From the Sunday times today:
When American entrepreneur Gregory Peters planted the first palm trees in the dusty soil of La Manga Golf Club more than 43 years ago he can have had no idea that the resort — and the country around it — would be in the rough more times than Tiger Woods’s comeback.
La Manga Club, a holiday resort not far from Murcia in southern Spain, encapsulates the Spanish property market, mirroring its smooth periods on the green and dark bunker days. Today, though, Spanish economists, property market commentators and La Manga Club’s management believe they can see clearly down the fairway — and what they can see, unlike Woods, is a return to form.
After a long period when few properties were sold, the management of La Manga Club has ambitious plans to double its already sizeable estate (2,200 homes in 45 communities set in 1,400 acres) and move it more upmarket. There are plans for more than 300 new properties, many of them high-end luxury contemporary homes, to be built in the next five years. Plus 700 new properties, two new golf courses, a new tennis academy, new football centre and polo centre planned for the next ten years. Ambitious maybe, although it seems that La Manga Club may be pitching it just right.
Figures from the Bank of Spain and the Spanish government suggest that the country’s economy is growing at its fastest rate since 2008. Meanwhile CaixaBank’s Real Estate Thermometer report published last week said “the price adjustment has practically come to an end”.
The domestic property market is slowly recovering, the large surplus of properties in Spain finally beginning to sell (there are still 536,000 new properties on the market, down from a peak of 650,000 in 2009, according to a recent report in El País newspaper), and the luxury market powered by international buyers is well and truly back, according to estate agents.
Chris Clover, managing director of Panorama Properties, Savills’ associate in Marbella, says: “The luxury market is back with a roar and we have sold more homes priced over £3 million this year, so far, than in the last three years together.”
Clover adds that the euro’s weakness, combined with Spain’s economic recovery lagging that of other countries, has created a perfect opportunity for international investors. “There are people who have been waiting since 2008 to purchase property, waiting for the market to touch the bottom . . . Now that pent-up demand is being released with people who want to get in before prices rise . . . there is still good availability and prices well below pre-crisis highs.”
Alexander Vaughan, co-founder of estate agency Lucas Fox (Knight Frank’s representative in Barcelona), says: “In the last two years, thanks to more confidence in the recovery of the Spanish economy and the euro in general, we have seen the market reactivating, with price re-adjustments across the board.
“The appeal of Spain is as strong as it has ever been and we are seeing a huge growth in what we call ‘lifestyle investors’. They want to make a wise property investment and choose Spain because of the quality of life it offers. This is a key trend in the recovering market today.”
In its report on the last ten years of the Spanish market Lucas Fox says that increased demand is most evident in the cities of Barcelona and Madrid, where prices are recovering, although not quite back to peak levels.
Sotheby’s International Realty and Wealth-X, a research company specialising in high-net-worth individuals, highlight Madrid’s recovery in a recent real estate report on Europe. One of Sotheby International Realty’s affiliate agents Kristina Szekely says: “The Spanish real estate market has shown a marked improvement in 2015. Madrid is leading the way in its recovery as the principal city, being a place of interest for foreign investment in Spain. Prices are recovering and starting to increase in Madrid, creating a stronger market for both buyers and sellers.”
Vaughan picks out Sitges, near Barcelona, Ibiza and Marbella as markets that “have attracted buyers who have recognised the long-term investment opportunities of quality properties close to lifestyle amenities. Sales price drops have been less severe in these markets, with prices fairly stable between 2008 and 2015.”
These are the markets most likely to be buoyed by foreign investors, but where once it was mostly the British that bought in Spain the demographics have changed. Figures published by Spain’s Ministry of Development this week show that 16.9 per cent of properties bought in the first three months of this year, in Spain, were purchased by non-Spaniards, a rise of 17.2 per cent over the same period last year.
Vaughan says: “UK buyers continue to make up a large part of foreign property investors in Spain, but since 2010, the proportion of clients from France, Germany, Italy and the Netherlands has increased alongside Scandinavian buyers.”
Clover too emphasises the importance of Scandinavian buyers, led by the oil-rich Norwegians, in the revival of the luxury property market in Marbella. The Norwegians are an important market too for La Manga Club, which is keen to widen its appeal beyond the Brits who makes up 70 per cent of residents. Non-executive chairman P-Y Gerbeau, an outspoken French businessman best known for his high profile roles in turning around Disneyland Paris and the Millennium Dome, says: “I love the English, I married an English rose, but we need to encourage other nationalities. The Scandinavians are an important market for us.”
Gerbeau, who bought a home here five years ago, also wants to counter the image of it being a resort appealing principally to golf-playing retirees. He wants to attract more young families and to offer a broader range of sports including horse riding, cycling and watersports. The club’s general manager, José Asenjo, also talks about exploring the possibility of partnering with a local hospital to cater for cosmetic surgery tourists — it seems that the resort’s ambitions reach far and wide.
La Manga Club recently launched new properties in its Buganvillas community (plots from €230,000 (£160,000), plus custom villas from €550,000) and Las Acacias community (plots from €220,000, plus custom villas from €550,000), both of which have sold well off-plan. There is now great excitement about plans for a new community, La Princesa, of 500 upmarket contemporary homes (pricing to be decided but probably from €500,000) and hotel to be built within five years. This will be followed by La Manga Club’s 2020 project and the building of two new golf courses and more homes.
Much of these new developments are likely to be of a contemporary design to appeal to northern Europeans, including Scandinavians, taking La Manga Club back to its roots — its first homes, which are still some of its most popular at resale, were contemporary, white, modernist villas.
Jordi Robinat, chief executive of La Manga Club and whose company MedGroup (now called Arum Group) acquired it from the British company P&O in 2004, says: “After 40 years of successful existence, with ups and downs, there is a need to be growing and expanding. These projects will prepare La Manga Club for the next 40 years. Ten years ago people considered La Manga Club an old lady that belonged to the past, that has proved not to be the case. La Manga Club has been through financial storms, but while others have gone, we are now going full speed ahead.”