Top Spanish estate agency hit by slump

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The Independent Online

Viva Estates, one of the largest estate agents on Spain's Costa del Sol, has closed all but one of its offices, the latest victim of the downtown in the country's real-estate sector. The company, which sells flats and homes to a mainly British, German and Irish clientele, has shut 13 offices and now operates only out of its main office in Marbella.

It comes after the dramatic slide of Inmobiliaria Colonial SA, the third biggest real-estate company, last month. The president, Luis Portillo, was forced out after a share-price fall of 61.37 per cent in six months.

On the back of this, Renta Corporació* SA, the Barcelona-based real-estate agency, announced this week full-year net profit of €33m to €35m (£24.6m-£26.2m) on sales of €515m to €530m, after the fourth quarter was hit by deals that fell through due to a lack of financing. Originally, it had forecast double the profits at €62m.

The Spanish Prime Minister, José Luis Rodríguez Zapatero, yesterday attempted to restore confidence in the economy. "To create unjustified alarm can damage expectations, and is the least patriotic thing I know," he said in a speech.

During Spain's building boom house prices rose 150 per cent in 10 years, but now construction has stopped on many building sites and prices have fallen in normally "safe" markets, like Barcelona. Many Spanish families have fallen into negative equity.