Spanish companies Metrovacesa and Endesa to jointly build 2,000 apartments in Barcelona – estimated investment volumen of some 825 million euros
The Spanish real estate developer Metrovacesa and the Spanish energy utility Endesa have founded a company to develop an area of around 32 hectares in Barcelona for the construction of up to 2,000 apartments.
As the Spanish business newspaper „Cinco Días“ reports in its edition of 7 March 2019, the site of the former Sant Adrià de Besòs power plant, known for its three 200-metre-high chimneys, is to be converted into a residential area with hotels and service centres.
Until the real estate and financial crisis in 2008, Metrovacesa was Spain’s largest real estate company. Starting in 2009, it was in a troubled situation and was subsequently restructured, reduced in size and taken off the stock exchange. The company is now listed again on the stock exchange, the largest shareholders being the major Spanish banks Banco Santander (49.4%) and BBVA (20.9%). Unlike before the crisis, Metrovacesa is now active exclusively in Spain.
Endesa is one of Spain’s major energy suppliers, owning large parts of the power plant site, which will now be used to develop the real estate project.
The ambitious project initially has to overcome two hurdles. On the one hand, the conversion of the existing industrial area into a terrain for real estate development must be accomplished. A complex approval procedure is pending here. When designing the project, it must also be borne in mind that parts of the power plant with the three chimneys represent an industrial monument and must therefore not be demolished. The apartments and other real estate to be built must therefore be integrated into the remaining parts of the power plant construction.
The project, which is rather unusual in terms of design and partners, shows that there is interest and demand for the construction of ambitious new real estate projects in the greater Barcelona area. This is a positive signal for the Spanish real estate sector, ten years after the construction and financial crisis shook the country.
On the other hand, it should be noted that the new real estate boom in Spain is limited to the metropolitan regions such as Madrid, Barcelona, Valencia and Bilbao and the top tourist centres. In many other regions, by contrast, property prices remain low or continue to fall.
For investors, this means that in Spain a lot of time and effort should be invested in identifying suitable locations (-> Due Diligence) so that a real estate project can ultimately generate the expected profit.