Metrovacesa reported a 13% rise in revenues, surpassing 586 million euros in the most recent year. The developer, backed by Banco Santander, BBVA, and Mexican magnate Carlos Slim, also expanded its gross margin and net margin by 31% and 42% respectively, reaching 74 million euros in earnings before interest, taxes, depreciation, and amortization (EBITDA).
However, the listed company once again revalued its real estate asset portfolio, this time by more than 60 million euros, leaving it in a loss position. Specifically, the report shows a 9.6% depreciation in the value of tertiary-use land due to higher interest rates and weaker office demand, while the residential portfolio rebounded with a near 4% uplift. Although the drop in asset values does not affect cash generation, it obliges the promoter to report losses of 20.8 million euros for 2023, down from 23.5 million in 2022.
Over the past year, Metrovacesa delivered 1,675 homes at an average price of 300,000 euros, achieving a 22% margin. In the same period, the promoter initiated construction on 2,078 residential properties, bringing the pipeline to 6,385 units in various stages of development to be delivered over the next three years. The company also has 3,332 homes already reserved, ensuring more than 1.1 billion euros of revenue in the coming years.
In a note, Jorge Pérez de Leza, the chief executive, summarized the year: “Metrovacesa completed a very solid 2023, meeting its objectives and plans despite volatility in interest rates and inflation. The company confirms a profile of strong cash generation coupled with selective land acquisitions that strengthen the business model as a sustainable long-term developer.”
Land purchases and sales
During 2023, Metrovacesa actively engaged in land trading, the raw material for its development activity. The investment program allocated 90 million euros to acquiring parcels for 1,900 homes, with margins and returns described as highly attractive. The purchases concentrated in Madrid, where parcels were acquired from Sareb to build 1,000 homes; Málaga in the Z district; Vinival in Valencia; and the Mondragón Barracks in Granada.
On the disposals side, Metrovacesa sold a student-residence project on its Oria campus in northern Madrid and a plot in the Valdebebas development, where Hotel101, a Philippine hotel-chain, plans a macro-hotel complex alongside the new Formula 1 circuit. Also included in the results was the sale of the Monteburgos 3 office building in Madrid and non-strategic plots in Jerez de la Frontera, Seville, Córdoba, and Murcia. Overall, the promoter received 84.1 million euros, about 20% above net asset value, signaling renewed demand for tertiary land beyond traditional office spaces [source: company presentation].