Developers going bust

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  • #53763
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    Anonymous
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    I’d like to know about any developers going bust with a big project. Anyone hears of a development running into out of cash, or any other telltale signs like worked stopped, please let me know.

    Thanks

    Mark

  • #79796
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    Anonymous
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    Hi Mark,

    Here a few examples:

    DURSA PROPERTIES – ISLA DEL FRAILE RESORT

    Dursa Properties. They are developing the Isla Del Fraile Resort near Aguilas coast city.

    It was supposed to be two phases and the first phase is delaying a lot and lately the construction work is very very slow almost insignificant. I have a property near the beach there and every weekend I spent my time there I drive throught the road which is near the development and it always seems the same. It seems that they are struggling to get the money to finish it so surely the sales will be very scared about that.

    This development is supposed to be a luxury one but the first phase has horrible views to the montains and the second one with views to the sea and the island of Fraile it has not started yet and I guess It wont never.

    LORCA GOLF RESORT BY GROUP ALZE (Who the hell are this guys?)

    They would develop which was going to be the first golf resort in Lorca (Murcia). In order to avoid law they destroyed the environment with the bulldozers so there wasnt anything to protect in which was supposed a protected area.

    Luckily the crisis arrived and the guys who were behind this got in almost bankrupt and the work stopped. It have passed almost 3 years and the work continues stopped and the nature have regenerated by itself what the bulldozers destroyed. There is still there a sales stand in the middle of the desert but I think it also wont be developed soon. I expect 10 years or more for this or even it wont be developer never. You can see this going from Lorca to Aguilas looking at the left when you start driving along the mountain that separates Lorca from Aguilas.

  • #79800
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    The developer Proturex appear to have been in financial trouble for sometime now.

    Palmera Properties advertised these people as reliable and reputable and managed to take a substantial deposit from us for an apartment at place called El Zoco situated near a village called Golco in the Alpujarra.

    Needless to say no apartment and no refund.

    Problems with this particular development over the past 4 years.

    jwh

  • #79987
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    Today just another one.

    SEOP Obras y Proyectos.

    Apart from a property developer is also the mayor shareolder of the football club Racing de Santander.

    http://www.cotizalia.com/cache/2008/03/18/84_constructora_presenta_suspension_pagos_deudas_clientes.html

  • #80095
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    Anonymous
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    San Juan De Los Terreros. Builder: Prolacon Mar – now in liquidation.

  • #80236
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    Reported over the weekend in the local press that Grupo Sanchez (AKA Sanchez Romero) has filed for protection from creditors. This company has big developments in Denia (Alicante), Doña Julia, on the Costa del Sol, and Brazil. They had celebrity endorsements from Antonio Banderas and Melanie Griffith. Just goes to show what little use celebrity endorsements are.

    http://www.grupo-sanchez.com/

    Grupo Jale went under the other day. They have several developments on the Cost del Sol.

    I also read that Grupo Lábaro are having cash flow problems. This is most worrying. If Labaro are in trouble, then nobody is safe. Apparently they are having to flog assets in a emergency to raise 26 million Euros, but they have NOT yet had to file for protection from creditors (known in Spain as presentar un concurso de acreedores) so they may pul through.

    Now developers are dropping thick and fast.

    Mark

  • #80238
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    Anonymous
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    Hi

    And the deposits of thousands who are only waiting for that habitation licence. 😕

    Just Frank 8)

  • #80259
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    Anonymous
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    Mark,

    I have an interest in Grupo Labaro, can you tell me where you read the article regarding their financial troubles?

    DGR

  • #80356
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    Anonymous
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    The Inmo Colonial saga goes on.The Dubai Investment Company appears to have given up in its attempt to buy the ailing company. Now the major banks plan to take over the reins of the company, nothing is certain yet but looks to be the most likely way forward. The banks want to protect their interests and stop the two major shareholders making a bad sale. The Dubai offer was finally 1,19 europs per share having offered 2,15 e initially. Must have seen some of the worms in the can.

    The banks are now thinking of arranging a business plan for the longer term and utilising the high calibre of the Colonial portfolio.

    Luis Portillo the major shareholder owes 1.473,5 euros to 14 banks and savings banks.the biggest creditor is Banco Popular with 365,1 m euros,followed by La Caixa, 161,3m and Bancaja 116m. His partner Luis Nozaleza owes 457m euros ,the majority to Reyal ,205,2 m. He and Portillo own 47 % of the Colonial shares. An additional total of 6,400 m is owed by the company to Goldman Sachs,Eurohypo,Calyon, and Royal Bank of Scotland.

    These latter banks agreed last week to back the business plan proposed by Portillo and Nozaleda. The group has agreed to sell up to 33% of its interest in Societe Foniere Lyonnaise (SFL) which had been delayed due to the talks with Dubai. The company also states that this debt of 6.400 m euros and other debts due repayment over the next few years seem “perfectly realisable”

    Encoval a company with 937 flats in various stages of construction in the Valencian Community and Tarragona.has entered in “Suspension de pagos”, making a total of over 40 companies to do so this year. The amount of debt has not been quantified. The company is 40%owned by the property company Zamir Siglo xx1. Its sales totalled 36,2 m euros in 2006 and it debt was 46,2 m euros. So probably only God knows how much it is now.

    The company found itself entrapped by lack of liquidity and non payment by clients. The principal clients of the company are Espacio s.l ,Encovil,Promociomnes Denia 2002,Nuespri,Cisa Habital,Parque Sol,Vallehermosa,Pinar Levante and Inmo Cuz de Jativa.

    The Euribor rose again yesterday to its highest level this year. Things aint getting any better ,no matter what the agents say.

  • #80365
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    A list of companies with problems listed today by El Mundo newspaper:

    http://www.elmundo.es/mundodinero/2008/03/25/economia/1206460082.html

    – Llanera
    – Grupo Ereaga
    – Marbar
    – Contsa
    – Habitat
    – Grupo Jale
    – Nozar
    – Seop
    – Grupo Sanchez
    – Cosmani
    – Prasi
    – Encoval

  • #80369
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    peterparra

    no sofiA in the list then, that’s a suprise?

  • #80370
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    No, Fadesa Martin is there either.

  • #80372
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    Anonymous
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    dont worry. Allong the next week we will complete the list!

  • #80373
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    Anonymous
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    I am listening right now the bbc radio one and they are talking about the meltdown of the spanish property market.

    With this advertising in the UK it seem likely that even less people there will be eager to buy something here right now.

  • #80377
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    peterparra

    exactly…….so when will the message get through to those in Spain, who have the power to change things for the better.

    Unbelievable!

  • #80378
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    Anonymous
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    Just an observation –

    With the likes of Fedesa who also built in Morroco and latterly in Brazil along with grupo sanches, what effect will this have on these markets?

    Many developers I know have jumped ship and started building in Brazil hoping this would subsidise the dire market in Spain. But now it seems their old debts are catching up with them and with the average Brazilian property not more (for the time being) than a quarter (or less) than a Spanish property, these developers need to sell an awful lot to make up the slack! 😥

    AP

  • #80381
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    Anonymous
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    I agree and if you keep in mind the disposal income of an average Brazilian.

  • #80384
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    Anonymous
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    ……..are there that many nuts in Brazil?

  • #80386
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    Anonymous
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    Less than the British nuts in Spain.

  • #80396
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  • #80400
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    A week ago, Mark wrote:

    I also read that Grupo Lábaro are having cash flow problems. This is most worrying. If Labaro are in trouble, then nobody is safe.

    Quoted from Peter’s link (roughly translated)
    “Lábaro Real Estate Group has applied to the Court de lo Mercantil No. 4 Madrid for voluntary declaration of bankruptcy.
    This company, founded in 1987, is the parent company of a group of companies in the real estate sector that specializes in land management and the promotion of housing. Its core business lies in Spain, but also has activities in other countries of Eastern Europe”.

    Why does the news of this one have more implications than any other of the big ones…..”nobody is safe”?
    Because of its size?
    Am also wondering if these companies’ ventures into Eastern Europe are now proving to be the straw that breaks the camel’s back.

  • #80417
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    To a certain extent because of its size, but also because it had a reputation for being one of the better run developers in Spain.

    This kind of news is a negative feedback loop. It creates negative market sentiment, which drives more to the wall, and so on. The situation is clearly not good, and it’s going to get a whole lot worse. I think we are just at the start.

    More on Labaro’s problems (in Spanish)

    http://www.elpais.com/articulo/economia/Labaro/convierte/mayor/victima/crisis/inmobiliaria/elpepueco/20080401elpepieco_8/Tes

    Yes, I think the expansion into Eastern Europe has been part of their undoing. Just like they all built the same sort of rubbish in Spain, they all rushed as one into places like Poland as part of a diversification strategy. Always the same; no differentiation, no unique and durable advantages. All these developers thought they were hotshot business wizards, but in reality they were just the beneficiaries of a mindless property boom fuelled by cheap credit. Madness.

    Mark

  • #80424
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    Mark:
    I have seen some of the works these people have done/doing in Poland. The business ethos remained the same. They had degraded and looked down upon local developers and buyers.

    The Polish despite of having to deal with the communist blocks have rejected the finished products that the Spanish companies were/are providing and buying from Polish, French, German companies.

    The Polish buy for nesting with usual emotions attached to it. Easy credit or not. Investing/nesting are two opposite side of housing.

  • #80430
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  • #80437
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    Two more yesterday:

    -Encoval (Property developer)
    -grupo i (Property consultancy group)

    http://www.elpais.com/articulo/economia/crisis/ladrillo/cobra/nuevas/victimas/elpepueco/20080402elpepieco_1/Tes

  • #80441
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    Forget about a hard landing. This is a crash landing.

    Grupo i were very active in the second home sector. I dealt with them a bit, and read all their reports. It’s interesting to see how this downturn is hitting at all levels; developers, agents, consultants. Blimey, perhaps I’m next.

    Mark

  • #80442
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    No Mark.

    Spanish Property Insight will never go to Bankrupt!

    I think is a good and independent place for good and also bad news about the spanish property market.

  • #80443
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    SPI may be a more placid place though if the agents disappear ! 😯 I guess the cudgels could be taken up by the economists . 🙁

  • #80446
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    In a recent Times article concerning the stock market, some old sage was quoted as saying, “the market always finds new ways to make the same old mistakes.”

    How very apt as to what is going on now in the property market.

    HOWEVER, it is not just Spain which is suffering, DAMAC has cancelled a project on the Palms, Dubai which was sold out in 2003. No contruction has taken place.

    Brazil – many Spanish developers have fallen foul of the strcit banking regulations (yeah I know, Brazil and regulation), meaning that cleints monies are locked away in the Brazil central bank.

    Bulgaria – 193 coastal properties are at risk of demolition.

    I guess what I am trying to say, is yes its bad in Spain, but you are not alone.

    AP

  • #80452
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    @mark wrote:

    Blimey, perhaps I’m next.

    Mark

    I’m looking forward to your book. I have enough stories of blind greed, I’m sure you know of many many more. I think the coming stories of fear will be just as interesting and heartbreaking.

  • #80472
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    Hi

    Just reading some of the comments about the down turn in the Spanish Property market, the Irish market is equally as depressed.
    Dublin prices have dropped 20/25% over the last twelve months.

    A lot of small time investors are now stuck with 5/10 properties with falling values and falling rents.

    It is also a common held view in Ireland that over the last number of years when the price of development land sky rocketted in Ireland developers turned to Spain bought land and developed properties which they inturn sold to people in Ireland as holiday homes.

    Most Irish people have now to concentrate on their own business rather than talking about flying to the pad in spain for the weekend 🙂

    The holiday home overseas became an integral part of Irish lifestyle during the Celtic Tiger Economy, the Celtic Tiger has lost its roar over the last two years at least.

    Murph

  • #80907
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  • #80707
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  • #80908
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  • #80708
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  • #80918
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    There is a rumour at SIMA (Madrid) this week that Grupo Evemarina is in trouble financially, look out for further information. They are building mainly around Malaga and Cadiz.

    Also, a prominent Brazilian developer has spent almost half a million euros in marketing this year and has no sales to show for it.

    Also, PW are discounting La Torre by 35%.

    AP

  • #80718
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    There is a rumour at SIMA (Madrid) this week that Grupo Evemarina is in trouble financially, look out for further information. They are building mainly around Malaga and Cadiz.

    Also, a prominent Brazilian developer has spent almost half a million euros in marketing this year and has no sales to show for it.

    Also, PW are discounting La Torre by 35%.

    AP

  • #80974
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    Direct Auctions have 50% reduction on 2 bed apartments in Murcia. Does anyone know exactly where, is it a PW development
    Wrixon

  • #80773
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    Anonymous
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    Direct Auctions have 50% reduction on 2 bed apartments in Murcia. Does anyone know exactly where, is it a PW development
    Wrixon

  • #80978
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    Why not e-mail Direct Auctions and ask?

  • #80777
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    Anonymous
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    Why not e-mail Direct Auctions and ask?

  • #80980
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    Anonymous
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    What is happening? Why stop building when people are waiting to purchase their properties? It doesn’t make any sense…….

  • #80779
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    Anonymous
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    What is happening? Why stop building when people are waiting to purchase their properties? It doesn’t make any sense…….

  • #80996
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    katy
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    ¿Que?

    Think the problem is that not many people are waiting to purchase properties. Developers may have only sold 5% of a block.

  • #80795
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    katy
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    ¿Que?

    Think the problem is that not many people are waiting to purchase properties. Developers may have only sold 5% of a block.

  • #81424
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    I know this is not new news, but Viva Estates in the CDS is in administration, but we have been told today that they are 5 million euros in the red!

    I wonder if Planet Viva will survive? ❓

    AP

  • #81425
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    katy
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    Sure it will survive one way or another, isn’t their latest money raiser selling space in Hot Properties.

  • #81446
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    there seems to be a few names of development companies missing from the list.
    I personally think that the papers do not print all the names especially if other parties may have a vested interest in certain developers.
    I know that there are many names missing from that list .

  • #81456
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    katy
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    @katy wrote:

    Sure it will survive one way or another, isn’t their latest money raiser selling space in Hot Properties.

    Just an update, Friends received a call from Viva asking them if they would like to advertise in their property magazine. 400 euros for a quarter of a page, plus IVA I suppose. He told them that seeing his apartment had been on their books and in the mag for 19 months and remained unsold why would he want to pay 400 to have it featured now? The salesman said because you could cut out the Agent (VIVA) and offer the seller a better deal ❗

    You couldn’t make it up could you 😆 Will this guy do anything to raise some cash 👿

  • #81488
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    Inez
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    Crikey – I could do with one of their sales guys! Selling snow to the eskimos!

  • #81497
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    Anonymous
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    I wonder where the outlets are to obtain one of these magazines. They have closed all their branches except one.

  • #81499
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    They are usually left outside supermarkets, banks etc. I am looking forward to the edition of the private ad ones, just out of curiousity to see who and how many suckers they have signed up.

  • #82314
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    Basque construction company Urazca, has filed for bankruptcy protection

    The company has debts estimated at some 65 million €.
    One of the most important construction and real estate companies in the Basque Country, Urazca, has applied for bankruptcy protection. The company, headed by the ex President of the Athletic de Bilbao football club, Ignacio Ugartetxe, finds itself facing debts of some 65 million € in addition to other commercial debts of a further 25 million €.

    http://www.typicallyspanish.com/news/publish/article_16410.shtml

  • #82325
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    Hi,

    I am not sure how big a player Idearco is but they have now gone bust, leaving one development (not mine, thank the lord) with a huge debt which, apparently, the property owners of the development now have to pay for. So unfair!

    http://lamarinaforum.com/index.php?showtopic=6060

    http://216.239.59.104/search?q=cache:YgNcJYMceAQJ:www.costablanca-news.com/news/newssouth.htm+idearco&hl=en&ct=clnk&cd=10&gl=uk

  • #82329
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    I hope that people who are thinking of buying semi completed or a completed property in a incomplete urbanization at no matter what price learn from this situation.

  • #82330
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    shakeel

    i think most people are clued up enough now, not to touch incomplete places with a bargepole. What will happen though?, at some stage, money will have to change hands. I can only think that sooner or later, the developers nerve will break, and they will have to sell them at massive discounts not seen before, just to get some money back. They seem to be holding out to some degree, but i doubt we have seen anything yet, when it comes to heavy discounting?

  • #82331
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    Goodstich44: I hope for their sake they are clued up. The heart breaking stories that one hears makes you wonder.

    “The brains left at Gatwick airport ” expression has not been heard for a while. It makes me wonder if the brains are now being left at Luton instead.

  • #82333
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    Hi there.
    Just to add to your opinion on people being clued up, I live in Ireland and believe it or not there has never been one thing in the newspapers here warning people or alertint them to the situation that has now developed in Spain regarding the illegal properties and so forth.
    If it was not for my own personal experience plus the knowledge I gained from all you guys on the forum I am afraif I would be totally in the dark regarding the situation in Spain. I can assure you that there are a lot of people pver here that would go into a buying situation without having full knowledge or the facts. so There are people who are not clued up!
    I have written many letters to the t.v broadcasters and newspapers here in Ireland asking why they are not talling people what is going on over there but I have never had even so much as a receipt notice back from them. If you ask me (and I have said this to them ) I think there are vested interests from various sections /parties who have vested interests in Spain and they do not want to rock the boat and further.It would wonder how this can all go on and people not being informed by the media …but I assure you it is happening!

  • #82342
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    Bettyboo, whilst I agree with you no matter how much publicity there is. Ignorance and oblivion is a problem.

    A have a friend of mine Regional sales manager to a company now constructing in Med Saidia ( Morocco ) offered me the properties before they were launched. I turned it down as it was next to Algerian border where there is bloody civil war going on. I met him recently and he told me that I was the only one who has raised this issue with him.

  • #82343
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    shakeel wrote:
    A have a friend of mine Regional sales manager to a company now constructing in Med Saidia ( Morocco ) offered me the properties before they were launched. I turned it down as it was next to Algerian border where there is bloody civil war going on.

    That development in Saidia was/is one the biggest cons that I have heard in my entire life. People were led to believe that it is the best deal of the century.
    Now many cry because they were stupid in 2006.

  • #82374
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    San Jose Inversiones, the developer of various projects including a big one called Santa Ana del Monte – Jumilla Golf, in Jumilla, Murcia, now in administration. A lot of unfortunate buyers will be caught up in this one.

    Mark

  • #82376
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    Mark – there’s an overlap of info. on this company. See Black Spots and the thread on Santa Ana Del Monte, Jumilla, Murcia.

  • #82377
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    bettyboo

    that is very sad, if people are still falling in to the old traps, with all the current information available….on this site alone!!

    Surely most people would check out the internet for positive/negative reports these days wouldn’t they? I do that before buying a lawn mover these days, that alone a second home!

  • #82403
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    I know Goodstitch! It is very sad and almost unbelievable but I assure you it is still happening, well at least here in Ireland it is. Only last week there was a lady on the radio who phoned in for any help or advise she could be given in relation to an apartment she bought that later turned out not to be an apartment at all but a commercial outlet that was being sold to her as a dwelling. She only found out that it was a commercial property only when she went to sign at the notary but that was too late as it was in her contract in Spanish…which she could not read so it is still happening! As I have said I have contacted the newspapers and that to ask why they are not making people aware the pitfalls but they are just not interested and there are a lot of people who do not even know how to use the internet never mind go on it to do research on the developers/properties , they take someones word when they tell them “all is well, all will be fine” but as we know only too well is most cases it is not fine.

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