"Homes on golf courses maintain their value even during crisis periods for the real estate sector"
Established in Spain 60 years ago, Taylor Wimpey España is a subsidiary of Taylor Wimpey PLC, a multinational real estate developer listed on the stock exchange, with its headquarters in the United Kingdom. This guarantees reliability and solvency for all the property projects it develops, and total security for buyers of its homes. Specialising in residential tourism, the market-leading company operates in Spain on the Costa del Sol, Mallorca and the Costa Blanca. In this interview, Taylor Wimpey’s director in Andalucía, Ignacio Oslé, talks about the company’s strong position on the Costa del Sol.
What real estate projects are Taylor Wimpey currently developing associated with Costa del Sol golf courses?
Right now we are developing a project of 90 apartments overlooking Los Arqueros Golf called Botanic; another project, Le Caprice, comprising 14 exclusive apartments at La Quinta Golf, with spectacular views of the third hole; two more projects, Green Golf, apartments and townhouses at Estepona Golf; and finally a large real estate project, more than 1,000 homes, that we are going to develop at La Cala Golf Resort in Mijas. Currently we have a project called Grand View, 60 apartments, and another, Natura, consisting of townhouses.
How many homes do you currently have under construction on the Costa del Sol?
Under development I estimate we have around 600 active ones, with planning completed and work underway.
Do you consider that real estate development is essential for the profitability of a golf club, or is it possible for a course to be maintained exclusively with income from green fees?
Yes, they can be profitable by themselves. However, what happens is that, from the time a golf course is built to when it gains value in the market, there is a period of between five and 10 years during which you need additional financial support to recoup your investment, and normally at that moment there is a loss-making shortfall. Subsequently, with good management, a good team and fine-tuning the costs, a golf course can become a profitable business by itself.
The Costa del Sol is experiencing a new era with the real estate market at boiling point. How are sales going and what type of clientele, by nationality, predominates among buyers?
When it comes to off-plan sales there has actually been a major increase over the last three years. Initially we were almost alone in the market and we were among the first witnesses of this new reality. Right now, the British are still the priority clients despite Brexit. This year there has even been some recovery, after a decrease of almost 20 per cent last year. People once again have a certain degree of confidence in their personal budgets and therefore are returning to buy homes from us. The next main clients are Scandinavians, followed by Belgians and Russians, and then we have an incredible melting pot of nationalities, which is a unique phenomenon in Spain that is not repeated in other markets such as the Costa Blanca or Mallorca – where they tend to be British or Russian. Here, on the other hand, there is a multinational clientele, and that is what enables us to be a unique international tourist destination.
Are the Spanish still in a minority as buyers of homes associated with golf courses?
They are still a minority, and on the Costa del Sol we are still not really noting Spaniards acquiring a second residence. I think this will be the challenge over the next five years: that this kind of client returns, with their economic capacity, and they start to buy homes on golf courses.
Do homes have added value when they are on a golf course?
Definitely. They are homes that maintain their value even in crisis periods for the real estate sector during economic cycles. They also have a potential rental value for golfers, which is important, and their environments do not deteriorate: by this I mean that golf courses, which are like large gardens, have very good maintenance, in addition to security. It should also be noted that it is a very dynamic market, with customers buying and selling homes on golf courses because they are in high demand and therefore have a high added value.
Are they only golfers who buy homes next to a golf course or are there some people who do not play but like to have a large garden in front of their property?
According to our statistics and our experience as managers of golf courses in the past, we can say that only 15 per cent of those who have acquired homes from us in the last 10 years were purely golfers. They have been seeking a golf environment as a place of residence for the safety it gives them, for the quality of its streets, for having a clubhouse, for feeling sheltered within a community, with a certain economic status and leisure amenities... And then yes, gradually they have become caught up in golf. Here on the Costa del Sol the photo that a foreign client is seeking is that of an expanded golf garden and sea views, with Gibraltar in the background: that is the El Dorado of homes to which all clients here aspire.
In recent times, both rental prices and sales have been rising considerably on the Costa del Sol. Do you think we run the risk of suffering a real estate bubble again?
To have a real estate bubble, the main issue would be that there was a large stock of unsold homes – that is the critical factor. Therefore, we cannot talk about a real estate bubble in the short term. What can be said of the second home market on the Costa del Sol, and in Madrid and other cities where there is more demand, is that we are reaching a period of maturity in the sector, where prices have now gone up and I do not believe they are going to rise much more, although construction costs are rising, margins are being squeezed... In short, now is the moment for developers with very good management practices and major financial capacity to obtain a small profit margin in this business – and manage time, costs and profitability astutely.
Taylor Wimpey has in the past owned a golf course on the Costa del Sol: Los Arqueros. Does the company plan to build or acquire any others in the near future?
We are a residential developer and we have dedicated ourselves to building homes. We have already built various golf courses but I think that in the immediate future we will only focus on residential tourism.