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Why real estate is facing a “pivotal moment,” according to developers - La Nacion Propiedades
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www.lanacion.com.ar
July 04, 2024
During the Summit organized by LA NACION, representatives of the main developers described what is happening in the market and listed the reasons that support a change of cycle.
Ivan Mazorco
Mariano Galeazza, partner at Desarrollos Norte; Marcos Juejati, founding partner at Northbaires; Carla Quiroga, journalist at LA NACION; Carlos Spina, partner and commercial director at Argencons; Gonzalo de la Serna, CEO of Consultatio and Enrique Shaw, CEO of Pinamar SAFabian Malavolta
The real estate market continues to show signs of improvement after a difficult first half of the year for real estate developers. With a lot of work ahead, but with conditions that are gradually making the activity more favorable, some of the entrepreneurs who build the most important projects in Argentina were present at the ninth chapter of the Real Estate Summit organized by LA NACION.
In this context, Mariano Galeazza , partner at Desarrollos Norte; Marcos Juejati , founding partner at Northbaires; Enrique Shaw , CEO of Pinamar SA; Gonzalo de la Serna , CEO of Consultatio and Carlos Spina , partner and commercial director of Argencons, spoke with Carla Quiroga, journalist from LA NACION, sharing an analysis of the current situation and how they are adapting their developments and business models to the ups and downs of the economy.
“I think the worst is over. There will be inflation variables, but at a slower pace. Our expectation is that everything will be calmer, that is why we sell in dollars, which is something we did not do before,” explained Galeazza, who also expressed surprise at the movements of the dollar in recent days, but provided reassurance for what is to come.
Mariano Galeazza, partner at Desarrollos NorteFabian Malavolta
“The worst moment was the first semester and things are going to change radically. Selling in dollars sounded too bold and today it seems that things are starting to get better. We are going to a better moment ,” added Spina. Along those lines, De la Serna explained how selling in dollars at a fixed price and financing in dollars were the tools that worked best for him during these months of 2024 and Juejati emphasized patience. “Bricks are not only a refuge of value but, in special products, they are a value multiplier. You have to be patient and take things with you, keeping up with what happens month by month,” argued the developer.
For his part, Shaw noted that his market, the city of Pinamar, has changed substantially since the pandemic. “The old chalet where people would spend a whole month is less in demand, now buildings with amenities, services and security are in demand. We have a segment that has changed and that changes the technology of the houses,” he summarized.
If you want to see the full event click here
For example, Desarrollos Norte already has more than 90% of the Azzurra Tortugas project sold, with lots with a ticket price of between US$120,000 and US$500,000 for lots between 600m² and 1000m². With the success of that development, which began in 2021 and had the support of Casa Living, Galeazza announced that he is looking for new land to replicate that experience “but more boutique.” The focus is on the Pilar area.
Costantini's right-hand man said that in these six months he sold the same number of lots as in the first half of 2023 in his Puertos development, a point achieved, according to De la Serna, thanks to having offered flex financing in fixed dollars. “With this financing, it is the client who builds it based on his own flow, being able to add reinforcements if he receives a bonus, reduce installments, expand them... The fact that we have sold the same as last year is due to flex financing, sales in dollars and the consolidation of Puertos. Today we have 500 houses under construction,” the executive summarized.
However, he made a clarification: “It is important that, as these projects are consolidated, they are accompanied by infrastructure. Today, fuel prices have increased and, looking at the numbers, the number of tolls that cross the Panamericana every day has decreased. The Mitre train route is ready, but the investment in the train is lacking, for example.”
Carlos Spina, director of ArgenconsFabian Malavolta
From Argencons, on the other hand, they are betting on a cost-based trust model, “the secret of why they were able to advance so many projects at the same time”: it is a joint venture, where the work does not begin if it is not sold and “the investor who enters one of these projects knows that they will be finished within the proposed time frame”. “For us, the construction company and the trustee are fixed costs; the time that a project takes is an extra cost”, explained Spina. In this way, they managed to deliver 180,000 m² in the last 24 months. “Today we have 330,000 m² under construction in different stages”, explained the businessman who acknowledged “having opportunities with apartments that are sold at the cost of construction last year thanks to the fact that the work is finished and the Quartier District in the heart of Retiro is “on the road”.
In a completely different line, Northbaires decided to open a space for the young premium segment, with average prices around US$3,000 and US$3,500 per square meter and whose emblem is the OM building, located in the Buenos Aires neighborhood of Palermo and equipped with more than 170 units. “We support young people with a payment method where they can leave up to 40 installments after possession. We are still building it and we have already sold more than 95% of the building,” said Juejati, who also said he is thinking about a new project with the same model, also in the Palermo area.
Marcos Juejati, CEO of NorthbairesFabian Malavolta
Away from the Buenos Aires Metropolitan Area (AMBA), Pinamar SA has its sights set on several projects in that city, highlighting Bosques, a 250-hectare project with 1,000 lots. “Today it is in its third stage and it is the largest one we have done so far, with more than 1,000 lots and 600 apartments. It was very well received by the demand and in the next few months we will give possessions and the construction of the houses will begin,” said Shaw, who highlighted the potential that the Pinamar Norte area has.
The information, provided by Spina, served to put the issue on the table. “It is important that we work on developing instruments that allow this mortgage credit to flow directly to the new or developing product. If we achieve this, it can prevent excessive increases in used loans and the so-called bubbles,” analyzed De la Serna.
Another of the firsts of the talk was given by Spina: he closed an agreement with the Melia hotel for the hotel chain to settle in its project in Bajo Retiro, in addition to moving forward with a Quartier project in Punta del Este. Juejati, from Northbaires, also confessed his next project on the land he has in dock IV of Puerto Madero: he will do a luxury project for which he closed an agreement with Sofitel, and Galeazza said that Casa Living will land in Punta del Este.
Gonzalo de la Serna, CEO of ConsultatioFabian Malavolta
“We are optimistic and we believe that this can happen to Argentina. We are optimistic that we are at the beginning of a cycle that will energize the sector and make Real Estate become more widespread for more people as a refuge and value multiplier,” said Juejati. “With the tools that exist today, we can also work. All of this has a new impetus and there is an awareness that 120,000 UVA credits were delivered in the previous round and nobody put on a helmet,” Spina said. “If we work on the flow, with less capital you have a huge multiplier,” he concluded in agreement.
While waiting for changes in the current paradigm and with the optimism that the situation is tending to improve, new projects are just around the corner. De la Serna exclusively confirmed that Consultatio is negotiating with a bank to offer mortgage loans for the project under development. This would apply to Huergo 475 , a project that is about to finish, but that would serve as a “pilot and bridge” so that this possibility becomes a reality in more developments.
Enrique Shaw, CEO of Pinamar SA
“There is an understanding among all the actors that there is a huge opportunity. There are few initiatives, we are at a low level of activity and this crisis can be seen as an opportunity. We need stability for that and there are many files waiting to get started. In many aspects we are back to square one, the change can be very big ,” Shaw concluded.
www.buysellba.com
Source:
Por qué el real estate está frente a un “momento bisagra”, según los desarrolladores
Durante el Summit organizado por LA NACION, referentes de las principales desarrolladoras describieron lo que está pasando en el mercado y enumeraron las razones que abonan un cambio de ciclo
www.lanacion.com.ar
July 04, 2024
During the Summit organized by LA NACION, representatives of the main developers described what is happening in the market and listed the reasons that support a change of cycle.
Ivan Mazorco
Mariano Galeazza, partner at Desarrollos Norte; Marcos Juejati, founding partner at Northbaires; Carla Quiroga, journalist at LA NACION; Carlos Spina, partner and commercial director at Argencons; Gonzalo de la Serna, CEO of Consultatio and Enrique Shaw, CEO of Pinamar SAFabian Malavolta
The real estate market continues to show signs of improvement after a difficult first half of the year for real estate developers. With a lot of work ahead, but with conditions that are gradually making the activity more favorable, some of the entrepreneurs who build the most important projects in Argentina were present at the ninth chapter of the Real Estate Summit organized by LA NACION.
In this context, Mariano Galeazza , partner at Desarrollos Norte; Marcos Juejati , founding partner at Northbaires; Enrique Shaw , CEO of Pinamar SA; Gonzalo de la Serna , CEO of Consultatio and Carlos Spina , partner and commercial director of Argencons, spoke with Carla Quiroga, journalist from LA NACION, sharing an analysis of the current situation and how they are adapting their developments and business models to the ups and downs of the economy.
“I think the worst is over. There will be inflation variables, but at a slower pace. Our expectation is that everything will be calmer, that is why we sell in dollars, which is something we did not do before,” explained Galeazza, who also expressed surprise at the movements of the dollar in recent days, but provided reassurance for what is to come.
Mariano Galeazza, partner at Desarrollos NorteFabian Malavolta
“The worst moment was the first semester and things are going to change radically. Selling in dollars sounded too bold and today it seems that things are starting to get better. We are going to a better moment ,” added Spina. Along those lines, De la Serna explained how selling in dollars at a fixed price and financing in dollars were the tools that worked best for him during these months of 2024 and Juejati emphasized patience. “Bricks are not only a refuge of value but, in special products, they are a value multiplier. You have to be patient and take things with you, keeping up with what happens month by month,” argued the developer.
For his part, Shaw noted that his market, the city of Pinamar, has changed substantially since the pandemic. “The old chalet where people would spend a whole month is less in demand, now buildings with amenities, services and security are in demand. We have a segment that has changed and that changes the technology of the houses,” he summarized.
If you want to see the full event click here
Developments and business models at a pivotal moment
Despite the complex situation, the sector does not allow much time for reflection. Although these were six challenging months - due to the rise in construction costs between November and April of this year - as the developers pointed out, their different bets allowed them to maintain and even increase the level of sales in some projects and position themselves well to adopt the upcoming trends.For example, Desarrollos Norte already has more than 90% of the Azzurra Tortugas project sold, with lots with a ticket price of between US$120,000 and US$500,000 for lots between 600m² and 1000m². With the success of that development, which began in 2021 and had the support of Casa Living, Galeazza announced that he is looking for new land to replicate that experience “but more boutique.” The focus is on the Pilar area.
Costantini's right-hand man said that in these six months he sold the same number of lots as in the first half of 2023 in his Puertos development, a point achieved, according to De la Serna, thanks to having offered flex financing in fixed dollars. “With this financing, it is the client who builds it based on his own flow, being able to add reinforcements if he receives a bonus, reduce installments, expand them... The fact that we have sold the same as last year is due to flex financing, sales in dollars and the consolidation of Puertos. Today we have 500 houses under construction,” the executive summarized.
However, he made a clarification: “It is important that, as these projects are consolidated, they are accompanied by infrastructure. Today, fuel prices have increased and, looking at the numbers, the number of tolls that cross the Panamericana every day has decreased. The Mitre train route is ready, but the investment in the train is lacking, for example.”
Carlos Spina, director of ArgenconsFabian Malavolta
From Argencons, on the other hand, they are betting on a cost-based trust model, “the secret of why they were able to advance so many projects at the same time”: it is a joint venture, where the work does not begin if it is not sold and “the investor who enters one of these projects knows that they will be finished within the proposed time frame”. “For us, the construction company and the trustee are fixed costs; the time that a project takes is an extra cost”, explained Spina. In this way, they managed to deliver 180,000 m² in the last 24 months. “Today we have 330,000 m² under construction in different stages”, explained the businessman who acknowledged “having opportunities with apartments that are sold at the cost of construction last year thanks to the fact that the work is finished and the Quartier District in the heart of Retiro is “on the road”.
In a completely different line, Northbaires decided to open a space for the young premium segment, with average prices around US$3,000 and US$3,500 per square meter and whose emblem is the OM building, located in the Buenos Aires neighborhood of Palermo and equipped with more than 170 units. “We support young people with a payment method where they can leave up to 40 installments after possession. We are still building it and we have already sold more than 95% of the building,” said Juejati, who also said he is thinking about a new project with the same model, also in the Palermo area.
Marcos Juejati, CEO of NorthbairesFabian Malavolta
Away from the Buenos Aires Metropolitan Area (AMBA), Pinamar SA has its sights set on several projects in that city, highlighting Bosques, a 250-hectare project with 1,000 lots. “Today it is in its third stage and it is the largest one we have done so far, with more than 1,000 lots and 600 apartments. It was very well received by the demand and in the next few months we will give possessions and the construction of the houses will begin,” said Shaw, who highlighted the potential that the Pinamar Norte area has.
Credit as an opportunity and an exclusive novelty
2024 will see the return of mortgage lending. Something that, although it has not yet had a numerical impact on sales, is beginning to emerge strongly in terms of reactivating the sector. In contrast to Argentina, in Uruguay credit is offered to non-residents and to the trustor (called fideicomitente in the neighbouring country) for up to 20 years and up to 70% financing.The information, provided by Spina, served to put the issue on the table. “It is important that we work on developing instruments that allow this mortgage credit to flow directly to the new or developing product. If we achieve this, it can prevent excessive increases in used loans and the so-called bubbles,” analyzed De la Serna.
Another of the firsts of the talk was given by Spina: he closed an agreement with the Melia hotel for the hotel chain to settle in its project in Bajo Retiro, in addition to moving forward with a Quartier project in Punta del Este. Juejati, from Northbaires, also confessed his next project on the land he has in dock IV of Puerto Madero: he will do a luxury project for which he closed an agreement with Sofitel, and Galeazza said that Casa Living will land in Punta del Este.
Gonzalo de la Serna, CEO of ConsultatioFabian Malavolta
“We are optimistic and we believe that this can happen to Argentina. We are optimistic that we are at the beginning of a cycle that will energize the sector and make Real Estate become more widespread for more people as a refuge and value multiplier,” said Juejati. “With the tools that exist today, we can also work. All of this has a new impetus and there is an awareness that 120,000 UVA credits were delivered in the previous round and nobody put on a helmet,” Spina said. “If we work on the flow, with less capital you have a huge multiplier,” he concluded in agreement.
While waiting for changes in the current paradigm and with the optimism that the situation is tending to improve, new projects are just around the corner. De la Serna exclusively confirmed that Consultatio is negotiating with a bank to offer mortgage loans for the project under development. This would apply to Huergo 475 , a project that is about to finish, but that would serve as a “pilot and bridge” so that this possibility becomes a reality in more developments.
Enrique Shaw, CEO of Pinamar SA
“There is an understanding among all the actors that there is a huge opportunity. There are few initiatives, we are at a low level of activity and this crisis can be seen as an opportunity. We need stability for that and there are many files waiting to get started. In many aspects we are back to square one, the change can be very big ,” Shaw concluded.
www.buysellba.com
