Changing Fortunes: Turnover of Top 30 Real Estate Companies

The aggregate turnover of the top 30 real estate companies decreased to 6,030 million euros in 2012, which is only 2.1% less than in 2011 but 50% lower than in 2009, according to a study by DBK, a subsidiary of Informa D&B. This is despite the sale of assets to the financial lending institutions.

The Spanish property market was immersed “in an intense crisis”, says DBK, though the real estate companies’ income is stabilising this year, due to a bottoming out of prices.

However, residential construction has continued the downward trend observed in recent years, falling by 12.1%, putting the value of construction work at 30,210 million euros. DBK estimate that, at the close of 2013, this variable will be reduced by an additional 9%.

Meanwhile, the number of homes completed declined by 25.6%, reaching a total 133,415 units, a figure that is 80% lower than in 2007, and points to a further drop of over 50% for the current year, according to this report.

Activity also continued to deteriorate in the non-residential segment, where the value of production decreased by 9.7% in 2012 and the total construction area in this type of work fell by 31.3%.

DBK noted in their report that, in the short term, there will continue to be new transactions for the purchase of assets and real estate companies by investment funds, both domestic and foreign, especially by real estate subsidiaries of financial institutions.

According to El Mundo, in January of this year, there were 174,463 real estate companies, which is around 750 companies less than in the previous year. Aside from the effectively dissolved companies, many companies are inactive, or are in a situation of bankruptcy or liquidation.

The report indicates that about 70% of the real estate companies registered in Spain are in the regions of Catalonia, Madrid, Andalusia and Valencia, and also highlights the progress made by banking subsidiary companies, which in June this year had a real estate portfolio valued at about 40,000 million euros.