Mark Stücklin
The Spanish press reports that Marbella-based home-builder Grupo Otero is in financial trouble with potentially-big implications for numerous foreign investors sold luxury holiday-homes off-plan with aggressive price-discount claims.
The Spanish media outlet El Confidencial reports that Spanish builder and developer Grupo Otero has defaulted on payments to suppliers causing building work to stop on the company’s residential construction sites on the Costa del Sol, calling this a blow to the luxury real estate business on the coast.
According to El Confidencial, cash-flow problems have forced Grupo Otero to stop paying its contractors and suppliers, resulting in them walking off half-finished construction sites. Some are said to be taking away delivered materials in an attempt to recoup costs. Grupo Otero is said to be already behind on payments of millions of euros it owes to its business partners, which could lead to financial ruin for suppliers and contractors.
The article at El Confidencial suggests that Grupo Otero’s executives have admitted they are in financial trouble, but as usual in situations like this suppliers and clients are basically in the dark as to what is going on.
Grupo Otero’s foreign investors
Marbella-based Grupo Otero started life as a builder on the Costa del Sol in 2017, and quickly expanded into luxury second-home development in the same year, going on to create other lines of business like interior design and international sales and marketing in the form of a company Atrium, or Atrium Capital Partners’ as they brand themselves on Facebook and other platforms. Grupo Otero claim they are “leaders in the development of luxury homes on the Costa del Sol” with more than 250m€ invested and more than 190 units built. The group appears to have several websites including otero.com.es, oterogroup.es, and oteromarbella.com.
With an aggressive sales pitch of getting clients “40% below the market price” one of Grupo Otero’s websites is clearly targeting foreign investors looking for new homes and holiday-homes on the Costa del Sol. According to El Confidencial, the biggest group of Grupo Otero’s clients come from the UK, followed by Germany, Nordic countries, and the USA. Along with turnkey building projects they also appear to be marketing their own development projects like La Paloma Collection (pitched as ‘Close to Sotogrande!’) and Oceanic in Duquesa, Manilva, and two new projects called Silk and Camponario, both in Estepona.
Apart from the usual focus on CGIs and renders to give the impression of high-end luxury contemporary villas in a tropical setting the website doesn’t give much away. You have to register to download a brochure, so it’s not clear what kind of purchase structure Grupo Otero are offering their clients. If Grupo Otero is a developer offering clients off-plan purchases with all the mandatory consumer guarantees to protect deposits and stage payments then buyers will get their money back one way or another if Grupo Otero goes under.
However, if Grupo Otero has been selling a self-build model like By Nok, another failed property company on the Costa del Sol, then buyers and investors with could find themselves in a tricky situation, at risk of losing some or all of the money already invested. By Nok also lured clients with claims of massive price savings and discounts to market price, so once again it looks like a case of a Costa del Sol builder promising juicy discounts whilst actually serving up high risks.
johnmhughes@btinternet.com says:
If something seems too good to be true then it often is.
I would never purchase an off-plan property in Spain, because this happens and people end up losing all of their money.
Vin says:
Unfortunately you are right .
Nothing free in this world
Un Hombre Verde says:
Starting to remind me of 2007/2008, I hope I’m wrong!
Chris Anderson says:
Yes we own an Otero villa and i could see this coming unfortunately. They have grown too fast without proper structure .We are lucky as our villa is finished but without occupation license and all our snags rectified we own the Velvet villa but the villas opposite on the silk site have just started construction and i feel sorry for the owners.
I suppose Otero will have some form of official statement to follow. This is typical of Spanish builders and hype.
Mohammed El aissaoui says:
hola Chris, tambien compramos una velvet pero tenemos el problema de primera ocupacion me podrian ayudar como lo hicieron por favor….mi correo es elserviceporti@gmail.com
RACHAEL ANDERSON says:
Are you on velvet too ?
I’m Chris wife
You can contact me Rachael.anderson68@uahoo.co.uk
RACHAEL ANDERSON says:
Sorry
Rachael.anderson68@yahoo.co.uk
ataspain says:
The Spanish system is safe. Under Spanish law, all money paid in advance for a property must be guaranteed or insured and the money can be recovered if you don’t receive the property.
andrew chappory says:
I bought a house in Manilva Otero Development in Sept 2021. on Turnkey project I have kept stage payments on time and never failed or defaulted. They used the system where we bought the land and became became the developer. and Otero became the builder. So far I have paid them 510,000 euros for the land and towards the house. All that is standing on the plot is a half built shell of a house with no services. I am told that as the developer we will not get any compensation, and they have just walked away.
At 83 years of age I now find myself with no money, no house and living in the back of a car.
Thank Rubens Otero I hope you sleep well
johnmhughes@btinternet.com says:
So sorry to hear this, but it seems to happen regularly in Spain, when the market improves and the developers get greedy again.
To a certain extent, this has happened in Reserva Marbella, where a lot of properties have been reduced in price, because the developers have failed to complete the project.
I have been studying the Spanish property market for some time and my conclusion is that you have to be extra careful, especially when buying off-plan.