However, after not too long, there was a problem that overshadowed the shining colours of the multiple greens: the economic crisis. The market simply dropped from one moment to the other and those promotions that initially promised over 2,000 homes, couldn’t go beyond 500. Some of them even remained empty and unsold, said the expert.At that point in time, there were a lot of arrangements with creditors and bankruptcy. Some promoters even saw how their dreams were broken right in front of their eyes and the promotions linked to golf courses increased the banks’ assets lists of properties.
In fact, around 20% of the market is still under the control of non-natural proprietorships. In other words, mainly under the financial entities that inherited these assets as a payment method due to the mortgage debts that were signed during the crisis period. Obviously, these institutions needed the money, so they started selling them below the market price to survive, as it is stated on the Golf Market report of the CBRE.
Real estate in Costa del Sol: getting back on their feet
The recent importance of golf Costa del Sol within the country’s economy, especially when it is referred to quality tourism, foresees a growing activity in the development of linked products, services and industries.
Southern Spain is still one of the most demanded golf vacations in all Europe, where 3% of British and 2% of Germans travel south with the sole intention of practising the sport. The total number of tourists who choose to play golf amounts 2% of the entire population, which makes golf the greatest category of sports tourism in the last few years and summed up 2,000 million Euros in 2017.
As a consequence, this has reopened the residential market located around these complexes and brought back financing and investment to the development industry. Obviously, this does not mean it is growing huge promotions overnight, but rather it is just beginning with a few thousand units.
Even though Levante has a few new developments in the outstanding golf course Campoamor, developed by the real estate promoter Maral, or the Metrovacesa’s promotion in front of the marvellous golf club Escopión in Valencia, there are some really great highlights developed for the PGA Catalunya Resort or the Emporda Golf Resort, where 20 million Euros have been invested to improve the offer.
Nonetheless, Costa del Sol is flooded with projects in the development area, especially in Estepona, Mijas, Marbella and many others. Almost all real estate promoters are focusing on this area because it has better possibilities in this growing market.
Golf Costa del Sol: a large component to take care
All of these promotions and investments will always be successful -almost guaranteed- as long as the shareholders agree to make necessary changes to the complexes in order to adjust them to the new models that modern golfers are looking for in a golf course.
Out of the 359 golf courses in Spain, 28% fall under the Pay & Play model; 18% is a club that needs shareholders and 54% use a mixed model in which there are shareholders, but they still admit the Pay & Play under certain conditions.
After the late 2000’s crisis, many of these have fallen on the hands of the banks and funds that do not have experience in the area and are willing to try out different management methods, being Sareb the most exposed one.
Hence, there is an interesting opening to the opportunity of including new operators who may be interested in getting on board with the new model trends, like the Fun, Family and Friends, which is targeted toward non-golfers.
Besides, these new players must strengthen new business lines that could increase the revenues. According to Madrid’s Golf Federation, the income average of Spanish courses is 1.3 million Euros a year -in 2016-, most of which are being maintained on green fees, restorations and shares. According to Caro, these incomes can only be raised by applying new models like footgolf, already present in the US.
In the early 2000s, Spain experienced a boom in new developments that linked golf with the residential market, especially on the southern coast were brand new urbanizations were growing. According to Javier Caro, Research Director for CBRE, these newly built homes located just in front of the greens were 10 to 15 per cent higher than the regular local real estate value, so developing and promoting companies started investing in many projects and building fast. However, after not too long, there
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