Malaga, the 'in' city for investors

The transformation of the Hoyo  de Esparteros area with a hotel  designed by Rafael Moneo is  costing 45 million euros and is  being carried out by the  Catalonian H10 Hotels group.
The transformation of the Hoyo de Esparteros area with a hotel designed by Rafael Moneo is costing 45 million euros and is being carried out by the Catalonian H10 Hotels group. / FRANCIS SILVA
  • Spanish and foreign companies and investment funds are setting their sights on the city to carry out projects of many different types

She has just finished a meeting with a British hotel group that want to open their first property in Malaga. Last week she was with a Scandinavian company with the same plan and she has been asked by a German restaurant chain to find somewhere for them to open a branch in the city.

María José García de la Serna, sales manager at Salvago Advisors property consultancy, meets at least two groups or investment fund representatives a week that are interested in opening a business in Malaga, a city that is recovering the role of new investment hub that it enjoyed before the pandemic - if it ever really lost it at all.

The news of a luxury hotel project planned for the site of the Andalucía cinema near Plaza de la Merced by a group of companies, including one in which Barcelona footballer Gerard Piqué is involved, is more evidence of the attraction Malaga holds for those with sufficient funds to finance multi-million euro projects.

"We can say that we are back where we were in 2019. This hasn't been a financial crisis, but a health one, so there is still a great deal of liquidity and a need to invest among groups from all over the world," says José María, who assists Americans, Europeans and Asians who are looking for opportunities for hotels, residential projects and tourist apartments. This is a product for which Malaga has now overtaken Barcelona: restrictions on this type of accommodation in that city are leading investors to look at Malaga instead.

"Malaga is incomparable, they all love what this city is about," says María José, who considers it a very positive sign that the banks are starting to offer financing once again.

A stroll through the city is proof enough of how many investment projects are currently under way, and the fact that they have not slowed down despite the crisis caused by the pandemic.

The works to transform the Hoyo de Esparteros area, near the market, with a hotel designed by Rafael Moneo; the four and five star hotels respectively at La Equitativa on the Alameda; the recent development of nearly 1,000 homes that has taken place in the Bizcochero area of Teatinos; the work by the German Aquila Capital fund to build two 30-storey skyscrapers of apartments for sale and to rent and a hotel in Martiricos; those also being built by this same development group at La Princesa with 350 rental apartments in three buildings, one of them 73 metres tall; the site clearing that is under way at Sánchez Blanca, beside Intelhorce, for a future urbanisation of more than 3,000 homes currently led by developer Urbania; the student residences which have sprung up in the city centre and around the university campus; the completion of the Colinas del Limonar residential development; the homes for the elderly that are being built on the east side of the city... these are just some examples of the dynamism in investment and they are a sign of what is yet to come.

Because, if the trend continues, Malaga has some very golden years ahead. Another scenario reflecting this promising future is the western shoreline, where works have already begun in the Torre del Río sector, which will be dominated by three 20-storey towers of luxury apartments, some of them valued at more than three million euros. In addition to this first project and the one which is now starting in El Pato II sector, a further 870 homes, shops, offices and a hotel are planned at La Térmica and, later on, another three 23-storey towers will replace the Nereo warehouses.

Private universities

Continuing along this same west coast we come to a site which the council wants to use for a private university, and it also wants one in Teatinos. Five educational institutions have competed for these two projects, and it now looks as if the contracts will be awarded to Alfonso X El Sabio and the Europea of Madrid.

The city council also recently received the Basque university of Mondragón, which includes the Basque Culinary Centre, that also plans to open in Malaga. Likewise, the Insur group has won a contract put to tender by the Town Planning department for an office building beside Tabacalera, which will cost around 30 million euros.

José Luis Aguilar, the owner of Larios Tres Consultores and Larios Tres Legal, says Malaga is "the most attractive hub in Spain for investors, after Madrid and Barcelona".

"All the big investors want to come here," he says, but he warns against the danger of dying from success. "If we do things well, this could be a golden California, but if we do them badly we will suffer the consequences," he points out.

He raises the alarm over questions that he considers could be detrimental to this flourishing scenario. One of them is the increase in the price of land, which he says is "overheating" and needs to be controlled. The other is the government's intention to cap rental prices, something that could damage the business plans of developers who are building properties for rent.

Nevertheless, José Luis Aguilar believes that if these questions are solved and the bureaucratic processes for approving projects are eased, "we are in a good place and we are going to experience one of the most important episodes in Malaga's history".

Further indications of this are the projects which aim to encourage people to make more use the port, such as the megayacht berths which are being created on Muelle Uno and Dos, the hotel at the cruise terminal, the San Andrés marina and the offices planned on the Muelle de Heredia.

Likewise, investors are looking favourably upon the council's Malaga Litoral coastal plan, which would move traffic underground on the southern edge of the historic city centre.

In fact there are also numerous major logistical and residential projects on the outskirts of the city, in Churriana, Guadalhorce, Campanillas and Puerto de la Torre, to accommodate distribution companies and thousands and homes.

But there is another aspect to Malaga's draw for large Spanish and foreign investors, and that is an essential corenerstone that will define the medium-term future of the city as a driving force: it is technological Malaga, the seed for which was sown more than a decade ago and which is now paying off in terms of attracting talent.

The announcement of the arrival of giants such as Google and Vodafone has frustrated other Spanish cities which were competing for a piece of this tasty cake, because it is Malaga that has finally tasted the result of the work it began years ago.

Along with those, in the past four months important investments have been announced by Dekra, Globant, Telefónica and TDK, to mention just some of the most well-known names.

Independent consultant and CEO of Honestas Advisors José Carlos Romero refers to this when explaining his conviction that the future in Malaga lies in "providing real estate and legal coverage to technological companies," and he also adds local successes to that, such as Freepik and BeSoccer. However, he also has a warning to give: "We still need more supply and facilities in two key sectors, office infrastructure and logistics. It's great that they are coming, but they do need to have suitable space in which to work" he says.