It will take an existing home in part-exchange for a newly-built home in the Madrid region
The initiative, which is a first in the Spanish property market, takes advantage of the synergy between the property developer and its network of realtors
The project complements other company initiatives aimed at making a home purchase more accessible
Responding to new customer demands
Ferrovial Inmobiliaria has launched a new initiative in which it will take an existing home in part-exchange for a newly-built home.
The move, which is a first in the Spanish property sector, responds to emerging needs of customers that want to upgrade to a larger home or a better location; the scheme works as follows:
- Ferrovial Inmobiliaria buys the "old" home:- Don Piso, the company's realty brokerage subsidiary, buys the "old" home at an appraised price that is agreed upon with the seller;
- New home purchase: no down payment, and finance assured:- The buyer does not have to make any down payment;
- Finance is assured by Ferrovial Inmobiliaria;
- The buyer does not have to move out of the old home until the new home is ready.
The scheme is aimed at potential customers who own an apartment in a province where Don Piso operates through a directly-operated office and who are interested in buying a home developed by Ferrovial Inmobiliaria in the Madrid region.
Ferrovial Inmobiliaria has a portfolio of over 450 homes that qualify for this scheme; they are located in Madrid city and in other municipalities of the region such as Las Rozas, Leganés, Alcorcón and Alcobendas.
The company may extend the scheme to other regions in the future.
Synergy with the realty brokerage subsidiary; complementary to other initiatives
This scheme takes advantage of synergy between Ferrovial Inmobiliaria, which is specialised in developing new homes (mainly first homes), and Don Piso, its realty brokerage subsidiary (acquired in 2001).
Since its acquisition, Don Piso has greatly expanded its network and now has over 330 branches (company-owned and franchised) in Spain. A total of 3,112 homes were sold or brokered in 2005.
The house exchange scheme complements other recent initiatives by the company, which include making home purchase more affordable for younger people by establishing a small down payment and monthly instalments of 450 euro until the home is ready for delivery.
These conditions have enabled many young people to consider buying a home as an investment option without the risks of large monthly instalments. That experience commenced one year ago in Madrid at the PAU Vallecas development; over 200 homes have been sold since then.
Innovation in sales
Ferrovial's Real Estate division continues to seek novel selling strategies that enable it to increase its sales capacity, by multiplying channels or adapting to changing demands. The company currently has over 500 points of sale in Spain.
In 2001, it became the first property developer to sell homes through the El Corte Inglés network of department stores. That initiative is in place in Madrid, Málaga, Sevilla, Valencia, Barcelona, Zaragoza, Alicante and the Canary Islands.
The strategy was complemented by the acquisition of Don Piso and its network of property brokers, and the opening of 'Ferrovialhogar' offices, which provide a one-stop shop where prospective customers can inquire about and buy any home in Ferrovial's real estate portfolio.
The 'Ferrovialhogar' initiative has been established in Madrid and Zaragoza and will be extended this year to the east coast (Valencia), Málaga and the Canary Islands (Las Palmas).
In 2005, over 40% of total sales by Ferrovial Inmobiliaria in Central Spain in 2005 were channelled through 'Ferrovialhogar'. In 2005, Ferrovial's Real Estate division attained 813.6 million euro in sales (a 6% increase) and 169.4 million euro in EBITDA (+13.3%).
With a presence in forty cities in Spain, Ferrovial currently has a real estate portfolio worth over 1.1 billion euro (10.1% more than in March 2005), which assures continued activity for the next 15 months.
