After a hiatus of several years, construction activity has recommenced in Marbella. We spoke to some of the leading developers in the area about a new era of development.
The construction sector was one of the biggest victims of the global financial crisis and Spanish property crash that hit Marbella at the end of 2008. In its wake, no new projects were launched and building gradually ground to a halt, while recently finished developments found a dearth of buyers. Many promoters had to abandon ship, leaving half completed construction sites behind as the banks inherited an unwanted portfolio of real estate.
By 2010 the once flourishing sector was in dire straits, its main activity now the construction of luxurious individual villas in spots such as La Zagaleta and the renovation of old properties by specialist small-scale developers.
In the midst of this, however, a few companies had the foresight and confidence in the local market to approach the banks and begin to finish projects, upgrade and market them, and add post-sale management services not seen here before.
The success they achieved at a time when most of Europe was still in full recession and the press spoke of the Spanish property sector in disparaging terms is not just impressive, but admirable. As the Costa del Sol was one of the first regions to emerge out of the shadows and back into growth, it saw the early transition from the redevelopment and sale of unfinished, unsold projects to the creation of new ones. International funds were quick to grasp the opportunities, and have helped spurn a new era of property development on the Costa del Sol.
The return of construction in the region has, however, coincided with a major shift in consumer tastes. Together with new technologies this has opened up a whole new age of development that over the coming years will slowly transform not just how Marbella and its surroundings look, but also what its housing stock offers. We spoke to leading local developers about Marbella property development in the 21st century.
According to Michael, the selection of an existing development or new-build project is based above all on common sense and the classic values of location, quality, style and cost. “A good question to ask yourself is would you like to live there, and what could you do to make it better.” It isn’t all plain sailing for developers though as in Marbella the legal aspects of land, are very much at the forefront of any pre-analysis.
“Beyond studying the legal status of the land, we look at the desirability of the location and the possible product distribution on it. In other words, can the plot comfortably hold the type of property that is envisaged? If all these criteria are met we analyse projected product cost against envisaged income and sales potential.”
These are the things prospective investors are most interested in, and since banks are still not providing this kind of funding it is private capital that is needed, both in the form of private investors and funds. “It depends on the criteria of the individual or fund in question as to what will pique their interest,” says Michael.
“Generally speaking, once you have demonstrated your seriousness, your understanding of the market, your experience and your ability to get the job done in what is at times a tricky playing field, then it’s all about the numbers.”
Asked about the ingredients that make a successful development in today’s market, he answers: “This never changes – location, location, location, followed by design, quality and price…
Words Michel Cruz Photography courtesy of Kevin Horn & FM Consulting
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