Sant Just - Large real estate development in Barcelona
146 apartments & 16 townhouses
“The success of the project was based on engineering the most effective combination, and collaboration of individuals, that resulted in exceptional returns over the required time frame.
Ignacio Jimenez - Senior Director of Real Estate
A: Opportunity / Challenge
We have a very good relationship with Solvia which is the Real Estate service provider of Banco Sabadell, and this was a plot of land they had in their portfolio to sell. The location is aspirational for many families from Barcelona looking to relocate near the city but close to open spaces like Collserola Park. It is also an entirely new neighbourhood with all the services and utilities families look for, so those fundamental aspects validated Sant Just as a valid opportunity.
The key challenges where negotiating the right price for the land, as well as connecting the right financing partners for the project. From the very beginning, we knew that the balancing the operational management of the financing parties, main constructor and promotor was crucial in order to ensure the highest return.
B: Project / Operations
We worked closely with Solvia to narrow down price differentials and raised financing for the land from Banco Sabadell. Finding the right construction partner for the project took a significant amount of time and included the rejection of many candidates. We finally partnered with the highly competent TR group.
Financing the construction was tough, due to the lingering after-effects of the financial crisis influencing the committees of many of the major banking institutions. There were difficulties in obtaining a loan that could not only fulfil our requirements, but also the needs of our customers and the future subrogates of the mortgage loans. Finally, bank Ibercaja provided the most agreeable, solution. Lastly, during the final phase of the project a construction over run threatened to stall its completion.
C: Results / Outcome
The project was highly successful in terms of sales, both in terms of fast absorption, final sale prices, and in economic and financial returns for our investors. The construction over run was successfully re-negotiated with the construction company, and we successfully managed to complete within the contracted deadline.
In summary, managing this project was like conducting an orchestra, with so many individuals and enterprises involved, that being able to attend everyone’s needs - in order to meet all deadlines and contractual obligations - was the biggest challenge we overcame.
Most importantly, we sold the project at the right price and over the correct time-frame, which served to validate our initial projections and the return for our investors.