How has Grupo Avintia evolved since starting in 2007, and what would you highlight as its main achievements?
The group was first strongly linked to the residential sector, and we developed the group by collaborating with different financial entities beyond construction, such as assets with financial-title problems. The company has the capabilities and flexibility to adapt its business, and this is our great value. We do land acquisition, land development, debt, and investment fundraising to develop sub-assets. We look after the entire value chain of engineering development, project, promotion, construction, after-sales, and delivery. We have changed the company according to trends in the sector. Since the business changes so quickly, it forces the sector to adapt to its needs, due to the rise in construction costs, the amount of confidence in the final buyers, and surplus values of land. All this will significantly change the business model, making the business malleable. In sales figures, we exceeded EUR600 million for the group in 2019. The plan for 2020 is to consolidate our portfolio in construction and real estate.
The residential area makes up a large part of the company's growth. Was this a conscious development, and do you intend for it to continue being a large proportion of Avintia's portfolio?
Indeed, 70% of what we do corresponds to construction. We have about 111 projects underway and 7,200 homes under construction. The other 30% of our business is in civil works and macro projects, such as roads. We try to match the needs of the market to change and innovate in industrialization. Due to the volume of our platform, we can do a lot in this regard. In the real estate sector, the group has about 40 ongoing projects with different associative models with developers. Avintia's real estate business started because there were no promoter partners in the country. This part of the group seeks partnerships at the national level with promoters who can develop promotions in geographical areas where we have a relationship with asset holders but no model. We go with the financial entities, get the asset, and look for the partner offering the best solution. The real estate part has separated into three branches. One branch is the old Avintia that continues working on a smaller scale because there are fewer and fewer promotions for third parties. Another branch is Avintia Inmobiliaria, which does pure promotion through exclusive projects in areas like Ibiza. The third branch is renting, which we have generated through a rental housing platform named Locare. We have closed on a first investment of EUR120 million to construct 919 homes in Madrid with Tectum, an investment platform. This will be the first project we do in B2R.
The issue of human talent and the rising cost of materials are two discussed topics in the construction industry in Spain. Is this an issue that Avintia faces in its operations?
In the end, everything is done through people. In a sector that has many ups and downs, we must attract talent and internal productive capacity. We are working on this problem day by day. The subject of materials is complicated. No company can work on materials because it is a market, and it is a matter of supply and demand. Concerning industrialization, we are working upstream. To make a sustainable product, we can guarantee the term, price, and quality. Nobody in the real state sector guarantees all three things. Due to the low amount of labor in construction and cost of materials, both the construction and quality are much resented. We are trying to tackle the issue with a new project, Proyecta, where we work upstream with the client in the industrialization and development parts. We help the client or developer to meet their expectations of term, price, and quality. For terms, we work on construction systems with them and take the project forward.