field of launch vehicles by becoming the 4th country involved in the new Ariane6 launcher, via a contribution of 6% (182 million euros). This investment will generate a positive return over the course of the launcher’s life cycle and will lead to a business volume of approximately 1 billion euros for companies taking part in the ESA development programme. Furthermore, this 6% will enable more Spanish companies to participate in the Ariane6 launcher, as opposed to the lower number taking part in the current Ariane5.
Spain will also provide 46 million euros to other launch vehicle programmes.
Spain will contribute 17 million euros to maintaining the International Space Station (ISS).
In addition, Spain will contribute to programs for which the ESA requested funding at the previous Council Meeting at a Ministerial Level, held in Naples in 2012, and to which Spain was unable to contribute at the time given the economic situation of the country that year:
In the field of security: 20 million euros, for the development of a national Space Security system, through which to gain access to the 0.6 billion-1 billion euros that the European Commission has allocated to the European system over the next decade.
In the field of telecommunications: 18 million euros, for maintaining the technological capabilities of Spanish industry in a sector that is highly attractive to trade.
In the field of technology: 15 million euros, for the development of new technologies capable of enabling Spanish companies to bid from a level playing field alongside their European competitors on future ESA missions.
In the field of Earth observation: 25 million euros, for Europe’s Copernicus satellite constellation (that generate additional business paid for with funds from the European Commission); and 12 million euros, for future scientific missions (including maintenance of the Maspalomas space centre).
In the field of space exploration: 10 million euros for the mission to Mars, Exomars and technological activities in preparation for future missions
Spanish investments in ESA programmes
Spain has traditionally stood among the five or six highest contributors to the European Space Agency, with a contribution of between 5% and 7% of the total funding allocated to optional programs.
This has enabled spectacular progress over the last 20 years, in which the Spanish space industry has moved from playing a secondary role in the value chain to one of leadership in complete systems.
Besides the capacity to lead complete space systems, there is a raft of independent medium-sized companies that have developed important technologies and components that are now used successfully in both the commercial and institutional markets.
In the field of space infrastructure, Spain is also home to one of the five major activity centers operated by the ESA. The European Space Astronomy Centre (ESAC) in Madrid focuses on the development and operation of the instrumentation on scientific satellites launched by the ESA. The centre has experienced strong growth since 2004 (the number of employees working there has more than doubled), its status within the ESA has been risen from a ‘monitoring station’ to an ‘establishment’ and new lines of activity have been launched (the Space Situational Awareness Programme or SSA).

India a investment magnet for Spanish BUsiness?

India presents itself as investment magnet for Spanish businesses.

Madrid, Dec 3 (IANS/EFE) More than 100 representatives from the Spanish and Indian public and private sectors got together Wednesday in Madrid to strengthen their countries' ties at a time when the Asian giant has become a global "centre of gravity" for development with huge opportunities for investment.

The two-day meeting is taking place within the framework of the 1st Spain-India Forum organised by the Spain-India Council Foundation under the theme, "Cities and Sustainable Transport for the Next Generations". 

"The Forum is a magnificent opportunity to consolidate our bilateral relations and bring together Spanish and Indian society," said Antonio Escámez, president of the Spain-India Council Foundation, at the event's inauguration. 

"It's clear that the global centre of gravity is moving towards the East," he said, "and Spain is ready to boost its relations with India."
Currently, 230 Spanish companies are active in India and bilateral trade last year reached 3.3 billion euros ($4.06 billion) with the Asian nation enjoying a 1.2 billion-euro trade advantage, according to official Spanish government figures. 

Also taking part at the Forum's inauguration was India's Federation of Chambers of Commerce and Industry (Ficci) secretary-general Didar Singh, who emphasised that "Asia is the engine of the 21st century in the short term" and especially India with its one billion inhabitants and a market of 700 million people.
However, he said India needed to invest heavily in infrastructure to improve competitiveness and take advantage of investment opportunities.
Didar Singh referred to a mission underway in his country, "Make in India", which is aimed at easing business, and mentioned the "economic corridors" project which is based on improving infrastructure and creating an entrepreneurial environment in smart cities which he described as a great business opportunity. 

The Ficci secretary-general also spoke of schemes to boost India's training programmes to put 500 million qualified workers into the job market in the coming years.
Didar Singh, whose organisation has 250,000 businesses as members, announced that the next forum would be held in New Delhi. 

Tallen Kumar, the CEO of the Delhi-Mumbai Industrial Corridor, in charge of industrial policy and promotion at the Indian ministry of industries and trade, highlighted sustainable cities with good transport networks as being "fundamental for us" and invited Spanish businesses to invest in these projects.
Among India's challenges, he said, was to transform the industrial sector into an engine for the economy which now lags behind agriculture and services.
In this regard, he stressed the role of the industrial corridors, although he cautioned that "we want to be the basic engine in this development, but with sustainability".
Kumar said India needed to bet on quality infrastructure and emphasised the work the Indian government was carrying out in deregulating to facilitate administrative processes and in reforming the labour market. 

Another challenge for India, he mentioned, was urbanisation as there was already a huge population movement from rural areas to the cities and calculated that in 2050, there would be 700 million people living in urban environments.
"The industrial corridors will be the solution," he said, with the goal of reaching integral development with sustainable cities linked by state-of-the-art transport systems.
Kumar also stressed the "commercial model" of urbanisation, saying there would be no government subsidies but "the soul of the city" would be taken into account, along with "good governance." 

Offering wonderful opportunities for foreign companies, including Spanish firms, were energy management, water, public transport, security and waste management.
Participating at the forum inauguration on the Spanish side were Director General of Foreign Policy, Ignacio Ybañez, and Director General of Trade and Investment at the ministry of economy, Antonio Jose Fernández-Martos, who spoke of India's potential for Spanish investment. 

Over the two days of the Forum, representatives from Indian cities like New Delhi, Chennai and Bangalore, and Spanish cities like Madrid and Barcelona, will discuss with business people and bankers from both countries urban development, sustainability and transport.

Source: www.business-standard.com/