Wednesday, June 24, 2020

Inside the head of a highly skilled real estate professional - Mr. Gilberto Mariscal

Gilberto Mariscal has a ton of experience within the real-estate sector in the south of Spain. He holds a double degree in business administration as well as over 20 years of hands-on experience, making him one of the most trusted and knowledgeable players on the real estate market of Costa del Sol today.

Welcome Gilberto and thank you for taking the time to do this interview with us today. 

You are the owner of the company LAND RESET in Malaga that specializes in real estate on Costa del Sol. You have a few different lines of business such as Asset Management, Project Management, Urban Development and Project Development, to mention a few. You have been in the business for many years, please tell our readers a bit about yourself, your background and your experience.

Of course, it is a pleasure for me to speak with you.

I have a double degree in business administration from Leeds Metropolitan University in England and the University of Malaga in Spain. 

I started my professional career 23 years ago at Deloitte, providing auditing and strategic consulting services to companies in Málaga, Andalusia and Spain. Soon I specialized in construction companies and real estate developers. Later I became General Manager of several real estate groups in Spain, Mexico and Argentina. 

On my return from my stay in Mexico, I decided to start my own company and founded it with a few partners. It was a complicated moment, in the midst of the last financial crisis, but I had full confidence in the potential of the Spanish real estate market, which soon proved correct. 

The objective of LAND RESET is to offer investors and developers a comprehensive real estate service, from identifying investment possibilities to the construction and sale of real estate projects on the Costa del Sol.

How do you see the current situation with the COVID-19 affecting the market in the short and long-run?

Coronavirus has had a major impact worldwide. Health is the most important thing we have, and this virus has tested all the health systems in the world at the same time with dramatic consequences. 

In the short term, the confinement of the population at a global level has caused paralysis of the economy, with the consequent financial impact. In these reopening moments, there is a lot of optimism, and it seems that the efforts made are paying off. I think that in the coming months we will recover economic activity, and although there will be a new outbreak of the virus, this time the world will be better prepared to deal with it; although until there is a vaccine that will bring victory against the virus we will not return to normal.

Regarding the real estate sector, it is convenient to differentiate between first and second residence developments, between projects with high sales ratios before the pandemic and projects with few or no sales, and between well-capitalized projects and projects highly dependent on indebtedness.

That said, I think that in general, we are going to go through a rapid decline in the market, more in sales volume than in price drops (although in certain areas and projects there will be investment opportunities), which will be followed by a progressive recovery in sales rate during 2021 and 2022. In the case of the Costa del Sol, the 2020 summer sales season is going to be bad, and the market will not start to recover until international air traffic is normalized and the arrival of international visitors is reactivated. The good thing is that during the last years real estate developers have done things well. A large part of the real estate developers on the Costa del Sol are very well-capitalized as well as professionalized and they can overcome these next months.

As a destination, Spain in general, and the Costa del Sol in particular, is still a fantastic place to live and visit; with excellent infrastructures, services, and a unique climate. Once we defeat the virus, the market will return to normal, as it did in the previous crisis.

Many people want to compare the Corona crisis with the financial crisis of 08/09 and the following debt crisis that hit Spain in the following year, do you think they are comparable? And how do you look at the future of real estate in the post-COVID-19 world and what opportunities will arise?

I believe that the crises of 09/09 are hugely different from the current one. The financial crisis was a crisis of the world economic-financial system with a very high economic cost, which especially affected Spain due to its dependence on private debt and a very rigid labour market, which forced the country to carry out important reforms and sacrifices.

The coronavirus crisis, on the other hand, is a health crisis that will resolve itself when the desired vaccine is achieved. Of course, it has and will have economic consequences, but the European countries in particular, and world economies in general, are much better prepared to face them.

In the real estate sector, there will be opportunities, of course, as there were in the period 2011-2016 in Spain. The difference now, in my opinion, is that the period of recovery of the value of assets will be much faster in this crisis, because once the health alert is controlled with the arrival of the coronavirus vaccine, the traffic of visitors to Spain will recover, and with it sales and asset prices. On the other hand, as I said before I don´t think that the real estate market in La Costa del Sol or Spain is going to collapse. There is going to be many opportunities but in specific situations and specific spaces of time.  

I know that you are also involved in some land deals where you administrate the process of making urban land buildable, can you tell us about that and what potential you see in that niche of the market in general.

The main opportunity I see is that there may be certain landowners who, due to different circumstances associated with the coronavirus crisis, may decide to sell their assets at a price lower than their real value. If we add to this circumstance the potential of land revaluation during its urban development, and a full recovery scenario of 2-3 years, I believe that there will be very good opportunities in this business area. 

With your knowledge and experience, if you were to put on the glasses of an investor with 1,000,000 Euro to invest, what kind of investment would you consider the most interesting in the next 12 months and why?

On the Costa del Sol I would focus on land opportunities, mainly land to build second homes because it is the market that is most affected by this crisis, but also land to build "first-homes" for spanish recidensts it´s priced attractively. 

The challenge is to look for land opportunities with a significant discount price, and with a location and characteristics that allow a satisfactory recovery of land prices to be estimated in 2-3 years. In the previous crisis, the investor who invested in the years 2011 and 2012, when nobody bought in Spain, has had revaluations only in land value, of up to 300%. Now is time to look for these similar opportunities.

What advise would you give a first-time investor on Costa del Sol?

My main advice is to look for a local company or professional team that advises you well. The Costa del Sol is a fantastic destination to invest, but you must know the market and its characteristics very well if you don’t want to have unexpected problems. 

It is particularly important to study investments in the coast legally, urbanistically, technically and commercially; and to know the idiosyncrasy of each municipality. For example, it does not take as long to obtain a building permit in Estepona as in Marbella; and in real-estate, time is as important as costs.

As a local, name three of your favourite places or things to experience in Malaga

Museo Picasso, in the heart of the city, an amazing collection from our most famous citizen in a beautiful building. 
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Muelle Uno, a beautiful open shopping centre in the port of Malaga, on the seafront. 
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Bodegas el Pimpi, a restaurant with a spectacular gastronomic experience of traditional
Spanish food, partly owned by the actor Antonio Banderas, one of
Málaga’s most famous sons now living.
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To learn more about how you can take advantage of the existing Post-COVID-19 market by investing with Bosque & Colina, click here and fill in the form.

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