Valencia - Property Investment
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The New Valencia
The “City of Light” is fast becoming an extremely desirable
place to live and also rapidly growing as a resort, an unusual accolade
for a City.
You could ask why, but the question you should really ask, is why
did it not happen before? The city has history, location, culture,
night life, great beaches and with more than 300 days of sunshine
annually and average temperatures of 19 °C, there is certainly
nothing wrong with the climate.
Many other locations are successful at attracting visitors for a
week end break, but how many of them have sufficient facets to offer
a complete holiday experience?
Valencia is a thriving, expanding, exciting location, with so much
to offer the tourist already and much, much more to come. Cheap airlines
have arrived and Valencia is steadily emerging as a new holiday destination.
Tourism has grown consecutively over the last 10 years.
More importantly for our clients, is although property prices are
now increasing, with the right gearing and with careful property selection,
it is a city that is still affordable to invest in and yet it is still
possible to find new projects in great locations with huge potential.
With average prices still around 35% below those of Barcelona, we
expect significant growth over the next few years and believe that
the time is now right to invest before this disparity erodes.
José Salinas the managing director of Valencia’s tourist
office announced that Valencia will probably finish 2007 having received
over 2,000,000 visitors, five times more than before. It will become
Spain’s third most popular tourist destination. The Financial
Times recently stated: “Valencia is the strongest tourist destination”.
Whilst traveling around the city redevelopment is everywhere to be
seen, you can really see the new Valencia emerging.
Why invest in Valencia?
Although Valencia is currently the third largest Spanish city behind
Madrid and Barcelona, it is situated in probably the best logistical
location for a coastal metropolis. Barcelona saw significant change
and growth preceeding the 1992 Olympic Games, which incidentally,
Cliff was lucky to be invited to as a guest, visiting the city many
times before and after the games, experiencing the extreme changes
that an event like this can create. It was the Olympics that regenerated
the port and started the property market moving in Barcelona. Valencia
is currently experiencing a very similar transformation.
Following the dramatic arts and sciences millennium projects, the
opportunity of significant growth and redevelopment was grasped after
the winning Swiss team in the 31st Americas Cup, chose Valencia as
the location to host the 32nd, an event that took place over a three
or four year period.
Previously, Valencia’s tourist industry was far behind the
other major cities, the port was a dirty, noisy, industrial place
and not somewhere to visit as a tourist, or certainly want to live.
Now tourists as well as the Local Valencianos are visiting the new
harbor area in their droves, following the first phase of its urban
makeover. A study before the works started on the Americas Cup project,
estimated an incredible, additional revenue of 6 billion for Spain,
3.6 of which was destined for the city itself. So far, 2 billion Euros
has been spent on transforming Valencia into a jewel, mostly on infrastructure.
The America's Cup Management claimed a TV exposure of two billion
viewers over the four years.
This redevelopment has been the trigger for an intensive program
of change and for a couple of years we have been waiting and watching
for the best time to capitalize on this development, we believe that
the time is right now. Following on from the projects surrounding
the Americas Cup Yachting extravaganza, the business and real estate
activity is now very dynamic in the city and the PIB (Producto Interior
Bruto), Spanish for Gross Domestic Product is well above the average
for Spain. Pre Americas Cup Valencia has a lot in common with the
pre Olympic Barcelona scenario.
Interestingly, and significantly, it is the only city in Spain that
has had the foresight to install an optic fiber telephone network,
the scale of current development there is staggering, in addition
the commercial port at its new location, is still the most important
on the Mediterranean coast.
The second greatest increase in property values for the first quarter
of 2006, by regional community, was registered by the Valencian Community
with an increase of 5.8%, behind Cataluña (Barcelona). Currently
there is a price disparity between Barcelona and Valencia property
prices in the region of 35% and it is here where a considerable proportion
of our expected future growth will flow from. We believe that the
gap will close significantly over the next three years; there is now
no reason for such a large price difference.
The recent exciting announcement that Valencia will from next year,
host seven seasons of races within the Formula 1 Grand Prix championship,
constructed on a new street circuit in the style of Monaco is further
good news and in addition, following the success of the Alinghi, Swiss
Yachting team it has been announced that the 33rd round will also
be held in the same location over 2008 and 2009. This will mean a
further 3 years of international publicity for the city.
General information and statistics
The city of Valencia has a total population as of 2007 of 807,396
inhabitants and if you then include the residents living within a
15 km radius of the city this increases to 1,500,000.00. This figure
represents 18% of the population of the Valencian region and is, in
terms of population, the third largest city in Spain after Madrid
with 3,099,834 residents and Barcelona with 1,578,546 residents. During
the most recent years there has been an influx of foreigners choosing
Valencia as their home provoking a new dynamic increase in the population.
The economy of the city has enjoyed positive dynamic growth during
recent years which can be reflected in the unemployment figures, the
number of new vehicles on the road or in the increasing number of
construction licenses. Valencia is increasingly becoming a big player
on the world stage as a centre of economic strength which is reflected
in its strong institutions which are the key for economic development
such as the Valencia Trade Fair, the Autonomous Port, the Stock Exchange,
the Palace of Congress and its Universities. Not forgetting the number
of important cultural institutions that are becoming increasingly
important in the development of the city, the IVAM Valencia Institute
of Modern Art, the Palace of Music or the City of Arts and Sciences
all contribute an undeniable added value to the city.
How has the city developed in the past and what is planned
for the future?
Valencia has grown in a rather unusual way. Most coastal towns and
cities shrink inland from the seafront in a triangular arrangement,
with a significant percentage of the populated area located by the
sea. Valencia has expanded, appropriately, in the form of an orange,
spreading outwards from the historic centre, which is set back some
distance from the ocean.
The
river Turia ran through the city to the port area in the past
where the town meets the coast although now the water is redirected.
Along the dry river bed the space has been used to great advantage,
incorporating a vast selection of parks, leisure facilities and play
areas along its
9km length of green belt, surrounded by ancient walls and buildings.
As you near the sea along the Turia it opens up into an area that
is dominated by the Ciudad
de las Artes y las Ciencias (City
of the Arts and Sciences), famously designed by the Architect
Santiago
Calatrava for the Millennium and currently the most visited attraction
in Europe.
Calatrava
Towers: In the future, situated on a site next to the Oceanografic
Centre, to further reinforce Valencia as an international city
of note, triple towers are planned that will be the highest in Spain,
again designed by Calatrava. In front of the Calatrava towers and
running down towards the port is where the new Grand Prix circuit
will be situated, incorporating in the circuit the new areas of the
marina, remodeled for the Americas Cup challengers.
To the north from the port the best beaches of Malvarosa and Patacona
are situated.
To the south a vast area has been designated a natural park area,
The
Albufera, which is centered around the largest fresh water lake
in Europe. The park area totals 21,000 hectares.
Valencia is famous worldwide for its football team “Valencia
CF” and its stadium “the Mestalla” has been
scheduled for replacement at a new location, yet another ambitious
new project in the city. The first stone was laid in March this year
and the inauguration is scheduled for 2009.
The future looks bright and the city will expand along the coast
as well as spreading out inland. A recently approved project on the
periphery includes two zones of 10,000 and 12,000 properties.
Tourism in Valencia
Valencia continues to achieve an ever growing international
status and the latest figures published by the European Cities Tourism
(ECT) show that Valencia grew 5 times faster than the average for
European urban tourism, representing almost 3% of the overall growth
recorded throughout the continent.
Valencia also experienced the greatest growth of any Spanish tourist
destination in 2005, an increase which was 6.7% higher than the average
for Spain’s eight leading destinations, 5.6% higher than the
Region of Valencia and 9.4% higher than Spain as a whole.
Valencia is therefore the leader in terms of increasing urban tourism,
on both a national and European level, with more tourists choosing
Valencia City as a destination over other holiday spots.
This growth has been sustained fundamentally through an upsurge
in the British, Italian and Belgian markets, which grew by 76%, 52%
and 84% respectively in comparison with 2004. As a consequence the
total spend of foreign tourists amounted to 172.6 million euros in
2005, 19.6% more than in 2004. The new air connections to other European
cities have made a considerable contribution to the situation of foreign
tourism in Valencia, whose airport received 1.5 million more passengers
than in 2004, of whom 66% flew in from overseas.
As a result of the strong investment into Valencia City another
area seeing growth is in congress tourism, which
again rose in 2005. A total of 689 events were recorded in 2005, a
year on year rise of 4.2% over 2004, and a cumulative increase of
52.4% since 2002. 
The choice of Valencia as the setting for major events such as the
America’s Cup, World meeting of Families, World Athletics
Championships and now a Monaco style F1 Grand Prix to
be held in the streets of Valencia singles out the city as a fashionable
venue for other future major product launches and promotions.
The improvement in the city’s infrastructure and a commitment
to bringing the city closer to the sea are the foundations of a promising
future for Valencia’s tourism sector as a prime European destination.
Even the Zoo has been given a makeover and will be moved to the new
bio park, situated in the Turia riverbed.
F1 in Valencia: Formula 1 is coming to the Valencian
streets and the first race is in 2008. The Valencian government has
signed a seven year deal with Bernie Ecclestone and we expect that
this will be extended beyond. A new Monaco style circuit has been
designed which incorporates the Americas Cup marina area. See the
more information links at the bottom of the page.
33RD Americas Cup: The
Americas Cup is staying in Valencia, the official agreement has
been announced to stage the next round over 2008 and 2009 the decision
to hold F1 races around the port area must have been a contributing
factor.
Cruise tourism, practically non-existent a few
years ago saw 80 cruise ship stopovers in 2006 and 86,000 passengers.
New facilities at the city’s port will open in 2007.
The construction of these assets has ostensibly limited activities
in 2006, but will make 2007 a historic year in terms of the quantitative
leap for cruise tourism.
As a result of the money spent by tourists in the city, it is estimated
that the business had an economic impact amounting to 800 million
euros in 2005, 11.8% higher than the figures for 2004.
Where in Valencia should I invest and what should
I buy?
In the areas surrounding the municipality there are a variety of property
types available, however Valencia is a city and the vast majority
of properties are apartments built in blocks of at least eight levels.
A report out from the Ministerio de Vivienda (Ministry of housing)
states that 84% of rentals in Spain are apartments.
Location is always important; the best areas to purchase in for rentals
are, around the arts and science buildings along the Turia and north
of the Turia, particularly around the University area. Easy access
to the Metro system is also very important.
In the future, as the holiday rental market establishes itself, properties
with easy access to the beach will have a extra appeal, therefore
anywhere near to the Malvarrosa beach area would also be a good choice.
Rental income
Here is some general rental market information. We will include an
estimate of achievable rental rates within each of the relevant project
pages.
All of the projects and resorts offered have been chosen from a vast
array of new construction and redevelopment projects available, each
one examined by IPS over an extensive period for the best possible
rentability during ownership, to maximize the return on your investment.
Rentals of property in Spain went up by an average of 4,3 percent
in 2006, 1.9 points over the variation of the Indices General de Precios
de Consumo (IPC) (consumer price index).
In the first four months of 2007 the increase is even greater, during
which property rentals increased by 1.9 percent. Source: The Instituto
Nacional de Estadística (INE). We expect future rental rates
to continue to improve during the expected ownership period.
Rental rates are currently rising in advance of salary increases
due to the increased interest charges as more and more potential buyers
are now choosing to rent rather than to buy, choosing to make the
most of their disposable income, rather than to financially restrict
themselves with a heavy mortgage repayment.
In turn this reduces the available rental property pool and pushes
rental rates progressively higher. Rates should continue to rise until
the disparity between mortgage payments and rental rates stabilises.
This is good news for the long term investor, as long as the property
purchased is desirable and located correctly, to secure its future
resale.
Although there is already a strong rental market in the city, that
has been increasing in proportion to property price rises and increased
interest rates. This is bolstered by the huge pool of rental clients
coming from Valencia’s extensive university that is spread over
a large area in the north east of the city. In 2006 the University
educated a total of 45,495 students looked after by 3564 personnel,
a very significant group of potential tenants.
It should be noted however that Valencia as a city for tourism is
embracing a new era and the market for holiday rental will continue
to grow steadily over the coming years.
Already we have found a specialist weekend rental company operating
in the city, meanwhile, the holiday market is now establishing itself
with increasing demand for properties offering good beach access in
the summer, paying a significant premium.
According to the company Tecnitasa, who have completed a study of
the rental prices of the main coastal areas in Spain, a 100 m2 apartment
in August in Alboraya would currently earn 4,555 Euros for the month.
In time this market will broaden in line with other holiday locations,
enabling far sighted investors to reap the rewards.
Beaches in Valencia
Another Valencian jewel is its beaches, offering some of the widest,
longest and cleanest anywhere, enabling Valencia in the future to
offer a complete and multifaceted holiday experience. An experience
not available in many city locations around the world and definitely
not available in another location that is as easily and cheaply accessible.
Fine sand, blue water, Mediterranean breeze and ever present Sun,
the beaches within Valencia are as good as a city beach can possibly
get and just a few minutes out of the city.
Playa las Arenas and Playa de Cabanyal
The built up part of the city beach line, with promenades, bars, restaurants,
events and hotels.
Playa de Malvarossa
The main and the most popular city beach of Valencia north of the
port, exploding with beach activity on summer weekends. Water sports
equipment hire is available.
Playa de Patacona
A slightly further, prettier and more tranquil city beach with more
space and lesser crowds.
Playa Pinedo
Stuated to the south of Valencia.
Playa El Saler
The most stunning beach in and around Valencia, this beach has blue
flag status for its superb quality. Over six kilometers of sandy beach
near Valencia's La Albufera Natural Park.
Playa la Devesa / Dehesa
As good as El Saler, but totally undeveloped. Although isolated, this
beach has a range of services available and is set right in the heart
of Valencia's La Albufera Natural Park.
Golf courses available locally
There are 4 golf courses that surround the city. The most prestigious
golf course is El
Saler which is claimed to be listed as one of the best 100 championship
golf course in the world. El
Bosque also has played host to some of the most important international
championships. Golf
Club Mediterraneo offers a perfect golf course
in addition to other sports and spa facilities. El
Escorpion
(Spanish only website) offers an excellent golf course.
In addition we are now offering a complete selection of properties
at the new 27 hole golf project that is situated next to a national
park area and the town of Anna, to view the project information for
Anna Golf Resort please
click here!
Airport Access
Located at Manises just 8km from the city, the airport terminal has
been recently extended and the car parking expanded and extensively
reworked. The volume of low cost flights from the UK, Ireland, France
and other parts of Europe is increasing steadily.
A new Metro line has been opened from the city’s airport offering
even easier access to all parts of Valencia, in preparation for the
increasing level of tourism.
High speed rail link
A new section of the Spanish high speed rail network “AVE”
is currently under construction, linking Madrid with Valencia in an
hour and a half.
Although work on this project has already started,
due to the scale of the project it will not be operational until 2010.
Land grab in Valencia - LRAU
The Valencian land grab law, more correctly known as LRAU, is something
that always causes concern, particularly as it is mostly misunderstood.
It would not be possible for any of the projects that we offer to
our clients for investment to fall victim to it, as LRAU can only
affect large areas of land, or single properties on large plots, it
does not affect development sites and urbanizations.
More Information
Watch our video presentations
The following videos are available as windows Media Video
files (.wmv), click on the help button for more information on how
to view. 
1 - This video "Fly over Valencia" is
available free on the official Valencia Tourist Office website and
gives a good overview of the cities highlights. We have included a
copy here as a windows media file.
Please
click here to view! 
(18 meg)
2 - This is a video showing the location of the
F1 track and a computer designed simulation of the Valencian Grand
Prix Circuit.
Please
click here to view!
(20 meg)
3 - This video simulation shows what it will be
like to drive around the Valencian circuit in an F1 race car.
Please
click here to view!
(11 meg)
4 - A theatrical glimpse of Valencia’s most
famous tourist attractions produced by the tourist board.
Please
click here to view!
(18 meg)
F1 in Valencia open another page with larger images
of the new Valencian Formula 1 circuit and more information including
what an F1 car sounds like.
Please
click here to view!
Press pack a booklet covering tourism in Valencia
is available from the Valencian Tourist Office as a PDF file (4mb).
Please
click here to view!
Calatrava Towers for more information on the project
as, well as computer generated images of the triple towers.
Please
click here!
Google
Earth – Free satellite image viewing program
The satellite image viewing system provided free by Google is a great
tool for demonstrating project locations and at IPS we now use this
tool whenever we are examining proposed site locations for viability.
In Valencia the images available are of particularly up to date and
high quality, probably thanks to the Americas Cup Yacht Races and
the future F1 circuit.
We have included links to download the location files and fly to
the sites on the specific pages.
Please click this help button for more information on how to view
with Google Earth. Click
here for help! 
Disclaimer
The information in this website is provided by IP SPAIN and whilst we
endeavour to keep the information up-to-date and correct, we make no
representations for warranties of any kind about the completeness, accuracy
and reliability with respect to the website or the information within
the website. Any reliance you place on such information is therefore
strictly at your own risk. If you have any questions about this website
or the services we provide please feel free to contact IP SPAIN.
