Development Locations
Andalusian Developments
Southern Spain
Development of large parts of the Spanish Mediterranean coastline has been a major factor in the country’s economic success from the early nineties.
Construction per se is a major feature of the continued economic growth. The increasing prosperity of the indigenous population has fuelled the demand for residential development, mirroring a similar bricks and mortar ownership culture here in the UK.
Additionally, Spain maintains a consistent top three position for gross numbers of global visitors (52m in 2006) and overseas property purchasers historically seeking a foothold in a market economy and climate that satisfies increasing numbers of northern Europeans in the traditional holiday home/retirement home aspirations.
Increasing demand has fuelled large scale volume construction in some cases without consideration of infrastructure and longer term market demands and a projected over supply of property in some geographical locations.
Capital values have risen in line with and have often exceeded the growth experienced here in the UK and the cyclical nature of property growth has pretty much mirrored the UK marketplace, but with the advantage of a (historically) significantly lower cost base.
The present market is currently experiencing a major adjustment and many observers have welcomed this current situation to re-position the real estate economy in order to make sensible and reasonable projections and achieve realistic returns over the medium to long term.
The southern Andalusian coastline, more commonly know as the Costa del Sol, has generally attracted higher net worth purchasers, as this area has developed residentially and commercially since the mid eighties.
The area south of Marbella to Sotogrande is recognised as the golf capital of Europe and currently hosts fifty courses with an additional ten under construction. Residential and commercial development has matched the expansion and created a significant level of permanent residential living, a noticeable proportion of the indigenous population from northern Spain acquiring a second home as the overall economic growth places Spain as one of the European Union members success stories in the last decade.
Frequent visitor and traditional northern European holidaymaker numbers continue to rise in spite of a wider variety of low-cost airline destinations offering competitive travel and accommodation costs elsewhere.
A significant factor is the expansion of the main conduit for the area, Malaga airport. With flight connections to more than 60 worldwide destinations, in the region of 13 million passengers passed through the airport in 2006. Current expansion is underway to incorporate a third terminal and additional runway together with facilities for the increasing number of business travellers; the expansion has been designed to accommodate a 20% traffic increase predicted over the next five years.
This specific area is benefiting from extensive infrastructure investment; communication networks, air, high speed rail and motorway networks are key elements in the success of the region and considered by informed observers as significant factors in the future values and continuing economic success.
The Estepona Estate
The Estepona Country Club estate is currently awaiting final detailed planning appraisal as a private-gated estate with features that are unique to the area.
The development will achieve some of the lowest density build with large areas of gardens and parkland. Encompassed within the site is the first International Tennis Academy for this area of Spain, widely welcomed by the planning authorities and the region’s administrators. The management and stewardship will be led by the highly successful Warwickshire Lawn Tennis Academy in association with the UK’s Lawn Tennis Association and their network of European tennis connections.
In addition, the development has incorporated a range of sports disciplines to offer recreational and winter training facilities to be marketed throughout Europe. A combination of unique facilities, high quality accommodation, low density and a wide range of recreational aspects indicate the potential for year round rental income and future current stock values.
Subject to the second phase stock availability for this significantly enhanced site being as keenly priced as the first phase, the property advisors consider the development suitable to meet the medium to long term objectives of the funds.
In addition to the Dominican Republic, Morocco and Andalusia, the property advisers are considering other potential arenas and the same critical factors will apply when assessing future locations and stock options for fund investment.