Marina D'Or on the Costa Azahar

The Regional Government of Valencia (the Generalitat) has given the go-ahead to a massive enlargement of the Marina D’Or development on the Costa Azahar. Marina D’Or Golf, as the project is called, is now the biggest residential planning scheme in Europe, and its approval coincides with the biggest property crash in Spain’s history.

Located north of Valencia City, in the municipalities of Cabanes and Oropesa, the self-styled “Holiday City” developed by Jesus Ger will cover 18 million square metres of land, including 3 golf courses, numerous hotels, a theme park, indoor ski slopes, and more than 30,000 homes, 20% of which will be social housing.

According to Spanish press reports, the developer plans to start building the 3 golf courses first, leaving the homes for when the property market recovers.

Marina D'Or

Mundo delusion?

The plans include a theme park called Mundo Ilusión, to be developed by the Generalitat, on 800,000 meters of land provided by the Marina D’Or Group. Mundo Ilusion is the pet project of Carlos Fabra, the long-standing president of the provincial government of Castellón.

Jesus Ger, the boss of Marina D’Or, has called on the Generalitat to start work on the Mundo Ilusión theme park to encourage tourists to visit. Ger argues the government should get behind the project like it did with Terra Mítica in Alicante.

No matter that Terra Mítica has been a commercial failure and waste of public money, as opposition politicians like Marina Albiol of the EUPV claim. “We continue to think that Mundo Ilusión makes no sense; everything suggests it will be a financial failure,” Albiol told the Spanish press, saying her party will oppose another “drain of public money as happened with Terra Mítica.”

Marina D'Or expansion site

The Costa Azahar, or ‘Orange Blossom Coast’, in the Valencian province of Castellon, wins the dubious prize of hosting the biggest unsold inventory of new properties per head of population (glut ratio), according to new figures from the Ministry of Housing, reported in the Spanish daily El Pais.

Charming Marina D’Or beefs up the ratio in Castellón

Thanks largely to a massive new development called Marina D’Or, which the article in El Pais describes as a ‘monstruo urbanístico’, or town planning monstrosity, the province of Castellon had 30 unsold new properties per 1,000 provincial residents at the end of 2008, compared to a Spanish average of 13.3 properties per 1,000 of population. These glut ratios are bound to have deteriorated further in the last 6 months.

The Costa Azahar’s property glut leapt from 23 per 1,000 at the start of 2008, to 30/1,000 at the end of the year, a rise of 30% in 2008, the year the Spanish property market crashed.

Generally speaking, the regions with the worst gluts are located on the coast or in dormitory towns around Madrid. On the coast, Almeria, Santa Cruz de Tenerife and Alicante all have new home ‘glut ratios’ of more than 20/1,000.

And Mr.Drain’s Seseña does it for Toledo

Seseña Urbanisation

After Castellon, the worst glut is to be found in Toledo (Castilla La Mancha), thanks to a massive new development in Seseña, built by El Pocero, or Mr. Drains, as a new dormitory town within commuting distance of Madrid. Many of the homes in Seseña have now been repossessed by banks, and Mr. Drains has gone off to build homes in Equatorial Guinea, one of the most forsaken and corrupt countries in Africa.

The Spanish regions with the healthiest property markets in terms of glut ratios of less than 5/1,000 include Caceres (Extremadura), and Cantabria, on the North coast of Spain. The lack of a serious housing overhang in these regions means they should be the first to recover.

The Marina D’Or Group, developer of the Marina D’Or resort in Oropesa, Castellón (North of Valencia), on the Costa Azahar, opened its Oxford Street showroom in 2006, planning to sell holiday apartments and property investments at its ‘vacation city’ resort to a booming British market. But whilst Marina D’Or was fitting out its showroom, British interest in Spanish property was already cooling fast, and has recently all but collapsed. As a result Marina D’Or is stuck with a lease, reported to run until 2020, on a London showroom that costs more than 580,000 Pounds per year in rent and taxes.

Given the fall in demand the financial burden of the running the showroom has become a problem for Marina D’Or reports an article in the Spanish financial daily ‘Expansion’. British buyers have abandoned Spain, claims the article, worried by the economic crisis at home and collapsing property prices abroad. The article quotes Ben May, an analyst at Capital Economics, as expecting “a drop of more than 30% in Spanish property prices in the next few years.” And according to experts, the number of holiday homes purchased by Britons has fallen from around 50,000 per year in 2005 and 2006 to less than 5,000 in 2008.

A handful of other Spanish developers, like now bankrupt Martinsa-Fadesa, and Llanera (who also sponsored Charlton Athletic), also opened up offices in London at around the same time. Most of them have now closed their London offices.

“I prefer, without any doubt, tourism before Marina d’Or,” said the Minister, who is ultimately responsible for the tourist industry in Spain. “We have to focus on quality tourism”. At the very least it is clear that, as far as Sebastián is concerned, Marina d’Or is not quality.

The minister’s comments enraged Carlos Fabra, head of the provincial government of Castellón, where Marina d’Or is located. In a press release Fabra criticised Sebastián for disparaging “one of the pillars of tourism in Castellón”. He went on to say that “one cannot tolerate the minister responsible for tourism in Spain making such declarations”.

Marina d’Or is a controversial new development that has been heavily marketed to British holiday home buyers and investors. It has been consistently criticised by Greenpeace for its environmental impact, and its promoter is implicated in corruption scandals.

A spokesperson for the company run by Jesus Ger told Europa Press that the results were due to the “expansion programme the group has been implementing, and delays experienced delivering some apartments.”

Marina d’Or is possibly the biggest eyesore on the Spanish coast, not to mention a disaster for the local environment.

It’s also a mystery how Marina d’Or ever got the go-ahead from the Coastal department of the environmental ministry to build what looks like a wall of cement so close to the beach, when the law explicitly prohibits that.

Marina d’Or is implicated in ongoing investigations into urban planning corruption scandals, both in Oropesa and other parts of Spain like Cabanes. The owner of Marina d’Or – Jesus Ger – is being investigated for perverting the course of justice and influence peddling.

Marina d’Or plans to deal with the Spanish property market downturn by focusing on international expansion. “We are clear that the situation in the real estate sector means we have to make a big effort on the international front, and focus on our developments in the countries where we are present,” Marina d’Or told Europa Press.

That means Marina d’Or plans to increase its efforts to export its unattractive product to countries like Morocco, Brazil, Bulgaria, Egypt, Panama, and The Dominican Republic.