“Real Estate is one of the pillars of the welfare state”
Patricia Hernández is the CEO of Vía Ágora and also the best example of the increasingly prominent role of women in top positions in real estate companies. Linked to the developer since 2007, last September she took over from Juan Antonio Gómez-Pintado, president and founder of the group. The new CEO of Vía Ágora reviews in this interview with Urbanitae the closing figures for 2023 and the company’s forecasts for 2024. She ensures that it will be a year of stabilization in prices and calls on the Administration to show greater courage in taking measures to boost the sector. Among them, unlocking available land, reviewing taxation, and streamlining planning and urban management procedures.
Let’s talk about the origin and trajectory of Vía Ágora.
Vía Ágora was born in 2007 and drove the real estate development project known as Vía Célere, which extended to Bulgaria, Poland, and Brazil, in addition to Spain. In 2017, we sold the Spanish part of the business and focused on managing the international part.
In 2019, we decided to focus on Spain and relaunched the development activity here, now under the brand Vía Ágora. So, in 2024, we will celebrate 5 years of this seemingly new project, although our history goes back many years.
The management and promotion of homes and commercial properties are the focus of your activity. What figures will you close 2023 with, and what are your forecasts for 2024?
At the end of 2023, we had more than 1,400 homes in the pipeline, of which 659 are in the build-to-rent (BTR) model, and the rest are for sale.
This 2024 seems to be a year of macro-level stabilization and also for our business, so we are consolidating our project in both modalities. This year we will deliver part of these projects and add additional ones, so the forecast is to close the year with figures similar to those of 2023.
As a novelty, we expect the first projects in Los Cerros to come to light, an area we have been developing for several years and where we have a large land bank.
In which geographical areas do you have a greater presence? Do you plan to reach other locations?
Currently, we are present in Madrid and Andalusia, where we want to continue growing. We also study other areas like Levante or the Basque Country with interest, although we have not found a project to enter those locations at the moment.
In addition to buying and selling, Vía Ágora has also entered the build-to-rent business with the start of the construction of four affordable rental projects awarded by the City of Madrid. What weight does this model have in your business?
As mentioned earlier, BTR currently represents around 47% of the homes we develop, and within this business line, 65% is public-private collaboration. There are 425 homes in Madrid that will be integrated into the Palatino Residencial project, which currently has about 1,300 homes under the City’s plan.
In addition to this line of affordable housing, we also have very interesting projects of free-market homes that balance the available rental housing in the city of Madrid.
What are the main threats to the home buying market currently? Will we see a correction in the prices of new construction homes in the next year, 2024?
Well, it seems like a mantra already, but undoubtedly, the lack of land supply. It is already a reality, but as long as the lands in development that are underway are not unclogged, we continue to worsen the problem, of course. Action needs to be taken on land production timelines.
The buying market is sensitive to other variables, such as financing, but at the moment, I do not see a threat but rather the opposite; we are likely starting the path to more reasonable levels, and that will improve access.
“Build-to-rent represents about 47% of the homes promoted by Vía Ágora, 65% of which is public-private collaboration.”
So, with the existing lack of supply and improvements in financing on the horizon, I do not think there will be a correction in the prices of new construction homes this year. Neither significant increases; it will be more of a stabilization.
From the promoter’s point of view, what do you demand from the Administration?
Firstly, it is necessary to release the available land they have. Secondly, at the regulatory level, a review of taxation is very important. Also, streamlining planning and urban management procedures and providing more certainty to them.
We demand that they be brave in adopting measures, and we will see results. Finally, do not abandon home buying policies because offering housing solutions for today is good, but we must also encourage people to invest in their future. Encourage families’ savings, which is especially interesting given the pension forecasts we have.
You are applying artificial intelligence (AI) to the development of a residential project. A pilot project that positions Vía Ágora as a pioneering company in this field. Tell us about this initiative.
This first pilot project is being carried out through the group’s subsidiary, Lignum Tech, which is responsible for manufacturing industrialized wood facades, terraces, stairs, and industrialized bathrooms. We started with a generative architecture project that we will develop over a period of six months, together with the company Valenthia Strategy, using their Nidus technology.
It is an application that works through AI and is capable of optimally fitting the finishing pieces on an industrialized facade. We provide the size of the finishing pieces within a facade project, which includes window openings, structure, and floors, and in just 30 seconds, it develops the project. This fitting task used to be done by two qualified technicians who spent about 160 hours on it.
AI gives you the best option according to the criteria you have requested. We can ask it to prioritize the highest number of whole pieces on the facade or the least waste, or optimize the panel size, for example. The application offers several versions, and technicians only have to decide which one is the most optimal.
Real estate crowdfunding is growing as an alternative financing option for developers. What will be its role in the coming years?
The developer is still very tied to bank financing because for a long time, it was almost the only alternative, and also because of the price. However, in recent years, interesting changes have occurred in the mix of financial providers for the developer’s business. Very interesting alternative financing options, bonds and promissory notes, have appeared, as well as real estate crowdfunding platforms and even tokenization.
“The sector is transforming its processes, implementing sustainability, innovation, and digitization in all phases of the value chain.”
Obviously, they are new ways of doing things that have different implementation rhythms, but certainly for the developer and also for the balance of the financial system, it is always interesting to be able to access other formulas or other types of credit. From the investor’s side, crowdfunding offers the possibility of investing in real estate to the small investor, who did not have access before, and by contributing smaller amounts, investors can diversify their portfolio.
In other countries, investment volumes are genuinely interesting. Here, we are still far from that, but the trend is to converge towards these markets that are ahead of us.
How do you foresee the real estate market in the short and medium term?
The real estate sector is one of the pillars of the welfare state, and it is clear that it will continue
to grow and adapt to the needs of our increasingly complex societies. We have large, very professional companies that are taking up the challenge to push and respond to the challenges we face.
In the short and medium term, the behavior of interest rates will mark the result, and since the expectation is for normalization, we are positive.
Going down to the ground, residential, which is the market we know best, is going through a stressful moment because we are not able to satisfy it as we would like. It is true that we sell the product we release well, which is a very important part, but it is also true that we have great cost pressures and capacity problems that we strive not to transfer to the price or do so as little as possible. We are the first interested in maintaining a healthy market.
In addition, the sector is transforming its processes, implementing sustainability, innovation, digitization in all phases of the value chain, and introducing a true revolution with industrialization.
I think there is a transcendental change in all environmental requirements, especially regarding carbon footprint compensation, product life analysis, etc., and the market situation (lack of labor, housing accessibility, need for savings in terms of time and costs, etc.) leads us to think that the future of the sector lies in industrialization.