London-based billionaires the Reuben brothers have bought 144 hectares of beachfront property in Ibiza for €35 million, demonstrating big confidence in the future of the island.
“They have caused quite a stir on the island, and with good reason,” reports the Spanish paper El Confidencial. “David and Simon Reuben, the second richest men in the UK, have acquired 144 hectares of Ibiza coastline.”
Reuben bros. bought three plots in Cala Bassa, Cala Conta and Es Penyal, all in the west of the island, including the über-cool Sunset Ashram beach bar and restaurant, and almost 5 kilometres of beachfront. The vendors are reported to be a local family called Gallart Sans.
Having bought property in Ibiza, the Reubens may have plans to develop the land with super luxury tourism and property projects, claims El Confidencial, citing local sources.
Some people in Ibiza are already voicing their opposition to alleged plans to develop the land. “Ibiza says no to the Reuben brothers for the ‘redeveloppement’ of Cala Conta,Cala Bassa and Es Penyal natural sites” – a petition at Change.org – has collected 4,000 signatures, even though nobody really knows what their plans are. The petition is organised by the Movement New Earth (sic), who say they represent “the voice of all brothers and sisters who act as protectors of New Earth and all forms of life.”
The Gallart Sans family had planning permission to build on the land, but the permission has lapsed, according to reports in the Sunday Times. However, the town hall of Sant Josep, where the land is located, told the local press they have no official record of that.
News of billionaires spending tens of millions of Euros on real estate in Ibiza will not come as a great surprise to Ibiza watchers. “In recent years Ibiza has become into a destination for the super wealthy looking for a unique experience, for which they prepared to pay big bucks,” explains El Confidencial.
“Many funds and private equity investors are looking for projects to back in Ibiza,” says Patricio Palomar, a director at CBRE, quoted by El Confidencial. “Returns are much higher than traditional investments like office space, retail and logistics.”
ANALYSIS BY MARK STÜCKLIN
It’s possible the Reubens have only purchased an option, rather than the land itself, but this still looks like a vote of confidence in the future of the White Island as a top drawer destination.
Ibiza has not escaped the Spanish real estate crisis, but the fundamentals of supply and demand in both tourism and housing are much healthier for investors in Ibiza than other parts of Spain. There is no glut of new homes, and Ibiza offers something unique that attracts affluent buyers from all over the world, and the UK in particular.
According to some research I did a few months ago, asking prices in Ibiza are almost back to where they were before the crisis began. The same cannot be said for other parts of the Spanish coast, not even Marbella, as the following graph illustrates.
Since the crisis started there have been just a handful of new developments in Ibiza, and two of them – Les Terraces de Cala Tarida, and The White Angel* – have been a commercial success, selling well throughout the crisis. People who bought at Les Terraces de Cala Tarida in the worst years of the crisis are now probably sitting on substantial capital gains.
As a part of Spain, Ibiza has been starved of capital for new projects in recent years, because Spanish banks treated all areas the same. Now funds and private equity investors like the Reubens are flooding in to Ibiza with capital to change that. They will likely find a ready market for well-conceived projects, if they can get planning permission.
*SPI advised both projects on sales & marketing plans.