Real State

Promociones y Propiedades
Inmobiliarias Espacio
Torre Espacio
Ps de la Castellana 259-D Pta 50
28046 Madrid. España

Torre Espacio Castellana
Torre Espacio
Ps de la Castellana 259-D Pta 4
28046 Madrid. España

T: +34 91 417 6930
F: +34 91 556 5334



Developmet Activities

Promociones y Propiedades Inmobiliarias Espacio, S.L.U. is a subsidiary fully owned by Grupo Villar Mir, S.A. It was created in June 2000 through the contribution of the real estate business that until such time had been handled directly by Inmobiliaria Espacio, S.A. since its creation in 1972.

Promociones y Propiedades Inmobiliarias Espacio, S.L.U. carries out real estate activities, mainly residential developments, on the Mediterranean coast, Madrid and Majorca, among other locations, and either directly or through its subsidiaries, under the “Inmobiliaria Espacio” brand.

Property Management


This is a high-quality, mixed-use project that encompasses several historical buildings in the centre of Madrid, where Calle Sevilla, Carrera de San Jerónimo, Plaza de Canalejas and Calle Alcalá all

converge. When completed, this project will undoubtedly become one of the prime luxury destinations in Europe, comprising what will be the best hotel in Spain, top-quality residential units, an exclusive shopping area and a car park.


Espacio Caleido, S.A., a subsidiary in which Grupo Villar Mir, S.A. holds a 51% ownership interest, was awarded the leasehold for 75 years by the Madrid City Council on a plot of land located in the “Cuatro Torres Business Area” complex for the construction and operation of a building that will comprise 52,500 square metres for public use and 17,500 square metres for retail use, in addition to 2,000 parking spaces. The building, in the shape of an upside-down “T”, is designed as a hybrid services volume containing several types of coexisting spaces, thus generating significant synergies. It is currently one of the most significant projects underway in Madrid.


Real State Division of Grupo Villar Mir

Grupo Villar Mir’s Real Estate Division is composed of the company Promociones y Propiedades Inmobiliarias Espacio, S.L.U. (Priesa) and its subsidiaries that work in the field of property development: Canalejas Madrid Centro, S.L.U. and Espacio Caleido, S.A. Grupo Villar Mir’s non-controlling interest in Inmobiliaria Colonial, S.A. must also be mentioned here, as a financial investment that was successfully sold as of the reporting date.

The Division achieved turnover of EUR 48 million in 2016, a 58% decrease compared to the figure recorded in 2015.

In 2016, the Real Estate Division turnover accounted for 1% of the consolidated turnover of Grupo Villar Mir.

Origin and structure of the real estate division

  • Promociones y Propiedades Inmobiliarias, S.L.U. The Real Estate Division was created in 2000 when Promociones y Propiedades Inmobiliarias Espacio, S.L.U. was established in June of that year. From then on, it has managed all the Group’s real estate activities in land management and residential developments, either directly or through its subsidiaries.
  • Inmobiliaria Colonial, S.A. In January 2014, Grupo Villar Mir, S.A.U. acquired a total of 55.2 million shares of Inmobiliaria Colonial, S.A., representing 24.41% of its share capital, making it the largest individual shareholder in the company. Through this shareholding position, Grupo Villar Mir, S.A.U. is providing support to the company’s process of restructuring its financial debt and recapitalisation, which has returned Inmobiliaria Colonial, S.A. to its benchmark position in the real estate market while also affording Grupo Villar Mir capital gains through the sale of its ownership interests.
  • Centro Canalejas Madrid, S.L. Work at the Canalejas Complex is progressing quickly and satisfactorily. In the early months of 2017, Grupo Villar Mir sold 32.5% of its shares to Mohari Limited, Mark Scheinberg’s investing branch, which in turn also purchased another 17.5% from OHLD, leading Mohari to hold a 50% stake in this unique project along with GVM and OHLD. This sale is part of our policy of rotating assets once they begin to generate value.
  • Espacio Caleido, S.A. 51% of this company is held by Promociones y Propiedades Inmobiliarias Espacio, S.L.U., which is also entrusted with management thereof. In a public bidding process, this company was awarded the leasehold for 75 years on a plot of land located in the “Cuatro Torres Business Area” complex, entailing the right to construct a total of 75,000 m2 above ground level. The project design is now finished, permit applications have been filed and two leasing agreements with a 75-year term, the first 20 years of which are compulsory, have been signed with Instituto de Empresa and Grupo Hospitalario Quirón, which will occupy the entire institutional area.

    As an event occurring after the 2016 reporting date, similar to the case of Centro Canalejas Madrid, we should highlight that we have sold 49% of Espacio Caleido, S.A. to Grupo Emperador, a Philippine family-owned company, which purchased it through one of its real estate subsidiaries.

Real State Division


The main financial figures of the Real Estate Division are as follows:


Main Financial Figures of the Real Estate Division


Spain continues on the path of economic growth that began the previous year and, along with Ireland, currently leads the group of countries with the highest growth rates in the Eurozone. Proof of this can be seen in all the macroeconomic figures (improved GDP, decrease in the deficit, drop in the risk premium, increase in exports, negative trade balance, and so on). The local market is also seeing highly positive trends: the unemployment rate is around 18%, as is the rate of membership in the Social Security system, with the most significant growth rate since 2006.

These positive figures have had a profound impact on consumers and investors, whose confidence in our economy has improved substantially, which, together with low interest rates and greater access to credit, has in turn bolstered household consumption and investments.

The real estate sector is benefiting from this optimism and continues to attract large numbers of investors, although the political situation and territorial issue could hamper all kinds of foreign and domestic investment in the short term. All the sector indicators (sales, prices, mortgages) display positive figures at year-end for the second year running. Caution when making purchasing decisions has subsided and we are now experiencing a period in which investors feel they must make decisions quickly or opportunities will slip away with time. The adjustments in housing prices make it possible to shorten the number of years needed to pay for a home, which has dropped from 8 to 4.5, and the efforts that households must make to purchase a home have also been eased: it is no longer necessary to allocate 50% of their income, but rather 33%. Therefore, families can now afford larger flats in better locations.

However, wage adjustments from these past years and the quality of the jobs generated are preventing demand from being created with sufficient confidence and solvency rates to reactivate the market as a whole. There is still a portion of the population that is denied access, either because of a lack of stable employment or because of insufficient wages, and that does not have enough savings to purchase a home, thus being forced to turn to the rental market which, due to the shortage of supply, is beginning to see significant price increases.

Housing prices are finally starting to rise in most sectors and locations. Large cities like Madrid and Barcelona, where a supply shortage is starting to be felt, especially for primary residences, are experiencing price hikes that are well above average, reaching double-digit figures in certain locations. The shortage of new housing supply has the second-hand market to dominate in most of the transactions at this time, as it also has the added advantage of lower prices, larger areas and highly consolidated locations.

The second residence sector is also experiencing significant price increases in certain areas of the Mediterranean arch and on the islands due to strong demand from foreign investors. The allure of the Spanish coastline is definitely becoming stronger for foreign buyers. This type of buyer now represents 20% of the total purchase and sale transactions in Spain, and this number increases year after year (seven years of steady growth, with a 13% increase over 2015), reaching figures similar to those registered before the real estate crisis hit.

The urban land market continues to be one of the most active markets in the real estate sector. We must not forget that it was one of the hardest hit areas in the nine years of the real estate crisis: price adjustments reached almost 80% of the value for land lacking or with lengthy urban zoning procedures, compared to a 35% adjustment for housing. The positive signs being sent by the Spanish real estate sector have attracted important foreign funds with considerable resources of their own that do not require bank financing. They have ceased to aim their investments at more mature markets like office buildings, retail and hotels, and their new investments are now focusing on land or on buildings to be renovated for subsequent development.

For the time being, the greatest demand for land is centred on large cities and their catchment areas (in which nearly two thirds of the land ready for building currently available in Spain is located) and on the islands and Mediterranean coast for foreign clients with high purchasing power. However, although Spain has enough land ready for building to construct one and a half million homes -which would be a sufficient quantity, at a reasonable demand estimate of 175,000 homes/year, to satisfy the market over the next eight years the authorities and all stakeholders in the sector must reach an agreement as quickly as possible in order to streamline the zoning procedures and place land on the market as soon as possible to prevent significant price increases in upcoming years. The way in which financial institutions and the SAREB (which own more than 50% of the land currently ready for building) manage their land portfolios, obtained during the crisis years after the bank restructuring period and the disappearance of numerous developers, will also be crucial.

The mortgage market is slowly rebounding, which is an unequivocal sign that the real estate market is in the recovery phase. Financial institutions are once again showing confidence in this market to improve their income statements for the coming years, although the legal proceedings in which they are involved as result of claims for floor clauses and refunds of arrangement fees will lessen their benefits. This will undoubtedly makemortgageconditions moreexpensive and harsher for future investors in real estate assets.

Investors continue to benefit from the current low interest rates and the overall decrease over past years in the differentials used by financial institutions. Although most mortgages continue to have floating interest rates, there has been a considerable increase in recent years in the number of fixed rate mortgages, which represent 40% of new mortgages taken out this year, when this figure was less than 5% just two years ago.

The average amount for residential sector mortgages remains the same as the previous year (around EUR 110,000), with an average financing term of 19 years. As regards the LTV (loan to value) ratio, the average rate for the current loan portfolio is around 60%, although in recent years a certain upturn in mortgages with LTV ratios of more than 80% has been seen as a result of the policy of swift divestments of real estate assets still held by financial institutions in their portfolios.

In light of the reactivated development activity, financial institutions are also starting to grant developer’s loans, but only for very specific transactions and with pre-sales of more than 50% of the development. For this type of loans, the differentials are in the vicinity of 250 basis points and they are only granted for construction, rarely for purchases of land. Banks continue to be very demanding for this type of product and the project and developer’s feasibility are analysed carefully, as they want to avoid committing the same mistakes as in the construction boom.

To conclude, we can be said to have entered a new residential market cycle with a clear path before us for the next five years. The new market stakeholders, such as investment funds, financial institutions, cooperatives and the few remaining real estate businesses (the latter ofwhich could play an essential role offering their experience and the potential of their human resources to other stakeholders who lack these resources and knowledge), have the technical and commercial capacity to manage their assets with the aim of meeting a reasonable demand of 175,000 homes/year. It is essential for them, in conjunction with the public administration, to be aware of their management, take the necessary steps to avoid committing the same mistakes as in the past and manage to create a cycle of moderate, steady, growth. To do so:

  • buyers’ current confidence in the economy, employment and the sector must remain high;
  • price hikes experienced in the sector must remain moderate;
  • the perceived accessibility to housing must continue;
  • the housing supply must match the current population pyramid;
  • local and regional authorities must streamline zoning procedures in order to generate land ready for building in a sustainable, organised manner over time on par with the supply and
  • financing must match the actual repayment capacities of buyers, without surpassing the threshold of 80% LTV.

Our analysis by sub-sector is as follows:

  • First households in prime locations will again experience price increases, taking into account the good purchasing power of the population segment on which this type of housing is focused and the current shortage of this product. International investors will be revitalising agents of this product type, especially in the main capital cities of Spain. Due to the lack of land for this type of product, building restorations in prime locations will take the spotlight in the next few years.
  • The average priced non-subsidised first residence segment has already undergone the necessary price adjustment and existing stock has been absorbed, so we will see a reactivation of this segment over the upcoming years in line with the increase in demand for this type (currently, 85% of housing demand is in this segment). Furthermore, the high level of activity in the land purchasing market in recent years is a sign that many new developments will be launched on the market.
  • In the second residence sector, as a result of the crisis domestic customers will take much longer to focus their investments on this segment, so it will be traditional European customers, mainly English, French and German, who continue investing in Spain, thanks to the competitive prices currently seen for this product and the lure of tourism to our coasts. However, in the short and medium terms, there could be a drop in the number of English investors until questions arising from the United Kingdom’s departure from Europe have been clarified. Prices in the luxury second residence sector in locations such as the islands and the coast of Malaga could increase as a result of a shortage of product and the high demand generated.
  • Finally, with regards to the social housing subsector, this segment that will definitely tend to disappear as a result of the lack of public support in the future, leaving only a residual activity to promote rental housing or the occasional state-owned development.

Based on the above, we estimate that 2017 will be a good year for the real estate sector. As the public becomes more aware of the good macroeconomic news, as foreign investors have already done, and financial institutions continue to open the tap on financing, domestic demand will again set its sights on the real estate sector.


Year Performance

The total turnover for the division amounted to EUR 48 million in 2016, a 58% decrease from the previous year. This decrease comes primarily as a result of the drop in activity in new home deeds (as the housing stock owned by the Group when the crisis began has been reduced considerably and due to the policy of not investing to mitigate the crisis) and failure to close on sales of land in deeds totalling EUR 46 million.

With regard to investment in real estate development, we have continued with the goal set in previous years of halting all new investment except for land-related investment entailing some sort of protected status, developments in which more than 50% is pre-sold and real estate developments belonging to financial institutions that delegate construction and commercialisation to PRIESA –given its track record, professionalism, market know how and the confidence they place in it as part of Grupo Villar Mir. The main lines of action for 2016 were as follows:

  • Geographic expansion was halted, focusing on carrying out the zoning procedures for the land the company had in its balance sheets.
  • Marketing actions were leveraged to sell the finished developments and land in high demand in excellent locations of large cities and coastal areas, while trying to preserve most of the returns as per initial forecasts.
  • Developing social housing units under way. At year-end 2016, PRIESA was developing and commercialising more than 266 homes under some kind of public housing scheme, which were developed through associate companies such as Espacio Joven Hogares, S.L. (held by the Bankia subsidiary Intermediación y Patrimonios, and ECISA), awarded bidder of the first development of 100 units from the “Vivienda Joven con Opción a Compra” programme (youth housing for lease with the option to buy) programme in Mostoles (Madrid), and the programme for 139 homes in Alcorcón (Madrid), and 27 homes in Campo Real, also in the region of Madrid. Furthermore, “Espacio Valdebebas del Mediterráneo” (a subsidiary fully owned by PRIESA) held a portfolio of land for 565 social housing units in Valladolid, the first two phases of which (156 units) are completely sold out and handed over at year-end, and commercialisation of Phase III (91 units) has begun, with an 80% pre-sales rate at year-end. We also continued to commercialise and construct the first phase of 112 homes which PRIESA has in the centre of Malaga, where it holds a portfolio of land for 224 social housing units.

Thanks to the support of its sole shareholder, PRIESA has managed to successfully handle the sharp depreciation of the entire land portfolio it owns directly or through its investees, which has prompted a write-down of assets totalling EUR 185 million at the present time. This adjustment mainly affected the plots of land acquired in the two or three years prior to the start of the real estate crisis. However, the recovery the sector is experiencing was also reflected in the appraisals that were made in the last two years, with assessments that were around 15% higher, which has made it possible to revert part of the write-downs previously made.

On the other hand, the Group owns an excellent portfolio of land in good locations, which is highly attractive from a commercial perspective. This fact, combined with the excellent zoning procedures carried out, has enabled the Group to close sales quickly and with good returns when it applied its divestment policy. Therefore, land sales totalling EUR 121 million have been made in the last two years, representing more than 50% of the total sales during these two years.

PRIESA’s profit from operations (EBIT) showed losses of EUR 32 million, compared to EUR 15 million in profit the previous year, due mainly to the fact that no reversal of impairment was recognised this year on all the Group’s assets and to the policy of selling off non-strategic products, thus choosing to reduce its debt instead of gaining long-term returns. As a result of all this, 2016 ended with losses after tax of EUR 73 million, compared to EUR 53 million in 2015, owing to the losses recognised by the Group under the new corporate income tax regulations, which call for the non-deductibility of portfolio impairment, and to the guarantees that the Group has had to provide to its investees’ financial institutions.

On the other hand, at 31 December 2016, the sum for formalised purchase and sale agreements, only awaiting delivery of the dwellings, came to EUR 15 million, with a 20% average margin. As in every period, these contracts will be taken to sales as the developments are concluded and the homes delivered.

At year-end, Grupo PRIESA had five developments underway for a total of 337 housing units and 38,000 m² gross. Moreover, the company continues to work as a property developer in several industrial areas in the Regions of Valencia, Castilla-La Mancha and Castilla-Leon. At year-end, the Group had a portfolio of land on which to build a total of 437,000 m², real estate assets with a net carrying amount of EUR 273 million.

Finally, it is important to note the major efforts made to reduce its bank debt during the crisis. Proof of this is that, by the end of 2016, PRIESA had EUR 126 million in net bank debt, which represents a reduction of EUR 307 million (70%) since 2008.




Registered Sales
Number of Dwellings Sold
Contract Sales
Financial Debt



Forecast for 2017

Until credit starts clearly flowing back into the real estate market, the existing stock is absorbed and the housing supply is adjusted to meet demand, PRIESA’s activity will continue to be guided by the following premises:

  • Refraining from purchasing any additional land other than that already in the portfolio, unless it is from banks, and provided that there is a guarantee regarding the sale and financing.
  • Land sales in keeping with the investment fever currently prevailing in the market for these kinds of assets lured by attractive prices.
  • Launch of new developments with pre-sales rates higher than 50% in locations in which a shortage of finished product is seen.
  • Continuing with social housing developments and management of developments for banks and investment funds.
  • Speeding up the management of administrative authorisation on the land in our portfolio so that once this situation is behind us, we have a high-quality stock of land ready for building.
  • Maximum restraint in operational and structural spending.

With these premises, the Real Estate Division is expected to achieve a turnover of EUR 76 million in 2017.


Product Portfolio

CMC Canalejas Madrid Centro

Grupo Villar Mir made one of the largest investments in the Spanish real estate sector in 2012 with the purchase from Banco Santander of seven buildings constituting the complex known as Centro Canalejas Madrid, for a total of EUR 215 million.

The aim of this project is to renovate the historical centre of Madrid, by taking the seven adjacent buildings between Calle Alcalá, Calle Sevilla, Plaza de Canalejas and Carrera de San Jerónimo and transforming them into a 27,000 m² luxury hotel operated by the prestigious Canadian chain Four Seasons, its first establishment in Spain, plus 22 homes for sale distributed over a total area of approximately 6,500 m², a shopping and entertainment centre spanning 16,000 m² divided onto three floors, destined to become the benchmark in central Madrid, and an underground car park with capacity for 400 vehicles.

The total investment will be approximately EUR 525 million, and long-term financing for the project was formalised in December 2014 with nine banks for a total of EUR 268.5 million.

In 2016, the rate of development of Centro Canalejas Madrid slowed somewhat due to certain changes in criteria compared to the previous government bodies and the time needed for the new administrations to comprehend the project. Refinancing of the aforementioned long-term loan agreement therefore had to be negotiated with the syndicate of nine banks. However, the development is now fully operational after reaching diverse agreements with the different administrations.

At the same time, true to its commitment of maximum respect in working on the buildings, OHL Desarrollos and Inmobiliaria Espacio continue with the restoration work on all the interior features with heritage value.

Centro Canalejas Madrid is certainly an ambitious and large-scale project, which will be realised in the second quarter of 2019 thanks to the experience and technical capacity of OHL Desarrollos and Grupo Villar Mir (through Inmobiliaria Espacio) in large projects, their financial solvency and consolidated prestige, which enable them to establish partnerships with the most prestigious hotel chains and tackle technically complex undertakings.

The mixed-use Centro Canalejas Madrid complex with an area of 50,000 m² is a project of great significance for the city, both for its size and for its profile as a future international tourist destination, which will provide Madrid with an iconic area comparable to other major European capitals. With the approach of joining different buildings together and horizontal distribution, Centro Canalejas Madrid will feature:

  • A 5-star deluxe hotel managed by Four Seasons (the first in Spain), one of the most prestigious international hotel chains, with a total of 202 keys.
  • Twenty-two residential units under the Four Seasons Private Residences Madrid brand.
  • An exclusive retail space, which will include national and international high level brands and will become a landmark in the city.
  • A bank office.
  • 400 parking spaces, approximately.

How CCM will contribute to improve Madrid:

  • It will attract wealth and create new quality jobs.
  • It will recover a unique architectural ensemble, giving the capital a new cultural and entertainment icon, which will include the first Four Seasons hotel in Spain, a 5-star deluxe hotel operated by an international benchmark chain.
  • It will lead urban regeneration, which will undoubtedly be beneficial from multiple points of view: social, economic and urban planning, among others.
  • It will improve the quality of life of its citizens by building new underground infrastructures in order to reduce traffic in the area and create new pedestrian spaces.
  • It will reactivate a focal point of Madrid, boosting economic activity by building a cosmopolitan space that will be a tourist attraction point, both nationally and internationally.


Caleido is located not only in one of the most attractive areas of Madrid, but also one with the brightest outlook, near the Cuatro Torres Business Area. It is a strategic destination with a large number of businesses in which more than 16,000 people work. Its superb connections to the rest of Madrid and other areas of Spain by motorway (direct access to the M-30, M-40 and A-1), public transport (subway, commuter trains and city buses) and high-speed train (Chamartín and Atocha Stations) must be highlighted, not to mention the fact that it is 10 kilometres from Barajas Airport. In 2016, Espacio Caleido consolidated this project, one of the most emblematic in Madrid, rounding off the “Cuatro Torres Business Area” business park with a building containing mixed-use, institutional and retail spaces, the latter of which responds to the need for entertainment and dining options in the area. Furthermore, it will be surrounded by a generous green zone comprising a park covering 33,000 m2. It is scheduled to begin operation in the third quarter of 2020.

During this year, leasing agreements were signed with the private university IE and the Quirón clinic. IE has positioned itself as the main tenant of the project, leasing more than 50,000 m2 of institutional space for educational purposes. With this move, one of the most highly reputed universities in the world will transfer its headquarters to the first vertical campus in Europe. IE university will be distributed between the base area of the designed building, where its sports facilities, auditorium, library, entrance and cafeteria will be located, and the tower, which rises up to 160 metres above the base and will house the classrooms and administrative and management areas.

In addition, a few months later, Grupo Quirón took up the remaining institutional space to create a clinic focusing on sport, research and wellness. It will be located in the north wing of the base of the tower, with access on the north side of the designed building, opposite La Paz Hospital, and shall feature a large entrance lobby, which will foster communication between the two institutions.

The retail space shall be an extension of the city’s urban network, helping make the north-south axis much more comfortable and providing services and retail options along the path between La Paz Hospital and Plaza de Castilla. The design comprises a large horizontal volume at the base to create a retail avenue that links La Paz Hospital to Sinesio Delgado, thus providing the pedestrian traffic in the area with much-needed east-west permeability. Two main squares are created on either side of the tower, one to the north and the other to the south, surrounded by green roofs along the sides and on top, which lead to the IE campus on the south side and to a city park on the north, which is integrated into the retail space and endeavours to create similarities with High Line Park in Manhattan. This area will encourage after-work events, art exhibitions, fashion weeks and nightlife in a green oasis within the financial district. The launch of the retail area has been delayed until the concept and design have been completely defined for this zone, which is destined to become an innovative entertainment and dining destination within the M-30 ring road.

The project will include 1,693 parking spaces, of which 1,163 are for retail use, 400 for educational use and 130 for healthcare use.

The project will create more than 1,500 jobs during the construction phase and subsequently, around 4,000 jobs within the Region of Madrid. It will contribute EUR 85 million to the GDP of the Region of Madrid during the construction phase, and this sum shall increase to up to EUR 305 million during the entire concession period. In turn, based on Grupo Villar Mir’s firm commitment to the environment, Caleido aims to become LEED Gold certified, accrediting us as one of the most efficient and sustainable buildings in Spain.

As events after the 2016 reporting date, we must highlight that we have obtained the construction permit from the regional authorities and have begun demolition work and construction of the foundation slab of the tower. It is also important to note that 49% of Espacio Caleido was purchased by Grupo Emperador, which became our partner in this crucial project for the city of Madrid and for Grupo Villar Mir in mid-2017.