A constant business, without fuss, and in which finding maximum efficiency is the key so that profitability, although modest, reaches shareholders periodically and safely. The Spanish Rental Housing Company (Cevasa) has managed to maintain itself for almost 60 years in a sector, that of the promotion and management of protected rental housing, in which there is always a market, but which has suffered multiple legislative and regulatory changes and a crisis that took away dozens of firms and thousands of jobs. In the last decade, the sector has also been the focus of public policies due to rental tension, rising prices and difficulties in accessing housing. Cevasa – which has its own fleet of 2,300 rental apartments in Barcelona and its metropolitan area, plus the management of the rental of offices, premises and parking (which represent 15% of the assets) – has emerged as a useful tool for the Administration, which has it as a partner in two mixed companies. The company is listed on the Stock Exchange, and since mid-July the share price has been rising, reaching its all-time high, 8.40 euros. But Donato Muñoz, CEO of Cevasa, explains that the value of the company is much greater: «Within the entire real estate sector, residential profitability is the lowest of all, and we have to be extremely efficient. For this reason, the market discounts 60% of the real value of the company, which would be above 20 euros per share,» explains Muñoz in an office at the Cevasa offices on Meridiana Avenue. from Barcelona. There, in the area of the three towers that rise above the emblematic Hipercor store, the company has about 1,100 apartments, the so-called Meridiana Cero Complex. To these are added other housing complexes in the Catalan capital, in Sabadell, Cornellà, Montgat and other municipalities. She has been a member of the Administration on two occasions. One is SBD Lloguer Social, in Sabadell, where, as a partner of the City Council, it has promoted more than 1,000 homes since 2005. The second experience is more recent and larger: Habitatge Metròpolis Barcelona, promoted by the Barcelona Metropolitan Area (AMB) and where this organization and the City Council have half of the participation, and the private partners are Cevasa and Neinor. The development of the mixed metropolitan operator, which is in charge of building 4,500 public rental apartments on public land in Barcelona and its surroundings, lasted almost eight years. The first, in Sant Boi de Llobregat, will be finished in a few months.
A ‘rare bird’
Cevasa was founded in 1968, in the wake of Franco’s regime, in a residential context that is unrecognizable today. There were so-called protected real estate properties, which did not pay taxes, and there was aid to promote social rentals. Until the eighties of the last century, they built more than 2,000 rental apartments in Madrid and Barcelona. They were years of internal migration waves and growth of cities towards the periphery. Listed since 1970, it is the only company in the continuous market whose main business is housing rental, and the only one still standing from that time dedicated to this activity. After selling its assets in Madrid, it is now concentrating on the Barcelona area. The majority of the capital is controlled by the founding family, the Vaqué Boix, while the rest is distributed by Banco Santander and other minority partners. As the deans of this sector, Cevasa has seen protected rentals evolve to what they are today: only 2.5% of homes in Spain. “In the eighties, subsidized housing went into crisis,” explains Muñoz about the freezing of rents at that time, which led many companies to bankruptcy and others stopped investing. Cevasa resisted, just as it did after the burst of the real estate bubble. “Provided housing continued to be produced linearly until 2010. From then on, only 10% of what should be done is done,” explains Muñoz. Accompanied by Agustín Berbel, deputy general director and financial director of Cevasa, and Arnau Grabulosa, director of Heritage, he warns that the Administration is the main owner of the land intended for protected housing, but that this activity «needs a lot of investment.» “Until 2012 there was a lot of aid, but then there was no more, and the price has to be assumed by the developer,” says Muñoz, who also recalls that the tax burden is very high, after the corporate tax credit was reduced by half. The context is one of the reasons why they have not entered the Madrid Plan Vive: “We gave up because, due to taxation, the benefit was too fair.” In this context, the key is efficiency. “If we are above our competitors in profitability it is because we are extremely efficient,” says Berbel. “Only comparable to the European rental housing leaders,” says its website. A team of 30 people and maintenance staff are dedicated to seeking the maximum optimization of these assets: each month 2% of their assets are released, which are put up for sale, and what is necessary is quickly invested (sometimes between 40,000 and 50,000 euros to renovate apartments that have become outdated, explains Muñoz) and a tenant is found. On average, Cevasa’s apartments are between 10% and 15% below the market price, but by always having everything occupied, they achieve an average annual return of 2.18%, enough to satisfy shareholders. Cevasa has an equity value of 550 million euros and in 2024 increased its rental income by 13.3%, to 11.4 million euros. Despite this, the net profit was 10.1 million, 16% less than the previous year. This drop is explained because the figure has to be compared with that of 2023, when the company obtained a greater profit than usual thanks to a promotion intended for sale, something that normally does not happen because the bulk of its promotions are for rental. According to the 2023 report, 38% of the houses managed by Cevasa are rent-free, while the rest is divided between old rent (25% of the stock) and officially subsidized housing (37%). Managers are critical of the regulatory fluctuations in all these segments. «There are too many regulatory changes. If you enter a business that is long-term, 30 years ahead, you have to have regulations 30 years ahead,» says Berbel, who believes that, in terms of housing, especially in Catalonia, there is a «regulatory dance» that generates insecurity.