PROPERTY
VIVA ESPAÑA WITH SPANISH PROPERTY PRICES DOWN BY 60 PER CENT FROM THEIR 2007 PEAK, NOW IS THE TIME FOR GOLF-LOVING REAL ESTATE INVESTORS TO TAKE ADVANTAGE, SAYS HONG KONG-BASED ADVISORY FIRM, FINANCIAL PARTNERS.
T
he Costa del Sol in southern Spain remains one of Europe’s leading golf destinations. Quality tournament courses, warm weather, laid-back lifestyle, beautiful beaches, stunning views of the Mediterranean Sea, delicious cuisine and cultural heritage all provide a perfect setting for those looking to indulge in one of the world’s great sports.
Some of Europe’s top courses are concentrated in this region of Andalucia, including Valderrama Golf Club, in Sotogrande, Los Flamingos Golf, San Roque Golf Club and Alcaidesa Links Golf Course. In this issue, we provide some insight into the Spanish property market and assess some of the real estate investment opportunities in and around some of the Costa del Sol’s golf courses to provide some guidance as to whether it is the right time to buy.
THE SPANISH PROPERTY MARKET It is no secret that the Spanish real estate market has been in a distressed state since the Global Financial Crisis in 2008. Unemployment levels have reached record highs and the press continues to cover the market with interest as Spain’s banks look to offload billions of Euros worth of real estate. Due to the increasing pressure from the EU to resolve the mounting problems in the real estate sector, in 2012 68
HK GOLFER・MAR 2014
the Spanish Government established SAREB – an entity to handle all the toxic real estate assets, known colloquially as the Banco Malo. Whilst the news about Spain’s distressed economy forms the topic of conversation at many functions, the reality is that, perhaps, there has not been a better opportunity in the last 15 years to consider investing in Spain. Real estate in every market globally is cyclical. Spain is no different, with current prices off by up to 60 per cent (or more) in some cases from their peak in 2007. After six years of strife, the Spanish market has now begun to show signs of life, with both private investors and major institutional and private equity real estate investors showing strong interest over the last six months. Whether the market has reached its bottom is anyone’s guess, but sentiment suggests that it is hovering somewhere near the bottom, indicating now may be the time to think about getting in. HKGOLFER.COM
THE GOLDEN VISA To stimulate the market, the Spanish Government has recently added one extra ingredient. In October 2013, the Spanish Government approved the Spanish residency programme, known as the ‘Golden Visa’, permitting foreign investors who invest €500,000 (approximately HK$5 million) or more on property in Spain to reside in Spain and travel and stay freely across the EU Schengen Visa Countries. This has directly resulted in renewed international interest in the Spanish property market especially from Chinese, Russian, Indian and the Middle Eastern investors. Spain’s new ‘Golden Visa’ immigration policy coupled with a distressed real estate market now presents a unique opportunity for golf-loving real estate investors. The key for investors is to take a long-term view and be able to act quickly when the right opportunity presents itself. The challenge with Spain is identifying the right opportunity. The supply of distressed real estate is bountiful, the surroundings are often idyllic, and the prices are relatively cheap and almost everything is for sale from the banks or otherwise. So where should golf-loving real estate investors put their money?
FINDING THE RIGHT OPPORTUNITY
Cheap prices and distressed debt do not always mean that the investment is a good one. There are a large number of properties and distressed assets that you would perhaps not even recommend to your most prolific golfing adversary. However, in and amongst the turmoil, HKGOLFER.COM
there are definitely good opportunities. Below we highlight some key points for an investor to consider when deciding to invest in residential property in Spain: - Establish from the outset whether your purchase is for personal enjoyment, immigration, pure investment and capital appreciation or a combination - Search for properties in established areas with existing infrastructure and amenities - Select completed properties or developments that have been finished to a high standard and granted occupation permits (Licencia de Primera Ocupación) - Select properties within developments with good management and security - Understand your investment horizon and
Clockwise from above: apartments at Alcaidesa; Golf 19 apartments are situated close to the course at Los Flamingos (opposite page) HK GOLFER・MAR 2014
69
Duquesa Golf Apartments are located up in the hills of Estepoma
financing options - Understand the acquisition costs and annual taxes/maintenance charges - Buy through a reputable agent who understands the local area and has the relationships with the local banks, developers and private owners. - Use a reputable lawyer Acquisition costs in Spain typically run at 1113 per cent on top of the purchase price, with slight variances across different regions. These costs cover transfer tax, VAT, stamp duty, notary and registry fees, legal fees and in some cases financing costs. Agency fees may be included in the asking price or at other times the purchaser may be required to pay a buyer commission/fee on top of the asking price. This will largely depend on whether the property being purchased is a distressed sale from a developer, a private owner or bank repossession.
WHAT CAN I BUY? When it comes to golf and property investing in Spain, what can you actually get for your money on the Costa del Sol? It is important to note that while the Spanish rental market on the coastal areas is typically strong during the peak holiday seasons, investment in distressed residential real estate in the coastal areas is not a yield play, but rather a long-term capital appreciation play. Here we showcase a selection of potential property investment opportunities from our portfolio on the Costa del Sol at different price points, which offer good mid-to-long term potential. Each development is located in close proximity to a top golf course and on offer at significantly 70
HK GOLFER・MAR 2014
discounted prices of up to 60 per cent to those quoted in 2007/2008. Areas such as Alcaidesa Golf Course and Duquesa Golf Course offer the opportunity to buy two-bedroom 80sqm apartments for around €100,000 (HK$1 million) where prices typically ranged from €180,000 to €350,000 (HK$1.8m HK$3.5m) in 2007. These developments come complete with swimming pools, landscaped gardens, parking, and security. For those looking between Estepona, Puerto Banus Marina and Marbella, for example in the Los Flamingos Golf area, luxury contemporary apartments close to the luxury five-star Villa Padierna Hotel may range from €235,000 €470,000 (HK$2.35m – HK$4.7m), where prices in 2007 typically started at over €450,000 (HK$4.5m). For those interested in a luxury private villa with a swimming pool in the exclusive areas of Sotogrande (close to Valderrama and Alemara golf courses) or Marbella (close to Las Brisas Golf Club and Marbella Club), prices can range upwards of €1m (HK$10m). For Asian golfers with an eye on international real estate investment, the Spanish market is not to be ignored for the three main reasons: 1) The “Golden Visa” policy is an attractive incentive for foreign investors, enabling easy travel and unlimited stay across the EU. 2) The distressed prices present an opportunity for long-term capital appreciation. 3) The Costa del Sol’s golf courses are some of the best in Europe. In our opinion, it is definitely the right time to buy, or at least to start looking, whether for personal enjoyment or pure investment. The key is to take a long-term view of the market, and enjoy Spain’s attractions in the interim. HKGOLFER.COM
WHERE TO BUY ALCAIDESA GOLF APARTMENTS T h e G o l f : Yo u w i l l f i n d t w o magnificent golf courses within the complex, one of which is the only links course in southern Europe, Alcaidesa Links, considered by the magazine Golf World to be one of the 20 best links on the European continent. Many tournaments have been played at Alcaidesa Link s, including two PGAs of Andalusia, in 1993 and 1994, one PGA of Spain in 1995 and The Ryder Cup Junior Match in 1997. There is also a magnificent driving range with 72 prac tice bays, a spacious practice area with putting green, bunkers and a short game area.
World-class golf awaits at Valderrama
Properties: This new residential development offers 154 apartments and penthouses. Unit sizes range from 80sqm to 135sqm with two and three-bedroom layouts. Some units include large terraces of between 60sqm to 200sqm, providing an ideal vantage point to enjoy the outdoors and take in the view. Facilities include two outdoor swimming pools, spacious communal areas, incredible sea views and 24-hour security. In addition, the beach and golf course are only five minutes away. Price: €87,500 - €232,500
GOLF 19 APARTMENTS The Golf: Flamingos Golf is a 6,853-yard, par 72 championship course with narrow fairways that are naturally laid out on gently sloping terrain. The course has nine water hazards and 43 bunkers, most of which protect the approaches into its fast Bermuda grass greens. The ever-present ocean breeze makes this excellent design quite the challenge. Properties: Located in the exclusive area of Los Flamingos, close to Villa Padierna, one of the area’s top luxury hotels, Golf 19 is a private luxury development with contemporary one, two and three-bedroom units and penthouses. Units range in size from 69sqm to 154sqm each with a large private terrace or private garden. The properties are finished to a high standard and offer stunning views to the golf course, lakes, landscaped gardens and out across the Mediterranean Sea. Facilities include two swimming pools, clubhouse, gym, a putting green and 24-hour security. The development is located only a short 10-minute drive to the glamorous international Marina of Puerto Banus and Marbella. Price: €235,000 - €425,000
72
HK GOLFER・MAR 2014
DUQUESA GOLF APARTMENTS The Golf: Duquesa is an 18-hole club located up in the hills of Estepona and offers spectacular views of the Mediterranean and an interesting mix of holes. Properties: Located on the Costa del Sol about 10 minutes from the exclusive area of Sotogrande and close to the Duquesa International Marina. The development comprises a range of one, two and three-bedroom units and penthouses nestled overlooking the golf course. Facilities include various swimming pools, landscaped gardens, paddle tennis court and 24-hour security. This established development has been designed in typical Andalucian architecture. Price: €99,000 - €125,000
LUXURY VILLA, SOTOGRANDE The Golf: Designed by Dave Thomas, the 27-hole Almenara course winds its way serenely through exceptional landscapes and around two large larkes surrounded by pine and cork trees. Properties: This charming Andalucian villa is situated in the prestigious development of Sotogrande with views out towards the Almenara Golf Course and the Mediterranean Sea. The villa sits on private 2,452sqm plot and has six bedrooms, a stunning garden and a private swimming pool making it an ideal family home with plenty of outdoor space. Price: €950,000 For more information on any of these properties, and property investing in Spain in general, please email spain@hkgolfer.com or call +852 35904153.
HKGOLFER.COM