How did Cogress Spain come to be?
Looking at Cogress’ progress and how far we’ve come since 2014, following Cogress UK’s inception, it was of paramount importance to us to follow our strategy for international expansion.
We started looking at the Spanish market after seeing a flurry of deals amid signs that the financial constraints imposed by the crisis have finally been shaken off. There started to be a degree of confidence in the recuperation of the Spanish economy that we couldn’t ignore.
In addition to that, we underwent a 12 month period of thorough due diligence work and discussions with local experts to examine the viability of the Cogress’ model in Spain.
The most important factor for us when extending our global footprint, was to not only find a stable, growing economy but to also connect with experienced partners who would be able to provide constant advice and cater to our investor’s needs while identifying the most attractive and unique investment opportunities.
Our team of experts include a strong, local professional network with well-established developers, experienced analysts and a top-tier Spanish law firm with significant experience in real estate and capital markets.
Why do you think the Spanish market is so attractive for property investments?
It is not my positive perception of the market alone, but also what the numbers tell us. The Spanish market is one of the fastest growing economies in the Eurozone; a drop in property supply over the past 10 years, combined with recent economic growth, has resulted in a strong need for new properties to satisfy growing demand from local residents in the key cities of Spain.
Based on the latest facts and figures and despite Spain’s downturn, the country has managed to bounce back out of the economic crisis, managing to exceed its pre-crisis level of gross domestic product. Nine years after Spain slid into a long and bitter recession, the country is back where it was in 2008!
What are your expansion plans in Spain?
To start with, we aim to consolidate our presence in the main capital markets of Madrid and Barcelona, while keeping track of developments in other focal parts of the country, such as Malaga, Marbella region, Sevilla, Valencia, and other coastal and island markets, as well as the north of Spain, especially Pamplona, San Sebastian and the Basque Country. We ultimately wish to provide a variety of investment opportunities that may suit the different liquidity and risk profiles that our investors demand. We screen all the developers that we work with according to strict due diligence criteria and perform market, technical and financial analysis on all the deals that we encounter. We are very selective and only take on a fraction of the investment opportunities that are presented to us.
What is the focus and vision for Cogress in Spain?
As a global company, our focus is always on our investors. We are a company that strives to provide the best opportunities to its investors and developers standing by our four pillars of business success which are Trust, Accountability, Transparency and Accessibility. This is of vital importance to us if we are to become the largest private equity investor in the market – based on delivery.
How do you think our Spanish partner’s experience can contribute to the success of Cogress in Spain?
As I mentioned, we are always looking to find the most experienced and well-established property professionals to join our team whether they are in Spain, UK, US or Israel.
I believe that a manager, is as good as the people in his team and so taking the decision to expand to Madrid gives me great satisfaction because I have confidence in all our partners and the team we have put together.
Why do you think the Cogress model will be a success in Spain?
I believe Cogress plays a pioneering role in the property world. We are breaking new ground by bringing liquidity to illiquid markets for property developers and offering choices to investors who weren’t able to consider involvement before. I believe that this is a global need that we, as a company, are able to address. We are not just creating partnerships between developers and investors but also disrupting the way people invest.
We are starting to see a shift in investor’s preferences. Investors are tired of being tied up with Banks and black books. They are starting to enjoy the independence of choosing where and how to invest without relying on others. This is refreshing, to say the least. It is not possible to predict the future but historically, real estate has always generated much investor interest and maintained consistent buoyancy, which gives us great confidence for the future.
Following the Brexit vote, Spain made a strong case in welcoming UK financial services businesses by offering a flexible approach towards the implementation of various measures aimed at making authorisation processes as simple as possible. The fact that Cogress is an English based FCA regulated company is making the process seamless and straightforward.
What impact do you expect to have on the local property development market?
From the very first meeting with a Spanish developer, the response we have had to our financing model has been phenomenal. Spanish property developers used to rely solely on banks for their financing needs. The real estate crisis ended all that, and since then alternative players such as specialist funds have entered the property financing market. Our model is complementary to bank credit and fits well with local market needs. Banks have also welcomed our partnerships with developers. We expect to be able to help selected property developers leverage their operations and take advantage of development opportunities as they may arise, without being constrained by capital needs.