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I have just heard from managers of big companies in Lorca that Polaris World property developer have several unpaid promissory notes in the zone mainly to suppliers.
Llanera started in the same way and in some months ahead it got in bankrupt. Is Polaris World the next high profile victim?
Are you interested in the developments of this property development?
Would you risk buying offplan development of this developer?
Or is only a rumour and Polaris World is a solid company?
Please comments welcomed!
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Often thought the same thing myself about PW, having placed a deposit for a property there, but managed to escape with my deposit intact.
Their business model is the same as I guess most Spanish developers, get money up front and in stage payments, and then build the property. Problem is that the supply of new customers seems to be drying up. The price of resales stubbornly refuses to budge above the original PW prices, and in some cases is less, and there are a lot of them.
The current slowdown in the market must be having and effect on PW and others in terms of cash flow. However, I do believe that PW are backed by Credit Suisse. But then again, Llanera were backed by Lehman Bros.
Kevin
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Meanwhile the investigation in the council of Torre Pacheco (very near to Polaris World interests) continues:
http://www.laverdad.es/murcia/20071028/comarcas/murcia-juez-prorroga-secreto-20071028.html
I expected to know the result of the investigation at the end of this summer but this is another example of the bad and slow spanish justice.
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There have been very strong rumors over the last weeks on this company, non confirmed yet, always “a friend of a friend tells me that…”.
That’s why now, more than ever, Bank Guarantees are so important to protect and secure your interim payments until completion.
This is why I have posted that I advise purchasing resales rather than off-plan in Spain because the risks of developers defaulting is increasing day by day.
I will always defend purchasing off-plan because it is a great investment providing your timing is correct, but now it is getting just too risky. If high-profile developers are already defaulting due to the change of the market conditions (credit-crunch, lack of purchasers..) imagine all the medium and smaller ones which really account for 90% of the off-plan market in Spain that don’t have the financial clout. All the above IMHO.
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It will get worse in Spain as the British market accounts for a big percentage of Spanish properties. It seems that here in the UK we are in for a difficult few years re property/selling/purchase/finance. It’s bound to have a knock on effect on foreign purchase. Developers will have a hard time selling their developments. JMHO.
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One sign of the times are in the new TV advertises of Polaris World here in Spain.
Before the crisis the market of Polaris World was luxury homes for europeans. Now the last TV advertise is driven to the Spanish market and we can hear something like this in the spot:
“Housing is a big problem in Spain. But we have achieved to offer you really affordable properties in the best resorts of europe. Just or only 89.000 euros….”
So they before were selling luxury properties to brits but now they are philanthropist people who helps the young spaniards to get their home. Selling their unselled stocks?
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😉
I agree totally with Claire’s view, any downturn in the UK market and also other markets will impact further on the Spanish property market.
Spain has overbuilt big time with unattractive apartment blocks and townhouses, all competing for sales, not enough buyers.
Now the same thing is happening in the UK according to recent TV prog. particularly with apartments in places like Leeds, Manchester etc, where some are having to sell for £80-90,000 below what they paid a year or 2 ago.
Developers in Spain will be biting buyers’ hands off soon just to offload, serves them right IMO.
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“Switzerland’s second largest bank, Credit Suisse, fell 4.6%, after seeing profits slump 31% for the third quarter, having being hit by a rise in bad debt.”
The above is sourced from bbc.co.uk
If Credit Suisse are financing Polaris World, then I would be very worried if I was an off plan purchaser without a bank guarantee, as many people on PW currently are. PW seem to be very tardy in issuing such guarantees. Even with a bank guarantee, it may not be worth the paper it is written on.
Kevin
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Suzanne
looks like the same old story. Spanish developers making it up as they go along, with little fear of being bought to rights. In the meantime the innocent victim, full of stress and bewilderment, spends a fortune and years, just trying to get back what is rightfully theirs.
Still seems that if you are a selfish greedy liar in Spain, then you will be fine. If you are an honest person just trying to get justice though, you have very little help from Spanish authorities.
We just have to keep plugging away though and believe it will change for the good, sooner or later?
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In this website from Murcia we can find a lot of information about the state of POLARIS WORLD.
The people who manages the website are from the region so they could have fresh information about POLARIS that will show up in the national media some months later.
But also this media is less reliable and we can’t state that the information they give is totally true but is another source of information for the evaluation of the state of POLARIS WORLD.
In this article they talk about the critict situation of POLARIS WORLD:
http://www.vegamediapress.es/noticias/index.php?option=com_content&task=view&id=6251&Itemid=104
And in this other they talk about lies o POLARIS to clients:
http://www.vegamediapress.es/noticias/index.php?option=com_content&task=view&id=6265&Itemid=104
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The desesperate situation of POLARIS WORLD makes them to publish articles in the press like this:
http://elmundo.es/mundodinero/2007/11/23/economia/1195824839.html
In it we can read that POLARIS spend about 17 millions euro in publicity.
What do you think? Is a waste of money or this strategy is saving them from the run of money off Spain?
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Also today we have in ELMUNDO this article:
http://www.elmundo.es/mundodinero/2007/11/23/economia/1195824392.html
In it we can see that despite all problems POLARIS will put 17.000 new properties on the market.
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@peterparra wrote:
In it we can read that POLARIS spend about 17 millions euro in publicity.
What do you think? Is a waste of money or this strategy is saving them from the run of money off Spain?17,000 properties to shift, 17 million euro in publicity – if you do the maths it works out as a 1000 euros marketing-investment per property. No doubt they’ll add the 1000 euros onto each property price. A gamble at this stage…yes, but will pay for itself if a healthy percentage of purchasers fall for their publicity.
They need to take this gamble as the company admitted: “A few weeks ago the joys in the accounts of the company dropped its intensity”.
Don’t we all know that one! 😉
I have a feeling the “intensity of joy” will drop even further before it gets better – if ever. Depends how many people believe their advertising. -
Article in English about this:
http://www.typicallyspanish.com/news/publish/article_13815.shtml
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