Thinking back to his childhood, Javier García-Valcárcel (Madrid, 53) has the greetings of real estate development. “Work has kept me busy since I was capricious,” says the boss and son of the president of the Madrid support association (Asprima) of the same name for more than two decades. But the careers of father and son are similar to those in the show industry before the Great Recession and now. It means little. And according to the plans of García-Valcárcel junior, even less will be alike.
The Madrid boss founded Gestilar, the company he heads, in 2009. “We were in the worst crisis in history, in the worst country in the crisis and in the worst sector of the country,” he recalls. The company was born with his personal savings “like a company with sponsor DNA” at a time when “there were opportunities for domination” because “the crisis had taken away many companies”. With a limited investment capacity, these first houses were built as a cooperative to start a few promotions between 2013 and 2014 with the equity accumulated by the company. These would be the first two stages of a story that the developer breaks down into four.
With the market picking up and struggling to hit the ground running, the third period came in 2017 with an alliance with Morgan Stanley: “We realized that if we were going to promote 800 more homes than they had, we had to partner with one of the international funds he had the necessary assets to carry out the projects”, explains the entrepreneur. But the operation, in which the real estate fund managed by the American investment desk provided 90% of the working capital and the Spanish firm the remaining 10%, limited certain opportunities in a booming sector.
This corset was the origin of the last period, until now. “We sat down with Morgan and asked them that in the transactions they didn’t want to close in the short term, they give us the option of introducing them to other funds, and Gestilar became a multi-fund company”, explains García-Valcarcel. The result is a small heterodox promoter who, despite his average size, has the ability to glimpse capital from different investors for different operations: last year he delivered 300 apartments and invoiced 180 million. And I want to grow. It currently has more houses on display or in thesis period (3,100) than it has delivered (2,500) in its 13-year history.
Along the way, García-Valcárcel has added a construction business to the genre (via another alliance, in this case with Lantania), an infamy he deems crucial. “Construction is the high price [el principal coste directo] of the thesis promoter represents between 30% and 50% of the cost of the production process and we have shown that it has such a significant weight that it must be internalized to control costs, execution times and the quality of our product from the start to finish”, he assures. The audacity was taken in 2019, but it proved very useful in times of exorbitant prices of materials and works, which “made negotiations with subcontractors impossible because no one in the industry loses capital”.
In any case, the Madrid promoter is struggling to reproduce his model: “If we managed to integrate a construction company, then such a complicated operation would be very admissible in one of the large companies of the hexahedron of our size and our agility. “, he points. But the paradox is that this step, which they thought possible because of its small size, offers them many growth prospects thanks to build-to-rent, which consists of building buildings to transfer all their housing. “Profit margins are tighter and I wouldn’t dare embark on a thesis without my own construction company,” he explains. Gestilar is behind the oldest exposure announced to date, a 750-unit development in Getafe (Madrid), owned by Deutsche Bank’s benevolent investor DWS. And with the same partner or other funds like Azora or Aberdeen, you are close to the projected 2,000 units.
Build to Rent is a sector that is gaining predominance in Spain, mainly driven by investment companies. They are the owners of the buildings and the promoters build them (and sell them) on order. But beware of a last link: who then manages these rentals? Although there are already a few companies, Gestilar sees this as a business opportunity. “We don’t rule out the possibility of creating an area to run large rentals and add value to those funds that trust our work,” he says. But he adds a condition to take this step: “We need a large number of housing units in operation to be able to cover the cost of construction of this new limit.”
In his main area of activity, classic promotion, the entrepreneur sees growth gains in new markets as well as those already known (Madrid, Galicia, Catalonia and the Balearic Islands). “We are analyzing operations in new places such as Saliente, Andalusia and the Cantabrian coast”. A movement which, according to him, will accompany the investment funds which “partly because of the land error, will start working beyond Madrid and Barcelona and on smaller projects”. The cycle has changed. “It may be that in this vicious circle of inflation and rising costs, some funds prefer to stop the pace of investment,” he says, although he adds that he continues “to be interested in the ‘Spain”.
Gestilar is still present in two emblematic factories in urban centers, the Judería do Cura in Vigo and the Mahou-Calderón factory in Madrid. “This type of project will no longer occur in the short or medium term and it is a privilege for us”, explains the entrepreneur. But the country is running out, and García-Valcárcel knows this is eroding its traditional market in affluent middle-class neighborhoods: “We are not present in all urban developments in Madrid, and we do not pretend to be”, a- he points out. .
Will this open a new stage? For the moment, the coordinator refuses to “relocate” completely, to disappear from the cities and to concentrate on the periphery. “Given the scarcity of space in the center, it will be unavoidable”, he says, adding that he has already thought of a plan: “We are not ruling out adapting to the environment and entering downtown, but house by house.” This means repairing and betraying apartments, “but with a large volume” of 1,000 to 1,500 apartments per year. In addition to rental management, this is another new area of activity on a scale that no coordinator has tried before. But García – Valcárcel sees all its meaning in it: “I see the future in door-to-door transfers”, he is convinced, “the second-hand market in Spain is 500,000 apartments [vendidas al año] and new construction only 90,000″.