What's Interesting for Developers in Sotogrande?

If you take the average property in Sotogrande, you would find a 4 bedroom villa of about 450 m2 built on a plot of around 1600 m2, and in todays market you would find it listed at between €1,000,000 and €1,750,000. There is evidence that successful sales are achieving as little as 60% of list price.

These figures make it very difficult for a developer to consider building the average property. Even with the huge reduction on build costs and improved chances of obtaining a building plot for a reasonable price, the developer would struggle to show an acceptable profit when building an average villa in Sotogrande.

There is however an opening for a different type of property. Even if Sotogrande promotes itself as an exclusive resort development, and every year attracts some of the most affluent people in the world to enjoy its facilities, there are still very few properties at the very top end of the scale.

Over the past two years, there have been 2 or 3 properties sold at prices of between 6 and 10 €millions, and a well known owner whose property was listed at 25 €millions is believed to have rejected an offer of €18 millions.

If you do the maths...a property of 2,000 m2 on a plot of say 10,000 m2 with attendant main house, guest house, spa and indoor swimming pool, tennis court and landscaping etc should cost no more than €6,000,000 (including land purchase) to produce. Assuming the design has been well thought about and the property competes well with the best that Sotogrande has to offer, then the listing price of such a property should be in the region of €10,000,000 plus.

The main constraint for this type of development is in finding a good plot, located in a quiet and private area with a good outlook, without the prospect of future building works, good separation between existing properties, and all at a reasonable price!

I do however have some ideas...please feel free to contact me.