Further evidence of Spain’s property downturn

Further evidence of Spain’s property downturn can be found in the first quarter results of Spain’s largest developers and constructors, not to mention the downsizing of one of Spain’s largest estate agents.

First quarter revenues and profits of all the big quoted develops are significantly down on last year. The worst performance came from Martinsa-Fadesa, developer of the Costa Esuri residential golf resort in Ayamonte, whose losses increased by 37% to 85 million Euros. Metrovacesa’s profits fell 77% to 102 million Euros, and Realia’s by 36.2% to 27 million.

Red ink is also running all over the accounts of Don Piso, one of Spain’s largest estate agencies, with 260 offices around Spain. Revenue this year is down more than 65% compared to Q1 2007, pushing the company into losses. Don Piso announced yesterday that it is laying off 80% of its staff, and closing down all the 120 offices run by the company (the remainder being franchised).

Don Piso owns a large portfolio of properties that it is struggling to sell, mainly in Catalonia and Andalucia. The company has launched a aggressive sales campaign involving discounts of up to 20% to 30% to try and shift these properties.

Habitat, the Catalan developer that owns Don Piso, has been trying to sell the company since it took over Ferrovial Inmobiliaria, the previous owner of Don Piso, in December. So far, no takers. Habitat itself only just escaped insolvency earlier this year when its banks agreed to restructure Habitat’s monumental debts.