Neinor Homes’ confirmation of negotiations to buy Vía Célere came as a surprise to the sector. Many analysts have long believed that consolidation is the only possible way forward. Land shortages and the rising construction costs that the industry has been suffering from recently have highlighted the importance of increasing size to approach the development process from a better strategic and economic position.
Several of these factors influenced Neinor’s takeover of Quabit earlier in the year. The main reasons were the location of the land, the construction company and the potential financial synergies. In 10 months, Neinor intends to take an even more ambitious step: the merger with Vía Célere, which will lead to the emergence of the largest developer in Spain. It will have a portfolio of land plots of nearly 37,000 houses and assets worth over 3.8 billion euros.
The figures from the asset takeover make this a strategic transaction for Neinor, even if it is only aimed at gaining market share. Whether or not it takes place, some analysts suggest it will spark a reaction in the rest of the sector in 2022. Other players may also enter the bidding for Vía Célere.
“The trend we have seen in recent months is the creation of large companies with huge land banks for development,” emphasize Itxaso López and Bárbara Hernández-Mora, co-heads of Dentons real estate. In their view, the transformation that traditional developers have undergone since 2008 - leading to the virtual disappearance of the so-called G-14, where Metrovacesa remains the “last Mohican” - coincides with the evolution of demand. We are seeing a growing interest in renting from the traditional focus on buying a house as a first or second house.
Isidro del Moral, Head of Real Estate at Bird & Bird, attributes this trend to two factors: “The current decline in the number of houses under construction compared to pre-pandemic levels, and the redirection of a significant portion of savings to this type of investment.” At the same time, he refers to inflation in financial costs and expenses, as well as regulatory uncertainty.