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Prime Minister Pedro Sánchez calls ‘housing a right and not a speculative business’ as costs soar for locals

Spain has become the latest EU country to eliminate “golden visas” that attracted thousands of foreign property investors, as soaring housing costs render the programmes politically toxic.

Prime Minister Pedro Sánchez said his cabinet would on Tuesday take the first steps towards scrapping the visas, which were introduced in 2013 and enabled investors who spent at least €500,000 on real estate to obtain the right to live in Spain.

“We will take the necessary measures to ensure that housing is a right and not just a speculative business,” said Sánchez, head of a Socialist-led coalition government.

Spain’s decision follows moves by Portugal and Ireland last year to scrap golden visas linked to real estate. In all three countries, the programmes were introduced to attract overseas investment and fuel a recovery from financial crises driven by a crash in their real estate markets.

The European Commission has been critical of golden visas, citing security risks as well as concerns over possible corruption, money laundering and tax evasion. In 2022, it called on member states to address those risks and end even more controversial golden passport programmes, notably in Malta and Cyprus, which offer not just residency but citizenship.

In Spain, many of the roughly 10,000 golden visas granted in the past decade had gone to Russian and Chinese citizens, a government official said. They enable recipients to live in the country for three years.

Economists do not see Spain’s golden visas as the prime reason for rising property prices, but since last year Sánchez has been under pressure to end the scheme from leftwing members of his coalition worried about soaring housing costs.

Although golden visas can be obtained via various forms of investment, Sánchez said 94 out of every 100 granted in Spain had been linked to property purchases. They were concentrated in tourism hubs including Barcelona, Málaga, Alicante, Valencia, Madrid and Palma de Mallorca, he said.

“These are the cities that are facing a highly stressed housing market, where it is almost impossible to find decent housing for those who live and work there and pay their taxes every day,” Sánchez said.

“This is not the model of country that we need, one of speculative investment in housing, because it is a model that leads us to disaster and above all to lacerating inequality.”

Spanish MPs must first approve a change in the law in order for the golden visa to be scrapped.

In a study published last year, Transparency International’s Spain arm said the country had granted 2,700 visas to Chinese citizens and more than 1,100 to Russians.

While Ireland scrapped its programme entirely last year, Portugal closed down the real estate route but enables people to obtain golden visas through other forms of investment. Existing golden visas remain valid in both countries.

The Barcelona-based group has been buying up brands and its diversification into cosmetics is paying off

Beauty may be in the eye of the beholder but the fast-growing cosmetics sector should have a broader appeal to investors. Fragrances, face creams and foundations have the attractive qualities of high margins, pricing power and a growing share of household budgets.

Those strengths are not necessarily reflected in the performance of German beauty retailer Douglas, which is down more than a tenth since its March IPO. Puig, a frequent industry outperformer behind brands such as Paco Rabanne and Nina Ricci, should have better luck. On Monday, it revealed its intention to float in Spain with a mooted valuation of up to €10bn.

The Barcelona-based group, whose name is pronounced “poodge”, was originally a licensed fragrance manufacturer. It has spent the past decade buying up brands, with 10 deals in 12 years including a majority stake in Charlotte Tilbury Beauty. Diversification into skincare and cosmetics is paying off; these were the fastest-growing segments last year. Plans to raise €1.25bn via listing could fund further deals and consolidate ownership of businesses in which it has acquired majority stakes.

A sizeable secondary sale is also expected from the Puig family, who will maintain control of the company via dual class shares.

Beauty is a category through which luxury groups engage with aspirational new consumers. Puig’s brand acquisition strategy is adding up. Its sales were ahead of the market last year, up by 19 per cent with make-up and skin care up by 23 and 31 per cent respectively. The latter is attributed to the success of Charlotte Tilbury, which is popular for products including its Magic Cream moisturiser.

Nonetheless, spending on beauty is expected to slow this year in line with a broader luxury slowdown. The sector might manage sales growth of 7 per cent this year, thinks Bernstein, down from 15 per cent in 2023. Hence the decline in Douglas’s share price. Shares in US-listed Ulta and e.l.f. have also suffered.

Despite this, Puig’s mooted valuation looks achievable. Assume it continues to outperform and sales grow by a 10th this year, ebitda margins stay at 20 per cent and net debt remains roughly constant. Then the enterprise value to ebitda multiple would be 10.5 times at a €10bn valuation. That would be well below L’Oréal on 20 times and below the 12 times that Coty and L’Occitane trade at.

Spain’s largest IPO in years is so far looking good.

BOLOGNA, Italy, April 8 (Reuters) - Ferrari wants to increase its expertise in battery cells given their importance in its shift to electrified vehicles, but it has no plans to manufacture them itself, its CEO Benedetto Vigna said on Monday.

The Italian luxury sports car maker has been selling hybrid-electric cars since 2019 and has promised its first-fully electric vehicle at the end of next year. Ferrari (RACE.MI), opens new tab, which sold just shy of 14,000 cars last year, might not have the scale to produce its own cells profitably.

"We want to open up cells and understand what is in there," Vigna said at the opening of a research centre on battery cells in partnership with Italy's Bologna University and chipmaker NXP Semiconductors (NXPL.O), opens new tab.

"Production will always be done through external manufacturers, based on the know-how we hope to acquire through this research centre," Vigna said during a presentation.

"We cannot afford to take cells as black boxes," he added.

The E-Cells Lab is focused on electrochemistry and is aimed at boosting Ferrari's long term expertise in battery cells, which it buys from external suppliers.

"We'll use more and more cells and will ... need to know the chemistry," Vigna said.

E-Cells Lab would initially focus on lithium-based, liquid-state cells, but was ready to turn to address new chemistries and technologies, although Vigna said he did not see solid-state batteries as a real option for the time being.

Acquisition of AIR Communities is Blackstone’s largest transaction in the multifamily market

Blackstone has agreed to acquire an owner of upscale apartment buildings for about $10 billion, signaling that one of the world’s largest real-estate investors is ramping up investments again after a period of moving more cautiously.

Blackstone is taking private Apartment Income REIT, known as AIR Communities, which owns 76 rental housing communities that are primarily in coastal markets, including Miami, Los Angeles, and Boston, according to people familiar with the matter. The firm plans to invest another $400 million to improve these properties, these people said.

The acquisition is Blackstone’s largest transaction in the multifamily market. It reflects the firm’s bullishness on rental housing and its belief that commercial real estate overall is bottoming and the time is ripe to step up investments.

“We can see the pillars of a real-estate recovery coming into place,” Blackstone President Jonathan Gray said on an earnings call earlier this year. “We are, of course, not waiting for the all-clear sign and believe the best investments are made during times of uncertainty.”

Blackstone posted lower quarterly earnings in January, and its profit was hit by a decline in the value of its real-estate investments. The firm in recent months has begun to invest more aggressively in the commercial real-estate market, betting that interest rates are stabilizing and access to capital is becoming easier.

Blackstone late last year acquired a stake in a $17 billion loan portfolio from the defunct Signature Bank. In December, Blackstone and Digital Realty agreed to create a new venture to develop $7 billion in data centers that will target the largest providers of online content, cloud services and artificial intelligence.

Earlier this year, Blackstone agreed to acquire Tricon Residential, which owns, operates and develops a portfolio of about 38,000 single-family rental homes in the U.S., for $3.5 billion.

The firm has agreed to acquire AIR Communities at $39.12 a share in an all-cash transaction, which represents a 25% premium to the company’s closing share price on Friday, said people briefed on the matter. Blackstone is acquiring the firm through its $30.4 billion global real-estate fund, in a transaction valued at about $10 billion, including the assumption of debt. It is expected to close in the third quarter.

Blackstone considers multifamily, and rental housing in general, one of the best commercial property segments to invest in. While a crush of new supply, especially in the Sunbelt region, and higher interest rates have weighed on the multifamily business, the markets in AIR Communities portfolio have been less impacted.

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