TBY talks to Juan Antonio Gómez-Pintado, President of Via Célere, on water wastage, trends in Spanish real estate, and ambitious construction targets.

What are the activities of Via Célere? What is the origin of the company and how has it evolved in recent years?

We are a pure homebuilding company. After selling, just before the crisis, my first developing company, I founded Via Célere in May 2007 with four people with an international approach. The economic crisis hit Spain, and the real estate sector sunk, though several opportunities emerged. Our first operations were in Brazil and Bulgaria, followed by Poland, from 2008 to 2010. For Spain, when the economic crisis hit, and the real estate sector sunk, several opportunities emerged. Financial entities contacted us because they were identifying operations with healthy companies that could develop the number of assets they were recovering from defaulting clients. In 2010 and 2011, we reached an agreement with some of these entities, which meant the return of our activities in Spain. In 2011, we reached an agreement with Bankia, Banco Sabadell, and Catalunya Caixa, and in 2012, we began to visualize many opportunities in our sector and began to intervene directly without any swap agreements with financial entities. In 2017, I sold Via Célere to a group of funds, among which the majority is hold by Varde Partners. It was clear to me that another cycle was emerging, that in order to lead the homebuilding sector we needed to scale and that Varde could give us that strength. Since then we have gone through two successful M&As and are now the biggest residential developer in Spain.

Via Célere has a strong commitment to innovation and industrialization. How do you embody this in your projects?

Our philosophy as a company is that we want to do something different from what the industry has done in the past. We have launched product innovations (differential communal areas, dwellings customization…), as well as process innovation (Lean construction methodologies, industrialization of bathrooms and other elements in a factory instead of building them on site…). For these activities Via Celere has more than 10 R&D certificates. We still have many challenges ahead, and one of them is the environment. Our sector has traditionally had a major impact, which is why all our projects must be energy efficient with low CO2 emissions. Another topic refers to the 24-35 years old segment. These people do not have the economic capacity to become independent from the family home which is generating an important social problem. Via Celere has launched the “Magic House" which is a flexible dwelling as an innovative proposal to address this challenge.

What is the commitment of Via Célere to building energy-efficient flats?

Right now, 80% of our projects have the highest energy efficiency. The energy savings of these dwellings for our clients amount for more than EUR1,000 per year when compared to their previous homes. In order to build an A energy class building we have to reinforce the insulation of the façade, use renewable energy sources and more efficient heating/cooling systems.

Vía Célere has several offices throughout Spain. Does Madrid have the potential to develop its real estate?

The fact that Madrid is a mature market does not mean that activity is falling or that we have an oversupply. On the contrary. Madrid was the first city to see activity growth after the crisis and became a focus of attraction for land purchases and construction. As a result, it is true that margins have decreased. However, there is still a sustained demand and lack of supply mainly due to shortage of fully permitted land.

Has Via Célere considered entering the distribution warehouse and offices, the hottest sector in real estate in Spain currently?

Via Celere is a pure homebuilder and, so, we are only considering residential developments. By the end of 2019, we will have more than 110 projects underway throughout Spain. However, as President of the National Developers Association, we can see that other purposes for the land (such as warehouses or offices) have increased greatly in the past years. The are several reasons for this increase. For instance, restrictions on using traditional vehicles in Madrid. This is increasing the demand from large merchandise holders for locations in the surrounding areas of Madrid, where they will keep an electric vehicles fleet to enter the city.

Why is Spain such an attractive country for foreign investment in real estate?

From a macro perspective, Spain is a good option in terms of comparable investments. Alternative markets are being sought, and investors are focusing on Spain because it has emerged strong after the crisis and the necessary reforms. First was the export sector, followed by industry and tourism. We have gained great competitiveness in our country, which makes Spain attractive. All this is linked to the creation of new jobs and new homes. The residential sector has taken advantage of the scenario because there was no supply for approximately 10 years and demand has stalled. Also, interest rates in Europe favors residential investment.

How has the local real estate sector and its policies evolved after the crisis?

The main area that has changed is financing. The sector learned how dangerous leverage can be. There has also been a change between financial entities and developing companies. The risk departments of financial institutions that have suffered greatly during the crisis have a different approach now.

What are the objectives of Vía Célere for the rest of 2019 and 2020?

We want to fulfill our business plan goals. In 2019, we will deliver 1,200-1,300 units that we will increase in 2020 with the product we already have under construction. This means approximately 2,500 units and, in 2021, we target 3,800-4,200 units. One of the big problems we have is to give precise figures. In this sector, even if we finish a development, we still depend that licenses (from the municipality) are also on time. That is why is better to give ranges.